EX-99.1

EX-99.1 2 d913736dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

NEWS RELEASE

TO BUSINESS EDITOR:

PEOPLES FINANCIAL SERVICES CORP. Reports First Quarter 2015 Earnings

Scranton, PA, April 21/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 months ended March 31, 2015. Peoples reported net income of $5.0 million, or $0.67 per basic and diluted weighted average share for the first quarter of 2015, compared to net income of $4.7 million, or $0.62 per share, for the comparable period of 2014. The results for the three months ended March 31, 2014, include pre-tax acquisition related expenses of $608 thousand. Gains on sale of investment securities were $832 thousand for the three months ended March 31, 2015, while there were no gains recognized for the comparable period in 2014.

Core net income for the three months ended March 31, 2015 was $4.5 million, a $590 thousand decrease from $5.1 million for the same period in 2014. Core net income per share for the three months ended March 31, 2015 was $0.60, compared to $0.67 for the same period in 2014.

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 2015 and 2014 contained items which Peoples considers non-core, namely net gains on sales of investment securities available-for-sale and one-time acquisition related expenses. 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.

FIRST QUARTER NOTABLES

•

Entrance into Luzerne County market through the acquisition of a commercial property located in Kingston, PA. The office is expected to be fully operational by the first quarter 2016.

•

Successful first full quarter of operations in newly established Lehigh Valley market through the origination of $36.5 million in loans and acquisition of $3.2 million in deposits at March 31, 2015.

•

Initiated process of reconstitution of the Wealth Management Division and Trust Department of Peoples Security Bank and Trust Company under the direction of a professional with 31 years of experience in reengineering fiduciary and investment advisory service functions.

•

Nonperforming assets to loans, net, and foreclosed assets was relatively constant at 0.91% at the end of the first quarter of 2015 compared to the end of the prior quarter and improved significantly from 1.30% at quarter end March 31, 2014.

•

Loans, net grew $27.3 million or 9.1% on an annualized basis in the first quarter of 2015 following growth of $30.0 million or 10.0% on an annualized basis in the fourth quarter of 2014.

•

Tangible book value per share improved $1.08 to $23.96 at the end of the first quarter of 2015 compared to $22.88 at March 31, 2014.

INCOME STATEMENT REVIEW

The tax-equivalent net interest margin for the quarter ended March 31, 2015 was 3.88% compared to 4.09% in 2014. Loan accretion included in loan interest income in the first quarter of 2015, related to loans acquired in the fourth quarter of 2013, was $225 thousand, resulting in an increase in the tax-equivalent net interest margin of 6 basis points. For the first quarter of 2014, loan accretion related to loans acquired was $1.1 million including accretion recognized on loan payoffs, resulting in an increase in the tax-equivalent net interest margin of 29 basis points.

Tax-equivalent net interest income for the quarter ended March 31, decreased $706 thousand to $14.8 million in 2015 from $15.5 million in 2014. The decrease in tax equivalent net interest income was primarily due to the decrease in loan accretion for the first quarter of 2015, compared to the same period of 2014. The tax-equivalent yield on the loan portfolio decreased to 4.70% for the first quarter of 2015 compared to 5.14%, for the comparable period in 2014. For the first quarter, loans, net averaged $1.2 billion in both 2015 and 2014. For the quarter ended March 31, the tax-equivalent yield on total investments decreased to 2.78% in 2015, from 2.81% in 2014. Average investments totaled $313.1 million in the first quarter of 2015 and $319.8 million in the first quarter of 2014. The cost of funds declined to 0.54% in the three months ended March 31, 2015 from 0.59%, for the same period of 2014. Average interest-bearing liabilities were constant at $1.2 billion for the quarters ended March 31, 2015 and 2014.

The provision for loan losses was $750 thousand for the quarter ended March 31, 2015, compared to $857 thousand for the same period last year. The reduction in the provision for loan losses in 2015 was due to the application of our allowance for loan losses methodology, which was primarily influenced by reporting a lower level of nonperforming assets as a percentage of loans and foreclosed assets compared to the prior year period.

For the quarter ended March 31, noninterest income totaled $4.3 million in 2015 and $3.6 million in 2014. Increases in wealth management services and mortgage banking activities offset decreases in service charges, fees and commissions, revenues from merchant services and income from fiduciary activities. Net gains on sale of investment securities were $832 thousand, for the three months ended March 31, 2015, compared to no gains for the comparable period in 2014.

Noninterest expense for the first quarter of 2015 decreased to $11.1 million from $11.3 million for the same period in 2014. The recognition of acquisition related expense of $608 thousand, in the first quarter of 2014, was the primary cause for this decrease as there was no comparable expense for the first quarter of 2015. The remaining categories of noninterest expense increased in total by $415 thousand. Increases in employee related costs and net occupancy expenses were partially offset by decreases in merchant services expense, amortization of intangible assets and other expenses.

BALANCE SHEET REVIEW

Total assets decreased $27.5 million or 6.4% on an annualized basis for the quarter ended March 31, 2015. Strong loan demand resulted in an increase in loans, net of $27.3 million or 9.1% on an annualized basis in the first quarter of 2015. The increase was attributable to organic growth fostered through our entrance into the Lehigh Valley market as well as renewed interest in business lending in existing markets. The loan growth was funded through the sale of certain investment securities available for sale. Total investments declined to $294.5 million at March 31, 2015 from $354.3 million at the end of 2014. Along with the increase in loans and the decrease to investment securities, deposits decreased $9.3 million for the first quarter of 2015 while short-term, overnight borrowings decreased $19.6 million. The majority of the decline in deposits was in noninterest bearing deposits, which decreased 10.9% on an annualized basis to $305.0 million at March 31, 2015 compared to $313.5 million at the end of 2014.

Stockholders’ equity equaled $249.5 million or $33.05 per share at March 31, 2015, and $246.8 million or $32.69 per share at December 31, 2014. Total tangible stockholders’ equity improved to $180.9 million or $23.96 per share at March 31, 2015, compared to $177.9 million or $23.57 per share at December 31, 2014. Stockholders’ equity grew $2.7 million in the first quarter of 2015 as net income was partially offset by dividends and an increase in accumulated other comprehensive loss. Dividends declared for the three months ended March 31, 2015 amounted to $0.31 per share. The dividend payout ratio was of 46.4% in the first quarter of 2015.

ASSET QUALITY REVIEW

Nonperforming assets were $11.3 million or 0.91% of loans, net and foreclosed assets at March 31, 2015, a slight degradation from $10.9 million or 0.90% at December 31, 2014, and an improvement from $15.3 million or 1.30% at March 31, 2014. The allowance for loan losses equaled $10.8 million or 0.87% of loans, net at March 31, 2015, compared to $10.3 million or 0.85% of loans, net, at December 31, 2014, and $8.9 million or 0.75% of loans, net, at March 31, 2014. Loans charged-off, net of recoveries, for the three months ended March 31, 2015, equaled $285 thousand or 0.09% of average loans, compared to $649 thousand or 0.22% of average loans for the comparable period last year.

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Lackawanna, Lehigh, Luzerne, Monroe, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 26 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 m.luciani@pennsecurity.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; 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)


	Mar 31 2015			Dec 31 2014			Sept 30 2014			June 30 2014			Mar 31 2014

Key performance data:
Per share data:
Net income	$	0.67		$	0.58		$	0.70		$	0.44		$	0.62
Core net income (1)	$	0.60		$	0.58		$	0.65		$	0.51		$	0.67
Cash dividends declared	$	0.31		$	0.31		$	0.31		$	0.31		$	0.31
Book value	$	33.05		$	32.69		$	32.60		$	32.35		$	32.13
Tangible book value (1)	$	23.96		$	23.57		$	23.43		$	23.14		$	22.88
Market value:
High	$	49.26		$	52.52		$	52.52		$	53.05		$	42.26
Low	$	39.35		$	44.17		$	45.99		$	42.50		$	37.85
Closing	$	44.87		$	49.68		$	45.99		$	51.39		$	41.62
Market capitalization	$	338,695		$	375,002		$	347,149		$	387,910		$	314,163
Common shares outstanding		7,548,358			7,548,358			7,548,358			7,548,358			7,548,358

