PEOPLES FINANCIAL SERVICES CORP. Reports Second Quarter 2017 Earnings
SCRANTON, Pa.— 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 six months endedJune 30, 2017. Peoples reported net income of$5.7 million, or$0.76per share for the second quarter of 2017, compared to$4.9 million, or$0.66per share for the comparable period of 2016.
Core net income, which we have defined to exclude gains on the sale of investment securities available-for-sale, as well as the gain on the sale of our merchant services portfolio, net of tax, for the three months endedJune 30, 2017was$4.4 million, a$253 thousanddecrease from$4.6 millionfor the same period in 2016. The results for the three months endedJune 30, 2017include a gain on the sale of our merchant services portfolio of$2.3 millionwhile the results for the three months endedJune 30, 2016include gains on the sale of investment securities of$381 thousand. Core net income per share for the three months endedJune 30, 2017was$0.59, compared to$0.62for the same period in 2016.
Net income for the six months endedJune 30, 2017, totaled$10.5 millionor$1.41per share compared to$9.7 millionor$1.32per share for the same period last year.
Core net income for the six months endedJune 30, 2017was$9.2 million, a decrease of 1.9% from$9.3 millionfor the same period in 2016. Core net income per share for the six months endedJune 30, 2017was$1.24, a decrease from$1.26for the same period in 2016. The results for the six months endedJune 30, 2017include a gain on the sale of our merchant services portfolio of$2.3 millionwhile the results for the six months endedJune 30, 2016include net gains on the sale of investment securities of$623 thousand.
In addition to evaluating its results of operations in accordance with accounting principles generally accepted inthe United States of America("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 herein contain items, which Peoples considers non-core, namely gains on sales of investment securities available-for-sale, as well as the gain on the sale of our merchant services portfolio. 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.
NOTABLES
Loans, net grew$64.4 million, or 8.5% annualized year-to-date in 2017.Deposits grew$50.7 millionor 6.4% annualized year-to-date in 2017.Book value per share improved to$35.63atJune 30, 2017from$34.71atDecember 31, 2016, and$34.40atJune 30, 2016.Tangible book value per share improved to$26.56atJune 30, 2017from$25.57atDecember 31, 2016, and$25.18atJune 30, 2016.Tax-equivalent net interest income increased to$17.0 millionfor the second quarter of 2017 compared to$16.7 millionfor the first quarter of 2017, and$16.2 millionfor the second quarter of 2016.Tax-equivalent net interest margin decreased five basis points in the second quarter of 2017 to 3.68%, compared to 3.73% for the quarter endedMarch 31, 2017, and decreased 13 basis points compared to 3.81% for the quarter endedJune 30, 2016.Entered into and executed a merchant asset purchase agreement with a third party to sell and transfer our merchant business, which resulted in a gain of$2.3 million.Executed a marketing and sales agreement to share in the future revenue generated from the sold merchant portfolio, and from new merchant referrals.Nonperforming assets to loans, net, and foreclosed assets decreased to 0.73% atJune 30, 2017, from 0.78% atMarch 31, 2017, and 0.90% atJune 30, 2016.The allowance for loan losses to loans, net increased to 1.11% atJune 30, 2017, from 1.09% atMarch 31, 2017, and 1.01% atJune 30, 2016.INCOME STATEMENT REVIEW
The tax-equivalent net interest margin for the three and six months endedJune 30, were 3.68% and 3.71% respectively in 2017, compared to 3.81% for the same periods in 2016. Loan accretion included in loan interest income for the six months ended June30, 2017, related to loans acquired in the fourth quarter of 2013, was$94 thousand, resulting in an increase in the tax-equivalent net interest margin of 1 basis point. Loan accretion included in loan interest income in the first half of 2016, related to loans acquired in the fourth quarter of 2013, was$372 thousand, resulting in an increase in the tax-equivalent net interest margin of 4 basis points.
