PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited First Quarter 2023 Earnings

Rhea-AI Summary

Peoples Financial Services Corp. (NASDAQ: PFIS) reported net income of $7.6 million or $1.05 per diluted share for Q1 2023, a 21.3% decrease from $9.6 million or $1.33 in Q1 2022. This decline was attributed to a higher provision for credit losses of $1.3 million and increased operating expenses, despite a net interest income rise of $0.4 million.

The company experienced loan growth of $90 million (13.5% annualized) and strong deposit increases of $189.4 million, now totaling $3.2 billion.

However, asset quality remained high, with nonperforming assets at 0.05% of total assets.

Positive

• Net interest income increased by $0.4 million due to strong loan growth.
• Dividends paid rose 5.1% to $0.41 per share.
• Nonperforming assets improved to 0.05% of total assets from 0.12% in the prior year.
• Stockholders' equity increased to $328.6 million, reflecting strong capital position.

Negative

• Net income decreased by 21.3% year-over-year.
• Provision for credit losses increased by $1.0 million.
• Operating expenses rose by $2.2 million (15.4%) due to higher salaries and benefits.

SCRANTON, Pa., April 27, 2023 /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 months ended March 31, 2023.

Peoples reported net income of $7.6 million, or $1.05 per diluted share for the three months ended March 31, 2023, a 21.3% decrease when compared to $9.6 million, or $1.33 per share for the comparable period of 2022. The decrease in earnings for the three months ended March 31, 2023 was due to a higher provision for credit losses and higher operating expenses which more than offset an increase in net interest income and noninterest income. 

Net interest income for the current period increased $0.4 million when compared to the three months ended March 31, 2022 on strong loan growth resulting in higher interest income partially offset by increased costs of funds. The provision for credit losses increased $1.0 million due to loan growth and our Current Expected Credit Losses (CECL) related model impact from updated forecasted economic conditions.  The year ago period included a provision for credit losses of $0.3 million based on our allowance for credit losses methodology and then current conditions. Noninterest expenses for the three months ended March 31, 2023 increased $2.2 million compared to the prior year's period due to higher salaries and benefits, other expenses, including an increase in FDIC assessments and loan account processing fees, and gains on other real estate owned in the year ago period.

During the quarter ended March 31, 2023, $65.6 million in securities were sold at a net gain of $81 thousand as part of our strategy to add liquidity and reduce short-term borrowings.  Core net income, a non-GAAP measure¹, which we defined as excluding the gains or losses from sales of our investment securities portfolio, for the three months ended March 31, totaled $7.5 million and $9.6 million in 2023 and 2022, respectively. Core net income per share, a non-GAAP measure¹, for the three months ended March 31, 2023 was $1.04, a 21.8% decrease from $1.33 reported for the same period in 2022.

FINANCIAL HIGHLIGHTS

• Net income for the three months ended March 31, 2023 was $7.6 million or $1.05 per diluted share.
• Dividends paid during the three months ended March 31, 2023 totaled $0.41 per share representing a 5.1% increase from 2022.
• Sold $65.6 million of investment securities, including U.S. Treasury bonds, tax-exempt municipals and mortgage-backed securities at a net gain of $81 thousand. The proceeds were used to pay-down higher cost short-term borrowings.
• Adopted the CECL accounting standard effective January 1, 2023, which resulted in a decrease to the Allowance for Credit Losses (ACL) of $3.3 million and an increase to the reserve for unfunded commitments of $0.3 million. The adoption also resulted in an increase to retained earnings of $2.3 million, net of tax.
• Net loan growth for the three months ended March 31, 2023 was $90.0 million or 13.5% annualized and consisted primarily of commercial real estate loans.
• The provision for credit losses was $1.3 million for the three months ended March 31, 2023 due to loan growth and CECL related model impact from updated forecasted economic conditions.
• Core deposit growth for the three months ended March 31, 2023 totaled $28.0 million. In addition, to improve on-balance sheet liquidity, brokered deposits were increased $161.4 million, which included $166.9 million of longer-term Callable CDs at a weighted average cost of 5.18%. Overall, total deposits grew by $189.4 million to $3.2 billion.
• At March 31, 2023, the Company had $1.7 billion in additional liquidity available in the form of lines of credit at the Federal Reserve Bank and Federal Home Loan Bank of Pittsburgh (FHLB), brokered deposit capacity and unencumbered securities that may be pledged as collateral, representing 45.7% of total assets and 51.9% of total deposits.
• At March 31, 2023, the Company was well capitalized as evidenced by the following capital ratios: leverage ratio of 9.66%, common equity tier 1 capital ratio of 12.00% , tier 1 capital ratio of 12.00% and total capital ratio of 12.88%
• 16,573 shares were purchased at an average price per share of $49.79 and retired under the Company's common stock repurchase plan. The Company, in response to market volatility and economic uncertainty caused by the two large bank failures, has temporarily suspended its stock repurchase plan to preserve capital.
• Asset quality remained strong as nonperforming assets as a percentage of total assets at March 31, 2023 was 0.05%, compared to 0.12% and 0.14% at December 31, 2022 and March 31, 2022.

¹ See reconciliation of non-GAAP financial measures on p. 16 - 17

INCOME STATEMENT REVIEW

In March 2022, the Federal Open Market Committee ("FOMC") began increasing the federal funds rate in an attempt to curb inflation.   Since then, there have been nine rate increases, totaling 475 basis points.  There were seven rate hikes in 2022, two increases during the first three months of 2023 and an additional rate hike is anticipated at the May 2023 FOMC meeting. These increases directly impact our core source of income, net interest income through yields on investments and loans and the cost of funding via deposits and borrowings.  Through March 31, 2023, we have realized higher rates on our existing adjustable and variable rate loans and new originations.  The benefit of higher asset yields however, has been offset by higher funding costs as rate-sensitive depositors seek higher rates.  We anticipate that funding costs will continue to increase in the future as a result of the FOMC rate adjustments, local competition for deposits and the cost of alternative funding.

