EX-99.1 2 pfis-20160202ex991519bf2.htm EX-99.1 pfis_Ex99_1

Exhibit 99.1

NEWS RELEASE

TO BUSINESS EDITOR:

PEOPLES FINANCIAL SERVICES CORP. Reports Fourth Quarter 2015 Earnings

Scranton, PA, February 2, 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 months and year ended December 31, 2015. Peoples reported net income of $3.8 million, or $0.52 per basic and diluted weighted average share for the fourth quarter of 2015, compared to $4.4 million, or $0.58 per share, for each of the third quarter of 2015 and fourth quarter of 2014.  Other expenses in the fourth quarter of 2015 included a charge for the disposal of a nonrecoverable asset attributable to the dissolution of Penseco Realty, Inc. which reduced net income by $440.7 thousand or $0.06 per share.

Core net income, excluding net gains on sale of investment securities available-for-sale, for the three months ended December 31, 2015 was $3.7 million, a decrease from $4.3 million for the third quarter of 2015 and $4.4 million for the fourth quarter of 2014. Core net income per share for the three months ended December 31, 2015 was $0.50, compared to $0.57 for the third quarter of 2015 and $0.58 for the fourth quarter of 2014.

Net income for the year ended December 31, 2015, totaled $17.7 million or $2.36 per share compared to $17.6 million or $2.34 per share for 2014.  The results for 2015 include net gains on sale of investment securities of $1.2 million compared to $0.9 million during 2014. Pre-tax acquisition related expenses recognized for the year ended December 31, 2014 approximated $1.7 million. Core net income for 2015 was $17.0 million, compared to  $18.2 million for 2014. Core net income per share for 2015 was $2.26, a decrease from $2.41 for 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 three and twelve month periods included herein contain 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.

NOTABLES

·

Loans, net grew $70.3 million in the fourth quarter of 2015 as demand increased throughout all markets. 

·

Deposits grew $11.2 million in the fourth quarter of 2015.

·

Tangible book value per share increased to $24.29 at December 31, 2015 from $23.57 at December 31, 2014.

·

Tax-equivalent net interest margin increased 5 basis points in the fourth quarter of 2015 to 3.79% compared to 3.74% for the quarter ended September 30, 2015 and was unchanged from the fourth quarter of 2014 at 3.79%.

·

Tax-equivalent net interest income increased $538.0 thousand for the fourth quarter of 2015 to $15.4 million compared to $14.9 million for the third quarter of 2015 and increased $375.0 thousand compared to $15.1 million for the fourth quarter of 2014.

·

The effective tax rate for the year ended December 31, 2015 decreased to 20.3% from 23.6% in 2014.

·

The Company established a loan production office located in King of Prussia, Montgomery County, Pennsylvania in the fourth quarter of 2015.

·

Peoples Security Wealth Management Group acquired Gilmartin Associates, an asset management and retirement plan services company with $120.0 million of assets under management in the fourth quarter of 2015.

 

 

 INCOME STATEMENT REVIEW

The tax-equivalent net interest margins for the three and twelve months ended December 31, were 3.79% and 3.81% in 2015, compared to 3.79% and 3.86% in 2014, respectively. Loan accretion included in loan interest income for the three and twelve months ended December 31, 2015 related to loans acquired in the fourth quarter of 2013 was $190.6 thousand and  $665.5 thousand, resulting in an increase in the tax-equivalent net interest margin of 5 and 4 basis points, respectively. Comparatively, loan accretion included in loan interest income for the three and twelve months ended December 31,  2014 was  $240.0 thousand and  $2.1 million, resulting in an increase in the tax-equivalent net interest margin of 6 and 14 basis points, respectively.  

