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Peoples Financial Services Corp. Reports Third Quarter 2017 Earnings

SCRANTON, Pa., Oct. 24, 2017 /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, 2017. Peoples reported net income of $5.4 million, or $0.72 per share for the third quarter of 2017, compared to $5.1 million, or $0.69 per share for the comparable period of 2016.

Core net income for the three months ended September 30, 2017 was $5.4 million, a $232 thousand increase from $5.1 million for the same period in 2016. The results for the three months ended September 30, 2017 and 2016 did not include any income that is considered non-core.

Net income for the nine months ended September 30, 2017, totaled $15.8 million or $2.14 per share compared to $14.9 million or $2.01 per share for the same period last year.

Core net income, which we have defined to exclude gains on the sale of investment securities available-for-sale, as well as the gain on the sale of our merchant services portfolio, net of tax, for both the nine months ended September 30, 2017 and 2016 was $14.5 million. Core net income per share for the nine months ended September 30, 2017 was $1.96, an increase from $1.95 for the same period in 2016. The results for the nine months ended September 30, 2017 include a gain on the sale of our merchant services portfolio of $2.3 million while the results for the nine months ended September 30, 2016 include net gains on the sale of investment securities of $623 thousand.

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 included herein contain items, which Peoples considers non-core, namely gains on sales of investment securities available-for-sale, as well as the gain on the sale of our merchant services portfolio. 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 $99.6 million, or 8.7% annualized for the nine months ended September 30, 2017.
  • Deposits grew $99.1 million or 8.3% annualized for the nine months ended September 30, 2017.
  • Book value per share improved to $36.00 at September 30, 2017 from $34.71 at December 31, 2016, and $34.68 at September 30, 2016.
  • Tangible book value per share improved to $26.97 at September 30, 2017 from $25.57 at December 31, 2016, and $25.50 at September 30, 2016.
  • Tax-equivalent net interest income increased to $17.5 million for the third quarter of 2017 compared to $17.0 million for the second quarter of 2017, and $16.6 million for the third quarter of 2016.
  • Tax-equivalent net interest margin increased five basis points in the third quarter of 2017 to 3.73%, compared to 3.68% for the quarter ended June 30, 2017, but decreased three basis points compared to 3.76% for the quarter ended September 30, 2016.
  • Nonperforming assets to loans, net, and foreclosed assets increased to 0.83% at September 30, 2017, from 0.73% at June 30, 2017, but decreased compared to 0.93% at September 30, 2016.
  • The allowance for loan losses to loans, net increased to 1.15 % at September 30, 2017, from 1.11% at June 30, 2017, and 1.03% at September 30, 2016.
  • Opened a new community office located in the Lehigh Valley, on Tilghman Street in West Allentown, PA. The office includes a retail branch which opened for the transaction of business in July 2017.

INCOME STATEMENT REVIEW

The tax-equivalent net interest margin for the three and nine months ended September 30, were 3.73% and 3.71% respectively in 2017, compared to 3.76% and 3.79%, respectively for the same periods in 2016.

Tax-equivalent net interest income for the nine months ended September 30, increased $2.5 million to $51.1 million in 2017 from $48.6 million in 2016. The increase in tax equivalent net interest income was primarily due to a $128.6 million increase in average earning assets for the nine months ended September 30, 2017 when compared to the same period in 2016. The tax-equivalent yield on the loan portfolio decreased to 4.39% for the nine months ended September 30, 2017 compared to 4.45% for the comparable period in 2016. Loans, net averaged $1.6 billion for the nine months ended September 30, 2017 and $1.4 billion for the comparable period in 2016. For the nine months ended September 30, the tax-equivalent yield on total investments decreased to 2.85% in 2017 from 2.91% in 2016. Average investments totaled $269.9 million through three quarters in 2017 and $272.5 million in those same three quarters in 2016. Average interest-bearing liabilities increased $102.0 million for the nine months ended September 30, 2017, compared to the corresponding period last year. The cost of funds, which represents our average rate paid on total interest-bearing liabilities, increased to 0.60% in the nine months ended September 30, 2017 from 0.55% for the same period of 2016.

