Exhibit 99.1
Press Release — For Immediate Release
January 19, 2011
Penns Woods Bancorp, Inc. Reports Record Fourth Quarter 2010 Operating Earnings
Williamsport, PA — Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported that net income from core operations (“operating earnings”), which is a non-GAAP measure of net income excluding net securities gains and losses, increased to $2,854,000 and $10,815,000 for the three and twelve months ended December 31, 2010 compared to $2,423,000 and $9,291,000 for the same periods of 2009. Operating earnings per share for the three months ended December 31, 2010 were $0.74 basic and dilutive compared to $0.63 basic and dilutive for the same period of 2009 or an increase of 17.5%. Operating earnings per share for the twelve months ended December 31, 2010 increased 16.5% to $2.82 basic and dilutive compared to $2.42 basic and dilutive for the same period of 2009. Operating earnings for the three and twelve months ended December 31, 2010 have been positively impacte d by continued emphasis on core deposit growth, an increasing net interest margin, and expense control. 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 this paragraph to the comparable GAAP financial measures is included at the end of this press release.
Net income, as reported under U.S. generally accepted accounting principles, for the three and twelve months ended December 31, 2010 was $2,861,000 and $10,929,000 compared to $2,500,000 and $6,093,000 for the same periods of 2009. Results for the twelve month period ended December 31, 2010 compared to 2009 were significantly impacted by an increase in after-tax securities gains of $3,312,000 (from a loss of $3,198,000 to a gain of $114,000). Included within the change in after-tax securities losses for the twelve months ended December 31, 2009 are pre-tax other than temporary impairment charges relating to certain equity securities held in the investment portfolio of $4,614,000, while there were no such charges during the twelve months ended December 31, 2010. Basic and dilutive earnings per share for the three and twelve months ended December 31, 2010 were $0.75 and $2.85 compared to $0.65 and $1.59 for the corresponding periods of 2009. Return on average assets and return on average equity were 1.63% and 15.56% for the three months ended December 31, 2010 compared to 1.47% and 14.72% for the corresponding period of 2009. Net income for the
twelve months ended December 31, 2010 correlates to a return on average assets and return on average equity of 1.56% and 15.30% compared to 0.92% and 9.66% for the twelve month 2009 period.
The net interest margin for the three and twelve months ended December 31, 2010 was 4.66% and 4.57% compared to 4.42% and 4.40% for the corresponding periods of 2009. Contributing to the increased net interest margin is the significant growth in lower cost core deposits, which has led to the average rate paid on interest bearing liabilities decreasing 57 basis points (bp) and 56 bp for the three and twelve months ended December 31, 2010 compared to the same periods of 2009. In addition, the average rate paid on time deposits decreased 71 bp and 77 bp for the three and twelve months ended December 31, 2010 compared to the same periods of 2009. The liability rate decreases are the result of Federal Open Market Committee (FOMC) actions to maintain low interest rates, our strategic decision to shorten the duration of the time deposit portfolio over the past two years, and core depos it growth that provided a lower cost source of funding. The duration of the time deposit portfolio began being lengthened during the second half of 2009 and continues to be lengthened due to the apparent bottoming or near bottoming of deposit rates. In addition, an FHLB long-term borrowing of $10,000,000 at a rate of 3.98% matured, with cash on hand being utilized to pay-off the borrowing during the three months ended December 31, 2010. “Balance sheet management and growth has led to the increasing net interest margin. During 2010, we accumulated cash in anticipation of the FHLB borrowings that were maturing in the second half of the year. In addition, we have reduced our time deposit portfolio and focused on core deposits which carry a lower cost. Although the focus was on the liability side of the balance sheet, we did not lose sight of the earning asset portfolio. Actions have been taken to reduce the duration of the investment portfolio, while the loan portfolio continues to add quality loans that possess a fair risk/return trade-off and complement the overall earning asset portfolio,” commented Richard A. Grafmyre, President and Chief Executive Officer of Penns Woods Bancorp, Inc.