Tax-equivalent net interest income for the quarter ended December 31, increased $375.0 thousand to $15.4 million in 2015 from $15.1 million in 2014.  The tax-equivalent yield on the loan portfolio decreased to 4.52% for the fourth quarter of 2015 compared to 4.74% for the comparable period in 2014. For the fourth quarter, loans, net averaged $1.3 billion in 2015 compared to $1.2 billion in 2014. For the quarter ended December 31, the tax-equivalent yield on total investments increased to 2.74% in 2015 from 2.57% in 2014. Average investments totaled $300.3 million in the fourth quarter of 2015 and $360.0 million in the fourth quarter of 2014. The cost of funds declined to 0.51% in the three months ended December 31, 2015 from 0.54% for the same period of 2014. Average interest-bearing liabilities were $1.2 billion for the quarters ended December 31, 2015 and 2014.  Tax-equivalent net interest income for the twelve months ended December 31, decreased $202.0 thousand to $60.1 million in 2015 from $60.3 million in 2014. The tax-equivalent yield on the loan portfolio decreased to 4.59%  in 2015 compared to 4.87%  in 2014. Loans, net averaged $1.3 billion in 2015 and $1.2 billion in 2014. For the twelve months ended December 31, the tax-equivalent yield on investments was 2.71% in 2015 compared to 2.67% in 2014. Average investments totaled $311.2 million in 2015 and $338.5 million in 2014. Average interest-bearing liabilities increased slightly for the twelve months ended December 31, 2015, compared to the corresponding period last year. The cost of funds declined to 0.51%  in 2015 from 0.57%  in 2014.

For the quarter ended December 31, the provision for loan losses was $1.3 million in 2015 and $800.0 thousand in 2014. The provision for loan losses totaled $3.7 million for the twelve months ended December 31, 2015, compared to $3.5 million for the same period last year. The increase in the provision for loan losses in 2015 was a result of loan growth and an increase in the level of nonperforming loans.  

For the three months ended December 31, noninterest income totaled $3.8 million in 2015 and $3.5 million in 2014. For the twelve months ended December 31, noninterest income totaled $15.7 million in 2015, an increase from $15.3 million in 2014. Net gains on sale of investment securities were $1.2 million in 2015 compared to $861.0 thousand in 2014. Increases in revenues from merchant services income, wealth management services and mortgage banking activities more than offset a decrease in service charges, fees and commissions, income from fiduciary activities and life insurance investment income.  

For the fourth quarter, noninterest expense amounted to $12.5 million in 2015 and $11.3 million in 2014. The fourth quarter of 2015 included a $678.0 thousand charge for the disposal of a nonrecoverable asset. Noninterest expense increased $0.9 million or 1.8% to $46.8 million for the twelve months ended December 31, 2015, from $45.9 million for the twelve months ended December 31, 2014. Increases in salaries and employee benefits, net occupancy and equipment, merchant services expense and other expenses were partially offset by decreases in amortization of intangible assets and acquisition related expenses.  The market expansion into Lehigh Valley and King of Prussia along with the buildout of our wealth management platform led to the increases in salaries and employee benefit and occupancy expenses.

 

 BALANCE SHEET REVIEW

Total assets, loans and deposits totaled $1.8 billion, $1.3 billion and $1.5 billion, respectively, at December 31, 2015. Loans, net grew $70.3 million or 22.0% on an annualized basis in the fourth quarter of 2015. Loans, net increased $131.0 million or 10.8% from December 31, 2014 to 2015.  Deposits grew $11.2 million or 3.1% on an annualized basis in the fourth quarter of 2015. Total deposits increased $30.3 million or 2.1%  in 2015 when compared to year-end 2014. Noninterest-bearing deposits increased $7.5 million or 2.4% while interest-bearing deposits increased $22.8 million or 2.0% in 2015. Total investments were $297.0 million at December 31, 2015, including $284.9 million securities classified as available-for-sale and $12.1 million classified as held-to-maturity.

 

Stockholders’ equity equaled $248.8 million or $33.57 per share at December 31, 2015, and $246.8 million or $32.69 per share at December 31, 2014. Tangible stockholders’ equity improved to $24.29 per share at December 31, 2015, from $23.57 per share at year-end 2014. Dividends declared for the twelve months ended December 31, 2015 amounted to $1.24 per share representing a dividend payout ratio of 52.5%.

ASSET QUALITY REVIEW

Nonperforming assets were $12.5 million or 0.93% of loans, net and foreclosed assets at December 31, 2015, compared to $11.7 million or 0.92% at September 30, 2015, and $10.9 million or 0.90% at December 31, 2014. The allowance for loan losses equaled $13.0 million or 0.97% of loans, net at December 31, 2015 compared to $10.3 million or 0.85% of loans, net, at December 31, 2014. Loans charged-off, net of recoveries, for the twelve months ended December 31, 2015, equaled $1.1 million or 0.08% of average loans, compared to $1.8 million or 0.15% of average loans for the twelve months ended December 31, 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 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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

Key performance data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.52

 

$
0.58

 

$
0.59

 

$
0.67

 

$
0.58

 

Core net income (1)

