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PEOPLES FINANCIAL SERVICES CORP. Reports Unaudited Fourth Quarter 2022 Earnings


SCRANTON, Pa., Jan. 26, 2023 /PRNewswire/ — Peoples Financial Services Corp. (“Peoples”) (NASDAQ: PFIS), the bank holding company for Peoples Security Bank and Trust Company, today reported unaudited financial results at and for the three and twelve months ended December 31, 2022.


Peoples Financial Services Corp. Logo. (PRNewsFoto/Peoples Financial Services Corp.) (PRNewsFoto/PEOPLES FINANCIAL SERVICES CORP_)

Peoples reported net income of $9.1 million, or $1.27 per diluted share for the three months ended December 31, 2022, a 44.3% decrease when compared to $16.4 million, or $2.28 per share for the comparable period of 2021. The decrease in earnings for the three months ended December 31, 2022 was due primarily to an after-tax gain of $9.6 million from the sale of Visa Class B shares in the year ago fourth quarter period and an after-tax loss of $1.6 million on the sale of securities available for sale in the current period. The sale of lower yielding U.S. Treasury bonds and the immediate reinvestment of the proceeds into higher yielding, longer duration mortgage-backed securities is expected to improve net interest income over the near term.  Net interest income for the current period increased $2.8 million on strong loan growth resulting in higher interest income partially offset by increased costs of funds. The current period includes a credit to the provision for loans losses of $2.1 million based on application of our allowance for loan losses methodology that included a decline in historical loss factors and overall improvement to the credit quality of the loan portfolio based on current conditions.  The year ago period included a provision for loan losses of $1.8 million based on our allowance for loan losses methodology and then current conditions.  Noninterest expenses for the three months ended December 31, 2022 increased $2.5 million compared to the prior year’s period due to higher salaries, benefits, occupancy and equipment costs in part due to ongoing investment in the Company’s market expansion strategy and digital technology upgrade.

Core net income, a non-GAAP measure1, which we defined as excluding the gain on the sale of the Visa Class B shares and gains or losses from our investment securities portfolio, for the three months ended December 31, totaled $10.7 million and $6.8 million in 2022 and 2021, respectively. Core net income per share, a non-GAAP measure1, for the three months ended December 31, 2022 was $1.49, a 56.8% increase from $0.95 reported for the same period in 2021. The increase in core net income in the current three month period is due primarily to a $3.9 million decrease to the provision for loan losses, the product of a $2.1 million credit to the provision due to a release from the allowance for loan losses in the current period based on our allowance for loan losses methodology and changes to historical loss factors and improved credit quality of the loan portfolio based on current conditions, and a $1.8 million provision in the year ago period based on our loan losses methodology and then current conditions.  Net interest income for the current period increased $2.8 million on strong loan growth resulting in higher interest income partially offset by increased funding costs.  Noninterest expenses for the current period increased $2.5 million due to higher salaries, benefits, occupancy and equipment costs in part due to ongoing investment in the Company’s market expansion strategy and digital technology upgrade.

Net income for the year ended December 31, 2022, totaled $38.1 million or $5.28 per diluted share, a 12.5% decrease over $43.5 million or $6.02 per diluted share in the prior year. The decrease in earnings in the twelve months ended December 31, 2022 is a result of lower noninterest income due to the pre-tax $2.0 million loss on the sale of available for sale securities in the current period and the pre-tax gain of $12.2 million from the sale of Visa Class B shares in the prior year, combined with higher noninterest expenses.  Higher net interest income and a lower provision for loan losses partially offset the declines. Net interest income increased $11.1 million due to $447.5 million in non-PPP loan growth and a higher rate environment, offset in part by higher deposit and borrowing costs. The provision for loan losses decreased from the prior year by $2.2 million due to a lower reserve requirement based on our loan losses methodology that included a reduction in historical losses. Higher noninterest expenses were due to higher salaries and benefits of $3.8 million and higher occupancy and equipment costs of $3.7 million in part due to our continued investment in the market expansion strategy which included a full-year of operations in our newest markets, and our recent digital technology upgrade implemented during the second half of 2021.

1 See reconciliation of non-GAAP financial measures on p. 18 – 20

Core net income, a non-GAAP measure1, for the twelve months ended December 31, 2022 was $39.7 million or $5.50 per diluted share, a 17.3% increase when compared to $33.9 million or $4.69 per diluted share for the same period of 2021. The increase in core net income for the current period is due to an increase to net interest income of $11.1 million, a lower provision for loan losses of $2.2 million in the current period and higher noninterest income of $0.3 million in the current twelve month period when excluding the pre-tax gain of $12.2 million from the sale of Visa Class B shares in the year ago period and a pre-tax loss of $2.0 million on the sale of securities available for sale during the current period, partially offset by higher noninterest expense of $7.4 million in the twelve months ended December 31, 2022.

NOTABLES

  • Annual earnings of $38.1 million or $5.28 per diluted share. Core earnings of $39.7 million and $5.50 per share.
  • Tax-equivalent net interest income, a non-GAAP measure1, increased $11.5 million or 13.3% to $97.7 million for the twelve months ended December 31, 2022 compared to $86.1 million for the same period in 2021.
  • Dividends paid during 2022 totaled $1.58 per share representing a 5.3% increase from 2021.
  • Net loan growth for the twelve months ended December 31, 2022, excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, was $447.5 million or 19.8% annualized.
  • Deposit growth during the twelve months ended December 31, 2022, excluding brokered deposits, totaled $59.6 million.
  • Return on average assets (“ROAA”) was 1.04% and 1.12% for the three and twelve months ended December 31, 2022 compared to 1.97% and 1.41% for the comparable periods in 2021.
  • Core return on average assets, a non-GAAP measure1, was 1.22% and 1.16% for the three and twelve months ended December 31, 2022 compared to 0.82% and 1.10% for the prior year’s periods.
  • Return on average equity (“ROE”) was 11.79% and 11.87% for the three and twelve months ended December 31, 2022 compared to 19.34% and 13.34% for the comparable periods in 2021.
  • Core return on average equity, a non-GAAP measure1, was 13.81% and 12.35% for the three and twelve months ended December 31, 2022 compared to 8.03% and 10.40% for the prior year’s periods.
  • Return on average tangible equity, a non-GAAP measure1, was 14.87% and 15.01% for the three and twelve months ended December 31, 2022 compared to 23.87% and 16.60% for the comparable periods in 2021.
  • Core return on average tangible equity, a non-GAAP measure1, was 17.41% and 15.62% for the three and twelve months ended December 31, 2022 compared to 9.91% and 12.90% for the comparable periods in 2021.
  • Nonperforming assets as a percentage of total assets at December 31, 2022 improved to 0.12% as compared to 0.15% at December 31, 2021.
  • During the quarter, our Doylestown branch was relocated to a newly constructed full service facility to enhance our commitment to the Bucks County region.

