SCRANTON, Pa., July 31, 2020 /PRNewswire/ -- Peoples Financial
Services Corp. ("Peoples") (NASDAQ: PFIS), the bank holding company
for Peoples Security Bank and Trust Company, today reported
unaudited financial results at and for the three and six months
ended June 30, 2020. The
results for the three months ended June 30,
2020 reflect the impact of $201.3
million of loans originated through the United States
Department of Treasury's Paycheck Protection Program ("PPP") and
COVID-19 related impacts. Peoples reported net income of
$7.6 million, or $1.03 per diluted share for the three months
ended June 30, 2020, an increase of
6.0% when compared to $7.1 million,
or $0.96 per diluted share for the
comparable period of 2019. The increase in earnings for the
three months ended June 30, 2020 is
the product of an increase in pre-provision net interest income of
$1.8 million, due primarily to lower
funding costs of $1.3 million, and
lower noninterest expenses of $1.2
million primarily from deferred loan origination cost
benefit related to the PPP loans originated in the second quarter.
Partially offsetting the increase was a higher provision for loan
losses of $1.5 million resulting from
the application of our allowance for loan losses methodology, and
changes to qualitative factors relating to the adverse impact of
the COVID-19 crisis.
Net income for the six months ended June
30, 2020, totaled $12.9
million or $1.74 per diluted
share, a 5.2% decrease when compared to $13.6 million or $1.83 per diluted share for the same period last
year. The decrease in earnings in the 2020 six month period
is the result of an increase to our provision for loan losses of
$3.9 million, primarily due to
changes to the qualitative factors included in our allowance for
loan losses methodology relating to the impact of COVID-19, and
lower noninterest income of $0.6
million. Partially offsetting the decline were
increases in our pre-provision net interest income of $3.0 million, or 8.2%, which were the result of
average earning asset growth of $268.8
million and lower funding costs of $1.5 million, and lower noninterest expenses of
$1.0 million.
In addition to evaluating its results of operations in
accordance with 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 in this release contain items, which
Peoples considers non-core, namely gains and losses incurred within
the investment securities 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.
Core net income, which we have defined to exclude losses or
gains on investment securities, for the three months ended
June 30, totaled $7.5 million and $7.1
million in 2020 and 2019, respectively. Core net income per
share for the three months ended June 30,
2020 was $1.03, an increase
from $0.96 for the same period in
2019. The results in 2020 exclude a pre-tax $39 thousand unrealized gain on our equity
investment portfolio while the results for 2019 exclude a pre-tax
$23 thousand gain on the sale of debt
securities and a $9 thousand
unrealized loss on our equity investment portfolio.
Core net income for the six months ended June 30, 2020 was $12.7
million or $1.72 per diluted
share, a decrease of 6.1% compared to $13.5
million or $1.83 per diluted
share for the same period of 2019. Results for the six months ended
June 30, 2020 exclude a pre-tax gain
of $267 thousand on the sale of debt
securities and a $84 thousand
unrealized loss on our equity investment securities portfolio. The
2019 results were impacted by a pre-tax gain of $23 thousand on the sale of debt securities and
an $8 thousand unrealized loss on our
equity investment securities portfolio.
NOTABLES
- Loans, net growth of $323.1
million or 17.4% since June 30,
2019, including $201.3 million
of PPP commercial loans. Excluding PPP loans, loans increased
$121.8 million or 6.6% since
June 30, 2019
- Deposits grew $238.6 million or
12.1% for the six months ended June 30,
2020, due in part to PPP loan proceeds deposited in customer
accounts.
- Efficiency ratio improved to 54.0% for the three months ended
June 30, 2020, compared to 61.2% in
the year ago period due to lower noninterest expenses.
- Tangible book value per share improved to $33.74 at June 30,
2020 from $31.68 at
December 31, 2019, and from
$30.58 at June
30, 2019.
- Tax-equivalent net interest income increased $2.9 million or 7.5% to $40.8 million for the six months ended
June 30, 2020 compared to
$37.9 million for the same period in
2019.
- Provision for loan losses increased $3.9
million or 278.6% to $5.3
million for the six months ended June
30, 2020 from $1.4 million
during the year ago period. The increase was due primarily to
higher qualitative factors related to economic decline resulting
from the adverse impact of COVID-19.
- The ratio of the allowance for loan losses to total loans was
1.24% and 1.18% at June 30, 2020 and
June 30, 2019, respectively.
Excluding PPP loans that do not carry an allowance for losses due
to a 100% government guarantee, the ratio equaled 1.36% at
June 30, 2020, or an impact of 12
basis points.
- Issued $33.0 million aggregate
principal, fixed-to-floating rate subordinated debentures due
June 1, 2030, qualifying as Tier 2
Capital.
- Dividends declared for the six months ended June 30, 2020 amounted to $0.72 per share, a 5.9% increase from 2019,
representing a dividend payout ratio of 41.1%.
- Notified our customers and primary regulators of our intent to
close the Duryea, Gouldsboro, and South Scranton offices during
the third quarter of 2020.
INCOME STATEMENT REVIEW
Calculated on a fully taxable equivalent basis ("FTE"), our
tax-equivalent net interest margin for the three and six months
ended June 30 were 3.36% and 3.43%
respectively in 2020, compared to 3.62% and 3.60% respectively
for the same periods in 2019. The PPP loans' 1% interest rate
negatively impacted the net interest margin by 5 and 2 basis points
for the three and six months ended June 30,
2020, respectively. The tax-equivalent yield on
interest-earning assets decreased 59 basis points to 3.90% and
decreased 39 basis points to 4.07% for the three and six months
ended June 30, 2020 from
4.49% and 4.46% during the corresponding periods of 2019.
The decrease in yield is due to lower market rates the result
of the Federal Open Market Committee ("FOMC") cutting the federal
funds rate by 75 basis points during the second half of 2019, and
aggressive actions to cut rates 150 basis points in the first
quarter of 2020. The decrease in market rates resulted in
lower rates on our existing adjustable rate loans and affected
rates on new originations. At the same time, we experienced
lower interest-bearing liability costs due to the lower market
rates. Our cost of funds, which represents our average rate
paid on total interest-bearing liabilities, decreased 42 and
27 basis points to 0.75% and 0.88% respectively for the three and
six months ended June 30, 2020 when compared to 1.17% and
1.15% respectively for the same periods in 2019.
Tax-equivalent net interest income for the six months ended
June 30, increased $2.9 million or 7.5% to $40.8 million in 2020 from $37.9 million in 2019. The increase in tax
equivalent net interest income was due to lower interest expense of
$1.5 million, resulting from lower
borrowing rates, and a $215.7 million increase in average loans for
the six months ended June 30, 2020
when compared to the same period in 2019. PPP loans averaged
$81.7 million in the six month period
ended June 30, 2020 with interest and
fees totaling $1.1 million. The
tax-equivalent yield on the loan portfolio decreased to 4.34% for
the six months ended June 30, 2020,
compared to 4.75% for the comparable period in 2019 due to lower
market rates and the yield earned on PPP loans. Loans, net averaged
$2.1 billion for the six months ended
June 30, 2020 and $1.8 billion for the comparable period in 2019.
For the six months ended June 30, the
tax-equivalent yield on total investments decreased to 2.45% in
2020 from 2.53% in 2019. Average investments totaled $309.9 million in 2020 and $274.2 million in 2019. Average interest-bearing
liabilities increased $153.0 million
for the six months ended June 30,
2020, compared to the corresponding period last year due to
higher customer savings rates, new account relationships and the
addition of brokered deposits.
