EX-99.1 2 pfis-20160722ex9913fc337.htm EX-99.1 pfis_Ex99_1

Exhibit 99.1

NEWS RELEASE

TO BUSINESS EDITOR:

PEOPLES FINANCIAL SERVICES CORP. Reports Second Quarter 2016 Earnings

Scranton, PA, July 22, 2016/PRNEWSWIRE/ – Peoples Financial Services Corp. (“Peoples”) (NASDAQ: PFIS), the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three and six months ended June 30, 2016.  Peoples reported net income of $4.9 million, or $0.66 per share for the second quarter of 2016, compared to $4.4 million, or $0.59 per share, for the comparable period of 2015. 

Core net income, excluding net gains on sale of investment securities available-for-sale, net of tax for the three months ended June 30, 2016 was $4.6 million, a $176 thousand increase from $4.4 million for the same period in 2015. Core net income per share for the three months ended June 30, 2016 was $0.62, compared to $0.59 for the same period in 2015.  

Net income for the six months ended June 30, 2016, totaled $9.7 million or $1.32 per share compared to $9.5 million or $1.26 per share for the same period last year.

Core net income for the six months ended June 30, 2016 was $9.3 million, an increase of 4.5% from $8.9 million for the same period in 2015. Core net income per share for the six months ended June 30, 2016 was $1.26, an increase from $1.18 for the same period in 2015. The results for the six months ended June 30, 2016 include net gains on sale of investment securities of $623 thousand compared to $832 thousand in the first six months of 2015. 

In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Peoples routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders’ equity and core net income ratios. The reported results for 2016 and 2015 included herein contain items which Peoples considers non-core, namely net gains on sales of investment securities available-for-sale. Peoples believes the reported non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends. Where non-GAAP disclosures are used in this press release, a reconciliation to the comparable GAAP measure is provided in the accompanying tables. The non-GAAP financial measures Peoples uses may differ from the non-GAAP financial measures of other financial institutions.

SECOND QUARTER NOTABLES

·

Loans, net grew $123.9 million, or 18.6% on an annualized basis in the first half of 2016 as demand increased throughout the Lehigh Valley and King of Prussia markets. 

·

Deposits grew $41.1 million, or 5.7% on an annualized basis in the first six months of 2016.

·

Tangible book value per share improved $0.89 to $25.18 at June 30, 2016 from $24.29 at December 31, 2015 and $1.03 from $24.15 at June 30, 2015.

·

Tax-equivalent net interest margin remained level at 3.81% in the second quarter of 2016 when compared to the  first quarter of 2016, and increased 2 basis points compared to 3.79% for the quarter ended December 31, 2015. Tax-equivalent net interest margin decreased 3 basis points compared to 3.84%  for the quarter ended June 30, 2015.

·

Tax-equivalent net interest income increased $343 thousand to $16.2 million for the second quarter of 2016 compared to $15.8 million for the first quarter of 2016, and increased $1.2 million when compared to $14.9 million for the second quarter of 2015.

 

 INCOME STATEMENT REVIEW

The tax-equivalent net interest margins for the three and six months ended June 30, were 3.81%  for both periods in 2016, compared to 3.84% and 3.86% in 2015, respectively. Loan accretion included in loan interest income for the six months ended June 30, 2016, related to loans acquired in the fourth quarter of 2013, was $372 thousand, resulting in an increase in the tax-equivalent net interest margin of 4 basis points. For the second quarter of 2016, loan accretion included in loan interest income related to loans acquired was $157 thousand. Loan accretion included in loan interest income in the first half of 2015, related to loans acquired in the fourth quarter of 2013, was $347 thousand, resulting in an increase in the tax-equivalent net interest margin of 4 basis points. For the second quarter of 2015, loan accretion included in loan interest income related to loans acquired was $122 thousand.

Tax-equivalent net interest income for the six months ended June 30, increased $2.2 million to $32.0 million in 2016 from $29.8 million in 2015. The increase in tax equivalent net interest income was primarily due to a $135.5 million increase in earning assets in the first half of 2016 when compared to the same period in 2015. The tax-equivalent yield on the loan portfolio decreased to 4.49% for the six months ended June 30, 2016 compared to 4.66% for the comparable period in 2015. Loans, net averaged $1.4 billion in 2016 and $1.2 billion in 2015. For the six months ended June 30, the tax-equivalent yield on total investments increased to 2.90% in 2016 from 2.76% in 2015. Average investments totaled $279.0 million in 2016 and $310.5 million in 2015. Average interest-bearing liabilities increased $128.3 million for the six months ended June 30, 2016, compared to the corresponding period last year. The cost of funds increased to 0.55% in the six months ended June 30, 2016 from 0.52% for the same period of 2015. Tax-equivalent net interest income for the three months ended June 30, increased to $16.2 million in 2016 from $14.9 million in 2015.

