| Filed by Peoples Financial Services Corp. |
| Pursuant to Rule 425 under the Securities Act of 1933 and |
| deemed filed pursuant to Rule 14a-12 of the Securities Exchange Act of 1934 |
|
| Subject Company: Penseco Financial Services Corporation |
| Commission File No. 000-23777 |
| |
| NEWS RELEASE |
| TO BUSINESS EDITOR: |
PEOPLES FINANCIAL SERVICES CORP. REPORTS EARNINGS
Hallstead, PA, July 12 – Peoples Financial Services Corp. (OTCBB:PFIS) today reported earnings for the six months ended June 30, 2013, of $4,562 thousand or $1.48 per share, a decrease of $142 thousand or 3.0%, compared to $4,704 thousand or $1.51 per share for the same period last year. Earnings for the second quarter 2013 totaled $2,282 thousand or $0.74 per share compared to $2,284 thousand or $0.73 per share for the second quarter of 2012.
Return on average assets was 1.34% for the second quarter and 1.37% for the first half of 2013, compared to 1.46% and 1.51% for the respective periods of 2012. Return on average stockholders’ equity was 13.78% and 14.02%, respectively, for the second quarter and year-to-date 2013, compared to 15.36% and 16.02% for the same periods of 2012.
“The slight decrease in comparable first half earnings were caused primarily by higher levels of noninterest expense and income taxes which more than offset the improvement in our net interest income and the reduction in the provision for loan losses,” stated Alan W. Dakey, President and Chief Executive Officer. “We look for improved financial performance with the completion of our pending merger with Penseco Financial Services Corporation expected to take effect in the fourth quarter of 2013 provided all approvals are received. This business combination is unique as it brings together two strong community banks that were each founded in Northeastern Pennsylvania as opposed to recent takeovers of local community banks by out of market financial institutions. We believe our ability to continue to operate as a local community bank after the completion of the transaction will benefit the communities of Northeastern Pennsylvania and Southern New York through offering exceptional personalized service and a significantly enhanced product and service line. Moreover, we believe this transaction improves the prospects for increased long-term shareholder value by increasing the potential of share liquidity through the planned post closing NASDAQ listing and raising the dividend by approximately 35%,” concluded Dakey.
HIGHLIGHTS
| | • | Net interest income for the first six months improved 5.1% over the prior year. |
| | • | Dividends per share increased 9.5% in 2013. |
| | • | Year-to-year loan growth approximated 7.7%. |
| | • | Deposits grew $22.6 million in the first half of 2013. |
| | • | Nonperforming assets decreased 6.3% in the second quarter 2013. |
INCOME STATEMENT REVIEW
Tax-equivalent net interest income for the six months ended June 30, improved $471 thousand or 3.9% to $12,625 thousand in 2013 from $12,154 thousand in 2012. A slight improvement of $46 thousand in tax-equivalent interest revenue was supplemented by a material decrease in interest expense of $425 thousand. Growth in average earning assets of $41.0 million offset partially by a 29 basis point decrease in the tax-equivalent yield on earning assets were the primary factors contributing to the increase in interest revenue. Specifically, the tax-equivalent yield on the loan portfolio decreased 18 basis points to 5.27% for the first half of 2013 from 5.45% for the same period of 2012. In addition, average loans increased $20.8 million or 4.5% comparing the six months ended June 30, 2013 and 2012. The tax-equivalent yield on the investment portfolio decreased 32 basis points to 3.08% in 2013 from 3.40% in 2012. Average investments increased $10.7 million or 7.9% in 2013. Partially offsetting the negative effects of the yield decrease and aiding the positive effects of earning asset growth was a decrease of 23 basis points in the cost of funds, which was the primary factor leading to the decreased interest expense. The tax-equivalent net interest margin for the six months ended June 30, decreased 11 basis points to 3.99% in 2013 from 4.10% in 2012. The net interest margin for the second quarter of 2013 was 4.03%, compared to 3.96% the previous quarter.
The provision for loan losses was $330 thousand for the six months ended June 30, 2013, and $1,035 thousand for the same six months of 2012. The provision for loan losses was $165 thousand for the second quarter of 2013 compared to $390 thousand for the same period last year.
Noninterest income totaled $2,348 thousand for the six months ended June 30, 2013, a decrease of $225 thousand or 8.7% from $2,573 thousand for the same six months of last year. Mortgage banking income increased 9.8% to $413 thousand in 2013 from $376 thousand in 2012. For the second quarter, noninterest income decreased $214 thousand to $1,123 thousand in 2013, from $1,337 thousand in 2012.