The provision for loan losses totaled $5.3 million for the six months ended
June 30, 2020 and $1.4 million for the six months ended
June 30, 2019. For the quarter
ended June 30, the provision for loan
losses was $1.8 million in 2020 and
$0.4 million in 2019. The increase to
the provision in the 2020 period results from the application of
our loan losses methodology which includes monitoring of our asset
quality and the general economic environment to assure the
allowance for loan losses is adequate to cover estimated credit
losses in the loan portfolio. Changes to the qualitative factors
related to economic decline resulting from the adverse impact of
the COVID-19 crisis was the primary reason for the higher
provision.
For the six months ended June 30,
noninterest income totaled $7.0
million in 2020, a decrease from $7.6 million in 2019. Service charges,
fees, and commissions totaled $3.0
million in the six months ended June
30, 2020 compared to $3.7
million during the corresponding period of 2019 as the
volume of consumer and commercial service charge activity
fell. Merchant services and wealth management income both
decreased largely due to lower transaction volumes in the COVID-19
environment. Mortgage banking revenue increased $0.2 million as sold mortgage production volumes
increased due to low interest rates, and net gains on the sale of
investment securities were higher by $0.2
million in the 2020 period. For the three months ended
June 30, noninterest income totaled
$3.4 million in 2020, a decrease
from $4.2 million in 2019. The
decrease was due to lower service charges, fees and commissions as
the volume of consumer and commercial service charge activity
significantly fell, to lower wealth management income due to the
prevailing COVID-19 environment, and to a decrease in fee income
generated from commercial loan interest rate swap transactions in
the 2020 period. Increased mortgage banking revenue resulting
from an increase in sold mortgage production volumes partially
offset the decreases.
Noninterest expense decreased $1.0 million or 3.7% to $26.9 million for the six months ended
June 30, 2020, from $27.9 million for the six months ended
June 30, 2019. Salaries and employee
benefits decreased $0.7 million or
4.7% due to an increase to deferred loan origination cost benefit
of $1.3 million related to the
origination of PPP loans during the second quarter of 2020.
The initial deferred cost benefit will add back to expense
primarily over the twenty-four month duration of the PPP loans and
may be accelerated based on the timing of the forgiveness of PPP
loans made to our borrowers by the Small Business Administration
("SBA"). In addition, other expenses during the six months
ended June 30, 2020 decreased
$0.5 million due to lower FDIC
assessments and advertising expense. Occupancy and equipment
expenses increased due to our market expansion when comparing the
first half of 2020 and 2019 as those expenses increased
$0.3 million or 5.4%. Noninterest
expense decreased $1.2 million or
8.2% to $13.2 million for the three
months ended June 30, 2020, from
$14.4 million for the three months
ended June 30, 2019. Salaries and
employee benefits decreased $1.0
million or 12.3% due to deferred loan origination cost
benefit related to the origination of PPP loans during the 2020
period. Decreases to other expenses of $0.4
million were partially offset by higher occupancy and
equipment expenses of $0.2 million
due to our market expansion when comparing the three months ending
June 30, 2020 and 2019.
BALANCE SHEET REVIEW
At June 30, 2020, total assets,
loans and deposits were $2.7 billion,
$2.2 billion and $2.2 billion, respectively. Loans, net increased
$243.7 million or 12.6% from
December 31, 2019. The growth in
loans was primarily in commercial and industrial loans resulting
from our participation in the SBA's administered PPP, and to a
lesser extent in commercial real estate loans. During the
second quarter of 2020 we originated $201.3
million in PPP loans, the majority of which were to existing
customers and had initial terms of twenty-four months. We
expect a significant decline in these loan balances during the
second half of 2020 as our commercial customers are expected to
apply for and receive forgiveness under the PPP program. Total
deposits increased $238.6 million or
12.1% from December 31, 2019 due to
proceeds of PPP loans retained on deposit by our commercial
borrowers, stimulus payments received and retained by our
customers, organic growth of customer relationships and
$26.3 million of brokered deposits.
Non-interest bearing deposits increased $112.0 million or 24.2% and interest-bearing
deposits increased $126.6 million or
8.4% during the six months ended June 30,
2020. Total investments were $295.4
million at June 30, 2020,
including $288.0 million securities
classified as available-for-sale and $7.4
million classified as held-to-maturity.
During the three months ended June 30,
2020, we sold $33.0 million
aggregate principal amount of subordinated notes due 2030 (the
"2020 Notes"), to accredited investors in a private
placement. The 2020 Notes are intended to be treated as Tier
2 capital for regulatory capital purposes. The 2020 Notes
bear interest at a rate of 5.375% per year for the first five years
and then will float based on a benchmark rate, provided that the
interest rate applicable to the outstanding principal balance
during the period the 2020 Notes are floating will at no time be
less than 4.75%.
Stockholders' equity equaled $312.0
million or $42.55 per share at
June 30, 2020, and $299.0 million or $40.47 per share at December 31, 2019. Tangible stockholders' equity
improved to $33.74 per share at
June 30, 2020, from $31.68 per share at December 31, 2019. Dividends declared for the six
months ended June 30, 2020 amounted
to $0.72 per share, a 5.9% increase
from 2019, representing a dividend payout ratio of 41.1%.
ASSET QUALITY REVIEW
Nonperforming assets were $13.5
million or 0.62% of loans, net and foreclosed assets at
June 30, 2020, compared to
$10.5 million or 0.54% of loans, net
and foreclosed assets at December 31,
2019. The increase in non-performing loans was mainly due to
the placement of three large commercial loans on non-accrual. All
three loans have been individually measured for impairment and have
specific reserves allocated. Our allowance for loan losses
increased $4.3 million or 18.9% in
the first six months of 2020, due largely to the adjustment of
qualitative factors in our allowance for loan losses methodology,
which reflect economic decline and expectation of increased credit
losses due to COVID-19's adverse impact on economic and business
operating conditions. The allowance for loan losses equaled
$27.0 million or 1.24% of loans, net
at June 30, 2020 compared to
$22.7 million or 1.17% of loans, net,
at December 31, 2019. Excluding PPP loans that do not carry an
allowance for losses due to a 100% government guarantee, the ratio
equaled 1.36% at June 30, 2020.
Loans charged-off, net of recoveries, for the six months ended
June 30, 2020, equaled $1.0 million or 0.10% of average loans, compared
to $0.8 million or 0.09% of average
loans for the comparable period last year.
Impact of COVID-19
Operationally, as the COVID-19 events unfold, our priority is to
take care of our customers and employees. Our management team
continues to modify and enhance strategies and protocols intended
to protect our workforce and customers, maintain services for
customers, assure the functional continuity of our operating
systems, controls and processes, and mitigate financial risks posed
by changing market conditions. We have followed the recommendations
of our state governments as to conducting business and opened the
lobbies of the majority of our branches while maintaining safety
protocols by limiting the number of customers in the lobby at a
time and installing protective shields at teller windows.
From a lending perspective, organic loan growth, with the
exception of PPP loans, has been slowed as we focus on managing our
existing portfolio. We have participated in the Coronavirus Aid,
Relief and Economic Security Act ("CARES Act"), Paycheck Protection
Program, a $350 billion specialized
low-interest loan program funded by the U.S. Treasury Department
and administered by the U.S. Small Business Administration. The
Paycheck Protection Program ("PPP") provides borrower guarantees
for lenders, as well as loan forgiveness incentives for borrowers
that utilize the loan proceeds to cover employee
compensation-related business operating costs. Our loan officers
are guiding our commercial customers through the application and
forgiveness process. Through June 30,
2020, we have approved 1,373 PPP loans totaling $201.3 million. Substantially all of the loans
were made to existing customers, funded under the two year PPP loan
program, and the loan proceeds initially deposited with our
institution. At origination, loan fee income totaled $6.6 million and is being earned primarily over
the 24 month duration of the loans as a part of the loan yield. At
June 30, 2020, $5.9 million remains to be earned in future
quarters and may be accelerated based on the timing of forgiveness
of PPP loans by the SBA.