Calculated on a fully taxable equivalent basis, a non-GAAP measure¹, our net interest margin for the three months ended March 31, 2023 was 2.81%, a decrease of 16 basis points when compared to the 2.97% for the three months ended December 31, 2022 and March 31, 2022.  The decrease in net interest margin from the prior three month period and year ago period was due to higher funding costs offsetting the increased yield and balance of earning assets. The tax-equivalent yield on interest-earning assets increased 32 basis points to 4.16% during the three months ended March 31, 2023 from 3.84% during the three months ended December 31, 2022, and increased 94 basis points when compared to 3.22% for the three months ended March 31, 2022. Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, increased 65 basis points to 1.85% for the three months ended March 31, 2023 when compared to 1.20% during the three months ended December 31, 2022 and increased 150 basis points compared to 0.35% in the prior year period.  We continued to increase interest rates paid on deposits during the quarter in order to pay competitive rates to attract new deposits and retain current balances.  Our cost of interest-bearing deposits increased 60 basis points during the current three month period to 1.68% from 1.08% in the prior three month period ended December 31, 2022.  Our cost of total deposits for the three months ended March 31, 2023 increased 46 basis points to 1.27% from 0.81% during the three months ended December 31, 2022.

On a trailing twelve month basis, our average cost of interest-bearing deposits increased 141 basis points, from 0.27% at March 31, 2022 to 1.68% at March 31, 2023, representing a beta on interest-bearing deposits of approximately 31.3%. Our overall cost of total deposits increased 107 basis points from 0.20% at March 31, 2022 to 1.27%, representing a beta on total deposits of approximately 23.8%.  Each of these increases was due to the higher costs of deposits and short-term borrowings used to fund loan growth. 

First Quarter 2023 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income, a non-GAAP measure¹, for the three months ended March 31, increased $0.4 million or 2.0% to $23.5 million in 2023 from $23.1 million in 2022. The increase in tax equivalent net interest income was due to higher tax-equivalent interest income of $9.7 million less elevated interest expense of $9.3 million. 

The higher interest income was the result of an increase in yield and average balance of earning assets.  Average earning assets were $236.6 million higher in the three month period ended March 31, 2023 when compared to the year ago period.  PPP loans averaged $22.2 million in the three-month period ended March 31, 2023 with interest and net fees totaling approximately $73 thousand compared to average balances of $49.0 million with interest and net fees totaling $1.0 million in the year ago period. The tax-equivalent yield on the loan portfolio was 4.66% and 3.85% for the three months ended March 31, 2023 and 2022. Excluding PPP loans, the tax-equivalent yield of the loan portfolio was 4.68% and 3.75% for the three months ended March 31, 2023 and 2022, respectively.   This increase was due to the higher rates on adjustable and floating rate loans, and new loan originations.  Loans, net averaged $2.8 billion for the three months ended March 31, 2023 and $2.4 billion for the comparable period in 2022. For the three months ended March 31, the tax-equivalent yield on total investments increased to 1.83% in 2023 from 1.68% in 2022. Average investments totaled $599.7 million in the first three months of 2023 and $633.7 million in the first three months of 2022.

The increased interest expense in the three months ended March 31, 2023 was due primarily to higher rates on consumer, business and municipal deposits driven by the higher interest rate environment.  The Company's total cost of deposits increased during the three months ended March 31, 2023 compared to the year ago period by 107 basis points to 1.27%, and the cost of interest-bearing deposits increased 141 basis points to 1.68% from 0.27% in the previous year three month period. Short-term FHLB borrowings were utilized in the current period to fund loan growth; short term borrowings averaged $91.5 million in the current period and added $1.1 million of interest expense at an average cost of 4.81% compared to no short-term borrowings in the year ago period.

Average interest-bearing liabilities also increased $217.9 million for the three months ended March 31, 2023, compared to the corresponding period last year due to an increase in non-maturity and brokered deposits and short-term borrowings.  Average noninterest-bearing deposits increased $10.5 million or 1.4% from the prior period and now represent 24.2% of total deposits.

For the three months ended March 31, 2023, the provision for credit losses was $1.3 million compared to $0.3 million in the year ago period.  The current period provision increase was due to loan growth and the impact of the economic forecast on portfolio loss rates.   

Noninterest income for the three months ended March 31, 2023 was $3.7 million, a $0.3 million increase from the prior year's quarter due primarily to higher retail and commercial account service charges, increased debit card interchange revenue and a higher FHLB dividend, partially offset by lower swap related revenue.

Noninterest expense increased $2.2 million or 15.4% to $16.5 million for the three months ended March 31, 2023, from $14.3 million for the three months ended March 31, 2022. Salaries and employee benefits increased $1.0 million or 12.9% due to annual merit increases; new hires; lower deferred loan origination costs; and higher employee benefit costs.  Occupancy and equipment expenses were higher by $0.3 million in the current period due to the increase in transactional costs relating to our expansion market volume. Other expenses increased $0.5 million due primarily to higher FDIC assessments and loan account processing fees.  The year ago period included gains on the sale of other real estate owned of $0.5 million which we classify in noninterest expense; the current year period included no gains. 

The provision for income tax expense decreased $0.4 million for the three months ended March 31, 2023 compared to the year ago period due to lower taxable income in the current year's period.  The effective tax rate for the quarter ended March 31, 2023 was 15.5% compared to 16.0% in the year ago period.

BALANCE SHEET REVIEW

At March 31, 2023, total assets, loans and deposits were $3.7 billion, $2.8 billion and $3.2 billion, respectively. During the quarter, investment sales, deposit growth and FHLB term borrowings were utilized to fund loan growth and repay short-term borrowings.

Loan growth for the three months ended March 31, 2023, excluding PPP loans, was $88.0 million or 13.1% annualized.  This represents a reduction in growth compared to the three months ended December 31, 2022, in which loan growth was $106.4 million.  Higher interest rates and economic uncertainty may result in lower loan demand and lower growth over the near-term.  Commercial real estate loans made up the majority of the growth with residential real estate loans also increasing.  At March 31, 2023, gross PPP loans remaining totaled $22.2 million and net deferred PPP fees remaining totaled $0.2 million and are expected to be earned during 2023 as the remaining SBA PPP loans are forgiven or repaid. 