Noninterest expense for the six months ended June 30, increased $897 thousand or 12.4% to $8,109 thousand in 2013 from $7,212 thousand in 2012. Employee-related costs rose $479 thousand or 13.8% as a result of increases in staffing, higher health insurance costs and normal merit increases. Additional equipment-related costs resulted in a $126 thousand or 8.1% increase in net occupancy and equipment expense. Other expenses increased $292 thousand or 13.3% comparing the six months ended June 30, 2013 and 2012. For the second quarter, noninterest expense totaled $4,158 thousand in 2013, an increase of $260 thousand or 6.7% from $3,898 thousand in 2012.
BALANCE SHEET REVIEW
Total assets equaled $689.0 million at June 30, 2013, an increase of $50.3 million compared to $638.7 million at June 30, 2012. Strong loan demand resulted in an increase of $35.1 million or 7.7% in loans, net of unearned income, to $492.2 million at the close of the second quarter of 2013 from $457.1 million one year earlier. There were $19.6 million in federal funds sold as of the end of the second quarter of 2013 compared to $13.1 million at the same point in 2012 as deposit growth ramped up in the second quarter of 2013. Investment securities available-for-sale amounted to $138.8 million at June 30, 2013, and $128.6 million at June 30, 2012. Despite strong competition for deposits within our market area, total deposits increased $58.8 million comparing June 30, 2013 and 2012.
Stockholders’ equity equaled $67.6 million or $21.89 per share at June 30, 2013, and $63.9 million or $20.48 per share at June 30, 2012. Included in stockholders’ equity was accumulated other comprehensive income related entirely to net unrealized holding gains on available-for-sale investment securities of $3,038 thousand at June 30, 2013, compared to accumulated other comprehensive income of $4,559 thousand at the end of the same period of 2012. Dividends declared for the first six months were $0.46 per share in 2013 and $0.42 per share in 2012.
Nonperforming assets equaled $11.8 million or 2.39% of loans, net of unearned income and foreclosed assets at June 30, 2013, compared to $9.8 million or 2.14% one year earlier. The slight deterioration in asset quality resulted from an increase in nonaccrual loans and foreclosed assets partially offset by a decrease in accruing loans past due 90 days or more.
The allowance for loan losses equaled $6.7 million or 1.37% of loans, net of unearned income, at June 30, 2013, compared to $5.9 million or 1.29% at June 30, 2012. The allowance for loan losses covered 57.1% of nonperforming assets at the end of the second quarter of 2013, compared to 60.3% at the same time last year. Loans charged-off, net of recoveries, for the six months ended June 30, equaled $176 thousand or 0.07% of average loans outstanding in 2013 compared to $468 thousand or 0.21% of average loans outstanding in 2012.
Peoples Financial Services Corporation is the parent company of Peoples Neighborhood Bank (the “Bank”), an independent community bank serving Lackawanna, Wyoming and Susquehanna Counties in Pennsylvania and Broome County in New York through twelve 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. In addition, customers can take advantage of PNB Online Banking services by accessing the Company's website at http://www.peoplesnatbank.com. Peoples Wealth Management, a division of the Bank’s subsidiary Peoples Advisors LLC, provides investment advisory services to the general public. The Company's 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.
ADDITIONAL INFORMATION ABOUT THE MERGER:
Peoples Financial Services Corp. will be filing a registration statement, which will include a joint proxy statement/prospectus of Penseco Financial Services Corporation and Peoples Financial Services Corp., and other relevant documents concerning the merger with the SEC. WE URGE INVESTORS TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER DOCUMENTS TO BE FILED WITH THE SEC IN CONNECTION WITH THE MERGER OR INCORPORATED BY REFERENCE IN THE PROXY STATEMENTS/PROSPECTUS BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to obtain these documents free of charge at the SEC’s website, http://www.sec.gov/. In addition, documents filed with the SEC by Penseco Financial Services Corporation will be available free of charge by written request to Mr. Patrick M. Scanlon, Senior Vice President, Finance Division Head, Penn Security Bank & Trust Company, 150 North Washington Avenue, Scranton, Pennsylvania 18503 or oral request to Mr. Scanlon at (570)346-7741, extension 2316.
Documents filed with the SEC by Peoples Financial Services Corp. will be available free of charge by written request to Mr. Scott A. Seasock, Senior Vice President and Chief Financial Officer, Peoples Financial Services Corp., 82 Franklin Avenue, Hallstead, Pennsylvania 18822 or oral request to Mr. Seasock at (570)879-6122.
