SecProbe.io

September 9, 2013

Via E -mail
Alan W. Dakey
President and Chief Executive Officer
Peoples Financial Services Corp.
82 Franklin Ave.
Hallstead, PA 18822

Re: Peoples Financial Services Corp.
Registration Statement on Form S -4
Filed August 13, 2013
  File No. 333-190587

Dear Mr. Dakey :

We have reviewed your registration statement  and have the following comments.  In
some of our comments, we may ask you to provide us with information so we may better
understand your disclosure.

Please respond to this letter by amending your registration statement and providing the
requested information .  If you do not believe our comments apply to your facts and
circumstanc es or do not believe an amendment is appropriate, please tell us why in your
response.

After reviewing any amendment to your registration statement and the information you
provide in response to these  comments, we may have  additional comments.

Regist ration Statement on Form S -4 filed on August 13, 2013

General

1. A beneficial ownership table of Peoples should be included as required by Item 403 of
Regulation S -K. See Item 18(a)(5)(ii) of Form S -4 and Item 6(d) of Schedule 14A.

Cover Page

2. Your disclos ure states that “[i]n the merger, Penseco shareholders will receive 1.3636
shares of Peoples common stock for each share of Penseco common stock they own at
the effective time of the merger, subject to adjustment in accordance with the merger
agreement.”  Please revise the cover page to describe such potential adjustments in
greater detail or add a cross reference to the disclosure in the section headed “Terms of

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 2

 the Merger” on page 68.  Also revise Question 8 on page 4 and the penultimate paragraph
on page  9 to clarify that the merger consideration is subject to adjustment.

3. Please revise the cover page to disclose that Peoples’ and Penseco’s  shareholders have
dissenter/appraisal rights.  Additionally, add a reference to Question 14 on page 5 and the
“Right s of Dissenting Shareholders” section on page 90.

4. Please revise the inside front cover page of your prospectus to state that security holders
must request the information incorporated by reference no later than five business days
before the date they must  make their investment decision.  Refer to Item 2 to Form S -4.

Questions and Answers about the Merger

Q 14: Do I have the right to dissent from the merger?, page 5

5. Please revise to clarify that dissenting shareholders must vote against the merger, abstain
from voting or not return the proxy.  Make corresponding revisions to the disclosure in
the “Rights of Dissenting Shareholders” section on page 90.

Prospectus Su mmary

Peoples and Penseco directors and managem ent may have interests…, page 11

6. Please revise to quantify the aggregate interest of each director and manager.

Peoples will pursue a Nasdaq listing of its common stock…, page 13

7. Please revise to add a cro ss-reference to the penultimate risk factor on page 32.

Risk Factors

Risks Relating to the Merger, page 25

8. Please add a risk factor indicating that neither of the fairness opinions received in
connection with the merger has been updated since its date o f issuance.

The Merger, page 40

9. Please revise to discuss whether the executive committee of Penseco’s board considered
potential business combinations with third parties other than Peoples.  Also explain why
the committee decided to pursue a business com bination with Peoples rather than other
third parties.

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 3

 10. Please revise this section to:
 quantify the proposed exchange ratio discussed at the meeting held on April 5, 2013;
 disclose in greater detail the potential risks of the transaction discussed at the Penseco
board meeting held on May 28, 2013; and
 disclose in greater detail the strategic alternatives discussed at the Peoples board
meeting held on May 31, 2013.

11. You dis close that between June 12, 2013 and June 28, 2013 the parties negotiated the
terms of the definitive merger agreement.  Please disclose in greater detail the terms that
were negotiated, revised and agreed upon.

12. Provide us with any analyses, reports, p resentations, or similar materials, including any
board books, provided to or prepared by Boenning & Scattergood, Inc.  and Griffin
Financial Group, LLC  in connection with rendering the fairness opinions.  Please also
supplementally provide us with copies of the Boenning and Griffin engagement letters.

13. You disclose that Boenning and Griffin each used internal financial projections for
Peoples and Penseco , as provided by Peoples’ and Penseco’s senior management teams,
and that such projections were not prepared with a view towards public disclosure.
Please revise your disclosure to discuss in greater detail the bases for and the nature of
the material ass umptions underlying the projections.  Also supplementally provide us
with copies of such projections and tell us how you concluded that disclosure of the
projections is not necessary or appropriate.

