EX-99.1 2 pfis-20151022ex991cc8773.htm EX-99.1 pfis_Ex99_1

Exhibit 99.1

NEWS RELEASE

TO BUSINESS EDITOR:

PEOPLES FINANCIAL SERVICES CORP. Reports Third Quarter 2015 Earnings

Scranton, PA, October 22/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 nine months ended September 30, 2015. Peoples reported net income of $4.4 million, or $0.58 per basic and diluted weighted average share for the third quarter of 2015, compared to $5.2 million, or $0.70 per share, for the comparable period of 2014.

Core net income, excluding net gains on sale of investment securities available-for-sale and merger related expenses, for the three months ended September 30, 2015 was $4.3 million, a decrease from $4.4 million for the second quarter of 2015 and $4.9 million for the same period in 2014. Core net income per share for the three months ended September 30, 2015 was $0.57, compared to $0.59 for the second quarter of 2015 and $0.65 for the same period in 2014.

Net income for the nine months ended September 30, 2015, totaled $13.9 million or $1.84 per share compared to $13.3 million or $1.76 per share for the same period last year. Core net income for the nine months ended September 30, 2015 was $13.2 million, compared to  $13.8 million for the same period in 2014. Core net income per share for the nine months ended September 30, 2015 was $1.76, a decrease from $1.83 for the same period in 2014. The results for the nine months ended September 30, 2015 include net gains on sale of investment securities of $979.0 thousand compared to $861.0 thousand in the first nine months of 2014. Pre-tax acquisition related expenses recognized in the first nine months of 2014 approximated $1.7 million.

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 three and nine months ended September 30, 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.

THIRD QUARTER NOTABLES

·

Loans, net grew $39.0 million or 12.6% annualized in the third quarter of 2015.  

·

Deposits grew $19.9 million or 5.5% annualized in the third quarter of 2015.

·

Tangible book value per share improved $0.35 to $24.49 at the end of the third quarter of 2015 compared to $24.14 at June 30, 2015. 

·

Through nine months of 2015, return on average assets and core return on average assets were 1.07% and 1.02%, respectively compared to 1.04% and 1.08%, respectively for the same period in 2014.

·

Nonperforming assets as a percentage of loans, net and foreclosed assets declined to 0.92% at the end of the third quarter of 2015 from 1.11% at September 30, 2014.

 

 INCOME STATEMENT REVIEW

The tax-equivalent net interest margins for the three and nine months ended September 30, were 3.74% and 3.82% in 2015, compared to 3.84% and 3.88% in 2014, respectively. Loan accretion included in loan interest income for the three and nine months ended September 30, 2015 related to loans acquired in the fourth quarter of 2013 was $128.1 thousand and  $474.9 thousand, resulting in an increase in the tax-equivalent net interest margin of 4 basis points for each respective period. Comparatively, loan accretion included in loan interest income for the three and nine months ended September 30, 2014 was $469.9 thousand and $1.9 million, resulting in an increase in the tax-equivalent net interest margin of 12 and 16 basis points, respectively.  

Tax-equivalent net interest income for the nine months ended September 30, decreased $577.0 thousand to $44.7 million in 2015 from $45.2 million in 2014. The decrease in tax equivalent net interest income was primarily due to a $1.4 million decrease in loan accretion recognized in the first nine months of 2015 when compared to the same period in 2014. The tax-equivalent yield on the loan portfolio decreased to 4.61% for the nine months ended September 30, 2015 compared to 4.91% for the comparable period in 2014. Loans, net averaged $1.2 billion in 2015 and 2014. For the nine months ended September 30, the tax-equivalent yield on investments was constant at 2.70% in 2015 and 2014. Average investments totaled $314.9 million in 2015 and $331.2 million in 2014. Average interest-bearing liabilities increased slightly for the nine months ended September 30, 2015, compared to the corresponding period last year. The cost of funds declined to 0.51% in the nine months ended September 30, 2015 from 0.58% for the same period of 2014. Tax-equivalent net interest income for the three months ended September 30, decreased to $14.9 million in 2015 from $15.2 million in 2014.