The directors, executive officers, and certain other members of management and employees of Penseco Financial Services Corporation and Peoples Financial Services Corp. are participants in the solicitation of proxies in favor of the merger from the shareholders of Penseco Financial Services Corporation and Peoples Financial Services Corp. Information about the directors and executive officers of Penseco Financial Services Corporation is set forth in its Annual Report on Form 10-K filed on March 14, 2013 for the year ended December 31, 2012 (including the definitive proxy statement filed on April 1, 2013, and incorporated by reference therein). Additional information regarding the interests of such participants, as well as information about the directors and executive officers of Peoples Financial Services Corp. will be included in the joint proxy statement/prospectus and the other relevant documents filed with the SEC if and when they become available.
This document is not an offer to sell shares of Peoples Financial Services Corp. securities which may be issued in the proposed transaction. Such securities are offered only by means of the joint proxy statement/prospectus referred to above.
Summary Data
Peoples Financial Services Corp.
Five Quarter Trend
(In thousands, except per share data)
| | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Key performance data: | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | |
| Net income | | $ | 0.74 | | | $ | 0.74 | | | $ | 0.70 | | | $ | 0.72 | | | $ | 0.73 | |
| Cash dividends declared | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.22 | | | $ | 0.22 | | | $ | 0.21 | |
| Book value | | $ | 21.89 | | | $ | 21.98 | | | $ | 21.46 | | | $ | 21.05 | | | $ | 20.48 | |
| Tangible book value | | $ | 21.74 | | | $ | 21.81 | | | $ | 21.29 | | | $ | 20.87 | | | $ | 20.29 | |
| Market value: | | | | | | | | | | | | | | | | | | | | |
| High | | $ | 39.90 | | | $ | 34.00 | | | $ | 31.00 | | | $ | 31.00 | | | $ | 30.00 | |
| Low | | $ | 33.00 | | | $ | 30.05 | | | $ | 29.50 | | | $ | 28.80 | | | $ | 28.00 | |
| Closing | | $ | 35.25 | | | $ | 33.00 | | | $ | 30.50 | | | $ | 29.85 | | | $ | 29.00 | |
| Market capitalization | | $ | 108,824 | | | $ | 101,795 | | | $ | 94,070 | | | $ | 93,083 | | | $ | 90,432 | |
| Common shares outstanding | | | 3,087,206 | | | | 3,084,706 | | | | 3,084,256 | | | | 3,118,356 | | | | 3,118,356 | |
| | | | | | | | | | | | | | | | | | | | |
| Selected ratios: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Return on average stockholders' equity | | | 13.78 | % | | | 14.26 | % | | | 13.51 | % | | | 14.26 | % | | | 15.36 | % |
| | | | | | | | | | | | | | | | | | | | |
| Return on average assets | | | 1.34 | % | | | 1.40 | % | | | 1.31 | % | | | 1.38 | % | | | 1.46 | % |
| | | | | | | | | | | | | | | | | | | | |
| Stockholders' equity to total assets | | | 9.81 | % | | | 10.00 | % | | | 9.86 | % | | | 10.11 | % | | | 10.00 | % |
| | | | | | | | | | | | | | | | | | | | |
| Efficiency ratio | | | 56.96 | % | | | 56.35 | % | | | 54.77 | % | | | 55.87 | % | | | 55.20 | % |
| | | | | | | | | | | | | | | | | | | | |
| Nonperforming assets to loans, net, and foreclosed assets | | | 2.39 | % | | | 2.61 | % | | | 2.66 | % | | | 2.23 | % | | | 2.14 | % |
| | | | | | | | | | | | | | | | | | | | |
| Net charge-offs to average loans, net | | | 0.05 | % | | | 0.10 | % | | | 0.04 | % | | | -0.04 | % | | | 0.05 | % |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses to loans, net | | | 1.37 | % | | | 1.38 | % | | | 1.41 | % | | | 1.34 | % | | | 1.29 | % |
| | | | | | | | | | | | | | | | | | | | |
| Earning assets yield (FTE) | | | 4.69 | % | | | 4.67 | % | | | 4.57 | % | | | 4.75 | % | | | 4.96 | % |
| | | | | | | | | | | | | | | | | | | | |
| Cost of funds | | | 0.85 | % | | | 0.91 | % | | | 0.99 | % | | | 1.08 | % | | | 1.10 | % |
| | | | | | | | | | | | | | | | | | | | |
| Net interest spread (FTE) | | | 3.84 | % | | | 3.76 | % | | | 3.58 | % | | | 3.67 | % | | | 3.86 | % |
| | | | | | | | | | | | | | | | | | | | |
| Net interest margin (FTE) | | | 4.03 | % | | | 3.96 | % | | | 3.79 | % | | | 3.89 | % | | | 4.09 | % |
Peoples Financial Services Corp.