 INCOME STATEMENT REVIEW

In March 2022, the Federal Open Market Committee (“FOMC”) began increasing the federal funds rate in an attempt to curb inflation.   Since then, there have been 7 rate increases, totaling 425 basis points and additional rate hikes are anticipated in 2023. These increases directly impact our core source of income, net interest income through yields on investments and loans and the cost of funding via deposits and borrowings.  Through December 31, 2022, we have realized higher rates on our existing adjustable and variable rate loans and new originations.  The benefit of higher asset yields however, has been partially mitigated by higher funding costs primarily during the three months ended December 31, 2022, as rate-sensitive depositors seek higher rates.  We anticipate that funding costs will continue to increase in the future as a result of the FOMC rate adjustments, local competition for deposits and the cost of alternative funding.

Calculated on a fully taxable equivalent basis, a non-GAAP measure1, our net interest margin for the three months ended December 31, 2022 was 2.97%, a decrease of 11 basis points when compared to the three months ended September 30, 2022, and an increase of 15 basis points when compared to 2.82% for the same three month period in 2021.  The decrease in net interest margin from the prior three month period was due to higher funding costs offsetting the higher yield and volume of earning assets. The tax-equivalent yield on interest-earning assets increased 25 basis points to 3.84% during the three months ended December 31, 2022 from 3.59% during the three months ended September 30, 2022, and increased 76 basis points when compared to 3.08% for the three months ended December 31, 2021. Our cost of funds, which represents our average rate paid on total interest-bearing liabilities, increased 48 basis points to 1.20% for the three months ended December 31, 2022 when compared to 0.72% during the three months ended September 30, 2022 and increased 83 basis points compared to 0.37% in the prior year period.  Each of these increases was due to the higher costs of deposits and short-term borrowings used to fund loan growth. 

Fourth Quarter 2022 Results – Comparison to Prior-Year Quarter

Tax-equivalent net interest income, a non-GAAP measure1, for the three months ended December 31, increased $2.9 million or 13.2% to $24.9 million in 2022 from $22.0 million in 2021. The increase in tax equivalent net interest income was due to higher tax-equivalent interest income of $8.1 million less elevated interest expense of $5.2 million

The higher interest income was the result of an increase in yield and average volume of earning assets.  Average earning assets were $224.5 million higher in the three month period ended December 31, 2022 when compared to the year ago period.  PPP loans averaged $22.4 million in the three-month period ended December 31, 2022 with interest and net fees totaling approximately $90 thousand compared to average balances of $73.2 million with interest and net fees totaling $808 thousand in the year ago period. The tax-equivalent yield on the loan portfolio was 4.35% and 3.78% for the three months ended December 31, 2022 and 2021. Excluding PPP loans, the tax-equivalent yield of the loan portfolio was 4.38% and 3.76% for the three months ended December 31, 2022 and 2021, respectively.   This increase was due to the higher rates on adjustable and floating rate loans, and new loan originations.  Loans, net averaged $2.7 billion for the three months ended December 31, 2022 and $2.3 billion for the comparable period in 2021. For the three months ended December 31, the tax-equivalent yield on total investments increased to 1.68% in 2022 from 1.65% in 2021. Average investments totaled $640.0 million in 2022 and $551.1 million in 2021.

The increased interest expense in the current three month period is due primarily to higher rates on public funds and non-maturity deposits driven by the higher interest rate environment.  The Company’s total cost of deposits increased during the three months ended December 31, 2022 compared to the year ago period by 59 basis points to 0.81%, and the cost of interest-bearing deposits increased to 1.08% from 0.29% in the previous year three month period. Short-term FHLB borrowings were utilized in the current period to fund loan growth; short term borrowings averaged $49.4 million in the current period and added $0.5 million of interest expense at an average cost of 4.20% compared to no short-term borrowings in the year ago period.

Average interest-bearing liabilities increased $172.8 million for the three months ended December 31, 2022, compared to the corresponding period last year due to an increase in non-maturity and public fund deposits and short-term borrowings.  Average noninterest-bearing deposits increased $33.5 million or 4.6% from the prior period and now represent 24.8% of total deposits.

For the three months ended December 31, 2022, $2.1 million was released from the allowance for loans losses compared to a provision for loan losses of $1.8 million in the year ago period.  The current period reversal was due to the roll-off of historical losses from the 3 year calculation period.  For the year ago period, the provision for loan losses increased due to $138.1 million in non-PPP loan growth.

Noninterest income for the three months ended December 31, 2022 was $1.2 million, a $14.1 million decrease from the prior year’s quarter due primarily to a pre-tax $2.0 million loss on the sale of securities available for sale in the fourth quarter 2022 and the $12.2 million pre-tax gain from the sale of Visa Class B shares in the prior year’s quarter.  Noninterest income, excluding the loss on the sale of securities available for sale and the gain from the sale of Visa Class B shares, increased $0.1 million to $3.2 million for the three months ended December 31, 2022. The increase was due to higher service charges, fees and commissions offset in part by reduced interest rate swap revenues which were negatively impacted by interest rate movements.

Noninterest expense increased $2.5 million or 16.7% to $17.2 million for the three months ended December 31, 2022, from $14.8 million for the three months ended December 31, 2021. Salaries and employee benefits increased $1.1 million or 13.6% due to annual merit increases and the addition of lending teams and credit support staff in our newest expansion markets of Piscataway, New Jersey and Pittsburgh, Pennsylvania that opened during the fourth quarter of 2021.  Occupancy and equipment expenses were higher by $1.5 million in the current period due to information technology investments related in part to mobile/digital banking solutions implemented during the second half of 2021.

The provision for income tax expense decreased $2.5 million for the three months ended December 31, 2022 compared to the year ago period due to higher taxable income in the prior year’s period due to the Visa Class B shares gain.  The effective tax rate for the quarter ended December 31, 2022 was 15.6% compared to 19.4% in the year ago period.

2022 vs. 2021 Full Year Results

Calculated on a fully taxable equivalent basis (“FTE”), a non-GAAP measure1, the net interest margin for the twelve months ended December 31, 2022 was 3.02%, an increase of 3 basis points over the prior year’s period of 2.99%.   Excluding the impact of PPP loan interest and net fees, the net interest margin increased to 3.00% in the current period from 2.90% in the year ago period.  Tax-equivalent net interest income, a non-GAAP measure1, for the twelve months ended December 31, increased $11.5 million or 13.4% to $97.7 million in 2022 from $86.1 million in 2021.  The increase in net interest income was driven by an increase in average earning assets of $355.8 million and a higher yield on those assets, partially offset by higher funding costs due to an increase of $264.2 million in average interest-bearing liabilities and higher interest rates.  The 2022 period included $1.8 million in SBA PPP interest and fees, a decrease of $5.3 million compared to the $7.1 million in the year ago period. Average loans increased $302.1 million and investments increased $250.1 million compared to December 31, 2021.  The yield on earning assets was 3.50% for 2022 compared to 3.32% in 2021.  The cost of interest bearing liabilities during the twelve month period rose to 0.68% from 0.46% a year ago. 