Tax-equivalent net interest income for the six months endedJune 30, increased$1.6 millionto$33.6 millionin 2017 from$32.0 millionin 2016. The increase in tax equivalent net interest income was primarily due to a$139.6 millionincrease in average earning assets for the six months endedJune 30, 2017when compared to the same period in 2016. The tax-equivalent yield on the loan portfolio decreased to 4.38% for the six months endedJune 30, 2017compared to 4.49% for the comparable period in 2016. Loans, net averaged$1.6 billionfor the six months endedJune 30, 2017and$1.4 billionfor the comparable period in 2016. For the three months endedJune 30, the tax-equivalent yield on total investments decreased to 2.85% in 2017 from 2.95% in 2016. Average investments totaled$272.9 millionin the first half of 2017 and$279.0 millionin the first half of 2016. Average interest-bearing liabilities increased$115.0 millionfor the six months endedJune 30, 2017, compared to the corresponding period last year. The cost of funds increased to 0.59% in the six months endedJune 30, 2017from 0.55% for the same period of 2016.
The provision for loan losses totaled$2.4 millionfor the six months ended June30, 2017 and 2016. For the quarter endedJune 30, the provision for loan losses was$1.2 millionin both 2017 and 2016.
For the six months ended June30, noninterest income totaled$10.2 millionin 2017, an increase from$8.0 millionin 2016. The gain on sale of our merchant services portfolio was$2.3 millionin 2017 compared to the same period in 2016 when we recognized gains of$623 thousandfrom the sale of available-for-sale investment securities. Increases in service charges, fees and commissions, revenues from merchant services and income from fiduciary activities more than offset decreases in income generated from wealth management services, income from mortgage banking activities and life insurance investment income. For the three months endedJune 30, 2017and 2016, noninterest income totaled$6.4 millionand$4.1 million, respectively. The aforementioned gain generated from the sale of our merchant services portfolio occurred in the second quarter of 2017 with no comparable transaction within that same period in 2016. No gain or loss from the sale of investment securities available-for-sale were recognized during the three months endedJune 30, 2017while a gain from the sale of investment securities of$381 thousandwas recognized during the corresponding period last year.
Noninterest expense increased$2.6 millionor 11.1% to$26.3 millionfor the six months ended June30, 2017, from$23.7 millionfor the six months ended June30, 2016. Salaries and employee benefits increased$2.1 millionor 18.4% due to merit increases and continued investment in our expansion markets in theLehigh ValleyandKing of Prussia. For the second quarter of 2017, noninterest expense increased to$14.0 millionfrom$12.1 millionfor the same period in 2016, an increase of$1.9 millionor 15.6%. The sale of our merchant services portfolio contributed$271 thousandto the increase. Additionally, as with the year-to-date results, the buildout of our expansion plan led to increases in salaries and employee benefit expense when comparing the two periods.
BALANCE SHEET REVIEW
AtJune 30, 2017, total assets, loans and deposits were$2.1 billion,$1.6 billionand$1.6 billion, respectively. Loans, net grew$64.4 millionor 8.5% annualized in the first half of 2017. Loans, net grew$132.6 millionor 9.0% fromJune 30, 2016toJune 30, 2017. Deposits grew$50.7 millionor 6.4% annualized in the first six months of 2017. Total deposits grew$142.6 millionor 9.5% fromJune 30, 2016toJune 30, 2017. Noninterest bearing deposits increased$2.8 millionor 1.6% annualized while interest-bearing deposits increased$47.9 millionor 7.8% annualized in the first half of 2017. Total investments were$266.6 millionatJune 30, 2017, including$256.7 millionsecurities classified as available-for-sale and$9.9 millionclassified as held-to-maturity.
Stockholders' equity equaled$263.5 millionor$35.63per share atJune 30, 2017, and$256.6 millionor$34.71per share atDecember 31, 2016. Tangible stockholders' equity improved to$26.56per share atJune 30, 2017, from$25.57per share atDecember 31, 2016. Dividends declared for the six months endedJune 30, 2017amounted to$0.62per share representing a dividend payout ratio of 44.0%.
