Exhibit 99.1
PEOPLES FINANCIAL SERVICES CORP. Reports First Quarter 2014 Earnings
Scranton, PA, April 25/PRNEWSWIRE/ – Peoples Financial Services Corp. (“Peoples”) (NASDAQ OMX: PFIS), the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three months ended March 31, 2014. Peoples, which completed a merger with Penseco Financial Services Corporation (“Penseco”) on November 30, 2013, reported net income of $4.7 million, or $0.62 per basic and diluted weighted average share for the quarter ended March 31, 2014, compared to $2.5 million, or $0.56 per share, for the comparable quarter of 2013. Earnings per share amounts in prior periods are based on restated shares outstanding. The merger between Peoples and Penseco was accounted for as a reverse acquisition of Peoples by Penseco. As a result of the reverse merger, Peoples is the legal acquirer and Penseco is the accounting acquirer. In a reverse merger the historical financial statements are those of the accounting acquirer. The results for the quarter ended March 31, 2014, include pre-tax merger related expenses of approximately $608.0 thousand. The conversion of the core processing system is scheduled to be completed at the end of April, 2014. Accordingly, cost savings associated with such action are not anticipated to be realized until sometime beginning in the third quarter of 2014.
In addition to evaluating its results of operations in accordance with accounting principles generally accepted in the United States of America (“GAAP”), Peoples routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible book value per share and return on average tangible stockholders’ equity. Peoples believes these non-GAAP financial measures provide information useful to investors in understanding its operating performance and trends, and facilitates comparisons with the performance of its peers. 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 other financial institutions use to measure their results of operations.
HIGHLIGHTS
| | • | | First quarter 2014 earnings per share increased $0.06 or 10.71% compared to the corresponding quarter of 2013. |
| | • | | Annualized return on average assets and average tangible stockholders’ equity were 1.13% and 11.88% for the first quarter of 2014. |
| | • | | The efficiency ratio improved to 59.79% in the first quarter of 2014 compared to 66.10% in the first quarter of 2013. |
| | • | | Nonperforming assets to loans, net and foreclosed assets decreased to 1.30% in the first quarter of 2014 from 1.42% in the prior quarter. |
| | • | | Loans, net increased to $1.2 billion at March 31, 2014, including loans acquired from the merger having an acquisition date fair value of $504.0 million, from $636.3 million at March 31, 2013. |
| | • | | Deposits improved to $1.4 billion at the end of the first quarter 2014, including deposits assumed from the merger having an acquisition date fair value of $628.3 million, from $741.3 at the end of the first quarter 2013. |
| | • | | Tangible book value per share improved $0.56 at the end of the first quarter of 2014 to $22.88 compared to year end 2013. |
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INCOME STATEMENT REVIEW
The tax-equivalent net interest margin for the three months ended March 31, was 4.09% in 2014 compared to 4.05% in 2013. Loan accretion included in loan interest income in the first quarter of 2014 related to loans acquired in the fourth quarter of 2013 was $904.0 thousand, resulting in an increase in the tax-equivalent net interest margin of 24 basis points. The tax-equivalent net interest margin for the fourth quarter of 2013 was 3.82%.
Tax-equivalent net interest income for the three months ended March 31, increased $7.1 million to $15.5 million in 2014 from $8.4 million in 2013. The increase in tax equivalent net interest income was primarily due to the growth in average earning assets from the merger and a 4 basis point improvement in the tax-equivalent net interest margin. The tax-equivalent yield on the loan portfolio was constant at 5.14% in 2014 and 2013. Loans, net averaged $1.2 billion in the first quarter of 2014 compared to $630.8 million for the same quarter last year. For the first three months, the tax-equivalent yield on total investments decreased to 2.81% in 2014 from 3.17% in 2013. Average investments totaled $319.8 million in the first quarter of 2014 and $175.3 million in the first quarter of 2013. Average interest-bearing liabilities increased to $1.2 billion for the three months ended March 31, 2014, compared to $625.2 million for the corresponding period last year. The cost of funds declined to 0.59% in the first quarter of 2014 from 0.67% for the first quarter of 2013.
The provision for loan losses totaled $857.0 thousand in 2014, compared to $300.0 thousand in 2013. The increase in the provision for loan losses in the first quarter of 2014 was primarily due to reporting a higher level of nonperforming assets as a percentage of loans and other real estate owned and a greater net charge-off ratio comparing the first three months of 2014 and 2013.
Noninterest income totaled $3.6 million in 2014, an increase of $0.8 million from $2.8 million in 2013. Increases in service charges, fees and commissions and income from fiduciary and wealth management services more than offset decreases in revenues from merchant services and mortgage banking activities.
