Exhibit 99.1
Press Release – For Immediate Release
July 13, 2005
Contact:
Penns Woods Bancorp, Inc.
Mr. Ronald A. Walko
President and Chief Executive Officer
115 South Main Street
Jersey Shore, PA 17740
570-322-1111
Penns Woods Bancorp, Inc. Announces 2005 Second Quarter Earnings
Jersey Shore, PA – Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported net income for the three and six months ended June 30, 2005 of $2,760,000 and $5,475,000 compared to $2,804,000 and $5,477,000 for the same periods of 2004. Basic and dilutive earnings per share for the three and six months ended June 30, 2005 were $0.83 and $1.65 as compared to $0.85 and $1.65 for the three and six months ended June 30, 2004. Return on average assets and return on average equity was 2.02% and 14.81% for the three months ended June 30, 2005 as compared to 2.10% and 15.99% for the corresponding period of 2004. The six month earnings results correlate to a return on average assets and return on average equity of 2.02% and 14.68% as compared to 2.07% and 15.44% for the six months ended June 30, 2004.
Net income from core operations for the three and six months ended June 30, 2005, excluding security gains, was $2,307,000 and $4,618,000, respectively.
Total assets increased $32,511,000 or 5.98% to $575,739,000 from $543,228,000 at June 30, 2004 as management continues to increase earning assets with emphasis on growing the net loan portfolio with well secured real estate loans. In addition to the loan growth, there has been a focus on creating and maintaining solid deposit customer relationships throughout the marketplace. The result of these efforts has been an increase in the net loan portfolio of $26,817,000 and an increase in deposits of $13,524,000 from June 30, 2004 to June 30, 2005.
“We opened our new North Atherton Street, State College branch during May to provide one stop shopping for the financial needs of our customers. The branch houses traditional banking services in addition to a commercial lender, a mortgage originator, and an investment services representative to allow our customers ease in obtaining access to any of our products offered.” stated Ronald A. Walko, President and Chief Executive Officer of Penns Woods Bancorp, Inc.
Shareholders’ equity increased $8,974,000 to $77,211,000 at June 30, 2005 equating to a book value per share of $23.24 as compared to $20.56 at June 30, 2004. During the three months ended June 30, 2005 a dividend of $0.46 per share was paid to shareholders. The dividend represented a 31.4% increase over the dividend of $0.35 paid during the comparable period of 2004 and an increase of $0.01 or 2.2% over the first quarter 2005 dividend. A dividend of $0.91 has been paid during the six months ended June 30, 2005 as compared to $0.70 for the comparable period of 2004. “The increase of $0.21 or 30.0% in dividends during the six months ended June 30, 2005 as compared to 2004 was the result of continued profitability and the decision by the Board of Directors during the first quarter of 2005 to discontinue special dividends by incorporating the value of the special dividends into the regular quarterly declared dividends,” commented Mr. Walko. The range of closing prices for Penns Woods Bancorp, Inc. “PWOD” stock was between $44.50 and $49.90 during the three months ended June 30, 2005 and between $44.50 and $50.00 for the six months ended June 30, 2005.
Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates twelve branch offices providing financial services in Lycoming, Clinton and Centre Counties. Investment and insurance products are offered through the bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.
