PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited First Quarter 2024 Earnings

Rhea-AI Summary

Peoples Financial Services Corp. reported unaudited first-quarter 2024 earnings, with a net income of $3.5 million, a 54.3% decrease from the previous year. The core net income was $3.9 million, with a notable strategic combination with FNCB Bancorp, Inc. expected to close in 2024. Asset quality remained strong, with nonperforming assets at 0.21% of total assets.

Positive

• Net income decreased by 54.3% to $3.5 million in the first quarter of 2024 compared to the same period in 2023.
• The core net income for the first quarter of 2024 was $3.9 million, with a strategic combination with FNCB Bancorp, Inc. expected to close in the second half of 2024.
• Asset quality remained strong with nonperforming assets at 0.21% of total assets at the end of March 2024.

Negative

• Net interest income decreased due to higher deposit costs and operating expenses.
• Total deposits decreased by $75.1 million during the first quarter of 2024.
• The unrealized loss on available for sale securities increased to $54.0 million at the end of March 2024.

Insights

Financial Analyst

The reported 54.3% decrease in net income for Peoples Financial Services Corp. is a significant deviation from the previous year's performance. One must consider the rising deposit costs and operating expenses, including acquisition-related outlays, as contributing factors to the reduced profitability. Analyzing these results, investors should note the increased interest rates' impact on both the cost of funds and net interest margin. While the growth in commercial loans indicates an active lending environment, the overall decrease in noninterest income and decline in deposits reflect the challenges of maintaining deposit volumes in a competitive interest rate landscape.

M&A Specialist

The proposed strategic combination with FNCB Bancorp, Inc. presents a transformative opportunity for Peoples, potentially creating a more robust financial entity with a strong market share in the region. The estimated 59% EPS accretion in 2025 and the 51% dividend increase are optimistic projections that merit close attention, as they suggest substantial value creation post-merger. However, as with any merger, the realization of these synergies will depend on successful integration and market conditions.

Risk Management Analyst

When considering the asset quality metrics that remained strong, with nonperforming assets at only 0.21% of total assets, it indicates a well-managed credit portfolio. The lower provision for credit losses, a reflection of favorable loan performance and a reduction in loan balance growth, is also reassuring. However, the increase in nonaccrual loans, despite the well-secured status and government agency guaranty, warrants monitoring as it could signal potential risks in the loan portfolio if the trend continues.

SCRANTON, Pa., April 25, 2024 /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, 2024.

Peoples reported net income of $3.5 million, or $0.49 per diluted share for the three months ended March 31, 2024, a 54.3% decrease when compared to $7.6 million, or $1.05 per diluted share for the comparable period of 2023. Quarterly net income included lower net interest income of $3.7 million due primarily to higher deposit costs, higher operating expenses of $1.6 million, which includes $0.5 million of acquisition related expenses, and lower noninterest income of $0.3 million, partially offset by a lower provision for credit losses of $0.6 million. 

Core net income¹, a non-GAAP measure, excludes gains or losses on the sale of investment portfolio securities and acquisition related expenses from the previously announced proposed combination further discussed below of $0.5 million incurred during the three months ended March 31, 2024. Core net income¹ totaled $3.9 million or $0.55 per diluted share for the three months ended March 31, 2024 compared to $7.5 million, or $1.04 per share for the comparable period of 2023. 

Core pre-provision net revenue (PPNR)¹, a non-GAAP measure, excludes the aforementioned pre-tax "non-core" items along with the income tax expense (benefit) and the provisions for credit losses and losses on unfunded commitments, for the three months ended March 31, 2024 was $5.6 million or $0.79 per diluted share.  The PPNR for the corresponding prior year period was $10.0 million or $1.40 per diluted share.

STRATEGIC COMBINATION WITH FNCB BANCORP, INC.

On September 27, 2023, Peoples announced it had entered into a definitive agreement and plan of merger (the "merger agreement") to strategically combine with FNCB Bancorp, Inc., the parent company of FNCB Bank ("FNCB").  The proposed strategic combination is expected to close in the second half of 2024, subject to satisfaction of customary closing conditions, including regulatory approvals.  Shareholders of both companies approved the strategic combination at their respective special shareholders' meetings held on March 22, 2024.  Highlights of the proposed transaction are expected to include:

• Strategic combination that creates a bank holding company with nearly $5.5 billion in assets.
• #2 ranked deposit market share in the Scranton-Wilkes Barre metro statistical area and #5 ranked Pennsylvania-headquartered community bank under $20 billion in total assets.
• Estimated 59% earnings per share ("EPS") accretion to Peoples in 2025, inclusive of all merger synergies, and a 51% dividend increase to Peoples shareholders.

NOTABLES IN THE QUARTER

• Core net income¹ for the three months ended March 31, 2024 was $3.9 million or $0.55 per diluted share.
• For the three months ended March 31, 2024, net loan growth was $8.5 million or 1.20% annualized and consisted primarily of growth in commercial loans.
• Asset quality remained strong as nonperforming assets as a percentage of total assets at March 31, 2024 was 0.21%, compared to 0.13% at December 31, 2023.
• Total deposits decreased $75.1 million to $3.2 billion during 2024 due in part to seasonal outflows of municipal deposits.
• At March 31, 2024, the Company had $110.0 million in cash and cash equivalents, a decrease of $77.4 million from December 31, 2023. Additional contingent sources of available liquidity total $1.7 billion and include 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. The Company's cash and cash equivalents balance and available liquidity represent 49.2% of total assets and 56.3% of total deposits.
• At March 31, 2024, estimated total insured deposits were approximately $2.4 billion, or 75.1% of total deposits; as compared to approximately $2.4 billion, or 73.1% of total deposits at December 31, 2023. Included in the uninsured total at March 31, 2024 is $345.8 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.2 million of affiliate company deposits. Total insured and collateralized deposits represent 88.3% of total deposits at March 31, 2024.