From a credit risk perspective, we have taken actions to
identify and assess our COVID-19 related credit exposures based on
asset class and borrower type. During the second quarter of 2020,
we worked to proactively monitor our loan portfolio by contacting
many of our borrowers to evaluate the impact of the pandemic on
them, their businesses and the underlying collateral for our loans.
The Company implemented a customer payment deferral program to
assist both consumer and business borrowers that may be
experiencing financial hardship due to COVID-19 related challenges.
For borrowers who received a loan payment deferral we are working
with the borrowers to evaluate the potential for further
deterioration of credit quality at the end of the deferral period.
We evaluated our commercial loan and commercial real estate loan
portfolios to identify those loans in industries that are most at
risk or where other information indicates the borrower may be
significantly impacted by the effects of COVID-19. Through
July 20, 2020, the Company granted
payment deferral requests for up to six months to 298 commercial
borrowers with outstanding loan balances of $306.4 million and to 476 consumer borrowers with
outstanding balances of $23.2
million. These loan deferrals and modifications have been
executed consistent with the guidelines of the CARES Act. Pursuant
to the CARES Act, these loan deferrals are not included in our
nonperforming loans disclosed below. Loans in deferment status will
continue to accrue interest during the deferment period unless
otherwise classified as nonperforming.
Our Asset Liability Management Committee met in May to review
our capital adequacy and liquidity contingency funding plan due to
the high degree of uncertainty around the magnitude and duration of
the economic impact of the COVID-19 pandemic. The Company's capital
planning and capital management activities, coupled with its
historically strong earnings performance and prudent dividend
practices, have allowed us to build strong capital reserves.
Because of the uncertain economic impact of COVID-19, however,
during the second quarter of 2020 the Company issued $33.0 million aggregate principal amount 5.375%
fixed-to-floating rate subordinated notes due June 2030. The
notes are intended to qualify as Tier 2 capital for regulatory
purposes. At June 30, 2020, all of
the Company's regulatory capital ratios significantly exceeded all
well-capitalized thresholds.
Additionally, management believes the Company's liquidity
position is strong. At June 30, 2020,
the Company's cash and due from banks balances were $51.9 million and we maintained $158.1 million of availability at the Federal
Reserve Bank's discount window. We may also utilize the Federal
Reserve's Paycheck Protection Program Liquidity Facility ("PPPLF")
by pledging the PPP loans as collateral; at June 30, $201.3
million would be available to borrow for a term equal to the
maturity date of the loans pledged. The Company also
maintains an available-for-sale investment securities portfolio,
comprised primarily of highly liquid U.S. Treasury and U.S. agency
securities, highly-rated municipal securities and U.S.
agency-backed mortgage backed securities. This portfolio serves as
a ready source of liquidity and capital. At June 30, 2020, the Company's available-for-sale
investment securities portfolio totaled $287.7 million, $233.3
million of which were unencumbered. Net unrealized gains on
the portfolio were $11.3 million. The
Bank's unused borrowing capacity at the Federal Home Loan Bank of
Pittsburgh at June 30, 2020 was $599.4
million.
The COVID-19 crisis is expected to continue to impact the
Company's financial results, as well as demand for its products and
services during the second half of 2020 and potentially beyond. The
short and long-term implications of the COVID-19 crisis, and
related monetary and fiscal stimulus measures, on our future
revenues, earnings results, allowance for loan losses, capital
reserves, and liquidity are uncertain at this time.
About Peoples:
Peoples Financial Services Corp. is the parent company of
Peoples Security Bank and Trust Company, a community bank serving
Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Schuylkill, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 29 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. and Peoples
Security Bank and Trust Company (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; the unfolding COVID-19
crisis and the governmental responses to the crisis; 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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Key performance
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share and per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1.03
|
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
0.97
|
|
$
|
0.96
|
|
Core net income
(1)
|
|
$
|
1.03
|
|
$
|
0.70
|
|
$
|
0.67
|
|
$
|
0.97
|
|
$
|
0.96
|
|
Cash dividends
declared
|
|
$
|
0.36
|
|
$
|
0.36
|
|
$
|
0.35
|
|
$
|
0.34
|
|
$
|
0.34
|
|
Book value
|
|
$
|
42.55
|
|
$
|
41.68
|
|
$
|
40.47
|
|
$
|
40.08
|
|
$
|
39.41
|
|
Tangible book value
(1)
|
|
$
|
33.74
|
|
$
|
32.86
|
|
$
|
31.68
|
|
$
|
31.27
|
|
$
|
30.58
|
|
Market
value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
High
|
|
$
|
38.86
|
|
$
|
50.10
|
|
$
|
53.43
|
|
$
|
48.38
|
|
$
|
45.41
|
|
Low
|
|
$
|
30.24
|
|
$
|
35.60
|
|
$
|
44.46
|
|
$
|
42.90
|
|
$
|
42.00
|
|
Closing
|
|
$
|
38.19
|
|
$
|
39.74
|
|
$
|
50.35
|
|
$
|
45.29
|
|
$
|
44.99
|
|
Market
capitalization
|
|
$
|
280,042
|
|
$
|
291,820
|
|
$
|
372,010
|
|
$
|
334,637
|
|
$
|
332,885
|
|
Common shares
outstanding
|
|
|
7,332,856
|
|
|
7,343,240
|
|
|
7,388,480
|
|
|
7,388,759
|
|
|
7,399,078
|
|
Selected
ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Return on average
stockholders' equity
|
|
|
9.87
|
%
|
|
7.05
|
%
|
|
6.69
|
%
|
|
9.65
|
%
|
|
9.98
|
%
|
Core return on
average stockholders'
equity (1)
|
|
|
9.83
|
%
|
|
6.90
|
%
|
|
6.55
|
%
|
|
9.63
|
%
|
|
9.97
|
%
|
Return on average
tangible
stockholders' equity
|
|
|
12.49
|
%
|
|
8.99
|
%
|
|
8.55
|
%
|
|
12.40
|
%
|
|
12.93
|
%
|
Core return on
average tangible
stockholders' equity (1)
|
|
|
12.44
|
%
|
|
8.79
|
%
|
|
8.38
|
%
|
|
12.38
|
%
|
|
12.91
|
%
|
Return on average
assets
|
|
|
1.13
|
%
|
|
0.86
|
%
|
|
0.83
|
%
|
|
1.21
|
%
|
|
1.24
|
%
|
Core return on
average assets (1)
|
|
|
1.12
|
%
|
|
0.84
|
%
|
|
0.81
|
%
|
|
1.21
|
%
|
|
1.24
|
%
|
Stockholders' equity
to total assets
|
|
|
11.56
|
%
|
|
12.03
|
%
|
|
12.08
|
%
|
|
12.48
|
%
|
|
12.55
|
%
|
Efficiency ratio
(2)
|
|
|
54.01
|
%
|
|
57.88
|
%
|
|
57.63
|
%
|
|
59.65
|
%
|
|
61.15
|
%
|
Nonperforming assets
to loans, net, and
foreclosed assets
|
|
|
0.62
|
%
|
|
0.60
|
%
|
|
0.54
|
%
|
|
0.61
|
%
|
|
0.68
|
%
|
Net charge-offs to
average loans, net
|
|
|
0.10
|
%
|
|
0.10
|
%
|
|
0.78
|
%
|
|
0.05
|
%
|
|
0.11
|
%
|
Allowance for loan
losses to loans, net
|
|
|
1.24
|
%
|
|
1.27
|
%
|
|
1.17
|
%
|
|
1.19
|
%
|
|
1.18
|
%
|
Interest-bearing
assets yield (FTE) (3)
|
|
|
3.90
|
%
|
|
4.25
|
%
|
|
4.30
|
%
|
|
4.42
|
%
|
|
4.49
|
%
|
Cost of
funds
|
|
|
0.75
|
%
|
|
1.01
|
%
|
|
1.06
|
%
|
|
1.10
|
%
|
|
1.17
|
%
|
Net interest spread
(FTE) (3)
|
|
|
3.15
|
%
|
|
3.24
|
%
|
|
3.24
|
%
|
|
3.32
|
%
|
|
3.32
|
%
|
Net interest margin
(FTE) (3)
|
|
|
3.36
|
%
|
|
3.50
|
%
|
|
3.52
|
%
|
|
3.61
|
%
|
|
3.62
|
%
|
|
|
(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 federal statutory tax rate
prevailing during the indicated periods of 21%.