Noninterest expense for the three months ended March 31, 2014, increased $4.2 million or 59.2% to $11.3 million, from $7.1 million in 2013. The recognition of merger related expense of $608.0 thousand along with the inclusion of the Peoples operations in 2014 were the primary causes for the increase over the first quarter of 2013.
BALANCE SHEET REVIEW
Total assets, loans and deposits totaled $1.7 billion, $1.2 billion and $1.4 billion, respectively, at March 31, 2014. Loans, net was unchanged comparing the end of the first quarter 2014 to year-end 2013, while total deposits grew $24.6 million or 7.2% annualized in the first three months of 2014. Noninterest-bearing deposits grew $2.1 million or 3.1% annualized while interest-bearing deposits increased $22.5 million or 8.3% annualized in the first quarter of 2014. Total investments were $318.8 million at March 31, 2014, including $302.2 million securities classified as available-for sale and $16.6 million classified as held-to-maturity.
Stockholders’ equity equaled $242.6 million or $32.13 per share at March 31, 2014, and $238.8 million or $31.62 per share at December 31, 2013. Total tangible stockholders’ equity improved to $172.7 million or $22.88 per share at March 31, 2014, compared to $168.6 million or $22.32 per share at year-end 2013. Dividends declared for the first three months of 2014 amounted to $0.31 per share representing a dividend payout ratio of 50.0%.
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ASSET QUALITY REVIEW
Nonperforming assets decreased to $15.3 million or 1.30% of loans, net and foreclosed assets at March 31, 2014, from $16.8 million or 1.42% at December 31, 2013. The allowance for loan losses equaled $8.9 million or 0.75% of loans, net compared to $8.7 million or 0.74% of loans, net, at December 31, 2013, and $7.1 million or 1.12% at March 31, 2013. The decrease in the ratio of the allowance for loan losses as a percentage of loans, net, from March 31, 2013, is primarily a function of acquisition accounting, whereby the historical loan portfolio of Peoples was recorded at its estimated fair value, including a discount to reflect credit risk, and the Peoples historical allowance for loan losses was eliminated. Loans charged-off, net of recoveries, for the three months ended March 31, 2014, equaled $649.0 thousand or 0.22% of average loans, compared to $140.0 thousand or 0.09% of average loans in 2013.
Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Lackawanna, Luzerne, Monroe, Susquehanna, Wayne and Wyoming Counties in Pennsylvania and Broome County in New York through 26 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. 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.
SOURCE: Peoples Financial Services Corp.
/Contact: MEDIA/INVESTORS, Marie L. Luciani, Investor Relations Officer, 570.346.7741 or m.luciani@pennsecurity.com
| Co: | Peoples Financial Services Corp. |
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; 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, such as Peoples recent merger with Penseco Financial Services Corporation, 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,
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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 thepre- 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]
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Summary Data
Peoples Financial Services Corp.
Five Quarter Trend
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| | | Mar 31 2014 | | | Dec 31 2013 | | | Sept 30 2013 | | | June 30 2013 | | | March 31 2013 | |
Key performance data: | | | | | | | | | | | | | | | | | | | | |
Per share data: | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.62 | | | $ | (0.39 | ) | | $ | 0.56 | | | $ | 0.64 | | | $ | 0.56 | |
Cash dividends declared | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | |
Book value | | $ | 32.13 | | | $ | 31.62 | | | $ | 29.91 | | | $ | 29.75 | | | $ | 29.82 | |
Tangible book value (1) | | $ | 22.88 | | | $ | 22.32 | | | $ | 23.87 | | | $ | 23.68 | | | $ | 23.74 | |
Market value: | | | | | | | | | | | | | | | | | | | | |
High | | $ | 42.26 | | | $ | 39.50 | | | $ | 33.37 | | | $ | 30.43 | | | $ | 27.87 | |
Low | | $ | 37.85 | | | $ | 31.53 | | | $ | 29.70 | | | $ | 27.21 | | | $ | 27.13 | |
Closing | | $ | 41.62 | | | $ | 38.00 | | | $ | 33.00 | | | $ | 30.43 | | | $ | 27.54 | |
Market capitalization | | $ | 314,163 | | | $ | 287,012 | | | $ | 147,828 | | | $ | 135,939 | | | $ | 123,028 | |
Common shares outstanding | | | 7,548,358 | | | | 7,552,944 | | | | 4,479,624 | | | | 4,467,261 | | | | 4,467,261 | |
| | | | | |
Selected ratios: | | | | | | | | | | | | | | | | | | | | |
Return on average stockholders’ equity | | | 8.03 | % | | | (5.01 | )% | | | 7.39 | % | | | 8.53 | % | | | 7.65 | % |
| | | | | |
Return on average tangible stockholders’ equity (1) | | | 11.88 | % | | | (6.69 | )% | | | 9.37 | % | | | 10.80 | % | | | 9.76 | % |
| | | | | |
Return on average assets | | | 1.13 | % | | | (0.72 | )% | | | 1.08 | % | | | 1.23 | % | | | 1.11 | % |
| | | | | |
Stockholders’ equity to total assets | | | 14.12 | % | | | 14.14 | % | | | 14.60 | % | | | 14.45 | % | | | 14.33 | % |
| | | | | |
Efficiency ratio (3) | | | 59.79 | % | | | 117.51 | % | | | 67.89 | % | | | 62.77 | % | | | 66.10 | % |
| | | | | |
Nonperforming assets to loans, net, and foreclosed assets | | | 1.30 | % | | | 1.42 | % | | | 0.57 | % | | | 0.71 | % | | | 0.78 | % |
| | | | | |
Net charge-offs to average loans, net | | | 0.22 | % | | | 0.12 | % | | | 0.13 | % | | | 0.04 | % | | | 0.09 | % |
| | | | | |
Allowance for loan losses to loans, net | | | 0.75 | % | | | 0.74 | % | | | 1.20 | % | | | 1.18 | % | | | 1.12 | % |
| | | | | |
Earning assets yield (FTE) (2) | | | 4.53 | % | | | 4.27 | % | | | 4.38 | % | | | 4.40 | % | | | 4.45 | % |
| | | | | |
Cost of funds | | | 0.59 | % | | | 0.60 | % | | | 0.61 | % | | | 0.61 | % | | | 0.66 | % |
| | | | | |
Net interest spread (FTE) (2) | | | 3.94 | % | | | 3.67 | % | | | 3.76 | % | | | 3.79 | % | | | 3.88 | % |
| | | | | |
Net interest margin (FTE) (2) | | | 4.09 | % | | | 3.82 | % | | | 3.93 | % | | | 3.94 | % | | | 4.05 | % |
| | | | | |
Reconciliation of Non-GAAP financial measures: | | | | | | | | | | | | | | | | | | | | |
Return on average tangible equity: | | | | | | | | | | | | | | | | | | | | |
Net income | | $ | 4,698 | | | $ | (2,130 | ) | | $ | 2,486 | | | $ | 2,844 | | | $ | 2,521 | |
Amortization of intangibles, net of tax | | | 223 | | | | 98 | | | | 36 | | | | 36 | | | | 42 | |
| | $ | 4,921 | | | $ | (2,032 | ) | | $ | 2,522 | | | $ | 2,880 | | | $ | 2,563 | |
| | | | | |
Average stockholders’ equity | | $ | 237,953 | | | $ | 169,098 | | | $ | 133,817 | | | $ | 134,108 | | | $ | 133,698 | |
Less: average intangibles | | | 70,033 | | | | 48,633 | | | | 27,089 | | | | 27,144 | | | | 27,204 | |
| | $ | 167,920 | | | $ | 120,465 | | | $ | 106,728 | | | $ | 106,964 | | | $ | 106,494 | |
| (1) | Non-GAAP financial measure. |
| (2) | Tax-equivalent adjustments were calculated using the prevailing federal statutory tax rate. |
| (3) | Total noninterest expense less amortization of intangible assets divided by net interest income and noninterest income. |
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Peoples Financial Services Corp.
Consolidated Statements of Income
(In thousands, except per share data)
| | | | | | | | |
| Three Months Ended | | Mar 31 2014 | | | Mar 31 2013 | |
Interest income: | | | | | | | | |
Interest and fees on loans: | | | | | | | | |
Taxable | | $ | 14,000 | | | $ | 7,377 | |
Tax-exempt | | | 635 | | | | 410 | |
Interest and dividends on investment securities available-for-sale: | | | | | | | | |