Consolidated Statements of Income
(In thousands, except per share data)
| Six Months Ended | | June 30 | | | June 30 | |
| | 2013 | | | 2012 | |
| | | | | | |
| Interest income: | | | | | | |
| Interest and fees on loans: | | | | | | |
| Taxable | | $ | 11,633 | | | $ | 11,197 | |
| Tax-exempt | | | 589 | | | | 812 | |
| Interest and dividends on investment securities available-for-sale: | | | | | | | | |
| Taxable | | | 1,165 | | | | 1,239 | |
| Tax-exempt | | | 696 | | | | 687 | |
| Dividends | | | 12 | | | | 15 | |
| Interest on interest-bearing balances with banks | | | 2 | | | | 5 | |
| Interest on federal funds sold | | | 14 | | | | | |
| Total interest income | | | 14,111 | | | | 13,955 | |
| | | | | | | | |
| Interest expense: | | | | | | | | |
| Interest on deposits | | | 1,972 | | | | 2,119 | |
| Interest on short-term borrowings | | | 64 | | | | 111 | |
| Interest on long-term debt | | | 112 | | | | 343 | |
| Total interest expense | | | 2,148 | | | | 2,573 | |
| Net interest income | | | 11,963 | | | | 11,382 | |
| Provision for loan losses | | | 330 | | | | 1,035 | |
| Net interest income after provision for loan losses | | | 11,633 | | | | 10,347 | |
| | | | | | | | |
| Noninterest income: | | | | | | | | |
| Service charges, fees and commissions | | | 1,632 | | | | 1,540 | |
| Wealth management income | | | 394 | | | | 281 | |
| Mortgage banking income | | | 413 | | | | 376 | |
| Net gains (losses) on sale of investment securities available-for-sale | | | (1 | ) | | | 383 | |
| Net gains (losses) on sale of other real estate | | | (90 | ) | | | (7 | ) |
| Total noninterest income | | | 2,348 | | | | 2,573 | |
| | | | | | | | |
| Noninterest expense: | | | | | | | | |
| Salaries and employee benefits expense | | | 3,958 | | | | 3,479 | |
| Net occupancy and equipment expense | | | 1,669 | | | | 1,543 | |
| Other expenses | | | 2,482 | | | | 2,190 | |
| Total noninterest expense | | | 8,109 | | | | 7,212 | |
| Income before income taxes | | | 5,872 | | | | 5,708 | |
| Provision for income tax expense | | | 1,310 | | | | 1,004 | |
| Net income | | $ | 4,562 | | | $ | 4,704 | |
| | | | | | | | |
| Other comprehensive income (loss): | | | | | | | | |
| Unrealized holding gains (losses) on investment securities available-for-sale | | $ | (2,786 | ) | | $ | 1,768 | |
| Reclassification adjustment for losses (gains) included in net income | | | 1 | | | | (383 | ) |
| Income tax expense (benefit) related to other comprehensive income | | | (947 | ) | | | 471 | |
| Other comprehensive income (loss), net of income taxes | | | (1,838 | ) | | | 914 | |
| Comprehensive income | | $ | 2,724 | | | $ | 5,618 | |
| | | | | | | | |
| Per share data: | | | | | | | | |
| Net income | | $ | 1.48 | | | $ | 1.51 | |
| Cash dividends declared | | $ | 0.46 | | | $ | 0.42 | |
| Average common shares outstanding | | | 3,085,216 | | | | 3,118,269 | |
Peoples Financial Services Corp.