|
Peoples Financial
Services Corp.
|
Consolidated
Statements of Income
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
June 30
|
|
Six Months
Ended
|
|
2020
|
|
2019
|
|
Interest
income:
|
|
|
|
|
|
|
|
Interest and fees on
loans:
|
|
|
|
|
|
|
|
Taxable
|
|
$
|
42,077
|
|
$
|
40,744
|
|
Tax-exempt
|
|
|
1,972
|
|
|
2,208
|
|
Interest and
dividends on investment securities:
|
|
|
|
|
|
|
|
Taxable
|
|
|
2,973
|
|
|
2,035
|
|
Tax-exempt
|
|
|
594
|
|
|
1,082
|
|
Dividends
|
|
|
48
|
|
|
41
|
|
Interest on
interest-bearing deposits in other banks
|
|
|
30
|
|
|
23
|
|
Total interest
income
|
|
|
47,694
|
|
|
46,133
|
|
Interest
expense:
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
6,367
|
|
|
7,124
|
|
Interest on
short-term borrowings
|
|
|
675
|
|
|
1,408
|
|
Interest on long-term
debt
|
|
|
436
|
|
|
576
|
|
Interest on
subordinated debt
|
|
|
148
|
|
|
|
|
Total interest
expense
|
|
|
7,626
|
|
|
9,108
|
|
Net interest
income
|
|
|
40,068
|
|
|
37,025
|
|
Provision for loan
losses
|
|
|
5,300
|
|
|
1,400
|
|
Net interest income
after provision for loan losses
|
|
|
34,768
|
|
|
35,625
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
Service charges,
fees, commissions
|
|
|
3,038
|
|
|
3,700
|
|
Merchant services
income
|
|
|
586
|
|
|
655
|
|
Commissions and fees
on fiduciary activities
|
|
|
999
|
|
|
999
|
|
Wealth management
income
|
|
|
618
|
|
|
747
|
|
Mortgage banking
income
|
|
|
449
|
|
|
285
|
|
Bank owned life
insurance income
|
|
|
380
|
|
|
378
|
|
Interest rate swap
revenue
|
|
|
719
|
|
|
789
|
|
Net loss on
investment securities
|
|
|
(84)
|
|
|
(8)
|
|
Net gain on sale of
investment securities available-for-sale
|
|
|
267
|
|
|
23
|
|
Total noninterest
income
|
|
|
6,972
|
|
|
7,568
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
Salaries and employee
benefits expense
|
|
|
14,904
|
|
|
15,632
|
|
Net occupancy and
equipment expense
|
|
|
6,121
|
|
|
5,810
|
|
Amortization of
intangible assets
|
|
|
308
|
|
|
374
|
|
Other
expenses
|
|
|
5,560
|
|
|
6,103
|
|
Total noninterest
expense
|
|
|
26,893
|
|
|
27,919
|
|
Income before income
taxes
|
|
|
14,847
|
|
|
15,274
|
|
Provision for income
tax expense
|
|
|
1,990
|
|
|
1,718
|
|
Net income
|
|
$
|
12,857
|
|
$
|
13,556
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
Unrealized gain on
investment securities available-for-sale
|
|
$
|
9,723
|
|
$
|
5,050
|
|
Reclassification
adjustment for gains included in net income
|
|
|
(267)
|
|
|
(23)
|
|
Change in derivative
fair value
|
|
|
493
|
|
|
506
|
|
Income tax related to
other comprehensive income
|
|
|
2,090
|
|
|
1,162
|
|
Other comprehensive
income, net of income taxes
|
|
|
7,859
|
|
|
4,371
|
|
Comprehensive
income
|
|
$
|
20,716
|
|
$
|
17,927
|
|
Share and per share
amounts:
|
|
|
|
|
|
|
|
Net income -
basic
|
|
$
|
1.75
|
|
$
|
1.83
|
|
Net income -
diluted
|
|
|
1.74
|
|
|
1.83
|
|
Cash dividends
declared
|
|
$
|
0.72
|
|
$
|
0.68
|
|
Average common shares
outstanding - basic
|
|
|
7,360,517
|
|
|
7,399,178
|
|
Average common shares
outstanding - diluted
|
|
|
7,391,202
|
|
|
7,410,558
|
|
Peoples Financial
Services Corp.
|
Consolidated
Statements of Income
|
(In thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
Three months ended
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and fees on
loans:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$
|
21,160
|
|
$
|
20,917
|
|
$
|
20,804
|
|
$
|
20,940
|
|
$
|
20,641
|
|
Tax-exempt
|
|
|
941
|
|
|
1,031
|
|
|
1,035
|
|
|
1,066
|
|
|
1,109
|
|
Interest and
dividends on investment securities available-for-sale:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
1,425
|
|
|
1,548
|
|
|
1,308
|
|
|
1,092
|
|
|
1,025
|
|
Tax-exempt
|
|
|
295
|
|
|
299
|
|
|
385
|
|
|
411
|
|
|
520
|
|
Dividends
|
|
|
25
|
|
|
23
|
|
|
24
|
|
|
19
|
|
|
22
|
|
Interest on
interest-bearing deposits in other banks
|
|
|
6
|
|
|
24
|
|
|
15
|
|
|
27
|
|
|
15
|
|
Interest on federal
funds sold
|
|
|
|
|
|
|
|
|
45
|
|
|
77
|
|
|
|
|
Total interest
income
|
|
|
23,852
|
|
|
23,842
|
|
|
23,616
|
|
|
23,632
|
|
|
23,332
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on
deposits
|
|
|
2,864
|
|
|
3,503
|
|
|
3,905
|
|
|
3,966
|
|
|
3,713
|
|
Interest on
short-term borrowings
|
|
|
102
|
|
|
573
|
|
|
151
|
|
|
83
|
|
|
595
|
|
Interest on long-term
debt
|
|
|
231
|
|
|
205
|
|
|
308
|
|
|
347
|
|
|
296
|
|
Interest on
subordinated debt
|
|
|
148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
|
3,345
|
|
|
4,281
|
|
|
4,364
|
|
|
4,396
|
|
|
4,604
|
|
Net interest
income
|
|
|
20,507
|
|
|
19,561
|
|
|
19,252
|
|
|
19,236
|
|
|
18,728
|
|
Provision for loan
losses
|
|
|
1,800
|
|
|
3,500
|
|
|
4,000
|
|
|
700
|
|
|
350
|
|
Net interest income
after provision for loan losses
|
|
|
18,707
|
|
|
16,061
|
|
|
15,252
|
|
|
18,536
|
|
|
18,378
|
|
Noninterest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges,
fees, commissions
|
|
|
1,433
|
|
|
1,605
|
|
|
1,730
|
|
|
1,806
|
|
|
1,981
|
|
Merchant services
income
|
|
|
472
|
|
|
114
|
|
|
136
|
|
|
182
|
|
|
457
|
|
Commissions and fees
on fiduciary activities
|
|
|
493
|
|
|
506
|
|
|
519
|
|
|
569
|
|
|
492
|
|
Wealth management
income
|
|
|
231
|
|
|
387
|
|
|
382
|
|
|
395
|
|
|
370
|
|
Mortgage banking
income
|
|
|
312
|
|
|
137
|
|
|
143
|
|
|
172
|
|
|
137
|
|
Bank owned life
insurance income
|
|
|
193
|
|
|
187
|
|
|
188
|
|
|
189
|
|
|
192
|
|
Interest rate swap
revenue
|
|
|
249
|
