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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

for the quarterly period ended March 31, 2021

or

Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

for the transition period from

001-36388

(Commission File Number)

PEOPLES FINANCIAL SERVICES CORP.

(Exact name of registrant as specified in its charter)

Pennsylvania

23-2391852

(State of

incorporation)

(IRS Employer

ID Number)

150 North Washington Avenue, Scranton, PA

18503

(Address of principal executive offices)

(Zip code)

(570) 346-7741

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

    

Trading Symbol

    

Name of each exchange on which registered:

Common stock, $2.00 par value

PFIS

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.    Yes      No  

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of the registrant’s common stock, as of the latest practicable date: 7,203,641 at April 30, 2021.

Table of Contents

PEOPLES FINANCIAL SERVICES CORP.

FORM 10-Q

For the Quarter Ended March 31, 2021

Contents

Page No.

PART I.

FINANCIAL INFORMATION:

Item 1.

Financial Statements

Consolidated Balance Sheets at March 31, 2021 (Unaudited) and December 31, 2020

3

Consolidated Statements of Income and Comprehensive Income for the Three Months ended March 31, 2021 and 2020 (Unaudited)

4

Consolidated Statements of Changes in Stockholders’ Equity for the Three Months ended March 31, 2021 and 2020 (Unaudited)

5

Consolidated Statements of Cash Flows for the Three Months ended March 31, 2021 and 2020 (Unaudited)

6

Notes to Consolidated Financial Statements (Unaudited)

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

35

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

53

Item 4.

Controls and Procedures

54

PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

55

Item 1A.

Risk Factors

55

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

55

Item 3.

Defaults upon Senior Securities

55

Item 4.

Mine Safety Disclosures

55

Item 5.

Other Information

56

Item 6.

Exhibits

56

Signatures

57

2

Table of Contents

Peoples Financial Services Corp.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

    

March 31, 2021

    

December 31, 2020

 

Assets:

Cash and due from banks:

Cash and due from banks

$

30,786

$

29,287

Interest-bearing deposits in other banks

8,432

15,905

Federal funds sold

 

264,100

 

183,000

Total cash and due from banks

303,318

228,192

 

Investment securities:

Available-for-sale

 

333,753

 

295,911

Equity investments carried at fair value

159

138

Held-to-maturity: Fair value March 31, 2021, $7,389; December 31, 2020, $7,513

 

7,166

 

7,225

Total investment securities

 

341,078

 

303,274

Loans

 

2,179,534

 

2,177,982

Less: allowance for loan losses

 

26,783

 

27,344

Net loans

 

2,152,751

 

2,150,638

Loans held for sale

458

837

Premises and equipment, net

 

46,777

 

47,045

Accrued interest receivable

 

8,206

 

8,255

Goodwill

 

63,370

 

63,370

Intangible assets, net

 

835

 

960

Bank owned life insurance

42,530

42,316

Other assets

 

36,146

 

38,915

Total assets

$

2,995,469

$

2,883,802

Liabilities:

Deposits:

Noninterest-bearing

$

661,262

$

622,475

Interest-bearing

 

1,889,154

 

1,814,638

Total deposits

 

2,550,416

 

2,437,113

Short-term borrowings

 

51,980

 

50,000

Long-term debt

 

14,264

 

14,769

Subordinated debentures

33,000

33,000

Accrued interest payable

 

1,120

 

736

Other liabilities

 

27,358

 

31,307

Total liabilities

 

2,678,138

 

2,566,925

Stockholders’ equity:

Common stock, par value $2.00, authorized 25,000,000 shares, issued and outstanding 7,211,293 shares at March 31, 2021 and 7,215,202 shares at December 31, 2020

 

14,423

 

14,431

Capital surplus

 

128,854

 

129,274

Retained earnings

 

177,836

 

171,023

Accumulated other comprehensive income (loss)

 

(3,782)

 

2,149

Total stockholders’ equity

 

317,331

 

316,877

Total liabilities and stockholders’ equity

$

2,995,469

$

2,883,802

See notes to unaudited consolidated financial statements

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Peoples Financial Services Corp.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

(Dollars in thousands, except per share data)

For the Three Months Ended March 31,

    

2021

    

2020

 

Interest income:

Interest and fees on loans:

Taxable

$

20,900

$

20,917

Tax-exempt

 

870

 

1,031

Interest and dividends on investment securities:

Taxable

 

1,243

 

1,548

Tax-exempt

 