Boenning’s Compensation..., page 56

14. We note your disclo sure that Peoples agreed to pay Boenning a transaction fee of
approximately $805,000, of which $275,000 was paid upon the signing of a definitive
agreement with the remainder to be paid upon the closing of the merger.  Please reconcile
your disclosure with  the language in the third paragraph of Boenning’s opinion, which
states that its fees were not contingent upon completion of the merger.  If a substantial
portion of the payment for the opinion was conditioned upon the completion of the
transaction, pleas e revise your disclosure to explain how the Peoples board assessed the
significance and reliability of Boenning’s fairness opinion in light of such condition.

Valuation of Penseco, page 66

15. In the first paragraph on page 68, you disclose that Penseco agre ed to pay Griffin:
 a non-refundable  retainer fee payable upon execution of the engagement letter;
 a fee payable upon the delivery of Griffin’s fairness opinion; and
 a fee contingent on the completion of a transaction.

Please revise your disclosure to qua ntify each of such fees.  If a substantial portion of the
aggregate fees paid to Griffin was conditioned upon the completion of the transaction,

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 4

 please revise your disclosure to explain how the Penseco board assessed the significance
and reliability of Griffin’s fairness opinion in light of such condition.

Rights of Dissenting Shareholders, page 90

16. Please restate the dates of the special meetings for each of Peoples and Penseco in this
section.

Executive Compensation

Compensation Discussion and Analysis, page 107

17. Please revise to provide compensation information for the three most highly compensated
executive officers in addition to the PEO and PFO. See Item 402 of Regulation S -K.
Alternatively, if you concluded that you have provided appropria te disclosure for all
individuals for whom disclosure is required under Item 402 of Regulation S -K, please tell
us the basis for that conclusion.

Annual Cash Incentives, page 108

18. You disclose that the annual cash incentives reward your executive officers  for the
achievement of “Economic Profit Targets and Individual Strategic Targets.”   Please
revise to disclose the specific objectives used to determine compensation, even if no
compensation is granted.   To the extent you believe that disclosure of this in formation is
not required because it would result in competitive harm such that the information could
be excluded under Instruction 4 to Item 402(b) of Regulation S -K, please provide a
detailed supplemental analysis supporting your conclusion.   In particul ar, your
competitive harm analysis should clearly explain the nexus between disclosure of the
performance objectives and the competitive harm that is likely to result from disclosure.
Refer to Item 402(b)(2)(v) of Regulation S -K and Regulation S -K Complia nce &
Disclosure Interpretation 118.04.

Benchmarking, page 110

19. Please revise your disclosure to identify the members of any peer group used to
determine compensation levels. See Item 402(b)(2)(xiv) of Regulation S -K.

Related Party Transactions, page 11 7

20. In the last sentence of this section, please revise to remove the qualification “in the
opinion of Peoples Neighborhood Bank’s Management;” it is inappropriate.  Refer to
Instruction 4 to 404(a) of Regulation S -K.

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 5

 Management’s Discussion and Analysis  of Financial Condition, page 118

21. Please revise your MD&A disclosure to include a discussion of your operating
environment, as you have done on pages 20 to 22 in Peoples’ Form 10 -K for the fiscal
year ended December 31, 2011.  Also include quantification of economic indicators in
your revised disclosure, to the extent feasible.

Annex C – Fairness Opinion of Griffin

22. The last paragraph on page 2 states that Griffin’s opinion is provided to Penseco’s board
of directors and “may not be relied upon by any oth er person for any other reason.”  This
limitation appears to limit reliance by investors on the opinion.  We view the limitation as
inappropriate since the opinion is being provided to shareholders in a public disclosure
document under the federal securiti es laws.  Please either delete the limitation or disclose
the basis for the advisor’s belief that shareholders cannot rely on the opinion to support
any claims against it arising under applicable state law.  Describe any applicable
authority or disclose th at the availability of this defense will be resolved by a court of
competent jurisdiction.  Also disclose that the resolution will have no effect on the rights
and responsibilities of the board of directors under applicable state law and disclose that
the availability of the defense would have no effect on the rights and responsibilities of
either the advisor or the board under federal securities laws.

Exhibits

General

23. Please file as exhibits:
 the Incentive Compensation Plan adopted by Peoples’ directors ;
 the consents of each director nominee named in the section headed “Board Positions
and Compensation” on page 81 who has not signed the registration statement.  Refer
to Rule 438 of the Securities Act of 1933; and
 all contracts or forms thereof entered in to pursuant to the Merger, including any
employment agreements.