|
|
470
|
|
|
646
|
|
|
355
|
|
|
509
|
|
Net gain (loss) on
investment securities
|
|
|
39
|
|
|
(123)
|
|
|
126
|
|
|
14
|
|
|
(9)
|
|
Net gain on sale of
investment securities available-for-sale
|
|
|
|
|
|
267
|
|
|
|
|
|
|
|
|
23
|
|
Total noninterest
income
|
|
|
3,422
|
|
|
3,550
|
|
|
3,870
|
|
|
3,682
|
|
|
4,152
|
|
Noninterest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits expense
|
|
|
7,048
|
|
|
7,856
|
|
|
7,686
|
|
|
8,056
|
|
|
8,037
|
|
Net occupancy and
equipment expense
|
|
|
3,042
|
|
|
3,079
|
|
|
3,104
|
|
|
2,997
|
|
|
2,849
|
|
Amortization of
intangible assets
|
|
|
154
|
|
|
154
|
|
|
173
|
|
|
183
|
|
|
182
|
|
Other
expenses
|
|
|
2,998
|
|
|
2,562
|
|
|
2,681
|
|
|
2,843
|
|
|
3,361
|
|
Total noninterest
expense
|
|
|
13,242
|
|
|
13,651
|
|
|
13,644
|
|
|
14,079
|
|
|
14,429
|
|
Income before income
taxes
|
|
|
8,887
|
|
|
5,960
|
|
|
5,478
|
|
|
8,139
|
|
|
8,101
|
|
Income tax
expense
|
|
|
1,311
|
|
|
679
|
|
|
446
|
|
|
991
|
|
|
957
|
|
Net income
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized gain
(loss) on investment securities available-for-sale
|
|
$
|
2,094
|
|
$
|
7,629
|
|
$
|
(102)
|
|
$
|
161
|
|
$
|
2,611
|
|
Reclassification
adjustment for gains included in net income
|
|
|
|
|
|
(267)
|
|
|
|
|
|
|
|
|
(23)
|
|
Change in pension
liability
|
|
|
|
|
|
|
|
|
639
|
|
|
|
|
|
|
|
Change in derivative
fair value
|
|
|
(543)
|
|
|
1,036
|
|
|
(218)
|
|
|
153
|
|
|
443
|
|
Income tax related to
other comprehensive income
|
|
|
326
|
|
|
1,765
|
|
|
67
|
|
|
66
|
|
|
637
|
|
Other comprehensive
income, net of income taxes
|
|
|
1,225
|
|
|
6,633
|
|
|
252
|
|
|
248
|
|
|
2,394
|
|
Comprehensive
income
|
|
$
|
8,801
|
|
$
|
11,914
|
|
$
|
5,284
|
|
$
|
7,396
|
|
$
|
9,538
|
|
Share and per share
amounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income -
basic
|
|
$
|
1.03
|
|
$
|
0.72
|
|
$
|
0.68
|
|
$
|
0.97
|
|
$
|
0.96
|
|
Net income -
diluted
|
|
|
1.03
|
|
|
0.71
|
|
|
0.68
|
|
|
0.96
|
|
|
0.96
|
|
Cash dividends
declared
|
|
$
|
0.36
|
|
$
|
0.36
|
|
$
|
0.35
|
|
$
|
0.34
|
|
$
|
0.34
|
|
Average common shares
outstanding - basic
|
|
|
7,341,636
|
|
|
7,379,438
|
|
|
7,388,488
|
|
|
7,394,992
|
|
|
7,399,302
|
|
Average common shares
outstanding - diluted
|
|
|
7,376,700
|
|
|
7,405,703
|
|
|
7,410,899
|
|
|
7,417,403
|
|
|
7,413,114
|
|
Peoples Financial
Services Corp.
|
Details of Net
Interest and Net Interest Margin
|
(In thousands,
fully taxable equivalent basis)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
Three months ended
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Net interest
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$
|
21,160
|
|
$
|
20,917
|
|
$
|
20,804
|
|
$
|
20,940
|
|
$
|
20,641
|
|
Tax-exempt
|
|
|
1,191
|
|
|
1,305
|
|
|
1,311
|
|
|
1,348
|
|
|
1,404
|
|
Total loans,
net
|
|
|
22,351
|
|
|
22,222
|
|
|
22,115
|
|
|
22,288
|
|
|
22,045
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
1,445
|
|
|
1,571
|
|
|
1,332
|
|
|
1,111
|
|
|
1,047
|
|
Tax-exempt
|
|
|
374
|
|
|
378
|
|
|
487
|
|
|
520
|
|
|
659
|
|
Total
investments
|
|
|
1,819
|
|
|
1,949
|
|
|
1,819
|
|
|
1,631
|
|
|
1,706
|
|
Interest on
interest-bearing balances in other
banks
|
|
|
5
|
|
|
24
|
|
|
15
|
|
|
27
|
|
|
15
|
|
Federal funds
sold
|
|
|
6
|
|
|
|
|
|
45
|
|
|
77
|
|
|
|
|
Total interest
income
|
|
|
24,181
|
|
|
24,195
|
|
|
23,994
|
|
|
24,023
|
|
|
23,766
|
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
2,864
|
|
|
3,503
|
|
|
3,905
|
|
|
3,966
|
|
|
3,713
|
|
Short-term
borrowings
|
|
|
102
|
|
|
573
|
|
|
151
|
|
|
83
|
|
|
595
|
|
Long-term
debt
|
|
|
231
|
|
|
205
|
|
|
308
|
|
|
347
|
|
|
296
|
|
Subordinated
debt
|
|
|
148
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest
expense
|
|
|
3,345
|
|
|
4,281
|
|
|
4,364
|
|
|
4,396
|
|
|
4,604
|
|
Net interest
income
|
|
$
|
20,836
|
|
$
|
19,914
|
|
$
|
19,630
|
|
$
|
19,627
|
|
$
|
19,162
|
|
Loans,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
4.19
|
%
|
|
4.60
|
%
|
|
4.67
|
%
|
|
4.80
|
%
|
|
4.85
|
%
|
Tax-exempt
|
|
|
3.75
|
%
|
|
3.88
|
%
|
|
3.88
|
%
|
|
3.94
|
%
|
|
3.96
|
%
|
Total loans,
net
|
|
|
4.16
|
%
|
|
4.55
|
%
|
|
4.62
|
%
|
|
4.74
|
%
|
|
4.78
|
%
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
2.24
|
%
|
|
2.36
|
%
|
|
2.29
|
%
|
|
2.20
|
%
|
|
2.21
|
%
|
Tax-exempt
|
|
|
3.46
|
%
|
|
3.10
|
%
|
|
2.88
|
%
|
|
2.93
|
%
|
|
3.20
|
%
|
Total
investments
|
|
|
2.41
|
%
|
|
2.48
|
%
|
|
2.42
|
%
|
|
2.39
|
%
|
|
2.51
|
%
|
Interest-bearing
balances with banks
|
|
|
0.16
|
%
|
|
1.17
|
%
|
|
1.12
|
%
|
|
2.14
|
%
|
|
2.67
|
%
|
Federal funds
sold
|
|
|
0.14
|
%
|
|
|
|
|
1.85
|
%
|
|
2.14
|
%
|
|
|
|
Total interest-bearing
assets
|
|
|
3.90
|
%
|
|
4.25
|
%
|
|
4.30
|
%
|
|
4.42
|
%
|
|
4.49
|
%
|
Interest
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
0.72
|
%
|
|
0.92
|
%
|
|
1.00
|
%
|
|
1.03
|
%
|
|
1.03
|
%
|
Short-term
borrowings
|
|
|
0.44
|
%
|
|
1.62
|
%
|
|
2.00
|
%
|
|
2.62
|
%
|
|
2.69
|
%
|
Long-term
debt
|
|
|
1.13
|
%
|
|
2.54
|
%
|
|
2.52
|
%
|
|
2.61
|
%
|
|
2.83
|
%
|
Subordinated
debt
|
|
|
5.38
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities
|
|
|
0.75
|
%
|
|
1.01
|
%
|
|
1.06
|
%
|
|
1.10
|
%
|
|
1.17
|
%
|
Net interest
spread
|
|
|
3.15
|
%
|
|
3.24
|
%
|
|
3.24
|
%
|
|
3.32
|
%
|
|
3.32
|
%
|
Net interest
margin
|
|
|
3.36
|
%
|
|
3.50
|
%
|
|
3.52
|
%
|
|
3.61
|
%
|
|
3.62
|
%
|
Peoples Financial
Services Corp.