  INCOME STATEMENT REVIEW

• Calculated on a fully taxable equivalent basis, a non-GAAP measure¹, our net interest margin for the three months ended March 31, 2024 was 2.29%, a decrease of 1 basis point when compared to the 2.30% for the three months ended December 31, 2023, and 52 basis points when compared to 2.81% for the same three month period in 2023. 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 7 basis points to 4.56% during the three months ended March 31, 2024 from 4.49% during the three months ended December 31, 2023, and increased 40 basis points when compared to 4.16% for the three months ended March 31, 2023.
• Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, increased 10 basis points to 2.96% for the three months ended March 31, 2024 when compared to 2.86% during the three months ended December 31, 2023 and increased 111 basis points compared to 1.85% in the prior year period. We continued to increase interest rates paid on deposits during the quarter to attract new deposits, retain current balances and maintain liquidity.
• Our cost of interest-bearing deposits increased 10 basis points during the current three month period to 2.90% from 2.80% in the prior three month period ended December 31, 2023, and increased 122 basis points compared to 1.68% for the three months ended March 31, 2023.
• Our cost of total deposits for the three months ended March 31, 2024 increased 9 basis points to 2.34% from 2.25% during the three months ended December 31, 2023, and increased 107 basis points compared to 1.27% for the three months ended March 31, 2023.

First Quarter 2024 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income, a non-GAAP measure², for the three months ended March 31, decreased $3.7 million or 15.9% to $19.8 million in 2024 from $23.5 million in 2023. The decrease in tax-equivalent net interest income was due to a $4.7 million increase in tax-equivalent interest income that was offset by an $8.4 million increase in interest expense.

The higher interest income was the result of an increase in yield and average balance of earning assets.  Average earning assets were $91.4 million higher in the three month period ended March 31, 2024 when compared to the year ago period.  The tax-equivalent yield on the loan portfolio was 5.04% and 4.66% for the three months ended March 31, 2024 and 2023, respectively.  This increase was due to the higher rates on adjustable and floating rate loans, and new loan originations.  Loans, net, averaged $2.9 billion for three months ended March 31, 2024 and $2.8 billion for the comparable period in 2023. For the three months ended March 31, the tax-equivalent yield on total investments decreased to 1.80% in 2024 from 1.83% in 2023. Average investments totaled $533.9 million in the three months ended March 31, 2024 and $599.7 million in the three months ended March 31, 2023.

The increased interest expense in the three months ended March 31, 2024 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, 2024 compared to the year ago period by 107 basis points to 2.34%, and the cost of interest-bearing deposits increased 122 basis points to 2.90% from 1.68% in the previous year three month period. Short-term borrowings averaged $19.7 million in the current period at an average cost of 5.35% compared to $91.5 million in short-term borrowings at an average cost of 4.81% in the prior period.

Average interest-bearing liabilities increased $206.5 million for the three months ended March 31, 2024, compared to the corresponding period last year due primarily to an increase in brokered certificate of deposits.  Average noninterest-bearing deposits decreased $128.3 million or 17.2% from the prior period, due in part to a shift to interest-bearing accounts, and represented 19.2% of total average deposits in the current period as compared to 24.2% in the year ago period.

For the three months ended March 31, 2024, $0.7 million was recorded to the provision for credit losses compared to $1.3 million in the year ago period.  The current period provision was due to a lower calculated allowance for credit losses.  The lower calculated allowance was the result of a decline in model loss rates due to a reduction of balances in the existing portfolio and performance of the loan portfolio comparing favorably to peer performance along with lower qualitative adjustments related to a decline in the growth rate of loan balances.  The prior period provision was due to higher loan growth and the impact of the economic forecast on portfolio loss rates.

Noninterest income for the three months ended March 31, 2024 was $3.4 million, a $0.3 million decrease from the prior year's quarter, primarily due to lower swap income on reduced origination volume.

Noninterest expense increased $1.6 million or 9.6% to $18.1 million for the three months ended March 31, 2024, from $16.5 million for the three months ended March 31, 2023. Acquisition related expenses, including legal and consulting and advisory fees, totaled $0.5 million. Salaries and employee benefits decreased $0.2 million or 2.7% due primarily to lower salaries, payroll taxes and benefits, partially offset by lower deferred loan origination costs.   Occupancy and equipment expenses increased $0.6 million in the current period due to higher information technology (IT) expense and higher facilities costs from inflationary price pressure. Other expenses increased $0.7 million due primarily to a higher provision for unfunded loan commitments resulting from an update to underlying assumptions in the reserve calculation and FDIC assessments, partially offset by lower loan account processing fees due to lower origination volume.

The provision for income tax expense was $0.5 million for the three months ended March 31, 2024 and $1.4 million for the three months ended March 31, 2023, a decrease of $0.9 million due to lower taxable income.

BALANCE SHEET REVIEW

At March 31, 2024, total assets, loans and deposits were $3.7 billion, $2.9 billion and $3.2 billion, respectively. During the three month period, federal funds sold were utilized to fund loan growth and seasonal deposit outflows.  

Loan growth for the three months ended March 31, 2024 was $8.5 million or 1.2%, which is consistent with the Company's current balance sheet strategy to slow loan growth.  Commercial loans made up the majority of the growth with residential real estate loans also increasing.

Total investments were $477.8 million at March 31, 2024, compared to $483.9 million at December 31, 2023.  At March 31, 2024, the available for sale securities totaled $394.4 million and the held to maturity securities totaled $83.3 million. The unrealized loss on the available for sale securities increased $2.4 million from $51.5 million at December 31, 2023 to $54.0 million at March 31, 2024.  The unrealized losses on the held to maturity portfolio totaled $13.3 million and $13.2 million at March 31, 2024 and December 31, 2023, respectively. 

