HALLSTEAD, Pa. — Peoples Financial Services Corp. is one of at least two dozen community banks that will deregister with the Securities and Exchange Commission (SEC) under the Jumpstart Our Business Startups (JOBS) Act passed by Congress and signed into law by President Barack Obama in April.
The law enables banks with fewer than 1,200 shareholders to deregister their stock with the SEC, which means they no longer need to file quarterly and annual financial statements with the federal securities regulator.
“We felt for a bank of our size, it made sense to deregister,” says Alan Dakey, president and CEO of Peoples Financial, the holding company for Peoples Neighborhood Bank, which has three branches in Broome County. The banking company has about 1,100 shareholders.
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The SEC filing requirements are substantial, both in terms of cost and in the time it takes to put them together, he says. “We feel there are cost savings probably in the area of $150,000 [annually] by not being SEC registered.” The cost savings stem primarily from the reduction of accounting, legal, and administrative costs connected with preparing the SEC filings.
Peoples Financial’s board of directors has already approved the measure and the company will soon file a Form 15 with the SEC, requesting deregistration. The company will then wait for the agency’s response approving the company’s deregistration. Dakey says this should all be accomplished by the end of the second quarter, which means Peoples Financial will no longer need to file an 8K with the SEC beginning in the third quarter of this year.
That doesn’t mean Peoples Financial won’t still provide that information, Dakey points out. “We clearly want to remain transparent,” he says. The company will continue to maintain a detailed investor-relations section on its website, www.peoplesnatbank.com, and will still issue quarterly news releases summarizing the company’s performance, he says. The company will also continue to issue annual reports in accordance with generally accepted accounting principles. Dakey invites anyone looking for more information to contact the company directly.
The deregistration also doesn’t mean the company is free from regulation or oversight, Dakey says. Peoples Financial remains regulated by the Federal Deposit Insurance Corporation (FDIC) and the Pennsylvania Department of Banking.
Peoples Financial shares continue to trade on the bulletin boards under the PFIS symbol. The stock currently trades at about $29 per share with only a few hundred shares trading each day.
According to a May 21 article in the banking publication American Banker (www.americanbanker.com), at least 25 community banks have announced they would deregister and more are expected to follow suit.
The article noted that about 275 banks that currently report to the SEC are eligible to deregister their shares. First Bancshares in Missouri recently announced its plans to deregister — a move that will save the bank, which has $197 million in assets, up to $200,000 a year in expenses.
American Banker reported that 189 of 413 banks that currently trade on NASDAQ have fewer than 1,200 shareholders and are eligible to deregister with the SEC. Another 85 banks that trade over-the-counter are also eligible.
Peoples Financial, which has $631.7 million in assets, serves Lackawanna, Wyoming, and Susquehanna counties in Pennsylvania and Broome County in New York through its 11 Peoples Neighborhood Bank branches and its Peoples Wealth Management investment-advisory subsidiary.
Peoples holds about 1.3 percent of the deposit market share in the Binghamton metropolitan statistical area with deposits of $33.7 million, according to June 30, 2011, FDIC statistics. M&T Bank leads the market, with a nearly 49 percent share and $1.3 billion in deposits.
Peoples Financial reported first-quarter net income of $2.4 million, or 78 cents per share, up from $1.8 million, or 57 cents per share, a year ago.
