HALLSTEAD, Pa. — A strong third quarter in which earnings rose 20.5 percent to $2.24 million, or 72 cents per share, at Peoples Financial Services Corp. (OTC BB: PFIS) is just one reason why it’s expanding its presence in Broome County. Those profit figures are up from $1.86 million, or 60 cents per share, in the third quarter of 2011.
The parent company of Peoples Neighborhood Bank benefitted from strong mortgage-banking growth, President and CEO Alan Dakey says. Mortgage-banking income rose from just $32,000 in the third quarter of 2011 to $277,000 in this year’s third quarter. Interest rates are low, which is stimulating both refinancing and new mortgage activity, Dakey says. About 80 percent of Peoples’ mortgage activity is refinancing, he notes.
Peoples is also seeing strong loan demand from small businesses, with a significant portion of that business in the mortgage area as well. Much of the activity, Dakey notes, is in Broome County, where Peoples currently operates three branches and plans to open a fourth office in the near future.
“We’ve had growth with our existing facilities in that market,” he says, so expanding further into the area was the next step to encouraging even more growth. Peoples is currently renovating the former Binghamton Savings Bank facility at 275 Main St., Binghamton. The building, which has been vacant for about two years, most recently housed an M&T Bank branch. Dakey says Peoples hopes to open the branch office in late December or early January.
Peoples Neighborhood Bank holds a 1.51 percent share of the total deposit market in the Binghamton metropolitan statistical area with deposits of $40.3 million, as of June 30, according to the FDIC. M&T Bank leads the market, at 50.15 percent, with $1.34 billion in deposits.
In the third quarter, Peoples reported interest income of $6.916 million, up from $6.897 million a year ago. Noninterest income increased from $1.02 million a year ago to $1.26 million this quarter as fees increased from $736,000 to $804,000 and from the previously mentioned mortgage-fee income increase.
Noninterest expenses increased 2.2 percent from $3.76 million to $3.84 million, due in part to an increase in salaries and benefits from $1.65 million to $1.79 million.
The provision for loan losses was $330,000 for the quarter, up from $269,000 a year ago.
For the first nine months of 2012, Peoples reported net income of $6.9 million, or $2.23 per share, up 15.4 percent from $6.02 million, or $1.92 per share, a year ago.
Total assets were $649.4 million on Sept. 30, up from $607.2 million a year ago. Loans increased 10.1 percent to $470.4 million, up from $427.2 million a year earlier. Total deposits increased $68.2 million to $554.4 million.
Peoples Financial Services Corp. (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. The company’s stock trades over the counter, and traded for about $30 per share at press time.
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