The provision for loan losses totaled $3.6 million for the nine months ended September 30, 2017 and 2016. For the quarter ended September 30, the provision for loan losses was $1.2 million in both 2017 and 2016.

For the nine months ended September 30, noninterest income totaled $13.8 million in 2017, an increase from $12.0 million in 2016. The gain on sale of our merchant services portfolio was $2.3 million in 2017 compared to the same period in 2016 when we recognized gains of $623 thousand from the sale of available-for-sale investment securities. Increases in service charges, fees and commissions, income from fiduciary activities and wealth management services more than offset decreases in income generated from revenues from merchant services, income from mortgage banking activities and life insurance investment income. For the three months ended September 30, 2017 and 2016, noninterest income totaled $3.7 million and $4.0 million, respectively. The decrease was primarily due to lower merchant services income in the current period due to the sale of our merchant business in the second quarter of 2017. Offsetting the decrease was higher service charges, fees and commissions due to the bank entering into an interest rate swap transaction during the third quarter of 2017, which resulted in the recognition of net fee income in the amount of $496 thousand. The interest rate swap allowed the bank to retain a large commercial credit relationship.

Noninterest expense increased $3.1 million or 8.6% to $38.8 million for the nine months ended September 30, 2017, from $35.7 million for the nine months ended September 30, 2016. Salaries and employee benefits increased $3.1 million or 18.9% due to merit increases and continued investment in our expansion markets in the Lehigh Valley and King of Prussia. For the third quarter of 2017, noninterest expense increased to $12.5 million from $12.0 million for the same period in 2016, an increase of $463 thousand or 3.9%. Again, salaries and employee benefits were the key driver of the increase, $6.6 million for the third quarter of 2017 compared to $5.5 million for the comparable period in 2016, an increase of $1.1 million or 19.8%. As with the results for the nine months ended September 30, 2017, the buildout of our expansion plan led to increases in salaries and employee benefit expense when comparing the two periods. The increase in salaries and employee benefits expense was partially offset by a decrease of $857 thousand or 96.3% in merchant services expense due to the sale of our merchant services portfolio during the second quarter of 2017.

BALANCE SHEET REVIEW

At September 30, 2017, total assets, loans and deposits were $2.1 billion, $1.6 billion and $1.7 billion, respectively. Loans, net grew $99.6 million or 8.7% annualized through nine months in 2017. Loans, net grew $110.1 million or 7.2% from September 30, 2016 to September 30, 2017. Deposits grew $99.1 million or 8.3% annualized through nine months in 2017. Total deposits grew $122.0 million or 7.8% from September 30, 2016 to September 30, 2017. Noninterest bearing deposits increased $18.5 million or 7.0% annualized while interest-bearing deposits increased $80.6 million or 8.7% annualized through nine months in 2017. Total investments were $268.7 million at September 30, 2017, including $259.1 million securities classified as available-for-sale and $9.6 million classified as held-to-maturity.

Stockholders' equity equaled $266.3 million or $36.00 per share at September 30, 2017, and $256.6 million or $34.71 per share at December 31, 2016. Tangible stockholders' equity improved to $26.97 per share at September 30, 2017, from $25.57 per share at December 31, 2016. Dividends declared for the nine months ended September 30, 2017 amounted to $0.94 per share representing a dividend payout ratio of 43.9%.

ASSET QUALITY REVIEW

Nonperforming assets were $13.6 million or 0.83% of loans, net and foreclosed assets at September 30, 2017, compared to $14.2 million or 0.93% of loans, net and foreclosed assets at December 31, 2016. The allowance for loan losses equaled $18.8 million or 1.15% of loans, net at September 30, 2017 compared to $16.0 million or 1.04% of loans, net, at December 31, 2016. Loans charged-off, net of recoveries, for the nine months ended September 30, 2017, equaled $730 thousand or 0.06% of average loans, compared to $863 thousand or 0.08% of average loans for the comparable period last year.