The provision for loan losses totaled $2.4 million for the nine months ended September 30, 2015, compared to $2.7 million for the same period last year. The decrease 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. For the quarter ended September 30, the provision for loan losses was $900.0 thousand in 2015 and $666.0 thousand in 2014.

For the nine months ended September 30, noninterest income totaled $12.0 million in 2015, an increase from $11.7 million in 2014. Net gains on sale of investment securities were $979.0 thousand in 2015 compared to $861.0 thousand in 2014. Increases in revenues from merchant services income, wealth management services, mortgage banking activities and life insurance investment income more than offset a decrease in service charges, fees and commissions and income from fiduciary activities. For the three months ended September 30, noninterest income totaled $4.0 million in 2015 and $4.4 million in 2014.

Noninterest expense decreased $0.3 million or 0.9% to $34.3 million for the nine months ended September 30, 2015, from $34.6 million for the nine months ended September 30, 2014. The recognition of acquisition related expense of $1.7 million in 2014, offset by a $1.4 million increase in salaries and employee benefits expense was the primary cause for the decrease in 2015. For the third quarter, noninterest expense amounted to $11.7 million in 2015 and $11.1 million in 2014.

 

 BALANCE SHEET REVIEW

Total assets, loans and deposits totaled $1.8 billion, $1.3 billion and $1.4 billion, respectively, at September 30, 2015. Loans, net grew $39.0 million or 12.6% on an annualized basis in the third quarter of 2015. Year to date, loans, net increased $60.7 million comparing the end of the third quarter 2015 to year-end 2014. Total deposits increased $19.9 million or 5.5% on an annualized basis in the third quarter of 2015. Noninterest-bearing deposits increased $6.9 million or 9.2% on an annualized basis while interest-bearing deposits increased $13.0 million or 4.6% on an annualized basis in 2015. Total investments were $312.9 million at September 30, 2015, including $299.8 million securities classified as available-for-sale and $13.1 million classified as held-to-maturity.

Stockholders’ equity equaled $252.1 million or $33.53 per share at September 30, 2015, and $246.8 million or $32.69 per share at December 31, 2014. Tangible stockholders’ equity improved to $184.1 million or $24.49 per share at September 30, 2015, compared to $177.9 million or $23.57 per share at year-end 2014. Dividends declared for the nine months ended September 30, 2015 amounted to $0.93 per share representing a dividend payout ratio of 50.5%.

 

ASSET QUALITY REVIEW

Nonperforming assets were $11.7 million or 0.92% of loans, net and foreclosed assets at September 30, 2015, compared to $10.5 million or 0.86% at June 30, 2015, and $10.9 million or 0.90% at December 31, 2014. The allowance for loan losses equaled $12.0 million or 0.95% of loans, net at September 30, 2015 compared to $10.3 million or 0.85% of loans, net, at December 31, 2014. Loans charged-off, net of recoveries, for the nine months ended September 30, 2015, equaled $695.0 thousand or 0.08% of average loans, compared to $1.2 million or 0.14% of average loans for the nine months ended September 30, 2014.

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 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; 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

 

 

2015

 

2015

 

2015

 

2014

 

2014

 

Key performance data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.58

 

$
0.59

 

$
0.67

 

$
0.58

 

$
0.70

 

Core net income (1)

 

$
0.57

 

$
0.59

 

$
0.60

 

$
0.58

 

$
0.65

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Book value

 

$
33.53

 

$
33.20

 

$
33.05

 

$
32.69

 

$
32.60

 

Tangible book value (1)

 

$
24.49

 

$
24.14

 

$
23.96

 

$
23.57

 

$
23.43

 

Market value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$
41.60

 

$
43.76

 

$
49.26

 

$
52.52

 

$
52.52

 

Low

 

$
34.56

 

$
36.89

 

$
39.35

 

$
44.17

 

$
45.99

 

Closing

 

$
34.93

 

$
39.61

 

$
44.87

 

$
49.68

 

$
45.99

 

Market capitalization

 

$
262,642

 

$
298,767

 

$
338,695

 

$
375,002

 

$
347,149

 

Common shares outstanding

 

