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PEOPLES FINANCIAL SERVICES CORP. Reports Fourth Quarter 2017 Earnings

SCRANTON, Pa., Feb. 2, 2018 /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 twelve months ended December 31, 2017.  Peoples reported net income of $2.7 million, or $0.36 per share for the fourth quarter of 2017, compared to $4.7 million, or $0.64 per share for the comparable period of 2016.

Net income for the twelve months ended December 31, 2017, totaled $18.5 million or $2.50 per share compared to $19.6 million or $2.65 per share for the same period last year.

On December 22, 2017, President Donald Trump signed into law H.R. 1, also known as the Tax Cuts and Jobs Act, which among other things reduced the federal corporate income tax rate to 21% effective January 1, 2018. As a result, and in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company concluded that its deferred tax assets, net had to be revalued. The Company’s deferred tax assets, net represents expected corporate tax benefits anticipated to be realized in the future.  The reduction in the federal corporate income tax rate reduces these anticipated future benefits.  The revaluation of the Company’s deferred tax assets, net at December 31, 2017 resulted in a reduction of these net assets and a corresponding increase in income tax expense of $2.6 million or $0.35 per share, which was recorded in the fourth quarter of 2017.

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 herein contain items, which Peoples considers non-core, namely gains on sales of investment securities available-for-sale, gains on the sale of our merchant services portfolio and the non-recurring tax provision related to the Tax Cuts and Jobs Act of 2017. 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 excludes the $2.6 million non-recurring charge to tax expense related to the revaluation of our deferred tax assets, for the three months ended December 31, 2017, was $5.3 million or $0.71 per share, an increase of $0.6 million or 11.5% from $4.7 million for the same period in 2016.  The results in the fourth quarter of 2016 did not include any items considered non-core.

Core net income, which we have defined to exclude gains on the sale of investment securities available-for-sale, the gain on the sale of our merchant services portfolio, net of tax, and the non-recurring charge to income tax expense related to the revaluation of our deferred tax assets, for the twelve months ended December 31, totaled $19.8 million and $19.2 million in 2017 and 2016, respectively. Core net income per share for the twelve months ended December 31, 2017 was $2.67, an increase from $2.59 for the same period in 2016. The results in 2017 include a gain on the sale of our merchant services portfolio of $2.3 million and a charge to income tax expense of $2.6 million for the revaluing of our deferred tax assets, net, while the results for 2016 include net gains on the sale of investment securities of $623 thousand.

NOTABLES

  • Loans, net growth of $60.6 million in the fourth quarter of 2017 (14.7% annualized rate), with total growth during 2017 of $160.1 million, or 10.4%.
  • Deposit growth of $31.2 million in the fourth quarter of 2017 (7.3% annualized rate), with total deposit growth during 2017 of $130.3 million or 8.2%.
  • Book value per share improved to $35.82 at December 31, 2017 from $34.71 at December 31, 2016.
  • Tangible book value per share improved to $26.83 at December 31, 2017 from $25.57 at December 31, 2016.
  • Tax-equivalent net interest income increased to $17.8 million for the fourth quarter of 2017 compared to $17.5 million for the third quarter of 2017, and $16.6 million for the fourth quarter of 2016.
  • Tax-equivalent net interest margin decreased 10 basis points in the fourth quarter of 2017 to 3.63%, compared to 3.73% for the quarter ended September 30, 2017 and decreased four basis points compared to 3.67% for the quarter ended December 31, 2016.
  • Nonperforming assets to loans, net, and foreclosed assets decreased to 0.68% at December 31, 2017, from 0.83% at September 30, 2017 and 0.93% at December 31, 2016.
  • The allowance for loan losses to loans, net was 1.12 % at December 31, 2017, an increase from 1.04% at December 31, 2016.
  • With the passage of “H.R.1.”, the Tax Cuts and Jobs Act of 2017 (“the Tax Act”), we took a non-recurring charge to income tax expense of $2.6 million due to the revaluation of our deferred tax assets, net in the fourth quarter of 2017. The Tax Act, among other items, reduces the federal corporate income tax rate from 35% to 21% commencing in 2018.