390

 

299

Dividends

 

23

 

23

Interest on interest-bearing deposits in other banks

 

2

 

24

Interest on federal funds sold

49

Total interest income

 

23,477

 

23,842

Interest expense:

Interest on deposits

 

2,092

 

3,503

Interest on short-term borrowings

 

71

 

573

Interest on long-term debt

 

103

 

205

Interest on subordinated debt

443

Total interest expense

 

2,709

 

4,281

Net interest income

 

20,768

 

19,561

(Credit) provision for loan losses

 

(500)

 

3,500

Net interest income after (credit) provision for loan losses

 

21,268

 

16,061

Noninterest income:

Service charges, fees, commissions and other

 

1,184

 

1,605

Merchant services income

 

93

 

114

Commission and fees on fiduciary activities

 

533

 

506

Wealth management income

 

358

 

387

Mortgage banking income

 

312

 

137

Increase in cash surrender value of life insurance

 

219

 

187

Interest rate swap revenue

797

470

Net gain (loss) on equity investment securities

 

21

 

(123)

Net gain on sale of investment securities available-for-sale

 

 

267

Total noninterest income

 

3,517

 

3,550

Salaries and employee benefits expense

 

6,570

 

7,856

Net occupancy and equipment expense

 

3,267

 

3,079

Amortization of intangible assets

 

125

 

154

Professional fees and outside services

439

365

FDIC insurance and assessments

260

74

Donations

339

338

Other expenses

 

1,629

 

1,785

Total noninterest expense

 

12,629

 

13,651

Income before income taxes

 

12,156

 

5,960

Income tax expense

 

2,678

 

679

Net income

 

9,478

 

5,281

Other comprehensive income (loss):

Unrealized gain (loss) on investment securities available-for-sale

 

(7,750)

 

7,629

Reclassification adjustment for net gain on sales included in net income

 

 

(267)

Change in derivative fair value

242

1,036

Other comprehensive income (loss)

(7,508)

8,398

Income tax expense (benefit)

 

(1,577)

 

1,765

Other comprehensive income (loss), net of income taxes

 

(5,931)

 

6,633

Comprehensive income

$

3,547

$

11,914

Per share data:

Net income:

Basic

$

1.31

$

0.72

Diluted

$

1.31

$

0.71

Average common shares outstanding:

Basic

 

7,210,952

 

7,379,438

Diluted

 

7,246,016

 

7,405,703

Dividends declared

0.37

0.36

See notes to unaudited consolidated financial statements

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Peoples Financial Services Corp.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY (UNAUDITED)

(Dollars in thousands, except per share data)

    

    

    

    

Accumulated

 

Other

 

Common

Capital

Retained

Comprehensive

 

    

Stock  

    

Surplus  

    

Earnings  

    

Income (Loss)  

    

Total

 

Balance, January 1, 2021

$

14,431

$

129,274

$

171,023

$

2,149

$

316,877

Net income

 

9,478

9,478

Other comprehensive loss, net of income taxes

 

(5,931)

(5,931)

Dividends declared: $0.37 per share

 

(2,665)

(2,665)

Stock based compensation

89

89

Share retirement: 13,101 shares

(26)

(491)

(517)

Common stock grants awarded, net of unearned compensation of $182: 9,192 shares

18

(18)

Balance, March 31, 2021

$

14,423

$

128,854

$

177,836

$

(3,782)

$

317,331

    

    

    

    

Accumulated

 

Other

 

Common

Capital

Retained

Comprehensive

 

    

Stock  

    

Surplus  

    

Earnings  

    

Income (Loss)  

    

Total

 

Balance, January 1, 2020

$

14,777

$

135,251

$

152,187

$

(3,205)

$

299,010

Net income

 

5,281

5,281

Other comprehensive income, net of income taxes

 

6,633

6,633

Dividends declared: $0.36 per share

 

(2,662)

(2,662)

Stock based compensation

 

5

5

Share retirement: 53,746 shares

(107)

(2,097)

(2,204)

Balance, March 31, 2020

$

14,670

$

133,159

$

154,806

$

3,428

$

306,063

See notes to unaudited consolidated financial statements

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Peoples Financial Services Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands, except per share data)

For the Three Months Ended March 31,

    

2021

    

2020

    

Cash flows from operating activities:

Net income

$

9,478

$

5,281

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation of premises and equipment

 

680

 

735

Amortization of right-of-use lease asset

109

104

Amortization of deferred loan costs, net

 