Total assets increased $15,484,000 to $691,688,000 at December 31, 2010 compared to December 31, 2009. Net loans increased $8,650,000 or 2.2% despite a soft economy that has in general provided fewer loan opportunities. Housing, transportation, and all other facets related to the Marcellus Shale natural gas exploration are creating loan opportunities and we are aggressively attempting to attract those loans that meet and/or exceed our credit standards. The economic issues of the continuing soft economy are impacting our loan credit quality ratios, although we continue to compare favorably to other members of the financial industry. Our nonperforming loans to total loans ratio has increased to 1.50% at December 31, 2010 from 1.10% at December 31, 2009. The increase in nonperforming loans is primarily the result of an increase in commercial loan delinquencie s. The increase is centered on several loans that are in a secured position and have sureties with a strong underlying financial position. Annualized net loan charge-offs to average loans of 0.19% for the twelve month period ended December 31, 2010 remain at a minimal level. The allowance for loan losses was
increased to 1.45% of total loans at December 31, 2010 due to the general economic uncertainty and an increase in nonperforming loans. The investment portfolio increased $6,773,000 from December 31, 2009 to December 31, 2010 due to the purchase of short maturity bonds that have been utilized to reduce the portfolio duration.
Deposits have grown 4.1% or $20,221,000 to $517,508,000 at December 31, 2010 compared to December 31, 2009, with core deposits (total deposits excluding time deposits) increasing 17.3% or $48,512,000. Core deposits at December 31, 2010 comprise 63.4% of total deposits compared to 56.2% at December 31, 2009. “Leading the increase was growth of $32,489,000 or 43.5% in money market accounts resulting from strategic actions undertaken to build customer relationships that utilize multiple staple products. These actions have resulted in not only deposit growth across core deposit categories, but have also led to increased revenues related to card usage. Maintaining the deposit momentum will be a key focus as we move forward. We are committed to utilizing targeted marketing efforts through various delivery channels, developing products and services to meet the nee ds of our market area, and most importantly providing the tools and training to our employees that will allow them to grow our franchise,” commented Mr. Grafmyre.
Shareholders’ equity decreased $296,000 to $66,620,000 at December 31, 2010 compared to December 31, 2009 as accumulated other comprehensive loss increased by $4,200,000. The increase in accumulated other comprehensive loss is a result of an increase in unrealized losses on available for sale securities from an unrealized loss of $3,569,000 at December 31, 2009 to an unrealized loss of $7,276,000 at December 31, 2010. Accumulated other comprehensive loss 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 an increase in the net loss of $493,000. The current level of shareholders’ equity equates to a book value per share of $17.37 at December 31, 2010 compared to $17.45 at December 31, 2009 and an equity to asset ratio of 9.63% at Decemb er 31, 2010 compared to 9.90% at December 31, 2009. Excluding accumulated other comprehensive gain/loss, book value per share was $19.90 at December 31, 2010 compared to $18.88 at December 31, 2009. Dividends paid to shareholders were $0.46 and $1.84 for the three and twelve months ended December 31, 2010 and 2009.
“Investors and regulators have placed a premium on capital levels during this prolonged period of a sluggish economy. We continue to augment our “well capitalized” regulatory capital position through solid earnings and a dividend policy that results in sufficient capital growth that will allow for balance sheet growth. Moving forward we intend to continue building capital levels to provide for organic growth, while also maintaining sufficient capital to facilitate growth through other opportunities that may arise,” commented Mr. Grafmyre.
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.
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 regulat ory 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, 2009.
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.