About Peoples:

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Bucks, Lackawanna, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 27 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.

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 share and per share data)





Sept 30


June 30


Mar 31


Dec 31


Sept 30



2017


2017


2017


2016


2016

Key performance data:
















Per share data:
















Net income


$

0.72


$

0.77


$

0.65


$

0.64


$

0.69

Core net income (1)


$

0.72


$

0.59


$

0.65


$

0.64


$

0.69

Cash dividends declared


$

0.32


$

0.31


$

0.31


$

0.31


$

0.31

Book value


$

36.00


$

35.63


$

35.07


$

34.71


$

34.68

Tangible book value (1)


$

26.97


$

26.56


$

25.97


$

25.57


$

25.50

Market value:
















High


$

49.00


$

45.73


$

49.57


$

50.54


$

40.76

Low


$

39.25


$

39.25


$

39.66


$

38.41


$

37.93

Closing


$

47.80


$

43.73


$

41.80


$

48.70


$

40.76

Market capitalization


$

353,553


$

323,434


$

309,075


$

360,095


$

301,385

Common shares outstanding



7,396,505



7,396,163



7,394,143



7,394,143



7,394,143

Selected ratios:
















Return on average stockholders' equity



8.00%



8.71%



7.51%



7.29%



7.95%

Core return on average stockholders' equity (1)



8.00%



6.70%



7.51%



7.29%



7.95%

Return on average tangible stockholders' equity (1)



10.70%



11.73%



10.15%



9.88%



10.82%

Core return on average tangible stockholders' equity (1)



10.70%



9.03%



10.15%



9.88%



10.82%

Return on average assets



1.03%



1.11%



0.97%



0.94%



1.05%

Core return on average assets (1)



1.03%



0.85%



0.97%



0.94%



1.05%

Stockholders' equity to total assets



12.73%



12.76%



12.82%



12.83%



13.01%

Efficiency ratio (2)



57.81%



63.95%



59.13%



58.59%



56.89%

Nonperforming assets to loans, net, and foreclosed assets



0.83%



0.73%



0.78%



0.93%



0.93%

Net charge-offs to average loans, net



0.04%



0.09%



0.05%



0.30%



0.08%

Allowance for loan losses to loans, net



1.15%



1.11%



1.09%



1.04%



1.03%

Interest-bearing assets yield (FTE) (3)



4.19%



4.14%



4.17%



4.10%



4.17%

Cost of funds



0.61%



0.60%



0.57%



0.56%



0.54%

Net interest spread (FTE) (3)



3.58%



3.54%



3.60%



3.54%



3.63%

Net interest margin (FTE) (3)



3.73%



3.68%



3.73%



3.67%



3.76%



(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


2017


2016

Interest income:







Interest and fees on loans:







Taxable


$

48,021


$

44,400

Tax-exempt



2,334



2,301

Interest and dividends on investment securities:







Taxable



2,130



1,879

Tax-exempt



2,262



2,611

Dividends



37



31

Interest on interest-bearing deposits in other banks



107



47

Interest on federal funds sold







Total interest income



54,891



51,269

Interest expense:







Interest on deposits



4,617



3,961

Interest on short-term borrowings



599



282

Interest on long-term debt



1,041



1,067

Total interest expense



6,257



5,310

Net interest income



48,634



45,959

Provision for loan losses



3,600



3,600

Net interest income after provision for loan losses



45,034



42,359

Noninterest income:







Service charges, fees, commissions



5,410



4,513

Merchant services income



2,358



3,209

Commissions and fees on fiduciary activities



1,542



1,495

Wealth management income



1,081



979

Mortgage banking income



576



616

Life insurance investment income



577



594

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






623

Net gains on sale of merchant services business



2,278




Total noninterest income



13,822



12,029

Noninterest expense:







Salaries and employee benefits expense



19,851



16,702

Net occupancy and equipment expense



7,327



6,998

Merchant services expense



1,796



2,270

Amortization of intangible assets



785



899

Other expenses



9,079



8,879

Total noninterest expense



38,838



35,748

Income before income taxes



20,018



18,640

Provision for income tax expense



4,209



3,785

Net income


$

15,809


$

14,855

Other comprehensive income (loss):







Unrealized gains on investment securities available-for-sale


$

1,076


$

1,003

Reclassification adjustment for gains included in net income






(623)

Change in pension liability







Income tax expense related to other comprehensive income



377



133

Other comprehensive income, net of income taxes



699



247

Comprehensive income


$

16,508


$

15,102

Per share data:







Net income


$

2.14


$

2.01

Cash dividends declared


$

0.94


$

0.93

Average common shares outstanding



7,395,612



7,397,581

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


2017


2017


2017


2016


2016

Interest income:
















Interest and fees on loans:
















Taxable


$

16,535


$

15,945


$

15,541


$

15,502


$

15,294

Tax-exempt



813



795



726



730



770

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
















Taxable



714



719



697



636



575

Tax-exempt



716



752



794



827



861

Dividends



13



12



12



17



10

Interest on interest-bearing deposits in other banks



40



38



29



3



15

Total interest income



18,831



18,261



17,799



17,715



17,525

Interest expense:
















Interest on deposits



1,654



1,529



1,434



1,468



1,356

Interest on short-term borrowings



177



248



174



120



116

Interest on long-term debt



344



349



348



353



353

Total interest expense



2,175



2,126



1,956



1,941



1,825

Net interest income



16,656



16,135



15,843



15,774



15,700

Provision for loan losses



1,200



1,200



1,200



1,400



1,200

Net interest income after provision for loan losses



15,456



14,935



14,643



14,374



14,500

Noninterest income:
















Service charges, fees, commissions



2,156



1,682



1,572



1,603



1,542

Merchant services income



165



1,178



1,015



990



1,257

Commissions and fees on fiduciary activities



540



494



508



481



539

Wealth management income



414



348



319



319



271

Mortgage banking income



193



204



179



269



217

Life insurance investment income



193



195



189



197



199

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
















Net gains on sale of merchant services business






2,278










Total noninterest income



3,661



6,379



3,782



3,859



4,025

Noninterest expense:
















Salaries and employee benefits expense



6,550



7,026



6,275



5,732



5,466

Net occupancy and equipment expense



2,483



2,450



2,394



2,424



2,316

Merchant services expense



33



1,033



730



723



890

Amortization of intangible assets



259



258



268



287



297

Other expenses



3,155



3,235



2,689



3,116



3,048

Total noninterest expense



12,480



14,002



12,356



12,282



12,017

Income before income taxes



6,637



7,312



6,069



5,951



6,508

Income tax expense



1,287



1,653



1,269



1,223



1,390

Net income


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Other comprehensive (loss) income :
















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


$

(381)


$

1,184


$

273


$

(4,420)


$

(1,120)

Reclassification adjustment for gains included in net income
















Change in pension liability












917




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



(133)



415



96



(1,226)



(392)

Other comprehensive (loss) income, net of income taxes



(248)



769



177



(2,277)



(728)

Comprehensive income


$

5,102


$

6,428


$

4,977


$

2,451


$

4,390

Per share data:
















Net income


$

0.72


$

0.77


$

0.65


$

0.64


$

0.69

Cash dividends declared


$

0.32


$

0.31


$

0.31


$

0.31


$

0.31

Average common shares outstanding



7,396,505



7,396,163



7,394,143



7,394,143



7,394,143

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


2017


2017


2017


2016


2016

Net interest income:
















Interest income
















Loans, net:
