For the year ended December 31, 2022, $0.4 million was released from the allowance for loans losses compared to a provision for loan losses of $1.8 million in the year ago period.  The current period release was due to application of our allowance for loan losses methodology that included a decline in historical loss factors and overall improvement to the quality of the loan portfolio based on current conditions.  The provision in the year ago period was due to application of our allowance for loan losses methodology and evaluation of qualitative factors that existed at December 31, 2021.

Noninterest income for the twelve months ended December 31, 2022 was $11.8 million, a $13.8 million decrease from $25.6 million for the twelve months ended December 31, 2021. The prior year’s period includes a pre-tax $12.2 million gain on the sale of Visa Class B shares.  Excluding the current year’s loss on sale of securities and the prior year’s Visa Class B shares gain, noninterest income for the year ended December 31, 2022 increased $0.3 million.  During the year, service charges, fees and commissions increased $0.9 million due in part to the reversal of an accrual of a $0.3 million bank owned life insurance benefit in the year ago period, higher consumer and commercial deposit service charges and higher revenue related to debit card activity.  Mortgage banking income decreased $0.5 million during the twelve months ended December 31, 2022 compared to the prior year on lower sales volumes.

Noninterest expense for the twelve months ended December 31, 2022, was $63.0 million, an increase of $7.4 million from $55.6 million for the prior year’s period.  The increase was due primarily to $3.8 million in higher salaries and benefits expense due to annual merit increases, our investment into our newest expansion markets and lower deferred loan origination costs, which are recorded as a contra-salary expense.   Occupancy and equipment expenses were higher by $3.7 million in the current period due to information technology investments related to mobile/digital banking solutions implemented during the second half of 2021 and additional costs related to entrance into the Piscataway, New Jersey and Pittsburgh, Pennsylvania  markets.  Other expenses, which include professional, consulting and deposit insurance assessments, accounted for an increase of $0.4 million.

The provision for income taxes for the year ended December 31, 2022 decreased $2.4 million and the effective tax rate was 16.0% as compared to 18.7% in the prior period due to the Visa Class B shares gain in the prior year’s period.

 BALANCE SHEET REVIEW

At December 31, 2022, total assets, loans and deposits were $3.6 billion, $2.7 billion and $3.0 billion, respectively. Loan growth for the twelve months ended December 31, 2022, excluding PPP loans, was $447.5 million or 19.8% due to improved loan demand and organic growth in our newest markets.  Loan growth, excluding PPP loans, during the three months ended December 31, 2022 totaled $106.8 million.  Higher interest rates and economic uncertainty may result in lower loan demand and lower growth over the near-term when compared to the year-ended December 31, 2022.  Commercial real estate loans made up the majority of the growth with tax-exempt loans and residential real estate loans also showing increases.  During the twelve months ended December 31, 2022, the SBA forgave PPP loans totaling $46.6 million.  Gross PPP loans remaining at December 31, 2022 total $22.3 million.  Net deferred PPP fees remaining at December 31, 2022 totaled $0.2 million and are expected to be earned during 2023 as the remaining SBA PPP loans are forgiven or repaid. 

Total investments were $569.0 million at December 31, 2022, compared to $588.7 million at December 31, 2021.  The decrease to the investment portfolio resulted from the unrealized loss on the available for sale portfolio, maturities and pay-downs, offset in part by purchases.  At December 31, 2022, the available for sale portfolio had an unrealized loss of $66.3 million compared to an unrealized loss of $1.8 million at December 31, 2021, which was the result of the rapid increase in interest rates as the FOMC increased rates seven times from March through December 2022 totaling 425 basis points.  During the quarter, $45.5 million in low yielding, shorter term available for sale U.S. Treasury securities were sold at a loss of $2.0 million with the proceeds reinvested into higher yielding, longer term mortgage backed securities.  The loss is expected to be earned back in less than fifteen months based on the approximate 374 basis point increase in yield on the purchased bonds.

Loan growth during the period was funded by federal funds sold, deposit inflows and short-term borrowings.  During the year, the federal funds sold balance decreased from $242.4 million, total deposits increased $83.2 million and short-term borrowing increased to $114.9 million.  Noninterest-bearing deposits increased $35.0 million, or 4.8% and interest-bearing deposits increased $48.2 million, or 2.2% during the twelve months ended December 31, 2022.

Stockholders’ equity equaled $315.4 million or $44.06 per share at December 31, 2022, and $340.1 million or $47.44 per share at December 31, 2021. The decrease in stockholders’ equity from December 31, 2021 is primarily attributable to a decrease to accumulated other comprehensive loss (“AOCI”) resulting from an increase to the unrealized loss on available for sale securities and dividends paid to shareholders, partially offset by net income.  Tangible stockholders’ equity decreased to $35.19 per share at December 31, 2022, from $38.54 per share at December 31, 2021. Dividends declared for the twelve months ended December 31, 2022 amounted to $1.58 per share, a 5.3% increase from the 2021 period, representing a dividend payout ratio of 29.9%.  During the three months ended December 31, 2022, 4,732 shares were purchased and retired under the Company’s common stock repurchase plan.

ASSET QUALITY REVIEW

Asset quality metrics remained strong and continued to improve.  Nonperforming assets were $4.1 million or 0.15% of loans, net and foreclosed assets at December 31, 2022, compared to $5.0 million or 0.21% of loans, net and foreclosed assets at December 31, 2021.  As a percentage of total assets, nonperforming assets improved to 0.12% at December 31, 2022 compared to 0.15% at December 31, 2021.  The decrease in nonperforming assets was due to the sale of the Company’s foreclosed properties which totaled $0.5 million at December 31, 2021 and a $1.1 million decrease to nonaccrual and restructured loans due in part to the sale of a pool of commercial and residential nonaccrual loans with a book balance of $0.9 million, partially offset by a $0.7 million increase to loans past due ninety days and still accruing. At December 31, 2022 the Company had no foreclosed properties.

 The Company’s allowance for loan losses decreased $2.3 million to $27.5 million due to net charge-offs of $0.2 million combined with a release of the allowance for loan losses of $2.1 million during the quarter ended December 31, 2022 based on our allowance methodology.  For the twelve months ended December 31, 2022, the allowance decreased $0.9 million, the product of a credit to the provision for loan losses of $0.4 million and net charge-offs of $0.5 million.  The allowance for loan losses equaled $27.5 million or 1.01% of loans, net at December 31, 2022 compared to $28.4 million or 1.22% of loans, net, at December 31, 2021.  Excluding PPP loans which do not carry an allowance for loan losses due to a 100% government guarantee, the ratio equaled 1.01% at December 31, 2022 and 1.26% at December 31, 2021.  Loans charged-off, net of recoveries, for the twelve  months ended December 31, 2022, equaled $0.5 million or 0.02% of average loans, compared to $0.7 million or 0.03% of average loans for the comparable period last year.