626

39

Amortization of intangibles

 

125

 

154

Amortization of low income housing partnerships

120

120

(Credit) provision for loan losses

 

(500)

 

3,500

Net unrealized (gain) loss on equity investment securities

(21)

123

Net (gain) loss on sale of other real estate owned

 

10

 

(4)

Loans originated for sale

 

(4,869)

(2,297)

Proceeds from sale of loans originated for sale

 

5,382

3,023

Net gain on sale of loans originated for sale

 

(134)

(10)

Net amortization of investment securities

 

260

 

281

Net gain on sale of investment securities available-for-sale

(267)

Increase in cash surrender value of life insurance

 

(219)

 

(187)

Deferred income tax expense

 

620

 

619

Stock based compensation

 

89

 

5

Net change in:

Accrued interest receivable

 

49

 

(302)

Other assets

 

(918)

 

(10,038)

Accrued interest payable

 

384

 

59

Other liabilities

 

383

 

10,014

Net cash provided by operating activities

 

11,654

 

10,952

Cash flows from investing activities:

Proceeds from sales of investment securities available-for-sale

 

 

26,502

Proceeds from repayments of investment securities:

Available-for-sale

 

12,876

 

17,522

Held-to-maturity

 

58

 

135

Purchases of investment securities:

Available-for-sale

 

(58,726)

 

(9,080)

Net purchase of restricted equity securities

 

(64)

 

(482)

Net increase in lending activities

 

(2,296)

 

(86,062)

Purchases of premises and equipment

 

(521)

 

(627)

Proceeds from sale of other real estate owned

 

549

 

157

Net cash used in investing activities

 

(48,124)

 

(51,935)

Cash flows from financing activities:

Net increase in deposits

 

113,303

 

38,506

Repayment of long-term debt

 

(505)

 

(483)

Net increase in short-term borrowings

 

1,980

 

12,000

Retirement of common stock

 

(517)

(2,204)

Cash dividends paid

 

(2,665)

 

(2,662)

Net cash provided by financing activities

 

111,596

 

45,157

Net increase in cash and cash equivalents

 

75,126

 

4,174

Cash and cash equivalents at beginning of period

 

228,192

 

31,153

Cash and cash equivalents at end of period

$

303,318

$

35,327

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Peoples Financial Services Corp.

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Dollars in thousands, except per share data)

For the Three Months Ended March 31,

    

2021

    

2020

    

Supplemental disclosures:

Cash paid during the period for:

Interest

$

2,325

$

4,222

Income taxes

 

 

Noncash items:

Transfers of loans to other real estate

$

57

$

626

Initial recognition of right-of-use assets

899

Initial recognition of lease liability

899

See notes to unaudited consolidated financial statements

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Peoples Financial Services Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Dollars in thousands, except per share data)

1. Summary of significant accounting policies:

Nature of operations:

Peoples Financial Services Corp., a bank holding company incorporated under the laws of Pennsylvania, provides a full range of financial services through its wholly-owned subsidiary, Peoples Security Bank and Trust Company (“Peoples Bank”), collectively, the “Company” or “Peoples”. The Company services its retail and commercial customers through twenty-six full-service community banking offices located within Bucks, Lackawanna, Lebanon, Lehigh, Luzerne, Monroe, Montgomery, Northampton, Susquehanna and Wyoming Counties of Pennsylvania and Broome County of New York.

Basis of presentation:

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10-01 of Regulation S-X. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the consolidated financial position and results of operations for the periods presented have been included. All significant intercompany balances and transactions have been eliminated in consolidation. Prior-period amounts are reclassified when necessary to conform to the current year’s presentation. These reclassifications did not have any effect on the consolidated operating results or financial position of the Company. The consolidated operating results and financial position of the Company for the three months ended and as of March 31, 2021, are not necessarily indicative of the results of consolidated operations and financial position that may be expected in the future.

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Significant estimates that are particularly susceptible to material change in the near term relate to the determination of the allowance for loan losses, fair value of financial instruments, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of deferred tax assets, determination of other-than-temporary impairment losses on securities, and impairment of goodwill. Actual results could differ from those estimates. For additional information and disclosures required under GAAP, reference is made to the Company’s Annual Report on Form 10-K for the period ended December 31, 2020.