Taxable


$

16,535


$

15,945


$

15,541


$

15,502


$

15,294

Tax-exempt



1,250



1,223



1,117



1,123



1,184

Total loans, net



17,785



17,168



16,658



16,625



16,478

Investments:
















Taxable



766



768



709



653



585

Tax-exempt



1,102



1,156



1,222



1,272



1,325

Total investments



1,868



1,924



1,931



1,925



1,910

Interest on interest-bearing balances in other
banks



1



1



29



3



15

Federal funds sold
















Total interest income



19,654



19,093



18,618



18,553



18,403

Interest expense:
















Deposits



1,654



1,529



1,434



1,468



1,356

Short-term borrowings



177



248



174



120



116

Long-term debt



344



349



348



353



353

Total interest expense



2,175



2,126



1,956



1,941



1,825

Net interest income


$

17,479


$

16,967


$

16,662


$

16,612


$

16,578

Loans, net:
















Taxable



4.43%



4.37%



4.41%



4.33%



4.39%

Tax-exempt



4.33%



4.29%



4.30%



4.25%



4.36%

Total loans, net



4.42%



4.36%



4.40%



4.33%



4.39%

Investments:
















Taxable



1.93%



1.93%



1.87%



1.72%



1.74%

Tax-exempt



4.09%



4.17%



4.30%



4.22%



4.28%

Total investments



2.81%



2.85%



2.89%



2.83%



2.94%

Interest-bearing balances with banks



1.46%



1.31%



1.16%



3.58%



1.93%

Federal funds sold
















Total interest-bearing assets



4.19%



4.14%



4.17%



4.10%



4.17%

Interest expense:
















Deposits



0.50%



0.48%



0.47%



0.47%



0.45%

Short-term borrowings



1.30%



1.13%



0.86%



0.63%



0.58%

Long-term debt



2.43%



2.44%



2.44%



2.40%



2.38%

Total interest-bearing liabilities



0.61%



0.60%



0.57%



0.56%



0.54%

Net interest spread



3.58%



3.54%



3.60%



3.54%



3.63%

Net interest margin



3.73%



3.68%



3.73%



3.67%



3.76%

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)





















Sept 30


June 30


Mar 31


Dec 31


Sept 30

At period end


2017


2017


2017


2016


2016

Assets:
















Cash and due from banks


$

31,839


$

41,026


$

31,511


$

39,496


$

31,620

Interest-bearing balances in other banks



1,067



375



304



445



294

Federal funds sold
















Investment securities:
















Available-for-sale



259,138



256,774



264,644



259,410



249,913

Held-to-maturity



9,564



9,868



10,180



10,517



10,864

Total investments



268,702



266,642



274,824



269,927



260,777

Loans held for sale



460






444






360

Loans, net



1,632,515



1,597,362



1,559,867



1,532,965



1,522,391

Less: allowance for loan losses



18,831



17,802



16,969



15,961



15,712

Net loans



1,613,684



1,579,560



1,542,898



1,517,004



1,506,679

Premises and equipment, net



37,373



35,892



34,967



33,260



33,049

Accrued interest receivable



5,908



6,206



5,604



6,228



5,309

Goodwill



63,370



63,370



63,370



63,370



63,370

Other intangible assets, net



3,427



3,685



3,944



4,211



4,498

Other assets



66,406



68,002



65,640



65,501



65,283

Total assets


$

2,092,236


$

2,064,758


$

2,023,506


$

1,999,442


$

1,971,239

Liabilities:
















Deposits:
















Noninterest-bearing


$

372,146


$

356,435


$

358,538


$

353,686


$

342,782

Interest-bearing



1,315,709



1,282,998



1,257,006



1,235,071



1,223,028

Total deposits



1,687,855



1,639,433



1,615,544



1,588,757



1,565,810

Short-term borrowings



71,900



91,500



77,475



82,700



75,300

Long-term debt



50,199



57,160



57,615



58,134



58,685

Accrued interest payable



481



431



457



462



434

Other liabilities



15,505



12,725



13,096



12,771



14,570

Total liabilities



1,825,940



1,801,249



1,764,187



1,742,824



1,714,799

Stockholders' equity:
















