Exhibit 99.1
Press Release — For Immediate Release
July 21, 2022
Penns Woods Bancorp, Inc. Reports Second Quarter 2022 Earnings
Williamsport, PA — July 21, 2022 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)
Penns Woods Bancorp, Inc. achieved net income of $7.7 million for the six months ended June 30, 2022, resulting in basic and diluted earnings per share of $1.08.
Highlights
•Net income, as reported under GAAP, for the three and six months ended June 30, 2022 was $4.2 million and $7.7 million, respectively, compared to $3.6 million and $7.0 million for the same periods of 2021. Results for the three and six months ended June 30, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $154,000 (from a gain of $111,000 to a loss of $43,000) for the three month period and an increase in after-tax securities losses of $296,000 (from a gain of $205,000 to a loss of $91,000) for the six month period. Results for the three and six months ended June 30, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the six months ended June 30, 2022.
•The provision for loan losses decreased $20,000 and $385,000 for the three and six months ended June 30, 2022 to $330,000 and $480,000, respectively, compared to $350,000 and $865,000 for the 2021 periods. The provision for loan losses was elevated during 2021 due primarily to the uncertainty caused by the COVID-19 pandemic.
•Basic and diluted earnings per share for the three and six months ended June 30, 2022 were $0.60 and $1.08. Basic and diluted earnings per share for the three and six months ended June 30, 2021 were $0.51 and $1.00.
•Annualized return on average assets was 0.88% for three months ended June 30, 2022, compared to 0.76% for the corresponding period of 2021. Annualized return on average assets was 0.80% for the six months ended June 30, 2022, compared to 0.75% for the corresponding period of 2021.
•Annualized return on average equity was 10.15% for the three months ended June 30, 2022, compared to 8.70% for the corresponding period of 2021. Annualized return on average equity was 9.20% for the six months ended June 30, 2022, compared to 8.69% for the corresponding period of 2021.
Net Income
Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $4.3 million for the three months ended June 30, 2022 compared to $3.5 million for the same period of 2021. Core earnings were $7.8 million for the six months ended June 30, 2022, compared to $6.8 million for the same period of 2021. Core earnings per share for the three months ended June 30, 2022 were $0.61 basic and diluted, compared to $0.49 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the six months ended June 30, 2022 were $1.10 basic and diluted, compared to $0.97 basic and diluted for the same period of 2021. Core return on average assets and core return on average equity were 0.89% and 10.25% for the three months ended June 30, 2022, compared to 0.74% and 8.43% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.81% and 9.31% for the six months ended June 30, 2022 compared to 0.73% and 8.44% for the corresponding period of 2021. Core earnings for the three and six months ended June 30, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options while the six month period ended June 30, 2022 was also impacted negatively by an after-tax loss of $201,000 relating to a branch closure. A
reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.
Net Interest Margin
The net interest margin for the three and six months ended June 30, 2022 was 3.12% and 3.03%, compared to 2.78% and 2.83% for the corresponding periods of 2021. The increase in the net interest margin for the three and six month periods was driven by a decline in the rate paid on interest-bearing deposits of 29 and 33 basis points ("bps") as rates paid decreased throughout 2021 and remained at historically low levels during 2022. Leading the decline in the rate paid on interest-bearing deposits were decreases of 98 and 95 bps in the rate paid on time deposits as time deposits issued prior to the COVID-19 pandemic matured. The increase in the earning asset yield was driven by an increase in yield on federal funds sold and interest-bearing deposits due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). For the three and six months ended June 30, 2022 there was an increase in rate on federal funds sold of 57 and 30 bps, respectively, while the rate on interest bearing deposits increased 57 and 26 bps.
Assets
Total assets decreased $3.1 million to $1.9 billion at June 30, 2022 compared to June 30, 2021. Cash and cash equivalents decreased $176.1 million as interest-bearing accounts in other financial institutions decreased $174.9 million. Net loans increased $151.2 million to $1.5 billion at June 30, 2022 compared to June 30, 2021, as an emphasis was placed on commercial loan growth and customers focused on obtaining funding prior to additional FOMC rate increases. The investment portfolio increased $18.9 million from June 30, 2021 to June 30, 2022 as a portion of the excess cash liquidity was invested primarily into short-term municipal bonds with a maturity of five years or less.
Non-performing Loans
The ratio of non-performing loans to total loans ratio decreased to 0.34% at June 30, 2022 from 0.59% at June 30, 2021 as non-performing loans have decreased to $5.1 million at June 30, 2022 from $7.9 million at June 30, 2021. The majority of non-performing loans involve 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 $263,000 for the six months ended June 30, 2022 impacted the allowance for loan losses, which was 0.97% of total loans at June 30, 2022 compared to 1.08% at June 30, 2021.