Total deposits decreased $75.1 million during the three months ending March 31, 2024.  Noninterest-bearing deposits decreased $21.3 million and interest-bearing deposits decreased $53.8 million during the three months ended March 31, 2024.  The decrease in deposits was due to a $62.6 million decrease in municipal deposits and $24.3 million decrease in commercial deposits, partially offset by an $11.8 million increase in retail deposits.  The Company had $261.0 million of longer-term callable brokered CDs at March 31, 2024 and December 31, 2023.  The Company at any time has the option to call the majority of the CDs.  During the three months ended March 31, 2024, deposits declined due in part to seasonal outflows of municipal deposits and commercial depositors drawing down their noninterest-bearing balances.

The deposit base consisted of 42.8% retail accounts, 33.5% commercial accounts, 15.6% municipal relationships and 8.1% brokered deposits at March 31, 2024. At March 31, 2024, total estimated uninsured deposits, were $798.6 million, or approximately 24.9% of total deposits as compared to $883.5 million, or 26.9% of total deposits at December 31, 2023.  Included in the uninsured total at March 31, 2024 is $345.8 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.2 million of affiliate company 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.

In addition to deposit gathering and our current long term borrowings, we have additional sources of liquidity available such as cash and cash equivalents, overnight borrowings from the FHLB, the Federal Reserve's Discount Window and Borrower-in-Custody program, correspondent bank lines of credit, brokered deposit capacity and unencumbered securities.  At March 31, 2024, the Company had $110.0 million in cash and cash equivalents, a decrease of $77.4 million from December 31, 2023.  At March 31, 2024, we had $1.7 billion in available additional liquidity representing 46.2% of total assets, 52.9% of total deposits and 212.3% of uninsured 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, 2024.  Stockholders' equity equaled $340.0 million or $48.18 per share at March 31, 2024, and $340.4 million or $48.35 per share at December 31, 2023. The decrease in stockholders' equity from December 31, 2023 is primarily attributable to an increase to accumulated other comprehensive loss ("AOCI") resulting from an increase 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, 2024 and December 31, 2023 was $42.2 million and $40.3 million, respectively. 

Tangible stockholders' equity, a non-GAAP measure³, decreased to $39.20 per share at March 31, 2024, from $39.35 per share at December 31, 2023.  Dividends declared for the three months ended March 31, 2024 amounted to $0.41 per share, representing a dividend payout ratio of 83.8% of net income.  

ASSET QUALITY REVIEW 

Asset quality metrics remained strong.  Nonperforming assets were $7.7 million or 0.27% of loans, net and foreclosed assets at March 31, 2024, compared to $4.9 million or 0.17% of loans, net and foreclosed assets at December 31, 2023.  As a percentage of total assets, nonperforming assets totaled 0.21% at March 31, 2024 compared to 0.13% at December 31, 2023.  The increase in nonaccrual loans was primarily due to downgrading one loan totaling $2.65 million to nonaccrual.  This loan is well secured and also carries a 70% government agency guaranty.  At March 31, 2024, the Company had no foreclosed properties.

During the three month period ended March 31, 2024, net charge-offs were a nominal $6 thousand and our provision for credit losses totaled $0.7 million. The allowance for credit losses equaled $22.6 million or 0.79% of loans, net, at March 31, 2024 compared to $21.9 million or 0.77% of loans, net, at December 31, 2023.  Loans charged-off, net of recoveries, for the three months ended March 31, 2024 were $6 thousand, compared to $9 thousand 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, core net income and pre-provision revenue ratios, among others.  The reported results included in this release contain items, which Peoples considers non-core, namely acquisition related expenses and 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: macroeconomic trends, including interest rates and inflation; the effects of any recession in the United States; the impact on financial markets from geopolitical conflicts such as the military conflict between Russia and Ukraine and the conflict in Israel; risks associated with business combinations, including, but not limited to the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the FNCB merger agreement; the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the proposed FNCB merger within the expected timeframes or at all and to successfully integrate operations of FNCB and those of Peoples, which may be more difficult, time consuming or costly than expected; the proposed FNCB merger may divert management's attention from ongoing business operations and opportunities; effects of the announcement, pendency or completion of the proposed FNCB merger on our ability to retain customers and retain and hire key personnel and maintain relationships with our vendors, and on our operating results and business generally; changes in interest rates; economic conditions, particularly in our market area; legislative and regulatory changes and the ability to comply with the significant laws and regulations governing the banking and financial services business; monetary and fiscal policies of the U.S. government, including policies of the U.S. Department of Treasury and the Federal Reserve System; adverse developments in the financial industry generally, responsive measures to mitigate and manage such developments, related supervisory and regulatory actions and costs, and related impacts on customer and client behavior; credit risk associated with lending activities and changes in the quality and composition of our loan and investment portfolios; demand for loan and other products; deposit flows; competition; changes in the values of real estate and other collateral securing the loan portfolio, particularly in our market area; changes in relevant accounting principles and guidelines; inability of third party service providers to perform; our ability to prevent, detect and respond to cyberattacks; and other factors that may be described in our 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 and, specifically, the FNCB merger 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, if they are achieved at all. As a regulated financial institution, 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. Additional factors that could cause actual results to differ materially include the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between Peoples and FNCB; the outcome of any legal proceedings that may be instituted against Peoples or FNCB; the possibility that the proposed strategic combination will not close when expected or at all because required regulatory approvals are not received or other conditions to the closing are not satisfied on a timely basis or at all, or are obtained subject to conditions that are not anticipated (and the risk that required regulatory approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the proposed transaction).

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.