 

$
0.50

 

$
0.57

 

$
0.59

 

$
0.60

 

$
0.58

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Book value

 

$
33.57

 

$
33.53

 

$
33.20

 

$
33.05

 

$
32.69

 

Tangible book value (1)

 

$
24.29

 

$
24.49

 

$
24.15

 

$
23.96

 

$
23.57

 

Market value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

High

 

$
41.96

 

$
41.60

 

$
43.76

 

$
49.26

 

$
52.52

 

Low

 

$
34.43

 

$
34.56

 

$
36.89

 

$
39.35

 

$
44.17

 

Closing

 

$
38.08

 

$
34.93

 

$
39.61

 

$
44.87

 

$
49.68

 

Market capitalization

 

$
282,196

 

$
262,642

 

$
298,767

 

$
338,695

 

$
375,002

 

Common shares outstanding

 

 
7,410,606

 

 
7,519,109

 

 
7,542,725

 

 
7,548,358

 

 
7,548,358

 

Selected ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average stockholders’ equity

 

 
6.12

%  

 
7.00

%  

 
7.14

%  

 
8.28

%  

 
7.06

%  

Core return on average stockholders’ equity (1)

 

 
5.90

%  

 
6.85

%  

 
7.14

%  

 
7.40

%  

 
7.06

%  

Return on average tangible stockholders’ equity (1)

 

 
8.43

%  

 
9.62

%  

 
9.84

%  

 
11.48

%  

 
9.81

%  

Core return on average tangible stockholders’ equity (1)

 

 
8.14

%  

 
9.41

%  

 
9.84

%  

 
10.25

%  

 
9.81

%  

Return on average assets

 

 
0.85

%

 
1.00

%

 
1.03

%  

 
1.20

%  

 
1.01

%  

Core return on average assets (1)

 

 
0.82

%  

 
0.98

%  

 
1.03

%  

 
1.07

%  

 
1.01

%  

Stockholders’ equity to total assets

 

 
13.68

%  

 
14.22

%  

 
14.33

%  

 
14.55

%  

 
14.17

%  

Efficiency ratio (2)

 

 
64.16

%  

 
60.82

%  

 
60.39

%  

 
58.94

%  

 
59.18

%  

Nonperforming assets to loans, net, and foreclosed assets

 

 
0.93

%  

 
0.92

%  

 
0.86

%  

 
0.91

%  

 
0.90

%  

Net charge-offs to average loans, net

 

 
0.11

%  

 
0.09

%  

 
0.04

%  

 
0.09

%  

 
0.21

%  

Allowance for loan losses to loans, net

 

 
0.97

%  

 
0.95

%  

 
0.93

%  

 
0.87

%  

 
0.85

%  

Earning assets yield (FTE) (3)

 

 
4.17

%  

 
4.11

%  

 
4.22

%  

 
4.28

%  

 
4.19

%  

Cost of funds

 

 
0.51

%  

 
0.50

%  

 
0.50

%  

 
0.54

%  

 
0.54

%  

Net interest spread (FTE) (3)

 

 
3.66

%  

 
3.61

%  

 
3.72

%  

 
3.74

%  

 
3.65

%  

Net interest margin (FTE) (3)

 

 
3.79

%  

 
3.74

%  

 
3.84

%  

 
3.88

%  

 
3.79

%  

(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)

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Dec 31

 

Year Ended

 

2015

 

2014

 

Interest income:

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

Taxable

 

$
54,004

 

$
54,316

 

Tax-exempt

 

 
2,351

 

 
2,265

 

Interest and dividends on investment securities:

 

 

 

 

 

 

 

Taxable

 

 
3,207

 

 
3,946

 

Tax-exempt

 

 
3,385

 

 
3,271

 

Dividends

 

 
35

 

 
50

 

Interest on interest-bearing deposits in other banks

 

 
49

 

 
38

 

Interest on federal funds sold

 

 
10

 

 
70

 

Total interest income

 

 
63,041

 

 
63,956

 

Interest expense:

 

 

 

 

 

 

 

Interest on deposits

 

 
4,953

 

 
5,431

 

Interest on short-term borrowings

 

 
53

 

 
71

 

Interest on long-term debt

 

 
1,031

 

 
1,140

 

Total interest expense

 

 
6,037

 

 
6,642

 

Net interest income

 

 
57,004

 

 
57,314

 

Provision for loan losses

 

 
3,700

 