Significant events: COVID-19

Operationally, as COVID-19 related events unfold, our continued priority is the health and safety of our customers and employees. We recently worked with local government and health professionals and have had opportunities to offer our eligible employees and their family members appointments to receive the COVID-19 vaccine.  We continue to follow the recommendations of our state governments as to conducting business and have maintained safety protocols. Currently all our offices have returned to pre-pandemic operating hours with limited lobby access.

We participated in the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"), Paycheck Protection Program (“PPP”), a $350 billion specialized low-interest loan program funded by the U.S. Treasury Department and administered by the Small Business Administration (“SBA”).  During 2020, we approved 1,450 PPP loans totaling $217.5 million. Substantially all of the loans were made to existing customers, funded under the two year PPP loan program, and the loan proceeds initially were deposited with our institution.  PPP loan forgiveness commenced during the fourth quarter of 2020 and we continue to process loan forgiveness applications.  At March 31, 2021, we have 468 loans totaling $100.8 million remaining compared to 1,304 loans totaling $189.7 million at December 31, 2020. We expect the majority of the remaining $100.8 million to be forgiven during 2021. During the first quarter of 2021, we funded an additional 885 loans totaling $100.0 million under the SBA’s second PPP loan program.   The application process for the second PPP loan program ends May 31, 2021. 

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Peoples Financial Services Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Dollars in thousands, except per share data)

From a credit risk perspective, we took actions to identify and assess our COVID-19 related credit exposures based on asset class and borrower type. From the onset of the crisis, we worked to proactively monitor our loan portfolio by contacting many of our borrowers to evaluate the impact of the pandemic on them, their businesses and the underlying collateral for our loans. The Company implemented a customer payment deferral program to assist both consumer and business borrowers that may be experiencing financial hardship due to COVID-19 related challenges.  At the start of the pandemic, the Company granted payment deferral requests for up to six months to a total of 481 commercial loans with outstanding loan balances of $306.9 million and to 505 consumer loans with outstanding balances of $23.3 million. Outstanding loan balances remaining in deferral at March 31, 2021 totaled $1.3 million, a decrease of $4.8 million from the $6.1 million at December 31, 2020. As a percentage of total loan balances, excluding PPP loans, loans in deferral represented less than 0.1% of loans outstanding at March 31, 2021 compared to 0.3% of loans outstanding at December 31, 2020. At March 31, 2021, commercial loan balances remaining in deferral total $1.0 million while consumer loans total $0.3 million. Loan deferrals and modifications have been executed consistent with the guidelines of the CARES Act. Pursuant to the CARES Act, loan deferrals are not included in our nonperforming loans disclosed in our financial statement footnotes. Loans in deferral status will continue to accrue interest during the deferral period unless otherwise classified as nonperforming.

Recent accounting standards:

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board ("FASB") or other standard setting bodies that are adopted by the Company as of the required effective dates. The following should be read in conjunction with "Note 1 Summary of significant accounting policies" of the Notes to the Consolidated Financial Statements included in the Company’s 2020 Form 10-K. Unless otherwise discussed, management believes the impact of any recently issued standards, including those issued but not yet effective, will not have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This ASU will have a significant impact on the Company’s calculation and accounting for its allowance for loan losses as well as credit losses related to investment securities available-for-sale. A summary of significant provisions of this ASU is as follows:

 

The ASU requires that a financial asset (or a group of financial assets) measured at amortized cost basis be presented, net of a valuation allowance for credit losses, at an amount expected to be collected on the financial asset(s), and that the income statement include the measurement of credit losses for newly recognized financial assets as well as changes in expected losses on previously recognized financial assets. The provisions of this ASU require measurement of expected credit losses based on relevant information including past events, historical experience, current conditions, and reasonable and supportive forecasts that affect the collectability of the asset. The provisions of this ASU differ from current GAAP in that current GAAP generally delays recognition of the full amount of credit losses until the loss is probable of occurring.

The amendments in the ASU retain many of the disclosure requirements related to credit quality in current GAAP, updated to reflect the change from an incurred loss methodology to an expected credit loss methodology. In addition, the ASU requires that disclosure of credit quality indicators in relation to the amortized cost of financing receivables, a current requirement, be further disaggregated by year of origination.

This ASU requires that credit losses on available-for-sale debt securities be presented as an allowance rather than as a write-down, and limits the amount of the allowance for credit losses to the amount by which the fair value is below amortized cost. For purchased investment securities available-for-sale with a more-than-insignifcant amount of credit deterioration since origination, the ASU requires an allowance be determined in a manner similar to other investment securities available-for-sale; however, the initial allowance would be added to the purchase price, with only subsequent changes in the allowance recorded in credit loss expense, and interest income recognized at the effective rate excluding the discount embedded in the purchase price related to estimated credit losses at acquisition.