|
Consolidated
Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
At period end
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and due from
banks
|
|
$
|
27,146
|
|
$
|
22,181
|
|
$
|
26,943
|
|
$
|
35,908
|
|
$
|
26,615
|
|
Interest-bearing
balances in other banks
|
|
|
14,788
|
|
|
13,146
|
|
|
4,210
|
|
|
5,275
|
|
|
3,347
|
|
Federal funds
sold
|
|
|
10,000
|
|
|
|
|
|
|
|
|
10,100
|
|
|
|
|
Investment
securities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Available-for-sale
|
|
|
287,709
|
|
|
302,884
|
|
|
330,478
|
|
|
268,823
|
|
|
261,665
|
|
Equity investments
carried at fair value
|
|
|
338
|
|
|
299
|
|
|
423
|
|
|
297
|
|
|
283
|
|
Held-to-maturity
|
|
|
7,401
|
|
|
7,520
|
|
|
7,656
|
|
|
7,808
|
|
|
7,969
|
|
Loans held for
sale
|
|
|
1,939
|
|
|
270
|
|
|
986
|
|
|
1,390
|
|
|
831
|
|
Loans, net
|
|
|
2,181,909
|
|
|
2,023,155
|
|
|
1,938,240
|
|
|
1,881,090
|
|
|
1,858,799
|
|
Less: allowance for
loan losses
|
|
|
26,957
|
|
|
25,686
|
|
|
22,677
|
|
|
22,392
|
|
|
21,930
|
|
Net loans
|
|
|
2,154,952
|
|
|
1,997,469
|
|
|
1,915,563
|
|
|
1,858,698
|
|
|
1,836,869
|
|
Premises and
equipment, net
|
|
|
48,378
|
|
|
48,619
|
|
|
47,932
|
|
|
47,437
|
|
|
46,468
|
|
Accrued interest
receivable
|
|
|
8,368
|
|
|
7,283
|
|
|
6,981
|
|
|
6,655
|
|
|
7,303
|
|
Goodwill
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
Other intangible
assets, net
|
|
|
1,257
|
|
|
1,411
|
|
|
1,565
|
|
|
1,738
|
|
|
1,921
|
|
Other
assets
|
|
|
74,778
|
|
|
79,320
|
|
|
69,220
|
|
|
65,200
|
|
|
67,625
|
|
Total
assets
|
|
$
|
2,700,424
|
|
$
|
2,543,772
|
|
$
|
2,475,327
|
|
$
|
2,372,699
|
|
$
|
2,324,266
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noninterest-bearing
|
|
$
|
575,206
|
|
$
|
467,315
|
|
$
|
463,238
|
|
$
|
440,582
|
|
$
|
419,995
|
|
Interest-bearing
|
|
|
1,634,918
|
|
|
1,542,680
|
|
|
1,508,251
|
|
|
1,560,703
|
|
|
1,456,804
|
|
Total
deposits
|
|
|
2,210,124
|
|
|
2,009,995
|
|
|
1,971,489
|
|
|
2,001,285
|
|
|
1,876,799
|
|
Short-term
borrowings
|
|
|
50,000
|
|
|
164,150
|
|
|
152,150
|
|
|
|
|
|
82,700
|
|
Long-term
debt
|
|
|
60,938
|
|
|
32,250
|
|
|
32,733
|
|
|
52,509
|
|
|
52,980
|
|
Subordinated
debt
|
|
|
33,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued interest
payable
|
|
|
872
|
|
|
1,336
|
|
|
1,277
|
|
|
1,461
|
|
|
1,058
|
|
Other
liabilities
|
|
|
33,446
|
|
|
29,978
|
|
|
18,668
|
|
|
21,277
|
|
|
19,146
|
|
Total
liabilities
|
|
|
2,388,380
|
|
|
2,237,709
|
|
|
2,176,317
|
|
|
2,076,532
|
|
|
2,032,683
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common
stock
|
|
|
14,649
|
|
|
14,670
|
|
|
14,777
|
|
|
14,778
|
|
|
14,798
|
|
Capital
surplus
|
|
|
133,002
|
|
|
133,159
|
|
|
135,251
|
|
|
135,106
|
|
|
135,384
|
|
Retained
earnings
|
|
|
159,739
|
|
|
154,806
|
|
|
152,187
|
|
|
149,740
|
|
|
145,106
|
|
Accumulated other
comprehensive gain (loss)
|
|
|
4,654
|
|
|
3,428
|
|
|
(3,205)
|
|
|
(3,457)
|
|
|
(3,705)
|
|
Total stockholders'
equity
|
|
|
312,044
|
|
|
306,063
|
|
|
299,010
|
|
|
296,167
|
|
|
291,583
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,700,424
|
|
$
|
2,543,772
|
|
$
|
2,475,327
|
|
$
|
2,372,699
|
|
$
|
2,324,266
|
|
Peoples Financial
Services Corp.