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

 

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
		2024			2023			2023			2023			2023
Key performance data:
Share and per share amounts:
Net income		$	0.49		$	0.51		$	0.95		$	1.31		$	1.05
Core net income (1)		$	0.55		$	0.61		$	1.05		$	1.31		$	1.04
Core net income PPNR per share (1)		$	0.79		$	0.95		$	1.23		$	1.25		$	1.40
Cash dividends declared		$	0.41		$	0.41		$	0.41		$	0.41		$	0.41
Book value		$	48.18		$	48.35		$	46.07		$	46.53		$	45.96
Tangible book value (1)		$	39.20		$	39.35		$	37.07		$	37.64		$	37.09
Market value:
High		$	48.84		$	49.99		$	48.19		$	44.60		$	53.48
Low		$	38.09		$	38.58		$	40.04		$	30.60		$	42.52
Closing		$	43.11		$	48.70		$	40.10		$	43.79		$	43.35
Market capitalization		$	304,238		$	342,889		$	282,338		$	312,241		$	309,985
Common shares outstanding			7,057,258			7,040,852			7,040,852			7,130,409			7,150,757
Selected ratios:
Return on average stockholders' equity			4.09	%		4.40	%		8.05	%		11.42	%		9.43	%
Core return on average stockholders' equity (1)			4.59	%		5.26	%		8.91	%		11.54	%		9.35	%
Return on average tangible stockholders' equity			5.02	%		5.46	%		9.95	%		14.12	%		11.71	%
Core return on average tangible stockholders' equity (1)			5.64	%		6.53	%		11.01	%		14.28	%		11.61	%
Return on average assets			0.38	%		0.38	%		0.72	%		1.04	%		0.86	%
Core return on average assets (1)			0.43	%		0.46	%		0.79	%		1.05	%		0.85	%
Stockholders' equity to total assets			9.27	%		9.10	%		8.48	%		9.01	%		8.93	%
Efficiency ratio (1)(2)			75.77	%		69.94	%		63.50	%		63.51	%		60.61	%
Nonperforming assets to loans, net, and foreclosed assets			0.27	%		0.17	%		0.13	%		0.07	%		0.07	%
Nonperforming assets to total assets			0.21	%		0.13	%		0.10	%		0.06	%		0.05	%
Net charge-offs to average loans, net			0.00	%		0.39	%		0.01	%		0.00	%		0.00	%
Allowance for credit losses to loans, net			0.79	%		0.77	%		0.80	%		0.82	%		0.90	%
Interest-bearing assets yield (FTE) (3)			4.56	%		4.49	%		4.40	%		4.31	%		4.16	%
Cost of funds			2.96	%		2.86	%		2.61	%		2.29	%		1.85	%
Net interest spread (FTE) (3)			1.60	%		1.63	%		1.79	%		2.02	%		2.31	%
Net interest margin (FTE) (3)			2.29	%		2.30	%		2.44	%		2.61	%		2.81	%

(1)	See Reconciliation of Non-GAAP financial measures on pages 16-17.
(2)	Total noninterest expense less amortization of intangible assets and acquisition related expenses, 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		2024			2023
Interest income:
Interest and fees on loans:
Taxable		$	34,041		$	30,049
Tax-exempt			1,418			1,389
Interest and dividends on investment securities:
Taxable			1,918			2,124
Tax-exempt			371			457
Dividends			2			2
Interest on interest-bearing deposits in other banks			120			14
Interest on federal funds sold			1,127			243
Total interest income			38,997			34,278
Interest expense:
Interest on deposits			18,704			9,678
Interest on short-term borrowings			262			1,086
Interest on long-term debt			270			27
Interest on subordinated debt			443			443
Total interest expense			19,679			11,234
Net interest income			19,318			23,044
Provision for credit losses			708			1,264
Net interest income after provision for credit losses			18,610			21,780
Noninterest income:
Service charges, fees, commissions and other			2,036			1,965
Merchant services income			115			118
Commissions and fees on fiduciary activities			551			557
Wealth management income			361			398
Mortgage banking income			92			103
Increase in cash surrender value of life insurance			279			258
Interest rate swap revenue			(24)			223
Net losses on equity investment securities			(8)			(29)
Net gains on sale of investment securities available for sale						81
Total noninterest income			3,402			3,674
Noninterest expense:
Salaries and employee benefits expense			8,839			9,080
Net occupancy and equipment expense			4,725			4,103
Acquisition related expenses			486
Amortization of intangible assets						29
Other expenses			4,018			3,274
Total noninterest expense			18,068			16,486
Income before income taxes			3,944			8,968
Provision for income tax expense			478			1,389
Net income		$	3,466		$	7,579
Other comprehensive income (loss):
Unrealized (losses) gains on investment securities available for sale		$	(2,441)		$	10,836
Reclassification adjustment for gains on available for sale securities included in net income						(81)
Change in derivative fair value			1,079			(1,970)
Income tax (benefit) expense related to other comprehensive (loss) income			(298)			1,891
Other comprehensive (loss) income, net of income tax (benefit) expense			(1,064)			6,894
Comprehensive income		$	2,402		$	14,473
Share and per share amounts:
Net income - basic		$	0.49		$	1.06
Net income - diluted			0.49			1.05
Cash dividends declared			0.41			0.41
Average common shares outstanding - basic			7,052,912			7,157,553
Average common shares outstanding - diluted			7,102,112			7,198,970

 

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		2024			2023			2023			2023			2023
Interest income:
Interest and fees on loans:
Taxable		$	34,041		$	33,730		$	33,095		$	32,139		$	30,049
Tax-exempt			1,418			1,423			1,411			1,405			1,389
Interest and dividends on investment securities:
Taxable			1,918			1,939			1,920			1,929			2,124
Tax-exempt			371			372			375			378			457
Dividends			2									2			2
Interest on interest-bearing deposits in other banks			120			145			91			85			14
Interest on federal funds sold			1,127			2,463			1,873			798			243
Total interest income			38,997			40,072			38,765			36,736			34,278
Interest expense:
Interest on deposits			18,704			18,756			16,481			13,714			9,678
Interest on short-term borrowings			262			330			291			213			1,086
Interest on long-term debt			270			273			273			269			27
Interest on subordinated debt			443			444			443			444			443
Total interest expense			19,679			19,803			17,488			14,640			11,234
Net interest income			19,318			20,269			21,277			22,096			23,044
Provision for (credit to) credit losses			708			1,669			(166)			(2,201)			1,264
Net interest income after provision for (credit to) credit losses			18,610			18,600			21,443			24,297			21,780
Noninterest income:
Service charges, fees, commissions and other			2,036			1,881			1,900			1,982			1,965
Merchant services income			115			151			170			254			118
Commissions and fees on fiduciary activities			551			528			606			528			557
Wealth management income			361			399			393			386			398
Mortgage banking income			92			95			87			105			103
Increase in cash surrender value of life insurance			279			277			270			262			258
Interest rate swap revenue			(24)			(122)			266			23			223
Net (losses) gains on investment equity securities			(8)			6						12			(29)
Net gains on sale of investment securities available for sale															81
Total noninterest income			3,402			3,215			3,692			3,552			3,674
Noninterest expense:
Salaries and employee benefits expense			8,839			8,939			8,784			8,482			9,080
Net occupancy and equipment expense			4,725			4,468			4,298			4,277			4,103
Acquisition related expenses			486			826			869			121
Amortization of intangible assets						19			29			28			29
Net gains on sale of other real estate									(18)
Other expenses			4,018			3,346			3,092			3,706			3,274
Total noninterest expense			18,068			17,598			17,054			16,614			16,486
Income before income taxes			3,944			4,217			8,081			11,235			8,968
Income tax expense			478			587			1,335			1,810			1,389
Net income		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Other comprehensive (loss) income:
Unrealized (loss) gain on investment securities available for sale		$	(2,441)		$	19,494		$	(10,378)		$	(5,148)		$	10,836
Reclassification adjustment for gains on available for sale securities included in net income															(81)
Change in benefit plan liabilities						1,129
Change in derivative fair value			1,079			(1,650)			747			2,049			(1,970)
Income tax (benefit) expense related to other comprehensive (loss) income			(298)			3,894			(2,074)			(668)			1,891
Other comprehensive (loss) income, net of income tax (benefit) expense			(1,064)			15,079			(7,557)			(2,431)			6,894
Comprehensive income (loss)		$	2,402		$	18,709		$	(811)		$	6,994		$	14,473
Share and per share amounts:
Net income - basic		$	0.49		$	0.52		$	0.95		$	1.32		$	1.06
Net income - diluted			0.49			0.51			0.95			1.31			1.05
Cash dividends declared			0.41			0.41			0.41			0.41			0.41
Average common shares outstanding - basic			7,052,912			7,040,852			7,088,745			7,145,975			7,157,553
Average common shares outstanding - diluted			7,102,112			7,091,015			7,120,685			7,177,915			7,198,970

 

Peoples Financial Services Corp. Net Interest Margin (Unaudited) (In thousands, fully taxable equivalent basis)
		Three Months Ended
		March 31, 2024									March 31, 2023
		Average			Interest Income/			Yield/			Average			Interest Income/			Yield/
		Balance			Expense			Rate			Balance			Expense			Rate
Assets:
Earning assets:
Loans:
Taxable		$	2,632,554		$	34,041		5.20	%		$	2,546,068		$	30,049		4.79	%
Tax-exempt			225,293			1,795		3.20				223,917			1,757		3.18
Total loans			2,857,847			35,836		5.04				2,769,985			31,806		4.66
Investments:
Taxable			446,996			1,920		1.73				499,327			2,126		1.73
Tax-exempt			86,864			470		2.18				100,368			576		2.33
Total investments			533,860			2,390		1.80				599,695			2,702		1.83
Interest-bearing deposits			9,025			120		5.35				1,218			14		4.66
Federal funds sold			80,955			1,127		5.60				19,353			243		5.09
Total earning assets			3,481,687			39,473		4.56	%			3,390,251			34,765		4.16	%
Less: allowance for credit losses			22,290									24,557
Other assets			217,353									209,151
Total assets		$	3,676,750		$	39,473					$	3,574,845		$	34,765
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Money market accounts		$	754,889		$	7,135		3.80	%		$	721,864		$	4,588		2.58	%
Interest-bearing demand and NOW accounts			784,458			4,837		2.48				731,398			2,806		1.56
Savings accounts			422,815			275		0.26				512,655			216		0.17
Time deposits less than $100			409,192			4,337		4.26				192,519			1,181		2.49
Time deposits $100 or more			222,459			2,120		3.83				179,515			887		2.00
Total interest-bearing deposits			2,593,813			18,704		2.90				2,337,951			9,678		1.68
Short-term borrowings			19,687			262		5.35				91,530			1,086		4.81
Long-term debt			25,000			270		4.34				2,482			27		4.41
Subordinated debt			33,000			443		5.40				33,000			443		5.44
Total borrowings			77,687			975		5.05				127,012			1,556		4.97
Total interest-bearing liabilities			2,671,500			19,679		2.96				2,464,963			11,234		1.85
Noninterest-bearing deposits			616,610									744,931
Other liabilities			47,688									38,917
Stockholders' equity			340,952									326,034
Total liabilities and stockholders' equity		$	3,676,750								$	3,574,845
Net interest income/spread					$	19,794		1.60	%					$	23,531		2.31	%
Net interest margin								2.29	%								2.81	%
Tax-equivalent adjustments:
Loans					$	377								$	368
Investments						99									119
Total adjustments					$	476								$	487

The average balances of assets and liabilities, corresponding interest income and expense and resulting average yields or rates paid are summarized as follows. Averages for earning assets include nonaccrual loans. Investment averages include available for sale securities at amortized cost. Income on investment securities and loans is adjusted to a tax-equivalent basis using the prevailing federal statutory tax rate of 21%.

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		2024			2023			2023			2023			2023
Net interest income:
Interest income:
Loans, net:
Taxable		$	34,041		$	33,730		$	33,095		$	32,139		$	30,049
Tax-exempt			1,795			1,801			1,786			1,780			1,757
Total loans, net			35,836			35,531			34,881			33,919			31,806
Investments:
Taxable			1,920			1,939			1,920			1,931			2,126
Tax-exempt			470			471			475			481			576
Total investments			2,390			2,410			2,395			2,412			2,702
Interest on interest-bearing balances in other banks			120			145			91			85			14
Federal funds sold			1,127			2,463			1,873			798			243
Total interest income			39,473			40,549			39,240			37,214			34,765
Interest expense:
Deposits			18,704			18,756			16,481			13,714			9,678
Short-term borrowings			262			330			291			213			1,086
Long-term debt			270			273			273			269			27
Subordinated debt			443			444			443			444			443
Total interest expense			19,679			19,803			17,488			14,640			11,234
Net interest income		$	19,794		$	20,746		$	21,752		$	22,574		$	23,531
Loans, net:
Taxable			5.20	%		5.08	%		5.00	%		4.93	%		4.79	%
Tax-exempt			3.20	%		3.14	%		3.13	%		3.17	%		3.18	%
Total loans, net			5.04	%		4.93	%		4.85	%		4.79	%		4.66	%
Investments:
Taxable			1.73	%		1.71	%		1.68	%		1.65	%		1.73	%
Tax-exempt			2.18	%		2.14	%		2.15	%		2.18	%		2.33	%
Total investments			1.80	%		1.78	%		1.75	%		1.73	%		1.83	%
Interest-bearing balances with banks			5.35	%		5.51	%		5.24	%		5.04	%		4.66	%
Federal funds sold			5.60	%		5.52	%		5.52	%		5.24	%		5.09	%
Total interest-earning assets			4.56	%		4.49	%		4.40	%		4.31	%		4.16	%
Interest expense:
Deposits			2.90	%		2.80	%		2.53	%		2.21	%		1.68	%
Short-term borrowings			5.35	%		5.43	%		5.31	%		5.07	%		4.81	%
Long-term debt			4.34	%		4.33	%		4.33	%		4.32	%		4.41	%
Subordinated debt			5.40	%		5.34	%		5.33	%		5.40	%		5.44	%
Total interest-bearing liabilities			2.96	%		2.86	%		2.61	%		2.29	%		1.85	%
Net interest spread			1.60	%		1.63	%		1.79	%		2.02	%		2.31	%
Net interest margin			2.29	%		2.30	%		2.44	%		2.61	%		2.81	%

 

Peoples Financial Services Corp. Consolidated Balance Sheets (Unaudited) (In thousands)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
At period end		2024			2023			2023			2023			2023
Assets:
Cash and due from banks		$	32,009		$	33,524		$	39,285		$	37,774		$	31,354
Interest-bearing balances in other banks			8,259			9,141			9,550			5,814			7,129
Federal funds sold			69,700			144,700			205,700			93,100			102,100
Investment securities:
Available for sale			394,413			398,927			382,227			395,826			418,125
Equity investments carried at fair value			91			98			92			92			81
Held to maturity			83,306			84,851			86,246			88,211			89,705
Total investments			477,810			483,876			468,565			484,129			507,911
Loans held for sale			300			250
Loans			2,858,412			2,849,897			2,870,969			2,843,238			2,818,043
Less: allowance for credit losses			22,597			21,895			23,010			23,218			25,444
Net loans			2,835,815			2,828,002			2,847,959			2,820,020			2,792,599
Goodwill			63,370			63,370			63,370			63,370			63,370
Premises and equipment, net			59,097			61,276			61,936			57,712			56,561
Bank owned life insurance			49,673			49,397			49,123			48,857			48,598
Deferred tax assets			14,241			13,770			17,956			16,258			16,015
Accrued interest receivable			13,565			12,734			12,769			11,406			11,678
Other intangible assets, net									19			48			77
Other assets			45,299			42,249			49,567			43,287			41,079
Total assets		$	3,669,138		$	3,742,289		$	3,825,799		$	3,681,775		$	3,678,471
Liabilities:
Deposits:
Noninterest-bearing		$	623,408		$	644,683		$	691,071		$	713,375		$	746,089
Interest-bearing			2,580,530			2,634,354			2,674,012			2,516,106			2,489,878
Total deposits			3,203,938			3,279,037			3,365,083			3,229,481			3,235,967
Short-term borrowings			20,260			17,590			27,020			19,530			17,280
Long-term debt			25,000			25,000			25,000			25,000			25,000
Subordinated debt			33,000			33,000			33,000			33,000			33,000
Accrued interest payable			5,327			5,765			4,777			4,701			2,304
Other liabilities			41,621			41,475			46,529			38,276			36,286
Total liabilities			3,329,146			3,401,867			3,501,409			3,349,988			3,349,837
Stockholders' equity:
Common stock			14,122			14,093			14,093			14,272			14,323
Capital surplus			122,162			122,130			121,870			125,371			126,231
Retained earnings			249,123			248,550			247,857			244,017			237,522
Accumulated other comprehensive loss			(45,415)			(44,351)			(59,430)			(51,873)			(49,442)
Total stockholders' equity			339,992			340,422			324,390			331,787			328,634
Total liabilities and stockholders' equity		$	3,669,138		$	3,742,289		$	3,825,799		$	3,681,775		$	3,678,471

 

Peoples Financial Services Corp. Loan and Asset Quality Data (Unaudited) (In thousands)
At period end		March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Commercial
Taxable		$	400,439		$	317,245		$	351,545		$	384,091		$	375,033
Non-taxable			224,083			226,470			229,635			225,796			224,343
Total			624,522			543,715			581,180			609,887			599,376
Real estate
Commercial real estate			1,794,086			1,863,118			1,846,350			1,794,355			1,782,911
Residential			361,490			360,803			357,647			348,911			342,459
Total			2,155,576			2,223,921			2,203,997			2,143,266			2,125,370
Consumer
Indirect Auto			71,675			75,389			78,953			83,348			86,587
Consumer Other			6,639			6,872			6,839			6,737			6,710
Total			78,314			82,261			85,792			90,085			93,297
Total		$	2,858,412		$	2,849,897		$	2,870,969		$	2,843,238		$	2,818,043

		Mar 31			Dec 31			Sept 30			June 30			Mar 31
At quarter end		2024			2023			2023			2023			2023
Nonperforming assets:
Nonaccrual/restructured loans		$	7,056		$	3,961		$	3,060		$	1,900		$	1,798
Accruing loans past due 90 days or more			656			986			700			181			59
Foreclosed assets
Total nonperforming assets		$	7,712		$	4,947		$	3,760		$	2,081		$	1,857
			Mar 31			Dec 31			Sept 30			June 30			Mar 31
Three months ended			2024			2023			2023			2023			2023
Allowance for credit losses:
Beginning balance		$	21,895		$	23,010		$	23,218		$	25,444		$	27,472
ASU 2016-13 Transition Adjustment															(3,283)
Adjusted beginning balance			21,895			23,010			23,218			25,444			24,189
Charge-offs			108			2,808			65			77			75
Recoveries			102			24			23			52			66
Provision for (credit to) credit losses			708			1,669			(166)			(2,201)			1,264
Ending balance		$	22,597		$	21,895		$	23,010		$	23,218		$	25,444

 

Peoples Financial Services Corp. Deposit and Liquidity Detail (Unaudited) (In thousands)
At period end		March 31, 2024			December 31, 2023			September 30, 2023			June 30, 2023			March 31, 2023
Interest-bearing deposits:
Money market accounts		$	759,305		$	782,243		$	767,868		$	670,669		$	775,511
Interest-bearing demand and NOW accounts			754,673			796,426			825,066			760,690			698,888
Savings accounts			415,459			429,011			447,684			470,340			500,709
Time deposits less than $250			517,009			505,409			512,646			504,672			400,327
Time deposits $250 or more			134,084			121,265			120,748			109,735			114,443
Total interest-bearing deposits			2,580,530			2,634,354			2,674,012			2,516,106			2,489,878
Noninterest-bearing deposits			623,408			644,683			691,071			713,375			746,089
Total deposits		$	3,203,938		$	3,279,037		$	3,365,083		$	3,229,481		$	3,235,967

			March 31, 2024
At period end			Amount		Percent of Total			Number of accounts		Average Balance
Deposit Detail:
Retail		$	1,370,187		42.8	%		70,081	$	20
Commercial			1,072,263		33.5			13,327		80
Municipal			500,493		15.6			1,892		265
Brokered			260,995		8.1			24		10,875
Total Deposits		$	3,203,938		100.0			85,324	$	38
Uninsured			798,573		24.9	%
Insured			2,405,365		75.1
			December 31, 2023
At period end			Amount		Percent of Total			Number of accounts		Average Balance
Deposit Detail:
Retail		$	1,358,371		41.4	%		70,334	$	19
Commercial			1,096,547		33.4			13,433		82
Municipal			563,124		17.2			1,856		303
Brokered			260,995		8.0			24		10,875
Total Deposits		$	3,279,037		100.00			85,647	$	38
Uninsured			883,530		26.9	%
Insured			2,395,507		73.1

								Total Available
At March 31, 2024			Total Available			Outstanding			for Future Liquidity
FHLB advances		$	1,246,143		$	304,954		$	941,189
Federal Reserve - Discount Window			452,613						452,613
Correspondent bank lines of credit			18,000						18,000
Other sources of liquidity:
Brokered deposits			366,914			260,995			105,919
Unencumbered securities			177,553						177,553
Total sources of liquidity		$	2,261,223		$	565,949		$	1,695,274

 

Peoples Financial Services Corp. Consolidated Balance Sheets (Unaudited) (In thousands)
		Mar 31			Dec 31			Sept 30			June 30			Mar 31
Average quarterly balances		2024			2023			2023			2023			2023
Assets:
Loans, net:
Taxable		$	2,632,554		$	2,632,865		$	2,627,700		$	2,615,881		$	2,546,068
Tax-exempt			225,293			227,800			226,628			224,960			223,917
Total loans, net			2,857,847			2,860,665			2,854,328			2,840,841			2,769,985
Investments:
Taxable			446,996			450,533			454,727			469,712			499,327
Tax-exempt			86,864			87,297			87,731			88,371			100,368
Total investments			533,860			537,830			542,458			558,083			599,695
Interest-bearing balances with banks			9,025			10,432			6,893			6,839			1,218
Federal funds sold			80,955			176,983			134,583			61,093			19,353
Total interest-earning assets			3,481,687			3,585,910			3,538,262			3,466,856			3,390,251
Other assets			195,063			188,478			191,781			184,020			184,594
Total assets		$	3,676,750		$	3,774,388		$	3,730,043		$	3,650,876		$	3,574,845
Liabilities and stockholders' equity:
Deposits:
Interest-bearing		$	2,593,813		$	2,661,156		$	2,581,691		$	2,493,680		$	2,337,951
Noninterest-bearing			616,610			651,182			688,301			711,729			744,931
Total deposits			3,210,423			3,312,338			3,269,992			3,205,409			3,082,882
Short-term borrowings			19,687			24,103			21,759			16,854			91,530
Long-term debt			25,000			25,000			25,000			25,000			2,482
Subordinated debt			33,000			33,000			33,000			33,000			33,000
Other liabilities			47,688			52,760			47,788			39,494			38,917
Total liabilities			3,335,798			3,447,201			3,397,539			3,319,757			3,248,811
Stockholders' equity			340,952			327,187			332,504			331,119			326,034
Total liabilities and stockholders' equity		$	3,676,750		$	3,774,388		$	3,730,043		$	3,650,876		$	3,574,845

 

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		2024			2023			2023			2023			2023
Core net income per share:
Net income GAAP		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Adjustments:
Less: Gain (loss) on sale of available for sale securities															81
Add: Gain (loss) on sale of available for sale securities tax adjustment															17
Add: Acquisition related expenses			486			826			869			121
Less: Acquisition related expenses tax adjustment			59			115			144			19
Core net income		$	3,893		$	4,341		$	7,471		$	9,527		$	7,515
Average common shares outstanding - diluted			7,102,112			7,091,015			7,120,685			7,177,915			7,198,970
Core net income per share		$	0.55		$	0.61		$	1.05		$	1.33		$	1.04
Tangible book value:
Total stockholders' equity		$	339,992		$	340,422		$	324,390		$	331,787		$	328,634
Less: Goodwill			63,370			63,370			63,370			63,370			63,370
Less: Other intangible assets, net									19			48			77
Total tangible stockholders' equity		$	276,622		$	277,052		$	261,001		$	268,369		$	265,187
Common shares outstanding			7,057,258			7,040,852			7,040,852			7,130,409			7,150,757
Tangible book value per share		$	39.20		$	39.35		$	37.07		$	37.64		$	37.09
Core return on average stockholders' equity:
Net income GAAP		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Adjustments:
Less: Gain (loss) on sale of available for sale securities									—						81
Add: Gain (loss) on sale of available for sale securities tax adjustment									—						17
Add: Acquisition related expenses			486			826			869			121
Less: Acquisition related expenses tax adjustment			59			115			144			19
Core net income		$	3,893		$	4,341		$	7,471		$	9,527		$	7,515
Average stockholders' equity		$	340,952		$	327,187		$	332,504		$	331,119		$	326,034
Core return on average stockholders' equity			4.59	%		5.26	%		8.91	%		11.54	%		9.35	%
Return on average tangible equity:
Net income GAAP		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Average stockholders' equity		$	340,952		$	327,187		$	332,504		$	331,119		$	326,034
Less: average intangibles			63,370			63,380			63,404			63,433			63,461
Average tangible stockholders' equity		$	277,582		$	263,807		$	269,100		$	267,686		$	262,573
Return on average tangible stockholders' equity			5.02	%		5.46	%		9.95	%		14.12	%		11.71	%
Core return on average tangible stockholders' equity:
Net income GAAP		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Adjustments:
Less: Gain (loss) on sale of available for sale securities															81
Add: Gain (loss) on sale of available for sale securities tax adjustment															17
Add: Acquisition related expenses			486			826			869			121
Less: Acquisition related expenses tax adjustment			59			115			144			19
Core net income		$	3,893		$	4,341		$	7,471		$	9,527		$	7,515
Average stockholders' equity		$	340,952		$	327,187		$	332,504		$	331,119		$	326,034
Less: average intangibles			63,370			63,380			63,404			63,433			63,461
Average tangible stockholders' equity		$	277,582		$	263,807		$	269,100		$	267,686		$	262,573
Core return on average tangible stockholders' equity			5.64	%		6.53	%		11.01	%		14.28	%		11.61	%
Core return on average assets:
Net income GAAP		$	3,466		$	3,630		$	6,746		$	9,425		$	7,579
Adjustments:
Less: Gain (loss) on sale of available for sale securities															81
Add: Gain (loss) on sale of available for sale securities tax adjustment															17
Add: Acquisition related expenses			486			826			869			121
Less: Acquisition related expenses tax adjustment			59			115			144			19
Core net income		$	3,893		$	4,341		$	7,471		$	9,527		$	7,515
Average assets		$	3,676,750		$	3,774,388		$	3,730,043		$	3,650,876		$	3,574,845
Core return on average assets			0.43	%		0.46	%		0.79	%		1.05	%		0.85	%
Core pre-provision net revenue (PPNR) per share:
Income before taxes (GAAP)		$	3,944		$	4,217		$	8,081		$	11,235		$	8,968
Add: Acquisition related expenses			486			826			869			121
Add: Provision for (credit to) provision for credit losses			708			1,669			(166)			(2,201)			1,264
Add: Provision for (credit to) provision for credit losses on unfunded commitments			487			(2)			(12)			(171)			(185)
Core PPNR (non-GAAP)		$	5,625		$	6,710		$	8,772		$	8,984		$	10,047
Average common shares outstanding-diluted			7,102,112			7,091,015			7,120,685			7,177,915			7,198,970
Core PPNR per share (non-GAAP)		$	0.79		$	0.95		$	1.23		$	1.25		$	1.40

 

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, 2024 and 2023:
Three months ended March 31		2024			2023
Interest income (GAAP)		$	38,997		$	34,278
Adjustment to FTE			476			487
Interest income adjusted to FTE (non-GAAP)			39,473			34,765
Interest expense			19,679			11,234
Net interest income adjusted to FTE (non-GAAP)		$	19,794		$	23,531
The efficiency ratio is noninterest expenses, less amortization of intangible assets and acquisition related costs, 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, 2024 and 2023:
Three months ended March 31		2024			2023
Efficiency ratio (non-GAAP):
Noninterest expense (GAAP)		$	18,068		$	16,486
Less: Amortization of intangible assets expense						29
Less: Acquisition related expenses			486
Noninterest expense (non-GAAP)			17,582			16,457
Net interest income (GAAP)			19,318			23,044
Plus: Taxable equivalent adjustment			476			487
Noninterest income (GAAP)			3,402			3,674
Less: Net gains (losses) on equity securities			(8)			(29)
Less: Gain (loss) on sale of available for sale securities						81
Net interest income (FTE) plus noninterest income (non-GAAP)		$	23,204		$	27,153
Efficiency ratio (non-GAAP)			75.77	%		60.61	%

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SOURCE Peoples Financial Services Corp.

FAQ

What was Peoples Financial Services Corp.'s net income in the first quarter of 2024?

Peoples Financial Services Corp. reported a net income of $3.5 million in the first quarter of 2024.

What was the core net income for the first quarter of 2024?

The core net income for the first quarter of 2024 was $3.9 million.

What is the strategic combination Peoples Financial Services Corp. is entering into?

Peoples Financial Services Corp. is entering into a strategic combination with FNCB Bancorp, Inc.

What is the percentage of nonperforming assets to total assets at the end of March 2024?

Nonperforming assets totaled 0.21% of total assets at the end of March 2024.