Total investments were $507.9 million at March 31, 2023, compared to $569.0 million at December 31, 2022.  At March 31, 2023, the available-for-sale securities totaled $418.1 million and the held-to-maturity securities totaled $89.7 million and comprised 82.3% and 17.7% of the overall portfolio, respectively.  The unrealized losses on the held-to-maturity portfolio totaled $12.6 million and $14.6 million at March 31, 2023 and December 31, 2022, respectively.     During the three month period ended March 31, 2023, $65.6 million in U.S. Treasury, tax-exempt municipals and mortgage-backed securities were sold at a net gain of $81 thousand.  The proceeds were used to pay-down higher cost short-term borrowings.  

Total deposits increased $189.4 million during the three months ending March 31, 2023.  Noninterest-bearing deposits decreased $26.7 million and interest-bearing deposits increased $216.0 million during the three months ended March 31, 2023.  The increase in deposits was due to a $161.4 million net increase in brokered deposits and a $123.3 million increase in retail and commercial accounts partially offset by a $95.3 million seasonal decrease in municipal deposits.  During the three months ended March 31, 2023, the Company utilized a portion of its contingency funding sources and added $166.9 million of longer-term callable brokered CDs to improve its on-balance sheet liquidity position and mitigate risk to higher rates.  The Company has the option to call the CDs after an initial three or six month period.

The deposit base consisted of 48.6% retail accounts, 33.2% commercial accounts, 12.5% municipal relationships and 5.7% brokered deposits at March 31, 2023.  At March 31, 2023, 76.6% of deposits were fully insured by the FDIC while $757.4 million or 23.4% of total deposits were not insured by the FDIC.  In addition, at March 31, 2023 $292.0 million in letters of credit were pledged as collateral for municipal deposits.  As an additional resource to our uninsured depositors, we offer all depositors access to IntraFi's CDARS and ICS programs which allows deposit customers to obtain full FDIC deposit insurance while maintaining their relationship with our Bank.

During the three months ended March 31, 2023, the Company utilized a portion of its available line at the FHLB  and increased its long-term debt $25.0 million due to favorable pricing on the borrowings versus alternative funding sources. 

In addition to deposit gathering and our current long term borrowings, we have additional sources of liquidity available such as overnight borrowings from the FHLB, the Federal Reserve's Discount Window and Borrower-in-Custody (BIC) program, correspondent bank lines of credit, brokered deposit capacity and unencumbered securities.  Although we do not plan to access the Federal Reserve's Bank Term Funding Program (BTFP), we have $391.0 million of borrowing capacity based on the par value of unencumbered securities available as collateral under this line. At March 31, 2023, we had $1.7 billion in additional liquidity representing 45.7% of total assets and 51.9% of total deposits.  For additional information on our deposit portfolio and additional sources of liquidity see the tables on page 14.

The Company maintained its well capitalized position at March 31, 2023.  Stockholders' equity equaled $328.6 million or $45.96 per share at March 31, 2023, and $315.4 million or $44.06 per share at December 31, 2022. The increase in stockholders' equity from December 31, 2022 is primarily attributable to net income and a decrease to accumulated other comprehensive loss ("AOCI") resulting from a reduction in the unrealized loss on available for sale securities.  The net after tax unrealized loss on available for sale securities included in AOCI at March 31, 2023 and December 31, 2022 was $43.5 million and $52.0 million, respectively. 

Tangible stockholders' equity, a non-GAAP measure¹, increased to $37.09 per share at March 31, 2023, from $35.19 per share at December 31, 2022.  Dividends declared for the three months ended March 31, 2023 amounted to $0.41 per share, a 5.1% increase from the 2022 period, representing a dividend payout ratio of 39.0%.  During the three months ended March 31, 2023, 16,573 shares were purchased and retired under the Company's common stock repurchase plan at an average price per share of $49.79.  In response to market volatility and economic uncertainty, the Company has temporarily suspended its stock repurchase plan to preserve capital. 

ASSET QUALITY REVIEW

Asset quality metrics remained strong and continued to improve.  Nonperforming assets were $1.9 million or 0.07% of loans, net and foreclosed assets at March 31, 2023, compared to $4.1 million or 0.15% of loans, net and foreclosed assets at December 31, 2022.  As a percentage of total assets, nonperforming assets improved to 0.05% at March 31, 2023 compared to 0.12% at December 31, 2022.  The decrease in nonperforming assets was due to the reclassification of troubled debt restructurings due to a change in accounting guidance, reduced levels of loans 90 days or more past due and still accruing, collection activities, and a decline in nonaccrual loans as a result of a sizable principal reduction on a commercial real estate loan.  At March 31, 2023 the Company had no foreclosed properties.

Effective January 1, 2023, the Company transitioned to ASU 2016-13 Financial Instruments – Credit Losses (Topic 326), commonly referred to as CECL.  As a result of the transition to CECL, the allowance for credit losses was reduced $3.3 million to $24.2 million and the reserve for unfunded commitments was increased $270 thousand to $450 thousand.  The cumulative adjustment, net of tax, was offset to retained earnings.  In addition to the transition adjustment, a $1.3 million provision and net charge-offs of $9 thousand were applied. The allowance for credit losses equaled $25.4 million or 0.90% of loans, net at March 31, 2023 compared to $27.5 million or 1.01% of loans, net, at December 31, 2022. Loans charged-off, net of recoveries, for the three  months ended March 31, 2023 were minimal at $9 thousand, compared to $0.3 million or 0.05% 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 Allegheny, Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Schuylkill, Susquehanna, and Wyoming Counties in Pennsylvania, Middlesex County in New Jersey and Broome County in New York through 28 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.

In addition to evaluating its results of operations in accordance with U.S. generally accepted accounting principles ("GAAP"), Peoples routinely supplements its evaluation with an analysis of certain non-GAAP financial measures, such as tangible stockholders' equity and core net income ratios.  The reported results included in this release contain items, which Peoples considers non-core, namely the gain or loss on the sale of securities available for sale.  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.

 

Safe Harbor Forward-Looking Statements:

We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Peoples Financial Services Corp. and Peoples Security Bank and Trust Company (collectively, "Peoples") that are considered "forward-looking statements" as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, Peoples claims the protection of the statutory safe harbors for forward-looking statements.