Taxable | | | 928 | | | | 439 | |
Tax-exempt | | | 829 | | | | 623 | |
Dividends | | | 16 | | | | 19 | |
Interest on interest-bearing deposits in other banks | | | 10 | | | | 22 | |
Interest on federal funds sold | | | 14 | | | | | |
Total interest income | | | 16,432 | | | | 8,890 | |
| | |
Interest expense: | | | | | | | | |
Interest on deposits | | | 1,357 | | | | 671 | |
Interest on short-term borrowings | | | 34 | | | | 5 | |
Interest on long-term debt | | | 296 | | | | 357 | |
Total interest expense | | | 1,687 | | | | 1,033 | |
Net interest income | | | 14,745 | | | | 7,857 | |
Provision for loan losses | | | 857 | | | | 300 | |
Net interest income after provision for loan losses | | | 13,888 | | | | 7,557 | |
| | |
Noninterest income: | | | | | | | | |
Service charges, fees, commissions | | | 1,624 | | | | 961 | |
Merchant services income | | | 894 | | | | 1,031 | |
Commissions and fees on fiduciary activities | | | 567 | | | | 391 | |
Wealth management income | | | 187 | | | | 90 | |
Mortgage banking income | | | 99 | | | | 133 | |
Life insurance investment income | | | 189 | | | | 119 | |
Net gains on sale of investment securities available-for-sale | | | | | | | 101 | |
Total noninterest income | | | 3,560 | | | | 2,826 | |
| | |
Noninterest expense: | | | | | | | | |
Salaries and employee benefits expense | | | 5,168 | | | | 3,583 | |
Net occupancy and equipment expense | | | 1,733 | | | | 801 | |
Merchant services expense | | | 565 | | | | 625 | |
Amortization of intangible assets | | | 343 | | | | 64 | |
Acquisition related expenses | | | 608 | | | | | |
Other expenses | | | 2,870 | | | | 2,052 | |
Total noninterest expense | | | 11,287 | | | | 7,125 | |
Income before income taxes | | | 6,161 | | | | 3,258 | |
Income tax expense | | | 1,463 | | | | 737 | |
Net income | | $ | 4,698 | | | $ | 2,521 | |
| | |
Other comprehensive income (loss): | | | | | | | | |
Unrealized gains (losses) on investment securities available-for-sale | | $ | 2,394 | | | $ | (476 | ) |
Reclassification adjustment for gains included in net income | | | | | | | (101 | ) |
Change in pension liability | | | | | | | | |
Income tax expense (benefit) related to other comprehensive income (loss) | | | 838 | | | | (196 | ) |
Other comprehensive income (loss), net of income taxes | | | 1,556 | | | | (381 | ) |
Comprehensive income | | $ | 6,254 | | | $ | 2,140 | |
| | |
Per share data: | | | | | | | | |
Net income | | $ | 0.62 | | | $ | 0.56 | |
Cash dividends declared | | $ | 0.31 | | | $ | 0.31 | |
Average common shares outstanding | | | 7,550,253 | | | | 4,467,261 | |
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Consolidated Statements of Income
(In thousands, except per share data)
| | | | | | | | | | | | | | | | | | | | |
| Three months ended | | March 31 2014 | | | Dec 31 2013 | | | Sept 30 2013 | | | June 30 2013 | | | March 31 2013 | |
| | | | | |
Interest income: | | | | | | | | | | | | | | | | | | | | |
Interest and fees on loans: | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 14,000 | | | $ | 9,283 | | | $ | 7,213 | | | $ | 7,229 | | | $ | 7,377 | |
Tax-exempt | | | 635 | | | | 464 | | | | 396 | | | | 404 | | | | 410 | |
Interest and dividends on investment securities available-for-sale: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 928 | | | | 554 | | | | 386 | | | | 414 | | | | 439 | |
Tax-exempt | | | 829 | | | | 698 | | | | 658 | | | | 646 | | | | 623 | |
Dividends | | | 16 | | | | 31 | | | | 22 | | | | 16 | | | | 19 | |
Interest on interest-bearing deposits in other banks | | | 10 | | | | 18 | | | | 18 | | | | 28 | | | | 22 | |
Interest on federal funds sold | | | 14 | | | | 2 | | | | | | | | | | | | | |
Total interest income | | | 16,432 | | | | 11,050 | | | | 8,693 | | | | 8,737 | | | | 8,890 | |
| | | | | |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