 
3,524

 

Net interest income after provision for loan losses

 

 
53,304

 

 
53,790

 

Noninterest income:

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
6,245

 

 
6,484

 

Merchant services income

 

 
3,855

 

 
3,549

 

Commissions and fees on fiduciary activities

 

 
1,946

 

 
2,179

 

Wealth management income

 

 
845

 

 
752

 

Mortgage banking income

 

 
872

 

 
648

 

Life insurance investment income

 

 
767

 

 
778

 

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

 

 
1,189

 

 
861

 

Total noninterest income

 

 
15,719

 

 
15,251

 

Noninterest expense:

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
21,533

 

 
20,652

 

Net occupancy and equipment expense

 

 
9,104

 

 
8,102

 

Merchant services expense

 

 
2,643

 

 
2,236

 

Amortization of intangible assets

 

 
1,182

 

 
1,334

 

Acquisition related expenses

 

 

 

 

 
1,725

 

Other expenses

 

 
12,317

 

 
11,884

 

Total noninterest expense

 

 
46,779

 

 
45,933

 

Income before income taxes

 

 
22,244

 

 
23,108

 

Provision for income tax expense

 

 
4,521

 

 
5,459

 

Net income

 

$
17,723

 

$
17,649

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

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

 

$
(510)

 

$
4,343

 

Reclassification adjustment for gains included in net income

 

 
(1,189)

 

 
(861)

 

Change in unfunded pension liability

 

 
(296)

 

 
(3,684)

 

Income tax expense (benefit) related to other comprehensive income

 

 
(699)

 

 
(71)

 

Other comprehensive income (loss), net of income taxes

 

 
(1,296)

 

 
(131)

 

Comprehensive income

 

$
16,427

 

$
17,518

 

Per share data:

 

 

 

 

 

 

 

Net income

 

$
2.36

 

$
2.34

 

Cash dividends declared

 

$
1.24

 

$
1.24

 

Average common shares outstanding

 

 
7,516,451

 

 
7,548,825

 

 

 

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

Three months ended

 

2015

 

2015

 

2015

 

2015

 

2014

 

Interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
13,932

 

$
13,341

 

$
13,391

 

$
13,340

 

$
13,281

 

Tax-exempt

 

 
637

 

 
585

 

 
570

 

 
559

 

 
658

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
699

 

 
792

 

 
816

 

 
900

 

 
1,069

 

Tax-exempt

 

 
887

 

 
858

 

 
835

 

 
805

 

 
809

 

Dividends

 

 
11

 

 
9

 

 
6

 

 
9

 

 
18

 

Interest on interest-bearing deposits in other banks

 

 
10

 

 
13

 

 
15

 

 
11

 

 
9

 

Interest on federal funds sold

 

 
1

 

 

 

 

 
5

 

 
4

 

 
6

 

Total interest income

 

 
16,177

 

 
15,598

 

 
15,638

 

 
15,628

 

 
15,850

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 
1,264

 

 
1,229

 

 
1,192

 

 
1,268

 

 
1,306

 

Interest on short-term borrowings

 

 
30

 

 
11

 

 
4

 

 
8

 

 
4

 

Interest on long-term debt

 

 
275

 

 
245

 

 
252

 

 
259

 

 
276

 

Total interest expense

 

 
1,569

 

 
1,485

 

 
1,448

 

 
1,535

 

 
1,586

 

Net interest income

 

 
14,608

 

 
14,113

 

 
14,190

 

 
14,093

 

 
14,264

 

Provision for loan losses

 

 
1,300

 

 
900

 

 
750

 

 
750

 

 
800

 

Net interest income after provision for loan losses

 

 
13,308

 

 
13,213

 

 
13,440

 

 
13,343

 

 
13,464

 

Noninterest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service charges, fees, commissions

 

 
1,560

 

 
1,531

 

 
1,542

 

 
1,612

 

 
1,669

 

Merchant services income

 

 
919

 

 
1,183

 

 
963

 

 
790

 

 
765

 

Commissions and fees on fiduciary activities

 

 
459

 

 
541

 

 
487

 

 
459

 

 
489

 

Wealth management income

 

 
218

 

 
224

 

 
198

 

 
205

 

 
183

 

Mortgage banking income

 

 
205

 

 
197

 

 
248

 

 
222

 

 
214

 

Life insurance investment income

 

 
198

 

 
192

 

 
188

 

 
189

 

 
213

 