Peoples cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement.  Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; the impact on financial markets from geopolitical conflicts such as the military conflict between Russia and Ukraine; credit risk associated with our lending activities; changes in interest rates, loan demand, deposit flows, real estate values and competition; changes in customer behaviors, including consumer spending, borrowing and savings habits;  changes in accounting principles, policies, and guidelines including our adoption of Current Expected Credit Losses (CECL) methodology, and any potential volatility in the Company's operating results due to application of the CECL methodology; 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; the soundness of other financial institutions and any indirect exposure related to the closings of Silicon Valley Bank ("SVB"), Signature Bank and Silvergate Bank and their impact on the broader market through other customers, suppliers and partners or that the conditions which resulted in the liquidity concerns with SVB, Signature Bank and Silvergate Bank may also adversely impact, directly or indirectly, other financial institutions and market participants with which the Company has commercial or deposit relationships  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 (Unaudited) (In thousands, except share and per share data)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
		2023			2022			2022			2022			2022
Key performance data:
Share and per share amounts:
Net income		$	1.05		$	1.27		$	1.38		$	1.30		$	1.33
Core net income (1)		$	1.04		$	1.49		$	1.38		$	1.30		$	1.33
Cash dividends declared		$	0.41		$	0.40		$	0.40		$	0.39		$	0.39
Book value		$	45.96		$	44.06		$	42.14		$	43.50		$	44.64
Tangible book value (1)		$	37.09		$	35.19		$	33.26		$	34.62		$	35.76
Market value:
High		$	53.48		$	57.60		$	56.09		$	56.99		$	52.99
Low		$	42.52		$	47.00		$	46.84		$	47.41		$	46.35
Closing		$	43.35		$	51.84		$	46.84		$	55.84		$	50.48
Market capitalization		$	309,985		$	371,072		$	335,503		$	400,410		$	362,398
Common shares outstanding			7,150,757			7,158,018			7,162,750			7,170,661			7,179,037
Selected ratios:
Return on average stockholders' equity			9.43	%		11.79	%		12.69	%		11.71	%		11.82	%
Core return on average stockholders' equity (1)			9.35	%		13.81	%		12.69	%		11.71	%		11.82	%
Return on average tangible stockholders' equity			11.71	%		14.87	%		15.94	%		14.62	%		14.65	%
Core return on average tangible stockholders' equity (1)			11.61	%		17.41	%		15.94	%		14.62	%		14.65	%
Return on average assets			0.86	%		1.04	%		1.14	%		1.12	%		1.17	%
Core return on average assets (1)			0.85	%		1.22	%		1.14	%		1.12	%		1.17	%
Stockholders' equity to total assets			8.93	%		8.87	%		8.58	%		9.12	%		9.56	%
Efficiency ratio (1)(2)			60.61	%		60.07	%		54.95	%		54.89	%		53.57	%
Nonperforming assets to loans, net, and foreclosed assets			0.07	%		0.15	%		0.16	%		0.18	%		0.20	%
Nonperforming assets to total assets			0.05	%		0.12	%		0.12	%		0.13	%		0.14	%
Net charge-offs to average loans, net			0.00	%		0.03	%		0.00	%		0.00	%		0.05	%
Allowance for credit losses to loans, net			0.90	%		1.01	%		1.14	%		1.14	%		1.18	%
Interest-bearing assets yield (FTE) (3)			4.16	%		3.84	%		3.59	%		3.34	%		3.22	%
Cost of funds			1.85	%		1.20	%		0.72	%		0.39	%		0.35	%
Net interest spread (FTE) (3)			2.31	%		2.64	%		2.87	%		2.95	%		2.87	%
Net interest margin (FTE) (3)			2.81	%		2.97	%		3.08	%		3.06	%		2.97	%

(1)	See Reconciliation of Non-GAAP financial measures.
(2)	Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gains (losses) on investment securities available for sale.
(3)	Tax-equivalent adjustments were calculated using the federal statutory tax rate prevailing during the indicated periods of 21%.

 

Peoples Financial Services Corp. Consolidated Statements of Income (Unaudited) (In thousands, except per share data)
		Mar 31			Mar 31
Three months ended		2023			2022
Interest income:
Interest and fees on loans:
Taxable		$	30,049		$	20,853
Tax-exempt			1,389			1,161
Interest and dividends on investment securities:
Taxable			2,124			1,972
Tax-exempt			457			510
Dividends			2
Interest on interest-bearing deposits in other banks			14			2
Interest on federal funds sold			243			73
Total interest income			34,278			24,571
Interest expense:
Interest on deposits			9,678			1,468
Interest on short-term borrowings			1,086
Interest on long-term debt			27			28
Interest on subordinated debt			443			444
Total interest expense			11,234			1,940
Net interest income			23,044			22,631
Provision for credit losses			1,264			300
Net interest income after provision for credit losses			21,780			22,331
Noninterest income:
Service charges, fees, commissions and other			1,965			1,692
Merchant services income			118			114
Commissions and fees on fiduciary activities			557			555
Wealth management income			398			351
Mortgage banking income			103			144
Increase in cash surrender value of life insurance			258			218
Interest rate swap revenue			223			343
Net (losses) gains on equity investment securities			(29)			4
Net gains on sale of investment securities available for sale			81
Total noninterest income			3,674			3,421
Noninterest expense:
Salaries and employee benefits expense			9,080			8,040
Net occupancy and equipment expense			4,103			3,825
Amortization of intangible assets			29			96
Net losses (gains) on sale of other real estate owned						(458)
Other expenses			3,274			2,786
Total noninterest expense			16,486			14,289
Income before income taxes			8,968			11,463
Provision for income tax expense			1,389			1,833
Net income		$	7,579		$	9,630
Other comprehensive income (loss):
Unrealized gains (losses) on investment securities available for sale		$	10,836		$	(32,612)
Reclassification adjustment for gains on available for sale securities included in net income			(81)
Change in derivative fair value			(1,970)			(493)
Income tax expense (benefit) related to other comprehensive income (loss)			1,891			(6,952)
Other comprehensive income (loss), net of income tax expense (benefit)			6,894			(26,153)
Comprehensive income (loss)		$	14,473		$	(16,523)
Share and per share amounts:
Net income - basic		$	1.06		$	1.34
Net income - diluted			1.05			1.33
Cash dividends declared			0.41			0.39
Average common shares outstanding - basic			7,157,553			7,172,455
Average common shares outstanding - diluted			7,198,970			7,216,421

 

Peoples Financial Services Corp. Consolidated Statements of Income (Unaudited) (In thousands, except per share data)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
Three months ended		2023			2022			2022			2022			2022
Interest income:
Interest and fees on loans:
Taxable		$	30,049		$	27,515		$	25,128		$	22,009		$	20,853
Tax-exempt			1,389			1,367			1,338			1,218			1,161
Interest and dividends on investment securities:
Taxable			2,124			2,058			2,096			2,108			1,972
Tax-exempt			457			520			521			515			510
Dividends			2									2
Interest on interest-bearing deposits in other banks			14			40			41			18			2
Interest on federal funds sold			243			141			106			22			73
Total interest income			34,278			31,641			29,230			25,892			24,571
Interest expense:
Interest on deposits			9,678			6,251			3,316			1,597			1,468
Interest on short-term borrowings			1,086			524			457			122
Interest on long-term debt			27			9			16			23			28
Interest on subordinated debt			443			444			443			443			444
Total interest expense			11,234			7,228			4,232			2,185			1,940
Net interest income			23,044			24,413			24,998			23,707			22,631
Provision for (reversal of) credit losses			1,264			(2,149)			450			950			300
Net interest income after provision for (reversal of) credit losses			21,780			26,562			24,548			22,757			22,331
Noninterest income:
Service charges, fees, commissions and other			1,965			1,909			1,714			1,761			1,692
Merchant services income			118			131			157			562			114
Commissions and fees on fiduciary activities			557			532			591			551			555
Wealth management income			398			366			339			374			351
Mortgage banking income			103			104			135			128			144
Increase in cash surrender value of life insurance			258			289			269			244			218
Interest rate swap revenue			223			(135)			130			284			343
Net gains (losses) on investment equity securities			(29)			6			(18)			(23)			4
Net gains (losses) on sale of investment securities available-for-sale			81			(1,976)
Total noninterest income			3,674			1,226			3,317			3,881			3,421
Noninterest expense:
Salaries and employee benefits expense			9,080			9,188			8,474			7,851			8,040
Net occupancy and equipment expense			4,103			4,905			3,898			3,950			3,825
Amortization of intangible assets			29			74			96			97			96
Net losses (gains) on sale of other real estate												(20)			(458)
Other expenses			3,274			2,793			3,467			3,615			2,786
Total noninterest expense			16,486			16,960			15,935			15,493			14,289
Income before income taxes			8,968			10,828			11,930			11,145			11,463
Income tax expense			1,389			1,689			1,962			1,792			1,833
Net income		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities available for sale		$	10,836		$	6,356		$	(21,510)		$	(18,669)		$	(32,612)
Reclassification adjustment for (gains) losses on available for sale securities included in net income			(81)			1,976
Change in benefit plan liabilities						370
Change in derivative fair value			(1,970)			12			(46)			(201)			(493)
Income tax expense (benefit) related to other comprehensive income (loss)			1,891			1,447			(4,527)			(3,963)			(6,952)
Other comprehensive income (loss), net of income tax expense (benefit)			6,894			7,267			(17,029)			(14,907)			(26,153)
Comprehensive income (loss)		$	14,473		$	16,406		$	(7,061)		$	(5,554)		$	(16,523)
Share and per share amounts:
Net income - basic		$	1.06		$	1.28		$	1.39		$	1.30		$	1.34
Net income - diluted			1.05			1.27			1.38			1.30			1.33
Cash dividends declared			0.41			0.40			0.40			0.39			0.39
Average common shares outstanding - basic			7,157,553			7,158,329			7,169,809			7,172,181			7,172,455
Average common shares outstanding - diluted			7,198,970			7,201,785			7,213,147			7,215,890			7,216,421

 

Peoples Financial Services Corp. Net Interest Margin (Unaudited) (In thousands, fully taxable equivalent basis)
		Three Months Ended
		March 31, 2023									March 31, 2022
		Average			Interest Income/			Yield/			Average			Interest Income/			Yield/
		Balance			Expense			Rate			Balance			Expense			Rate
Assets:
Earning assets:
Loans:
Taxable		$	2,546,068		$	30,049		4.79	%		$	2,148,251		$	20,853		3.94	%
Tax-exempt			223,917			1,757		3.18				203,645			1,470		2.93
Total loans			2,769,985			31,806		4.66				2,351,896			22,323		3.85
Investments:
Taxable			499,327			2,126		1.73				523,301			1,972		1.53
Tax-exempt			100,368			576		2.33				110,394			646		2.37
Total investments			599,695			2,702		1.83				633,695			2,618		1.68
Interest-bearing deposits			1,218			14		4.66				5,888			2		0.14
Federal funds sold			19,353			243		5.09				162,218			73		0.18
Total earning assets			3,390,251			34,765		4.16	%			3,153,697			25,016		3.22	%
Less: allowance for credit losses			24,557									28,717
Other assets			209,151									216,581
Total assets		$	3,574,845		$	34,765					$	3,341,561		$	25,016
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market accounts		$	721,864		$	4,588		2.58	%		$	595,991		$	385		0.26	%
Interest bearing demand and NOW accounts			731,398			2,806		1.56				820,016			488		0.24
Savings accounts			512,655			216		0.17				505,816			93		0.07
Time deposits less than $100			192,519			1,181		2.49				127,610			302		0.96
Time deposits $100 or more			179,515			887		2.00				162,196			200		0.50
Total interest-bearing deposits			2,337,951			9,678		1.68				2,211,629			1,468		0.27
Short-term borrowings			91,530			1,086		4.81
Long-term debt			2,482			27		4.41				2,474			28		4.59
Subordinated debt			33,000			443		5.44				33,000			444		5.38
Total borrowings			127,012			1,556		4.97				35,474			472		5.32
Total interest-bearing liabilities			2,464,963			11,234		1.85				2,247,103			1,940		0.35
Noninterest-bearing deposits			744,931									734,348
Other liabilities			38,917									29,816
Stockholders' equity			326,034									330,294
Total liabilities and stockholders' equity		$	3,574,845			11,234					$	3,341,561			1,940
Net interest income/spread					$	23,531		2.31	%					$	23,076		2.87	%
Net interest margin								2.81	%								2.97	%
Tax-equivalent adjustments:
Loans					$	368								$	309
Investments						119									136
Total adjustments					$	487								$	445

 

Peoples Financial Services Corp. Details of Net Interest Income and Net Interest Margin (Unaudited) (In thousands, fully taxable equivalent basis)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
Three months ended		2023			2022			2022			2022			2022
Net interest income:
Interest income:
Loans, net:
Taxable		$	30,049		$	27,515		$	25,128		$	22,009		$	20,853
Tax-exempt			1,757			1,730			1,694			1,542			1,470
Total loans, net			31,806			29,245			26,822			23,551			22,323
Investments:
Taxable			2,126			2,058			2,096			2,110			1,972
Tax-exempt			576			658			659			652			646
Total investments			2,702			2,716			2,755			2,762			2,618
Interest on interest-bearing balances in other banks			14			40			41			18			2
Federal funds sold			243			141			106			22			73
Total interest income			34,765			32,142			29,724			26,353			25,016
Interest expense:
Deposits			9,678			6,251			3,316			1,597			1,468
Short-term borrowings			1,086			524			457			122
Long-term debt			27			9			16			23			28
Subordinated debt			443			444			443			443			444
Total interest expense			11,234			7,228			4,232			2,185			1,940
Net interest income		$	23,531		$	24,914		$	25,492		$	24,168		$	23,076
Loans, net:
Taxable			4.79	%		4.47	%		4.19	%		3.92	%		3.94	%
Tax-exempt			3.18	%		3.08	%		2.98	%		2.92	%		2.93	%
Total loans, net			4.66	%		4.35	%		4.09	%		3.83	%		3.85	%
Investments:
Taxable			1.73	%		1.54	%		1.53	%		1.53	%		1.53	%
Tax-exempt			2.33	%		2.35	%		2.34	%		2.35	%		2.37	%
Total investments			1.83	%		1.68	%		1.67	%		1.67	%		1.68	%
Interest-bearing balances with banks			4.66	%		3.41	%		1.77	%		0.68	%		0.14	%
Federal funds sold			5.09	%		3.86	%		3.08	%		0.37	%		0.18	%
Total interest-earning assets			4.16	%		3.84	%		3.59	%		3.34	%		3.22	%
Interest expense:
Deposits			1.68	%		1.08	%		0.59	%		0.30	%		0.27	%
Short-term borrowings			4.81	%		4.20	%		2.30	%		1.40	%
Long-term debt			4.41	%		4.87	%		4.64	%		4.85	%		4.59	%
Subordinated debt			5.44	%		5.33	%		5.33	%		5.38	%		5.38	%
Total interest-bearing liabilities			1.85	%		1.20	%		0.72	%		0.39	%		0.35	%
Net interest spread			2.31	%		2.64	%		2.87	%		2.95	%		2.87	%
Net interest margin			2.81	%		2.97	%		3.08	%		3.06	%		2.97	%

 

Peoples Financial Services Corp. Consolidated Balance Sheets (Unaudited) (In thousands)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
At period end		2023			2022			2022			2022			2022
Assets:
Cash and due from banks		$	31,354		$	37,675		$	35,000		$	39,693		$	35,863
Interest-bearing balances in other banks			7,129			193			8,410			8,040			4,440
Federal funds sold			102,100						69,600						101,200
Investment securities:
Available for sale			418,125			477,703			477,590			513,911			535,482
Equity investments carried at fair value			81			110			103			121			144
Held to maturity			89,705			91,179			92,771			94,446			95,829
Total investments			507,911			568,992			570,464			608,478			631,455
Loans held for sale									653			681			161
Loans			2,818,043			2,730,116			2,623,706			2,565,579			2,397,681
Less: allowance for credit losses			25,444			27,472			29,822			29,374			28,407
Net loans			2,792,599			2,702,644			2,593,884			2,536,205			2,369,274
Goodwill			63,370			63,370			63,370			63,370			63,370
Premises and equipment, net			56,561			55,667			54,394			53,094			51,977
Bank owned life insurance			48,598			48,344			48,235			47,968			43,828
Deferred tax assets			16,015			18,739			20,796			16,269			12,306
Accrued interest receivable			11,678			11,715			10,082			9,303			9,221
Other intangible assets, net			77			105			179			276			372
Other assets			41,079			46,071			41,739			38,162			29,334
Total assets		$	3,678,471		$	3,553,515		$	3,516,806		$	3,421,539		$	3,352,801
Liabilities:
Deposits:
Noninterest-bearing		$	746,089		$	772,765		$	769,935		$	747,558		$	759,986
Interest-bearing			2,489,878			2,273,833			2,354,205			2,163,725			2,204,878
Total deposits			3,235,967			3,046,598			3,124,140			2,911,283			2,964,864
Short-term borrowings			17,280			114,930			14,700			129,170
Long-term debt			25,000			555			1,104			1,646			2,182
Subordinated debt			33,000			33,000			33,000			33,000			33,000
Accrued interest payable			2,304			903			1,129			1,269			844
Other liabilities			36,286			42,179			40,923			33,274			31,450
Total liabilities			3,349,837			3,238,165			3,214,996			3,109,642			3,032,340
Stockholders' equity:
Common stock			14,323			14,321			14,330			14,346			14,352
Capital surplus			126,231			126,850			126,845			126,986			127,192
Retained earnings			237,522			230,515			224,238			217,139			210,584
Accumulated other comprehensive loss			(49,442)			(56,336)			(63,603)			(46,574)			(31,667)
Total stockholders' equity			328,634			315,350			301,810			311,897			320,461
Total liabilities and stockholders' equity		$	3,678,471		$	3,553,515		$	3,516,806		$	3,421,539		$	3,352,801