Interest on deposits | | | 1,357 | | | | 908 | | | | 647 | | | | 650 | | | | 671 | |
Interest on short-term borrowings | | | 34 | | | | 17 | | | | 6 | | | | 6 | | | | 5 | |
Interest on long-term debt | | | 296 | | | | 298 | | | | 299 | | | | 305 | | | | 357 | |
Total interest expense | | | 1,687 | | | | 1,223 | | | | 952 | | | | 961 | | | | 1,033 | |
Net interest income | | | 14,745 | | | | 9,827 | | | | 7,741 | | | | 7,776 | | | | 7,857 | |
Provision for loan losses | | | 857 | | | | 1,036 | | | | 525 | | | | 500 | | | | 300 | |
Net interest income after provision for loan losses | | | 13,888 | | | | 8,791 | | | | 7,216 | | | | 7,276 | | | | 7,557 | |
| | | | | |
Noninterest income: | | | | | | | | | | | | | | | | | | | | |
Service charges, fees, commissions | | | 1,624 | | | | 666 | | | | 1,006 | | | | 1,459 | | | | 961 | |
Merchant services income | | | 894 | | | | 813 | | | | 1,174 | | | | 918 | | | | 1,031 | |
Commissions and fees on fiduciary activities | | | 567 | | | | 454 | | | | 487 | | | | 403 | | | | 391 | |
Wealth management income | | | 187 | | | | 185 | | | | 130 | | | | 100 | | | | 90 | |
Mortgage banking income | | | 99 | | | | 117 | | | | 80 | | | | 33 | | | | 133 | |
Life insurance investment income | | | 189 | | | | 612 | | | | 117 | | | | 120 | | | | 119 | |
Net gains on sale of investment securities available-for-sale | | | | | | | 5 | | | | 33 | | | | 24 | | | | 101 | |
Total noninterest income | | | 3,560 | | | | 2,852 | | | | 3,027 | | | | 3,057 | | | | 2,826 | |
| | | | | |
Noninterest expense: | | | | | | | | | | | | | | | | | | | | |
Salaries and employee benefits expense | | | 5,168 | | | | 5,568 | | | | 3,340 | | | | 3,492 | | | | 3,583 | |
Net occupancy and equipment expense | | | 1,733 | | | | 1,801 | | | | 685 | | | | 701 | | | | 801 | |
Merchant services expense | | | 565 | | | | 543 | | | | 740 | | | | 582 | | | | 625 | |
Amortization of intangible assets | | | 343 | | | | 151 | | | | 55 | | | | 56 | | | | 64 | |
Acquisition related expenses | | | 608 | | | | 4,384 | | | | 220 | | | | 5 | | | | | |
Other expenses | | | 2,870 | | | | 2,603 | | | | 2,325 | | | | 2,020 | | | | 2,052 | |
Total noninterest expense | | | 11,287 | | | | 15,050 | | | | 7,365 | | | | 6,856 | | | | 7,125 | |
Income (loss) before income taxes | | | 6,161 | | | | (3,407 | ) | | | 2,878 | | | | 3,477 | | | | 3,258 | |
Income tax expense (benefit) | | | 1,463 | | | | (1,277 | ) | | | 392 | | | | 633 | | | | 737 | |
Net income (loss) | | $ | 4,698 | | | $ | (2,130 | ) | | $ | 2,486 | | | $ | 2,844 | | | $ | 2,521 | |
| | | | | |
Other comprehensive income (loss): | | | | | | | | | | | | | | | | | | | | |
Unrealized gains (losses) on investment securities available-for-sale | | $ | 2,394 | | | $ | (642 | ) | | $ | (20 | ) | | $ | (2,744 | ) | | $ | (476 | ) |
Reclassification adjustment for gains included in net income | | | | | | | (5 | ) | | | (33 | ) | | | (24 | ) | | | (101 | ) |
Change in pension liability | | | | | | | 3,642 | | | | | | | | | | | | | |
Income tax expense (benefit) related to other comprehensive income (loss) | | | 838 | | | | 1,160 | | | | (18 | ) | | | (941 | ) | | | (196 | ) |
Other comprehensive income (loss), net of income taxes | | | 1,556 | | | | 1,835 | | | | (35 | ) | | | (1,827 | ) | | | (381 | ) |
Comprehensive income (loss) | | $ | 6,254 | | | $ | (295 | ) | | $ | 2,451 | | | $ | 1,017 | | | $ | 2,140 | |
| | | | | |
Per share data: | | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 0.62 | | | $ | (0.39 | ) | | $ | 0.56 | | | $ | 0.64 | | | $ | 0.56 | |
Cash dividends declared | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | | | $ | 0.31 | |
Average common shares outstanding | | | 7,550,253 | | | | 5,515,199 | | | | 4,473,846 | | | | 4,467,261 | | | | 4,467,261 | |
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Peoples Financial Services Corp.