About Peoples:

Peoples Financial Services Corp. is the parent company of Peoples Security Bank and Trust Company, a community bank serving Allegheny, Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Schuylkill, Susquehanna, and Wyoming Counties in Pennsylvania, Middlesex County in New Jersey and Broome County in New York through 28 offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. Peoples’ business philosophy includes offering direct access to senior management and other officers and providing friendly, informed and courteous service, local and timely decision making, flexible and reasonable operating procedures and consistently applied credit policies.

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

Co:

Peoples Financial Services Corp.

St:

Pennsylvania

In:

Fin

Safe Harbor Forward-Looking Statements:

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

Peoples cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement.  Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; the COVID-19 crisis and the governmental responses to the crisis; the impact on financial markets from geopolitical conflicts such as the military conflict between Russia and Ukraine; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; our ability to identify and address cyber-security risks and other economic, competitive, governmental, regulatory and technological factors affecting Peoples’ operations, pricing, products and services and other factors that may be described in Peoples’ Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission from time to time.

In addition to these risks, acquisitions and business combinations present risks other than those presented by the nature of the business acquired. Acquisitions and business combinations may be substantially more expensive to complete than originally anticipated, and the anticipated benefits may be significantly harder-or take longer-to achieve than expected.  As regulated financial institutions, our pursuit of attractive acquisition and business combination opportunities could be negatively impacted by regulatory delays or other regulatory issues.  Regulatory and/or legal issues related to the pre-acquisition operations of an acquired or combined business may cause reputational harm to Peoples following the acquisition or combination, and integration of the acquired or combined business with ours may result in additional future costs arising as a result of those issues.

The forward-looking statements are made as of the date of this release, and, except as may be required by applicable law or regulation, Peoples assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements.

 [TABULAR MATERIAL FOLLOWS]

 

Summary Data

Peoples Financial Services Corp.

Five Quarter Trend (Unaudited)

(In thousands, except share and per share data)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31




2022


2022


2022


2022


2021


Key performance data:

















Share and per share amounts:

















Net income


$

1.27


$

1.38


$

1.30


$

1.33


$

2.28


Core net income (1)


$

1.49


$

1.38


$

1.30


$

1.33


$

0.95


Cash dividends declared


$

0.40


$

0.40


$

0.39


$

0.39


$

0.38


Book value


$

44.06


$

42.14


$

43.50


$

44.64


$

47.44


Tangible book value (1)


$

35.19


$

33.26


$

34.62


$

35.76


$

38.54


Market value:

















High


$

57.60


$

56.09


$

56.99


$

52.99


$

53.06


Low


$

47.00


$

46.84


$

47.41


$

46.35


$

45.64


Closing


$

51.84


$

46.84


$

55.84


$

50.48


$

52.69


Market capitalization


$

371,072


$

335,503


$

400,410


$

362,398


$

377,754


Common shares outstanding



7,158,018



7,162,750



7,170,661



7,179,037



7,169,372


Selected ratios:

















Return on average stockholders’ equity



11.79

%


12.69

%


11.71

%


11.82

%


19.34

%

Core return on average stockholders’ equity (1)



13.81

%


12.69

%


11.71

%


11.82

%


8.03

%

Return on average tangible stockholders’ equity



14.87

%


15.94

%


14.62

%


14.65

%


23.87

%

Core return on average tangible stockholders’ equity (1)



17.41

%


15.94

%


14.62

%


14.65

%


9.91

%

Return on average assets



1.04

%


1.14

%


1.12

%


1.17

%


1.97

%

Core return on average assets (1)



1.22

%


1.14

%


1.12

%


1.17

%


0.82

%

Stockholders’ equity to total assets



8.87

%


8.58

%


9.12

%


9.56

%


10.09

%

Efficiency ratio (1)(2)



60.07

%


54.95

%


54.89

%


53.57

%


58.26

%

Nonperforming assets to loans, net, and foreclosed assets



0.15

%


0.16

%


0.18

%


0.20

%


0.21

%

Nonperforming assets to total assets



0.12

%


0.12

%


0.13

%


0.14

%


0.15

%

Net charge-offs to average loans, net



0.03

%


0.00

%


0.00

%


0.05

%


0.01

%

Allowance for loan losses to loans, net



1.01

%


1.14

%


1.14

%


1.18

%


1.22

%

Interest-bearing assets yield (FTE) (3)



3.84

%


3.59

%


3.34

%


3.22

%


3.08

%

Cost of funds



1.20

%


0.72

%


0.39

%


0.35

%


0.37

%

Net interest spread (FTE) (3)



2.64

%


2.87

%


2.95

%


2.87

%


2.71

%

Net interest margin (FTE) (3)



2.97

%


3.08

%


3.06

%


2.97

%


2.82

%



(1)

See Reconciliation of Non-GAAP financial measures.

(2)

Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gains (losses) on investment securities available for sale and Visa Class B shares.

(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)











Dec 31


Dec 31


Twelve months ended


2022


2021


Interest income:








Interest and fees on loans:








Taxable


$

95,505


$

82,493


Tax-exempt



5,084



3,957


Interest and dividends on investment securities:








Taxable



8,234



5,464


Tax-exempt



2,066



1,731


Dividends



2



74


Interest on interest-bearing deposits in other banks



101



8


Interest on federal funds sold



342



330


Total interest income



111,334



94,057


Interest expense:








Interest on deposits



12,632



7,310


Interest on short-term borrowings



1,103



78


Interest on long-term debt



76



260


Interest on subordinated debt



1,774



1,774


Total interest expense



15,585



9,422


Net interest income



95,749



84,635


(Credit) provision for loan losses



(449)



1,750


Net interest income after (credit) provision for loan losses



96,198



82,885


Noninterest income:








Service charges, fees, commissions and other



7,076



6,169


Merchant services income



964



879


Commissions and fees on fiduciary activities



2,229



2,273


Wealth management income



1,430



1,537


Mortgage banking income



511



975


Increase in cash surrender value of life insurance



1,020



889


Interest rate swap revenue



622



759


Net (losses) gains on equity investment securities



(31)



2


Net losses on sale of investment securities available for sale



(1,976)





Net gain on sale of Visa Class B shares






12,153


Total noninterest income



11,845



25,636


Noninterest expense:








Salaries and employee benefits expense



33,553



29,736


Net occupancy and equipment expense



16,578



12,848


Amortization of intangible assets



363



491


Net gain on sale of other real estate owned



(478)



(210)


Other expenses



12,661



12,139


Total noninterest expense



62,677



55,004


Income before income taxes



45,366



53,517


Provision for income tax expense



7,276



9,998


Net income


$

38,090


$

43,519


Other comprehensive loss:








Unrealized loss on investment securities available for sale


$

(66,435)


$

(11,487)


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



1,976





Change in pension liability



370



2,109


Change in derivative fair value



(728)



(322)


Income tax benefit related to other comprehensive loss



(13,995)



(2,037)


Other comprehensive loss, net of income tax benefit



(50,822)



(7,663)


Comprehensive (loss) income


$

(12,732)


$

35,856


Share and per share amounts:








Net income – basic


$

5.31


$

6.05


Net income – diluted



5.28



6.02


Cash dividends declared



1.58



1.50


Average common shares outstanding – basic



7,168,092



7,196,160


Average common shares outstanding – diluted



7,211,643



7,235,303


 

Peoples Financial Services Corp.