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

 

 
210

 

 
147

 

 

 

 

 
832

 

 

 

 

Total noninterest income

 

 
3,769

 

 
4,015

 

 
3,626

 

 
4,309

 

 
3,533

 

Noninterest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits expense

 

 
5,290

 

 
5,397

 

 
5,613

 

 
5,233

 

 
5,769

 

Net occupancy and equipment expense

 

 
2,241

 

 
2,246

 

 
2,149

 

 
2,468

 

 
2,022

 

Merchant services expense

 

 
637

 

 
823

 

 
650

 

 
533

 

 
514

 

Amortization of intangible assets

 

 
286

 

 
296

 

 
295

 

 
305

 

 
324

 

Acquisition related expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other expenses

 

 
4,014

 

 
2,944

 

 
2,804

 

 
2,555

 

 
2,694

 

Total noninterest expense

 

 
12,468

 

 
11,706

 

 
11,511

 

 
11,094

 

 
11,323

 

Income before income taxes

 

 
4,609

 

 
5,522

 

 
5,555

 

 
6,558

 

 
5,674

 

Income tax expense

 

 
770

 

 
1,113

 

 
1,124

 

 
1,514

 

 
1,290

 

Net income

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

$
(644)

 

$
826

 

$
(1,459)

 

$
767

 

$
1,532

 

Reclassification adjustment for gains included in net income

 

 
(210)

 

 
(147)

 

 

 

 

 
(832)

 

 

 

 

Change in pension liability

 

 
(296)

 

 

 

 

 

 

 

 

 

 

 
(3,684)

 

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

 

 
(404)

 

 
237

 

 
(510)

 

 
(23)

 

 
(753)

 

Other comprehensive income (loss), net of income taxes

 

 
(746)

 

 
442

 

 
(949)

 

 
(42)

 

 
(1,399)

 

Comprehensive income

 

$
3,093

 

$
4,851

 

$
3,482

 

$
5,002

 

$
2,985

 

Per share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$
0.52

 

$
0.58

 

$
0.59

 

$
0.67

 

$
0.58

 

Cash dividends declared

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

$
0.31

 

Average common shares outstanding

 

 
7,435,440

 

 
7,536,824

 

 
7,546,198

 

 
7,548,358

 

 
7,548,358

 

 

 

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

Three months ended

 

2015

 

2015

 

2015

 

2015

 

2014

 

Net interest income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
13,932

 

$
13,341

 

$
13,391

 

$
13,340

 

$
13,281

 

Tax-exempt

 

 
979

 

 
901

 

 
877

 

 
860

 

 
1,013

 

Total loans, net

 

 
14,911

 

 
14,242

 

 
14,268

 

 
14,200

 

 
14,294

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
710

 

 
801

 

 
822

 

 
909

 

 
1,087

 

Tax-exempt

 

 
1,366

 

 
1,320

 

 
1,285

 

 
1,238

 

 
1,244

 

Total investments

 

 
2,076

 

 
2,121

 

 
2,107

 

 
2,147

 

 
2,331

 

Interest on interest-bearing balances in other banks

 

 
10

 

 
13

 

 
15

 

 
11

 

 
9

 

Federal funds sold

 

 
1

 

 

 

 

 
5

 

 
4

 

 
6

 

Total interest income

 

 
16,998

 

 
16,376

 

 
16,395

 

 
16,362

 

 
16,640

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
1,264

 

 
1,229

 

 
1,192

 

 
1,268

 

 
1,306

 

Short-term borrowings

 

 
30

 

 
11

 

 
4

 

 
8

 

 
4

 

Long-term debt

 

 
275

 

 
245

 

 
252

 

 
259

 

 
276

 

Total interest expense

 

 
1,569

 

 
1,485

 

 
1,448

 

 
1,535

 

 
1,586

 

Net interest income

 

$
15,429

 

$
14,891

 

$
14,947

 

$
14,827

 

$
15,054

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
4.51

%  

 
4.50

%  

 
4.62

%  

 
4.68

%  

 
4.67

%  

Tax-exempt

 

 
4.67

%  

 
4.82

%  

 
4.89

%  

 
4.96

%  

 
5.85

%  

Total loans, net

 

 
4.52

%  

 
4.52

%  

 
4.63

%  

 
4.70

%  

 
4.74

%  

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
1.60

%  

 
1.54

%  

 
1.60

%  

 
1.68

%  

 
1.63

%  

Tax-exempt

 