Details of Net Interest and Net Interest Margin
(In thousands, fully taxable equivalent basis)
| | | | | | | | | | | | | | | | | | | | |
| Three months ended | | March 31
2014 | | | Dec 31
2013 | | | Sept 30
2013 | | | June 30
2013 | | | March 31
2013 | |
| | | | | |
Net interest income: | | | | | | | | | | | | | | | | | | | | |
Interest income | | | | | | | | | | | | | | | | | | | | |
Loans, net: | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 14,000 | | | $ | 9,283 | | | $ | 7,213 | | | $ | 7,229 | | | $ | 7,377 | |
Tax-exempt | | | 978 | | | | 703 | | | | 600 | | | | 612 | | | | 621 | |
Total loans, net | | | 14,978 | | | | 9,986 | | | | 7,813 | | | | 7,841 | | | | 7,998 | |
Investments: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 944 | | | | 585 | | | | 408 | | | | 430 | | | | 458 | |
Tax-exempt | | | 1,274 | | | | 1,058 | | | | 997 | | | | 979 | | | | 944 | |
Total investments | | | 2,218 | | | | 1,643 | | | | 1,405 | | | | 1,409 | | | | 1,402 | |
Interest-bearing deposits in other banks | | | 10 | | | | 18 | | | | 18 | | | | 28 | | | | 22 | |
Federal funds sold | | | 14 | | | | 2 | | | | | | | | | | | | | |
Total interest income | | | 17,220 | | | | 11,649 | | | | 9,236 | | | | 9,278 | | | | 9,422 | |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 1,357 | | | | 908 | | | | 647 | | | | 650 | | | | 671 | |
Short-term borrowings | | | 34 | | | | 17 | | | | 6 | | | | 6 | | | | 5 | |
Long-term debt | | | 296 | | | | 298 | | | | 299 | | | | 305 | | | | 357 | |
Total interest expense | | | 1,687 | | | | 1,223 | | | | 952 | | | | 961 | | | | 1,033 | |
Net interest income | | $ | 15,533 | | | $ | 10,426 | | | $ | 8,284 | | | $ | 8,317 | | | $ | 8,389 | |
| | | | | |
Loans, net: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 5.18 | % | | | 4.72 | % | | | 4.83 | % | | | 4.94 | % | | | 5.21 | % |
Tax-exempt | | | 4.69 | % | | | 5.23 | % | | | 4.68 | % | | | 5.22 | % | | | 4.44 | % |
Total loans, net | | | 5.14 | % | | | 4.76 | % | | | 4.82 | % | | | 4.96 | % | | | 5.14 | % |
Investments: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 1.77 | % | | | 1.59 | % | | | 1.52 | % | | | 1.57 | % | | | 1.61 | % |
Tax-exempt | | | 4.99 | % | | | 5.58 | % | | | 6.41 | % | | | 6.37 | % | | | 6.36 | % |
Total investments | | | 2.81 | % | | | 2.95 | % | | | 3.32 | % | | | 3.30 | % | | | 3.17 | % |
Interest-bearing balances with banks | | | 0.14 | % | | | 0.28 | % | | | 0.28 | % | | | 0.27 | % | | | 0.25 | % |
Federal funds sold | | | 0.58 | % | | | 0.22 | % | | | | | | | | | | | | |
Total earning assets | | | 4.53 | % | | | 4.27 | % | | | 4.38 | % | | | 4.40 | % | | | 4.55 | % |
Interest expense: | | | | | | | | | | | | | | | | | | | | |
Deposits | | | 0.50 | % | | | 0.48 | % | | | 0.45 | % | | | 0.44 | % | | | 0.46 | % |
Short-term borrowings | | | 0.63 | % | | | 0.42 | % | | | 0.26 | % | | | 0.29 | % | | | 0.29 | % |
Long-term debt | | | 3.32 | % | | | 3.33 | % | | | 3.39 | % | | | 3.44 | % | | | 3.46 | % |
Total interest-bearing liabilities | | | 0.59 | % | | | 0.60 | % | | | 0.61 | % | | | 0.61 | % | | | 0.67 | % |
Net interest spread | | | 3.95 | % | | | 3.67 | % | | | 3.76 | % | | | 3.79 | % | | | 3.88 | % |
Net interest margin | | | 4.09 | % | | | 3.82 | % | | | 3.93 | % | | | 3.94 | % | | | 4.05 | % |
12
Peoples Financial Services Corp.
Consolidated Balance Sheets
(In thousands)
| | | | | | | | | | | | | | | | | | | | |
| At period end | | March 31 2014 | | | Dec 31 2013 | | | Sept 30 2013 | | | June 30 2013 | | | March 31 2013 | |
| | | | | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Cash and due from banks | | $ | 26,204 | | | $ | 30,004 | | | $ | 14,306 | | | $ | 14,199 | | | $ | 10,321 | |