Consolidated Statements of Income (Unaudited)

(In thousands, except per share data)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


Three months ended


2022


2022


2022


2022


2021


Interest income:

















Interest and fees on loans:

















Taxable


$

27,515


$

25,128


$

22,009


$

20,853


$

20,288


Tax-exempt



1,367



1,338



1,218



1,161



1,098


Interest and dividends on investment securities:

















Taxable



2,058



2,096



2,108



1,972



1,660


Tax-exempt



520



521



515



510



498


Dividends









2






2


Interest on interest-bearing deposits in other banks



40



41



18



2



2


Interest on federal funds sold



141



106



22



73



102


Total interest income



31,641



29,230



25,892



24,571



23,650


Interest expense:

















Interest on deposits



6,251



3,316



1,597



1,468



1,579


Interest on short-term borrowings



524



457



122








Interest on long-term debt



9



16



23



28



35


Interest on subordinated debt



444



443



443



444



444


Total interest expense



7,228



4,232



2,185



1,940



2,058


Net interest income



24,413



24,998



23,707



22,631



21,592


(Credit) provision for loan losses



(2,149)



450



950



300



1,750


Net interest income after (credit) provision for loan losses



26,562



24,548



22,757



22,331



19,842


Noninterest income:

















Service charges, fees, commissions and other



1,909



1,714



1,761



1,692



1,693


Merchant services income



131



157



562



114



120


Commissions and fees on fiduciary activities



532



591



551



555



548


Wealth management income



366



339



374



351



330


Mortgage banking income



104



135



128



144



211


Increase in cash surrender value of life insurance



289



269



244



218



220


Interest rate swap revenue



(135)



130



284



343



15


Net gain (loss) on investment securities



6



(18)



(23)



4



(7)


Net losses on sale of investment securities available for sale



(1,976)














Net gain on sale of Visa Class B shares















12,153


Total noninterest income



1,226



3,317



3,881



3,421



15,283


Noninterest expense:

















Salaries and employee benefits expense



9,188



8,474



7,851



8,040



8,087


Net occupancy and equipment expense



4,905



3,898



3,950



3,825



3,384


Amortization of intangible assets



74



96



97



96



116


Net gains on sale of other real estate









(20)



(458)



(15)


Other expenses



2,793



3,467



3,615



2,786



3,198


Total noninterest expense



16,960



15,935



15,493



14,289



14,770


Income before income taxes



10,828



11,930



11,145



11,463



20,355


Income tax expense



1,689



1,962



1,792



1,833



3,941


Net income


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Other comprehensive income (loss):

















Unrealized gain (loss) on investment securities available for sale


$

6,356


$

(21,510)


$

(18,669)


$

(32,612)


$

(3,078)


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



1,976














Change in benefit plan liabilities



370












2,109


Change in derivative fair value



12



(46)



(201)



(493)



(300)


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



1,447



(4,527)



(3,963)



(6,952)



(266)


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



7,267



(17,029)



(14,907)



(26,153)



(1,003)


Comprehensive income (loss)


$

16,406


$

(7,061)


$

(5,554)


$

(16,523)


$

15,411


Share and per share amounts:

















Net income – basic


$

1.28


$

1.39


$

1.30


$

1.34


$

2.29


Net income – diluted



1.27



1.38



1.30



1.33



2.28


Cash dividends declared



0.40



0.40



0.39



0.39



0.38


Average common shares outstanding – basic



7,158,329



7,169,809



7,172,181



7,172,455



7,172,501


Average common shares outstanding – diluted



7,201,785



7,213,147



7,215,890



7,216,421



7,207,565


 

Peoples Financial Services Corp.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)





















Three Months Ended




December 31, 2022


December 31, 2021




Average


Interest Income/


Yield/


Average


Interest Income/


Yield/




Balance 


Expense


Rate 


Balance 


Expense


Rate 


Assets:


















Earning assets:


















Loans:


















Taxable


$

2,441,358


$

27,515


4.47

%

$

2,088,935


$

20,288


3.85

%

Tax-exempt



223,293



1,730


3.08



185,471



1,390


2.97


Total loans



2,664,651



29,245


4.35



2,274,406



21,678


3.78


Investments:


















Taxable



528,826



2,058


1.54



446,096



1,662


1.48


Tax-exempt



111,206



658


2.35



105,044



630


2.38


Total investments



640,032



2,716


1.68



551,140



2,292


1.65


Interest-bearing deposits



4,649



40


3.41



9,739



2


0.08


Federal funds sold



14,477



141


3.86



264,068



102


0.15


Total earning assets



3,323,809



32,142


3.84

%


3,099,353



24,074


3.08

%

Less: allowance for loan losses



29,754








27,049







Other assets



198,907








229,172







Total assets


$

3,492,962


$

32,142




$

3,301,476


$

24,074




Liabilities and Stockholders’ Equity:


















Interest-bearing liabilities:


















Money market accounts


$

682,721


$

2,908


1.69

%

$

580,756


$

409


0.28

%

NOW accounts



794,032



2,244


1.12



816,345



543


0.26


Savings accounts



530,829



180


0.13



486,614



93


0.08


Time deposits less than $100



125,315



333


1.05



128,791



316


0.97


Time deposits $100 or more



169,077



586


1.38



163,923



218


0.53


Total interest-bearing deposits



2,301,974



6,251


1.08



2,176,429



1,579


0.29


Short-term borrowings



49,444



524


4.20






0.00


Long-term debt



814



9


4.87



2,959



35


4.69


Subordinated debt



33,000



444


5.33



33,000



444


5.34


Total borrowings



83,258



977


4.66



35,959



479


5.28


Total interest-bearing liabilities



2,385,232



7,228


1.20



2,212,388



2,058


0.37


Noninterest-bearing deposits



758,889








725,414







Other liabilities



41,436








26,924







Stockholders’ equity



307,405








336,750







Total liabilities and stockholders’ equity


$

3,492,962



7,228




$

3,301,476



2,058




Net interest income/spread





$

24,914


2.64

%




$

22,016


2.71

%

Net interest margin








2.97

%







2.82

%

Tax-equivalent adjustments:


















Loans





$

363







$

292




Investments






138








132




Total adjustments





$

501







$

424




 

Peoples Financial Services Corp.