INCOME STATEMENT REVIEW

The tax-equivalent net interest margin for the three and twelve months ended December 31, were 3.63% and 3.69% respectively in 2017, compared to 3.67% and 3.77% for the same periods in 2016.

Tax-equivalent net interest income for the twelve months ended December 31, increased $5.1 million to $77.6 million in 2017 from $72.5 million in 2016. The increase in tax equivalent net interest income was primarily due to a $135.9 million increase in average earning assets for the twelve months ended December 31, 2017 when compared to the same period in 2016. The tax-equivalent yield on the loan portfolio decreased to 4.39% for the twelve months ended December 31, 2017 compared to 4.43% for the comparable period in 2016. Loans, net averaged $1.6 billion for the twelve months ended December 31, 2017 and $1.5 billion for the comparable period in 2016. For the twelve months ended December 31, the tax-equivalent yield on total investments decreased to 2.84% in 2017 from 2.89% in 2016. Average investments totaled $272.4 million in 2017 and $271.3 million in 2016. Average interest-bearing liabilities increased $104.2 million for the twelve months ended December 31, 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 0.61% in the twelve months ended December 31, 2017 from 0.55% for the same period of 2016.

The provision for loan losses totaled $4.8 million for the twelve months ended December 31, 2017 and $5.0 million for the twelve months ended December 31, 2016. For the quarter ended December 31, the provision for loan losses was $1.2 million in 2017 and $1.4 million in 2016.

For the twelve months ended December 31, noninterest income totaled $17.2 million in 2017, an increase from $15.9 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 merchant services, income from mortgage banking activities and life insurance investment income. For the three months ended December 31, 2017 and 2016, noninterest income totaled $3.4 million and $3.9 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 as well as lower revenues generated from mortgage banking activities and life insurance investment income. Offsetting the decrease was higher service charges, fees and commissions, income from fiduciary activities and wealth management services.

Noninterest expense increased $3.3 million or 6.8% to $51.3 million for the twelve months ended December 31, 2017, from $48.0 million for the twelve months ended December 31, 2016. Salaries and employee benefits increased $4.2 million or 18.9% due to merit increases and continued investment in our expansion markets in the Lehigh Valley and King of Prussia. Partially offsetting the increase in salaries, merchant services related expenses decreased $1.2 million for the twelve months ended December 31, 2017 due to the sale of our merchant business in the second quarter of 2017. For the fourth quarter of 2017, noninterest expense increased to $12.5 million from $12.3 million for the same period in 2016, an increase of $173 thousand or 1.4%. Salaries and employee benefits were the key driver increasing to $6.8 million in the fourth quarter of 2017 compared to $5.7 million for the comparable period in 2016, an increase of $1.1 million or 19.0%. As with the results for the twelve months ended December 31, 2017, the buildout of our expansion plan led to the increases in salaries and employee benefit expense. Partially offsetting the increase to salaries and benefits was a decrease of $711 thousand or 98.3% in merchant services expense due to the sale of our merchant services portfolio during the second quarter of 2017.

BALANCE SHEET REVIEW

At December 31, 2017, total assets, loans and deposits were $2.2 billion, $1.7 billion and $1.7 billion, respectively. Loans, net grew $160.1 million or 10.4% from December 31, 2016 to December 31, 2017. Total deposits grew $130.3 million or 8.2% from December 31, 2016 to December 31, 2017. Noninterest bearing deposits increased $27.1 million or 7.7% while interest-bearing deposits increased $103.2 million or 8.4% in 2017. Total investments were $281.8 million at December 31, 2017, including $272.5 million securities classified as available-for-sale and $9.3 million classified as held-to-maturity.

Stockholders’ equity equaled $265.0 million or $35.82 per share at December 31, 2017, and $256.6 million or $34.71 per share at December 31, 2016. Tangible stockholders’ equity improved to $26.83 per share at December 31, 2017, from $25.57 per share at December 31, 2016. Dividends declared for the twelve months ended December 31, 2017 amounted to $1.26 per share representing a dividend payout ratio of 50.4%.