 

Peoples Financial Services Corp. Loan and Asset Quality Data (Unaudited) (In thousands)
At period end		March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Commercial
Taxable		$	375,033		$	377,215		$	371,164		$	371,153		$	370,574
Non-taxable			224,343			222,043			224,764			225,656			210,184
Total			599,376			599,258			595,928			596,809			580,758
Real estate
Commercial real estate			1,782,911			1,709,827			1,620,116			1,569,658			1,436,196
Residential			342,459			330,728			326,223			317,672			306,068
Total			2,125,370			2,040,555			1,946,339			1,887,330			1,742,264
Consumer
Indirect Auto			86,587			76,491			70,006			69,161			64,870
Consumer Other			6,710			13,812			11,433			12,279			9,789
Total			93,297			90,303			81,439			81,440			74,659
Total		$	2,818,043		$	2,730,116		$	2,623,706		$	2,565,579		$	2,397,681

 

		Mar 31			Dec 31			Sept 30			June 30			Mar 31
At quarter end		2023			2022			2022			2022			2022
Nonperforming assets:
Nonaccrual/restructured loans		$	1,798		$	3,386		$	3,938		$	4,387		$	4,573
Accruing loans past due 90 days or more			59			748			280			190			103
Foreclosed assets
Total nonperforming assets		$	1,857		$	4,134		$	4,218		$	4,577		$	4,676

 

			Mar 31			Dec 31			Sept 30			June 30			Mar 31
Three months ended			2023			2022			2022			2022			2022
Allowance for credit losses:
Beginning balance		$	27,472		$	29,822		$	29,374		$	28,407		$	28,383
ASU 2016-13 Transition Adjustment			(3,283)
Adjusted beginning balance			24,189			29,822			29,374			28,407			28,383
Charge-offs			75			233			101			98			355
Recoveries			66			32			99			115			79
Provision for credit losses			1,264			(2,149)			450			950			300
Ending balance		$	25,444		$	27,472		$	29,822		$	29,374		$	28,407

 

Peoples Financial Services Corp. Deposit and Liquidity Detail (Unaudited) (In thousands)
At period end		March 31, 2023			December 31, 2022			September 30, 2022			June 30, 2022			March 31, 2022
Interest-bearing deposits:
Money market accounts		$	775,511		$	685,323		$	706,947		$	592,989		$	605,686
Interest bearing demand and NOW accounts			698,888			772,712			813,743			752,397			797,333
Savings accounts			500,709			523,931			530,124			518,146			515,169
Time deposits less than $250			400,327			199,136			224,517			219,690			200,345
Time deposits $250 or more			114,443			92,731			78,874			80,503			86,345
Total interest-bearing deposits			2,489,878			2,273,833			2,354,205			2,163,725			2,204,878
Noninterest-bearing deposits			746,089			772,765			769,935			747,558			759,986
Total deposits		$	3,235,967		$	3,046,598		$	3,124,140		$	2,911,283		$	2,964,864

 

			March 31, 2023
At period end			Amount		Percent of Total			Number of accounts		Average Balance
Deposit Detail:
Retail		$	1,572,393		48.6	%		71,100	$	22
Commercial			1,076,060		33.3			11,659		93
Municipal			402,544		12.4			1,366		303
Brokered			184,970		5.7			18		10,276
Total Deposits		$	3,235,967		100.0			84,143	$	10,695
Uninsured			757,373		23.4	%
Insured			2,478,594		76.6
			December 31, 2022
At period end			Amount		Percent of Total			Number of accounts		Average Balance
Deposit Detail:
Retail		$	1,568,208		51.5	%		76,972	$	20
Commercial			956,969		31.4			11,560		84
Municipal			497,807		16.3			1,383		371
Brokered			23,614		0.8			11		2,147
Total Deposits		$	3,046,598		100.00			89,926	$	2,623
Uninsured			724,595		23.8	%
Insured			2,322,003		76.2

 

								Total Available
At March 31, 2023			Total Available			Outstanding			for Future Liquidity
FHLB advances		$	1,180,971		$	317,149		$	863,822
Federal Reserve discount window			225,037						225,037
Correspondent bank lines of credit			18,000						18,000
Other sources of liquidity:
Brokered deposits			367,847			184,970			182,877
Unencumbered securities			391,116						391,116
Total sources of liquidity		$	2,182,971		$	502,119		$	1,680,852

 

Peoples Financial Services Corp. Consolidated Balance Sheets (Unaudited) (In thousands)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
Average quarterly balances		2023			2022			2022			2022			2022
Assets:
Loans, net:
Taxable		$	2,546,068		$	2,441,358		$	2,377,803		$	2,254,405		$	2,148,251
Tax-exempt			223,917			223,293			225,637			211,885			203,645
Total loans, net			2,769,985			2,664,651			2,603,440			2,466,290			2,351,896
Investments:
Taxable			499,327			528,826			544,782			553,078			523,301
Tax-exempt			100,368			111,206			111,578			111,138			110,394
Total investments			599,695			640,032			656,360			664,216			633,695
Interest-bearing balances with banks			1,218			4,649			9,180			10,694			5,888
Federal funds sold			19,353			14,477			13,665			23,920			162,218
Total interest-earning assets			3,390,251			3,323,809			3,282,645			3,165,120			3,153,697
Other assets			184,594			169,153			180,861			181,900			187,864
Total assets		$	3,574,845		$	3,492,962		$	3,463,506		$	3,347,020		$	3,341,561
Liabilities and stockholders' equity:
Deposits:
Interest-bearing		$	2,337,951		$	2,301,974		$	2,228,829		$	2,167,569		$	2,211,629
Noninterest-bearing			744,931			758,889			770,833			756,225			734,348
Total deposits			3,082,882			3,060,863			2,999,662			2,923,794			2,945,977
Short-term borrowings			91,530			49,444			78,922			34,953
Long-term debt			2,482			814			1,369			1,901			2,474
Subordinated debt			33,000			33,000			33,000			33,000			33,000
Other liabilities			38,917			41,436			38,840			33,080			29,816
Total liabilities			3,248,811			3,185,557			3,151,793			3,026,728			3,011,267
Stockholders' equity			326,034			307,405			311,713			320,292			330,294
Total liabilities and stockholders' equity		$	3,574,845		$	3,492,962		$	3,463,506		$	3,347,020		$	3,341,561