Interest-bearing deposits in other banks | | | 7,168 | | | | 11,846 | | | | 14,016 | | | | 22,561 | | | | 42,945 | |
Federal funds sold | | | 45,840 | | | | 9,460 | | | | | | | | | | | | | |
Investment securities: | | | | | | | | | | | | | | | | | | | | |
Available-for-sale | | | 302,226 | | | | 299,715 | | | | 148,921 | | | | 152,511 | | | | 157,047 | |
Held-to-maturity | | | 16,607 | | | | 17,295 | | | | 18,079 | | | | 19,707 | | | | 15,201 | |
Total investments | | | 318,833 | | | | 317,010 | | | | 167,000 | | | | 172,218 | | | | 172,248 | |
Loans held for sale | | | 1,816 | | | | 1,757 | | | | | | | | | | | | | |
Loans, net | | | 1,177,122 | | | | 1,176,617 | | | | 655,946 | | | | 642,353 | | | | 636,283 | |
Less: allowance for loan losses | | | 8,859 | | | | 8,651 | | | | 7,871 | | | | 7,552 | | | | 7,110 | |
Net loans | | | 1,168,263 | | | | 1,167,966 | | | | 648,075 | | | | 634,801 | | | | 629,173 | |
Premises and equipment, net | | | 25,579 | | | | 26,119 | | | | 14,823 | | | | 14,960 | | | | 14,984 | |
Accrued interest receivable | | | 5,366 | | | | 5,866 | | | | 2,641 | | | | 3,004 | | | | 2,844 | |
Goodwill | | | 63,370 | | | | 63,370 | | | | 26,398 | | | | 26,398 | | | | 26,398 | |
Other intangible assets, net | | | 6,492 | | | | 6,835 | | | | 663 | | | | 719 | | | | 774 | |
Other assets | | | 49,330 | | | | 47,988 | | | | 29,575 | | | | 30,809 | | | | 30,101 | |
Total assets | | $ | 1,718,261 | | | $ | 1,688,221 | | | $ | 917,497 | | | $ | 919,669 | | | $ | 929,788 | |
| | | | | |
Liabilities: | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Noninterest-bearing | | $ | 282,060 | | | $ | 279,942 | | | $ | 153,552 | | | $ | 146,583 | | | $ | 144,128 | |
Interest-bearing | | | 1,122,006 | | | | 1,099,565 | | | | 574,748 | | | | 586,551 | | | | 597,209 | |
Total deposits | | | 1,404,066 | | | | 1,379,507 | | | | 728,300 | | | | 733,134 | | | | 741,337 | |
Short-term borrowings | | | 22,539 | | | | 22,052 | | | | 10,144 | | | | 8,188 | | | | 8,011 | |
Long-term debt | | | 35,838 | | | | 36,743 | | | | 34,971 | | | | 35,633 | | | | 36,287 | |
Accrued interest payable | | | 610 | | | | 723 | | | | 502 | | | | 466 | | | | 544 | |
Other liabilities | | | 12,643 | | | | 10,404 | | | | 9,607 | | | | 9,363 | | | | 10,384 | |
Total liabilities | | | 1,475,696 | | | | 1,449,429 | | | | 783,524 | | | | 786,784 | | | | 796,563 | |
| | | | | |
Stockholders’ equity: | | | | | | | | | | | | | | | | | | | | |
Common stock | | | 15,607 | | | | 15,614 | | | | 8,935 | | | | 8,935 | | | | 8,935 | |
Capital surplus | | | 146,035 | | | | 146,109 | | | | 40,054 | | | | 40,036 | | | | 40,018 | |
Retained earnings | | | 86,365 | | | | 84,008 | | | | 87,517 | | | | 86,412 | | | | 84,943 | |
Accumulated other comprehensive income (loss) | | | 858 | | | | (698 | ) | | | (2,533 | ) | | | (2,498 | ) | | | (671 | ) |
Less: Treasury stock, at cost | | | 6,300 | | | | 6,241 | | | | | | | | | | | | | |
Total stockholders’ equity | | | 242,565 | | | | 238,792 | | | | 133,973 | | | | 132,885 | | | | 133,225 | |
Total liabilities and stockholders’ equity | | $ | 1,718,261 | | | $ | 1,688,221 | | | $ | 917,497 | | | $ | 919,669 | | | $ | 929,788 | |
| | | | | |
Reconciliation of Non-GAAP financial measures: | | | | | | | | | | | | | | | | | | | | |
Tangible book value per share: Total stockholders’ equity | | $ | 242,565 | | | $ | 238,792 | | | $ | 133,973 | | | $ | 132,885 | | | $ | 133,225 | |
Less: Goodwill | | | 63,370 | | | | 63,370 | | | | 26,398 | | | | 26,398 | | | | 26,398 | |
Less: Other intangible assets, net | | | 6,492 | | | | 6,835 | | | | 663 | | | | 719 | | | | 774 | |
Total tangible stockholders’ equity | | $ | 172,703 | | | $ | 168,587 | | | $ | 106,912 | | | $ | 105,768 | | | $ | 106,053 | |
13
Peoples Financial Services Corp.
