Peoples Financial profit jumps in first quarter

HALLSTEAD, Pa. — Peoples Financial Services Corp., (OTCBB: PFIS), the parent company of Peoples Neighborhood Bank, reported that net income rose 34.5 percent to $2.4 million, or 78 cents per share, in the first quarter from $1.8 million, or 57 cents, in the year-earlier period.

“Higher net interest income and noninterest income were the primary factors contributing to the increase in comparable first-quarter earnings,” Peoples President and CEO Alan W. Dakey said in a news release. “We experienced strong growth in revenue generated by our loan division. Our loan portfolio grew significantly in the commercial and municipal sectors.”

He added that in 2012, the bank continues to focus on improving its noninterest revenue sources. “With this goal in mind, we began offering cash-back rewards for non-pin based customer debit-card transactions to improve efficiencies in our payment systems as well as generate increased revenues. We are extremely excited about this new product and believe that it will provide us with the competitive advantage necessary to grow our core deposit base and strengthen our existing deposit relationships.”

Peoples Financial’s net interest income rose 6.5 percent in the first quarter to 

$6.15 million while interest expense declined 7.5 percent to $1.3 million.

Noninterest revenue rose about 50 percent to $1.24 million from $822,000 a year ago. Contributing to the increase were a $34,000 rise in service-charge revenue and a $26,000 jump in mortgage-banking income. Peoples also realized a $284,000 gain on security sales during the quarter.

Peoples Financial’s noninterest expense decreased 2.4 percent to $3.3 million, driven by a 37.6 percent decline in other expenses generated by insurance proceeds from flood-related damages. That gain was offset by a $284,000, or 19.6 percent, increase in salaries and employee benefits. The company also reported a $114,000 increase in costs related to its recovery efforts from flood damage incurred in September 2011.

Peoples’ provision for loan losses increased $224,000 to $645,000.

Peoples Financial’s total assets were $631.7 million on March 31, up from 

$570.3 million a year ago. Total loans, net of unearned income, rose 12.6 percent to $459.2 million. Total deposits increased $48.6 million to $502.1 million.

The company’s board of directors declared a 21 cent cash dividend payable May 15 to shareholders of record April 30. 

Peoples Financial Services (www.peoplesnatbank.com) operates 11 branches of Peoples Neighborhood Bank in Lackawanna, Wyoming, and Susquehanna counties in Pennsylvania along with Broome County in New York. Peoples Wealth Management is a member-managed limited liability company for the purpose of providing investment advisory services to the general public.