 

Peoples Financial Services Corp. Reconciliation of Non-GAAP Financial Measures (Unaudited) (In thousands, except share and per share data)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
Three months ended		2023			2022			2022			2022			2022
Core net income per share:
Net income GAAP		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Adjustments:
Less: Loss on sale of available for sale securities			81			(1,976)
Add: Loss on sale of available for sale securities tax adjustment			17			(415)
Core net income		$	7,515		$	10,700		$	9,968		$	9,353		$	9,630
Average common shares outstanding - diluted			7,198,970			7,201,785			7,213,147			7,215,365			7,216,421
Core net income per share		$	1.04		$	1.49		$	1.38		$	1.30		$	1.33
Tangible book value:
Total stockholders' equity		$	328,634		$	315,350		$	301,810		$	311,897		$	320,461
Less: Goodwill			63,370			63,370			63,370			63,370			63,370
Less: Other intangible assets, net			77			105			179			276			372
Total tangible stockholders' equity		$	265,187		$	251,875		$	238,261		$	248,251		$	256,719
Common shares outstanding			7,150,757			7,158,018			7,162,750			7,170,661			7,179,037
Tangible book value per share		$	37.09		$	35.19		$	33.26		$	34.62		$	35.76
Core return on average stockholders' equity:
Net income GAAP		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Adjustments:
Less: Loss on sale of available for sale securities			81			(1,976)
Add: Loss on sale of available for sale securities tax adjustment			17			(415)
Core net income		$	7,515		$	10,700		$	9,968		$	9,353		$	9,630
Average stockholders' equity		$	326,034		$	307,405		$	311,713		$	320,292		$	330,294
Core return on average stockholders' equity			9.35	%		13.81	%		12.69	%		11.71	%		11.82	%
Return on average tangible equity:
Net income GAAP		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Average stockholders' equity		$	326,034		$	307,405		$	311,713		$	320,292		$	330,294
Less: average intangibles			63,461			63,512			63,549			63,694			63,790
Average tangible stockholders' equity		$	262,573		$	243,893		$	248,164		$	256,598		$	266,504
Return on average tangible stockholders' equity			11.71	%		14.87	%		15.94	%		14.62	%		14.65	%
Core return on average tangible stockholders' equity:
Net income GAAP		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Adjustments:
Less: Loss on sale of available for sale securities			81			(1,976)
Add: Loss on sale of available for sale securities tax adjustment			17			(415)
Core net income		$	7,515		$	10,700		$	9,968		$	9,353		$	9,630
Average stockholders' equity		$	326,034		$	307,405		$	311,713		$	320,292		$	330,294
Less: average intangibles			63,461			63,512			63,549			63,694			63,790
Average tangible stockholders' equity		$	262,573		$	243,893		$	248,164		$	256,598		$	266,504
Core return on average tangible stockholders' equity			11.61	%		17.41	%		15.94	%		14.62	%		14.65	%
Core return on average assets:
Net income GAAP		$	7,579		$	9,139		$	9,968		$	9,353		$	9,630
Adjustments:
Less: Loss on sale of available for sale securities			81			(1,976)
Add: Loss on sale of available for sale securities tax adjustment			17			(415)
Core net income		$	7,515		$	10,700		$	9,968		$	9,353		$	9,630
Average assets		$	3,574,845		$	3,492,962		$	3,463,506		$	3,347,020		$	3,341,561
Core return on average assets			0.85	%		1.22	%		1.14	%		1.12	%		1.17	%

 

Peoples Financial Services Corp.
Reconciliation of Non-GAAP Financial Measures (Unaudited)
(In thousands, except share and per share data)

 

The following tables reconcile the non-GAAP financial measures of FTE net interest income for the three months ended March 31, 2023 and 2022:

Three months ended March 31		2023			2022
Interest income (GAAP)		$	34,278		$	24,571
Adjustment to FTE			487			445
Interest income adjusted to FTE (non-GAAP)			34,765			25,016
Interest expense			11,234			1,940
Net interest income adjusted to FTE (non-GAAP)		$	23,531		$	23,076

The efficiency ratio is noninterest expenses, less amortization of intangible assets, as a percentage of FTE net interest income plus noninterest income. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three months ended March 31, 2023 and 2022:

Three months ended March 31		2023			2022
Efficiency ratio (non-GAAP):
Noninterest expense (GAAP)		$	16,486		$	14,289
Less: amortization of intangible assets expense			29			96
Noninterest expense adjusted for amortization of assets expense (non-GAAP)			16,457			14,193
Net interest income (GAAP)			23,044			22,631
Plus: taxable equivalent adjustment			487			445
Noninterest income (GAAP)			3,674			3,421
Less: Net gains (losses) on equity securities			(29)			4
Less: Gain on sale of available for sale securities			81
Net interest income (FTE) plus noninterest income (non-GAAP)		$	27,153		$	26,493
Efficiency ratio (non-GAAP)			60.61	%		53.57	%

 

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SOURCE Peoples Financial Services Corp.

FAQ

What were Peoples Financial Services Corp's net income results for Q1 2023?

Peoples Financial Services Corp. reported net income of $7.6 million, or $1.05 per diluted share for Q1 2023.

How did the net interest income change for Peoples Financial Services Corp in Q1 2023?

Net interest income increased by $0.4 million due to strong loan growth.

What is the provision for credit losses reported by PFIS for Q1 2023?

The provision for credit losses for Q1 2023 was $1.3 million, an increase from $0.3 million in the prior year.

How much did dividends increase for PFIS in Q1 2023?

Dividends paid during Q1 2023 totaled $0.41 per share, representing a 5.1% increase from the previous year.

What is the status of asset quality for Peoples Financial Services Corp?

Asset quality improved, with nonperforming assets at 0.05% of total assets as of March 31, 2023.