 
7,519,109

 

 
7,542,725

 

 
7,548,358

 

 
7,548,358

 

 
7,548,358

 

Selected ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders’ equity

 

 
7.00

%  

 
7.14

%  

 
8.28

%  

 
7.06

%  

 
8.49

%  

Core return on average stockholders’ equity (1)

 

 
6.85

%  

 
7.14

%  

 
7.40

%  

 
7.06

%  

 
7.87

%  

Return on average tangible stockholders’ equity (1)

 

 
9.62

%  

 
9.84

%  

 
11.48

%  

 
9.81

%  

 
11.85

%  

Core return on average tangible stockholders’ equity (1)

 

 
9.41

%  

 
9.84

%  

 
10.25

%  

 
9.81

%  

 
10.98

%  

Return on average assets

 

 
1.00

%

 
1.03

%

 
1.20

%  

 
1.01

%  

 
1.20

%  

Core return on average assets (1)

 

 
0.98

%  

 
1.03

%  

 
1.07

%  

 
1.01

%  

 
1.11

%  

Stockholders’ equity to total assets

 

 
14.22

%  

 
14.33

%  

 
14.55

%  

 
14.17

%  

 
14.27

%  

Efficiency ratio (2)

 

 
60.82

%  

 
60.39

%  

 
58.94

%  

 
59.18

%  

 
56.82

%  

Nonperforming assets to loans, net, and foreclosed assets

 

 
0.92

%  

 
0.86

%  

 
0.91

%  

 
0.90

%  

 
1.11

%  

Net charge-offs to average loans, net

 

 
0.09

%  

 
0.04

%  

 
0.09

%  

 
0.21

%  

 
0.04

%  

Allowance for loan losses to loans, net

 

 
0.95

%  

 
0.93

%  

 
0.87

%  

 
0.85

%  

 
0.86

%  

Earning assets yield (FTE) (3)

 

 
4.11

%  

 
4.22

%  

 
4.28

%  

 
4.19

%  

 
4.25

%  

Cost of funds

 

 
0.50

%  

 
0.50

%  

 
0.54

%  

 
0.54

%  

 
0.56

%  

Net interest spread (FTE) (3)

 

 
3.61

%  

 
3.72

%  

 
3.74

%  

 
3.65

%  

 
3.69

%  

Net interest margin (FTE) (3)

 

 
3.74

%  

 
3.84

%  

 
3.88

%  

 
3.79

%  

 
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)

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

Sept 30

 

Nine Months Ended

 

2015

 

2014

 

Interest income:

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

Taxable

 

$
40,072

 

$
41,035

 

Tax-exempt

 

 
1,714

 

 
1,607

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

Taxable

 

 
2,508

 

 
2,877

 

Tax-exempt

 

 
2,498

 

 
2,462

 

Dividends

 

 
24

 

 
32

 

Interest on interest-bearing deposits in other banks

 

 
39

 

 
29

 

Interest on federal funds sold

 

 
9

 

 
64

 

Total interest income

 

 
46,864

 

 
48,106

 

Interest expense:

 

 

 

 

 

 

 

Interest on deposits

 

 
3,689

 

 
4,125

 

Interest on short-term borrowings

 

 
23

 

 
67

 

Interest on long-term debt

 

 
756

 

 
864

 

Total interest expense

 

 
4,468

 

 
5,056

 

Net interest income

 

 
42,396

 

 
43,050

 

Provision for loan losses

 

 
2,400

 

 
2,724

 

Net interest income after provision for loan losses

 

 
39,996

 

 
40,326

 

Noninterest income:

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
4,685

 

 
4,815

 

Merchant services income

 

 
2,936

 

 
2,784

 

Commissions and fees on fiduciary activities

 

 
1,487

 

 
1,690

 

Wealth management income

 

 
627

 

 
569

 

Mortgage banking income

 

 
667

 

 
434

 

Life insurance investment income

 

 
569

 

 
565

 

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

 

 
979

 

 
861

 

Total noninterest income

 

 
11,950

 

 
11,718

 

Noninterest expense:

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
16,243

 

 
14,883

 