 
4.34

%  

 
4.46

%  

 
5.05

%  

 
5.36

%  

 
5.20

%  

Total investments

 

 
2.74

%  

 
2.60

%  

 
2.74

%  

 
2.78

%  

 
2.57

%  

Interest-bearing balances with banks

 

 
0.83

%  

 
0.85

%  

 
0.57

%  

 
1.64

%  

 
0.34

%  

Federal funds sold

 

 
0.54

%

 

 

 

 
0.35

%  

 
0.19

%  

 
0.31

%  

Total earning assets

 

 
4.17

%  

 
4.11

%  

 
4.22

%  

 
4.28

%  

 
4.19

%  

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits

 

 
0.44

%  

 
0.43

%  

 
0.43

%  

 
0.46

%  

 
0.46

%  

Short-term borrowings

 

 
0.42

%  

 
0.39

%  

 
0.38

%  

 
0.31

%  

 
0.14

%  

Long-term debt

 

 
2.83

%  

 
3.10

%  

 
3.16

%  

 
3.21

%  

 
3.26

%  

Total interest-bearing liabilities

 

 
0.51

%  

 
0.50

%  

 
0.50

%  

 
0.54

%  

 
0.54

%  

Net interest spread

 

 
3.66

%  

 
3.61

%  

 
3.72

%  

 
3.74

%  

 
3.65

%  

Net interest margin

 

 
3.79

%  

 
3.74

%  

 
3.84

%  

 
3.88

%  

 
3.79

%  

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

At period end

 

2015

 

2015

 

2015

 

2015

 

2014

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$
28,218

 

$
36,015

 

$
28,847

 

$
24,193

 

$
24,656

 

Interest-bearing balances in other banks

 

 
4,699

 

 
4,970

 

 
6,710

 

 
6,813

 

 
6,770

 

Federal funds sold

 

 

 

 

 

 

 

 

 

 

 
8,625

 

 

 

 

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Available-for-sale

 

 
284,935

 

 
299,832

 

 
318,790

 

 
280,300

 

 
339,586

 

Held-to-maturity

 

 
12,109

 

 
13,107

 

 
13,626

 

 
14,172

 

 
14,665

 

Total investments

 

 
297,044

 

 
312,939

 

 
332,416

 

 
294,472

 

 
354,251

 

Loans held for sale

 

 

 

 

 
3,439

 

 
2,879

 

 
3,101

 

 
3,486

 

Loans, net

 

 
1,340,865

 

 
1,270,545

 

 
1,231,541

 

 
1,237,168

 

 
1,209,894

 

Less: allowance for loan losses

 

 
12,975

 

 
12,043

 

 
11,428

 

 
10,803

 

 
10,338

 

Net loans

 

 
1,327,890

 

 
1,258,502

 

 
1,220,113

 

 
1,226,365

 

 
1,199,556

 

Premises and equipment, net

 

 
28,157

 

 
27,002

 

 
26,552

 

 
26,117

 

 
25,433

 

Accrued interest receivable

 

 
5,796

 

 
5,327

 

 
5,507

 

 
4,922

 

 
5,580

 

Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Other intangible assets, net

 

 
5,397

 

 
4,606

 

 
4,901

 

 
5,197

 

 
5,501

 

Other assets

 

 
58,487

 

 
56,600

 

 
56,460

 

 
50,786

 

 
53,066

 

Total assets

 

$
1,819,058

 

$
1,772,770

 

$
1,747,755

 

$
1,713,961

 

$
1,741,669

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Noninterest-bearing

 

$
320,978

 

$
303,741

 

$
296,823

 

$
305,037

 

$
313,498

 

Interest-bearing

 

 
1,134,832

 

 
1,140,909

 

 
1,127,944

 

 
1,111,241

 

 
1,112,060

 

Total deposits

 

 
1,455,810

 

 
1,444,650

 

 
1,424,767

 

 
1,416,278

 

 
1,425,558

 

Short-term borrowings

 

 
38,325

 

 
30,250

 

 
25,860

 

 

 

 

 
19,557

 

Long-term debt

 

 
60,354

 

 
31,000

 

 
31,663

 

 
32,318

 

 
33,140

 

Accrued interest payable

 

 
560

 

 
496

 

 
443

 

 
460

 

 
574

 

Other liabilities

 

 
15,241

 

 
14,286

 

 
14,618

 

 
15,447

 