Consolidated Statements of Income
(In thousands, except per share data)
| Three months ended | | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Interest income: | | | | | | | | | | | | | | | |
| Interest and fees on loans: | | | | | | | | | | | | | | | |
| Taxable | | $ | 6,003 | | | $ | 5,630 | | | $ | 5,732 | | | $ | 5,698 | | | $ | 5,682 | |
| Tax-exempt | | | 291 | | | | 298 | | | | 299 | | | | 316 | | | | 393 | |
| Interest and dividends on investment securities available-for-sale: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 580 | | | | 585 | | | | 528 | | | | 558 | | | | 603 | |
| Tax-exempt | | | 347 | | | | 349 | | | | 330 | | | | 325 | | | | 328 | |
| Dividends | | | 6 | | | | 6 | | | | 4 | | | | 6 | | | | 8 | |
| Interest on interest-bearing balances with banks | | | 1 | | | | 1 | | | | 3 | | | | 2 | | | | 1 | |
| Interest on federal funds sold | | | 7 | | | | 7 | | | | 12 | | | | 11 | | | | | |
| Total interest income | | | 7,235 | | | | 6,876 | | | | 6,908 | | | | 6,916 | | | | 7,015 | |
| | | | | | | | | | | | | | | | | | | | |
| Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Interest on deposits | | | 986 | | | | 986 | | | | 1,086 | | | | 1,115 | | | | 1,071 | |
| Interest on short-term borrowings | | | 37 | | | | 27 | | | | 26 | | | | 29 | | | | 49 | |
| Interest on long-term debt | | | 35 | | | | 77 | | | | 120 | | | | 163 | | | | 170 | |
| Total interest expense | | | 1,058 | | | | 1,090 | | | | 1,232 | | | | 1,307 | | | | 1,290 | |
| Net interest income | | | 6,177 | | | | 5,786 | | | | 5,676 | | | | 5,609 | | | | 5,725 | |
| Provision for loan losses | | | 165 | | | | 165 | | | | 330 | | | | 330 | | | | 390 | |
| Net interest income after provision for loan losses | | | 6,012 | | | | 5,621 | | | | 5,346 | | | | 5,279 | | | | 5,335 | |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest income: | | | | | | | | | | | | | | | | | | | | |
| Service charges, fees and commissions | | | 824 | | | | 808 | | | | 882 | | | | 804 | | | | 797 | |
| Wealth management income | | | 197 | | | | 197 | | | | 164 | | | | 180 | | | | 138 | |
| Mortgage banking income | | | 173 | | | | 240 | | | | 297 | | | | 277 | | | | 302 | |
| Net gains (losses) on sale of investment securities available-for-sale | | | (1 | ) | | | | | | | | | | | | | | | 99 | |
| Net gains (losses) on sale of other real estate | | | (70 | ) | | | (20 | ) | | | (331 | ) | | | | | | | 1 | |
| Total noninterest income | | | 1,123 | | | | 1,225 | | | | 1,012 | | | | 1,261 | | | | 1,337 | |
| | | | | | | | | | | | | | | | | | | | |
| Noninterest expense: | | | | | | | | | | | | | | | | | | | | |
| Salaries and employee benefits expense | | | 2,090 | | | | 1,868 | | | | 1,776 | | | | 1,792 | | | | 1,749 | |
| Net occupancy and equipment expense | | | 830 | | | | 839 | | | | 790 | | | | 747 | | | | 753 | |
| Other expenses | | | 1,238 | | | | 1,244 | | | | 1,097 | | | | 1,299 | | | | 1,396 | |
| Total noninterest expense | | | 4,158 | | | | 3,951 | | | | 3,663 | | | | 3,838 | | | | 3,898 | |
| Income before income taxes | | | 2,977 | | | | 2,895 | | | | 2,695 | | | | 2,702 | | | | 2,774 | |
| Provision for income tax expense | | | 695 | | | | 615 | | | | 519 | | | | 462 | | | | 490 | |
| Net income | | $ | 2,282 | | | $ | 2,280 | | | $ | 2,176 | | | $ | 2,240 | | | $ | 2,284 | |
| | | | | | | | | | | | | | | | | | | | |
| Other comprehensive income: | | | | | | | | | | | | | | | | | | | | |
| Unrealized holding gains (losses) on investment securities available-for-sale | | $ | (2,806 | ) | | $ | 20 | | | $ | 159 | | | $ | 321 | | | $ | 1,791 | |
| Reclassification adjustment for losses (gains) included in net income | | | 1 | | | | | | | | | | | | | | | | (99 | ) |
| Income tax expense (benefit) related to other comprehensive income | | | (954 | ) | | | 7 | | | | 54 | | | | 109 | | | | 575 | |
| Other comprehensive income (loss), net of income taxes | | | (1,851 | ) | | | 13 | | | | 105 | | | | 212 | | | | 1,117 | |
| Comprehensive income | | $ | 431 | | | $ | 2,293 | | | $ | 2,281 | | | $ | 2,452 | | | $ | 3,401 | |
| | | | | | | | | | | | | | | | | | | | |
| Per share data: | | | | | | | | | | | | | | | | | | | | |
| Net income | | $ | 0.74 | | | $ | 0.74 | | | $ | 0.70 | | | $ | 0.72 | | | $ | 0.73 | |
| Cash dividends declared | | $ | 0.23 | | | $ | 0.23 | | | $ | 0.22 | | | $ | 0.22 | | | $ | 0.21 | |
| Average common shares outstanding | | | 3,085,937 | | | | 3,084,487 | | | | 3,113,524 | | | | 3,118,356 | | | | 3,118,429 | |
Peoples Financial Services Corp.