Net occupancy and equipment expense

 

 
6,863

 

 
6,080

 

Merchant services expense

 

 
2,006

 

 
1,722

 

Amortization of intangible assets

 

 
896

 

 
1,010

 

Acquisition related expenses

 

 

 

 

 
1,725

 

Other expenses

 

 
8,303

 

 
9,190

 

Total noninterest expense

 

 
34,311

 

 
34,610

 

Income before income taxes

 

 
17,635

 

 
17,434

 

Provision for income tax expense

 

 
3,751

 

 
4,169

 

Net income

 

$
13,884

 

$
13,265

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

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

 

$
134

 

$
2,811

 

Reclassification adjustment for gains included in net income

 

 
(979)

 

 
(861)

 

Income tax expense (benefit) related to other comprehensive income

 

 
(296)

 

 
682

 

Other comprehensive income (loss), net of income taxes

 

 
(549)

 

 
1,268

 

Comprehensive income

 

$
13,335

 

$
14,533

 

Per share data:

 

 

 

 

 

 

 

Net income

 

$
1.84

 

$
1.76

 

Cash dividends declared

 

$
0.93

 

$
0.93

 

Average common shares outstanding

 

 
7,543,751

 

 
7,548,983

 

 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

Three months ended

 

2015

 

2015

 

2015

 

2014

 

2014

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
13,341

 

$
13,391

 

$
13,340

 

$
13,281

 

$
13,876

 

Tax-exempt

 

 
585

 

 
570

 

 
559

 

 
658

 

 
465

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
792

 

 
816

 

 
900

 

 
1,069

 

 
1,007

 

Tax-exempt

 

 
858

 

 
835

 

 
805

 

 
809

 

 
816

 

Dividends

 

 
9

 

 
6

 

 
9

 

 
18

 

 
2

 

Interest on interest-bearing deposits in other banks

 

 
13

 

 
15

 

 
11

 

 
9

 

 
10

 

Interest on federal funds sold

 

 

 

 

 
5

 

 
4

 

 
6

 

 
16

 

Total interest income

 

 
15,598

 

 
15,638

 

 
15,628

 

 
15,850

 

 
16,192

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 
1,229

 

 
1,192

 

 
1,268

 

 
1,306

 

 
1,354

 

Interest on short-term borrowings

 

 
11

 

 
4

 

 
8

 

 
4

 

 
9

 

Interest on long-term debt

 

 
245

 

 
252

 

 
259

 

 
276

 

 
279

 

Total interest expense

 

 
1,485

 

 
1,448

 

 
1,535

 

 
1,586

 

 
1,642

 

Net interest income

 

 
14,113

 

 
14,190

 

 
14,093

 

 
14,264

 

 
14,550

 

Provision for loan losses

 

 
900

 

 
750

 

 
750

 

 
800

 

 
666

 

Net interest income after provision for loan losses

 

 
13,213

 

 
13,440

 

 
13,343

 

 
13,464

 

 
13,884

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
1,531

 

 
1,542

 

 
1,612

 

 
1,669

 

 
1,634

 

Merchant services income

 

 
1,183

 

 
963

 

 
790

 

 
765

 

 
1,002

 

Commissions and fees on fiduciary activities

 

 
541

 

 
487

 

 
459

 

 
489

 

 
575

 

Wealth management income

 

 
224

 

 
198

 

 
205

 

 
183

 

 
217

 

Mortgage banking income

 

 
197

 

 
248

 

 
222

 

 
214

 

 
142

 

Life insurance investment income

 

 
192

 

 
188

 

 
189

 

 
213

 

 
109

 

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

 

 
147

 

 

 

 

 
832

 

 

 

 

 
701

 

Total noninterest income

 

 
4,015

 

 
3,626

 

 
4,309

 

 
3,533

 

 
4,380

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
5,397

 

 
5,613

 

 
5,233

 

 
5,769

 

 
4,754

 

Net occupancy and equipment expense

 

 
2,246

 

 
2,149

 

 
2,468

 

 
2,022

 

 
2,020

 

Merchant services expense

 

 
823

 

 
650

 