 
16,061

 

Total liabilities

 

 
1,570,290

 

 
1,520,682

 

 
1,497,351

 

 
1,464,503

 

 
1,494,890

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common stock

 

 
14,821

 

 
15,038

 

 
15,086

 

 
15,097

 

 
15,097

 

Capital surplus

 

 
135,371

 

 
139,263

 

 
140,045

 

 
140,232

 

 
140,214

 

Retained earnings

 

 
100,701

 

 
99,165

 

 
97,093

 

 
95,000

 

 
92,297

 

Accumulated other comprehensive income (loss)

 

 
(2,125)

 

 
(1,378)

 

 
(1,820)

 

 
(871)

 

 
(829)

 

Total stockholders’ equity

 

 
248,768

 

 
252,088

 

 
250,404

 

 
249,458

 

 
246,779

 

Total liabilities and stockholders’ equity

 

$
1,819,058

 

$
1,772,770

 

$
1,747,755

 

$
1,713,961

 

$
1,741,669

 

 

 

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

Average quarterly balances

 

2015

 

2015

 

2015

 

2015

 

2014

 

Assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$
1,226,295

 

$
1,176,533

 

$
1,163,445

 

$
1,155,435

 

$
1,127,719

 

Tax-exempt

 

 
83,176

 

 
74,203

 

 
71,978

 

 
70,334

 

 
68,731

 

Total loans, net

 

 
1,309,471

 

 
1,250,736

 

 
1,235,423

 

 
1,225,769

 

 
1,196,450

 

Investments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 
175,620

 

 
206,153

 

 
205,949

 

 
219,360

 

 
265,132

 

Tax-exempt

 

 
124,694

 

 
117,497

 

 
101,967

 

 
93,715

 

 
94,870

 

Total investments

 

 
300,314

 

 
323,650

 

 
307,916

 

 
313,075

 

 
360,002

 

Interest-bearing balances with banks

 

 
4,791

 

 
6,081

 

 
10,583

 

 
2,718

 

 
10,620

 

Federal funds sold

 

 
735

 

 
653

 

 
5,722

 

 
8,674

 

 
7,663

 

Total earning assets

 

 
1,615,311

 

 
1,581,120

 

 
1,559,644

 

 
1,550,236

 

 
1,574,735

 

Other assets

 

 
171,839

 

 
171,390

 

 
166,634

 

 
161,103

 

 
149,001

 

Total assets

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

Liabilities and stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing

 

$
1,147,296

 

$
1,140,012

 

$
1,123,810

 

$
1,109,914

 

$
1,124,702

 

Noninterest-bearing

 

 
309,665

 

 
305,753

 

 
300,855

 

 
298,166

 

 
300,287

 

Total deposits

 

 
1,456,961

 

 
1,445,765

 

 
1,424,665

 

 
1,408,080

 

 
1,424,989

 

Short-term borrowings

 

 
28,016

 

 
11,130

 

 
4,232

 

 
10,373

 

 
11,046

 

Long-term debt

 

 
38,494

 

 
31,330

 

 
31,989

 

 
32,726

 

 
33,612

 

Other liabilities

 

 
14,722

 

 
14,368

 

 
16,438

 

 
13,240

 

 
7,693

 

Total liabilities

 

 
1,538,193

 

 
1,502,593

 

 
1,477,324

 

 
1,464,419

 

 
1,477,340

 

Stockholders’ equity

 

 
248,957

 

 
249,917

 

 
248,954

 

 
246,920

 

 
246,396

 

Total liabilities and stockholders’ equity

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

 

 

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

 

 

2015

 

2015

 

2015

 

2015

 

2014

 

At quarter end

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonperforming assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nonaccrual/restructured loans

 

$
10,744

 

$
9,646

 

$
9,143

 

$
9,736

 

$
8,699

 

Accruing loans past due 90 days or more

 

 
763

 

 
1,631

 

 
1,072

 

 
1,237

 

 
1,623

 

Foreclosed assets

 

 
957

 

 
458

 

 
334

 

 
324

 

 
561

 

Total nonperforming assets

 

$
12,464

 

$
11,735

 

$
10,549

 

$
11,297

 

$
10,883

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Beginning balance

 

$
12,043

 

$
11,428

 

$
10,803

 

$
10,338

 

$
10,171

 

Charge-offs

 

 
573

 

 
315

 

 
174

 

 
365

 

 
641

 