The provision for loan losses totaled $2.4 million for the six months ended June 30, 2016, compared to $1.5 million for the same period last year. For the quarter ended June 30, the provision for loan losses was $1.2 million in 2016 and $750 thousand in 2015. The increase in the provision for loan losses in 2016 was primarily the result of increased loan growth.

For the six months ended June 30, noninterest income totaled $8.0 million in 2016, an increase from $7.9 million in 2015. Net gains on sale of investment securities were $623 thousand in 2016 compared to $832 thousand in 2015. Increases in revenues from merchant services, income from fiduciary activities, wealth management services and life insurance investment income more than offset a decrease in service charges, fees and commissions and income from mortgage banking activities. For the three months ended June 30, 2016, noninterest income totaled $4.1 million, including $381 thousand in recognized gains from sales of investment securities available-for-sale, compared to  $3.6 million for the same period in 2015. No gain or loss from the sale of investment securities available-for-sale was recognized during the three months ended June 30, 2015.  

Noninterest expense increased $1.1 million or 5.0% to $23.7 million for the six months ended June 30, 2016, from $22.6 million for the six months ended June 30, 2015. For the second quarter, noninterest expense amounted to $12.1 million in 2016 and $11.5 million in 2015.  The buildout of our expansion plan, wealth management platform as well as severance costs led to the increases in salaries and employee benefit expense.

 

 BALANCE SHEET REVIEW

Total assets, loans and deposits totaled $1.9 billion, $1.5 billion and $1.5 billion, respectively, at June 30, 2016. Loans, net grew $123.9 million or 18.6% on an annualized basis in the first half of 2016.  Loans, net increased $233.3 million or  18.9% from June 30, 2015 to June 30,  2016.  Deposits grew $41.1 million or 5.7% on an annualized basis in the first half of 2016.  Total deposits increased $72.1 million or 5.1%  at June 30, 2016 when compared to June 30, 2015. Noninterest-bearing deposits increased $2.8 million or 1.8%  on an annualized basis while interest-bearing deposits increased $38.3 million or 6.8%  on an annualized basis through the first six months of 2016. Total investments were $262.6 million at June 30, 2016, including $251.4 million securities classified as available-for-sale and $11.2 million classified as held-to-maturity.

 

Stockholders’ equity equaled $254.3 million or $34.40 per share at June 30, 2016, and $248.8 million or $33.57 per share at December 31, 2015.  Tangible stockholders’ equity improved to $25.18 per share at June 30, 2016,  from  $24.29 per share at December 31, 2015. Dividends declared for the six months ended June 30, 2016 amounted to $0.62 per share representing a dividend payout ratio of 47.0%.

ASSET QUALITY REVIEW

Nonperforming assets were $13.2 million or 0.90% of loans, net and foreclosed assets at June 30, 2016,  compared to  $12.5 million or 0.93% at December 31, 2015. The allowance for loan losses equaled $14.8 million or 1.01% of loans, net at June 30, 2016 compared to $13.0 million or 0.97% of loans, net, at December 31, 2015. Loans charged-off, net of recoveries, for the six months ended June 30, 2016, equaled $576 thousand or 0.08% of average loans, compared to $410 thousand or 0.07% of average loans for comparable period last year.  

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Bucks, Lackawanna, Lehigh, Luzerne, Monroe, Montgomery, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 24 offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. Peoples’ business philosophy includes offering direct access to senior management and other officers and providing friendly, informed and courteous service, local and timely decision making, flexible and reasonable operating procedures and consistently applied credit policies.

SOURCE: Peoples Financial Services Corp.

/Contact:   MEDIA/INVESTORS, Marie L. Luciani, Investor Relations Officer, 570.346.7741 or marie.luciani@psbt.com

Co:Peoples Financial Services Corp.

St:Pennsylvania

In:Fin

Safe Harbor Forward-Looking Statements:

We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Peoples Financial Services Corp., Peoples Security Bank and Trust Company, and its subsidiaries (collectively, “Peoples”) that are considered “forward-looking statements” as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as “believe,” “expect,” “anticipate,” “should,” “planned,” “estimated,” “intend” and “potential.” For these statements, Peoples claims the protection of the statutory safe harbors for forward-looking statements.