ASSET QUALITY REVIEW
Nonperforming assets were$11.6 millionor 0.73% of loans, net and foreclosed assets atJune 30, 2017, compared to$14.2 millionor 0.93% of loans, net and foreclosed assets atDecember 31, 2016. The allowance for loan losses equaled$17.8 millionor 1.11% of loans, net atJune 30, 2017compared to$16.0 millionor 1.04% of loans, net, at December31, 2016. Loans charged-off, net of recoveries, for the six months endedJune 30, 2017, equaled$559 thousandor 0.04% of average loans, compared to$576 thousandor 0.08% 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 servingBucks,Lackawanna,Lehigh,Luzerne,Monroe,Montgomery,Northampton,Susquehanna,WayneandWyomingCounties inPennsylvaniaand Broome County inNew Yorkthrough 26 offices. Each office, interdependent with the community, offers a comprehensive array of financial products and services to individuals, businesses, not-for-profit organizations and government entities. 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.
Safe Harbor Forward-Looking Statements:
We make statements in this press release, and we may from time to time make other statements regarding our outlook or expectations for future financial or operating results and/or other matters regarding or affecting Peoples Financial Services Corp., Peoples Security Bank and Trust Company, and its subsidiaries (collectively, "Peoples") that are considered "forward-looking statements" as defined in Section27A of the Securities Act of 1933, as amended, and Section21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements may be identified by the use of such words as "believe," "expect," "anticipate," "should," "planned," "estimated," "intend" and "potential." For these statements, Peoples claims the protection of the statutory safe harbors for forward-looking statements.
Peoples cautions you that a number of important factors could cause actual results to differ materially from those currently anticipated in any forward-looking statement. Such factors include, but are not limited to: prevailing economic and political conditions, particularly in our market area; credit risk associated with our lending activities; changes in interest rates, loan demand, real estate values and competition; changes in accounting principles, policies, and guidelines; changes in any applicable law, rule, regulation or practice with respect to tax or legal issues; 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]
Peoples Financial Services Corp.
Five Quarter Trend(In thousands, except share and per share data)
June30Mar31
Dec31Sept30
June302017
20172016
20162016
Key performance data:Per share data:
Net income$
0.76$
0.65$
0.64$
0.69$
0.66Core net income (1)
$0.59
$0.65
$0.64
$0.69
$0.62
Cash dividends declared$
0.31$
0.31$
0.31$
0.31$
0.31Book value
$35.63
$35.07
$34.71
$34.68
$34.40
Tangible book value (1)$
26.56$
25.97$
25.57$
25.50$
25.18Market value:
High$
45.73$
49.57$
50.54$
40.76$
40.55Low
$39.25
$39.66
$38.41
$37.93
$35.56
Closing$
43.73$
41.80$
48.70$
40.76$
39.14Market capitalization
$323,434
$309,075
$360,095
$301,385
$289,407
Common shares outstanding7,396,163
7,394,1437,394,143
7,394,1437,394,143
Selected ratios:Return on average stockholders' equity
8.71%
7.51%
7.29%
7.95%
7.72%
Core return on average stockholders' equity(1)6.70
%7.51
%7.29
%7.95
%7.33
%Return on average tangible stockholders' equity (1)
11.73%
10.15%
9.88%
10.82%
10.59%
Core return on average tangible stockholders' equity (1)9.03
%10.15
%9.88
%10.82
%10.05
%Return on average assets
1.11%
0.97%
0.94%
1.05%
1.03%
Core return on average assets (1)0.85
%0.97
%0.94
%1.05
%0.98
%Stockholders' equity to total assets
12.76%
12.82%
12.83%
13.01%
13.30%
Efficiency ratio (2)63.95
%59.13
%58.59
%56.89
%59.33
%Nonperforming assets to loans, net, and foreclosed assets
0.73%
0.78%
0.93%
0.93%
0.90%
Net charge-offs to average loans, net0.09
%0.05
%0.30
%0.08
%0.16
%Allowance for loan losses to loans, net
1.11%
1.09%
1.04%
1.03%
1.01%
Interest-bearing assets yield (FTE) (3)4.14
%4.17
%4.10
%4.17
%4.23
%Cost of funds
0.60%
0.57%
0.56%
0.54%
0.55%
Net interest spread (FTE) (3)3.54
%3.60
%3.54
%3.63
%3.68
%Net interest margin (FTE) (3)
3.68%
3.73%
3.67%
3.76%
3.81%
See Reconciliation of Non-GAAP financial measures.