Consolidated Balance Sheets
(In thousands)
| | | | | | | | | | | | | | | | | | | | |
| Average quarterly balances | | March 31 2014 | | | Dec 31 2013 | | | Sept 30
2013 | | | June 30
2013 | | | March 31
2013 | |
| | | | | |
Assets: | | | | | | | | | | | | | | | | | | | | |
Loans, net: | | | | | | | | | | | | | | | | | | | | |
Taxable | | $ | 1,096,793 | | | $ | 779,687 | | | $ | 599,417 | | | $ | 593,557 | | | $ | 574,105 | |
Tax-exempt | | | 84,688 | | | | 53,381 | | | | 51,391 | | | | 47,595 | | | | 56,717 | |
Total loans, net | | | 1,181,481 | | | | 833,068 | | | | 650,808 | | | | 641,152 | | | | 630,822 | |
Investments: | | | | | | | | | | | | | | | | | | | | |
Taxable | | | 216,173 | | | | 145,677 | | | | 107,486 | | | | 110,973 | | | | 115,130 | |
Tax-exempt | | | 103,625 | | | | 75,215 | | | | 62,422 | | | | 62,304 | | | | 60,216 | |
Total investments | | | 319,798 | | | | 220,892 | | | | 169,908 | | | | 173,277 | | | | 175,346 | |
Interest-bearing deposits in other banks | | | 7,327 | | | | 25,156 | | | | 25,629 | | | | 41,604 | | | | 34,414 | |
Federal funds sold | | | 32,444 | | | | 3,579 | | | | | | | | | | | | | |
Total earning assets | | | 1,541,050 | | | | 1,082,695 | | | | 846,345 | | | | 856,033 | | | | 840,582 | |
Other assets | | | 154,020 | | | | 101,903 | | | | 72,529 | | | | 76,839 | | | | 77,371 | |
Total assets | | $ | 1,695,070 | | | $ | 1,184,598 | | | $ | 918,874 | | | $ | 932,872 | | | $ | 917,953 | |
| | | | | |
Liabilities and stockholders’ equity: | | | | | | | | | | | | | | | | | | | | |
Deposits: | | | | | | | | | | | | | | | | | | | | |
Interest-bearing | | $ | 1,109,085 | | | $ | 756,833 | | | $ | 579,189 | | | $ | 594,471 | | | $ | 576,464 | |
Noninterest-bearing | | | 274,584 | | | | 193,481 | | | | 150,486 | | | | 145,757 | | | | 144,993 | |
Total deposits | | | 1,383,669 | | | | 950,314 | | | | 729,675 | | | | 740,228 | | | | 721,457 | |
Short-term borrowings | | | 21,351 | | | | 16,019 | | | | 9,091 | | | | 8,490 | | | | 6,943 | |
Long-term debt | | | 36,330 | | | | 35,542 | | | | 35,331 | | | | 35,985 | | | | 41,835 | |
Other liabilities | | | 15,767 | | | | 13,624 | | | | 10,960 | | | | 14,061 | | | | 14,020 | |
Total liabilities | | | 1,457,117 | | | | 1,015,499 | | | | 785,057 | | | | 798,764 | | | | 784,255 | |
Stockholders’ equity | | | 237,953 | | | | 169,098 | | | | 133,817 | | | | 134,108 | | | | 133,698 | |
Total liabilities and stockholders’ equity | | $ | 1,695,070 | | | $ | 1,184,597 | | | $ | 918,874 | | | $ | 932,872 | | | $ | 917,953 | |
14
Peoples Financial Services Corp.
Asset Quality Data
(In thousands)
| | | | | | | | | | | | | | | | | | | | |
| At quarter end | | March 31
2014 | | | Dec 31
2013 | | | Sept 30
2013 | | | June 30
2013 | | | March 31
2013 | |
| | | | | |
Nonperforming assets: | | | | | | | | | | | | | | | | | | | | |
Nonaccrual/restructured loans | | $ | 12,922 | | | $ | 14,653 | | | $ | 3,032 | | | $ | 2,939 | | | $ | 3,292 | |
Accruing loans past due 90 days or more | | | 1,663 | | | | 1,455 | | | | 636 | | | | 702 | | | | 939 | |
Foreclosed assets | | | 678 | | | | 648 | | | | 94 | | | | 949 | | | | 713 | |
Total nonperforming assets | | $ | 15,263 | | | $ | 16,756 | | | $ | 3,762 | | | $ | 4,590 | | | $ | 4,944 | |
| | | | | |
Three months ended | | | | | | | | | | | | | | | | | | | | |
| | | | | |
Allowance for loan losses: | | | | | | | | | | | | | | | | | | | | |
Beginning balance | | $ | 8,651 | | | $ | 7,871 | | | $ | 7,552 | | | $ | 7,110 | | | $ | 6,950 | |
Charge-offs | | | 683 | | | | 301 | | | | 216 | | | | 102 | | | | 222 | |
Recoveries | | | 34 | | | | 45 | | | | 10 | | | | 44 | | | | 82 | |
Provision for loan losses | | | 857 | | | | 1,036 | | | | 525 | | | | 500 | | | | 300 | |
Ending balance | | $ | 8,859 | | | $ | 8,651 | | | $ | 7,871 | | | $ | 7,552 | | | $ | 7,110 | |
15