ASSET QUALITY REVIEW

Nonperforming assets were $11.6 million or 0.68% of loans, net and foreclosed assets at December 31, 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 $19.0 million or 1.12% of loans, net at December 31, 2017 compared to $16.0 million or 1.04% of loans, net, at December 31, 2016. Loans charged-off, net of recoveries, for the twelve months ended December 31, 2017, equaled $1.8 million or 0.11% of average loans, compared to $2.0 million or 0.14% 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)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

2017

2017

2017

2017

2016

Key performance data:

Per share data:

Net income

$

0.36

$

0.72

$

0.77

$

0.65

$

0.64

Core net income (1)

$

0.71

$

0.72

$

0.59

$

0.65

$

0.64

Cash dividends declared

$

0.32

$

0.32

$

0.31

$

0.31

$

0.31

Book value

$

35.82

$

36.00

$

35.63

$

35.07

$

34.71

Tangible book value (1)

$

26.83

$

26.97

$

26.56

$

25.97

$

25.57

Market value:

High

$

51.06

$

49.00

$

45.73

$

49.57

$

50.54

Low

$

44.04

$

39.25

$

39.25

$

39.66

$

38.41

Closing

$

46.58

$

47.80

$

43.73

$

41.80

$

48.70

Market capitalization

$

344,529

$

353,553

$

323,434

$

309,075

$

360,095

Common shares outstanding

7,396,505

7,396,505

7,396,163

7,394,143

7,394,143

Selected ratios:

Return on average stockholders’ equity

3.92

%

8.00

%

8.71

%

7.51

%

7.29

%

Core return on average stockholders’
equity (1)

7.81

%

8.00

%

6.70

%

7.51

%

7.29

%

Return on average tangible
stockholders’ equity

5.22

%

10.70

%

11.73

%

10.15

%

9.88

%

Core return on average tangible
stockholders’ equity (1)

10.39

%

10.70

%

9.03

%

10.15

%

9.88

%

Return on average assets

0.49

%

1.03

%

1.11

%

0.97

%

0.94

%

Core return on average assets (1)

0.98

%

1.03

%

0.85

%

0.97

%

0.94

%

Stockholders’ equity to total assets

12.21

%

12.73

%

12.76

%

12.82

%

12.83

%

Efficiency ratio (2)

57.81

%

57.81

%

63.95

%

59.13

%

58.59

%

Nonperforming assets to loans, net, and
foreclosed assets

0.68

%

0.83

%

0.73

%

0.78

%

0.93

%

Net charge-offs to average loans, net

0.26

%

0.04

%

0.09

%

0.05

%

0.30

%

Allowance for loan losses to loans, net

1.12

%

1.15

%

1.11

%

1.09

%

1.04

%

Interest-bearing assets yield (FTE) (3)

4.13

%

4.19

%

4.14

%

4.17

%

4.10

%

Cost of funds

0.66

%

0.61

%

0.60

%

0.57

%

0.56

%

Net interest spread (FTE) (3)

3.47

%

3.58

%

3.54

%

3.60

%

3.54

%

Net interest margin (FTE) (3)

3.63

%

3.73

%

3.68

%

3.73

%

3.67

%

(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 35%.

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

Dec 31

Dec 31

Year Ended

2017

2016

Interest income:

Interest and fees on loans:

Taxable

$

64,946

$

59,902

Tax-exempt

3,163

3,031

Interest and dividends on investment securities:

Taxable

2,949

2,515

Tax-exempt

2,999

3,438

Dividends

52

48

Interest on interest-bearing deposits in other banks

133

50

Interest on federal funds sold

Total interest income

74,242

68,984

Interest expense:

Interest on deposits

6,450

5,429

Interest on short-term borrowings

900

402

Interest on long-term debt

1,348

1,420

Total interest expense

8,698

7,251

Net interest income

65,544

61,733

Provision for loan losses

4,800

5,000

Net interest income after provision for loan losses

60,744

56,733

Noninterest income:

Service charges, fees, commissions

7,344

6,116

Merchant services income

2,543

4,199

Commissions and fees on fiduciary activities

2,057

1,976

Wealth management income

1,411

1,298

Mortgage banking income

784

885

Life insurance investment income

769

791

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

623

Net gains on sale of merchant services business

2,278

Total noninterest income

17,186

15,888

Noninterest expense:

Salaries and employee benefits expense

26,670

22,434

Net occupancy and equipment expense

9,975

9,422

Merchant services expense

1,808

2,993

Amortization of intangible assets

1,034

1,186

Other expenses

11,806

11,995

Total noninterest expense

51,293

48,030

Income before income taxes

26,637

24,591

Provision for income tax expense

8,180

5,008

Net income

$

18,457

$

19,583

Other comprehensive income (loss):

Unrealized loss on investment securities available-for-sale

$

(1,790)

$

(3,417)

Reclassification adjustment for gains included in net income

(623)

Change in pension liability

318

917

Income tax expense related to other comprehensive income

(515)

(1,093)

Reclassification related to tax reform legislation (4)

(1,101)

Other comprehensive loss, net of income taxes

(2,058)

(2,030)

Comprehensive income

$

16,399

$

17,553

Per share data:

Net income

$

2.50

$

2.65

Cash dividends declared

$

1.26

$

1.24

Average common shares outstanding

7,395,837

7,396,716

(4)

Based on proposed guidance from the Financial Accounting Standards Board.

Peoples Financial Services Corp.

Consolidated Statements of Income

(In thousands, except per share data)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2017

2017

2017

2017

2016

Interest income:

Interest and fees on loans:

Taxable

$

16,925

$

16,535

$

15,945

$

15,541

$

15,502

Tax-exempt

829

813

795

726

730

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

Taxable

819

714

719

697

636

Tax-exempt

737

716

752

794

827

Dividends

15

13

12

12

17

Interest on interest-bearing deposits in other banks

26

40

38

29

3

Total interest income

19,351

18,831

18,261

17,799

17,715

Interest expense:

Interest on deposits

1,833

1,654

1,529

1,434

1,468

Interest on short-term borrowings

301

177

248

174

120

Interest on long-term debt

307

344

349

348

353

Total interest expense

2,441

2,175

2,126

1,956

1,941

Net interest income

16,910

16,656

16,135

15,843

15,774

Provision for loan losses

1,200

1,200

1,200

1,200

1,400

Net interest income after provision for loan losses

15,710

15,456

14,935

14,643

14,374

Noninterest income:

Service charges, fees, commissions

1,934

2,156

1,682

1,572

1,603

Merchant services income

185

165

1,178

1,015

990

Commissions and fees on fiduciary activities

515

540

494

508

481

Wealth management income

330

414

348

319

319

Mortgage banking income

208

193

204

179

269

Life insurance investment income

192

193

195

189

197

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

Net gains on sale of merchant services business

2,278

Total noninterest income

3,364

3,661

6,379

3,782

3,859

Noninterest expense:

Salaries and employee benefits expense

6,819

6,550

7,026

6,275

5,732

Net occupancy and equipment expense

2,648

2,483

2,450

2,394

2,424

Merchant services expense

12

33

1,033

730

723

Amortization of intangible assets

249

259

258

268

287

Other expenses

2,727

3,155

3,235

2,689

3,116

Total noninterest expense

12,455

12,480

14,002

12,356

12,282

Income before income taxes

6,619

6,637

7,312

6,069

5,951

Income tax expense

3,971

1,287

1,653

1,269

1,223

Net income

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Other comprehensive (loss) income :

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

$

(2,866)

$

(381)

$

1,184

$

273

$

(4,420)

Reclassification adjustment for gains included in net income

Change in pension liability

318

917

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

(892)

(133)

414

96

(1,226)

Reclassification related to tax reform legislation (5)

(1,101)

Other comprehensive (loss) income, net of income taxes

(2,757)

(248)

770

177

(2,277)

Comprehensive income

$

(109)

$

5,102

$

6,429

$

4,977

$

2,451

Per share data:

Net income

$

0.36

$

0.72

$

0.77

$

0.65

$

0.64

Cash dividends declared

$

0.32

$

0.32

$

0.31

$

0.31

$

0.31

Average common shares outstanding

7,396,505

7,396,505

7,396,163

7,394,143

7,394,143

(5)

Based on proposed guidance from the Financial Accounting Standards Board.