|
Consolidated
Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
Average quarterly balances
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans,
net:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
$
|
2,032,852
|
|
$
|
1,830,455
|
|
$
|
1,766,373
|
|
$
|
1,729,741
|
|
$
|
1,707,730
|
|
Tax-exempt
|
|
|
127,624
|
|
|
135,260
|
|
|
134,040
|
|
|
135,580
|
|
|
142,310
|
|
Total loans,
net
|
|
|
2,160,476
|
|
|
1,965,715
|
|
|
1,900,413
|
|
|
1,865,321
|
|
|
1,850,040
|
|
Investments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
|
|
|
260,160
|
|
|
267,179
|
|
|
231,079
|
|
|
200,444
|
|
|
189,265
|
|
Tax-exempt
|
|
|
43,466
|
|
|
49,046
|
|
|
67,208
|
|
|
70,381
|
|
|
82,565
|
|
Total
investments
|
|
|
303,626
|
|
|
316,225
|
|
|
298,287
|
|
|
270,825
|
|
|
271,830
|
|
Interest-bearing
balances with banks
|
|
|
12,595
|
|
|
8,263
|
|
|
5,317
|
|
|
5,006
|
|
|
2,554
|
|
Federal funds
sold
|
|
|
17,480
|
|
|
|
|
|
9,629
|
|
|
14,267
|
|
|
|
|
Total interest-bearing
assets
|
|
|
2,494,177
|
|
|
2,290,203
|
|
|
2,213,646
|
|
|
2,155,419
|
|
|
2,124,424
|
|
Other
assets
|
|
|
210,017
|
|
|
193,507
|
|
|
192,121
|
|
|
193,041
|
|
|
190,583
|
|
Total
assets
|
|
$
|
2,704,194
|
|
$
|
2,483,710
|
|
$
|
2,405,767
|
|
$
|
2,348,460
|
|
$
|
2,315,007
|
|
Liabilities and
stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
|
|
$
|
1,605,841
|
|
$
|
1,524,265
|
|
$
|
1,549,978
|
|
$
|
1,521,047
|
|
$
|
1,449,665
|
|
Noninterest-bearing
|
|
|
574,194
|
|
|
462,508
|
|
|
459,248
|
|
|
445,238
|
|
|
426,791
|
|
Total
deposits
|
|
|
2,180,035
|
|
|
1,986,773
|
|
|
2,009,226
|
|
|
1,966,285
|
|
|
1,876,456
|
|
Short-term
borrowings
|
|
|
93,447
|
|
|
142,121
|
|
|
30,018
|
|
|
12,563
|
|
|
88,792
|
|
Long-term
debt
|
|
|
82,117
|
|
|
32,477
|
|
|
48,468
|
|
|
52,731
|
|
|
41,948
|
|
Subordinated
debt
|
|
|
11,074
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
liabilities
|
|
|
28,798
|
|
|
21,096
|
|
|
19,452
|
|
|
22,900
|
|
|
20,773
|
|
Total
liabilities
|
|
|
2,395,471
|
|
|
2,182,467
|
|
|
2,107,164
|
|
|
2,054,479
|
|
|
2,027,969
|
|
Stockholders'
equity
|
|
|
308,723
|
|
|
301,243
|
|
|
298,603
|
|
|
293,981
|
|
|
287,038
|
|
Total liabilities and
stockholders' equity
|
|
$
|
2,704,194
|
|
$
|
2,483,710
|
|
$
|
2,405,767
|
|
$
|
2,348,460
|
|
$
|
2,315,007
|
|
Peoples Financial
Services Corp.
|
Asset Quality
Data
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
At quarter end
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonperforming
assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual/restructured loans
|
|
$
|
12,214
|
|
$
|
10,760
|
|
$
|
9,699
|
|
$
|
10,657
|
|
$
|
11,926
|
|
Accruing loans past
due 90 days or more
|
|
|
291
|
|
|
423
|
|
|
378
|
|
|
387
|
|
|
341
|
|
Foreclosed
assets
|
|
|
964
|
|
|
903
|
|
|
450
|
|
|
485
|
|
|
408
|
|
Total nonperforming
assets
|
|
$
|
13,469
|
|
$
|
12,086
|
|
$
|
10,527
|
|
$
|
11,529
|
|
$
|
12,675
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan
losses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning
balance
|
|
$
|
25,686
|
|
$
|
22,677
|
|
$
|
22,392
|
|
$
|
21,930
|
|
$
|
22,105
|
|
Charge-offs
|
|
|
617
|
|
|
798
|
|
|
3,809
|
|
|
308
|
|
|
576
|
|
Recoveries
|
|
|
88
|
|
|
307
|
|
|
94
|
|
|
70
|
|
|
51
|
|
Provision for loan
losses
|
|
|
1,800
|
|
|
3,500
|
|
|
4,000
|
|
|
700
|
|
|
350
|
|
Ending
balance
|
|
$
|
26,957
|
|
$
|
25,686
|
|
$
|
22,677
|
|
$
|
22,392
|
|
$
|
21,930
|
|
Peoples Financial
Services Corp.
|
Reconciliation of
Non-GAAP Financial Measures
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
Mar 31
|
|
Dec 31
|
|
Sept 30
|
|
June 30
|
|
Three months ended
|
|
2020
|
|
2020
|
|
2019
|
|
2019
|
|
2019
|
|
Core net income per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
GAAP
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: (gain) loss on
investment securities
|
|
|
(39)
|
|
|
(144)
|
|
|
(126)
|
|
|
(14)
|
|
|
(14)
|
|
Add: (gain) loss on
investment securities tax adjustment
|
|
|
(8)
|
|
|
(30)
|
|
|
(26)
|
|
|
(3)
|
|
|
(3)
|
|
Net income
Core
|
|
$
|
7,545
|
|
$
|
5,167
|
|
$
|
4,932
|
|
$
|
7,137
|
|
$
|
7,133
|
|
Average common shares
outstanding - basic
|
|
|
7,341,636
|
|
|
7,379,438
|
|
|
7,388,488
|
|
|
7,394,992
|
|
|
7,399,302
|
|
Core net income per
share
|
|
$
|
1.03
|
|
$
|
0.70
|
|
$
|
0.67
|
|
$
|
0.97
|
|
$
|
0.96
|
|
Tangible book
value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
$
|
312,044
|
|
$
|
306,063
|
|
$
|
299,010
|
|
$
|
296,167
|
|
$
|
291,583
|
|
Less:
Goodwill
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
|
63,370
|
|
Less: Other
intangible assets, net
|
|
|
1,257
|
|
|
1,411
|
|
|
1,565
|
|
|
1,738
|
|
|
1,921
|
|
Total tangible
stockholders' equity
|
|
$
|
247,417
|
|
$
|
241,282
|
|
$
|
234,075
|
|
$
|
231,059
|
|
$
|
226,292
|
|
Common shares
outstanding
|
|
|
7,332,856
|
|
|
7,343,240
|
|
|
7,388,480
|
|
|
7,388,759
|
|
|
7,399,078
|
|
Tangible book value
per share
|
|
$
|
33.74
|
|
$
|
32.86
|
|
$
|
31.68
|
|
$
|
31.27
|
|
$
|
30.58
|
|
Core return on
average stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
GAAP
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: (gain) loss on
investment securities
|
|
|
(39)
|
|
|
(144)
|
|
|
(126)
|
|
|
(14)
|
|
|
(14)
|
|
Add: (gain) loss on
investment securities tax adjustment
|
|
|
(8)
|
|
|
(30)
|
|
|
(26)
|
|
|
(3)
|
|
|
(3)
|
|
Net income
Core
|
|
$
|
7,545
|
|
$
|
5,167
|
|
$
|
4,932
|
|
$
|
7,137
|
|
$
|
7,133
|
|
Average stockholders'
equity
|
|
$
|
308,723
|
|
$
|
301,243
|
|
$
|
298,603
|
|
$
|
293,981
|
|
$
|
287,038
|
|
Core return on
average stockholders' equity
|
|
|
9.83
|
%
|
|
6.90
|
%
|
|
6.55
|
%
|
|
9.63
|
%
|
|
9.97
|
%
|
Return on average
tangible equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
GAAP
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Average stockholders'
equity
|
|
$
|
308,723
|
|
$
|
301,243
|
|
$
|
298,603
|
|
$
|
293,981
|
|
$
|
287,038
|
|
Less: average
intangibles