Details of Net Interest and Net Interest Margin
(In thousands, fully taxable equivalent basis)
| Three months ended | | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Net interest income: | | | | | | | | | | | | | | | |
| Interest income | | | | | | | | | | | | | | | |
| Loans, net: | | | | | | | | | | | | | | | |
| Taxable | | $ | 6,003 | | | $ | 5,630 | | | $ | 5,732 | | | $ | 5,698 | | | $ | 5,682 | |
| Tax-exempt | | | 440 | | | | 452 | | | | 453 | | | | 479 | | | | 595 | |
| Total loans, net | | | 6,443 | | | | 6,082 | | | | 6,185 | | | | 6,177 | | | | 6,277 | |
| Investments: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 586 | | | | 591 | | | | 532 | | | | 564 | | | | 611 | |
| Tax-exempt | | | 526 | | | | 529 | | | | 500 | | | | 492 | | | | 497 | |
| Total investments | | | 1,112 | | | | 1,120 | | | | 1,032 | | | | 1,056 | | | | 1,108 | |
| Interest-bearing balances with banks | | | 1 | | | | 1 | | | | 3 | | | | 2 | | | | 1 | |
| Federal funds sold | | | 7 | | | | 7 | | | | 12 | | | | 11 | | | | | |
| Total interest income | | | 7,563 | | | | 7,210 | | | | 7,232 | | | | 7,246 | | | | 7,386 | |
| Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 986 | | | | 986 | | | | 1,086 | | | | 1,115 | | | | 1,071 | |
| Short-term borrowings | | | 37 | | | | 27 | | | | 26 | | | | 29 | | | | 49 | |
| Long-term debt | | | 35 | | | | 77 | | | | 120 | | | | 163 | | | | 170 | |
| Total interest expense | | | 1,058 | | | | 1,090 | | | | 1,232 | | | | 1,307 | | | | 1,290 | |
| Net interest income | | $ | 6,505 | | | $ | 6,120 | | | $ | 6,000 | | | $ | 5,939 | | | $ | 6,096 | |
| | | | | | | | | | | | | | | | | | | | |
| Loans, net: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 5.29 | % | | | 5.23 | % | | | 5.22 | % | | | 5.31 | % | | | 5.43 | % |
| Tax-exempt | | | 5.39 | % | | | 5.53 | % | | | 5.49 | % | | | 5.59 | % | | | 5.65 | % |
| Total loans, net | | | 5.30 | % | | | 5.25 | % | | | 5.24 | % | | | 5.34 | % | | | 5.45 | % |
| Investments: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 2.42 | % | | | 2.37 | % | | | 2.07 | % | | | 2.42 | % | | | 2.49 | % |
| Tax-exempt | | | 4.48 | % | | | 4.56 | % | | | 5.41 | % | | | 5.90 | % | | | 5.94 | % |
| Total investments | | | 3.10 | % | | | 3.07 | % | | | 2.95 | % | | | 3.33 | % | | | 3.37 | % |
| Interest-bearing balances with banks | | | 1.41 | % | | | 0.48 | % | | | 0.93 | % | | | 0.52 | % | | | 0.37 | % |
| Federal funds sold | | | 0.20 | % | | | 0.37 | % | | | 0.25 | % | | | 0.23 | % | | | | |
| Total earning assets | | | 4.69 | % | | | 4.67 | % | | | 4.57 | % | | | 4.75 | % | | | 4.96 | % |
| Interest expense: | | | | | | | | | | | | | | | | | | | | |
| Deposits | | | 0.82 | % | | | 0.86 | % | | | 0.93 | % | | | 0.99 | % | | | 1.03 | % |
| Short-term borrowings | | | 0.81 | % | | | 0.77 | % | | | 0.77 | % | | | 0.85 | % | | | 0.61 | % |
| Long-term debt | | | 4.96 | % | | | 3.98 | % | | | 3.61 | % | | | 3.66 | % | | | 3.67 | % |
| Total interest-bearing liabilities | | | 0.85 | % | | | 0.91 | % | | | 0.99 | % | | | 1.08 | % | | | 1.10 | % |
| Net interest spread | | | 3.84 | % | | | 3.76 | % | | | 3.58 | % | | | 3.67 | % | | | 3.86 | % |
| Net interest margin | | | 4.03 | % | | | 3.96 | % | | | 3.79 | % | | | 3.89 | % | | | 4.09 | % |
Peoples Financial Services Corp.