 
533

 

 
514

 

 
662

 

Amortization of intangible assets

 

 
296

 

 
295

 

 
305

 

 
324

 

 
334

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 
109

 

Other expenses

 

 
2,944

 

 
2,804

 

 
2,555

 

 
2,694

 

 
3,205

 

Total noninterest expense

 

 
11,706

 

 
11,511

 

 
11,094

 

 
11,323

 

 
11,084

 

Income before income taxes

 

 
5,522

 

 
5,555

 

 
6,558

 

 
5,674

 

 
7,180

 

Income tax expense

 

 
1,113

 

 
1,124

 

 
1,514

 

 
1,290

 

 
1,944

 

Net income

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$
826

 

$
(1,459)

 

$
767

 

$
1,532

 

$
(825)

 

Reclassification adjustment for gains included in net income

 

 
(147)

 

 

 

 

 
(832)

 

 

 

 

 
(701)

 

Change in pension liability

 

 

 

 

 

 

 

 

 

 

 
(3,684)

 

 

 

 

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

 

 
237

 

 
(510)

 

 
(23)

 

 
(753)

 

 
(534)

 

Other comprehensive income (loss), net of income taxes

 

 
442

 

 
(949)

 

 
(42)

 

 
(1,399)

 

 
(992)

 

Comprehensive income

 

$
4,851

 

$
3,482

 

$
5,002

 

$
2,985

 

$
4,244

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.58

 

$
0.59

 

$
0.67

 

$
0.58

 

$
0.70

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Average common shares outstanding

 

 
7,536,824

 

 
7,546,198

 

 
7,548,358

 

 
7,548,358

 

 
7,548,358

 

 

 

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

Three months ended

 

2015

 

2015

 

2015

 

2014

 

2014

 

Net interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
13,341

 

$
13,391

 

$
13,340

 

$
13,281

 

$
13,876

 

Tax-exempt

 

 
901

 

 
877

 

 
860

 

 
1,013

 

 
715

 

Total loans, net

 

 
14,242

 

 
14,268

 

 
14,200

 

 
14,294

 

 
14,591

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
801

 

 
822

 

 
909

 

 
1,087

 

 
1,009

 

Tax-exempt

 

 
1,320

 

 
1,285

 

 
1,238

 

 
1,244

 

 
1,256

 

Total investments

 

 
2,121

 

 
2,107

 

 
2,147

 

 
2,331

 

 
2,265

 

Interest on interest-bearing balances in other banks

 

 
13

 

 
15

 

 
11

 

 
9

 

 
10

 

Federal funds sold

 

 

 

 

 
5

 

 
4

 

 
6

 

 
16

 

Total interest income

 

 
16,376

 

 
16,395

 

 
16,362

 

 
16,640

 

 
16,882

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
1,229

 

 
1,192

 

 
1,268

 

 
1,306

 

 
1,354

 

Short-term borrowings

 

 
11

 

 
4

 

 
8

 

 
4

 

 
9

 

Long-term debt

 

 
245

 

 
252

 

 
259

 

 
276

 

 
279

 

Total interest expense

 

 
1,485

 

 
1,448

 

 
1,535

 

 
1,586

 

 
1,642

 

Net interest income

 

$
14,891

 

$
14,947

 

$
14,827

 

$
15,054

 

$
15,240

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
4.50

%  

 
4.62

%  

 
4.68

%  

 
4.67

%  

 
4.88

%  

Tax-exempt

 

 
4.82

%  

 
4.89

%  

 
4.96

%  

 
5.85

%  

 
5.05

%  

Total loans, net

 

 
4.52

%  

 
4.63

%  

 
4.70

%  

 
4.74

%  

 
4.89

%  

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
1.54

%  

 
1.60

%  

 
1.68

%  

 
1.63

%  

 
1.57

%  

Tax-exempt

 

 
4.46

%  

 
5.05

%  

 
5.36

%  

 
5.20

%  

 
5.10

%  

Total investments

 

 
2.60

%  

 
2.74

%  

 
2.78

%  

 
2.57

%  

 
2.55

%  

Interest-bearing balances with banks

 