(2)Total noninterest expense less amortization of intangible assets divided by tax-equivalent net interest income and noninterest income less net gains(losses) on investment securities available-for-sale.
(3)Tax-equivalent adjustments were calculated using the prevailing federal statutory tax rate of 35%.
Consolidated Statements of Income
(In thousands, except per share data)June30
June30Six Months Ended
20172016
Interest income:Interest and fees on loans:
Taxable$
31,486$
29,106Tax-exempt
1,5211,531
Interest and dividends on investment securities:Taxable
1,4161,304
Tax-exempt1,546
1,750Dividends
2421
Interest on interest-bearing deposits in other banks67
32Interest on federal funds sold
Total interest income36,060
33,744Interest expense:
Interest on deposits2,963
2,605Interest on short-term borrowings
422166
Interest on long-term debt697
714Total interest expense
4,0823,485
Net interest income31,978
30,259Provision for loan losses
2,4002,400
Net interest income after provision for loan losses29,578
27,859Noninterest income:
Service charges, fees, commissions3,254
2,971Merchant services income
2,1931,952
Commissions and fees on fiduciary activities1,002
956Wealth management income
667708
Mortgage banking income383
399Life insurance investment income
384395
Net gains on sale of investment securities available-for-sale623
Net gains on sale of merchant services business2,278
Total noninterest income10,161
8,004Noninterest expense:
Salaries and employee benefits expense13,301
11,236Net occupancy and equipment expense
4,8444,682
Merchant services expense1,763
1,380Amortization of intangible assets
526602
Other expenses5,924
5,831Total noninterest expense
26,35823,731
Income before income taxes13,381
12,132Provision for income tax expense
2,9222,395
Net income$
10,459$
9,737Other comprehensive income (loss):
Unrealized gains on investment securities available-for-sale$
1,457$
2,123Reclassification adjustment for gains included in net income
(623)Change in pension liability
Income tax expense related to other comprehensive income510
525Other comprehensive income, net of income taxes
947975
Comprehensive income$
11,406$
10,712Per share data:
Net income$
1.41$
1.32Cash dividends declared
$0.62
$0.62
Average common shares outstanding7,395,158
7,399,318
Consolidated Statements of Income
(In thousands, except per share data)June30
Mar31Dec31
Sept30June30
Threemonthsended2017
20172016
20162016
Interest income:Interest and fees on loans:
Taxable$
15,945$
15,541$
15,502$
15,294$
14,760Tax-exempt
795726
730770
780Interest and dividends on investment securities available-for-sale:
Taxable719
697636
575617
Tax-exempt752
794827
861875
Dividends12
1217
1011
Interest on interest-bearing deposits in other banks38
293
1515
Total interest income18,261
17,79917,715
17,52517,058
Interest expense:Interest on deposits
1,5291,434
1,4681,356
1,322Interest on short-term borrowings
248174
120116
89Interest on long-term debt
349348
353353
354Total interest expense
2,1261,956
1,9411,825
1,765Net interest income
16,13515,843
15,77415,700
15,293Provision for loan losses
1,2001,200
1,4001,200
1,200Net interest income after provision for loan losses
14,93514,643
14,37414,500
14,093Noninterest income:
Service charges, fees, commissions1,682
1,5721,603
1,5421,527
Merchant services income1,178
1,015990
1,2571,038
Commissions and fees on fiduciary activities494
508481
539474
Wealth management income348
319319
271296
Mortgage banking income204
179269
217195
Life insurance investment income195
189197
199202
Net gains on sale of investment securities available-for-sale381