CONSOLIDATED BALANCE SHEET
(Unaudited)
| | | | June 30, | | | |
(In Thousands, Except Share Data) | | 2005 | | 2004 | | % Change | |
| | | | | | | |
ASSETS: | | | | | | | |
Noninterest-bearing balances | | $ | 16,945 | | $ | 10,895 | | 55.5 | % |
Interest-bearing deposits | | 25 | | 366 | | -93.2 | % |
Total cash and cash equivalents | | 16,970 | | 11,261 | | 50.7 | % |
| | | | | | | |
Investment securities, available for sale, at fair value | | 205,546 | | 206,263 | | -0.3 | % |
Investment securities held to maturity (fair value of $286 and $667) | | 268 | | 658 | | -59.3 | % |
Loans held for sale | | 4,073 | | 5,158 | | -21.0 | % |
| | | | | | | |
Loans, net of unearned discount of $1,055 and $1,062 | | 327,870 | | 300,718 | | 9.0 | % |
Allowance for loan and lease losses | | (3,492 | ) | (3,157 | ) | 10.6 | % |
LOANS, NET | | 324,378 | | 297,561 | | 9.0 | % |
| | | | | | | |
Bank premises and equipment, net | | 5,851 | | 4,693 | | 24.7 | % |
Accrued interest receivable | | 2,342 | | 2,207 | | 6.1 | % |
Bank-owned life insurance | | 11,163 | | 9,088 | | 22.8 | % |
Goodwill | | 3,032 | | 3,032 | | — | |
Other assets | | 2,116 | | 3,307 | | -36.0 | % |
TOTAL ASSETS | | $ | 575,739 | | $ | 543,228 | | 6.0 | % |
| | | | | | | |
LIABILITIES: | | | | | | | |
Interest-bearing deposits | | $ | 310,187 | | $ | 302,480 | | 2.5 | % |
Noninterest-bearing deposits | | 72,087 | | 66,270 | | 8.8 | % |
TOTAL DEPOSITS | | 382,274 | | 368,750 | | 3.7 | % |
| | | | | | | |
Short-term borrowings | | 21,245 | | 26,484 | | -19.8 | % |
Long-term borrowings, Federal Home Loan Bank | | 84,478 | | 75,878 | | 11.3 | % |
Accrued interest payable | | 1,050 | | 859 | | 22.2 | % |
Other liabilities | | 9,481 | | 3,020 | | 213.9 | % |
TOTAL LIABILITIES | | 498,528 | | 474,991 | | 5.0 | % |
| | | | | | | |
SHAREHOLDERS’ EQUITY: | | | | | | | |
Common stock par value $10.00, 10,000,000 shares authorized; 3,332,399 and 3,327,457 shares issued | | 33,324 | | 33,274 | | 0.2 | % |
Additional paid-in capital | | 17,711 | | 17,581 | | 0.7 | % |
Retained earnings | | 20,714 | | 16,175 | | 28.1 | % |
Accumulated other comprehensive gain | | 5,908 | | 1,546 | | 282.1 | % |
Less: Treasury stock at cost, (10,310 and 8,000) shares | | (446 | ) | (339 | ) | 31.6 | % |
TOTAL SHAREHOLDERS’ EQUITY | | 77,211 | | 68,237 | | 13.2 | % |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | | $ | 575,739 | | $ | 543,228 | | 6.0 | % |
THIS INTERIM STATEMENT IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
| | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
(In Thousands, Except Per Share Data) | | 2005 | | 2004 | | %Change | | 2005 | | 2004 | | %Change | |
INTEREST AND DIVIDEND INCOME: | | | | | | | | | | | | | |
Loans including fees | | $ | 5,671 | | $ | 5,137 | | 10.4 | % | $ | 11,171 | | $ | 10,028 | | 11.4 | % |
Investment Securities: | | | | | | | | | | | | | |
Taxable | | 1,214 | | 1,782 | | -31.9 | % | 2,478 | | 3,580 | | -30.8 | % |
Tax-exempt | | 688 | | 320 | | 115.0 | % | 1,277 | | 711 | | 79.6 | % |
Dividend | | 297 | | 293 | | 1.4 | % | 595 | | 540 | | 10.2 | % |
TOTAL INTEREST AND DIVIDEND INCOME | | 7,870 | | 7,532 | | 4.5 | % | 15,521 | | 14,859 | | 4.5 | % |
| | | | | | | | | | | | | |
INTEREST EXPENSE: | | | | | | | | | | | | | |
Deposits | | 1,420 | | 1,182 | | 20.1 | % | 2,614 | | 2,317 | | 12.8 | % |
Short-term borrowings | | 144 | | 99 | | 45.5 | % | 346 | | 236 | | 46.6 | % |
Long-term borrowings | | 893 | | 861 | | 3.7 | % | 1,746 | | 1,713 | | 1.9 | % |
TOTAL INTEREST EXPENSE | | 2,457 | | 2,142 | | 14.7 | % | 4,706 | | 4,266 | | 10.3 | % |
| | | | | | | | | | | | | |
NET INTEREST INCOME | | 5,413 | | 5,390 | | 0.4 | % | 10,815 | | 10,593 | | 2.1 | % |
| | | | | | | | | | | | | |
PROVISION FOR LOAN LOSSES | | 180 | | 75 | | 140.0 | % | 360 | | 150 | | 140.0 | % |