Recoveries

 

 
205

 

 
30

 

 
49

 

 
80

 

 
8

 

Provision for loan losses

 

 
1,300

 

 
900

 

 
750

 

 
750

 

 
800

 

Ending balance

 

$
12,975

 

$
12,043

 

$
11,428

 

$
10,803

 

$
10,338

 

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Sept 30

    

June 30

    

Mar 31

    

Dec 31

 

Three months ended

 

2015

 

2015

 

2015

 

2015

 

2014

 

Core net income per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
136

 

 
96

 

 

 

 

 
541

 

 

 

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income Core

 

$
3,703

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

Average common shares outstanding

 

 
7,435,440

 

 
7,536,824

 

 
7,546,198

 

 
7,548,358

 

 
7,548,358

 

Core net income per share

 

$
0.50

 

$
0.57

 

$
0.59

 

$
0.60

 

$
0.58

 

Tangible book value:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total stockholders’ equity

 

$
248,768

 

$
252,088

 

$
250,404

 

$
249,458

 

$
246,779

 

Less: Goodwill

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

 
63,370

 

Less: Other intangible assets, net

 

 
5,397

 

 
4,606

 

 
4,901

 

 
5,197

 

 
5,501

 

Total tangible stockholders’ equity

 

$
180,001

 

$
184,112

 

$
182,133

 

$
180,891

 

$
177,908

 

Common shares outstanding

 

 
7,410,606

 

 
7,519,109

 

 
7,542,725

 

 
7,548,358

 

 
7,548,358

 

Tangible book value per share

 

$
24.29

 

$
24.49

 

$
24.15

 

$
23.96

 

$
23.57

 

Core return on average stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
136

 

 
96

 

 

 

 

 
541

 

 

 

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income Core

 

$
3,703

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

Average stockholders’ equity

 

$
248,957

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

Core return on average stockholders’ equity

 

 
5.90

%  

 
6.85

%  

 
7.14

%  

 
7.40

%  

 
7.06

%  

Return on average tangible equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Average stockholders’ equity

 

$
248,957

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

Less: average intangibles

 

 
68,372

 

 
68,124

 

 
68,419

 

 
68,719

 

 
69,034

 

Average tangible stockholders’ equity

 

$
180,585

 

$
181,793

 

$
180,535

 

$
178,201

 

$
177,362

 

Return on average tangible stockholders’ equity

 

 
8.43

%  

 
9.62

%  

 
9.84

%  

 
11.48

%  

 
9.81

%  

Core return on average tangible stockholders’ equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
136

 

 
96

 

 

 

 

 
541

 

 

 

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income Core

 

$
3,703

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

Average stockholders’ equity

 

$
248,957

 

$
249,917

 

$
248,954

 

$
246,920

 

$
246,396

 

Less: average intangibles

 

 
68,372

 

 
68,124

 

 
68,419

 

 
68,719

 

 
69,034

 

Average tangible stockholders’ equity

 

$
180,585

 

$
181,793

 

$
180,535

 

$
178,201

 

$
177,362

 

Core return on average tangible stockholders’ equity

 

 
8.14

%  

 
9.41

%  

 
9.84

%  

 
10.25

%  

 
9.81

%  

Core return on average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income GAAP

 

$
3,839

 

$
4,409

 

$
4,431

 

$
5,044

 

$
4,384

 

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 
136

 

 
96

 

 

 

 

 
541

 

 

 

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income Core

 

$
3,703

 

$
4,313

 

$
4,431

 

$
4,503

 

$
4,384

 

Average assets

 

$
1,787,150

 

$
1,752,510

 

$
1,726,278

 

$
1,711,339

 

$
1,723,736

 

Core return on average assets

 

 
0.82

%  

 
0.98

%  

 
1.03

%  

 
1.07

%  

 
1.01

%  

 

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

    

Dec 31

    

Dec 31

 

Year Ended

 

2015

 

2014

 

Core net income per share:

 

 

 

 

 

 

 

Net income GAAP

 

$
17,723

 

$
17,649

 

Adjustments:

 

 

 

 

 

 

 

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

 

 
773

 

 
560

 

Add: Acquisition related expenses, net of tax

 

 

 

 

 
1,121

 

Net income Core

 

$
16,950

 

$
18,210

 

Average common shares outstanding

 

 
7,516,451

 

 
7,548,825

 

Core net income per share

 

$
2.26

 

$
2.41