Contact: | Richard A. Grafmyre, President and Chief Executive Officer | |
| 300 Market Street | |
| Williamsport, PA 17701 | |
| 570-322-1111 | e-mail: jssb@jssb.com |
THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT
PENNS WOODS BANCORP, INC. | |||||||||
CONSOLIDATED BALANCE SHEET | |||||||||
(UNAUDITED) | |||||||||
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| December 31, |
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(In Thousands, Except Share Data) |
| 2010 |
| 2009 |
| % Change |
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ASSETS |
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Noninterest-bearing balances |
| $ | 9,467 |
| $ | 13,760 |
| -31.2 | % |
Interest-bearing deposits in other financial institutions |
| 26 |
| 28 |
| -7.1 | % | ||
Total cash and cash equivalents |
| 9,493 |
| 13,788 |
| -31.2 | % | ||
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Investment securities, available for sale, at fair value |
| 215,565 |
| 208,768 |
| 3.3 | % | ||
Investment securities held to maturity (fair value of $83 and $108) |
| 83 |
| 107 |
| -22.4 | % | ||
Loans held for sale |
| 6,658 |
| 4,063 |
| 63.9 | % | ||
Loans |
| 415,557 |
| 405,529 |
| 2.5 | % | ||
Less: Allowance for loan losses |
| 6,035 |
| 4,657 |
| 29.6 | % | ||
Loans, net |
| 409,522 |
| 400,872 |
| 2.2 | % | ||
Premises and equipment, net |
| 7,658 |
| 7,988 |
| -4.1 | % | ||
Accrued interest receivable |
| 3,765 |
| 3,523 |
| 6.9 | % | ||
Bank-owned life insurance |
| 15,436 |
| 14,942 |
| 3.3 | % | ||
Investment in limited partnerships |
| 4,205 |
| 4,898 |
| -14.1 | % | ||
Goodwill |
| 3,032 |
| 3,032 |
| 0.0 | % | ||
Deferred tax asset |
| 11,897 |
| 9,491 |
| 25.4 | % | ||
Other assets |
| 4,374 |
| 4,732 |
| -7.6 | % | ||
TOTAL ASSETS |
| $ | 691,688 |
| $ | 676,204 |
| 2.3 | % |
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LIABILITIES |
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Interest-bearing deposits |
| $ | 428,161 |
| $ | 417,388 |
| 2.6 | % |
Noninterest-bearing deposits |
| 89,347 |
| 79,899 |
| 11.8 | % | ||
Total deposits |
| 517,508 |
| 497,287 |
| 4.1 | % | ||
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Short-term borrowings |
| 27,299 |
| 18,354 |
| 48.7 | % | ||
Long-term borrowings, Federal Home Loan Bank (FHLB) |
| 71,778 |
| 86,778 |
| -17.3 | % | ||
Accrued interest payable |
| 750 |
| 1,073 |
| -30.1 | % | ||
Other liabilities |
| 7,733 |
| 5,796 |
| 33.4 | % | ||
TOTAL LIABILITIES |
| 625,068 |
| 609,288 |
| 2.6 | % | ||
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SHAREHOLDERS’ EQUITY |
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Common stock, par value $8.33, 10,000,000 shares authorized; 4,015,753 and 4,013,142 shares issued |
| 33,464 |
| 33,443 |
| 0.1 | % | ||
Additional paid-in capital |
| 18,064 |
| 18,008 |
| 0.3 | % | ||
Retained earnings |
| 31,091 |
| 27,218 |
| 14.2 | % | ||
Accumulated other comprehensive loss: |
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Net unrealized loss on available for sale securities |
| (7,276 | ) | (3,569 | ) | 103.9 | % | ||
Defined benefit plan |
| (2,413 | ) | (1,920 | ) | 25.7 | % | ||
Less: Treasury stock at cost, 180,596 and 179,028 shares |
| (6,310 | ) | (6,264 | ) | 0.7 | % | ||
TOTAL SHAREHOLDERS’ EQUITY |
| 66,620 |
| 66,916 |
| -0.4 | % | ||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 691,688 |
| $ | 676,204 |
| 2.3 | % |
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
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| Three Months Ended |
| Twelve Months Ended |
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| December 31, |
| December 31, |
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(In Thousands, Except Per Share Data) |
| 2010 |
| 2009 |
| % Change |
| 2010 |
| 2009 |
| % Change |
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INTEREST AND DIVIDEND INCOME: |