Peoples cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; our ability to identify and address cyber-security risks and other economic, competitive, governmental, regulatory and technological factors affecting Peoples’ operations, pricing, products and services and other factors that may be described in Peoples’ Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

In addition to these risks, acquisitions and business combinations, present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder-or take longer-to achieve than expected. As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues. Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Peoples following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

 

 

 The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Peoples assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

[TABULAR MATERIAL FOLLOWS]

 

Summary Data

Peoples Financial Services Corp.

Five Quarter Trend

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

 

 

2016

 

2016

 

2015

 

2015

 

2015

 

Key performance data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.66

 

$
0.66

 

$
0.52

 

$
0.58

 

$
0.59

 

Core net income (1)

 

$
0.62

 

$
0.64

 

$
0.50

 

$
0.57

 

$
0.59

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Book value

 

$
34.40

 

$
33.98

 

$
33.57

 

$
33.53

 

$
33.20

 

Tangible book value (1)

 

$
25.18

 

$
24.73

 

$
24.29

 

$
24.49

 

$
24.15

 

Market value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$
40.55

 

$
38.77

 

$
41.96

 

$
41.60

 

$
43.76

 

Low

 

$
35.56

 

$
33.22

 

$
34.43

 

$
34.56

 

$
36.89

 

Closing

 

$
39.14

 

$
37.20

 

$
38.08

 

$
34.93

 

$
39.61

 

Market capitalization

 

$
289,407

 

$
275,254

 

$
282,196

 

$
262,642

 

$
298,767

 

Common shares outstanding

 

 
7,394,143

 

 
7,399,298

 

 
7,410,606

 

 
7,519,109

 

 
7,542,725

 

Selected ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders’ equity

 

 
7.72

%  

 
7.85

%  

 
6.12

%  

 
7.00

%  

 
7.14

%  

Core return on average stockholders’ equity (1)

 

 
7.33

%  

 
7.62

%  

 
5.90

%  

 
6.85

%  

 
7.14

%  

Return on average tangible stockholders’ equity (1)

 

 
10.59

%  

 
10.87

%  

 
8.43

%  

 
9.62

%  

 
9.84

%  

Core return on average tangible stockholders’ equity (1)

 

 
10.05

%  

 
10.52

%  

 
8.14

%  

 
9.41

%  

 
9.84

%  

Return on average assets

 

 
1.03

%

 
1.06

%

 
0.85

%  

 
1.00

%  

 
1.03

%  

Core return on average assets (1)

 

 
0.98

%  

 
1.03

%  

 
0.82

%  

 
0.98

%  

 
1.03

%  

Stockholders’ equity to total assets

 

 
13.30

%  

 
13.50

%  

 
13.68

%  

 
14.22

%  

 
14.33

%  

Efficiency ratio (2)

 

 
59.33

%  

 
58.05

%  

 
64.16

%  

 
60.82

%  

 
60.39

%  

Nonperforming assets to loans, net, and foreclosed assets

 

 
0.90

%  

 
0.88

%  

 
0.93

%  

 
0.92

%  

 
0.86

%  

Net charge-offs to average loans, net

 

 
0.16

%  

 
0.01

%  

 
0.11

%  

 
0.09

%  

 
0.04

%  

Allowance for loan losses to loans, net

 

 
1.01

%  

 
1.00

%  

 
0.97

%  

 
0.95

%  

 
0.93

%  

Earning assets yield (FTE) (3)

 

 
4.23

%  

 
4.22

%  

 
4.17

%  

 
4.11

%  

 
4.22

%  

Cost of funds

 

 
0.55

%  

 
0.54

%  

 
0.51

%  

 
0.50

%  

 
0.50

%  

Net interest spread (FTE) (3)

 

 
3.68

%  

 
3.68

%  

 
3.66

%  

 
3.61

%  

 
3.72

%  

Net interest margin (FTE) (3)

 

 
3.81

%  

 
3.81

%  

 
3.79

%  

 
3.74

%  

 
3.84

%  

(1)

See Reconciliation of Non-GAAP financial measures.

(2)

Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gains(losses) on investment securities available-for-sale. 

(3)

Tax-equivalent adjustments were calculated using the prevailing federal statutory tax rate of 35%.

