On July 25, 2024, Peoples Financial Services Corp (PFIS, Financial) released its 8-K filing reporting unaudited financial results for the second quarter and year-to-date 2024. Peoples Financial Services Corp is a bank holding company operating through its subsidiaries, providing a full range of financial services including checking accounts, savings accounts, loan products, mortgages, and advisory services. The company primarily operates in Pennsylvania, USA.
Performance Overview
For the second quarter ended June 30, 2024, Peoples Financial Services Corp reported net income of $3.3 million, or $0.46 per diluted share, a significant 65.2% decrease from $9.4 million, or $1.31 per diluted share, in the same period of 2023. This result fell short of analyst estimates, which projected earnings per share of $0.52.
The decline in net income was primarily driven by lower net interest income, which decreased by $3.2 million due to higher deposit costs, a higher provision for credit losses of $2.8 million, and increased operating expenses of $1.5 million, including $1.1 million in acquisition-related expenses.
Financial Achievements and Challenges
Despite the challenges, Peoples Financial Services Corp achieved core net income of $4.2 million, or $0.59 per diluted share, excluding acquisition-related expenses. However, this was still a decrease from $9.5 million, or $1.33 per share, in the prior year. Core pre-provision net revenue (PPNR) was $5.2 million, or $0.73 per diluted share, compared to $9.0 million, or $1.25 per diluted share, in the previous year.
For the six months ended June 30, 2024, net income was $6.7 million, or $0.95 per diluted share, down 60.3% from $17.0 million, or $2.37 per diluted share, in the same period of 2023. The decrease in net interest income of $7.0 million was offset by higher funding costs and increased operating expenses of $3.1 million, including $1.6 million in acquisition-related expenses.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Income | $3.3 million | $9.4 million |
| Earnings Per Share | $0.46 | $1.31 |
| Core Net Income | $4.2 million | $9.5 million |
| Core PPNR | $5.2 million | $9.0 million |
Balance Sheet and Cash Flow
As of June 30, 2024, total assets, loans, and deposits were $3.6 billion, $2.9 billion, and $3.1 billion, respectively. The company experienced a decrease in deposits by $214.1 million during the six months ended June 30, 2024, attributed to seasonal outflows and a shift to interest-bearing accounts.
Stockholders' equity stood at $340.8 million, or $48.29 per share, as of June 30, 2024, compared to $340.4 million, or $48.35 per share, at December 31, 2023. The tangible stockholders' equity decreased slightly to $39.31 per share from $39.35 per share at the end of 2023.
Asset Quality
Nonperforming assets were $7.1 million, or 0.25% of loans, net and foreclosed assets, as of June 30, 2024, compared to $4.9 million, or 0.17%, at December 31, 2023. The allowance for credit losses increased to $23.1 million, or 0.81% of loans, net, from $21.9 million, or 0.77%, at the end of 2023.
Strategic Combination with FNCB Bancorp, Inc.
On July 1, 2024, Peoples completed its merger with FNCB Bancorp, Inc., which is expected to result in a combined organization with approximately $5.5 billion in assets, $4.0 billion in loans, and $4.7 billion in deposits. The integration of FNCB is anticipated to enhance Peoples' market presence across Pennsylvania, New York, and New Jersey.
For more detailed financial information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Peoples Financial Services Corp for further details.
