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Peoples Financial Services Corp

PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Third Quarter and Year to Date 2024 Earnings

SCRANTON, Pa. , Nov. 5, 2024 /PRNewswire/ -- Peoples Financial Services Corp. ("Peoples" or the "Company") (NASDAQ: PFIS), the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three and nine months ended September 30, 2024.

Peoples reported a net loss of $4.3 million, or $0.43 per diluted share for the three months ended September 30, 2024, compared to net income of $6.7 million, or $0.95 per diluted share for the comparable period of 2023. Quarterly net income decreased primarily due to the non-recurring charges related to the July 1, 2024 merger of FNCB Bancorp, Inc. into Peoples and the merger of FNCB Bank into Peoples Security Bank and Trust Company (collectively referred to as the "FNCB merger").  Net interest income increased $18.0 million to $39.2 million and the tax-equivalent net interest margin ("NIM") increased 97 basis points to 3.26% due to the combined higher level of earning assets and the $3.7 million net accretion impact of purchase accounting marks on loans, deposits, and borrowings acquired and assumed in the FNCB merger which added 30 basis points of tax-equivalent NIM1, a non-GAAP measure.  Non-recurring charges, including a $14.3 million provision for credit losses on non-purchase credit deteriorated ("non-PCD") loans acquired in the FNCB merger and acquisition related expenses of $9.6 million, more than offset the higher level of net interest income.

Core net income and core earnings per share1, non-GAAP measures, exclude non-recurring transactions of $24.0 million and $0.9 million incurred during the three months ended September 30, 2024 and 2023 and totaled $16.5 million or $1.64 per diluted share for the three months ended September 30, 2024 compared to $7.5 million, or $1.05 per diluted share for the comparable period of 2023.

Core pre-provision net revenue (PPNR) and core PPNR per share1, non-GAAP measures, which exclude acquisition related expenses, the provision for credit losses and the provision for credit losses on unfunded commitments from income before taxes, for the three months ended September 30, 2024 was $18.3 million or $1.83 per diluted share.  The core PPNR and core PPNR diluted earnings per share for the corresponding prior year period was $8.8 million or $1.23 per diluted share. 

For the nine months ended September 30, 2024, net income was $2.4 million, or $0.30 per diluted share, compared to $23.8 million, or $3.31 per diluted share for the comparable period of 2023.  Net income for the current period decreased $21.4 million when compared to the nine months ended September 30, 2023 due to $25.5 million of non-recurring charges, including $11.2 million of acquisition expenses and a $14.3 million provision for credit losses on non-PCD loans, which were partially offset by higher interest income due to increased levels of earning assets.

Core net income and core earnings per share1, non-GAAP measures, totaled $25.6 million or $3.17 per diluted share for the nine months ended September 30, 2024 compared to $24.5 million, or $3.42 per share for the comparable period of 2023. 

Core pre-provision net revenue (PPNR) and core PPNR per share1, non-GAAP measures, for the nine months ended September 30, 2024 were $29.1 million or $3.60 per diluted share.  The core PPNR and core PPNR diluted earnings per share for the corresponding prior year period was $28.0 million or $3.90 per diluted share.

Merger with FNCB

Peoples acquired FNCB and its wholly-owned subsidiary FNCB Bank by merger on July 1 2024. The merger and acquisition method of accounting was used to account for the transaction with Peoples as the acquirer. The Company recorded the assets and liabilities of FNCB at their respective fair values as of July 1, 2024. The transaction was valued at approximately $133.7 million.  Primary reasons for the merger included: expansion of the branch network and commanding market share positions in northeastern Pennsylvania; attractive low-cost funding base; strong cultural alignment and a deep commitment to shareholders, customers, employees, and communities served by Peoples and FNCB, meaningful value creation to shareholders; and increased trading liquidity for both companies and increased dividends for Peoples shareholders.

At the time of the merger, FNCB contributed, after fair value purchase accounting adjustments, approximately $1.8 billion in assets, $421.9 million in investments, $1.2 billion in loans, $1.4 billion in deposits, $226.3 million in FHLB advances and other borrowings, and $8.0 million in subordinated debt and trust preferred debentures. The excess of the merger consideration over the fair value of the net FNCB assets acquired and liabilities assumed resulted in $13.6 million of goodwill.  The FNCB merger also resulted in a core deposit intangible valued at $36.6 million or 5.1% of core deposits.

Subsequent to the FNCB merger, through September 30, 2024, the Company sold $271.2 million par value of the available for sale securities portfolio acquired for net proceeds of $241.2 million and used $189.0 million of the proceeds to repay short-term overnight FHLB advances.

The Company incurred non-recurring expenses of $24.0 million and $25.5 million for the three and nine months ended September 30, 2024, respectively, related to merger and acquisition costs, and an increased allowance for credit losses related to the acquisition of non-PCD loans acquired in the FNCB merger.

The Company's financial results for any periods ended prior to July 1, 2024 reflect Peoples results only on a standalone basis. As a result of this factor and the below listed adjustments related to the FNCB merger, the Company's financial results for the third quarter of 2024 may not be directly comparable to prior reported periods. The following schedule highlights specific merger related activity for the three and nine months ended September 30, 2024:

Schedule of Merger & Acquisition Cost and Non-Recurring Merger Related Activity (Unaudited)











Quarter Ended



Nine Months Ended

(dollars in thousands)



September 30, 2024



September 30, 2024








M&A costs and merger related expenses


$

9,653


$

11,210

ACL provision for FNCB acquired legacy loans



14,328



14,328

Total net M&A costs and non-recurring transaction costs


$

23,981


$

25,538

 

NOTABLES IN THE QUARTER

  • Allowance for credit losses to loans, net increased to 0.97% at September 30, 2024 from 0.81% and 0.80% at June 30, 2024 and September 30, 2023, respectively.
  • Return on average equity for the three months ended September 30, 2024 was negative 3.58% compared to 8.05% for the three months ended September 30, 2023; excluding the non-recurring charges, core return on average equity1, a non-GAAP measure, was 13.61% for the three months ended September 30, 2024 compared to 8.91% for the three months ended September 30, 2023.
  • Return on average assets for the three months ended September 30, 2024 was negative 0.33% compared to 0.72% for the three months ended September 30, 2023; excluding the non-recurring charges, core return on average assets1, a non-GAAP measure, was 1.24% for the three months ended September 30, 2024 compared to 0.79% for the three months ended September 30, 2023.
  • Tangible book value per common share1, a non-GAAP measure, decreased to $36.24 per share at September 30, 2024 compared to $39.31 per share at June 30, 2024; this decrease was primarily due to the impact of loan marks associated with the FNCB merger and the net loss incurred for the third quarter of 2024.
  • At September 30, 2024, the Company had $285.5 million in cash and cash equivalents, an increase of $98.1 million from December 31, 2023. Additional contingent sources of available liquidity total $2.2 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 47.2% of total assets and 54.5% of total deposits.
  • At September 30, 2024, estimated total insured deposits were approximately $3.1 billion, or 66.2% of total deposits. Included in the uninsured total at September 30, 2024 is $372.5 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.7 million of affiliate company deposits. Total insured and collateralized deposits represent 74.3% of total deposits at September 30, 2024.

INCOME STATEMENT REVIEW 

  • NIM, calculated on a fully taxable equivalent basis, a non-GAAP measure1, for the three months ended September 30, 2024 was 3.26%, an increase of 97 basis points compared to 2.29% for the prior quarter and an increase of 82 basis points when compared to 2.44% for the corresponding three month period in 2023. The increase in tax-equivalent NIM from the year ago period was primarily from a higher volume of earning assets and the net accretion impact of purchase accounting marks on loans, deposits and borrowings acquired and assumed in the FNCB merger, which totaled $3.7 million of net interest income, and represented 30 basis points of tax-equivalent NIM.
  • The tax-equivalent yield on interest-earning assets, a non-GAAP measure2 , increased 105 basis points to 5.63% during the three months ended September 30, 2024 from 4.58% during the three months ended June 30, 2024, and increased 123 basis points when compared to 4.40% for the three months ended September 30, 2023.
  • The cost of funds, which represents the average rate paid on total interest-bearing liabilities, decreased 12 basis points to 2.89% for the three months ended September 30, 2024 when compared to 3.01% during the three months ended June 30, 2024 and increased 28 basis points compared to 2.61% in the prior year period.
  • The cost of interest-bearing deposits decreased 16 basis points during the three months ended September 30, 2024 to 2.76% from 2.92% in the three months ended June 30, 2024, and increased 23 basis points compared to 2.53% for the three months ended September 30, 2023.
  • The cost of total deposits for the three months ended September 30, 2024 was 2.33%, a decrease of 1 basis point from 2.34% for the three months ended June 30, 2024, an increase of 33 basis points compared to 2.00% for the three months ended September 30, 2023.

Third Quarter 2024 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income, a non-GAAP measure3, for the three months ended September 30, increased $18.2 million or 83.7% to $40.0 million in 2024 from $21.8 million in 2023.  The increase in tax-equivalent net interest income was due to a $29.8 million increase in tax-equivalent interest income that was offset by a $11.6 million increase in interest expense.

Higher interest income was the result of increases in the volume of earning assets due to the FNCB merger and net accretion from purchase accounting loan marks which totaled $4.7 million.  Average loans, net, increased $1.2 billion when comparing the three months ended September 30, 2024 to the corresponding three month period in 2023.  Average investments totaled $700.6 million in the three months ended September 30, 2024 and $542.5 million in the three months ended September 30, 2023.  Average federal funds sold decreased $42.4 million to $92.2 million for the three months ended September 30, 2024.

The increase in interest expense in the three months ended September 30, 2024 was $11.6 million due primarily to higher rates paid on consumer, business and municipal deposits coupled with the increased balances contributed by the FNCB merger.  The increase in interest expense included $1.0 million in amortization of purchase accounting marks on deposits and borrowings acquired and assumed in the FNCB merger.  The Company's total cost of deposits increased 33 basis points to 2.33% during the three months ended September 30, 2024 compared to the year ago period and the cost of interest-bearing deposits increased 23 basis points to 2.76% from 2.53% in the corresponding period of the prior year.  Short-term borrowings averaged $43.9 million in the current period at an average cost of 5.53% compared to $21.8 million in short-term borrowings at an average cost of 5.31% in the corresponding period of the prior year.

Average interest-bearing liabilities increased $1.3 billion for the three months ended September 30, 2024, compared to the corresponding period last year primarily due to the FNCB merger.  Average noninterest-bearing deposits increased $25.5 million or 3.7% from the corresponding period of the prior year, due in part to a shift to interest-bearing accounts, and represented 15.8% of total average deposits in the three months ended September 30 2024 as compared to 21.0% in the corresponding period of the prior year.

For the three months ended September 30, 2024, $14.5 million was recorded to the provision for credit losses compared to a credit of $0.2 million in the year ago period.  The current period provision included a non-recurring provision of $14.3 million for non-PCD loans acquired in the FNCB merger.  Excluding the impact of the FNCB merger, the provision for credit losses for the three months ended September 30, 2024 was $0.2 million.

Noninterest income for the three months ended September 30, 2024 and 2023 was $5.7 million and $3.7 million, respectively.  The increase was primarily due to the FNCB merger and consisted of higher levels of service charges, fees, commissions and other income, wealth management fees and increased cash surrender value of life insurance.  These increases were partially offset by lower interest rate swap revenue due to reduced origination volume.

Noninterest expense increased $18.4 million to $35.5 million for the three months ended September 30, 2024, from $17.1 million for the three months ended September 30, 2023.  Acquisition related expenses, including legal and consulting, core system de-conversion fees and advisory fees, totaled $9.7 million.  Salaries and employee benefits were $4.4 million higher due to the addition of 195 full time equivalent employees.  Occupancy and equipment expenses increased $2.2 million in the current period due to higher information technology (IT) expense and higher facilities costs from inflationary price pressure and the additional branches from the FNCB merger. 

The income tax benefit was $0.7 million or 13.2% of pre-tax loss for the three months ended September 30, 2024 compared to income tax expense of $1.3 million or 16.5% of pre-tax income for the three months ended September 30, 2023, a change of $2.0 million due to lower taxable income.

Nine-Month Results – Comparison to Prior Year First Nine months

The tax-equivalent NIM, a non-GAAP measure4, for the nine months ended September 30, 2024 was 2.69%, an increase of 7 basis points over the prior year's period of 2.62%.  Tax-equivalent net interest income, a non-GAAP measure1 for the nine months ended September 30, increased $11.2 million, or 16.5%, to $79.1 million in 2024 from $67.9 million in 2023.  The increase in tax-equivalent net interest income was primarily the result of higher loan interest income due to increased volume and rates on new loans acquired through the FNCB merger and an additional $4.7 million from accretion of purchase accounting marks on loans. Average investments increased $22.2 million compared to September 30, 2023, as the Company engaged in investment sales subsequent to the FNCB merger to repay short-term borrowings.  The tax-equivalent yield on earning assets was 5.01% for the first nine months of 2024 compared to 4.29% for the nine months ended September 30, 2023.  The cost of interest bearing liabilities during the nine month period ended September 30, 2024 increased 68 basis points to 2.94% from 2.26% for the nine months ended September 30, 2023 as the cost of interest-bearing deposit products and short-term borrowing costs increased. The net impact of the purchase accounting accretion and amortization of the loan, deposit and borrowing marks acquired and assumed in the FNCB merger was $3.7 million and contributed 13 basis points to the NIM.  

For the nine months ended September 30, 2024, a provision for credit losses of $15.8 million was recorded and included a $14.3 million day-one provision for non-PCD loans acquired in the FNCB merger.  The balance includes adjustments through September 30, 2024 for individually evaluated and pooled loans. 

Noninterest income was $12.7 million for the nine months ended September 30, 2024 and $10.9 million for the comparable period ended September 30, 2023.  During the period, service charges and fees increased $1.5 million , wealth management income increased $0.3 million, bank owned life insurance cash surrender value increased $0.3 million and gains on equity securities increased $0.2 million while interest rate swap revenue decreased $0.5 million on lower loan origination volume and market value adjustments.

Noninterest expense for the nine months ended September 30, 2024, was $71.7 million, an increase of $21.5 million from $50.2 million for the nine months ended September 30, 2023.  The increase was due primarily to higher acquisition related expenses, and higher expenses due to additional full time equivalent employees and facilities due to the FNCB merger. Salaries and employee benefits expenses increased $4.1 million compared to the year ago period due to the addition of 195 full time equivalent employees from the FNCB merger.  Occupancy and equipment expenses were higher by $3.1 million in the current period due to increased technology costs related to system integration and increased account and transaction volumes, and higher facilities costs.  Acquisition related expenses totaled $11.2 million compared to $1.0 million a year ago.  The provision for income taxes for the nine months ended September 30, 2024 decreased $4.3 million and the effective tax rate was 9.1% as compared to 16.0% in the prior period.

BALANCE SHEET REVIEW

At September 30, 2024, total assets, loans and deposits were $5.4 billion, $4.1 billion and $4.6 billion, respectively.

Loan growth for the nine months ended September 30, 2024 was $1.2 billion or 42.8%, due primarily to the $1.2 billion in loans acquired in the FNCB merger.  Commercial loans made up the majority of the growth with residential real estate loans also increasing.

Total investments were $647.1 million at September 30, 2024, compared to $483.9 million at December 31, 2023.  At September 30, 2024, the available for sale securities totaled $563.3 million and the held to maturity securities totaled $79.9 million.  The unrealized loss on the available for sale securities decreased $12.7 million from $51.5 million at December 31, 2023 to $38.8 million at September 30, 2024.  The unrealized losses on the held to maturity portfolio totaled $10.8 million and $13.2 million at September 30, 2024 and December 31, 2023, respectively. 

Total deposits increased $1.4 billion during the nine months ended September 30, 2024 due primarily to the $1.4 billion in deposits acquired in the FNCB merger.  Noninterest-bearing deposits increased $72.9 million and interest-bearing deposits increased $1.3 billion during the nine months ended September 30, 2024. The Company had $391.6 million and $261.0 million of longer-term callable brokered CDs at September 30, 2024 and December 31, 2023, respectively.  Of the balance at September 30, 2024, the Company has the option to call $248.9 million of the brokered CDs at any time.  Subsequent to quarter-end the Company called $100.7 million of its higher cost brokered CDs in order to reduce its cost of funds.

The Company's deposit base consisted of 38.6% retail accounts, 33.3% commercial accounts, 19.7% municipal relationships and 8.4% brokered deposits at September 30, 2024.  At September 30, 2024, total estimated uninsured deposits, were $1.6 billion, or approximately 33.8% of total deposits.  Included in the uninsured total at September 30, 2024 is $372.5 million of municipal deposits collateralized by letters of credit issued by the FHLB and pledged investment securities, and $1.7 million of affiliate company deposits.  We also offer customers access to IntraFi's CDARS and ICS programs through which their deposits may be allocated to separate FDIC-insured institutions, while they are able to maintain their relationship with the bank.

In addition to deposit gathering and current long-term debt, 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 September 30, 2024, the Company had $97.1 million in cash and cash equivalents, an increase of $63.6 million from December 31, 2023.  At September 30, 2024, we had $2.2 billion in available additional liquidity representing 41.8% of total assets, 48.4% of total deposits and 143.1% of uninsured deposits.  For additional information on the deposit portfolio and additional sources of liquidity, see the tables on page 17.

The Company maintained its well capitalized position at September 30, 2024.  Stockholders' equity equaled $475.1 million or $47.53 per share at September 30, 2024, and $340.4 million or $48.35 per share at December 31, 2023. The increase in stockholders' equity from December 31, 2023 is primarily attributable to the FNCB merger, net income less dividends to shareholders, partially offset by a $9.8 million decrease to accumulated other comprehensive loss ("AOCL") 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 AOCL at September 30, 2024 and December 31, 2023 was $28.6 million and $40.3 million, respectively. 

Tangible book value5, a non-GAAP measure, decreased to $36.24 per share at September 30, 2024, from $39.35 per share at December 31, 2023.  Dividends declared for the nine months ended September 30, 2024 amounted to $1.4375 per share.  

ASSET QUALITY REVIEW

Nonperforming assets were $21.5 million or 0.53% of loans, net and foreclosed assets at September 30, 2024, compared to $4.9 million or 0.17% of loans, net and foreclosed assets at December 31, 2023.  Nonperforming assets at September 30, 2024 included $7.6 million of loans acquired in the FNCB merger. As a percentage of total assets, nonperforming assets totaled 0.41% at September 30, 2024 compared to 0.13% at December 31, 2023.  At September 30, 2024, the Company had one foreclosed property recorded at $27 thousand.

During the nine months ended September 30, 2024, net charge-offs were $158 thousand and the provision for credit losses totaled $15.8 million.  The provision for credit losses included a $14.3 million FNCB merger related adjustment for non-PCD loans. The allowance for credit losses equaled $39.3 million or 0.97% of loans, net, at September 30, 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 September 30, 2024 were $82 thousand, compared to $42 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, Susquehanna, Wayne and Wyoming Counties in Pennsylvania, Middlesex County in New Jersey and Broome County in New York through 39 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 its subsidiaries (collectively, "Peoples") and other statements that are not historical facts 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 undue reliance should not be placed on forward-looking statements and 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; the possibility that Peoples may be unable to achieve the expected synergies and operating efficiencies of the FNCB merger within the expected timeframes or at all; the possibility that Peoples may be unable to successfully integrate operations of FNCB or that the integration may be more difficult, time consuming or costly than expected; the FNCB merger may divert management's attention from ongoing business operations and opportunities; effects of the 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; the dilution caused by Peoples' issuance of additional shares of its capital stock in connection with the FNCB merger; the outcome of any legal proceedings that may be threatened or instituted against Peoples; 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.

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)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30




2024


2024


2024


2023


2023


Key performance data:

















Share and per share amounts:

















Net (loss) income


$

(0.43)


$

0.46


$

0.49


$

0.51


$

0.95


Core net income (1)


$

1.64


$

0.59


$

0.55


$

0.61


$

1.05


Core net income (PPNR) (1)


$

1.83


$

0.73


$

0.79


$

0.95


$

1.23


Cash dividends declared


$

0.62


$

0.41


$

0.41


$

0.41


$

0.41


Book value


$

47.53


$

48.29


$

48.18


$

48.35


$

46.07


Tangible book value (1)


$

36.24


$

39.31


$

39.20


$

39.35


$

37.07


Market value:

















High


$

50.49


$

46.25


$

48.84


$

49.99


$

48.19


Low


$

41.44


$

36.26


$

38.09


$

38.58


$

40.04


Closing


$

46.88


$

45.54


$

43.11


$

48.70


$

40.10


Market capitalization


$

468,549


$

321,388


$

304,238


$

342,889


$

282,338


Common shares outstanding



9,994,648



7,057,258



7,057,258



7,040,852



7,040,852


Selected ratios:

















Return on average stockholders' equity



(3.58)

%


3.87

%


4.09

%


4.40

%


8.05

%

Core return on average stockholders' equity (1)