| | | | | | | | | | | | | |
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | | 5,233 | | 5,315 | | -1.5 | % | 10,455 | | 10,443 | | 0.1 | % |
| | | | | | | | | | | | | |
NON-INTEREST INCOME: | | | | | | | | | | | | | |
Service charges | | 536 | | 522 | | 2.7 | % | 991 | | 998 | | -0.7 | % |
Securities gains, net | | 687 | | 583 | | 17.8 | % | 1,298 | | 1,128 | | 15.1 | % |
Bank-owned life insurance | | 93 | | 90 | | 3.3 | % | 187 | | 180 | | 3.9 | % |
Insurance commissions | | 652 | | 545 | | 19.6 | % | 1,295 | | 1,159 | | 11.7 | % |
Other operating income | | 329 | | 310 | | 6.1 | % | 643 | | 622 | | 3.4 | % |
TOTAL NON-INTEREST INCOME | | 2,297 | | 2,050 | | 12.0 | % | 4,414 | | 4,087 | | 8.0 | % |
| | | | | | | | | | | | | |
NON-INTEREST EXPENSES: | | | | | | | | | | | | | |
Salaries and employee benefits | | 2,173 | | 1,886 | | 15.2 | % | 4,193 | | 3,865 | | 8.5 | % |
Occupancy expense, net | | 286 | | 230 | | 24.3 | % | 577 | | 473 | | 22.0 | % |
Furniture and equipment expense | | 234 | | 230 | | 1.7 | % | 455 | | 495 | | -8.1 | % |
Pennsylvania shares tax expense | | 140 | | 130 | | 7.7 | % | 279 | | 246 | | 13.4 | % |
Other operating expenses | | 1,054 | | 977 | | 7.9 | % | 2,004 | | 1,847 | | 8.5 | % |
TOTAL NON-INTEREST EXPENSES | | 3,887 | | 3,453 | | 12.6 | % | 7,508 | | 6,926 | | 8.4 | % |
| | | | | | | | | | | | | |
INCOME BEFORE INCOME TAX PROVISION | | 3,643 | | 3,912 | | -6.9 | % | 7,361 | | 7,604 | | -3.2 | % |
INCOME TAX PROVISION | | 883 | | 1,108 | | -20.3 | % | 1,886 | | 2,127 | | -11.3 | % |
NET INCOME | | $ | 2,760 | | $ | 2,804 | | -1.6 | % | $ | 5,475 | | $ | 5,477 | | — | |
| | | | | | | | | | | | | |
EARNINGS PER SHARE - BASIC | | $ | 0.83 | | $ | 0.85 | | -2.4 | % | $ | 1.65 | | $ | 1.65 | | — | |
| | | | | | | | | | | | | |
EARNINGS PER SHARE - DILUTED | | $ | 0.83 | | $ | 0.85 | | -2.4 | % | $ | 1.65 | | $ | 1.65 | | — | |
| | | | | | | | | | | | | |
WEIGHTED AVERAGE SHARES OUTSTANDING-BASIC | | 3,311,657 | | 3,319,445 | | -0.2 | % | 3,311,464 | | 3,320,649 | | -0.3 | % |
| | | | | | | | | | | | | |
WEIGHTED AVERAGE SHARES OUTSTANDING-DILUTED | | 3,313,546 | | 3,322,730 | | — | | 3,313,483 | | 3,324,063 | | -0.3 | % |
THIS INTERIM STATEMENT IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT
| | Three Months Ended | | Six Months Ended | |
| | June 30, | | June 30, | |
Performance Measures | | 2005 | | 2004 | | 2005 | | 2004 | |
Return on average equity | | 14.81 | % | 15.99 | % | 14.68 | % | 15.44 | % |
Return on average assets | | 2.02 | % | 2.10 | % | 2.02 | % | 2.07 | % |
Earnings per share - basic | | $ | 0.83 | | $ | 0.85 | | $ | 1.65 | | $ | 1.65 | |
Dividends paid | | $ | 0.46 | | $ | 0.35 | | $ | 0.91 | | $ | 0.70 | |
Book value per share | | $ | 23.24 | | $ | 20.56 | | $ | 23.24 | | $ | 20.56 | |
Stock closing price | | $ | 45.82 | | $ | 44.51 | | $ | 45.82 | | $ | 44.51 | |
Price/earnings multiple * | | 13.80 | | 13.09 | | 13.88 | | 13.49 | |
Price/book value multiple | | 1.97 | | 2.16 | | 1.97 | | 2.16 | |
* current period earnings annualized
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 PWOD, 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. Because certain of these items and their impact on PWOD’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 PWOD’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 other than statements of historical fact. PWOD 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 PWOD 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 PWOD’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-statebanking 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.
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
Contact: | Ronald A. Walko |
| (570) 322-1111 |
| (888) 412-5772 (Toll-Free in Pennsylvania) |
| email-jssb@jssb.com |