Common stock



14,793



14,792



14,788



14,788



14,788

Capital surplus



134,988



134,937



134,888



134,871



134,853

Retained earnings



119,971



116,988



113,621



111,114



108,677

Accumulated other comprehensive loss



(3,456)



(3,208)



(3,978)



(4,155)



(1,878)

Total stockholders' equity



266,296



263,509



259,319



256,618



256,440

Total liabilities and stockholders' equity


$

2,092,236


$

2,064,758


$

2,023,506


$

1,999,442


$

1,971,239

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30

Average quarterly balances


2017


2017


2017


2016


2016

Assets:
















Loans, net:
















Taxable


$

1,482,215


$

1,464,401


$

1,429,323


$

1,422,725


$

1,385,800

Tax-exempt



114,455



114,287



105,442



105,119



108,105

Total loans, net



1,596,670



1,578,688



1,534,765



1,527,844



1,493,905

Investments:
















Taxable



157,104



159,841



159,593



150,697



136,645

Tax-exempt



106,865



111,061



115,347



119,805



123,177

Total investments



263,969



270,902



274,940



270,502



259,822

Interest-bearing balances with banks



272



307



349



333



412

Federal funds sold
















Total interest-bearing assets



1,860,911



1,849,897



1,810,054



1,798,679



1,754,139

Other assets



195,773



196,913



194,499



192,266



188,256

Total assets


$

2,056,684


$

2,046,810


$

2,004,553


$

1,990,945


$

1,942,395

Liabilities and stockholders' equity:
















Deposits:
















Interest-bearing


$

1,299,661


$

1,270,459


$

1,244,021


$

1,241,586


$

1,195,645

Noninterest-bearing



366,610



356,282



346,567



341,795



337,337

Total deposits



1,666,271



1,626,741



1,590,588



1,583,381



1,532,982

Short-term borrowings



54,084



87,739



82,002



75,518



78,974

Long-term debt



56,270



57,372



57,856



58,404



58,960

Other liabilities



14,820



14,305



14,872



15,616



15,349

Total liabilities



1,791,445



1,786,157



1,745,318



1,732,919



1,686,265

Stockholders' equity



265,239



260,653



259,235



258,026



256,130

Total liabilities and stockholders' equity


$

2,056,684


$

2,046,810


$

2,004,553


$

1,990,945


$

1,942,395

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30



2017


2017


2017


2016


2016

At quarter end
















Nonperforming assets:
















Nonaccrual/restructured loans


$

11,714


$

10,429


$

11,446


$

12,974


$

12,409

Accruing loans past due 90 days or more



1,509



835



462



844



1,109

Foreclosed assets



358



384



236



393



703

Total nonperforming assets


$

13,581


$

11,648


$

12,144


$

14,211


$

14,221

















Three months ended
















Allowance for loan losses:
















Beginning balance


$

17,802


$

16,969


$

15,961


$

15,712


$

14,799

Charge-offs



268



431



311



1,358



355

Recoveries



97



64



119



207



68

Provision for loan losses



1,200



1,200



1,200



1,400



1,200

Ending balance


$

18,831


$

17,802


$

16,969


$

15,961


$

15,712

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30

Three months ended


2017


2017


2017


2016


2016

Core net income per share:
















Net income GAAP


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Adjustments:
















Less: Gain on sale of merchant services business






2,278










Less: Gains on sale of investment securities
















Add: Expenses related to sale of merchant services business






271










Add: Gain on sale of merchant services business tax adjustment






702










Add: Gains on sale of investment securities tax adjustment
















Net income Core


$

5,350


$

4,354


$

4,800


$

4,728


$

5,118

Average common shares outstanding



7,396,505



7,396,163



7,394,143



7,394,143



7,394,143

Core net income per share


$

0.72


$

0.59


$

0.65


$

0.64


$

0.69

Tangible book value:
