13.61

%


5.00

%


4.59

%


5.26

%


8.91

%

Return on average tangible stockholders' equity



(4.67)

%


4.76

%


5.02

%


5.46

%


9.95

%

Core return on average tangible stockholders' equity (1)



17.77

%


6.14

%


5.64

%


6.53

%


11.01

%

Return on average assets



(0.33)

%


0.37

%


0.38

%


0.38

%


0.72

%

Core return on average assets (1)



1.24

%


0.47

%


0.43

%


0.46

%


0.79

%

Stockholders' equity to total assets



8.86

%


9.42

%


9.27

%


9.10

%


8.48

%

Efficiency ratio (1)(2)



53.14

%


74.49

%


75.77

%


69.94

%


63.50

%

Nonperforming assets to loans, net, and foreclosed assets



0.53

%


0.25

%


0.27

%


0.17

%


0.13

%

Nonperforming assets to total assets



0.41

%


0.20

%


0.21

%


0.13

%


0.10

%

Net charge-offs to average loans, net



0.01

%


0.01

%


0.00

%


0.39

%


0.01

%

Allowance for credit losses to loans, net



0.97

%


0.81

%


0.79

%


0.77

%


0.80

%

Interest-bearing assets yield (FTE) (3)



5.63

%


4.58

%


4.56

%


4.49

%


4.40

%

Cost of funds



2.89

%


3.01

%


2.96

%


2.86

%


2.61

%

Net interest spread (FTE) (3)



2.74

%


1.57

%


1.60

%


1.63

%


1.79

%

Net interest margin (FTE) (3)



3.26

%


2.29

%


2.29

%


2.30

%


2.44

%



(1)

See Reconciliation of Non-GAAP financial measures on pages 19-21.

(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)










Sept 30


Sept 30

Nine months ended


2024


2023

Interest income:







Interest and fees on loans:







Taxable


$

127,859


$

95,283

Tax-exempt



5,116



4,205

Interest and dividends on investment securities:







Taxable



8,561



5,973

Tax-exempt



1,153



1,210

Dividends



59



4

Interest on interest-bearing deposits in other banks



632



190

Interest on federal funds sold



2,277



2,914

Total interest income



145,657



109,779

Interest expense:







Interest on deposits



63,216



39,805

Interest on short-term borrowings



1,444



1,590

Interest on long-term debt



1,929



569

Interest on subordinated debt



1,330



1,330

Interest on junior subordinated debt



260




Total interest expense



68,179



43,294

Net interest income



77,478



66,485

Provision for (credit to) credit losses



15,762



(1,103)

Net interest income after provision for (credit to) credit losses



61,716



67,588

Noninterest income:







Service charges, fees, commissions and other



7,304



5,847

Merchant services income



598



542

Commissions and fees on fiduciary activities



1,717



1,691

Wealth management income



1,486



1,177

Mortgage banking income



263



295

Increase in cash surrender value of life insurance



1,116



790

Interest rate swap revenue



25



512

Net gains (losses) on equity investment securities



155



(17)

Net gains on sale of investment securities available for sale



1



81

Total noninterest income



12,665



10,918

Noninterest expense:







Salaries and employee benefits expense



30,459



26,346

Net occupancy and equipment expense



15,745



12,678

Acquisition related expenses



11,210



990

Amortization of intangible assets



1,665



86

Net gains on sale of other real estate owned






(18)

Other expenses



12,649



10,140

Total noninterest expense



71,728



50,222

Income before income taxes



2,653



28,284

Provision for income tax expense



242



4,534

Net income


$

2,411


$

23,750

Other comprehensive income (loss) :







Unrealized gains (losses) on investment securities available for sale


$

12,744


$

(4,690)

Reclassification adjustment for gains on available for sale securities included in net income



(1)



(81)

Change in derivative fair value



(185)



826

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



2,748



(851)

Other comprehensive income (loss), net of income tax expense (benefit)



9,810



(3,094)

Comprehensive income


$

12,221


$

20,656

Share and per share amounts:







Net income - basic


$

0.30


$

3.33

Net income - diluted



0.30



3.31

Cash dividends declared



1.44



1.23

Average common shares outstanding - basic



8,039,734



7,130,506

Average common shares outstanding - diluted



8,094,036



7,165,570

 

Peoples Financial Services Corp.

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)



















Sept 30


June 30


Mar 31


Dec 31


Sept 30

Three months ended


2024


2024


2024


2023


2023

Interest income:
















Interest and fees on loans:
















Taxable


$

59,412


$

34,406


$

34,041


$

33,730


$

33,095

Tax-exempt



2,299



1,399



1,418



1,423



1,411

Interest and dividends on investment securities:
















Taxable



4,739



1,904



1,918



1,939



1,920

Tax-exempt



411



371



371



372



375

Dividends



55



2



2







Interest on interest-bearing deposits in other banks



397



115



120



145



91

Interest on federal funds sold



971



179



1,127



2,463



1,873

Total interest income



68,284



38,376



38,997



40,072



38,765

Interest expense:
















Interest on deposits



26,398



18,114



18,704



18,756



16,481

Interest on short-term borrowings



550



633



262



330



291

Interest on long-term debt



1,389



269



270



273



273

Interest on subordinated debt



443



444



443



444



443

Interest on junior subordinated debt



260













Total interest expense



29,040



19,460



19,679



19,803



17,488

Net interest income



39,244



18,916



19,318



20,269



21,277

Provision for (credit to) credit losses



14,458



596



708



1,669



(166)

Net interest income after provision for (credit to) credit losses



24,786



18,320



18,610



18,600



21,443

Noninterest income:
















Service charges, fees, commissions and other



3,384



1,885



2,036



1,881



1,900

Merchant services income



223



260



115



151



170

Commissions and fees on fiduciary activities



649



517



551



528



606

Wealth management income



708



416



361



399



393

Mortgage banking income



84



87



92



95



87

Increase in cash surrender value of life insurance



551



286



279



277



270

Interest rate swap revenue



(53)



102



(24)



(122)



266

Net gains (losses) on investment equity securities



175



(12)



(8)



6




Net gains on sale of investment securities available for sale



1













Total noninterest income



5,722



3,541



3,402



3,215



3,692

Noninterest expense:
















Salaries and employee benefits expense



13,170



8,450



8,839



8,939



8,784

Net occupancy and equipment expense



6,436



4,576



4,725



4,468



4,298

Acquisition related expenses



9,653



1071



486



826



869

Amortization of intangible assets



1,665









19



29

Net gains on sale of other real estate















(18)

Other expenses



4,578



4,061



4,018



3,346



3,092

Total noninterest expense



35,502



18,158



18,068



17,598



17,054

Income before income taxes



(4,994)



3,703



3,944



4,217



8,081

Income tax (benefit) expense



(657)



421



478



587



1,335

Net (loss) income


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746

Other comprehensive income (loss):
















Unrealized gain (loss) on investment securities available for sale


$

15,167


$

18


$

(2,441)


$

19,494


$

(10,378)

Reclassification adjustment for gains on available for sale securities included in net income



(1)













Change in benefit plan liabilities












1,129




Change in derivative fair value



(1,424)