Deposits
Deposits increased $25.9 million to $1.6 billion at June 30, 2022 compared to June 30, 2021. Noninterest-bearing deposits increased $46.9 million to $524.3 million at June 30, 2022 compared to June 30, 2021. Driving deposit growth was the continued emphasis on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. Interest-bearing deposits decreased due to the maturity of higher cost time deposits. The increased level of deposits has allowed for a $28.2 million decrease in long-term borrowings.
Shareholders’ Equity
Shareholders’ equity decreased $781,000 to $166.1 million at June 30, 2022 compared to June 30, 2021. Accumulated other comprehensive loss of $9.7 million at June 30, 2022 increased from a loss of $1.4 million at June 30, 2021 as a result of a $6.2 million net unrealized loss on available for sale securities at June 30, 2022 compared to a unrealized gain of $4.1 million at June 30, 2021 coupled with a decrease in loss of $2.1 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $23.56 at June 30, 2022 compared to $23.63 at June 30, 2021, and an equity to asset ratio of 8.78% at June 30, 2022 and 8.80% at June 30, 2021. Dividends declared for the six months ended June 30, 2022 and 2021 were $0.64 per share.
Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates seventeen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products. 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 these certain 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; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) 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, 2021.
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.pwod.com.
| | | | | | | | |
| Contact: | Richard A. Grafmyre, Chief Executive Officer |
| | 110 Reynolds Street |
| | Williamsport, PA 17702 |
| | 570-322-1111 | e-mail: pwod@pwod.com |
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | |
| | | June 30, |
| (In Thousands, Except Share and Per Share Data) | | 2022 | | 2021 | | % Change |
| ASSETS: | | | | | | |
| Noninterest-bearing balances | | $ | 26,540 | | | $ | 27,731 | | | (4.29) | % |
| Interest-bearing balances in other financial institutions | | 24,452 | | | 199,389 | | | (87.74) | % |
| Federal funds sold | | 40,000 | | | 40,000 | | | — | % |
| Total cash and cash equivalents | | 90,992 | | | 267,120 | | | (65.94) | % |
| | | | | | |
| Investment debt securities, available for sale, at fair value | | 192,438 | | | 171,783 | | | 12.02 | % |
| Investment equity securities, at fair value | | 1,153 | | | 1,269 | | | (9.14) | % |
| Investment securities, trading | | 33 | | | 43 | | | (23.26) | % |
| Restricted investment in bank stock, at fair value | | 13,458 | | | 15,120 | | | (10.99) | % |
| Loans held for sale | | 3,857 | | | 4,927 | | | (21.72) | % |
| Loans | | 1,489,132 | | | 1,337,947 | | | 11.30 | % |
| Allowance for loan losses | | (14,393) | | | (14,438) | | | 0.31 | % |
| Loans, net | | 1,474,739 | | | 1,323,509 | | | 11.43 | % |
| Premises and equipment, net | | 32,671 | | | 34,629 | | | (5.65) | % |
| Accrued interest receivable | | 8,246 | | | 8,363 | | | (1.40) | % |
| Bank-owned life insurance | | 34,115 | | | 34,005 | | | 0.32 | % |
| Investment in limited partnerships | | 4,901 | | | 4,795 | | | 2.21 | % |
| Goodwill | | 17,104 | | | 17,104 | | | — | % |
| Intangibles | | 396 | | | 568 | | | (30.28) | % |
| Operating lease right of use asset | | 2,747 | | | 2,946 | | | (6.75) | % |
| Deferred tax asset | | 5,689 | | | 3,624 | | | 56.98 | % |
| Other assets | | 9,267 | | | 5,065 | | | 82.96 | % |
| TOTAL ASSETS | | $ | 1,891,806 | | | $ | 1,894,870 | | | (0.16) | % |
| | | | | | |
| LIABILITIES: | | | | | | |
| Interest-bearing deposits | | $ | 1,065,291 | | | $ | 1,086,352 | | | (1.94) | % |
| Noninterest-bearing deposits | | 524,288 | | | 477,344 | | | 9.83 | % |
| Total deposits | | 1,589,579 | | | 1,563,696 | | | 1.66 | % |
| | | | | | |
| Short-term borrowings | | 5,464 | | | 7,520 | | | (27.34) | % |
| Long-term borrowings | | 112,874 | | | 141,051 | | | (19.98) | % |
| Accrued interest payable | | 452 | | | 961 | | | (52.97) | % |
| Operating lease liability | | 2,800 | | | 2,992 | | | (6.42) | % |
| Other liabilities | | 14,583 | | | 11,815 | | | 23.43 | % |
| TOTAL LIABILITIES | | 1,725,752 | | | 1,728,035 | | | (0.13) | % |
| | | | | | |
| SHAREHOLDERS’ EQUITY: | | | | | | |
| Preferred stock, no par value, 3,000,000 shares authorized; no shares issued | | — | | | — | | | n/a |
| Common stock, par value $5.55, 22,500,000 shares authorized; 7,559,165 and 7,541,627 shares issued; 7,048,940 and 7,061,042 shares outstanding | | 41,995 | | | 41,897 | | | 0.23 | % |
| Additional paid-in capital | | 53,651 | | | 53,205 | | | 0.84 | % |
| Retained earnings | | 92,903 | | | 85,281 | | | 8.94 | % |
| Accumulated other comprehensive (loss) gain: | | | | | | |
| Net unrealized (loss) gain on available for sale securities | | (6,222) | | | 4,085 | | | (252.31) | % |
| Defined benefit plan | | (3,458) | | | (5,523) | | | 37.39 | % |
| Treasury stock at cost, 510,225 and 480,225 | | (12,815) | | | (12,115) | | | 5.78 | % |
| TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY | | 166,054 | | | 166,830 | | | (0.47) | % |
| Non-controlling interest | | — | | | 5 | | | (100.00) | % |
| TOTAL SHAREHOLDERS' EQUITY | | 166,054 | | | 166,835 | | | (0.47) | % |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,891,806 | | | $ | 1,894,870 | | | (0.16) | % |
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| (In Thousands, Except Share and Per Share Data) | | 2022 | | 2021 | | % Change | | 2022 | | 2021 | | % Change |
| INTEREST AND DIVIDEND INCOME: | | | | | | | | | | | | |
| Loans including fees | | $ | 13,620 | | | $ | 13,099 | | | 3.98 | % | | $ | 26,658 | | | $ | 26,444 | | | 0.81 | % |
| Investment securities: | | | | | | | | | | | | |
| Taxable | | 864 | | | 838 | | | 3.10 | % | | 1,601 | | | 1,657 | | | (3.38) | % |
| Tax-exempt | | 194 | | | 164 | | | 18.29 | % | | 358 | | | 335 | | | 6.87 | % |
| Dividend and other interest income | | 506 | | | 305 | | | 65.90 | % | | 842 | | | 565 | | | 49.03 | % |
| TOTAL INTEREST AND DIVIDEND INCOME | | 15,184 | | | 14,406 | | | 5.40 | % | | 29,459 | | | 29,001 | | | 1.58 | % |
| | | | | | | | | | | | |
| INTEREST EXPENSE: | | | | | | | | | | | | |
| Deposits | | 710 | | | 1,489 | | | (52.32) | % | | 1,498 | | | 3,173 | | | (52.79) | % |
| Short-term borrowings | | 2 | | | 2 | | | — | % | | 3 | | | 4 | | | (25.00) | % |
| Long-term borrowings | | 625 | | | 820 | | | (23.78) | % | | 1,258 | | | 1,659 | | | (24.17) | % |
| TOTAL INTEREST EXPENSE | | 1,337 | | | 2,311 | | | (42.15) | % | | 2,759 | | | 4,836 | | | (42.95) | % |
| | | | | | | | | | | | |
| NET INTEREST INCOME | | 13,847 | | | 12,095 | | | 14.49 | % | | 26,700 | | | 24,165 | | | 10.49 | % |
| | | | | | | | | | | | |
| PROVISION FOR LOAN LOSSES | | 330 | | | 350 | | | (5.71) | % | | 480 | | | 865 | | | (44.51) | % |
| | | | | | | | | | | | |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | 13,517 | | | 11,745 | | | 15.09 | % | | 26,220 | | | 23,300 | | | 12.53 | % |
| | | | | | | | | | | | |
| NON-INTEREST INCOME: | | | | | | | | | | | | |
| Service charges | | 509 | | | 379 | | | 34.30 | % | | 1,004 | | | 762 | | | 31.76 | % |
| Debt securities (losses) gains, available for sale | | (10) | | | 137 | | | (107.30) | % | | (12) | | | 275 | | | (104.36) | % |
| Equity securities (losses) gains | | (41) | | | 4 | | | (1,125.00) | % | | (99) | | | (19) | | | (421.05) | % |
| Securities (losses) gains, trading | | (3) | | | (1) | | | (200.00) | % | | (4) | | | 3 | | | (233.33) | % |
| Bank-owned life insurance | | 161 | | | 162 | | | (0.62) | % | | 331 | | | 335 | | | (1.19) | % |
| Gain on sale of loans | | 266 | | | 670 | | | (60.30) | % | . | 611 | | | 1,578 | | | (61.28) | % |
| Insurance commissions | | 107 | | | 150 | | | (28.67) | % | | 277 | | | 307 | | | (9.77) | % |
| Brokerage commissions | | 158 | | | 207 | | | (23.67) | % | | 358 | | | 426 | | | (15.96) | % |
| Loan broker income | | 371 | | | 238 | | | 55.88 | % | | 912 | | | 677 | | | 34.71 | % |
| Debit card income | | 391 | | | 398 | | | (1.76) | % | | 736 | | | 778 | | | (5.40) | % |
| Other | | 228 | | | 565 | | | (59.65) | % | | 435 | | | 401 | | | 8.48 | % |
| TOTAL NON-INTEREST INCOME | | 2,137 | | | 2,909 | | | (26.54) | % | | 4,549 | | | 5,523 | | | (17.64) | % |
| | | | | | | | | | | | |
| NON-INTEREST EXPENSE: | | | | | | | | | | | | |
| Salaries and employee benefits | | 6,141 | | | 5,672 | | | 8.27 | % | | 12,405 | | | 11,270 | | | 10.07 | % |
| Occupancy | | 740 | | | 717 | | | 3.21 | % | | 1,650 | | | 1,693 | | | (2.54) | % |
| Furniture and equipment | | 746 | | | 971 | | | (23.17) | % | | 1,638 | | | 1,780 | | | (7.98) | % |
| Software amortization | | 219 | | | 208 | | | 5.29 | % | | 472 | | | 406 | | | 16.26 | % |
| Pennsylvania shares tax | | 396 | | | 372 | | | 6.45 | % | | 785 | | | 724 | | | 8.43 | % |
| Professional fees | | 582 | | | 684 | | | (14.91) | % | | 1,120 | | | 1,267 | | | (11.60) | % |
| Federal Deposit Insurance Corporation deposit insurance | | 228 | | | 264 | | | (13.64) | % | | 430 | | | 485 | | | (11.34) | % |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| | | | | | | | | | | | |
| Marketing | | 220 | | | 140 | | | 57.14 | % | | 284 | | | 203 | | | 39.90 | % |
| Intangible amortization | | 41 | | | 50 | | | (18.00) | % | | 85 | | | 103 | | | (17.48) | % |
| Other | | 1,107 | | | 1,170 | | | (5.38) | % | | 2,558 | | | 2,268 | | | 12.79 | % |
| TOTAL NON-INTEREST EXPENSE | | 10,420 | | | 10,248 | | | 1.68 | % | | 21,427 | | | 20,199 | | | 6.08 | % |
| INCOME BEFORE INCOME TAX PROVISION | | 5,234 | | | 4,406 | | | 18.79 | % | | 9,342 | | | 8,624 | | | 8.33 | % |
| INCOME TAX PROVISION | | 1,003 | | | 813 | | | 23.37 | % | | 1,679 | | | 1,584 | | | 6.00 | % |
| NET INCOME | | $ | 4,231 | | | $ | 3,593 | | | 17.76 | % | | $ | 7,663 | | | $ | 7,040 | | | 8.85 | % |
| Earnings attributable to noncontrolling interest | | — | | | 5 | | | (100.00) | % | | — | | | 11 | | | (100.00) | % |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' | | $ | 4,231 | | | $ | 3,588 | | | 17.92 | % | | $ | 7,663 | | | $ | 7,029 | | | 9.02 | % |
| EARNINGS PER SHARE - BASIC | | $ | 0.60 | | | $ | 0.51 | | | 17.65 | % | | $ | 1.08 | | | $ | 1.00 | | | 8.00 | % |
| EARNINGS PER SHARE - DILUTED | | $ | 0.60 | | | $ | 0.51 | | | 17.65 | % | | $ | 1.08 | | | $ | 1.00 | | | 8.00 | % |
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | | 7,059,045 | | | 7,059,667 | | | (0.01) | % | | 7,065,772 | | | 7,057,404 | | | 0.12 | % |
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | | 7,059,045 | | | 7,059,667 | | | (0.01) | % | | 7,065,772 | | | 7,057,404 | | | 0.12 | % |
| | | | | | | | | | | | |
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended |
| | | June 30, 2022 | | June 30, 2021 |
| (Dollars in Thousands) | | Average
Balance | | Interest | | Average
Rate | | Average
Balance | | Interest | | Average
Rate |
| ASSETS: | | | | | | | | | | | | |
| Tax-exempt loans | | $ | 52,886 | | | $ | 331 | | | 2.51 | % | | $ | 46,926 | | | $ | 334 | | | 2.85 | % |
| All other loans | | 1,394,631 | | | 13,358 | | | 3.84 | % | | 1,285,853 | | | 12,835 | | | 4.00 | % |
| Total loans | | 1,447,517 | | | 13,689 | | | 3.79 | % | | 1,332,779 | | | 13,169 | | | 3.96 | % |
| | | | | | | | | | | | |
| Federal funds sold | | 48,352 | | | 154 | | | 1.28 | % | | 25,538 | | | 45 | | | 0.71 | % |
| | | | | | | | | | | | |
| Taxable securities | | 154,484 | | | 1,048 | | | 2.75 | % | | 148,415 | | | 1,051 | | | 2.87 | % |
| Tax-exempt securities | | 45,824 | | | 245 | | | 2.17 | % | | 36,469 | | | 208 | | | 2.31 | % |
| Total securities | | 200,308 | | | 1,293 | | | 2.62 | % | | 184,884 | | | 1,259 | | | 2.76 | % |
| | | | | | | | | | | | |
| Interest-bearing deposits | | 102,172 | | | 168 | | | 0.66 | % | | 218,868 | | | 48 | | | 0.09 | % |
| | | | | | | | | | | | |
| Total interest-earning assets | | 1,798,349 | | | 15,304 | | | 3.42 | % | | 1,762,069 | | | 14,521 | | | 3.31 | % |
| | | | | | | | | | | | |
| Other assets | | 131,117 | | | | | | | 128,402 | | | | | |
| | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 1,929,466 | | | | | | | $ | 1,890,471 | | | | | |
| | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | |
| Savings | | $ | 248,063 | | | 24 | | | 0.04 | % | | $ | 225,625 | | | 28 | | | 0.05 | % |
| Super Now deposits | | 388,002 | | | 239 | | | 0.25 | % | | 285,672 | | | 208 | | | 0.29 | % |
| Money market deposits | | 304,636 | | | 210 | | | 0.28 | % | | 309,749 | | | 256 | | | 0.33 | % |
| Time deposits | | 164,301 | | | 237 | | | 0.58 | % | | 256,345 | | | 997 | | | 1.56 | % |
| Total interest-bearing deposits | | 1,105,002 | | | 710 | | | 0.26 | % | | 1,077,391 | | | 1,489 | | | 0.55 | % |
| | | | | | | | | | | | |
| Short-term borrowings | | 5,636 | | | 2 | | | 0.14 | % | | 7,047 | | | 2 | | | 0.11 | % |
| Long-term borrowings | | 112,901 | | | 625 | | | 2.22 | % | | 141,076 | | | 820 | | | 2.33 | % |
| Total borrowings | | 118,537 | | | 627 | | | 2.12 | % | | 148,123 | | | 822 | | | 2.23 | % |
| | | | | | | | | | | | |
| Total interest-bearing liabilities | | 1,223,539 | | | 1,337 | | | 0.44 | % | | 1,225,514 | | | 2,311 | | | 0.76 | % |
| | | | | | | | | | | | |
| Demand deposits | | 518,467 | | | | | | | 482,513 | | | | | |
| Other liabilities | | 20,708 | | | | | | | 17,384 | | | | | |
| Shareholders’ equity | | 166,752 | | | | | | | 165,060 | | | | | |
| | | | | | | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,929,466 | | | | | | | $ | 1,890,471 | | | | | |
| Interest rate spread | | | | | | 2.98 | % | | | | | | 2.55 | % |
| Net interest income/margin | | | | $ | 13,967 | | | 3.12 | % | | | | $ | 12,210 | | | 2.78 | % |
| | | | | | | | | | | | | | |
| | Three Months Ended June 30, |
| | | 2022 | | 2021 |
| Total interest income | | $ | 15,184 | | | $ | 14,406 | |
| Total interest expense | | 1,337 | | | 2,311 | |
| Net interest income (GAAP) | | 13,847 | | | 12,095 | |
| Tax equivalent adjustment | | 120 | | | 115 | |
| Net interest income (fully taxable equivalent) (non-GAAP) | | $ | 13,967 | | | $ | 12,210 | |
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Six Months Ended |
| | | June 30, 2022 | | June 30, 2021 |
| (Dollars in Thousands) | | Average
Balance | | Interest | | Average
Rate | | Average
Balance | | Interest | | Average
Rate |
| ASSETS: | | | | | | | | | | | | |
| Tax-exempt loans | | $ | 50,775 | | | $ | 639 | | | 2.54 | % | | $ | 46,177 | | | $ | 684 | | | 2.99 | % |
| All other loans | | 1,372,810 | | | 26,153 | | | 3.84 | % | | 1,289,660 | | | 25,904 | | | 4.05 | % |
| Total loans | | 1,423,585 | | | 26,792 | | | 3.80 | % | | 1,335,837 | | | 26,588 | | | 4.01 | % |
| | | | | | | | | | | | |
| Federal funds sold | | 49,171 | | | 247 | | | 1.01 | % | | 12,840 | | | 45 | | | 0.71 | % |
| | | | | | | | | | | | |
| Taxable securities | | 149,489 | | | 1,968 | | | 2.67 | % | | 146,740 | | | 2,083 | | | 2.88 | % |
| Tax-exempt securities | | 43,416 | | | 453 | | | 2.12 | % | | 36,420 | | | 424 | | | 2.36 | % |
| Total securities | | 192,905 | | | 2,421 | | | 2.54 | % | | 183,160 | | | 2,507 | | | 2.78 | % |
| | | | | | | | | | | | |
| Interest-bearing deposits | | 129,704 | | | 228 | | | 0.35 | % | | 207,495 | | | 94 | | | 0.09 | % |
| | | | | | | | | | | | |
| Total interest-earning assets | | 1,795,365 | | | 29,688 | | | 3.34 | % | | 1,739,332 | | | 29,234 | | | 3.39 | % |
| | | | | | | | | | | | |
| Other assets | | 128,624 | | | | | | | 126,418 | | | | | |
| | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 1,923,989 | | | | | | | $ | 1,865,750 | | | | | |
| | | | | | | | | | | | |
| LIABILITIES AND SHAREHOLDERS’ EQUITY: | | | | | | | | | | | | |
| Savings | | $ | 244,528 | | | 46 | | | 0.04 | % | | $ | 220,161 | | | 72 | | | 0.07 | % |
| Super Now deposits | | 379,496 | | | 434 | | | 0.23 | % | | 287,444 | | | 475 | | | 0.33 | % |
| Money market deposits | | 301,744 | | | 396 | | | 0.26 | % | | 307,885 | | | 523 | | | 0.34 | % |
| Time deposits | | 177,487 | | | 622 | | | 0.71 | % | | 255,408 | | | 2,103 | | | 1.66 | % |
| Total interest-bearing deposits | | 1,103,255 | | | 1,498 | | | 0.27 | % | | 1,070,898 | | | 3,173 | | | 0.60 | % |
| | | | | | | | | | | | |
| Short-term borrowings | | 5,416 | | | 3 | | | 0.11 | % | | 6,368 | | | 4 | | | 0.13 | % |
| Long-term borrowings | | 114,077 | | | 1,258 | | | 2.23 | % | | 141,279 | | | 1,659 | | | 2.37 | % |
| Total borrowings | | 119,493 | | | 1,261 | | | 2.13 | % | | 147,647 | | | 1,663 | | | 2.27 | % |
| | | | | | | | | | | | |
| Total interest-bearing liabilities | | 1,222,748 | | | 2,759 | | | 0.46 | % | | 1,218,545 | | | 4,836 | | | 0.80 | % |
| | | | | | | | | | | | |
| Demand deposits | | 512,441 | | | | | | | 464,237 | | | | | |
| Other liabilities | | 22,184 | | | | | | | 21,227 | | | | | |
| Shareholders’ equity | | 166,616 | | | | | | | 161,741 | | | | | |
| | | | | | | | | | | | |
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 1,923,989 | | | | | | | $ | 1,865,750 | | | | | |
| Interest rate spread | | | | | | 2.88 | % | | | | | | 2.59 | % |
| Net interest income/margin | | | | $ | 26,929 | | | 3.03 | % | | | | $ | 24,398 | | | 2.83 | % |
| | | | | | | | | | | | | | |
| | Six Months Ended June 30, |
| | | 2022 | | 2021 |
| Total interest income | | $ | 29,459 | | | $ | 29,001 | |
| Total interest expense | | 2,759 | | | 4,836 | |