Net Interest Margin (Unaudited)

(In thousands, fully taxable equivalent basis)





















For the Twelve Months Ended




December 31, 2022


December 31, 2021




Average


Interest Income/


Yield/


Average


Interest Income/


Yield/




Balance 


Expense


Rate 


Balance 


Expense


Rate 


Assets:


















Earning assets:


















Loans:


















Taxable


$

2,306,455


$

95,505


4.14

%

$

2,063,168


$

82,493


4.00

%

Tax-exempt



216,195



6,436


2.98



157,409



5,009


3.18


Total loans



2,522,650



101,941


4.04



2,220,577



87,502


3.94


Investments:


















Taxable



537,566



8,236


1.53



313,319



5,538


1.77


Tax-exempt



111,083



2,615


2.35



85,200



2,191


2.57


Total investments



648,649



10,851


1.67



398,519



7,729


1.94


Interest-bearing deposits



8,536



101


1.17



11,123



8


0.07


Federal funds sold



53,056



342


0.65



246,891



330


0.13


Total earning assets



3,232,891



113,235


3.50

%


2,877,110



95,569


3.32

%

Less: allowance for loan losses



29,298








27,209







Other assets



210,392








227,293







Total assets


$

3,413,985


$

113,235




$

3,077,194


$

95,569




Liabilities and Stockholders’ Equity:


















Interest-bearing liabilities:


















Money market accounts


$

624,528


$

4,967


0.80

%

$

549,169


$

1,960


0.36

%

NOW accounts



791,653



4,493


0.57



666,885



2,202


0.33


Savings accounts



520,770



496


0.10



468,851



382


0.08


Time deposits less than $100



127,801



1,299


1.02



128,313



1,416


1.10


Time deposits $100 or more



162,998



1,377


0.84



172,711



1,350


0.78


Total interest-bearing deposits



2,227,750



12,632


0.57



1,985,929



7,310


0.37


Short-term borrowings



42,680



1,103


2.58



13,973



78


0.56


Long-term debt



1,634



76


4.65



7,948



260


3.27


Subordinated debt



33,000



1,774


5.38



33,000



1,774


5.38


Total borrowings



77,314



2,953


3.82



54,921



2,112


3.85


Total interest-bearing liabilities



2,305,064



15,585


0.68



2,040,850



9,422


0.46


Noninterest-bearing deposits



753,399








684,527







Other liabilities



34,517








25,704







Stockholders’ equity



321,005








326,113







Total liabilities and stockholders’ equity


$

3,413,985



15,585




$

3,077,194



9,422




Net interest income/spread





$

97,650


2.82

%




$

86,147


2.86

%

Net interest margin








3.02

%







2.99

%

Tax-equivalent adjustments:


















Loans





$

1,352







$

1,052




Investments






549








460




Total adjustments





$

1,901







$

1,512




 

Peoples Financial Services Corp.

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

(In thousands, fully taxable equivalent basis)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


Three months ended


2022


2022


2022


2022


2021


Net interest income:

















Interest income:

















Loans, net:

















Taxable


$

27,515


$

25,128


$

22,009


$

20,853


$

20,288


Tax-exempt



1,730



1,694



1,542



1,470



1,390


Total loans, net



29,245



26,822



23,551



22,323



21,678


Investments:

















Taxable



2,058



2,096



2,110



1,972



1,662


Tax-exempt



658



659



652



646



630


Total investments



2,716



2,755



2,762



2,618



2,292


Interest on interest-bearing balances in other banks



40



41



18



2



2


Federal funds sold



141



106



22



73



102


Total interest income



32,142



29,724



26,353



25,016



24,074


Interest expense:

















Deposits



6,251



3,316



1,597



1,468



1,579


Short-term borrowings



524



457



122








Long-term debt



9



16



23



28



35


Subordinated debt



444



443



443



444



444


Total interest expense



7,228



4,232



2,185



1,940



2,058


Net interest income


$

24,914


$

25,492


$

24,168


$

23,076


$

22,016


Loans, net:

















Taxable



4.47

%


4.19

%


3.92

%


3.94

%


3.85

%

Tax-exempt



3.08

%


2.98

%


2.92

%


2.93

%


2.97

%

Total loans, net



4.35

%


4.09

%


3.83

%


3.85

%


3.78

%

Investments:

















Taxable



1.54

%


1.53

%


1.53

%


1.53

%


1.48

%

Tax-exempt



2.35

%


2.34

%


2.35

%


2.37

%


2.38

%

Total investments



1.68

%


1.67

%


1.67

%


1.68

%


1.65

%

Interest-bearing balances with banks



3.41

%


1.77

%


0.68

%


0.14

%


0.09

%

Federal funds sold



3.86

%


3.08

%


0.37

%


0.18

%


0.15

%

Total interest-earning assets



3.84

%


3.59

%


3.34

%


3.22

%


3.08

%

Interest expense:

















Deposits



1.08

%


0.59

%


0.30

%


0.27

%


0.29

%

Short-term borrowings



4.20

%


2.30

%


1.40

%







Long-term debt



4.87

%


4.64

%


4.85

%


4.59

%


4.68

%

Subordinated debt



5.33

%


5.33

%


5.38

%


5.38

%


5.38

%

Total interest-bearing liabilities



1.20

%


0.72

%


0.39

%


0.35

%


0.37

%

Net interest spread



2.64

%


2.87

%


2.95

%


2.87

%


2.71

%

Net interest margin



2.97

%


3.08

%


3.06

%


2.97

%


2.82

%

 

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


At period end


2022


2022


2022


2022


2021


Assets:

















Cash and due from banks


$

37,675


$

35,000


$

39,693


$

35,863


$

30,415


Interest-bearing balances in other banks



193



8,410



8,040



4,440



7,093


Federal funds sold






69,600






101,200



242,425


Investment securities:

















Available for sale



477,703



477,590



513,911



535,482



517,321


Equity investments carried at fair value



110



103



121



144



140


Held to maturity



91,179



92,771



94,446



95,829



71,213


Loans held for sale






653



681



161



408


Loans



2,730,116



2,623,706



2,565,579



2,397,681



2,329,173


Less: allowance for loan losses



27,472



29,822



29,374



28,407



28,383


Net loans



2,702,644



2,593,884



2,536,205



2,369,274



2,300,790


Goodwill



63,370



63,370



63,370



63,370



63,370


Premises and equipment, net



55,667



54,394



53,094



51,977



51,502


Bank owned life insurance



48,344



48,235



47,968



43,828



42,754


Deferred tax assets



18,739



20,796



16,269



12,306



5,354


Accrued interest receivable



11,715



10,082



9,303



9,221



8,528


Other intangible assets, net



105



179



276



372



468


Other assets



46,071



41,739



38,162



29,334



27,702


Total assets


$

3,553,515


$

3,516,806


$

3,421,539


$

3,352,801


$

3,369,483


Liabilities:

