 
0.85

%  

 
0.57

%  

 
1.64

%  

 
0.34

%  

 
0.68

%  

Federal funds sold

 

 

 

 

 
0.35

%  

 
0.19

%  

 
0.31

%  

 
0.19

%  

Total earning assets

 

 
4.11

%  

 
4.22

%  

 
4.28

%  

 
4.19

%  

 
4.25

%  

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
0.43

%  

 
0.43

%  

 
0.46

%  

 
0.46

%  

 
0.48

%  

Short-term borrowings

 

 
0.39

%  

 
0.38

%  

 
0.31

%  

 
0.14

%  

 
0.42

%  

Long-term debt

 

 
3.10

%  

 
3.16

%  

 
3.21

%  

 
3.26

%  

 
3.21

%  

Total interest-bearing liabilities

 

 
0.50

%  

 
0.50

%  

 
0.54

%  

 
0.54

%  

 
0.56

%  

Net interest spread

 

 
3.61

%  

 
3.72

%  

 
3.74

%  

 
3.65

%  

 
3.69

%  

Net interest margin

 

 
3.74

%  

 
3.84

%  

 
3.88

%  

 
3.79

%  

 
3.84

%  

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

At period end

 

2015

 

2015

 

2015

 

2014

 

2014

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$
36,015

 

$
28,847

 

$
24,193

 

$
24,656

 

$
21,179

 

Interest-bearing balances in other banks

 

 
4,970

 

 
6,710

 

 
6,813

 

 
6,770

 

 
6,932

 

Federal funds sold

 

 

 

 

 

 

 

 
8,625

 

 

 

 

 
6,100

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 
299,832

 

 
318,790

 

 
280,300

 

 
339,586

 

 
350,825

 

Held-to-maturity

 

 
13,107

 

 
13,626

 

 
14,172

 

 
14,665

 

 
15,264

 

Total investments

 

 
312,939

 

 
332,416

 

 
294,472

 

 
354,251

 

 
366,089

 

Loans held for sale

 

 
3,439

 

 
2,879

 

 
3,101

 

 
3,486

 

 
2,961

 

Loans, net

 

 
1,270,545

 

 
1,231,541

 

 
1,237,168

 

 
1,209,894

 

 
1,179,942

 

Less: allowance for loan losses

 

 
12,043

 

 
11,428

 

 
10,803

 

 
10,338

 

 
10,171

 

Net loans

 

 
1,258,502

 

 
1,220,113

 

 
1,226,365

 

 
1,199,556

 

 
1,169,771

 

Premises and equipment, net

 

 
27,002

 

 
26,552

 

 
26,117

 

 
25,433

 

 
25,692

 

Accrued interest receivable

 

 
5,327

 

 
5,507

 

 
4,922

 

 
5,580

 

 
5,381

 

Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Other intangible assets, net

 

 
4,606

 

 
4,901

 

 
5,197

 

 
5,501

 

 
5,826

 

Other assets

 

 
56,600

 

 
56,460

 

 
50,786

 

 
53,066

 

 
51,477

 

Total assets

 

$
1,772,770

 

$
1,747,755

 

$
1,713,961

 

$
1,741,669

 

$
1,724,778

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$
303,741

 

$
296,823

 

$
305,037

 

$
313,498

 

$
302,279

 

Interest-bearing

 

 
1,140,909

 

 
1,127,944

 

 
1,111,241

 

 
1,112,060

 

 
1,123,349

 

Total deposits

 

 
1,444,650

 

 
1,424,767

 

 
1,416,278

 

 
1,425,558

 

 
1,425,628

 

Short-term borrowings

 

 
30,250

 

 
25,860

 

 

 

 

 
19,557

 

 
6,514

 

Long-term debt

 

 
31,000

 

 
31,663

 

 
32,318

 

 
33,140

 

 
34,020

 

Accrued interest payable

 

 
496

 

 
443

 

 
460

 

 
574

 

 
597

 

Other liabilities

 

 
14,286

 

 
14,618

 

 
15,447

 

 
16,061

 

 
11,950

 

Total liabilities

 

 
1,520,682

 