Net gains on sale of merchant services business2,278
Total noninterest income6,379
3,7823,859
4,0254,113
Noninterest expense:Salaries and employee benefits expense
7,0266,275
5,7325,466
5,904Net occupancy and equipment expense
2,4502,394
2,4242,316
2,245Merchant services expense
1,033730
723890
748Amortization of intangible assets
258268
287297
297Other expenses
3,2352,689
3,1163,048
2,919Total noninterest expense
14,00212,356
12,28212,017
12,113Income before income taxes
7,3126,069
5,9516,508
6,093Income tax expense
1,6531,269
1,2231,390
1,238Net income
$5,659
$4,800
$4,728
$5,118
$4,855
Other comprehensive (loss) income :Unrealized gains (losses) on investment securities available-for-sale
$1,184
$273
$(4,420)
$(1,120)
$1,128
Reclassification adjustment for gains included in net income(381)
Change in pension liability917
Income tax expense (benefit) related to other comprehensive income (loss)415
96(1,226)
(392)262
Other comprehensive income (loss), net of income taxes769
177(2,277)
(728)485
Comprehensive income$
6,428$
4,977$
2,451$
4,390$
5,340Per share data:
Net income$
0.76$
0.65$
0.64$
0.69$
0.66Cash dividends declared
$0.31
$0.31
$0.31
$0.31
$0.31
Average common shares outstanding7,396,163
7,394,1437,394,143
7,394,1437,395,127
Details of Net Interest and Net Interest Margin
(In thousands, fully taxable equivalent basis)June30
Mar31Dec31
Sept30June30
Threemonthsended2017
20172016
20162016
Net interest income:Interest income
Loans, net:Taxable
$15,945
$15,541
$15,502
$15,294
$14,760
Tax-exempt1,223
1,1171,123
1,1841,200
Total loans, net17,168
16,65816,625
16,47815,960
Investments:Taxable
768709
653585
628Tax-exempt
1,1561,222
1,2721,325
1,346Total investments
1,9241,931
1,9251,910
1,974Interest on interest-bearing balances in other banks
129
315
15Federal funds sold
Total interest income19,093
18,61818,553
18,40317,949
Interest expense:Deposits
1,5291,434
1,4681,356
1,322Short-term borrowings
248174
120116
89Long-term debt
349348
353353
354Total interest expense
2,1261,956
1,9411,825
1,765Net interest income
$16,967
$16,662
$16,612
$16,578
$16,184
Loans, net:Taxable
4.37%
4.41%
4.33%
4.39%
4.47%
Tax-exempt4.29
%4.30
%4.25
%4.36
%4.40
%Total loans, net
4.36%
4.40%
4.33%
4.39%
4.47%
Investments:Taxable
1.93%
1.87%
1.72%
1.74%
1.79%
Tax-exempt4.17
%4.30
%4.22
%4.28
%4.28
%Total investments
2.85%
2.89%
2.83%
2.94%
2.95%
Interest-bearing balances with banks1.31
%1.16
%3.58
%1.93
%2.16
%Federal funds sold
Total interest-bearing assets4.14
%4.17
%4.10
%4.17
%4.23
%Interest expense:
Deposits0.48
%0.47
%0.47
%0.45
%0.45
%Short-term borrowings
1.13%
0.86%
0.63%
0.58%
0.57%
Long-term debt2.44
%2.44
%2.40
%2.38
%2.39
%Total interest-bearing liabilities
0.60%
0.57%
0.56%
0.54%
0.55%
Net interest spread3.54
%3.60
%3.54
%3.63
%3.68
%Net interest margin
3.68%
3.73%
3.67%
3.76%
3.81%
Consolidated Balance Sheets
(In thousands)June30
Mar31Dec31
Sept30June30
Atperiodend2017
20172016
20162016
Assets:Cash and due from banks
$41,026
$31,511
$39,496
$31,620
$29,805
Interest-bearing balances in other banks375
304445
294272
Federal funds soldInvestment securities:
Available-for-sale256,774
264,644259,410
249,913251,382
Held-to-maturity9,868
10,18010,517
10,86411,262
Total investments266,642
274,824269,927
260,777262,644
Loans held for sale444
360Loans, net
1,597,3621,559,867
1,532,9651,522,391
1,464,808Less: allowance for loan losses
17,80216,969
15,96115,712
14,799Net loans
1,579,5601,542,898
1,517,0041,506,679
1,450,009Premises and equipment, net
35,89234,967
33,26033,049
29,510Accrued interest receivable
6,2065,604
6,2285,309
5,952Goodwill
63,37063,370