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

    

June 30

    

June 30

 

Six Months Ended

 

2016

 

2015

 

Interest income:

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

Taxable

 

$
29,106

 

$
26,731

 

Tax-exempt

 

 
1,531

 

 
1,129

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

Taxable

 

 
1,304

 

 
1,716

 

Tax-exempt

 

 
1,750

 

 
1,640

 

Dividends

 

 
21

 

 
15

 

Interest on interest-bearing deposits in other banks

 

 
32

 

 
26

 

Interest on federal funds sold

 

 

 

 

 
9

 

Total interest income

 

 
33,744

 

 
31,266

 

Interest expense:

 

 

 

 

 

 

 

Interest on deposits

 

 
2,605

 

 
2,460

 

Interest on short-term borrowings

 

 
166

 

 
12

 

Interest on long-term debt

 

 
714

 

 
511

 

Total interest expense

 

 
3,485

 

 
2,983

 

Net interest income

 

 
30,259

 

 
28,283

 

Provision for loan losses

 

 
2,400

 

 
1,500

 

Net interest income after provision for loan losses

 

 
27,859

 

 
26,783

 

Noninterest income:

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
2,971

 

 
3,154

 

Merchant services income

 

 
1,952

 

 
1,753

 

Commissions and fees on fiduciary activities

 

 
956

 

 
946

 

Wealth management income

 

 
708

 

 
403

 

Mortgage banking income

 

 
399

 

 
470

 

Life insurance investment income

 

 
395

 

 
377

 

Net gains on sale of investment securities available-for-sale

 

 
623

 

 
832

 

Total noninterest income

 

 
8,004

 

 
7,935

 

Noninterest expense:

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
11,236

 

 
10,846

 

Net occupancy and equipment expense

 

 
4,682

 

 
4,617

 

Merchant services expense

 

 
1,380

 

 
1,183

 

Amortization of intangible assets

 

 
602

 

 
600

 

Other expenses

 

 
5,831

 

 
5,359

 

Total noninterest expense

 

 
23,731

 

 
22,605

 

Income before income taxes

 

 
12,132

 

 
12,113

 

Provision for income tax expense

 

 
2,395

 

 
2,638

 

Net income

 

$
9,737

 

$
9,475

 

Other comprehensive income:

 

 

 

 

 

 

 

Unrealized gain (loss) on investment securities available-for-sale

 

$
2,123

 

$
(692)

 

Reclassification adjustment for gains included in net income

 

 
(623)

 

 
(832)

 

Income tax expense (benefit) related to other comprehensive income

 

 
525

 

 
(533)

 

Other comprehensive income (loss), net of income taxes

 

 
975

 

 
(991)

 

Comprehensive income

 

$
10,712

 

$
8,484

 

Per share data:

 

 

 

 

 

 

 

Net income

 

$
1.32

 

$
1.26

 

Cash dividends declared

 

$
0.62

 

$
0.62

 

Average common shares outstanding

 

 
7,399,318

 

 
7,547,272

 

 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

Three months ended

 

2016

 

2016

 

2015

 

2015

 

2015

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
14,760

 

$
14,346

 

$
13,932

 

$
13,341

 

$
13,391

 

Tax-exempt

 

 
780

 

 
751

 

 
637

 

 
585

 

 
570

 

Interest and dividends on investment securities available-for-sale:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
617

 

 
687

 

 
699

 

 
792

 

 
816

 

Tax-exempt

 

 
875

 

 
875

 

 
887

 

 
858

 

 
835

 

Dividends

 

 
11

 

 
10

 

 
11

 

 
9

 

 
6

 

Interest on interest-bearing deposits in other banks

 

 
15

 

 
17

 

 
10

 

 
13

 

 
15

 

Interest on federal funds sold

 

 

 

 

 

 

 

 
1

 

 

 

 

 
5

 

Total interest income

 

 
17,058

 

 
16,686

 

 
16,177

 

 
15,598

 

 
15,638

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 
1,322

 

 
1,283

 

 
1,264

 

 
1,229

 

 
1,192

 

Interest on short-term borrowings

 

 
89

 

 
77

 

 
30

 

 
11

 

 
4

 

Interest on long-term debt

 

 
354

 

 
360

 

 
275

 

 
245

 

 
252

 

Total interest expense

 

 
1,765

 

 
1,720

 

 
1,569

 

 
1,485

 

 
1,448

 

Net interest income

 

 
15,293

 

 
14,966

 

 
14,608

 

 
14,113

 

 
14,190

 

Provision for loan losses

 

 
1,200

 

 
1,200

 

 
1,300

 

 
900

 

 
750

 

Net interest income after provision for loan losses

 

 
14,093

 

 
13,766

 

 
13,308

 

 
13,213

 

 
13,440

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
1,527

 

 
1,444

 

 
1,560

 

 
1,531

 

 
1,542

 

Merchant services income

 