Deposits:

















Noninterest-bearing


$

772,765


$

769,935


$

747,558


$

759,986


$

737,756


Interest-bearing



2,273,833



2,354,205



2,163,725



2,204,878



2,225,641


Total deposits



3,046,598



3,124,140



2,911,283



2,964,864



2,963,397


Short-term borrowings



114,930



14,700



129,170








Long-term debt



555



1,104



1,646



2,182



2,711


Subordinated debt



33,000



33,000



33,000



33,000



33,000


Accrued interest payable



903



1,129



1,269



844



408


Other liabilities



42,179



40,923



33,274



31,450



29,841


Total liabilities



3,238,165



3,214,996



3,109,642



3,032,340



3,029,357


Stockholders’ equity:

















Common stock



14,321



14,330



14,346



14,352



14,341


Capital surplus



126,850



126,845



126,986



127,192



127,549


Retained earnings



230,515



224,238



217,139



210,584



203,750


Accumulated other comprehensive loss



(56,336)



(63,603)



(46,574)



(31,667)



(5,514)


Total stockholders’ equity



315,350



301,810



311,897



320,461



340,126


Total liabilities and stockholders’ equity


$

3,553,515


$

3,516,806


$

3,421,539


$

3,352,801


$

3,369,483


 

Peoples Financial Services Corp.

Loan and Deposit Account Detail (Unaudited)

(In thousands)

















At the period end


December 31, 2022


September 30, 2022


June 30, 2022


March 31, 2022


December 31, 2021

Commercial
















Taxable


$

377,215


$

371,164


$

371,153


$

370,574


$

424,455

Non-taxable



222,043



224,764



225,656



210,184



188,672

Total



599,258



595,928



596,809



580,758



613,127

Real estate
















Commercial real estate



1,709,827



1,620,116



1,569,658



1,436,196



1,343,539

Residential



330,728



326,223



317,672



306,068



297,624

Total



2,040,555



1,946,339



1,887,330



1,742,264



1,641,163

Consumer
















Indirect Auto



76,491



70,006



69,161



64,870



65,791

Consumer Other



13,812



11,433



12,279



9,789



9,092

Total



90,303



81,439



81,440



74,659



74,883

Total


$

2,730,116


$

2,623,706


$

2,565,579


$

2,397,681


$

2,329,173

































At the period end


December 31, 2022


September 30, 2022


June 30, 2022


March 31, 2022


December 31, 2021

Interest-bearing deposits:
















Money market accounts


$

685,323


$

706,947


$

592,989


$

605,686


$

588,245

NOW accounts



772,712



813,743



752,397



797,333



851,086

Savings accounts



523,931



530,124



518,146



515,169



491,796

Time deposits less than $250



199,136



224,517



219,690



200,345



203,719

Time deposits $250 or more



92,731



78,874



80,503



86,345



90,795

Total interest-bearing deposits



2,273,833



2,354,205



2,163,725



2,204,878



2,225,641

Noninterest-bearing deposits



772,765



769,935



747,558



759,986



737,756

Total deposits


$

3,046,598


$

3,124,140


$

2,911,283


$

2,964,864


$

2,963,397

 

Peoples Financial Services Corp.

Consolidated Balance Sheets (Unaudited)

(In thousands)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


Average quarterly balances


2022


2022


2022


2022


2021


Assets:

















Loans, net:

















Taxable


$

2,441,358


$

2,377,803


$

2,254,405


$

2,148,251


$

2,088,935


Tax-exempt



223,293



225,637



211,885



203,645



185,471


Total loans, net



2,664,651



2,603,440



2,466,290



2,351,896



2,274,406


Investments:

















Taxable



528,826



544,782



553,078



523,301



446,096


Tax-exempt



111,206



111,578



111,138



110,394



105,044


Total investments



640,032



656,360



664,216



633,695



551,140


Interest-bearing balances with banks



4,649



9,180



10,694



5,888



9,739


Federal funds sold



14,477



13,665



23,920



162,218



264,068


Total interest-earning assets



3,323,809



3,282,645



3,165,120



3,153,697



3,099,353


Other assets



169,153



180,861



181,900



187,864



202,123


Total assets


$

3,492,962


$

3,463,506


$

3,347,020


$

3,341,561


$

3,301,476


Liabilities and stockholders’ equity:

















Deposits:

















Interest-bearing


$

2,301,974


$

2,228,829


$

2,167,569


$

2,211,629


$

2,176,429


Noninterest-bearing



758,889



770,833



756,225



734,348



725,414


Total deposits



3,060,863



2,999,662



2,923,794



2,945,977



2,901,843


Short-term borrowings



49,444



78,922



34,953








Long-term debt



814



1,369



1,901



2,474



2,959


Subordinated debt



33,000



33,000



33,000



33,000



33,000


Other liabilities



41,436



38,840



33,080



29,816



26,924


Total liabilities



3,185,557



3,151,793



3,026,728



3,011,267



2,964,726


Stockholders’ equity



307,405



311,713



320,292



330,294



336,750


Total liabilities and stockholders’ equity


$

3,492,962


$

3,463,506


$

3,347,020


$

3,341,561


$

3,301,476


 

Peoples Financial Services Corp.

Asset Quality Data (Unaudited)

(In thousands)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


At quarter end


2022


2022


2022


2022


2021


Nonperforming assets:

















Nonaccrual/restructured loans


$

3,386


$

3,938


$

4,387


$

4,573


$

4,461


Accruing loans past due 90 days or more



748



280



190



103



13


Foreclosed assets















487


Total nonperforming assets


$

4,134


$

4,218


$

4,577


$

4,676


$

4,961



















Three months ended

















Allowance for loan losses:

















Beginning balance


$

29,822


$

29,374


$

28,407


$

28,383


$

26,693


Charge-offs



233



101



98



355



105


Recoveries



32



99



115



79



45


Provision for loan losses



(2,149)



450



950



300



1,750


Ending balance


$

27,472


$

29,822


$

29,374


$

28,407


$

28,383


 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)




















Dec 31


Sept 30


June 30


Mar 31


Dec 31


Three months ended


2022


2022


2022


2022


2021


Core net income per share:

















Net income GAAP


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Adjustments:

















Less: Gain on sale of Visa Class B shares















12,153


Less: Loss on sale of available for sale securities



(1,976)














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



(415)