63,37063,370
63,370Other intangible assets, net
3,6853,944
4,2114,498
4,795Other assets
68,00265,640
65,50165,283
65,253Total assets
$2,064,758
$2,023,506
$1,999,442
$1,971,239
$1,911,610
Liabilities:Deposits:
Noninterest-bearing$
356,435$
358,538$
353,686$
342,782$
323,785Interest-bearing
1,282,9981,257,006
1,235,0711,223,028
1,173,078Total deposits
1,639,4331,615,544
1,588,7571,565,810
1,496,863Short-term borrowings
91,50077,475
82,70075,300
86,300Long-term debt
57,16057,615
58,13458,685
59,232Accrued interest payable
431457
462434
453Other liabilities
12,72513,096
12,77114,570
14,437Total liabilities
1,801,2491,764,187
1,742,8241,714,799
1,657,285Stockholders' equity:
Common stock14,792
14,78814,788
14,78814,788
Capital surplus134,937
134,888134,871
134,853134,835
Retained earnings116,988
113,621111,114
108,677105,852
Accumulated other comprehensive loss(3,208)
(3,978)(4,155)
(1,878)(1,150)
Total stockholders' equity263,509
259,319256,618
256,440254,325
Total liabilities and stockholders' equity$
2,064,758$
2,023,506$
1,999,442$
1,971,239$
1,911,610
Consolidated Balance Sheets
(In thousands)June30
Mar31Dec31
Sept30June30
Averagequarterlybalances2017
20172016
20162016
Assets:Loans, net:
Taxable$
1,464,401$
1,429,323$
1,422,725$
1,385,800$
1,327,003Tax-exempt
114,287105,442
105,119108,105
109,770Total loans, net
1,578,6881,534,765
1,527,8441,493,905
1,436,773Investments:
Taxable159,841
159,593150,697
136,645144,223
Tax-exempt111,061
115,347119,805
123,177126,620
Total investments270,902
274,940270,502
259,822270,843
Interest-bearing balances with banks307
349333
412372
Federal funds soldTotal interest-bearing assets
1,849,8971,810,054
1,798,6791,754,139
1,707,988Other assets
196,913194,499
192,266188,256
184,714Total assets
$2,046,810
$2,004,553
$1,990,945
$1,942,395
$1,892,702
Liabilities and stockholders' equity:Deposits:
Interest-bearing$
1,270,459$
1,244,021$
1,241,586$
1,195,645$
1,174,686Noninterest-bearing
356,282346,567
341,795337,337
327,937Total deposits
1,626,7411,590,588
1,583,3811,532,982
1,502,623Short-term borrowings
87,73982,002
75,51878,974
62,659Long-term debt
57,37257,856
58,40458,960
59,504Other liabilities
14,30514,872
15,61615,349
15,131Total liabilities
1,786,1571,745,318
1,732,9191,686,265
1,639,917Stockholders' equity
260,653259,235
258,026256,130
252,785Total liabilities and stockholders' equity
$2,046,810
$2,004,553
$1,990,945
$1,942,395
$1,892,702
Asset Quality Data
(In thousands)June30
Mar31Dec31
Sept30June30
20172017
20162016
2016Atquarterend
Nonperforming assets:Nonaccrual/restructured loans
$10,429
$11,446
$12,974
$12,409
$9,778
Accruing loans past due 90 days or more835
462844
1,1092,071
Foreclosed assets384
236393
7031,353
Total nonperforming assets$
11,648$
12,144$
14,211$
14,221$
13,202Three months ended
Allowance for loan losses:Beginning balance
$16,969
$15,961
$15,712
$14,799
$14,158
Charge-offs431
3111,358
355632
Recoveries64
119207
6873
Provision for loan losses1,200
1,2001,400
1,2001,200
Ending balance$
17,802$
16,969$
15,961$
15,712$
14,799
Reconciliation of Non-GAAP Financial Measures
(In thousands, except share and per share data)June30
Mar31Dec31
Sept30June30
Threemonthsended2017
20172016
20162016
Core net income per share:Net income GAAP
$5,659
$4,800
$4,728
$5,118
$4,855
Adjustments:Less: Gain on sale of merchant services business
2,278Less: Gains on sale of investment securities
381Add: Expenses related to sale of merchant services business
271Add: Gain on sale of merchant services business tax adjustment
702Add: Gains on sale of investment securities tax adjustment
133Net income Core
