HALLSTEAD, Pa. — Second-quarter profit dipped slightly at Peoples Financial Services Corp. (OTCBB: PFIS) as it no longer benefitted from gains it saw in 2011 from the sale of commercial real estate. But the banking company’s earnings are up just over 13 percent for the first six months of 2012.
Peoples reported on July 13 that it generated second-quarter net income of $2.28 million, or 73 cents per share. That’s down 3.2 percent from $2.36 million, or 75 cents, in the second quarter of 2011 when the company generated a $1.58 million nonrecurring gain from the sale of a commercial property.
However, for the first six months of this year, Peoples’ net income jumped 13.1 percent to $4.7 million, or $1.51 per share, compared with $4.16 million, or $1.32 a share, in the first half of 2011.
Peoples President and CEO Alan W. Dakey attributed higher net-interest income to the higher first-half earnings, with that income driven by strong growth in the company’s mortgage and commercial-loan sectors.
“We are fortunate to experience strong loan demand, which we see continuing in the third quarter,” Dakey said in a July 26 email to The Business Journal. “We are seeing stronger mortgage-banking income than we would have expected with both refinancing activity and new purchases. Our business-lending pipeline remains strong. The bulk of our lending is in the business sector, and we have had solid growth in this channel.”
While the bank does not share projected earnings, Dakey says he expects solid third and fourth quarters with earnings ahead of the first two quarters.
Non-interest income decreased during the second quarter from $1.34 million in 2011 to $1.29 million this year. Non-interest income for the six months fells 25.5 percent to $2.57 million in this year’s first half from $3.45 million in the year-ago period.
Non-interest expense decreased 4.2 percent during the second quarter to $3.89 million and fell 3.4 percent to
$7.47 million for the first six months of the year, mainly due to a $509,000 pre-payment penalty the company incurred in 2011.
The provision for loan losses decreased from $804,000 in the second quarter of 2011 to $390,000 in this year’s second quarter. The provision was trimmed from $1.23 million in the first six months of 2011 to $1.04 million in this year’s first half.
Peoples reported total assets of $638.7 million on June 30, up from $586.6 million a year earlier.
Peoples Financial Services (www.peoplesnatbank.com) operates eight branches of Peoples Neighborhood Bank in Lackawanna, Wyoming, and Susquehanna counties in Pennsylvania along with three branches in 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.