Total stockholders' equity


$

266,296


$

263,509


$

259,319


$

256,618


$

256,440

Less: Goodwill



63,370



63,370



63,370



63,370



63,370

Less: Other intangible assets, net



3,427



3,685



3,944



4,211



4,498

Total tangible stockholders' equity


$

199,499


$

196,454


$

192,005


$

189,037


$

188,572

Common shares outstanding



7,396,505



7,396,163



7,394,143



7,394,143



7,394,143

Tangible book value per share


$

26.97


$

26.56


$

25.97


$

25.57


$

25.50

Core return on average stockholders' equity:
















Net income GAAP


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Adjustments:
















Less: Gain on sale of merchant services business






2,278










Less: Gains on sale of investment securities
















Add: Expenses related to sale of merchant services business






271










Add: Gain on sale of merchant services business tax adjustment






702










Add: Gains on sale of investment securities tax adjustment
















Net income Core


$

5,350


$

4,354


$

4,800


$

4,728


$

5,118

Average stockholders' equity


$

265,239


$

260,653


$

259,235


$

258,026


$

256,130

Core return on average stockholders' equity



8.00%



6.70%



7.51%



7.29%



7.95%

Return on average tangible equity:
















Net income GAAP


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Average stockholders' equity


$

265,239


$

260,653


$

259,235


$

258,026


$

256,130

Less: average intangibles



66,926



67,185



67,448



67,725



68,017

Average tangible stockholders' equity


$

198,313


$

193,468


$

191,787


$

190,301


$

188,113

Return on average tangible stockholders' equity



10.70%



11.73%



10.15%



9.88%



10.82%

Core return on average tangible stockholders' equity:
















Net income GAAP


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Adjustments:
















Less: Gain on sale of merchant services business






2,278










Less: Gains on sale of investment securities
















Add: Expenses related to sale of merchant services business






271










Add: Gain on sale of merchant services business tax adjustment






702










Add: Gains on sale of investment securities tax adjustment
















Net income Core


$

5,350


$

4,354


$

4,800


$

4,728


$

5,118

Average stockholders' equity


$

265,239


$

260,653


$

259,235


$

258,026


$

256,130

Less: average intangibles



66,926



67,185



67,448



67,725



68,017

Average tangible stockholders' equity


$

198,313


$

193,468


$

191,787


$

190,301


$

188,113

Core return on average tangible stockholders' equity



10.70%



9.03%



10.15%



9.88%



10.82%

Core return on average assets:
















Net income GAAP


$

5,350


$

5,659


$

4,800


$

4,728


$

5,118

Adjustments:
















Less: Gain on sale of merchant services business






2,278










Less: Gains on sale of investment securities
















Add: Expenses related to sale of merchant services business






271










Add: Gain on sale of merchant services business tax adjustment






702










Add: Gains on sale of investment securities tax adjustment
















Net income Core


$

5,350


$

4,354


$

4,800


$

4,728


$

5,118

Average assets


$

2,056,684


$

2,046,810


$

2,004,553


$

1,990,945


$

1,942,395

Core return on average assets



1.03%



0.85%



0.97%



0.94%



1.05%

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)











Sept 30


Sept 30

Nine Months Ended


2017


2016

Core net income per share:







Net income GAAP


$

15,809


$

14,855

Adjustments:







Less: Gain on sale of merchant services business



2,278




Less: Gains on sale of investment securities






623

Add: Expenses related to sale of merchant services business



271




Add: Gain on sale of merchant services business tax adjustment



702




Add: Gains on sale of investment securities tax adjustment






218

Net income Core


$

14,504


$

14,450

Average common shares outstanding



7,395,612



7,397,581

Core net income per share


$

1.96


$

1.95

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SOURCE Peoples Financial Services Corp.