In November 2019, the FASB voted to defer the adoption date for smaller reporting companies from 2020 to 2023. At the relevant time, the Company qualified as a smaller reporting company and therefore guidance is effective for the Company in 2023. The Company will record the effect of implementing this ASU through a

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Peoples Financial Services Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Dollars in thousands, except per share data)

cumulative-effect adjustment through retained earnings as of the beginning of the reporting period in which Topic 326 is effective.

We are evaluating the impact of the ASU on our consolidated financial statements. In addition to our allowance for loan losses, we will also record an allowance for credit losses on debt securities instead of applying the impairment model currently utilized. The amount of the adjustments will be impacted by each portfolio’s composition and credit quality at the adoption date as well as economic conditions and forecasts at that time.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides optional expedients and exceptions for a limited time period to ease the potential burden in accounting for reference rate reform on financial reporting. The amendments in ASU 2020-04 are elective for entities with contracts, including derivative contracts, that reference LIBOR or some other reference rate that are expected to be discontinued. For the Company's cash flow hedges, ASU 2020-04 allows: (i) an entity to change the reference rate without having to designate the hedging relationship; (ii) for cash flow hedges in which the designated hedged risk is LIBOR, allows an entity to assert that it remains probable that the hedged forecasted transaction will occur; and (iii) allows an entity to change the designated method used to assess hedge effectiveness and simplifies or temporarily suspends the assessment of hedge effectiveness for hedging relationships. ASU 2020-04 must be applied prospectively and was effective immediately upon issuance and remains effective through December 31, 2022.

The Company adopted the amendments in ASU 2020-04 as of the March 12, 2020 issuance date, on a prospective basis. The adoption did not have an immediate direct impact to the consolidated financial statements. As contracts are modified through December 2022, we will assess the impact based on this guidance. The Company does not expect there will be a material impact to the consolidated financial statements.

2. Other comprehensive income (loss):

The components of other comprehensive income (loss) and their related tax effects are reported in the consolidated statements of income and comprehensive income. The accumulated other comprehensive income (loss) included in the Consolidated Balance Sheets relates to net unrealized gains and losses on investment securities available-for-sale, benefit plan adjustments and adjustments to derivative fair values.

The components of accumulated other comprehensive income (loss) included in stockholders’ equity at March 31, 2021 and December 31, 2020 are as follows:

    

March 31, 2021

    

December 31, 2020

 

Net unrealized gain on investment securities available-for-sale

$

1,946

$

9,696

Income tax

 

409

 

2,036

Net of income taxes

 

1,537

 

7,660

Benefit plan adjustments

 

(7,977)

 

(7,977)

Income tax benefit

 

(1,675)

 

(1,675)

Net of income taxes

 

(6,302)

 

(6,302)

Derivative adjustments

 

1,244

 

1,002

Income tax

 

262

 

211

Net of income taxes

 

982

 

791

Accumulated other comprehensive income (loss)

$

(3,782)

$

2,149

3. Earnings per share:

Basic earnings per share represent income available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Diluted earnings per share reflect additional common shares that would have been outstanding if dilutive potential common shares had been issued, as well as any adjustment to income that would result from the assumed issuance.

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Peoples Financial Services Corp.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

(Dollars in thousands, except per share data)

The following table presents the calculation of both basic and diluted earnings per share of common stock for the three months ended March 31, 2021 and 2020:

2021

2020

For the Three Months Ended March 31 

Basic  

Diluted  

Basic  

Diluted  

Net income

    

$

9,478

    

$

9,478

    

$

5,281

$

5,281

    

Average common shares outstanding

 

7,210,952

 

7,246,016

 

7,379,438

 

7,405,703

Earnings per share

$

1.31

$

1.31

$

0.72

$

0.71

4. Investment securities:

The amortized cost and fair value of investment securities aggregated by investment category at March 31, 2021 and December 31, 2020 are summarized as follows:

Gross

Gross

Amortized

Unrealized

Unrealized

Fair

 

March 31, 2021

    

Cost  

    

Gains  

    

Losses  

    

Value  

 

Available-for-sale:

U.S. Treasury securities

$

18,481

$

344

$

18,825

U.S. government-sponsored enterprises

56,620

963

57,583

State and municipals: