News Column

Penns Woods Bancorp, Inc. Reports Second Quarter 2014 Operating Earnings

July 21, 2014

WILLIAMSPORT, Pa., July 21, 2014 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (Nasdaq:PWOD)

Penns Woods Bancorp, Inc. continued its solid earnings and growth during the recently completed second quarter of 2014, achieving net income of $6,932,000 for the six months ended June 30, 2014 resulting in basic and dilutive earnings per share of $1.44.

Highlights

• Year over year comparisons are impacted by the acquisition of Luzerne National Bank Corporation ("Luzerne") that was effective June 1, 2013 and resulted in increases in net loans of $254,057,000; investments of $21,140,000; deposits of $279,867,000; and assets of $329,209,000 at the time of acquisition.

 • Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and bank owned life insurance gains on death benefits, increased to $3,142,000 for the three months ended June 30, 2014 compared to $2,818,000 for the same period of 2013.  Net income from core operations increased to $6,177,000 for the six months ended June 30, 2014 compared to $5,851,000 for the same period of 2013.

 • Operating earnings per share for the three months ended June 30, 2014 were $0.65 basic and dilutive compared to $0.68 basic and dilutive for the same period of 2013.  Operating earnings per share for the six months ended June 30, 2014 were $1.28 basic and dilutive compared to $1.46 basic and dilutive for the same period 2013.

 • Return on average assets was 1.13% for the three months ended June 30, 2014 compared to 1.48% for the corresponding period of 2013.  Return on average assets was 1.14% for the six months ended June 30, 2014 compared to 1.59% for the corresponding period of 2013.

 • Return on average equity was 10.29% for the three months ended June 30, 2014 compared to 13.54% for the corresponding period of 2013.  Return on average equity was 10.43% for the six months ended June 30, 2014 compared to 14.45% for the corresponding period of 2013.

"The six months ended June 30, 2014 were impacted by several events. During this time frame our flagship bank, Jersey Shore State Bank, undertook a significant upgrade to systems. While the upgrade at JSSB was taking place, our employees also converted Luzerne Bank in April from their legacy system to the new systems utilized by JSSB. The first half of 2014 has also seen the near completion of our Loyalsock branch that will house a full service branch and the mortgage division. While systems have been upgraded and a new branch was being constructed, attention has also been focused on shortening the earning asset portfolio and lengthening the deposit portfolio per our strategy to reduce interest rate and market price risk. We also continue to work through impaired credits in the loan portfolio which has resulted in $2,118,000 in charge-offs during the first six months of 2014," said Richard A. Grafmyre, CFP®, President and CEO.

A reconciliation of the non-GAAP financial measures of operating earnings, operating return on assets, operating return on equity, and operating earnings per share, described in the highlights, to the comparable GAAP financial measures is included at the end of this press release.

Net Income

Net income, as reported under GAAP, for the three and six months ended June 30, 2014 was $3,463,000 and $6,932,000 compared to $3,659,000 and $7,343,000 for the same periods of 2013.  Results for the three and six months ended June 30, 2014 compared to 2013 were impacted by a decrease in after-tax securities gains of $520,000 (from a gain of $841,000 to a gain of $321,000) for the three month periods and a decrease of $911,000 (from a gain of $1,492,000 to a gain of $581,000) for the six month periods.  In addition, a gain of $174,000 on death benefits related to bank owned life insurance was recorded during the first quarter of 2014.  Basic and dilutive earnings per share for the three and six months ended June 30, 2014 were $0.72 and $1.44 compared to $0.88 and $1.84 for the corresponding periods of 2013.  Return on average assets and return on average equity were 1.13% and 10.29% for the three months ended June 30, 2014 compared to 1.48% and 13.54% for the corresponding period of 2013. Return on average assets and return on average equity were 1.14% and 10.43% for the six months ended June 30, 2014 compared to 1.59% and 14.45% for the corresponding period of 2013.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2014 was 3.84% and 3.88% compared to 4.09% and 4.26% for the corresponding periods of 2013.  While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $1,250,000 and $2,979,000 for the three and six months ended June 30, 2014 compared to the corresponding periods of 2013.  Driving this increase is the growth in the loan and deposit portfolios for the six months ended June 30, 2014 compared to the corresponding period for 2013, primarily due to growth in home equity products and the continued emphasis on core deposit growth.  The primary funding for the loan growth was an increase in core deposits.  These deposits represent a lower cost funding source than time deposits and comprise 77.30% of total deposits at June 30, 2014 compared to 75.03% at June 30, 2013.  The continued growth in core deposits has led to the total cost of deposits decreasing to 40 basis points ("bp") for the six months ended June 30, 2014 from 54 bp for the corresponding period of 2013. The rate paid on borrowings decreased slightly due to the impact of maturities and the entering into a capital lease agreement.  The changes in the composition of the deposit and borrowing portfolios has led to the total cost of interest bearing funding decreasing to 58 bp for the six months ended June 30, 2014 from 77 bp for the corresponding period of 2013.

"Due to the yield on earning assets declining, the net interest margin continues to decrease each quarter by several basis points. The earning asset portfolio yield has decreased due to the roll off of higher yielding legacy assets that are being replaced by assets at lower yields due to the continued low interest rate environment. To counter the revenue impact of the declining asset yields, we have focused on increasing earning assets by adding quality short and intermediate term loans such as home equity loans, even though these new earning assets are at lower yields than legacy assets. This action has resulted in an increase in interest income on a fully taxable basis. In addition, the investment portfolio continues to be actively managed in order to reduce interest rate and market risk. This is being undertaken primarily through the sale of long-term municipal bonds that have a maturity date of 2025 or later and securities with a call date within the next five years.  The proceeds of the bond sales are being deployed primarily into loans with limited reinvestment into intermediate term corporate bonds and short and intermediate term municipal bonds.  The strategy to sell a portion of the long-term bond portfolio does negatively impact current earnings, but this action plays a key role in our long-term asset liability management strategy as the balance sheet is shortened to better prepare for a rising rate environment.  The funding side of the balance sheet has limited opportunities to reduce cost.  While we remain focused on increasing lower cost core deposits, we have begun to lengthen our funding sources as a campaign to attract four and five year time deposits has been conducted," commented President Grafmyre.

Assets

Total assets increased $15,889,000 to $1,222,847,000 at June 30, 2014 compared to June 30, 2013.  Net loans increased $69,964,000 to $847,521,000 at June 30, 2014 compared to June 30, 2013 due primarily to campaigns related to increasing home equity product market share during 2013 and 2014 and growth in the commercial portfolio.  The investment portfolio decreased $48,263,000 from June 30, 2013 to June 30, 2014 due to our strategy to reduce the investment portfolio duration through the selective selling of bonds as opportunities develop. The combination of loan portfolio growth and a decrease in the size of the investment portfolio has resulted in a shortening of the overall earning asset portfolio duration consistent with a strategy to reduce the interest rate and market risk exposure to a rising rate environment.

Non-performing Loans

The non-performing loans to total loans ratio increased to 1.40% at June 30, 2014 from 0.83% at June 30, 2013.   The increase in non-performing loans to $11,979,000 at June 30, 2014 from $6,515,000 at June 30, 2013 is primarily the result of commercial real estate backed loans becoming non-performing.  The majority of non-performing loans are centered on several loans that are either in a secured position and have sureties with a strong underlying financial position or have a specific allocation for any impairment recorded within the allowance for loan losses.  Net loan charge-offs of $2,118,000 for the six months ended June 30, 2014 negatively impacted the allowance for loan losses which was 1.03% of total loans at June 30, 2014. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $26,465,000 to $981,826,000 at June 30, 2014 compared to June 30, 2013. Core deposits (total deposits excluding time deposits) increased $42,157,000, while higher cost time deposits decreased $15,692,000 due to our commitment to building complete banking relationships with our customers.  Noninterest-bearing deposits increased $17,662,000 to $228,758,000 at June 30, 2014 compared to June 30, 2013.  Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. 

Shareholders' Equity

Shareholders' equity increased $9,874,000 to $135,802,000 at June 30, 2014 compared to June 30, 2013.  The accumulated other comprehensive gain of $635,000 at June 30, 2014 is primarily a result of an increase in unrealized gains on available for sale securities from an unrealized gain of $286,000 at June 30, 2013 to an unrealized gain of $3,360,000 at June 30, 2014.  The amount of accumulated other comprehensive gain at June 30, 2014 was also impacted by the change in net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan resulting in a decrease in the net loss of $2,082,000 to $2,725,000 at June 30, 2014.  The current level of shareholders' equity equates to a book value per share of $28.17 at June 30, 2014 compared to $26.14 at June 30, 2013 and an equity to asset ratio of 11.11% at June 30, 2014 compared to 10.43% at June 30, 2013.  Excluding goodwill and intangibles, book value per share was $24.29 at June 30, 2014 compared to $22.17 at June 30, 2013.  Dividends declared for the three and six months ended June 30, 2014 were $0.47 and $0.94 per share compared to $0.47 and $1.19 for the three and six months ended June 30, 2013.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County.  Investment and insurance products are offered through Jersey Shore State Bank's subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

NOTE:  This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP").  Management uses the non-GAAP measure of net income from core operations in its analysis of the company's performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature such as net securities gains and losses. Because certain of these items and their impact on the Company's performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company's core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release may contain certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact.  The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company's organization, compensation and benefit plans; (iii) the effect on the Company's competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; and (v) the effect of changes in the business cycle and downturns in the local, regional or national economies.  For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A.  Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise.  The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Previous press releases and additional information can be obtained from the Company's website at www.jssb.com.

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
       
 June 30,
(In Thousands, Except Share Data)20142013% Change
ASSETS      
Noninterest-bearing balances  $ 22,905  $ 26,888 (14.81)%
Interest-bearing deposits in other financial institutions 1,962 1,417 38.46%
Federal funds sold 134 n/a
Total cash and cash equivalents 24,867 28,439 (12.56)%
       
Investment securities, available for sale, at fair value 263,026 311,289 (15.50)%
Loans held for sale 1,827 5,409 (66.22)%
Loans 856,332 786,961 8.82%
Allowance for loan losses (8,811) (9,404) (6.31)%
Loans, net 847,521 777,557 9.00%
Premises and equipment, net 21,007 17,101 22.84%
Accrued interest receivable 4,235 4,999 (15.28)%
Bank-owned life insurance 25,601 25,022 2.31%
Investment in limited partnerships 1,891 2,552 (25.90)%
Goodwill 17,104 17,104 —%
Intangibles 1,621 1,984 (18.30)%
Deferred tax asset 6,807 9,906 (31.28)%
Other assets 7,340 5,596 31.17%
TOTAL ASSETS  $ 1,222,847  $ 1,206,958 1.32%
       
LIABILITIES      
Interest-bearing deposits  $ 753,068  $ 744,265 1.18%
Noninterest-bearing deposits 228,758 211,096 8.37%
Total deposits 981,826 955,361 2.77%
       
Short-term borrowings 21,926 39,000 (43.78)%
Long-term borrowings 71,202 70,750 0.64%
Accrued interest payable 399 442 (9.73)%
Other liabilities 11,692 15,477 (24.46)%
TOTAL LIABILITIES 1,087,045 1,081,030 0.56%
       
SHAREHOLDERS' EQUITY      
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued n/a
Common stock, par value $8.33, 15,000,000 shares authorized; 5,001,222 and 4,998,881 shares issued 41,676 41,657 0.05%
Additional paid-in capital 49,846 49,759 0.17%
Retained earnings 49,955 45,343 10.17%
Accumulated other comprehensive income (loss):      
Net unrealized gain on available for sale securities 3,360 286 1,074.83%
Defined benefit plan (2,725) (4,807) 43.31%
Treasury stock at cost, 180,596 shares (6,310) (6,310) —%
TOTAL SHAREHOLDERS' EQUITY 135,802 125,928 7.84%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 1,222,847  $ 1,206,958 1.32%
       
       
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
             
 Three Months Ended June 30,Six Months Ended June 30,
(In Thousands, Except Per Share Data)20142013% Change20142013% Change
INTEREST AND DIVIDEND INCOME:            
Loans including fees   $ 8,912  $ 7,277 22.47%  $ 17,725  $ 14,045 26.2%
Investment securities:            
Taxable 1,406 1,507 (6.70)% 2,864 2,950 (2.92)%
Tax-exempt 892 1,162 (23.24)% 1,823 2,429 (24.95)%
Dividend and other interest income 147 72 104.17% 274 134 104.48%
TOTAL INTEREST AND DIVIDEND INCOME 11,357 10,018 13.37% 22,686 19,558 15.99%
             
INTEREST EXPENSE:            
Deposits 741 760 (2.50)% 1,499 1,551 (3.35)%
Short-term borrowings 12 22 (45.45)% 27 47 (42.55)%
Long-term borrowings 473 482 (1.87)% 942 1,001 (5.89)%
TOTAL INTEREST EXPENSE 1,226 1,264 (3.01)% 2,468 2,599 (5.04)%
             
NET INTEREST INCOME 10,131 8,754 15.73% 20,218 16,959 19.22%
             
PROVISION FOR LOAN LOSSES 300 575 (47.83)% 785 1,075 (26.98)%
             
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,831 8,179 20.20% 19,433 15,884 22.34%
             
NON-INTEREST INCOME:            
Service charges 607 538 12.83% 1,202 980 22.65%
Securities gains, net 487 1,274 (61.77)% 880 2,260 (61.06)%
Bank-owned life insurance 181 144 25.69% 551 282 95.39%
Gain on sale of loans 421 302 39.40% 711 653 8.88%
Insurance commissions 283 247 14.57% 703 511 37.57%
Brokerage commissions 251 299 (16.05)% 522 547 (4.57)%
Other 699 731 (4.38)% 1,571 1,035 51.79%
TOTAL NON-INTEREST INCOME 2,929 3,535 (17.14)% 6,140 6,268 (2.04)%
             
NON-INTEREST EXPENSE:            
Salaries and employee benefits 4,167 3,442 21.06% 8,670 6,510 33.18%
Occupancy 552 397 39.04% 1,182 748 58.02%
Furniture and equipment 648 412 57.28% 1,319 820 60.85%
Pennsylvania shares tax 262 208 25.96% 506 392 29.08%
Amortization of investments in limited partnerships 166 166 —% 331 331 —%
Federal Deposit Insurance Corporation deposit insurance 201 119 68.91% 379 248 52.82%
Marketing 126 120 5.00% 236 215 9.77%
Intangible amortization 88 31 183.87% 180 31 480.65%
Other 2,212 2,070 6.86% 4,262 3,521 21.05%
TOTAL NON-INTEREST EXPENSE 8,422 6,965 20.92% 17,065 12,816 33.15%
             
INCOME BEFORE INCOME TAX PROVISION 4,338 4,749 (8.65)% 8,508 9,336 (8.87)%
INCOME TAX PROVISION 875 1,090 (19.72)% 1,576 1,993 (20.92)%
NET INCOME  $ 3,463  $ 3,659 (5.36)%  $ 6,932  $ 7,343 (5.60)%
             
EARNINGS PER SHARE - BASIC AND DILUTED  $ 0.72  $ 0.88 (18.18)%  $ 1.44  $ 1.84 (21.74)%
             
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED 4,820,193 4,151,035 16.12% 4,819,886 3,995,716 20.63%
             
DIVIDENDS DECLARED PER SHARE  $ 0.47  $ 0.47 —%  $ 0.94  $ 1.19 (21.01)%
             
             
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
             
 Three Months Ended
 June 30, 2014June 30, 2013
 Average  AverageAverage  Average
(Dollars in Thousands) BalanceInterestRateBalanceInterestRate
ASSETS:            
Tax-exempt loans   $ 26,040  $ 286 4.41%  $ 21,480  $ 249 4.65%
All other loans  805,971 8,723 4.34% 596,206 7,113 4.79%
Total loans  832,011 9,009 4.34% 617,686 7,362 4.78%
             
Federal funds sold  128 —% 98 —%
             
Taxable securities  175,374 1,540 3.51% 178,827 1,573 3.52%
Tax-exempt securities  95,589 1,352 5.66% 119,655 1,761 5.89%
Total securities  270,963 2,892 4.27% 298,482 3,334 4.47%
             
Interest-bearing deposits  14,396 13 0.36% 8,339 6 0.29%
             
Total interest-earning assets  1,117,498 11,914 4.27% 924,605 10,702 4.64%
             
Other assets  105,066     65,956    
             
TOTAL ASSETS   $ 1,222,564      $ 990,561    
             
LIABILITIES AND SHAREHOLDERS' EQUITY:            
Savings   $ 141,837 20 0.06%  $ 107,027 27 0.10%
Super Now deposits  189,473 150 0.32% 149,635 171 0.46%
Money market deposits  211,788 138 0.26% 172,228 129 0.30%
Time deposits  225,548 433 0.77% 191,046 433 0.91%
Total interest-bearing deposits  768,646 741 0.39% 619,936 760 0.49%
             
Short-term borrowings  15,422 11 0.29% 21,777 22 0.40%
Long-term borrowings  71,202 474 2.63% 71,237 482 2.68%
Total borrowings  86,624 485 2.22% 93,014 504 2.14%
             
Total interest-bearing liabilities  855,270 1,226 0.57% 712,950 1,264 0.71%
             
Demand deposits  220,975     153,840    
Other liabilities  14,651     15,652    
Shareholders' equity  134,668     108,120    
             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,225,564      $ 990,562    
Interest rate spread      3.70%     3.93%
Net interest income/margin     $ 10,688 3.84%    $ 9,438 4.09%
             
 Three Months Ended June 30,
 20142013
Total interest income   $ 11,357  $ 10,018
Total interest expense  1,226 1,264
Net interest income  10,131 8,754
Tax equivalent adjustment  557 684
Net interest income (fully taxable equivalent)   $ 10,688  $ 9,438
     
     
 Six Months Ended
 June 30, 2014June 30, 2013
 Average  AverageAverage  Average
(Dollars in Thousands)BalanceInterestRateBalanceInterestRate
ASSETS:            
Tax-exempt loans   $ 26,714  $ 592 4.47%  $ 21,860  $ 498 4.59%
All other loans  798,552 17,334 4.38% 546,033 13,716 5.07%
Total loans  825,266 17,926 4.38% 567,893 14,214 5.05%
             
Federal funds sold  344 —% 49 —%
             
Taxable securities  176,046 3,116 3.54% 170,226 3,076 3.61%
Tax-exempt securities  97,864 2,762 5.64% 123,543 3,680 5.96%
Total securities  273,910 5,878 4.29% 293,769 6,756 4.60%
             
Interest-bearing deposits  10,000 22 0.44% 6,024 8 0.27%
             
Total interest-earning assets  1,109,520 23,826 4.32% 867,735 20,978 4.86%
             
Other assets  105,718     57,369    
             
TOTAL ASSETS   $ 1,215,238      $ 925,104    
LIABILITIES AND SHAREHOLDERS' EQUITY:            
Savings   $ 140,803 51 0.07%  $ 95,848 52 0.11%
Super Now deposits  183,174 307 0.34% 143,509 344 0.48%
Money market deposits  209,314 272 0.26% 158,374 264 0.34%
Time deposits  228,846 869 0.77% 181,443 891 0.99%
Total interest-bearing deposits  762,137 1,499 0.40% 579,174 1,551 0.54%
             
Short-term borrowings  17,749 27 0.31% 21,574 47 0.44%
Long-term borrowings  71,202 942 2.63% 73,550 1,001 2.71%
Total borrowings  88,951 969 2.17% 95,124 1,048 2.19%
             
Total interest-bearing liabilities  851,088 2,468 0.58% 674,298 2,599 0.77%
             
Demand deposits  216,588     135,035    
Other liabilities  14,642     14,164    
Shareholders' equity  132,920     101,607    
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,215,238      $ 925,104    
Interest rate spread      3.74%     4.09%
Net interest income/margin     $ 21,358 3.88%    $ 18,379 4.26%
             
 Six Months Ended June 30,
 20142013
Total interest income $ 22,686$ 19,558
Total interest expense  2,468 2,599
Net interest income  20,218 16,959
Tax equivalent adjustment  1,140 1,420
Net interest income (fully taxable equivalent) $ 21,358$ 18,379
     
     
(Dollars in Thousands, Except Per Share Data)Quarter Ended
 6/30/20143/31/201412/31/20139/30/20136/30/2013
Operating Data          
Net income  $ 3,463  $ 3,469  $ 3,495  $ 3,246  $ 3,659
Net interest income 10,131 10,087 10,447 10,629 8,754
Provision for loan losses 300 485 600 600 575
Net security gains (losses) 487 393 160 (3) 1,274
Non-interest income, ex. net security gains 2,442 2,818 2,772 2,845 2,261
Non-interest expense 8,422 8,643 8,476 8,975 6,965
           
Performance Statistics          
Net interest margin 3.84% 3.96% 3.98% 4.07% 4.09%
Annualized return on average assets 1.13% 1.15% 1.16% 1.08% 1.48%
Annualized return on average equity 10.29% 10.58% 10.99% 10.39% 13.54%
Annualized net loan charge-offs to average loans —% 1.06% 0.04% 0.19% —%
Net charge-offs 9 2,109 87 374 1
Efficiency ratio 66.3% 66.3% 63.5% 66.6% 63.2%
           
Per Share Data          
Basic earnings per share  $ 0.72  $ 0.72  $ 0.73  $ 0.67  $ 0.88
Diluted earnings per share 0.72 0.72 0.73 0.67 0.88
Dividend declared per share 0.47 0.47 0.47 0.47 0.47
Book value 28.17 27.45 26.52 26.12 26.14
Common stock price:          
High 48.37 50.95 53.99 49.89 41.86
Low 43.21 43.19 47.03 42.76 39.44
Close 47.10 48.78 51.00 49.82 41.86
Weighted average common shares:          
Basic 4,820 4,820 4,819 4,818 4,151
Fully Diluted 4,820 4,820 4,819 4,818 4,151
End-of-period common shares:          
Issued 5,001 5,001 5,000 4,999 4,999
Treasury 181 181 181 181 181
           
           
 Quarter Ended
(Dollars in Thousands, Except Per Share Data)6/30/20143/31/201412/31/20139/30/20136/30/2013
Financial Condition Data:          
General          
Total assets  $ 1,222,847  $ 1,217,137  $ 1,211,995  $ 1,204,090  $ 1,206,958
Loans, net 847,521 812,091 808,200 796,533 777,557
Goodwill 17,104 17,104 17,104 17,104 17,104
Intangibles 1,621 1,709 1,801 1,892 1,984
Total deposits 981,826 983,026 973,002 975,521 955,361
Noninterest-bearing 228,758 218,740 217,377 215,374 211,096
           
Savings 141,362 142,030 138,621 142,193 140,667
NOW 176,066 191,191 177,996 169,974 161,972
Money Market 212,782 202,893 203,786 209,469 203,076
Time Deposits 222,858 228,172 235,222 238,511 238,550
Total interest-bearing deposits 753,068 764,286 755,625 760,147 744,265
           
Core deposits* 758,968 754,854 737,780 737,010 716,811
Shareholders' equity 135,802 132,305 127,815 125,852 125,928
           
Asset Quality          
Non-performing assets  $ 11,979  $ 10,614  $ 9,678  $ 6,064  $ 6,515
Non-performing assets to total assets 0.98% 0.87% 0.80% 0.50% 0.54%
Allowance for loan losses 8,811 8,520 10,144 9,630 9,404
Allowance for loan losses to total loans 1.03% 1.04% 1.24% 1.19% 1.19%
Allowance for loan losses to non-performing loans 73.55% 80.27% 104.82% 158.81% 144.34%
Non-performing loans to total loans 1.40% 1.29% 1.18% 0.75% 0.83%
           
Capitalization          
Shareholders' equity to total assets 11.11% 10.87% 10.55% 10.45% 10.43%
           
* Core deposits are defined as total deposits less time deposits
           
           
Reconciliation of GAAP and Non-GAAP Financial Measures
         
 Three Months Ended June 30,Six Months Ended June 30,
(Dollars in Thousands, Except Per Share Data)2014201320142013
GAAP net income   $ 3,463  $ 3,659  $ 6,932  $ 7,343
Less: net securities and bank-owned life insurance gains, net of tax  321 841 755 1,492
Non-GAAP operating earnings   $ 3,142  $ 2,818  $ 6,177  $ 5,851
         
 Three Months Ended June 30,Six Months Ended June 30,
 2014201320142013
Return on average assets (ROA)  1.13% 1.48% 1.14% 1.59%
Less: net securities and bank-owned life insurance (losses) gains, net of tax  0.10% 0.34% 0.12% 0.33%
Non-GAAP operating ROA  1.03% 1.14% 1.02% 1.26%
         
 Three Months Ended June 30,Six Months Ended June 30,
 2014201320142013
Return on average equity (ROE)  10.29% 13.54% 10.43% 14.45%
Less: net securities and bank-owned life insurance (losses) gains, net of tax  0.96% 3.11% 1.14% 2.93%
Non-GAAP operating ROE  9.33% 10.43% 9.29% 11.52%
         
 Three Months Ended June 30,Six Months Ended June 30,
 2014201320142013
Basic earnings per share (EPS)   $ 0.72  $ 0.88  $ 1.44  $ 1.84
Less: net securities and bank-owned life insurance (losses) gains, net of tax  0.07 0.20 0.16 0.38
Non-GAAP basic operating EPS   $ 0.65  $ 0.68  $ 1.28  $ 1.46
         
 Three Months Ended June 30,Six Months Ended June 30,
 2014201320142013
Dilutive EPS   $ 0.72  $ 0.88  $ 1.44  $ 1.84
Less: net securities and bank-owned life insurance (losses) gains, net of tax  0.07 0.20 0.16 0.38
Non-GAAP dilutive operating EPS   $ 0.65  $ 0.68  $ 1.28  $ 1.46
         

CONTACT: Richard A. Grafmyre, President and Chief Executive Officer 300 Market StreetWilliamsport, PA 17701 570-322-1111 e-mail: pwod@pwod.com

Source: Penns Woods Bancorp, Inc.


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