Add: Gain on sale of Visa Class B shares tax adjustment















2,552


Core net income


$

10,700


$

9,968


$

9,353


$

9,630


$

6,813


Average common shares outstanding – diluted



7,201,785



7,213,147



7,215,365



7,216,421



7,207,565


Core net income per share


$

1.49


$

1.38


$

1.30


$

1.33


$

0.95



















Tangible book value:

















Total stockholders’ equity


$

315,350


$

301,810


$

311,897


$

320,461


$

340,126


Less: Goodwill



63,370



63,370



63,370



63,370



63,370


Less: Other intangible assets, net



105



179



276



372



468


Total tangible stockholders’ equity


$

251,875


$

238,261


$

248,251


$

256,719


$

276,289


Common shares outstanding



7,158,018



7,162,750



7,170,661



7,179,037



7,169,372


Tangible book value per share


$

35.19


$

33.26


$

34.62


$

35.76


$

38.54



















Core return on average stockholders’ equity:

















Net income GAAP


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Adjustments:

















Less: Gain on sale of Visa Class B shares















12,153


Less: Loss on sale of available for sale securities



(1,976)














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



(415)














Add: Gain on sale of Visa Class B shares tax adjustment















2,552


Core net income


$

10,700


$

9,968


$

9,353


$

9,630


$

6,813


Average stockholders’ equity


$

307,405


$

311,713


$

320,292


$

330,294


$

336,750


Core return on average stockholders’ equity



13.81

%


12.69

%


11.71

%


11.82

%


8.03

%


















Return on average tangible equity:

















Net income GAAP


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Average stockholders’ equity


$

307,405


$

311,713


$

320,292


$

330,294


$

336,750


Less: average intangibles



63,512



63,549



63,694



63,790



63,896


Average tangible stockholders’ equity


$

243,893


$

248,164


$

256,598


$

266,504


$

272,854


Return on average tangible stockholders’ equity



14.87

%


15.94

%


14.62

%


14.65

%


23.87

%


















Core return on average tangible stockholders’ equity:

















Net income GAAP


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Adjustments:

















Less: Gain on sale of Visa Class B shares















12,153


Less: Loss on sale of available for sale securities



(1,976)














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



(415)














Add: Gain on sale of Visa Class B shares tax adjustment















2,552


Core net income


$

10,700


$

9,968


$

9,353


$

9,630


$

6,813


Average stockholders’ equity


$

307,405


$

311,713


$

320,292


$

330,294


$

336,750


Less: average intangibles



63,512



63,549



63,694



63,790



63,896


Average tangible stockholders’ equity


$

243,893


$

248,164


$

256,598


$

266,504


$

272,854


Core return on average tangible stockholders’ equity



17.41

%


15.94

%


14.62

%


14.65

%


9.91

%


















Core return on average assets:

















Net income GAAP


$

9,139


$

9,968


$

9,353


$

9,630


$

16,414


Adjustments:

















Less: Gain on sale of Visa Class B shares















12,153


Less: Loss on sale of available for sale securities



(1,976)














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



(415)














Add: Gain on sale of Visa Class B shares tax adjustment















2,552


Core net income


$

10,700


$

9,968


$

9,353


$

9,630


$

6,813


Average assets


$

3,492,962


$

3,463,506


$

3,347,020


$

3,341,561


$

3,301,476


Core return on average assets



1.22

%


1.14

%


1.12

%


1.17

%


0.82

%

 

Peoples Financial Services Corp.

Reconciliation of Non-GAAP Financial Measures (Unaudited)

(In thousands, except share and per share data)











Dec 31


Dec 31


Year ended


2022


2021


Core net income per share:








Net income (GAAP)


$

38,090


$

43,519


Adjustments:








Less: Gain on sale of Visa Class B shares






12,153


Less: Loss on sale of available for sale securities



(1,976)





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



(415)





Add: Gain on sale of Visa Class B shares tax adjustment






2,552


Core net income


$

39,651


$

33,918


Average common shares outstanding – basic



7,168,092



7,196,160


Average common shares outstanding – diluted



7,211,643



7,235,303


Core net income per share – basic


$

5.53


$

4.71


Core net income per share – diluted


$

5.50


$

4.69


 

The following tables reconcile the non-GAAP financial measures of FTE net interest income for the three and twelve months ended December 31, 2022 and 2021:









Three months ended December 31


2022


2021


Interest income (GAAP)


$

31,641


$

23,650


Adjustment to FTE



501



424


Interest income adjusted to FTE (non-GAAP)



32,142



24,074


Interest expense



7,228



2,058


Net interest income adjusted to FTE (non-GAAP)


$

24,914


$

22,016










Twelve months ended December 31


2022


2021


Interest income (GAAP)


$

111,334


$

94,057


Adjustment to FTE



1,901



1,512


Interest income adjusted to FTE (non-GAAP)



113,235



95,569


Interest expense



15,585



9,422


Net interest income adjusted to FTE (non-GAAP)


$

97,650


$

86,147


 

The efficiency ratio is noninterest expenses, less amortization of intangible assets, as a percentage of FTE net interest income plus noninterest income. The following tables reconcile the non-GAAP financial measures of the efficiency ratio to GAAP for the three and twelve months ended December 31, 2022 and 2021:









Three months ended December 31


2022


2021


Efficiency ratio (non-GAAP):








Noninterest expense (GAAP)


$

16,960


$

14,770


Less: amortization of intangible assets expense



74



116


Noninterest expense adjusted for amortization of assets expense (non-GAAP)



16,886



14,654










Net interest income (GAAP)



24,413



21,592


Plus: taxable equivalent adjustment



501



424


Noninterest income (GAAP)



1,226



15,283


Less: Net gains (losses) on equity securities



6



(7)


Less: Loss on sale of available for sale securities



(1,976)





Less: Gain on sale of Visa Class B shares






12,153


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


$

28,110


$

25,153










Efficiency ratio (non-GAAP)



60.07

%


58.26

%









Twelve months ended December 31


2022


2021


Efficiency ratio (non-GAAP):








Noninterest expense (GAAP)


$

62,677


$

55,004


Less: Amortization of intangible assets expense



363



491


Noninterest expense adjusted for amortization of assets expense (non-GAAP)



62,314



54,513










Net interest income (GAAP)



95,749



84,635


Plus: Taxable equivalent adjustment



1,901



1,512


Noninterest income (GAAP)



11,845



25,636


Less: Net (losses) gains on equity securities



(31)



2


Less: Loss on sale of available for sale securities



(1,976)





Less: Gain on sale of Visa Class B shares






12,153


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


$

111,502


$

99,628










Efficiency ratio (non-GAAP)



55.89

%


54.72

%

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/peoples-financial-services-corp-reports-unaudited-fourth-quarter-2022-earnings-301732024.html

SOURCE Peoples Financial Services Corp.



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