| Net interest income | | 26,700 | | | 24,165 | |
| Tax equivalent adjustment | | 229 | | | 233 | |
| Net interest income (fully taxable equivalent) (non-GAAP) | | $ | 26,929 | | | $ | 24,398 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in Thousands, Except Per Share Data, Unaudited) | | Quarter Ended |
| | 6/30/2022 | | 3/31/2022 | | 12/31/2021 | | 9/30/2021 | | 6/30/2021 |
| Operating Data | | | | | | | | | | |
| Net income | | $ | 4,231 | | | $ | 3,432 | | | $ | 4,879 | | | $ | 4,125 | | | $ | 3,588 | |
| Net interest income | | 13,847 | | | 12,853 | | | 12,921 | | | 12,632 | | | 12,095 | |
| Provision for loan losses | | 330 | | | 150 | | | (300) | | | 75 | | | 350 | |
| Net security (losses) gains | | (54) | | | (61) | | | 360 | | | 40 | | | 140 | |
| Non-interest income, excluding net security gains | | 2,191 | | | 2,473 | | | 2,835 | | | 2,911 | | | 2,769 | |
| Non-interest expense | | 10,420 | | | 11,007 | | | 10,259 | | | 10,447 | | | 10,248 | |
| | | | | | | | | | |
| Performance Statistics | | | | | | | | | | |
| Net interest margin | | 3.12 | % | | 2.93 | % | | 2.90 | % | | 2.85 | % | | 2.78 | % |
| Annualized return on average assets | | 0.88 | % | | 0.72 | % | | 1.02 | % | | 0.86 | % | | 0.76 | % |
| Annualized return on average equity | | 10.15 | % | | 8.17 | % | | 11.59 | % | | 9.85 | % | | 8.70 | % |
| Annualized net loan (recoveries) charge-offs to average loans | | (0.01) | % | | 0.09 | % | | 0.02 | % | | (0.01) | % | | 0.03 | % |
| Net (recoveries) charge-offs | | (40) | | | 303 | | | 81 | | | (44) | | | 114 | |
| Efficiency ratio | | 64.72 | % | | 71.53 | % | | 64.83 | % | | 66.93 | % | | 68.61 | % |
| | | | | | | | | | |
| Per Share Data | | | | | | | | | | |
| Basic earnings per share | | $ | 0.60 | | | $ | 0.49 | | | $ | 0.69 | | | $ | 0.58 | | | $ | 0.51 | |
| Diluted earnings per share | | 0.60 | | | 0.49 | | | 0.69 | | | 0.58 | | | 0.51 | |
| Dividend declared per share | | 0.32 | | | 0.32 | | | 0.32 | | | 0.32 | | | 0.32 | |
| Book value | | 23.56 | | | 23.81 | | | 24.37 | | | 23.84 | | | 23.63 | |
| Common stock price: | | | | | | | | | | |
| High | | 24.35 | | | 24.67 | | | 24.65 | | | 24.42 | | | 26.51 | |
| Low | | 22.34 | | | 23.64 | | | 23.50 | | | 22.78 | | | 23.03 | |
| Close | | 23.09 | | | 24.43 | | | 23.65 | | | 23.92 | | | 23.82 | |
| Weighted average common shares: | | | | | | | | | | |
| Basic | | 7,059 | | | 7,073 | | | 7,068 | | | 7,064 | | | 7,060 | |
| Fully Diluted | | 7,059 | | | 7,073 | | | 7,068 | | | 7,064 | | | 7,060 | |
| End-of-period common shares: | | | | | | | | | | |
| Issued | | 7,559 | | | 7,555 | | | 7,550 | | | 7,546 | | | 7,542 | |
| Treasury | | (510) | | | (480) | | | (480) | | | (480) | | | (480) | |
| | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| (Dollars in Thousands, Except Per Share Data, Unaudited) | | Quarter Ended |
| | 6/30/2022 | | 3/31/2022 | | 12/31/2021 | | 9/30/2021 | | 6/30/2021 | | |
| Financial Condition Data: | | | | | | | | | | | | |
| General | | | | | | | | | | | | |
| Total assets | | $ | 1,891,806 | | $ | 1,916,809 | | $ | 1,940,809 | | $ | 1,910,791 | | $ | 1,894,870 | | |
| Loans, net | | 1,474,739 | | 1,391,943 | | 1,377,971 | | 1,332,668 | | 1,323,509 | | |
| Goodwill | | 17,104 | | 17,104 | | 17,104 | | 17,104 | | 17,104 | | |
| Intangibles | | 396 | | 437 | | 480 | | 524 | | 568 | | |
| Total deposits | | 1,589,579 | | 1,612,395 | | 1,621,315 | | 1,593,019 | | 1,563,696 | | |