Selected ratios:

Return on average stockholders’ equity		8.28	%		7.06	%		8.49	%		5.60	%		8.01	%

Core return on average stockholders’ equity (1)		7.40	%		7.06	%		7.87	%		6.52	%		8.68	%

Return on average tangible stockholders’ equity (1)		11.93	%		10.28	%		12.34	%		8.42	%		11.89	%

Core return on average tangible stockholders’ equity (1)		10.25	%		9.81	%		10.98	%		9.21	%		12.30	%

Return on average assets		1.20	%		1.01	%		1.20	%		0.78	%		1.12	%

Core return on average assets (1)		1.07	%		1.01	%		1.11	%		0.91	%		1.22	%

Stockholders’ equity to total assets		14.55	%		14.17	%		14.27	%		14.10	%		14.12	%

Efficiency ratio (2)		58.63	%		61.81	%		56.79	%		67.91	%		59.79	%

Nonperforming assets to loans, net, and foreclosed assets		0.91	%		0.90	%		1.11	%		1.35	%		1.30	%

Net charge-offs to average loans, net		0.09	%		0.21	%		0.04	%		0.15	%		0.22	%

Allowance for loan losses to loans, net		0.87	%		0.85	%		0.86	%		0.82	%		0.75	%

Earning assets yield (FTE) (3)		4.28	%		4.19	%		4.25	%		4.17	%		4.53	%

Cost of funds		0.54	%		0.54	%		0.56	%		0.59	%		0.59	%

Net interest spread (FTE) (3)		3.74	%		3.65	%		3.69	%		3.58	%		3.94	%

Net interest margin (FTE) (3)		3.88	%		3.79	%		3.84	%		3.73	%		4.09	%

(1)	See Reconciliation of Non-GAAP financial measures.

(2)	Total noninterest expense less amortization of intangible assets divided by net interest income and noninterest income.

(3)	Tax-equivalent adjustments were calculated using the prevailing federal statutory tax rate.

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)


Three Months Ended	Mar 31			Mar 31
	2015			2014
Interest income:
Interest and fees on loans:
Taxable	$	13,340		$	14,000
Tax-exempt		559			635
Interest and dividends on investment securities:
Taxable		900			928
Tax-exempt		805			829
Dividends		9			16
Interest on interest-bearing deposits in other banks		8			10
Interest on federal funds sold		7			14
Total interest income		15,628			16,432

Interest expense:
Interest on deposits		1,268			1,357
Interest on short-term borrowings		8			34
Interest on long-term debt		259			296
Total interest expense		1,535			1,687
Net interest income		14,093			14,745
Provision for loan losses		750			857
Net interest income after provision for loan losses		13,343			13,888

Noninterest income:
Service charges, fees, commissions		1,612			1,624
Merchant services income		790			894
Commissions and fees on fiduciary activities		459			567
Wealth management income		205			187
Mortgage banking income		222			99
Life insurance investment income		189			189
Net gains on sale of investment securities available-for-sale		832
Total noninterest income		4,309			3,560

Noninterest expense:
Salaries and employee benefits expense		5,233			5,168
Net occupancy and equipment expense		2,468			1,733
Merchant services expense		533			565
Amortization of intangible assets		305			343
Acquisition related expenses					608
Other expenses		2,555			2,870
Total noninterest expense		11,094			11,287
Income before income taxes		6,558			6,161
Provision for income tax expense		1,514			1,463
Net income	$	5,044		$	4,698

Other comprehensive income (loss):
Unrealized gains (losses) on investment securities available-for-sale	$	767		$	2,394
Reclassification adjustment for gains included in net income		(832	)
Income tax expense (benefit) related to other comprehensive income		(23	)		838
Other comprehensive income (loss), net of income taxes		(42	)		1,556
Comprehensive income	$	5,002		$	6,254