 
1,497,351

 

 
1,464,503

 

 
1,494,890

 

 
1,478,709

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 
15,038

 

 
15,086

 

 
15,097

 

 
15,097

 

 
15,097

 

Capital surplus

 

 
139,263

 

 
140,045

 

 
140,232

 

 
140,214

 

 
140,150

 

Retained earnings

 

 
99,165

 

 
97,093

 

 
95,000

 

 
92,297

 

 
90,252

 

Accumulated other comprehensive income (loss)

 

 
(1,378)

 

 
(1,820)

 

 
(871)

 

 
(829)

 

 
570

 

Total stockholders’ equity

 

 
252,088

 

 
250,404

 

 
249,458

 

 
246,779

 

 
246,069

 

Total liabilities and stockholders’ equity

 

$
1,772,770

 

$
1,747,755

 

$
1,713,961

 

$
1,741,669

 

$
1,724,778

 

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

Average quarterly balances

 

2015

 

2015

 

2015

 

2014

 

2014

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
1,176,533

 

$
1,163,445

 

$
1,155,435

 

$
1,127,719

 

$
1,127,888

 

Tax-exempt

 

 
74,203

 

 
71,978

 

 
70,334

 

 
68,731

 

 
56,214

 

Total loans, net

 

 
1,250,736

 

 
1,235,423

 

 
1,225,769

 

 
1,196,450

 

 
1,184,102

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
206,153

 

 
205,949

 

 
219,360

 

 
265,132

 

 
254,556

 

Tax-exempt

 

 
117,497

 

 
101,967

 

 
93,715

 

 
94,870

 

 
97,822

 

Total investments

 

 
323,650

 

 
307,916

 

 
313,075

 

 
360,002

 

 
352,378

 

Interest-bearing balances with banks

 

 
6,081

 

 
10,583

 

 
2,718

 

 
10,620

 

 
5,875

 

Federal funds sold

 

 
653

 

 
5,722

 

 
8,674

 

 
7,663

 

 
34,227

 

Total earning assets

 

 
1,581,120

 

 
1,559,644

 

 
1,550,236

 

 
1,574,735

 

 
1,576,582

 

Other assets

 

 
171,390

 

 
166,634

 

 
161,103

 

 
149,001

 

 
152,821

 

Total assets

 

$
1,752,510

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

$
1,729,403

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$
1,140,012

 

$
1,123,810

 

$
1,109,914

 

$
1,124,702

 

$
1,126,915

 

Noninterest-bearing

 

 
305,753

 

 
300,855

 

 
298,166

 

 
300,287

 

 
303,441

 

Total deposits

 

 
1,445,765

 

 
1,424,665

 

 
1,408,080

 

 
1,424,989

 

 
1,430,356

 

Short-term borrowings

 

 
11,130

 

 
4,232

 

 
10,373

 

 
11,046

 

 
8,511

 

Long-term debt

 

 
31,330

 

 
31,989

 

 
32,726

 

 
33,612

 

 
34,510

 

Other liabilities

 

 
14,368

 

 
16,438

 

 
13,240

 

 
7,693

 

 
11,330

 

Total liabilities

 

 
1,502,593

 

 
1,477,324

 

 
1,464,419

 

 
1,477,340

 

 
1,484,707

 

Stockholders’ equity

 

 
249,917

 

 
248,954

 

 
246,920

 

 
246,396

 

 
244,696

 

Total liabilities and stockholders’ equity

 

$
1,752,510

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

$
1,729,403

 

 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

 

 

2015

 

2015

 

2015

 

2014

 

2014

 

At quarter end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual/restructured loans

 

$
9,646

 

$
9,143

 

$
9,736

 

$
8,699

 

$
11,324

 

Accruing loans past due 90 days or more

 

 
1,631

 

 
1,072

 

 
1,237

 

 
1,623

 

 
955

 

Foreclosed assets

 

 
458

 

 
334

 

 
324

 

 
561

 

 
840

 

Total nonperforming assets

 

$
11,735

 

$
10,549

 

$
11,297

 

$
10,883

 

$
13,119

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$
11,428

 