| Noninterest-bearing | | 524,288 | | 514,130 | | 494,360 | | 481,875 | | 477,344 | | |
| | | | | | | | | | | | |
| Savings | | 249,057 | | 245,661 | | 236,312 | | 231,189 | | 226,573 | | |
| NOW | | 353,102 | | 379,838 | | 366,399 | | 340,441 | | 296,450 | | |
| Money Market | | 309,453 | | 299,166 | | 318,877 | | 305,156 | | 301,405 | | |
| Time Deposits | | 153,679 | | 173,600 | | 205,367 | | 234,358 | | 261,924 | | |
| Total interest-bearing deposits | | 1,065,291 | | 1,098,265 | | 1,126,955 | | 1,111,144 | | 1,086,352 | | |
| | | | | | | | | | | | |
| Core deposits* | | 1,435,900 | | 1,438,795 | | 1,415,948 | | 1,358,661 | | 1,301,772 | | |
| Shareholders’ equity | | 166,054 | | 168,427 | | 172,274 | | 168,478 | | 166,830 | | |
| | | | | | | | | | | | |
| Asset Quality | | | | | | | | | | | | |
| Non-performing loans | | $ | 5,100 | | $ | 5,281 | | $ | 6,250 | | $ | 7,763 | | $ | 7,931 | | |
| Non-performing loans to total assets | | 0.27% | | 0.28% | | 0.32% | | 0.41% | | 0.42% | | |
| Allowance for loan losses | | 14,393 | | 14,023 | | 14,176 | | 14,557 | | 14,438 | | |
| Allowance for loan losses to total loans | | 0.97% | | 1.00% | | 1.02% | | 1.08% | | 1.08% | | |
| Allowance for loan losses to non-performing loans | | 282.22% | | 265.54% | | 226.82% | | 187.52% | | 182.05% | | |
| Non-performing loans to total loans | | 0.34% | | 0.38% | | 0.45% | | 0.58% | | 0.59% | | |
| | | | | | | | | | | | |
| Capitalization | | | | | | | | | | | | |
| Shareholders’ equity to total assets | | 8.78% | | 8.79% | | 8.88% | | 8.82% | | 8.80% | | |
* Core deposits are defined as total deposits less time deposits
Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended June 30, | | Six Months Ended June 30, |
| (Dollars in Thousands, Except Per Share Data) | | 2022 | | 2021 | | 2022 | | 2021 |
| GAAP net income | | $ | 4,231 | | $ | 3,588 | | $ | 7,663 | | $ | 7,029 |
| Less: net securities (losses) gains, net of tax | | (43) | | 111 | | (91) | | 205 |
| | | | | | | | |
| Non-GAAP core earnings | | $ | 4,274 | | $ | 3,477 | | $ | 7,754 | | $ | 6,824 |
| | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 |
| Return on average assets (ROA) | | 0.88 | % | | 0.76 | % | | 0.80 | % | | 0.75 | % |
| Less: net securities (losses) gains, net of tax | | (0.01) | % | | 0.02 | % | | (0.01) | % | | 0.02 | % |
| | | | | | | | |
| Non-GAAP core ROA | | 0.89 | % | | 0.74 | % | | 0.81 | % | | 0.73 | % |
| | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 |
| Return on average equity (ROE) | | 10.15 | % | | 8.70 | % | | 9.20 | % | | 8.69 | % |
| Less: net securities (losses) gains, net of tax | | (0.10) | % | | 0.27 | % | | (0.11) | % | | 0.25 | % |
| | | | | | | | |
| Non-GAAP core ROE | | 10.25 | % | | 8.43 | % | | 9.31 | % | | 8.44 | % |
| | | | | | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 |
| Basic earnings per share (EPS) | | $ | 0.60 | | | $ | 0.51 | | | $ | 1.08 | | | $ | 1.00 |
| Less: net securities (losses) gains, net of tax | | (0.01) | | | 0.02 | | | (0.02) | | | 0.03 |
| | | | | | | | |
| Non-GAAP basic core EPS | | $ | 0.61 | | | $ | 0.49 | | | $ | 1.10 | | | $ | 0.97 |
| | | | |
| | | Three Months Ended June 30, | | Six Months Ended June 30, |
| | | 2022 | | 2021 | | 2022 | | 2021 |
| Diluted EPS | | $ | 0.60 | | | $ | 0.51 | | | $ | 1.08 | | | $ | 1.00 |
| Less: net securities (losses) gains, net of tax | | (0.01) | | | 0.02 | | | (0.02) | | | 0.03 |
| | | | | | | | |
| Non-GAAP diluted core EPS | | $ | 0.61 | | | $ | 0.49 | | | $ | 1.10 | | | $ | 0.97 |