 
1,038

 

 
914

 

 
919

 

 
1,183

 

 
963

 

Commissions and fees on fiduciary activities

 

 
474

 

 
482

 

 
459

 

 
541

 

 
487

 

Wealth management income

 

 
296

 

 
412

 

 
218

 

 
224

 

 
198

 

Mortgage banking income

 

 
195

 

 
204

 

 
205

 

 
197

 

 
248

 

Life insurance investment income

 

 
202

 

 
193

 

 
198

 

 
192

 

 
188

 

Net gains on sale of investment securities available-for-sale

 

 
381

 

 
242

 

 
210

 

 
147

 

 

 

 

Total noninterest income

 

 
4,113

 

 
3,891

 

 
3,769

 

 
4,015

 

 
3,626

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
5,904

 

 
5,332

 

 
5,290

 

 
5,397

 

 
5,613

 

Net occupancy and equipment expense

 

 
2,245

 

 
2,437

 

 
2,241

 

 
2,246

 

 
2,149

 

Merchant services expense

 

 
748

 

 
632

 

 
637

 

 
823

 

 
650

 

Amortization of intangible assets

 

 
297

 

 
305

 

 
286

 

 
296

 

 
295

 

Other expenses

 

 
2,919

 

 
2,912

 

 
4,014

 

 
2,944

 

 
2,804

 

Total noninterest expense

 

 
12,113

 

 
11,618

 

 
12,468

 

 
11,706

 

 
11,511

 

Income before income taxes

 

 
6,093

 

 
6,039

 

 
4,609

 

 
5,522

 

 
5,555

 

Income tax expense

 

 
1,238

 

 
1,157

 

 
770

 

 
1,113

 

 
1,124

 

Net income

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unrealized gains (losses) on investment securities available-for-sale

 

$
1,128

 

$
995

 

$
(644)

 

$
826

 

$
(1,459)

 

Reclassification adjustment for gains included in net income

 

 
(381)

 

 
(242)

 

 
(210)

 

 
(147)

 

 

 

 

Change in pension liability

 

 

 

 

 

 

 

 
(296)

 

 

 

 

 

 

 

Income tax expense (benefit) related to other comprehensive income (loss)

 

 
262

 

 
264

 

 
(404)

 

 
237

 

 
(510)

 

Other comprehensive income (loss), net of income taxes

 

 
485

 

 
489

 

 
(746)

 

 
442

 

 
(949)

 

Comprehensive income

 

$
5,340

 

$
5,371

 

$
3,093

 

$
4,851

 

$
3,482

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.66

 

$
0.66

 

$
0.52

 

$
0.58

 

$
0.59

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Average common shares outstanding

 

 
7,395,127

 

 
7,403,510

 

 
7,435,440

 

 
7,536,824

 

 
7,546,198

 

 

 

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

Three months ended

 

2016

 

2016

 

2015

 

2015

 

2015

 

Net interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
14,760

 

$
14,346

 

$
13,932

 

$
13,341

 

$
13,391

 

Tax-exempt

 

 
1,200

 

 
1,155

 

 
979

 

 
901

 

 
877

 

Total loans, net

 

 
15,960

 

 
15,501

 

 
14,911

 

 
14,242

 

 
14,268

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
628

 

 
697

 

 
710

 

 
801

 

 
822

 

Tax-exempt

 

 
1,346

 

 
1,346

 

 
1,366

 

 
1,320

 

 
1,285

 

Total investments

 

 
1,974

 

 
2,043

 

 
2,076

 

 
2,121

 

 
2,107

 

Interest on interest-bearing balances in other banks

 

 
15

 

 
17

 

 
10

 

 
13

 

 
15

 

Federal funds sold

 

 

 

 

 

 

 

 
1

 

 

 

 

 
5

 

Total interest income

 

 
17,949

 

 
17,561

 

 
16,998

 

 
16,376

 

 
16,395

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
1,322

 

 
1,283

 

 
1,264

 

 
1,229

 

 
1,192

 

Short-term borrowings

 

 
89

 

 
77

 

 
30

 

 
11

 

 
4

 

Long-term debt

 

 
354

 

 
360

 

 
275

 

 
245

 

 
252

 

Total interest expense

 

 
1,765

 

 
1,720

 

 
1,569

 

 
1,485

 

 
1,448

 

Net interest income

 

$
16,184

 

$
15,841

 

$
15,429

 

$
14,891

 

$
14,947

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
4.47

%  

 
4.52

%  

 
4.51

%  

 
4.50

%  

 
4.62

%  

Tax-exempt

 

 
4.40

%  

 
4.45

%  

 
4.67

%  

 
4.82

%  

 
4.89

%  

Total loans, net

 

 
4.47

%  

 
4.52

%  

 
4.52

%  

 
4.52

%  

 
4.63

%  

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
1.79

%  

 
1.76

%  

 
1.60

%  

 
1.54

%  

 
1.60

%  

Tax-exempt

 

 
4.28

%  

 
4.24

%  

 
4.34

%  

 
4.46

%  

 
5.05

%  

Total investments

 

 
2.95

%  

 
2.86

%  

 
2.74

%  

 
2.60

%  

 
2.74

%  

Interest-bearing balances with banks

 

 
2.16

%  

 
1.46

%  

 
0.83

%  

 
0.85

%  

 
0.57

%  

Federal funds sold

 

 

 

 

 

 

 

 
0.54

%

 

 

 

 
0.35

%  

Total earning assets

 

 
4.23

%  

 
4.22

%  

 
4.17

%  

 
4.11

%  

 
4.22

%  

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
0.45

%  

 
0.45

%  

 
0.44

%  

 
0.43

%  

 
0.43

%  

Short-term borrowings

 

 
0.57

%  

 
0.58

%  

 
0.42

%  

 
0.39

%  

 
0.38

%  

Long-term debt

 

 
2.39

%  

 
2.41

%  

 
2.83

%  

 
3.10

%  

 
3.16

%  

Total interest-bearing liabilities

 

 
0.55

%  

 
0.54

%  

 
0.51

%  

 
0.50

%  

 
0.50

%  

Net interest spread

 

 
3.68

%  

 
3.68

%  

 
3.66

%  

 
3.61

%  

 
3.72

%  

Net interest margin

 

 
3.81

%  

 
3.81

%  

 
3.79

%  

 
3.74

%  

 
3.84

%  

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

At period end

 

2016

 

2016

 

2015

 

2015

 

2015

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$
29,805

 

$
23,699

 

$
28,218

 

$
36,015

 

$
28,847

 

Interest-bearing balances in other banks

 

 
272

 

 
299

 

 
4,699

 

 
4,970

 

 
6,710

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 
251,382

 

 
264,175

 

 
284,935

 

 
299,832

 

 
318,790

 

Held-to-maturity

 

 
11,262

 

 
11,681

 

 
12,109

 

 
13,107

 

 
13,626

 

Total investments

 

 
262,644

 

 
275,856

 

 
297,044

 

 
312,939

 

 
332,416

 

Loans held for sale

 

 

 

 

 
78

 

 

 

 

 
3,439

 

 
2,879

 

Loans, net

 

 
1,464,808

 

 
1,409,691

 

 
1,340,865

 

 
1,270,545

 

 
1,231,541

 

Less: allowance for loan losses

 

 
14,799

 

 
14,158

 

 
12,975

 

 
12,043

 

 
11,428

 

Net loans

 

 
1,450,009

 

 
1,395,533

 

 
1,327,890

 

 
1,258,502

 

 
1,220,113

 

Premises and equipment, net

 

 
29,510

 

 
29,386

 

 
28,157

 

 
27,002

 

 
26,552

 

Accrued interest receivable

 

 
5,952

 

 
5,455

 

 
5,796

 

 
5,327

 

 
5,507

 

Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Other intangible assets, net

 

 
4,795

 

 
5,091

 

 
5,397

 

 
4,606

 

 
4,901

 

Other assets

 

 
65,253

 

 
63,603

 

 
58,487

 

 
56,600

 

 
56,460

 

Total assets

 

$
1,911,610

 

$
1,862,370

 

$
1,819,058

 

$
1,772,770

 

$
1,747,755

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$
323,785

 

$
323,456

 

$
320,978

 

$
303,741

 

$
296,823

 

Interest-bearing

 

 
1,173,078

 

 
1,152,003

 

 
1,134,832

 

 
1,140,909

 

 
1,127,944

 

Total deposits

 

 
1,496,863

 

 
1,475,459

 

 
1,455,810

 

 
1,444,650

 

 
1,424,767

 

Short-term borrowings

 

 
86,300

 

 
60,350

 

 
38,325

 

 
30,250

 

 
25,860

 

Long-term debt

 

 
59,232

 

 
59,773

 

 
60,354

 

 
31,000

 

 
31,663

 

Accrued interest payable

 

 
453

 

 
506

 

 
560

 

 
496

 

 
443

 

Other liabilities

 

 
14,437

 

 
14,837

 

 
15,241

 

 
14,286

 

 
14,618

 

Total liabilities

 

 
1,657,285

 

 
1,610,925

 

 
1,570,290

 

 
1,520,682

 

 
1,497,351

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 
14,788

 

 
14,799

 

 
14,821

 

 
15,038

 

 
15,086

 

Capital surplus

 

 
134,835

 

 
134,994

 

 
135,371

 

 
139,263

 

 
140,045

 

Retained earnings

 

 
105,852

 

 
103,288

 

 
100,701

 

 
99,165

 

 
97,093

 

Accumulated other comprehensive loss

 

 
(1,150)

 

 
(1,636)

 

 
(2,125)

 

 
(1,378)

 

 
(1,820)

 

Total stockholders’ equity

 

 
254,325

 

 
251,445

 

 
248,768

 

 
252,088

 

 
250,404

 

Total liabilities and stockholders’ equity

 

$
1,911,610

 

$
1,862,370

 

$
1,819,058

 

$
1,772,770

 

$
1,747,755

 

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

Average quarterly balances

 

2016

 

2016

 

2015

 

2015

 

2015

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
1,327,003

 

$
1,276,491

 

$
1,226,295

 

$
1,176,533

 

$
1,163,445

 

Tax-exempt

 

 
109,770

 

 
104,326

 

 
83,176

 

 
74,203

 

 
71,978

 

Total loans, net

 

 
1,436,773

 

 
1,380,817

 

 
1,309,471

 

 
1,250,736

 

 
1,235,423

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
144,223

 

 
159,584

 

 
175,620

 

 
206,153

 

 
205,949

 

Tax-exempt

 

 
126,620

 

 
127,623

 

 
124,694

 

 
117,497

 

 
101,967

 

Total investments

 

 
270,843

 

 
287,207

 

 
300,314

 

 
323,650

 

 
307,916

 

Interest-bearing balances with banks

 

 
372

 

 
4,686

 

 
4,791

 

 
6,081

 

 
10,583

 

Federal funds sold

 

 

 

 

 

 

 

 
735

 

 
653

 

 
5,722

 

Total earning assets

 

 
1,707,988

 

 
1,672,710

 

 
1,615,311

 

 
1,581,120

 

 
1,559,644

 

Other assets

 

 
184,714

 

 
178,933

 

 
171,839

 

 
171,390

 

 
166,634

 

Total assets

 

$
1,892,702

 

$
1,851,643

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$
1,174,686

 

$
1,159,159

 

$
1,147,296

 

$
1,140,012

 

$
1,123,810

 

Noninterest-bearing

 

 
327,937

 

 
313,908

 

 
309,665

 

 
305,753

 

 
300,855

 

Total deposits

 

 
1,502,623

 

 
1,473,067

 

 
1,456,961

 

 
1,445,765

 

 
1,424,665

 

Short-term borrowings

 

 
62,659

 

 
53,436

 

 
28,016

 

 
11,130

 

 
4,232

 

Long-term debt

 

 
59,504

 

 
60,064

 

 
38,494

 

 
31,330

 

 
31,989

 

Other liabilities

 

 
15,131

 

 
15,755

 

 
14,722

 

 
14,368

 

 
16,438

 

Total liabilities

 

 
1,639,917

 

 
1,602,322

 

 
1,538,193

 

 
1,502,593

 

 
1,477,324

 

Stockholders’ equity

 

 
252,785

 

 
249,321

 

 
248,957

 

 
249,917

 

 
248,954

 

Total liabilities and stockholders’ equity

 

$
1,892,702

 

$
1,851,643

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

 

 

2016

 

2016

 

2015

 

2015

 

2015

 

At quarter end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual/restructured loans

 

$
9,778

 

$
10,020

 

$
10,744

 

$
9,646

 

$
9,143

 

Accruing loans past due 90 days or more

 

 
2,071

 

 
977

 

 
763

 

 
1,631

 

 
1,072

 

Foreclosed assets

 

 
1,353

 

 
1,409

 

 
957

 

 
458

 

 
334

 

Total nonperforming assets

 

$
13,202

 

$
12,406

 

$
12,464

 

$
11,735

 

$
10,549

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$
14,158

 

$
12,975

 

$
12,043

 

$
11,428

 

$
10,803

 

Charge-offs

 

 
632

 

 
123

 

 
573

 

 
315

 

 
174

 

Recoveries

 

 
73

 

 
106

 

 
205

 

 
30

 

 
49

 

Provision for loan losses

 

 
1,200

 

 
1,200

 

 
1,300

 