|
|
|
64,704
|
|
|
64,879
|
|
|
65,022
|
|
|
65,200
|
|
|
65,406
|
|
Average tangible
stockholders' equity
|
|
$
|
244,019
|
|
$
|
236,364
|
|
$
|
233,581
|
|
$
|
228,781
|
|
$
|
221,632
|
|
Return on average
tangible stockholders' equity
|
|
|
12.49
|
%
|
|
8.99
|
%
|
|
8.55
|
%
|
|
12.40
|
%
|
|
12.93
|
%
|
Core return on
average tangible stockholders' equity:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
GAAP
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: (gain) loss on
investment securities
|
|
|
(39)
|
|
|
(144)
|
|
|
(126)
|
|
|
(14)
|
|
|
(14)
|
|
Add: (gain) loss on
investment securities tax adjustment
|
|
|
(8)
|
|
|
(30)
|
|
|
(26)
|
|
|
(3)
|
|
|
(3)
|
|
Net income
Core
|
|
$
|
7,545
|
|
$
|
5,167
|
|
$
|
4,932
|
|
$
|
7,137
|
|
$
|
7,133
|
|
Average stockholders'
equity
|
|
$
|
308,723
|
|
$
|
301,243
|
|
$
|
298,603
|
|
$
|
293,981
|
|
$
|
287,038
|
|
Less: average
intangibles
|
|
|
64,704
|
|
|
64,879
|
|
|
65,022
|
|
|
65,200
|
|
|
65,406
|
|
Average tangible
stockholders' equity
|
|
$
|
244,019
|
|
$
|
236,364
|
|
$
|
233,581
|
|
$
|
228,781
|
|
$
|
221,632
|
|
Core return on
average tangible stockholders' equity
|
|
|
12.44
|
%
|
|
8.79
|
%
|
|
8.38
|
%
|
|
12.38
|
%
|
|
12.91
|
%
|
Core return on
average assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
GAAP
|
|
$
|
7,576
|
|
$
|
5,281
|
|
$
|
5,032
|
|
$
|
7,148
|
|
$
|
7,144
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: (gain) loss on
investment securities
|
|
|
(39)
|
|
|
(144)
|
|
|
(126)
|
|
|
(14)
|
|
|
(14)
|
|
Add: (gain) loss on
investment securities tax adjustment
|
|
|
(8)
|
|
|
(30)
|
|
|
(26)
|
|
|
(3)
|
|
|
(3)
|
|
Net income
Core
|
|
$
|
7,545
|
|
$
|
5,167
|
|
$
|
4,932
|
|
$
|
7,137
|
|
$
|
7,133
|
|
Average
assets
|
|
$
|
2,704,194
|
|
$
|
2,483,710
|
|
$
|
2,405,767
|
|
$
|
2,348,460
|
|
$
|
2,315,007
|
|
Core return on
average assets
|
|
|
1.12
|
%
|
|
0.84
|
%
|
|
0.81
|
%
|
|
1.21
|
%
|
|
1.24
|
%
|
Peoples Financial
Services Corp.
|
Reconciliation of
Non-GAAP Financial Measures
|
(In thousands,
except share and per share data)
|
|
|
|
|
|
|
|
|
|
|
|
June 30
|
|
June 30
|
|
Six Months
Ended
|
|
2020
|
|
2019
|
|
Core net income per
share:
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
|
12,857
|
|
$
|
13,556
|
|
Adjustments:
|
|
|
|
|
|
|
|
Less: Gain on
investment securities
|
|
|
(183)
|
|
|
(15)
|
|
Add: Gain on
investment securities tax adjustment
|
|
|
(38)
|
|
|
(3)
|
|
Net income
Core
|
|
$
|
12,712
|
|
$
|
13,544
|
|
Average basic common
shares outstanding
|
|
|
7,360,517
|
|
|
7,399,178
|
|
Average diluted
common shares outstanding
|
|
|
7,391,202
|
|
|
7,410,558
|
|
Core net income per
share - basic
|
|
$
|
1.73
|
|
$
|
1.83
|
|
Core net income per
share - diluted
|
|
$
|
1.72
|
|
$
|
1.83
|
|
Peoples Financial
Services Corp.
|
Reconciliation of
Non-GAAP Financial Measures
|
(In thousands,
except share and per share data)
|
|
The following table
reconciles the non-GAAP financial measures of FTE net interest
income for the three and six months
ended June 30, 2020 and 2019:
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30
|
|
2020
|
|
2019
|
|
Interest income
(GAAP)
|
|
$
|
23,852
|
|
$
|
23,332
|
|
Adjustment to
FTE
|
|
|
329
|
|
|
434
|
|
Interest income
adjusted to FTE (non-GAAP)
|
|
|
24,181
|
|
|
23,766
|
|
Interest
expense
|
|
|
3,345
|
|
|
4,604
|
|
Net interest income
adjusted to FTE (non-GAAP)
|
|
$
|
20,836
|
|
$
|
19,162
|
|
|
|
|
|
|
|
|
|
Six months ended June
30
|
|
2020
|
|
2019
|
|
Interest income
(GAAP)
|
|
$
|
47,694
|
|
$
|
46,133
|
|
Adjustment to
FTE
|
|
|
682
|
|
|
875
|
|
Interest income
adjusted to FTE (non-GAAP)
|
|
|
48,376
|
|
|
47,008
|
|
Interest
expense
|
|
|
7,626
|
|
|
9,108
|
|
Net interest income
adjusted to FTE (non-GAAP)
|
|
$
|
40,750
|
|
$
|
37,900
|
|
|
The efficiency ratio
is noninterest expenses, less amortization of intangible assets, as
a percentage of FTE net interest
income plus noninterest income less gains on equity securities and
gains on sale of assets. The following table reconciles the
non-GAAP financial measures of the efficiency ratio to GAAP for the
three and six months ended June 30, 2020 and 2019:
|
|
|
|
|
|
|
|
|
Three months ended
June 30
|
|
2020
|
|
2019
|
|
Efficiency ratio
(non-GAAP):
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
|
$
|
13,242
|
|
$
|
14,429
|
|
Less: amortization of
intangible assets expense
|
|
|
154
|
|
|
182
|
|
Noninterest expense
adjusted for amortization of assets expense (non-GAAP)
|
|
|
13,088
|
|
|
14,247
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
|
|
20,507
|
|
|
18,728
|
|
Plus: taxable
equivalent adjustment
|
|
|
329
|
|
|
434
|
|
Noninterest income
(GAAP)
|
|
|
3,422
|
|
|
4,152
|
|
Less: net gains
(losses) on equity securities
|
|
|
39
|
|
|
(9)
|
|
Less: net gains on
sale of securities
|
|
|
|
|
|
23
|
|
Net interest income
(FTE) plus noninterest income (non-GAAP)
|
|
$
|
24,219
|
|
$
|
23,300
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
(non-GAAP)
|
|
|
54.1
|
%
|
|
61.2
|
%
|
|
|
|
|
|
|
|
|
Six months ended June
30
|
|
2020
|
|
2019
|
|
Efficiency ratio
(non-GAAP):
|
|
|
|
|
|
|
|
Noninterest expense
(GAAP)
|
|
$
|
26,893
|
|
$
|
27,919
|
|
Less: amortization of
intangible assets expense
|
|
|
308
|
|
|
374
|
|
Noninterest expense
adjusted for amortization of assets expense (non-GAAP)
|
|
|
26,585
|
|
|
27,545
|
|
|
|
|
|
|
|
|
|
Net interest income
(GAAP)
|
|
|
40,068
|
|
|
37,025
|
|
Plus: taxable
equivalent adjustment
|
|
|
682
|
|
|
875
|
|
Noninterest income
(GAAP)
|
|
|
6,972
|
|
|
7,568
|
|
Less: net (losses)
gains on equity securities
|
|
|
(84)
|
|
|
(8)
|
|
Less: net gains on
sale of securities
|
|
|
267
|
|
|
23
|
|
Net interest income
(FTE) plus noninterest income (non-GAAP)
|
|
$
|
47,539
|
|
$
|
45,453
|
|
|
|
|
|
|
|
|
|
Efficiency ratio
(non-GAAP)
|
|
|
55.9
|
%
|
|
60.6
|
%
|
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SOURCE Peoples Financial Services Corp.