Peoples Financial Services Corp.

Details of Net Interest and Net Interest Margin

(In thousands, fully taxable equivalent basis)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2017

2017

2017

2017

2016

Net interest income:

Interest income

Loans, net:

Taxable

$

16,925

$

16,535

$

15,945

$

15,541

$

15,502

Tax-exempt

1,274

1,250

1,223

1,117

1,123

Total loans, net

18,199

17,785

17,168

16,658

16,625

Investments:

Taxable

859

766

768

709

653

Tax-exempt

1,132

1,102

1,156

1,222

1,272

Total investments

1,991

1,868

1,924

1,931

1,925

Interest on interest-bearing balances in other
banks

2

1

1

29

3

Federal funds sold

Total interest income

20,192

19,654

19,093

18,618

18,553

Interest expense:

Deposits

1,833

1,654

1,529

1,434

1,468

Short-term borrowings

301

177

248

174

120

Long-term debt

307

344

349

348

353

Total interest expense

2,441

2,175

2,126

1,956

1,941

Net interest income

$

17,751

$

17,479

$

16,967

$

16,662

$

16,612

Loans, net:

Taxable

4.36

%

4.43

%

4.37

%

4.41

%

4.33

%

Tax-exempt

4.36

%

4.33

%

4.29

%

4.30

%

4.25

%

Total loans, net

4.36

%

4.42

%

4.36

%

4.40

%

4.33

%

Investments:

Taxable

2.01

%

1.93

%

1.93

%

1.87

%

1.72

%

Tax-exempt

4.08

%

4.09

%

4.17

%

4.30

%

4.22

%

Total investments

2.82

%

2.81

%

2.85

%

2.89

%

2.83

%

Interest-bearing balances with banks

0.74

%

1.46

%

1.31

%

1.16

%

3.58

%

Federal funds sold

Total interest-bearing assets

4.13

%

4.19

%

4.14

%

4.17

%

4.10

%

Interest expense:

Deposits

0.54

%

0.50

%

0.48

%

0.47

%

0.47

%

Short-term borrowings

1.43

%

1.30

%

1.13

%

0.86

%

0.63

%

Long-term debt

2.44

%

2.43

%

2.44

%

2.44

%

2.40

%

Total interest-bearing liabilities

0.66

%

0.61

%

0.60

%

0.57

%

0.56

%

Net interest spread

3.47

%

3.58

%

3.54

%

3.60

%

3.54

%

Net interest margin

3.63

%

3.73

%

3.68

%

3.73

%

3.67

%

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

At period end

2017

2017

2017

2017

2016

Assets:

Cash and due from banks

$

36,336

$

31,839

$

41,026

$

31,511

$

39,496

Interest-bearing balances in other banks

1,152

1,067

375

304

445

Federal funds sold

Investment securities:

Available-for-sale

272,548

259,138

256,774

264,644

259,410

Held-to-maturity

9,274

9,564

9,868

10,180

10,517

Total investments

281,822

268,702

266,642

274,824

269,927

Loans held for sale

106

460

444

Loans, net

1,693,065

1,632,515

1,597,362

1,559,867

1,532,965

Less: allowance for loan losses

18,960

18,831

17,802

16,969

15,961

Net loans

1,674,105

1,613,684

1,579,560

1,542,898

1,517,004

Premises and equipment, net

37,557

37,373

35,892

34,967

33,260

Accrued interest receivable

6,936

5,908

6,206

5,604

6,228

Goodwill

63,370

63,370

63,370

63,370

63,370

Other intangible assets, net

3,178

3,427

3,685

3,944

4,211

Other assets

65,712

66,406

68,002

65,640

65,501

Total assets

$

2,170,274

$

2,092,236

$

2,064,758

$

2,023,506

$

1,999,442

Liabilities:

Deposits:

Noninterest-bearing

$

380,729

$

372,146

$

356,435

$

358,538

$

353,686

Interest-bearing

1,338,289

1,315,709

1,282,998

1,257,006

1,235,071

Total deposits

1,719,018

1,687,855

1,639,433

1,615,544

1,588,757

Short-term borrowings

123,675

71,900

91,500

77,475

82,700

Long-term debt

49,734

50,199

57,160

57,615

58,134

Accrued interest payable

497

481

431

457

462

Other liabilities

12,374

15,505

12,725

13,096

12,771

Total liabilities

1,905,298

1,825,940

1,801,249

1,764,187

1,742,824

Stockholders’ equity:

Common stock

14,793

14,793

14,792

14,788

14,788

Capital surplus

135,043

134,988

134,937

134,888

134,871

Retained earnings

121,353

119,971

116,988

113,621

111,114

Accumulated other comprehensive loss

(6,213)

(3,456)

(3,208)

(3,978)

(4,155)

Total stockholders’ equity

264,976

266,296

263,509

259,319

256,618

Total liabilities and stockholders’ equity

$

2,170,274

$

2,092,236

$

2,064,758

$

2,023,506

$

1,999,442

Peoples Financial Services Corp.

Consolidated Balance Sheets

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Average quarterly balances

2017

2017

2017

2017

2016

Assets:

Loans, net:

Taxable

$

1,540,356

$

1,482,215

$

1,464,401

$

1,429,323

$

1,422,725

Tax-exempt

116,055

114,455

114,287

105,442

105,119

Total loans, net

1,656,411

1,596,670

1,578,688

1,534,765

1,527,844

Investments:

Taxable

169,973

157,104

159,841

159,593

150,697

Tax-exempt

109,979

106,865

111,061

115,347

119,805

Total investments

279,952

263,969

270,902

274,940

270,502

Interest-bearing balances with banks

1,069

272

307

349

333

Federal funds sold

Total interest-bearing assets

1,937,432

1,860,911

1,849,897

1,810,054

1,798,679

Other assets

195,815

195,773

196,913

194,499

192,266

Total assets

$

2,133,247

$

2,056,684

$

2,046,810

$

2,004,553

$

1,990,945

Liabilities and stockholders’ equity:

Deposits:

Interest-bearing

$

1,338,282

$

1,299,661

$

1,270,459

$

1,244,021

$

1,241,586

Noninterest-bearing

376,888

366,610

356,282

346,567

341,795

Total deposits

1,715,170

1,666,271

1,626,741

1,590,588

1,583,381

Short-term borrowings

83,791

54,084

87,739

82,002

75,518

Long-term debt

49,949

56,270

57,372

57,856

58,404

Other liabilities

16,411

14,820

14,305

14,872

15,616

Total liabilities

1,865,321

1,791,445

1,786,157

1,745,318

1,732,919

Stockholders’ equity

267,926

265,239

260,653

259,235

258,026

Total liabilities and stockholders’ equity

$

2,133,247

$

2,056,684

$

2,046,810

$

2,004,553

$

1,990,945

Peoples Financial Services Corp.

Asset Quality Data

(In thousands)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

2017

2017

2017

2017

2016

At quarter end

Nonperforming assets:

Nonaccrual/restructured loans

$

10,559

$

11,714

$

10,429

$

11,446

$

12,974

Accruing loans past due 90 days or more

735

1,509

835

462

844

Foreclosed assets

284

358

384

236

393

Total nonperforming assets

$

11,578

$

13,581

$

11,648

$

12,144

$

14,211

Three months ended

Allowance for loan losses:

Beginning balance

$

18,831

$

17,802

$

16,969

$

15,961

$

15,712

Charge-offs

1,139

268

431

311

1,358

Recoveries

68

97

64

119

207

Provision for loan losses

1,200

1,200

1,200

1,200

1,400

Ending balance

$

18,960

$

18,831

$

17,802

$

16,969

$

15,961

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)

Dec 31

Sept 30

June 30

Mar 31

Dec 31

Three months ended

2017

2017

2017

2017

2016

Core net income per share:

Net income GAAP

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Adjustments:

Less: Gain on sale of merchant services business

2,278

Add: Expenses related to sale of merchant services business

271

Add: Gain on sale of merchant services business tax adjustment

702

Add: Tax expense from the Tax Cuts and Jobs Act of 2017

2,623

Net income Core

$

5,271

$

5,350

$

4,354

$

4,800

$

4,728

Average common shares outstanding

7,396,505

7,396,505

7,396,163

7,394,143

7,394,143

Core net income per share

$

0.71

$

0.72

$

0.59

$

0.65

$

0.64

Tangible book value:

Total stockholders’ equity

$

264,976

$

266,296

$

263,509

$

259,319

$

256,618

Less: Goodwill

63,370

63,370

63,370

63,370

63,370

Less: Other intangible assets, net

3,178

3,427

3,685

3,944

4,211

Total tangible stockholders’ equity

$

198,428

$

199,499

$

196,454

$

192,005

$

189,037

Common shares outstanding

7,396,505

7,396,505

7,396,163

7,394,143

7,394,143

Tangible book value per share

$

26.83

$

26.97

$

26.56

$

25.97

$

25.57

Core return on average stockholders’ equity:

Net income GAAP

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Adjustments:

Less: Gain on sale of merchant services business

2,278

Add: Expenses related to sale of merchant services business

271

Add: Gain on sale of merchant services business tax adjustment

702

Add: Tax expense from the Tax Cuts and Jobs Act of 2017

2,623

Net income Core

$

5,271

$

5,350

$

4,354

$

4,800

$

4,728

Average stockholders’ equity

$

267,926

$

265,239

$

260,653

$

259,235

$

258,026

Core return on average stockholders’ equity

7.81

%

8.00

%

6.70

%

7.51

%

7.29

%

Return on average tangible equity:

Net income GAAP

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Average stockholders’ equity

$

267,926

$

265,239

$

260,653

$

259,235

$

258,026

Less: average intangibles

66,673

66,926

67,185

67,448

67,725

Average tangible stockholders’ equity

$

201,253

$

198,313

$

193,468

$

191,787

$

190,301

Return on average tangible stockholders’ equity

5.22

%

10.70

%

11.73

%

10.15

%

9.88

%

Core return on average tangible stockholders’ equity:

Net income GAAP

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Adjustments:

Less: Gain on sale of merchant services business

2,278

Add: Expenses related to sale of merchant services business

271

Add: Gain on sale of merchant services business tax adjustment

702

Add: Tax expense from the Tax Cuts and Jobs Act of 2017

2,623

Net income Core

$

5,271

$

5,350

$

4,354

$

4,800

$

4,728

Average stockholders’ equity

$

267,926

$

265,239

$

260,653

$

259,235

$

258,026

Less: average intangibles

66,673

66,926

67,185

67,448

67,725

Average tangible stockholders’ equity

$

201,253

$

198,313

$

193,468

$

191,787

$

190,301

Core return on average tangible stockholders’ equity

10.39

%

10.70

%

9.03

%

10.15

%

9.88

%

Core return on average assets:

Net income GAAP

$

2,648

$

5,350

$

5,659

$

4,800

$

4,728

Adjustments:

Less: Gain on sale of merchant services business

2,278

Add: Expenses related to sale of merchant services business

271

Add: Gain on sale of merchant services business tax adjustment

702

Add: Tax expense from the Tax Cuts and Jobs Act of 2017

2,623

Net income Core

$

5,271

$

5,350

$

4,354

$

4,800

$

4,728

Average assets

$

2,133,247

$

2,056,684

$

2,046,810

$

2,004,553

$

1,990,945

Core return on average assets

0.98

%

1.03

%

0.85

%

0.97

%

0.94

%

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures

(In thousands, except share and per share data)

Dec 31

Dec 31

Year Ended

2017

2016

Core net income per share:

Net income GAAP

$

18,457

$

19,583

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

Add: Tax expense from the Tax Cuts and Jobs Act of 2017

2,623

Net income Core

$

19,775

$

19,178

Average common shares outstanding

7,395,837

7,396,716

Core net income per share

$

2.67

$

2.59

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/peoples-financial-services-corp-reports-fourth-quarter-2017-earnings-300592859.html

SOURCE Peoples Financial Services Corp.

Related Links

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