Per share data:
Net income	$	0.67		$	0.62
Cash dividends declared	$	0.31		$	0.31
Average common shares outstanding		7,548,358			7,550,253

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)



Three months ended	Mar 31 2015			Dec 31 2014			Sept 30 2014			June 30 2014			March 31 2014
Interest income:
Interest and fees on loans:
Taxable	$	13,340		$	13,281		$	13,876		$	13,159		$	14,000
Tax-exempt		559			658			465			507			635
Interest and dividends on investment securities available-for-sale:
Taxable		900			1,069			1,007			942			928
Tax-exempt		805			809			816			817			829
Dividends		9			18			2			14			16
Interest on interest-bearing deposits in other banks		8			9			10			9			10
Interest on federal funds sold		7			6			16			34			14
Total interest income		15,628			15,850			16,192			15,482			16,432

Interest expense:
Interest on deposits		1,268			1,306			1,354			1,414			1,357
Interest on short-term borrowings		8			4			9			24			34
Interest on long-term debt		259			276			279			289			296
Total interest expense		1,535			1,586			1,642			1,727			1,687
Net interest income		14,093			14,264			14,550			13,755			14,745
Provision for loan losses		750			800			666			1,201			857
Net interest income after provision for loan losses		13,343			13,464			13,884			12,554			13,888

Noninterest income:
Service charges, fees, commissions		1,612			1,669			1,634			1,557			1,624
Merchant services income		790			765			1,002			888			894
Commissions and fees on fiduciary activities		459			489			575			548			567
Wealth management income		205			183			217			165			187
Mortgage banking income		222			214			142			193			99
Life insurance investment income		189			213			109			267			189
Net gains on sale of investment securities available-for-sale		832						701			160
Total noninterest income		4,309			3,533			4,380			3,778			3,560

Noninterest expense:
Salaries and employee benefits expense		5,233			5,769			4,754			4,961			5,168
Net occupancy and equipment expense		2,468			2,022			2,020			2,327			1,733
Merchant services expense		533			514			662			495			565
Amortization of intangible assets		305			324			334			333			343
Acquisition related expenses								109			1,008			608
Other expenses		2,555			2,694			3,205			3,115			2,870
Total noninterest expense		11,094			11,323			11,084			12,239			11,287
Income before income taxes		6,558			5,674			7,180			4,093			6,161
Income tax expense		1,514			1,290			1,944			762			1,463
Net income		5,044		$	4,384		$	5,236		$	3,331		$	4,698

Other comprehensive income (loss):
Unrealized gains (losses) on investment securities available-for-sale		767		$	1,532		$	(825	)	$	1,242		$	2,394
Reclassification adjustment for gains included in net income		(832	)					(701	)		(160	)
Change in pension liability					(3,684	)
Income tax expense (benefit) related to other comprehensive income (loss)		(23	)		(753	)		(534	)		378			838
Other comprehensive income (loss), net of income taxes		(42	)		(1,399	)		(992	)		704			1,556
Comprehensive income (loss)	$	5,002		$	2,985		$	4,244		$	4,035		$	6,254

Per share data:
Net income	$	0.67		$	0.58		$	0.70		$	0.44		$	0.62
Cash dividends declared	$	0.31		$	0.31		$	0.31		$	0.31		$	0.31
Average common shares outstanding		7,548,358			7,548,358			7,548,358			7,548,358			7,550,253

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)


Three months ended	Mar 31 2015			Dec 31 2014			Sept 30 2014			June 30 2014			March 31 2014

Net interest income:
Interest income
Loans, net:
Taxable	$	13,340		$	13,281		$	13,876		$	13,159		$	14,000
Tax-exempt		860			1,013			715			779			978
Total loans, net		14,200			14,294			14,591			13,938			14,978
Investments:
Taxable		909			1,087			1,009			956			944
Tax-exempt		1,238			1,244			1,256			1,258			1,274
Total investments		2,147			2,331			2,265			2,214			2,218
Interest on interest-bearing balances in other banks		8			9			10			9			10
Federal funds sold		7			6			16			34			14
Total interest income		16,362			16,640			16,882			16,195			17,220
Interest expense:
Deposits		1,268			1,306			1,354			1,414			1,357
Short-term borrowings		8			4			9			24			34
Long-term debt		259			276			279			289			296
Total interest expense		1,535			1,586			1,642			1,727			1,687
Net interest income	$	14,827		$	15,054		$	15,240		$	14,468		$	15,533

Loans, net:
Taxable		4.68	%		4.67	%		4.88	%		4.69	%		5.18	%
Tax-exempt		4.96	%		5.85	%		5.05	%		4.94	%		4.69	%
Total loans, net		4.70	%		4.74	%		4.89	%		4.71	%		5.14	%
Investments:
Taxable		1.68	%		1.63	%		1.57	%		1.72	%		1.77	%
Tax-exempt		5.36	%		5.20	%		5.10	%		5.15	%		4.99	%
Total investments		2.78	%		2.57	%		2.55	%		2.77	%		2.81	%
Interest-bearing balances with banks		1.19	%		0.34	%		0.68	%		0.83	%		0.55	%
Federal funds sold		0.33	%		0.31	%		0.19	%		0.31	%		0.18	%
Total earning assets		4.28	%		4.19	%		4.25	%		4.17	%		4.53	%
Interest expense:
Deposits		0.46	%		0.46	%		0.48	%		0.51	%		0.50	%
Short-term borrowings		0.31	%		0.14	%		0.42	%		0.51	%		0.65	%
Long-term debt		3.21	%		3.26	%		3.21	%		3.27	%		3.30	%
Total interest-bearing liabilities		0.54	%		0.54	%		0.56	%		0.59	%		0.59	%
Net interest spread		3.74	%		3.65	%		3.69	%		3.58	%		3.94	%
Net interest margin		3.88	%		3.79	%		3.84	%		3.73	%		4.09	%

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands, except per share data)


	Mar 31			Dec 31			Sept 30		June 30		March 31
At period end	2015			2014			2014		2014		2014

Assets:
Cash and due from banks	$	24,193		$	24,656		$	21,179	$	51,416	$	26,204
Interest-bearing balances in other banks		6,813			6,770			6,932		10,592		7,168
Federal funds sold		8,625						6,100		15,400		45,840
Investment securities:
Available-for-sale		280,300			339,586			350,825		312,323		302,226
Held-to-maturity		14,172			14,665			15,264		15,915		16,607
Total investments		294,472			354,251			366,089		328,238		318,833
Loans held for sale		3,101			3,486			2,961		2,757		1,816
Loans, net		1,237,168			1,209,894			1,179,942		1,179,847		1,177,122
Less: allowance for loan losses		10,803			10,338			10,171		9,622		8,859
Net loans		1,226,365			1,199,556			1,169,771		1,170,225		1,168,263
Premises and equipment, net		26,117			25,433			25,692		25,670		25,579
Accrued interest receivable		4,922			5,580			5,381		5,576		5,366
Goodwill		63,370			63,370			63,370		63,370		63,370
Other intangible assets, net		5,197			5,501			5,826		6,159		6,492
Other assets		50,966			53,066			51,477		51,703		49,330
Total assets	$	1,714,141		$	1,741,669		$	1,724,778	$	1,731,106	$	1,718,261

Liabilities:
Deposits:
Noninterest-bearing	$	305,037		$	313,498		$	302,279	$	295,922	$	282,060
Interest-bearing		1,111,241			1,112,060			1,123,349		1,126,880		1,122,006
Total deposits		1,416,278			1,425,558			1,425,628		1,422,802		1,404,066
Short-term borrowings					19,557			6,514		14,088		22,539
Long-term debt		32,318			33,140			34,020		34,925		35,838
Accrued interest payable		460			574			597		580		610
Other liabilities		15,627			16,061			11,950		14,546		12,643
Total liabilities		1,464,683			1,494,890			1,478,709		1,486,941		1,475,696

Stockholders’ equity:
Common stock		15,097			15,097			15,097		15,097		15,607
Capital surplus		140,232			140,214			140,150		140,150		146,035
Retained earnings		95,000			92,297			90,252		87,356		86,365
Accumulated other comprehensive income (loss)		(871	)		(829	)		570		1,562		858
Less: Treasury stock, at cost												6,300
Total stockholders’ equity		249,458			246,779			246,069		244,165		242,565
Total liabilities and stockholders’ equity	$	1,714,141		$	1,741,669		$	1,724,778	$	1,731,106	$	1,718,261

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands except per share data)


	Mar 31		Dec 31		Sept 30		June 30		March 31
Average quarterly balances	2015		2014		2014		2014		2014

Assets:
Loans, net:
Taxable	$	1,155,435	$	1,127,719	$	1,127,888	$	1,124,273	$	1,096,793
Tax-exempt		70,334		68,731		56,214		63,295		84,688
Total loans, net		1,225,769		1,196,450		1,184,102		1,187,568		1,181,481
Investments:
Taxable		219,360		265,132		254,556		223,220		216,173
Tax-exempt		93,715		94,870		97,822		97,879		103,625
Total investments		313,075		360,002		352,378		321,099		319,798
Interest-bearing balances with banks		2,718		10,620		5,875		4,342		7,327
Federal funds sold		8,674		7,663		34,227		44,553		32,444
Total earning assets		1,550,236		1,574,735		1,576,582		1,557,562		1,541,050
Other assets		161,103		149,001		152,821		150,877		154,020
Total assets	$	1,711,339	$	1,723,736	$	1,729,403	$	1,708,439	$	1,695,070

Liabilities and stockholders’ equity:
Deposits:
Interest-bearing	$	1,109,914	$	1,124,702	$	1,126,915	$	1,118,108	$	1,109,085
Noninterest-bearing		298,166		300,287		303,441		288,015		274,584
Total deposits		1,408,080		1,424,989		1,430,356		1,406,123		1,383,669
Short-term borrowings		10,373		11,046		8,511		18,759		21,351
Long-term debt		32,726		33,612		34,510		35,419		36,330
Other liabilities		13,240		7,693		11,330		9,381		15,767
Total liabilities		1,464,419		1,477,340		1,484,707		1,469,682		1,457,117
Stockholders’ equity		246,920		246,396		244,696		238,757		237,953
Total liabilities and stockholders’ equity	$	1,711,339	$	1,723,736	$	1,729,403	$	1,708,439	$	1,695,070

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)


	Mar 31		Dec 31		Sept 30		June 30		March 31
At quarter end	2015		2014		2014		2014		2014

Nonperforming assets:
Nonaccrual/restructured loans	$	9,736	$	8,699	$	11,324	$	13,616	$	12,922
Accruing loans past due 90 days or more		1,237		1,623		955		1,693		1,663
Foreclosed assets		324		561		840		626		678
Total nonperforming assets	$	11,297	$	10,883	$	13,119	$	15,935	$	15,263

Three months ended

Allowance for loan losses:
Beginning balance	$	10,338	$	10,171	$	9,622	$	8,859	$	8,651
Charge-offs		365		641		177		790		683
Recoveries		80		8		60		352		34
Provision for loan losses		750		800		666		1,201		857
Ending balance	$	10,803	$	10,338	$	10,171	$	9,622	$	8,859

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)


	Mar 31			Dec 31			Sept 30			June 30			Mar 31
	2015			2014			2014			2014			2014
Three months ended

Core net income (loss) per share:
Net income (loss) GAAP	$	5,044		$	4,384		$	5,236		$	3,331		$	4,698
Adjustments:
Less: Gains on sale of investment securities, net of tax		541						456			104
Add: Acquisition related expenses, net of tax								71			655			395
Net income (loss) Core	$	4,503		$	4,384		$	4,851		$	3,882		$	5,093

Average common shares outstanding		7,548,358			7,548,358			7,548,358			7,548,358			7,550,253

Core net income (loss) per share	$	0.60		$	0.58		$	0.65		$	0.51		$	0.67

Tangible book value:
Total stockholders’ equity	$	249,458		$	246,779		$	246,069		$	244,165		$	242,565
Less: Goodwill		63,370			63,370			63,370			63,370			63,370
Less: Other intangible assets, net		5,197			5,501			5,826			6,159			6,492
Total tangible stockholders’ equity	$	180,891		$	177,908		$	176,873		$	174,636		$	172,703

Common shares outstanding		7,548,358			7,548,358			7,548,358			7,548,358			7,548,358

Tangible book value per share	$	23.96		$	23.57		$	23.43		$	23.14		$	22.88

Core return on average stockholders’ equity:
Net income (loss) GAAP	$	5,044		$	4,384		$	5,236		$	3,331		$	4,698
Adjustments:
Less: Gains on sale of investment securities, net of tax		541						456			104
Add: Acquisition related expenses, net of tax								71			655			395
Net income (loss) Core	$	4,503		$	4,384		$	4,851		$	3,882		$	5,093

Average stockholders’ equity	$	246,920		$	246,396		$	244,696		$	238,757		$	237,953

Core return on average stockholders’ equity		7.40	%		7.06	%		7.87	%		6.52	%		8.68	%

Return on average tangible equity:
Net income (loss) GAAP	$	5,044		$	4,384		$	5,236		$	3,331		$	4,698
Amortization of intangibles, net of tax		198			210			217			216			223
Adjusted net income (loss)	$	5,242		$	4,594		$	5,453		$	3,547		$	4,921

Average stockholders’ equity	$	246,920		$	246,396		$	244,696		$	238,757		$	237,953
Less: average intangibles		68,719			69,034			69,363			69,696			70,034
Average tangible stockholders’ equity	$	178,201		$	177,362		$	175,333		$	169,061		$	167,919

Return on average tangible stockholders’ equity		11.93	%		10.28	%		12.34	%		8.42	%		11.89	%

Core return on average tangible stockholders’ equity:
Net income (loss) GAAP	$	5,044		$	4,384		$	5,236		$	3,331		$	4,698
Adjustments:
Less: Gains on sale of investment securities, net of tax		541						456			104
Add: Acquisition related expenses, net of tax								71			655			395
Net income (loss) Core	$	4,503		$	4,384		$	4,851		$	3,882		$	5,093

Average stockholders’ equity	$	246,920		$	246,396		$	244,696		$	238,757		$	237,953
Less: average intangibles		68,719			69,034			69,363			69,696			70,034
Average tangible stockholders’ equity	$	178,201		$	177,362		$	175,333		$	169,061		$	167,919

Core return on average tangible stockholders’ equity		10.25	%		9.81	%		10.98	%		9.21	%		12.30	%

Core return on average assets:
Net income (loss) GAAP	$	5,044		$	4,384		$	5,236		$	3,331		$	4,698
Adjustments:
Less: Gains on sale of investment securities, net of tax		541						456			104
Add: Acquisition related expenses, net of tax								71			655			395
Net income (loss) Core	$	4,503		$	4,384		$	4,851		$	3,882		$	5,093

Average assets	$	1,711,339		$	1,723,736		$	1,729,403		$	1,708,439		$	1,695,070

Core return on average assets		1.07	%		1.01	%		1.11	%		0.91	%		1.22	%

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)


	Mar 31		Mar 31
	2015		2014
Three months ended

Core net income (loss) per share:
Net income (loss) GAAP	$	5,044	$	4,698
Adjustments:
Less: Gains on sale of investment securities, net of tax		541
Add: Acquisition related expenses, net of tax				395
Net income (loss) Core	$	4,503	$	5,093

Average common shares outstanding		7,548,358		7,550,253

Core net income (loss) per share	$	0.60	$	0.67