24. We note that you have filed forms of legal and tax opinions as exhibits 5.1, 8.1 and 8.2,
respectively.  Please file signed and dated opinions as soon as possible.

Exhibit 8.2

25. Please revise the second paragraph to limit counsel’s reliance on statements, covenants,
representations and warranties  to factual matters.

26. Please revise the penultimate paragraph on page 2 to state that the discussion referenced
in the opinion numbere d (ii) constitutes counsel’s opinion.  Also revise your disclosure to

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 6

 state that the discussion in the tax consequences section of the prospectus is counsel’s
opinion.

27. Please refer to the first two sentences in the last paragraph of the tax opinion.  You may
not include language implying that investors in the offering are not entitled to rely on the
opinions expressed.  Please remove the language in this paragraph that limits the use of
the opinions solely for the benefit of Penseco.

Exhibits 23.5 and 23. 6

28. We note that the consents of Boenning & Scattergood, Inc.  and Griffin Financial Group,
LLC , filed respectively as Exhibits 23.5 and 23.6, do not comply with Rule 436(a) of the
Securities Act of 1933, as the consents do not expressly state that Boenning , in the case
of Exhibit 23.5, and Griffin , in the case of Exhibit 23.6, consents to the quotation or
summarization of its opinion in the registration statement.  Please refile the consents with
the proper representation.

Penseco Financial Services Corpor ation - Form 10 -K for the Fiscal Year Ended December 31,
2012

Item 11. Executive Compensation

Definitive Proxy Statement on Schedule 14A

Non-Equity Incentive Awards, page 30

29. You disclose that the non -equity incentive awards are designed to reward your executive
officers for the achievement of certain corporate performance (relating to core earnings,
core revenue, core efficiency rating, loan growth, deposit growth and asset growth)  and
individual performance goals.  Please revise future filings to discl ose the specific
objectives used to determine compensation, even if no compensation is granted.  To the
extent you believe that disclosure of this information is not required because it would
result in competitive harm such that the information could be ex cluded under Instruction
4 to Item 402(b) of Regulation S -K, please provide a detailed supplemental analysis
supporting your conclusion.  In particular, your competitive harm analysis should clearly
explain the nexus between disclosure of the performance o bjectives and the competitive
harm that is likely to result from disclosure. Refer to Item 402(b)(2)(v) of Regulation S -K
and Regulation S -K Compliance & Disclosure Interpretation 118.04.

Executive Compensation, page 32

30. Please revise future filings to d isclose the information required by Item 402(g) of
Regulation S -K.

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 7

Signatures

31. We note that Patrick Scanlon has signed for the registrant but has not signed in his
capacity as Principal Financial Officer on behalf of the registrant.  Please file all futu re
reports in accordance with General Instruction D of Form 10 -K.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Act of 193 3 and
all applicable Securities  Act rules require.   Since the company and its management are in
possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

Notwithstanding our comments, in the event you request acceleration of the effective date
of the pending regist ration statement please provide  a written statement from the company
acknowledging that:

 should the Commission or the staff, acting pursuant to delegated authority, declare the
filing effective, it does not foreclose the Commission from taking any action with respect
to the filing;

 the action of the Commission or the staff, acting pursuant to delegated authority, in
declaring the filing effectiv e, does not relieve the company from its full responsibility for
the adequacy and accuracy of the disclosure in the filing; and

 the company may not assert staff comments and the declaration of effectiveness as a
defense in any proceeding initiated by the  Commission or any person under the federal
securities laws of the United States.

Please refer to Rules 460 and 461 regarding requests for  acceleration .  We will consider a
written request for acceleration of the effective date of the registration statem ent as confirmation
of the fact that those requesting acceleration are aware of their respective responsibilities under
the Securities Act of 1933 and the Securities Exchange Act of 1934 as they relate to the proposed
public offering of the securities spec ified in the above registration statement.  Please allow
adequate time  for us to review any amendment prior to the requested effective date of the
registration statement.

Alan W. Dakey
Peoples Financial Services Corp.
September 9, 2013
Page 8

 Please contact David Lin at (202) 551 -3552  or me at (202) 551 -3464  with any que stions.

Sincerely,

 /s/Mark Webb for

Kathryn McHale
Senior Staff Attorney

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