160



1,079



(1,650)



747

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



3,008



38



(298)



3,894



(2,074)

Other comprehensive income (loss), net of income tax expense (benefit)



10,734



140



(1,064)



15,079



(7,557)

Comprehensive income (loss)


$

6,397


$

3,422


$

2,402


$

18,709


$

(811)

Share and per share amounts:
















Net income - basic


$

(0.43)


$

0.47


$

0.49


$

0.52


$

0.95

Net income - diluted



(0.43)



0.46



0.49



0.51



0.95

Cash dividends declared



0.62



0.41



0.41



0.41



0.41

Average common shares outstanding - basic



9,987,627



7,057,258



7,052,912



7,040,852



7,088,745

Average common shares outstanding - diluted



10,044,449



7,114,115



7,102,112



7,091,015



7,120,685

 

Peoples Financial Services Corp.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)






















Three Months Ended




September 30, 2024



September 30, 2023




Average


Interest Income/


Yield/



Average


Interest Income/


Yield/




Balance  


Expense


Rate  



Balance  


Expense


Rate  


Assets:



















Earning assets:



















Loans:



















Taxable


$

3,790,138


$

59,412


6.24

%


$

2,627,700


$

33,095


5.00

%

Tax-exempt



278,496



2,910


4.16




226,628



1,786


3.13


Total loans



4,068,634



62,322


6.09




2,854,328



34,881


4.85


Investments:



















Taxable



611,032



4,794


3.12




454,727



1,920


1.68


Tax-exempt



89,532



520


2.31




87,731



475


2.15


Total investments



700,564



5,314


3.02




542,458



2,395


1.75


Interest-bearing deposits



10,820



150


5.55




6,893



91


5.24


Federal funds sold



92,171



1,218


5.26




134,583



1,873


5.52


Total earning assets



4,872,189



69,004


5.63

%



3,538,262



39,240


4.40

%

Less: allowance for credit losses



37,535









23,691







Other assets



456,540









215,472







Total assets


$

5,291,194


$

69,004





$

3,730,043


$

39,240




Liabilities and Stockholders' Equity:



















Interest-bearing liabilities:



















Money market accounts


$

906,842


$

8,231


3.61

%


$

697,387


$

5,945


3.38

%

Interest-bearing demand and NOW accounts



1,414,228



6,888


1.94




800,978



4,335


2.15


Savings accounts



518,038



3,420


2.63




462,468



272


0.23


Time deposits less than $100



687,511



4,637


2.68




412,705



4,234


4.07


Time deposits $100 or more



275,786



3,222


4.65




208,153



1,695


3.23


Total interest-bearing deposits



3,802,405



26,398


2.76




2,581,691



16,481


2.53


Short-term borrowings



43,895



550


4.98




21,759



291


5.31


Long-term debt



111,804



1,389


4.94




25,000



273


4.33


Subordinated debt



33,000



443


5.34




33,000



443


5.33


Junior subordinated debt



8,000



260


12.93











Total borrowings



196,699



2,642


5.34




79,759



1,007


5.01


Total interest-bearing liabilities



3,999,104



29,040


2.89




2,661,450



17,488


2.61


Noninterest-bearing deposits



713,776









688,301







Other liabilities



96,177









47,788







Stockholders' equity



482,137









332,504







Total liabilities and stockholders' equity


$

5,291,194








$

3,730,043







Net interest income/spread





$

39,964


2.74

%





$

21,752


1.79

%

Net interest margin








3.26

%








2.44

%

Tax-equivalent adjustments:



















Loans





$

611








$

375




Investments






109









100




Total adjustments





$

720








$

475





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.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)





















For the Nine Months Ended




September 30, 2024


September 30, 2023




Average


Interest Income/


Yield/


Average


Interest Income/


Yield/




Balance  


Expense


Rate  


Balance  


Expense


Rate  


Assets:


















Earning assets:


















Loans:


















Taxable


$

3,022,988


$

127,859


5.65

%

$

2,596,848


$

95,283


4.91

%

Tax-exempt



242,293



6,476


3.57



225,178



5,323


3.16


Total loans



3,265,281



134,335


5.50



2,822,026



100,606


4.77


Investments:


















Taxable



501,100



8,620


2.30



474,425



5,977


1.68


Tax-exempt



87,612



1,459


2.22



92,111



1,532


2.22


Total investments



588,712



10,079


2.29



566,536



7,509


1.77


Interest-bearing deposits



9,541



385


5.39



5,004



190


5.08


Federal funds sold



61,635



2,524


5.47



72,098



2,914


5.40


Total earning assets



3,925,169



147,323


5.01

%


3,465,664



111,219


4.29

%

Less: allowance for credit losses



27,660








24,711







Other assets



294,186








211,537







Total assets


$

4,191,695


$

147,323




$

3,652,490


$

111,219




Liabilities and Stockholders' Equity:


















Interest-bearing liabilities:


















Money market accounts


$

792,391


$

22,116


3.73

%

$

694,478


$

15,459


2.98

%

Interest-bearing demand and NOW accounts



977,722



16,125


2.20



768,277



10,661


1.86


Savings accounts



450,161



3,975


1.18



485,985



727


0.20


Time deposits less than $100



475,194



17,778


5.00



327,810



8,980


3.66


Time deposits $100 or more



271,765



3,222


1.58



195,450



3,978


2.72


Total interest-bearing deposits



2,967,233



63,216


2.85



2,472,000



39,805


2.15


Short-term borrowings



36,349



1,444


5.31



43,125



1,590


4.93


Long-term debt



54,147



1,929


4.76



17,576



569


4.33


Subordinated debt



33,000



1,330


5.38



33,000



1,330


5.39


Junior subordinated debt



2,692



260


12.90










Total borrowings



126,188



4,963


5.25



93,701



3,489


4.98


Total interest-bearing liabilities



3,093,421



68,179


2.94



2,565,701



43,294


2.26


Noninterest-bearing deposits



650,446








714,779







Other liabilities



59,622








42,101







Stockholders' equity



388,206








329,909







Total liabilities and stockholders' equity


$

4,191,695







$

3,652,490







Net interest income/spread





$

79,144


2.07

%




$

67,925


2.03

%

Net interest margin








2.69

%







2.62

%

Tax-equivalent adjustments:


















Loans





$

1,360







$

1,118




Investments






306








322




Total adjustments





$

1,666







$

1,440




 

Peoples Financial Services Corp.

Details of Net Interest Income and Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30


Three months ended


2024


2024


2024


2023


2023


Net interest income:

















Interest income:

















Loans, net:

















Taxable


$

59,412


$

34,406


$

34,041


$

33,730


$

33,095


Tax-exempt



2,910



1,771



1,795



1,801



1,786


Total loans, net



62,322



36,177



35,836



35,531



34,881


Investments:

















Taxable



4,794



1,906



1,920



1,939



1,920


Tax-exempt



520



469



470



471



475


Total investments



5,314



2,375



2,390



2,410



2,395


Interest on interest-bearing balances in other banks



150



115



120



145



91


Federal funds sold



1,218



179



1,127



2,463



1,873


Total interest income



69,004



38,846



39,473



40,549



39,240


Interest expense:

















Deposits



26,398



18,114



18,704



18,756



16,481


Short-term borrowings



550



633



262



330



291


Long-term debt



1,389



269



270



273



273


Subordinated debt



443



444



443



444



443


Junior subordinated debt



260














Total interest expense



29,040



19,460



19,679



19,803



17,488


Net interest income


$

39,964


$

19,386


$

19,794


$

20,746


$

21,752


Loans, net:

















Taxable



6.24

%


5.25

%


5.20

%


5.08

%


5.00

%

Tax-exempt



4.16

%


3.20

%


3.20

%


3.14

%


3.13

%

Total loans, net



6.09

%


5.09

%


5.04

%


4.93

%


4.85

%

Investments:

















Taxable



3.12

%


1.73

%


1.73

%


1.71

%


1.68

%

Tax-exempt



2.31

%


2.19

%


2.18

%


2.14

%


2.15

%

Total investments



3.02

%


1.80

%


1.80

%


1.78

%


1.75

%

Interest-bearing balances with banks



5.55

%


5.28

%


5.35

%


5.51

%


5.24

%

Federal funds sold



5.26

%


5.68

%


5.60

%


5.52

%


5.52

%

Total interest-earning assets



5.63

%


4.58

%


4.56

%


4.49

%


4.40

%

Interest expense:

















Deposits



2.76

%


2.92

%


2.90

%


2.80

%


2.53

%

Short-term borrowings



4.98

%


5.61

%


5.35

%


5.43

%


5.31

%

Long-term debt



4.94

%


4.33

%


4.34

%


4.33

%


4.33

%

Subordinated debt



5.34

%


5.41

%


5.40

%


5.34

%


5.33

%

Junior subordinated debt



12.93

%













Total interest-bearing liabilities



2.89

%


3.01

%


2.96

%


2.86

%


2.61

%

Net interest spread



2.74

%


1.57

%


1.60

%


1.63

%


1.79

%

Net interest margin



3.26

%


2.29

%


2.29

%


2.30

%


2.44

%

 

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30


At period end


2024


2024


2024


2023


2023


Assets:

















Cash and due from banks


$

97,090


$

41,234


$

32,009


$

33,524


$

39,285


Interest-bearing balances in other banks



10,286



8,722



8,259



9,141



9,550


Federal funds sold



178,093






69,700



144,700



205,700


Investment securities:

















Available for sale



562,486



385,240



394,413



398,927



382,227


Equity investments carried at fair value



3,921



78



91



98



92


Held to maturity



79,861



81,598



83,306



84,851



86,246


Total investments



646,268



466,916



477,810



483,876



468,565


Loans held for sale



803






300



250





Loans



4,069,683



2,869,553



2,858,412



2,849,897



2,870,969


Less: allowance for credit losses



39,341



23,123



22,597



21,895



23,010


Net loans



4,030,342



2,846,430



2,835,815



2,828,002



2,847,959


Goodwill



76,958



63,370



63,370



63,370



63,370


Premises and equipment, net



75,877



58,565



59,097



61,276



61,936


Bank owned life insurance



87,401



49,955



49,673



49,397



49,123


Deferred tax assets



33,078



14,460



14,241



13,770



17,956


Accrued interest receivable



17,979



13,326



13,565



12,734



12,769


Other intangible assets, net



35,907












19


Other assets



70,056



53,077



45,299



42,249



49,567


Total assets


$

5,360,138


$

3,616,055


$

3,669,138


$

3,742,289


$

3,825,799


Liabilities:

















Deposits:

















Noninterest-bearing


$

717,565


$

620,971


$

623,408


$

644,683


$

691,071


Interest-bearing



3,920,299



2,443,988



2,580,530



2,634,354



2,674,012


Total deposits



4,637,864



3,064,959



3,203,938



3,279,037



3,365,083


Short-term borrowings



37,346



104,250



20,260



17,590



27,020


Long-term debt



111,489



25,000



25,000



25,000



25,000


Subordinated debt



33,000



33,000



33,000



33,000



33,000


Junior subordinated debt



8,015














Accrued interest payable



6,829



5,507



5,327



5,765



4,777


Other liabilities



50,544



42,532



41,621



41,475



46,529


Total liabilities



4,885,087



3,275,248



3,329,146



3,401,867



3,501,409


Stockholders' equity:

















Common stock



19,993



14,122



14,122



14,093



14,093


Capital surplus



250,578



122,449



122,162



122,130



121,870


Retained earnings



239,021



249,511



249,123



248,550



247,857


Accumulated other comprehensive loss



(34,541)



(45,275)



(45,415)



(44,351)



(59,430)


Total stockholders' equity



475,051



340,807



339,992



340,422



324,390


Total liabilities and stockholders' equity


$

5,360,138


$

3,616,055


$

3,669,138


$

3,742,289


$

3,825,799


 

Peoples Financial Services Corp.

Loan and Asset Quality Data (Unaudited)

(In thousands)


















At period end


September 30, 2024


June 30, 2024


March 31, 2024


December 31, 2023


September 30, 2023


Commercial

















Taxable


$

616,369


$

411,112


$

400,439


$

317,245


$

351,545


Non-taxable



273,710



220,893



224,083



226,470



229,635


Total



890,079



632,005



624,522



543,715



581,180


Real estate

















Commercial real estate



2,309,588



1,793,652



1,794,086



1,863,118



1,846,350


Residential



550,590



369,671



361,490



360,803



357,647


Total



2,860,178



2,163,323



2,155,576



2,223,921



2,203,997


Consumer

















Indirect Auto



130,380



66,792



71,675



75,389



78,953


Consumer Other



15,580



7,433



6,639



6,872



6,839


Total



145,960



74,225



78,314



82,261



85,792


Equipment Financing



173,466














Total


$

4,069,683


$

2,869,553


$

2,858,412


$

2,849,897


$

2,870,969





















Sept 30


June 30


Mar 31


Dec 31


Sept 30


At quarter end


2024


2024


2024


2023


2023


Nonperforming assets:

















Nonaccrual/restructured loans


$

20,949


$

7,116


$

7,056


$

3,961


$

3,060


Accruing loans past due 90 days or more



569






656



986



700


Foreclosed assets



27



27











Total nonperforming assets


$

21,545


$

7,143


$

7,712


$

4,947


$

3,760





















Sept 30

June 30


Mar 31


Dec 31


Sept 30

Three months ended


2024


2024


2024


2023


2023

Allowance for credit losses:

















Beginning balance


$

23,123


$

22,597


$

21,895


$

23,010


$

23,218


Merger-related adjustments - Non PCD Loans



14,328














Merger-related adjustments - PCD Loans



1,842














Charge-offs



534



135



108



2,808



65


Recoveries



452



65



102



24



23


Provision for (credit to) credit losses



130



596



708



1,669



(166)


Ending balance


$

39,341


$

23,123


$

22,597


$

21,895


$

23,010


 

Peoples Financial Services Corp.

Deposit and Liquidity Detail (Unaudited)

(In thousands)

















At period end


September 30, 2024


June 30, 2024


March 31, 2024


December 31, 2023


September 30, 2023

Interest-bearing deposits:
















Money market accounts


$

1,018,575


$

690,631


$

759,305


$

782,243


$

767,868

Interest-bearing demand and NOW accounts



1,439,382



715,890



754,673



796,426



825,066

Savings accounts



509,412



397,827



415,459



429,011



447,684

Time deposits less than $250



824,791



504,879



517,009



505,409



512,646

Time deposits $250 or more



128,139



134,761



134,084



121,265



120,748

Total interest-bearing deposits



3,920,299



2,443,988



2,580,530



2,634,354



2,674,012

Noninterest-bearing deposits



717,565



620,971



623,408



644,683



691,071

Total deposits


$

4,637,864


$

3,064,959


$

3,203,938


$

3,279,037


$

3,365,083

 












September 30, 2024

At period end



Amount


Percent of Total



Number of accounts


Average Balance

Deposit Detail:











Retail


$

1,788,213


38.6

%


100,690

$

18

Commercial



1,544,269


33.3



19,496


79

Municipal



913,822


19.7



2,578


354

Brokered



391,560


8.4



50


7,831

Total Deposits


$

4,637,864


100.0



122,814

$

38












Uninsured



1,566,710


33.8

%





Insured



3,071,154


66.2




















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 September 30, 2024



Total Available



Outstanding



for Future Liquidity

FHLB advances


$

1,446,345


$

477,617


$

968,728

Federal Reserve - Discount Window & Bank Term Funding Program



569,771



25,000



544,771

Correspondent bank lines of credit



18,000






18,000

Other sources of liquidity:










Brokered deposits



804,021



391,560



412,461

Unencumbered securities



298,519






298,519

Total sources of liquidity


$

3,136,656


$

894,177


$

2,242,479

 

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30


Average quarterly balances


2024


2024


2024


2023


2023


Assets:

















Loans, net:

















Taxable


$

3,790,138


$

2,637,164


$

2,632,554


$

2,632,865


$

2,627,700


Tax-exempt



278,496



222,655



225,293



227,800



226,628


Total loans, net



4,068,634



2,859,819



2,857,847



2,860,665



2,854,328


Investments:

















Taxable



611,032



443,146



446,996



450,533



454,727


Tax-exempt



89,532



86,418



86,864



87,297



87,731


Total investments



700,564



529,564



533,860



537,830



542,458


Interest-bearing balances with banks



10,820



8,763



9,025



10,432



6,893


Federal funds sold



92,171



12,672



80,955



176,983



134,583


Total interest-earning assets



4,872,189



3,410,818



3,481,687



3,585,910



3,538,262


Other assets



419,005



198,248



195,063



188,478



191,781


Total assets


$

5,291,194


$

3,609,066


$

3,676,750


$

3,774,388


$

3,730,043


Liabilities and stockholders' equity:

















Deposits:

















Interest-bearing


$

3,802,405


$

2,496,298


$

2,593,813


$

2,661,156


$

2,581,691


Noninterest-bearing



713,776



620,256



616,610



651,182



688,301


Total deposits



4,516,181



3,116,554



3,210,423



3,312,338



3,269,992


Short-term borrowings



43,895



45,383



19,687



24,103



21,759


Long-term debt



111,804



25,000



25,000



25,000



25,000


Subordinated debt



33,000



33,000



33,000



33,000



33,000


Other liabilities



96,177



48,630



47,688



52,760



47,788


Total liabilities



4,801,057



3,268,567



3,335,798



3,447,201



3,397,539


Stockholders' equity



482,137



340,499



340,952



327,187



332,504


Total liabilities and stockholders' equity


$

5,283,194


$

3,609,066


$

3,676,750


$

3,774,388


$

3,730,043


 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)




















Sept 30


June 30


Mar 31


Dec 31


Sept 30


Three months ended


2024


2024


2024


2023


2023


Core net income per share:

















Net (loss) income GAAP


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746


Adjustments:

















Add: ACL provision for FNCB acquired legacy loans



14,328














Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,885














Add: Acquisition related expenses



9,653



1,071



486



826



869


Less: Acquisition related expenses tax adjustment



1,270



122



59



115



144


Core net income


$

16,489


$

4,231


$

3,893


$

4,341


$

7,471


Average common shares outstanding - diluted



10,044,449



7,114,115



7,102,112



7,091,015



7,120,685


Core net income per share


$

1.64


$

0.59


$

0.55


$

0.61


$

1.05



















Tangible book value:

















Total stockholders' equity


$

475,051


$

340,807


$

339,992


$

340,422


$

324,390


Less: Goodwill



76,958



63,370



63,370



63,370



63,370


Less: Other intangible assets, net



35,907












19


Total tangible stockholders' equity


$

362,186


$

277,437


$

276,622


$

277,052


$

261,001


Common shares outstanding



9,994,648



7,057,258



7,057,258



7,040,852



7,040,852


Tangible book value per share


$

36.24


$

39.31


$

39.20


$

39.35


$

37.07



















Core return on average stockholders' equity:

















Net (loss) income GAAP


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746


Adjustments:

















Add: ACL provision for FNCB acquired legacy loans



14,328














Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,885














Add: Acquisition related expenses



9,653



1,071



486



826



869


Less: Acquisition related expenses tax adjustment



1,270



122



59



115



144


Core net income


$

16,489


$

4,231


$

3,893


$

4,341


$

7,471


Average stockholders' equity


$

482,137


$

340,499


$

340,952


$

327,187


$

332,504


Core return on average stockholders' equity



13.61

%


5.00

%


4.59

%


5.26

%


8.91

%


















Return on average tangible equity:

















Net (loss) income GAAP


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746


Average stockholders' equity


$

482,137


$

340,499


$

340,952


$

327,187


$

332,504


Less: average intangibles



113,032



63,370



63,370



63,380



63,404


Average tangible stockholders' equity


$

369,105


$

277,129


$

277,582


$

263,807


$

269,100


Return on average tangible stockholders' equity



(4.67)

%


4.76

%


5.02

%


5.46

%


9.95

%


















Core return on average tangible stockholders' equity:

















Net (loss) income GAAP


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746


Adjustments:

















Add: ACL provision for FNCB acquired legacy loans



14,328














Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,885














Add: Acquisition related expenses



9,653



1,071



486



826



869


Less: Acquisition related expenses tax adjustment



1,270



122



59



115



144


Core net income


$

16,489


$

4,231


$

3,893


$

4,341


$

7,471


Average stockholders' equity


$

482,137


$

340,499


$

340,952


$

327,187


$

332,504


Less: average intangibles



113,032



63,370



63,370



63,380



63,404


Average tangible stockholders' equity


$

369,105


$

277,129


$

277,582


$

263,807


$

269,100


Core return on average tangible stockholders' equity



17.77

%


6.14

%


5.64

%


6.53

%


11.01

%


















Core return on average assets:

















Net (loss) income GAAP


$

(4,337)


$

3,282


$

3,466


$

3,630


$

6,746


Adjustments:

















Add: ACL provision for FNCB acquired legacy loans



14,328














Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,885














Add: Acquisition related expenses



9,653



1,071



486



826



869


Less: Acquisition related expenses tax adjustment



1,270



122



59



115



144


Core net income


$

16,489


$

4,231


$

3,893


$

4,341


$

7,471


Average assets


$

5,291,194


$

3,609,066


$

3,676,750


$

3,774,388


$

3,730,043


Core return on average assets



1.24

%


0.47

%


0.43

%


0.46

%


0.79

%


















Core pre-provision net revenue (PPNR) per share:

















(Loss) income before taxes (GAAP)


$

(4,994)


$

3,703


$

3,944


$

4,217


$

8,081


Add: Acquisition related expenses



9,653



1,071



486



826



869


Add: ACL provision for FNCB acquired legacy loans



14,328














Add: Provision for (credit to) credit losses



130



596



708



1,669



(166)


Add: Provision for (credit to) credit losses on unfunded commitments



(785)



(197)



487



(2)



(12)


Core PPNR (non-GAAP)


$

18,332


$

5,173


$

5,625


$

6,710


$

8,772


Average common shares outstanding-diluted



10,044,449



7,114,115



7,102,112



7,091,015



7,120,685


Core PPNR per share (non-GAAP)


$

1.83


$

0.73


$

0.79


$

0.95


$

1.23


 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)











Sept 30


Sept 30


Nine months ended


2024


2023


Core net income per share:








Net income GAAP


$

2,411


$

23,750


Adjustments:








Add: ACL provision for FNCB acquired legacy loans



14,328





Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,307





Less: Gain on sale of available for sale securities






81


Add: Gain on sale of available for sale securities tax adjustment






17


Add: Acquisition related expenses



11,210



990


Less: Acquisition related expenses tax adjustment



1,023



159


Core net income


$

25,619


$

24,517


Average common shares outstanding - diluted



8,094,036



7,165,570


Core net income per share


$

3.17


$

3.42










Core return on average stockholders' equity:








Net income GAAP


$

2,411


$

23,750


Adjustments:








Add: ACL provision for FNCB acquired legacy loans



14,328





Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,307





Less: Gain on sale of available for sale securities






81


Add: Gain on sale of available for sale securities tax adjustment






17


Add: Acquisition related expenses



11,210



990


Less: Acquisition related expenses tax adjustment



1,023



159


Core net income


$

25,619


$

24,517


Average stockholders' equity



388,206



329,909


Core return on average stockholders' equity



13.27

%


14.99

%









Return on average tangible equity:








Net income GAAP


$

2,411


$

23,750


Average stockholders' equity



388,206



329,909


Less: average intangibles



79,924



63,694


Average tangible stockholders' equity


$

308,282


$

266,215


Return on average tangible stockholders' equity



1.57

%


17.99

%









Core return on average tangible stockholders' equity:








Net income GAAP


$

2,411


$

23,750


Adjustments:








Add: ACL provision for FNCB acquired legacy loans



14,328





Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,307





Less: Gain on sale of available for sale securities






81


Add: Gain on sale of available for sale securities tax adjustment






17


Add: Acquisition related expenses



11,210



990


Less: Acquisition related expenses tax adjustment



1,023



159


Core net income


$

25,619


$

24,517


Average stockholders' equity



388,206



329,909


Less: average intangibles



79,924



63,694


Average tangible stockholders' equity


$

308,282


$

266,215


Core return on average tangible stockholders' equity



16.71

%


18.57

%









Core return on average assets:








Net income GAAP


$

2,411


$

23,750


Adjustments:








Add: ACL provision for FNCB acquired legacy loans



14,328





Less: ACL provision for FNCB acquired legacy loans tax adjustment



1,307





Less: Gain on sale of available for sale securities






81


Add: Gain on sale of available for sale securities tax adjustment






17


Add: Acquisition related expenses



11,210



990


Less: Acquisition related expenses tax adjustment



1,023



159


Core net income


$

25,619


$

24,517


Average assets



4,191,695



3,652,490


Core return on average assets



1.23

%


1.35

%









Core pre-provision net revenue (PPNR) per share:








Income before taxes (GAAP)


$

2,653


$

28,284


Add: ACL provision for FNCB acquired legacy loans



14,328





Add: Acquisition related expenses



11,210



990


Add: Provision for (credit to) credit losses



1,434



(1,103)


Add: Provision for (credit to) credit losses on unfunded commitments



(495)



(197)


Core PPNR (non-GAAP)


$

29,130


$

27,974


Average common shares outstanding-diluted



8,094,036



7,165,570


Core PPNR per share (non-GAAP)


$

3.60


$

3.90


 

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 and nine months ended September 30, 2024 and 2023:








Three months ended September 30


2024


2023

Interest income (GAAP)


$

68,284


$

38,765

Adjustment to FTE



720



475

Interest income adjusted to FTE (non-GAAP)



69,004



39,240

Interest expense



29,040



17,488

Net interest income adjusted to FTE (non-GAAP)


$

39,964


$

21,752








Nine months ended September 30


2024


2023

Interest income (GAAP)


$

145,657


$

109,779

Adjustment to FTE



1,666



1,440

Interest income adjusted to FTE (non-GAAP)



147,323



111,219

Interest expense



68,179



43,294

Net interest income adjusted to FTE (non-GAAP)


$

79,144


$

67,925

 

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 and nine months ended
September 30, 2024 and 2023:









Three months ended September 30


2024


2023


Efficiency ratio (non-GAAP):








Noninterest expense (GAAP)


$

35,502


$

17,054


Less: Amortization of intangible assets expense



1,665



29


Less: Acquisition related expenses



9,653



869


Noninterest expense (non-GAAP)



24,184



16,156










Net interest income (GAAP)



39,244



21,277


Plus: Taxable equivalent adjustment



720



475


Noninterest income (GAAP)



5,722



3,692


Less: Net gains (losses) on equity securities



175





Less: Gain (loss) on sale of available for sale securities



1





Net interest income (FTE) plus noninterest income (non-GAAP)


$

45,510


$

25,444


Efficiency ratio (non-GAAP)



53.14

%


63.50

%









Nine months ended September 30


2024


2023


Efficiency ratio (non-GAAP):








Noninterest expense (GAAP)


$

71,728


$

50,222


Less: Amortization of intangible assets expense



1,665



86


Less: Acquisition related expenses



11,210



990


Noninterest expense  (non-GAAP)



58,853



49,146










Net interest income (GAAP)



77,478



66,485


Plus: Taxable equivalent adjustment



1,666



1,440


Noninterest income (GAAP)



12,665



10,918


Less: Net losses on equity securities



155



(17)


Less: Gains on sale of available for sale securities



1



81


Net interest income (FTE) plus noninterest income (non-GAAP)


$

91,653


$

78,779


Efficiency ratio (non-GAAP)



64.21

%


62.38

%

 

1 See reconciliation of non-GAAP financial measures on pg.19-21.

2 See reconciliation of non-GAAP financial measures on pg.19-21.

3 See reconciliation of non-GAAP financial measures on pg.19-21.

4 See reconciliation of non-GAAP financial measures on pg.19-21.

5 See reconciliation of non-GAAP financial measures on pg.19-21.

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SOURCE Peoples Financial Services Corp.