$4,354
$4,800
$4,728
$5,118
$4,607
Average common shares outstanding7,396,163
7,394,1437,394,143
7,394,1437,395,127
Core net income per share$
0.59$
0.65$
0.64$
0.69$
0.62Tangible book value:
Total stockholders' equity$
263,509$
259,319$
256,618$
256,440$
254,325Less: Goodwill
63,37063,370
63,37063,370
63,370Less: Other intangible assets, net
3,6853,944
4,2114,498
4,795Total tangible stockholders' equity
$196,454
$192,005
$189,037
$188,572
$186,160
Common shares outstanding7,396,163
7,394,1437,394,143
7,394,1437,394,143
Tangible book value per share$
26.56$
25.97$
25.57$
25.50$
25.18Core return on average stockholders' equity:
Net income GAAP$
5,659$
4,800$
4,728$
5,118$
4,855Adjustments:
Less: Gain on sale of merchant services business2,278
Less: Gains on sale of investment securities381
Add: Expenses related to sale of merchant services business271
Add: Gain on sale of merchant services business tax adjustment702
Add: Gains on sale of investment securities tax adjustment133
Net income Core$
4,354$
4,800$
4,728$
5,118$
4,607Average stockholders' equity
$260,653
$259,235
$258,026
$256,130
$252,785
Core return on average stockholders' equity6.70
%7.51
%7.29
%7.95
%7.33
%Return on average tangible equity:
Net income GAAP$
5,659$
4,800$
4,728$
5,118$
4,855Average stockholders' equity
$260,653
$259,235
$258,026
$256,130
$252,785
Less: average intangibles67,185
67,44867,725
68,01768,313
Average tangible stockholders' equity$
193,468$
191,787$
190,301$
188,113$
184,472Return on average tangible stockholders' equity
11.73%
10.15%
9.88%
10.82%
10.59%
Core return on average tangible stockholders' equity:Net income GAAP
$5,659
$4,800
$4,728
$5,118
$4,855
Adjustments:Less: Gain on sale of merchant services business
2,278Less: Gains on sale of investment securities
381Add: Expenses related to sale of merchant services business
271Add: Gain on sale of merchant services business tax adjustment
702Add: Gains on sale of investment securities tax adjustment
133Net income Core
$4,354
$4,800
$4,728
$5,118
$4,607
Average stockholders' equity$
260,653$
259,235$
258,026$
256,130$
252,785Less: average intangibles
67,18567,448
67,72568,017
68,313Average tangible stockholders' equity
$193,468
$191,787
$190,301
$188,113
$184,472
Core return on average tangible stockholders' equity9.03
%10.15
%9.88
%10.82
%10.05
%Core return on average assets:
Net income GAAP$
5,659$
4,800$
4,728$
5,118$
4,855Adjustments:
Less: Gain on sale of merchant services business2,278
Less: Gains on sale of investment securities381
Add: Expenses related to sale of merchant services business271
Add: Gain on sale of merchant services business tax adjustment702
Add: Gains on sale of investment securities tax adjustment133
Net income Core$
4,354$
4,800$
4,728$
5,118$
4,607Average assets
$2,046,810
$2,004,553
$1,990,945
$1,942,395
$1,892,702
Core return on average assets0.85
%0.97
%0.94
%1.05
%0.98
%
Reconciliation of Non-GAAP Financial Measures
(In thousands, except share and per share data)June30
June30Six Months Ended
20172016
Core net income per share:Net income GAAP
$10,459
$9,737
Adjustments:Less: Gain on sale of merchant services business
2,278Less: Gains on sale of investment securities
623Add: Expenses related to sale of merchant services business
271Add: Gain on sale of merchant services business tax adjustment
702Add: Gains on sale of investment securities tax adjustment
218Net income Core
$9,154
$9,332
Average common shares outstanding7,395,158
7,399,318Core net income per share
$1.24
$1.26
SOURCE Peoples Financial Services Corp.
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