$
10,803

 

$
10,338

 

$
10,171

 

$
9,622

 

Charge-offs

 

 
315

 

 
174

 

 
365

 

 
641

 

 
177

 

Recoveries

 

 
30

 

 
49

 

 
80

 

 
8

 

 
60

 

Provision for loan losses

 

 
900

 

 
750

 

 
750

 

 
800

 

 
666

 

Ending balance

 

$
12,043

 

$
11,428

 

$
10,803

 

$
10,338

 

$
10,171

 

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

    

Sept 30

 

Three months ended

 

2015

 

2015

 

2015

 

2014

 

2014

 

Core net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
96

 

 

 

 

 
541

 

 

 

 

 
456

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 
71

 

Net income Core

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

$
4,851

 

Average common shares outstanding

 

 
7,536,824

 

 
7,546,198

 

 
7,548,358

 

 
7,548,358

 

 
7,548,358

 

Core net income per share

 

$
0.57

 

$
0.59

 

$
0.60

 

$
0.58

 

$
0.65

 

Tangible book value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$
252,088

 

$
250,404

 

$
249,458

 

$
246,779

 

$
246,069

 

Less: Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Less: Other intangible assets, net

 

 
4,606

 

 
4,901

 

 
5,197

 

 
5,501

 

 
5,826

 

Total tangible stockholders’ equity

 

$
184,112

 

$
182,133

 

$
180,891

 

$
177,908

 

$
176,873

 

Common shares outstanding

 

 
7,519,109

 

 
7,546,198

 

 
7,548,358

 

 
7,548,358

 

 
7,548,358

 

Tangible book value per share

 

$
24.49

 

$
24.14

 

$
23.96

 

$
23.57

 

$
23.43

 

Core return on average stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
96

 

 

 

 

 
541

 

 

 

 

 
456

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 
71

 

Net income Core

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

$
4,851

 

Average stockholders’ equity

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

$
244,696

 

Core return on average stockholders’ equity

 

 
6.85

%  

 
7.14

%  

 
7.40

%  

 
7.06

%  

 
7.87

%  

Return on average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Average stockholders’ equity

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

$
244,696

 

Less: average intangibles

 

 
68,124

 

 
68,419

 

 
68,719

 

 
69,034

 

 
69,363

 

Average tangible stockholders’ equity

 

$
181,793

 

$
180,535

 

$
178,201

 

$
177,362

 

$
175,333

 

Return on average tangible stockholders’ equity

 

 
9.62

%  

 
9.84

%  

 
11.48

%  

 
9.81

%  

 
11.85

%  

Core return on average tangible stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
96

 

 

 

 

 
541

 

 

 

 

 
456

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 
71

 

Net income Core

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

$
4,851

 

Average stockholders’ equity

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

$
244,696

 

Less: average intangibles

 

 
68,124

 

 
68,419

 

 
68,719

 

 
69,034

 

 
69,363

 

Average tangible stockholders’ equity

 

$
181,793

 

$
180,535

 

$
178,201

 

$
177,362

 

$
175,333

 

Core return on average tangible stockholders’ equity

 

 
9.41

%  

 
9.84

%  

 
10.25

%  

 
9.81

%  

 
10.98

%  

Core return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

$
5,236

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
96

 

 

 

 

 
541

 

 

 

 

 
456

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 
71

 

Net income Core

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

$
4,851

 

Average assets

 

$
1,752,509

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

$
1,729,403

 

Core return on average assets

 

 
0.98

%  

 
1.03

%  

 
1.07

%  

 
1.01

%  

 
1.11

%  

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

    

Sept 30

    

Sept 30

 

Nine months ended

 

2015

 

2014

 

Core net income per share:

 

 

 

 

 

 

 

Net income GAAP

 

$
13,884

 

$
13,265

 

Adjustments:

 

 

 

 

 

 

 

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

 

 
636

 

 
560

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 
1,121

 

Net income Core

 

$
13,248

 

$
13,826

 

Average common shares outstanding

 

 
7,543,751

 

 
7,548,983

 

Core net income per share

 

$
1.76

 

$
1.83