Consolidated Balance Sheets
(In thousands, except per share data)
| | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| At period end | | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | |
| Cash and due from banks | | $ | 9,459 | | | $ | 7,591 | | | $ | 9,777 | | | $ | 8,014 | | | $ | 8,084 | |
| Interest-bearing balances with banks | | | 298 | | | | 248 | | | | 1,126 | | | | 1,268 | | | | 1,175 | |
| Federal funds sold | | | 19,600 | | | | 15,410 | | | | 17,180 | | | | 3,525 | | | | 13,130 | |
| Investment securities available-for-sale | | | 138,758 | | | | 146,665 | | | | 147,780 | | | | 139,083 | | | | 128,596 | |
| Loans held for sale | | | 1,105 | | | | 785 | | | | 1,917 | | | | 1,204 | | | | 2,242 | |
| Loans, net | | | 492,213 | | | | 479,255 | | | | 465,773 | | | | 470,415 | | | | 457,054 | |
| Less: allowance for loan losses | | | 6,735 | | | | 6,635 | | | | 6,581 | | | | 6,297 | | | | 5,916 | |
| Net loans | | | 485,478 | | | | 472,620 | | | | 459,192 | | | | 464,118 | | | | 451,138 | |
| Premises and equipment, net | | | 8,748 | | | | 8,645 | | | | 8,685 | | | | 8,581 | | | | 8,716 | |
| Accrued interest receivable | | | 3,481 | | | | 3,433 | | | | 3,272 | | | | 3,391 | | | | 2,903 | |
| Other assets | | | 22,047 | | | | 22,385 | | | | 22,594 | | | | 20,232 | | | | 22,730 | |
| Total assets | | $ | 688,974 | | | $ | 677,782 | | | $ | 671,523 | | | $ | 649,416 | | | $ | 638,714 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Liabilities: | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Noninterest-bearing | | $ | 112,063 | | | $ | 106,516 | | | $ | 102,322 | | | $ | 97,950 | | | $ | 96,692 | |
| Interest-bearing | | | 484,872 | | | | 476,045 | | | | 471,989 | | | | 456,462 | | | | 441,419 | |
| Total deposits | | | 596,935 | | | | 582,561 | | | | 574,311 | | | | 554,412 | | | | 538,111 | |
| Short-term borrowings | | | 17,972 | | | | 19,975 | | | | 12,764 | | | | 13,598 | | | | 13,233 | |
| Long-term debt | | | 2,717 | | | | 2,925 | | | | 13,130 | | | | 13,333 | | | | 18,533 | |
| Accrued interest payable | | | 211 | | | | 204 | | | | 425 | | | | 263 | | | | 248 | |
| Other liabilities | | | 3,549 | | | | 4,324 | | | | 4,697 | | | | 2,171 | | | | 4,713 | |
| Total liabilities | | | 621,384 | | | | 609,989 | | | | 605,327 | | | | 583,777 | | | | 574,838 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Stockholders' equity: | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Common stock, par value $2.00 authorized 12,500,000, shares issued 3,341,251; | | | 6,683 | | | | 6,683 | | | | 6,683 | | | | 6,683 | | | | 6,683 | |
| Capital surplus | | | 3,191 | | | | 3,160 | | | | 3,155 | | | | 3,153 | | | | 3,155 | |
| Retained earnings | | | 60,923 | | | | 59,352 | | | | 57,781 | | | | 56,291 | | | | 54,738 | |
| Accumulated other comprehensive income | | | 3,038 | | | | 4,889 | | | | 4,876 | | | | 4,771 | | | | 4,559 | |
Less: Treasury stock, at cost, shares held 254,045; 256,545; 256,995; 222,895; 222,895 | | | 6,245 | | | | 6,291 | | | | 6,299 | | | | 5,259 | | | | 5,259 | |
| Total stockholders' equity | | | 67,590 | | | | 67,793 | | | | 66,196 | | | | 65,639 | | | | 63,876 | |
| Total liabilities and stockholders' equity | | $ | 688,974 | | | $ | 677,782 | | | $ | 671,523 | | | $ | 649,416 | | | $ | 638,714 | |
Peoples Financial Services Corp.
Consolidated Balance Sheets
(In thousands, except per share data)
| | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| Average quarterly balances | | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Assets: | | | | | | | | | | | | | | | |
| Loans, net: | | | | | | | | | | | | | | | |
| Taxable | | $ | 455,318 | | | $ | 438,073 | | | $ | 436,953 | | | $ | 426,500 | | | $ | 421,204 | |
| Tax-exempt | | | 32,703 | | | | 33,218 | | | | 32,844 | | | | 34,092 | | | | 42,392 | |
| Total loans, net | | | 488,021 | | | | 471,291 | | | | 469,797 | | | | 460,592 | | | | 463,596 | |
| Investments: | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 97,014 | | | | 101,328 | | | | 102,244 | | | | 92,860 | | | | 98,659 | |
| Tax-exempt | | | 47,066 | | | | 47,197 | | | | 36,785 | | | | 33,180 | | | | 33,624 | |
| Total investments | | | 144,080 | | | | 148,525 | | | | 139,029 | | | | 126,040 | | | | 132,283 | |
| Interest-bearing balances with banks | | | 286 | | | | 841 | | | | 1,282 | | | | 1,523 | | | | 1,078 | |
| Federal funds sold | | | 14,238 | | | | 7,652 | | | | 18,898 | | | | 19,168 | | | | 1,936 | |
| Total earning assets | | | 646,625 | | | | 628,309 | | | | 629,006 | | | | 607,323 | | | | 598,893 | |
| Other assets | | | 34,432 | | | | 34,081 | | | | 34,297 | | | | 40,111 | | | | 31,073 | |
| Total assets | | $ | 681,057 | | | $ | 662,390 | | | $ | 663,303 | | | $ | 647,434 | | | $ | 629,966 | |
| | | | | | | | | | | | | | | | | | | | |
| Liabilities and stockholders' equity: | | | | | | | | | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing | | $ | 480,084 | | | $ | 467,597 | | | $ | 466,604 | | | $ | 449,946 | | | $ | 419,987 | |
| Noninterest-bearing | | | 108,037 | | | | 102,126 | | | | 100,685 | | | | 98,725 | | | | 94,920 | |
| Total deposits | | | 588,121 | | | | 569,723 | | | | 567,289 | | | | 548,671 | | | | 514,907 | |
| Short-term borrowings | | | 18,229 | | | | 14,289 | | | | 13,437 | | | | 13,638 | | | | 32,446 | |
| Long-term debt | | | 2,828 | | | | 7,868 | | | | 13,239 | | | | 17,735 | | | | 18,641 | |
| Other liabilities | | | 5,445 | | | | 5,687 | | | | 5,271 | | | | 4,908 | | | | 4,175 | |
| Total liabilities | | | 614,623 | | | | 597,567 | | | | 599,236 | | | | 584,952 | | | | 570,169 | |
| Stockholders' equity | | | 66,434 | | | | 64,823 | | | | 64,067 | | | | 62,482 | | | | 59,797 | |
| Total liabilities and stockholders' equity | | $ | 681,057 | | | $ | 662,390 | | | $ | 663,303 | | | $ | 647,434 | | | $ | 629,966 | |
Peoples Financial Services Corp.
Asset Quality Data
(In thousands)
| | June 30 | | | March 31 | | | Dec 31 | | | Sept 30 | | | June 30 | |
| At quarter end | | 2013 | | | 2013 | | | 2012 | | | 2012 | | | 2012 | |
| | | | | | | | | | | | | | | |
| Nonperforming assets: | | | | | | | | | | | | | | | |
| Nonaccrual/restructured loans | | $ | 9,416 | | | $ | 9,717 | | | $ | 9,574 | | | $ | 7,453 | | | $ | 7,177 | |
| Accruing loans past due 90 days or more | | | 419 | | | | 850 | | | | 861 | | | | 804 | | | | 737 | |
| Foreclosed assets | | | 1,958 | | | | 2,013 | | | | 2,003 | | | | 2,304 | | | | 1,889 | |
| Total nonperforming assets | | $ | 11,793 | | | $ | 12,580 | | | $ | 12,438 | | | $ | 10,561 | | | $ | 9,803 | |
| | | | | | | | | | | | | | | | | | | | |
| Three months ended | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | |
| Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | |
| Beginning balance | | $ | 6,635 | | | $ | 6,581 | | | $ | 6,297 | | | $ | 5,916 | | | $ | 5,589 | |
| Charge-offs | | | 105 | | | | 169 | | | | 62 | | | | 35 | | | | 84 | |
| Recoveries | | | 40 | | | | 58 | | | | 16 | | | | 86 | | | | 21 | |
| Provision for loan losses | | | 165 | | | | 165 | | | | 330 | | | | 330 | | | | 390 | |
| Ending balance | | $ | 6,735 | | | $ | 6,635 | | | $ | 6,581 | | | $ | 6,297 | | | $ | 5,916 | |
SOURCE Peoples Financial Services Corp.
/Contact: MEDIA/INVESTORS, Scott A. Seasock, 570.879.2175 or scotts@peoplesnatbank.com
| Co: | Peoples Financial Services Corp. |
Except for the historical information contained, herein, the matters discussed in this press release are forward-looking statements that involve risks and uncertainties in the banking industry and overall economy. Such risks and uncertainties are detailed in the Company's Annual Report. |