 
900

 

 
750

 

Ending balance

 

$
14,799

 

$
14,158

 

$
12,975

 

$
12,043

 

$
11,428

 

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

    

June 30

 

Three months ended

 

2016

 

2016

 

2015

 

2015

 

2015

 

Core net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Gains on sale of investment securities, net of tax

 

 
248

 

 
157

 

 
136

 

 
96

 

 

 

 

Net income Core

 

$
4,607

 

$
4,725

 

$
3,703

 

$
4,313

 

$
4,431

 

Average common shares outstanding

 

 
7,395,127

 

 
7,403,510

 

 
7,435,440

 

 
7,536,824

 

 
7,546,198

 

Core net income per share

 

$
0.62

 

$
0.64

 

$
0.50

 

$
0.57

 

$
0.59

 

Tangible book value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$
254,325

 

$
251,445

 

$
248,768

 

$
252,088

 

$
250,404

 

Less: Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Less: Other intangible assets, net

 

 
4,795

 

 
5,091

 

 
5,397

 

 
4,606

 

 
4,901

 

Total tangible stockholders’ equity

 

$
186,160

 

$
182,984

 

$
180,001

 

$
184,112

 

$
182,133

 

Common shares outstanding

 

 
7,394,143

 

 
7,399,298

 

 
7,410,606

 

 
7,519,109

 

 
7,542,725

 

Tangible book value per share

 

$
25.18

 

$
24.73

 

$
24.29

 

$
24.49

 

$
24.15

 

Core return on average stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Gains on sale of investment securities, net of tax

 

 
248

 

 
157

 

 
136

 

 
96

 

 

 

 

Net income Core

 

$
4,607

 

$
4,725

 

$
3,703

 

$
4,313

 

$
4,431

 

Average stockholders’ equity

 

$
252,785

 

$
249,321

 

$
248,957

 

$
249,917

 

$
248,954

 

Core return on average stockholders’ equity

 

 
7.33

%  

 
7.62

%  

 
5.90

%  

 
6.85

%  

 
7.14

%  

Return on average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Average stockholders’ equity

 

$
252,785

 

$
249,321

 

$
248,957

 

$
249,917

 

$
248,954

 

Less: average intangibles

 

 
68,313

 

 
68,614

 

 
68,372

 

 
68,124

 

 
68,419

 

Average tangible stockholders’ equity

 

$
184,472

 

$
180,707

 

$
180,585

 

$
181,793

 

$
180,535

 

Return on average tangible stockholders’ equity

 

 
10.59

%  

 
10.87

%  

 
8.43

%  

 
9.62

%  

 
9.84

%  

Core return on average tangible stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Gains on sale of investment securities, net of tax

 

 
248

 

 
157

 

 
136

 

 
96

 

 

 

 

Net income Core

 

$
4,607

 

$
4,725

 

$
3,703

 

$
4,313

 

$
4,431

 

Average stockholders’ equity

 

$
252,785

 

$
249,321

 

$
248,957

 

$
249,917

 

$
248,954

 

Less: average intangibles

 

 
68,313

 

 
68,614

 

 
68,372

 

 
68,124

 

 
68,419

 

Average tangible stockholders’ equity

 

$
184,472

 

$
180,707

 

$
180,585

 

$
181,793

 

$
180,535

 

Core return on average tangible stockholders’ equity

 

 
10.05

%  

 
10.52

%  

 
8.14

%  

 
9.41

%  

 
9.84

%  

Core return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,855

 

$
4,882

 

$
3,839

 

$
4,409

 

$
4,431

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Less: Gains on sale of investment securities, net of tax

 

 
248

 

 
157

 

 
136

 

 
96

 

 

 

 

Net income Core

 

$
4,607

 

$
4,725

 

$
3,703

 

$
4,313

 

$
4,431

 

Average assets

 

$
1,892,702

 

$
1,851,643

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

Core return on average assets

 

 
0.98

%  

 
1.03

%  

 
0.82

%  

 
0.98

%  

 
1.03

%  

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

    

June 30

    

June 30

 

Six Months Ended

 

2016

 

2015

 

Core net income per share:

 

 

 

 

 

 

 

Net income GAAP

 

$
9,737

 

$
9,475

 

Adjustments:

 

 

 

 

 

 

 

Less: Gains on sale of investment securities, net of tax

 

 
405

 

 
541

 

Net income Core

 

$
9,332

 

$
8,934

 

Average common shares outstanding

 

 
7,399,318

 

 
7,547,272

 

Core net income per share

 

$
1.26

 

$
1.18