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Loans including fees |
| $ | 6,351 |
| $ | 6,543 |
| -2.9 | % | $ | 25,513 |
| $ | 25,568 |
| -0.2 | % |
Investment securities: |
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Taxable |
| 1,402 |
| 1,319 |
| 6.3 | % | 5,584 |
| 5,424 |
| 2.9 | % | ||||
Tax-exempt |
| 1,265 |
| 1,257 |
| 0.6 | % | 5,059 |
| 5,005 |
| 1.1 | % | ||||
Dividend and other interest income |
| 49 |
| 29 |
| 69.0 | % | 206 |
| 194 |
| 6.2 | % | ||||
TOTAL INTEREST AND DIVIDEND INCOME |
| 9,067 |
| 9,148 |
| -0.9 | % | 36,362 |
| 36,191 |
| 0.5 | % | ||||
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INTEREST EXPENSE: |
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Deposits |
| 1,336 |
| 1,927 |
| -30.7 | % | 6,055 |
| 8,284 |
| -26.9 | % | ||||
Short-term borrowings |
| 68 |
| 78 |
| -12.8 | % | 265 |
| 396 |
| -33.1 | % | ||||
Long-term borrowings, FHLB |
| 815 |
| 937 |
| -13.0 | % | 3,548 |
| 3,718 |
| -4.6 | % | ||||
TOTAL INTEREST EXPENSE |
| 2,219 |
| 2,942 |
| -24.6 | % | 9,868 |
| 12,398 |
| -20.4 | % | ||||
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NET INTEREST INCOME |
| 6,848 |
| 6,206 |
| 10.3 | % | 26,494 |
| 23,793 |
| 11.4 | % | ||||
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PROVISION FOR LOAN LOSSES |
| 750 |
| 335 |
| 123.9 | % | 2,150 |
| 917 |
| 134.5 | % | ||||
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NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES |
| 6,098 |
| 5,871 |
| 3.9 | % | 24,344 |
| 22,876 |
| 6.4 | % | ||||
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NON-INTEREST INCOME: |
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Deposit service charges |
| 568 |
| 581 |
| -2.2 | % | 2,177 |
| 2,200 |
| -1.0 | % | ||||
Securities gains (losses), net |
| 11 |
| 116 |
| -90.5 | % | 173 |
| (4,846 | ) | 103.6 | % | ||||
Bank-owned life insurance |
| 194 |
| 295 |
| -34.2 | % | 636 |
| 713 |
| -10.8 | % | ||||
Gain on sale of loans |
| 235 |
| 300 |
| -21.7 | % | 949 |
| 826 |
| 14.9 | % | ||||
Insurance commissions |
| 203 |
| 201 |
| 1.0 | % | 970 |
| 1,189 |
| -18.4 | % | ||||
Other |
| 674 |
| 581 |
| 16.0 | % | 2,554 |
| 2,205 |
| 15.8 | % | ||||
TOTAL NON-INTEREST INCOME |
| 1,885 |
| 2,074 |
| -9.1 | % | 7,459 |
| 2,287 |
| 226.1 | % | ||||
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NON-INTEREST EXPENSE: |
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Salaries and employee benefits |
| 2,435 |
| 2,524 |
| -3.5 | % | 10,214 |
| 10,189 |
| 0.2 | % | ||||
Occupancy, net |
| 293 |
| 310 |
| -5.5 | % | 1,240 |
| 1,266 |
| -2.1 | % | ||||
Furniture and equipment |
| 342 |
| 306 |
| 11.8 | % | 1,264 |
| 1,212 |
| 4.3 | % | ||||
Pennsylvania shares tax |
| 169 |
| 171 |
| -1.2 | % | 677 |
| 685 |
| -1.2 | % | ||||
Amortization of investments in limited partnerships |
| 210 |
| 142 |
| 47.9 | % | 693 |
| 567 |
| 22.2 | % | ||||
Other |
| 1,363 |
| 1,732 |
| -21.3 | % | 5,404 |
| 5,893 |
| -8.3 | % | ||||
TOTAL NON-INTEREST EXPENSE |
| 4,812 |
| 5,185 |
| -7.2 | % | 19,492 |
| 19,812 |
| -1.6 | % | ||||
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INCOME BEFORE INCOME TAX PROVISION (BENEFIT) |
| 3,171 |
| 2,760 |
| 14.9 | % | 12,311 |
| 5,351 |
| 130.1 | % | ||||
INCOME TAX PROVISION (BENEFIT) |
| 310 |
| 260 |
| 19.2 | % | 1,382 |
| (742 | ) | 286.3 | % | ||||
NET INCOME |
| $ | 2,861 |
| $ | 2,500 |
| 14.4 | % | $ | 10,929 |
| $ | 6,093 |
| 79.4 | % |
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EARNINGS PER SHARE - BASIC |
| $ | 0.75 |
| $ | 0.65 |
| 15.4 | % | $ | 2.85 |
| $ | 1.59 |
| 79.2 | % |
EARNINGS PER SHARE - DILUTED |
| $ | 0.75 |
| $ | 0.65 |
| 15.4 | % | $ | 2.85 |
| $ | 1.59 |
| 79.2 | % |
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC |
| 3,834,710 |
| 3,833,732 |
| 0.0 | % | 3,834,255 |
| 3,832,789 |
| 0.0 | % | ||||
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED |
| 3,834,847 |
| 3,833,869 |
| 0.0 | % | 3,834,394 |
| 3,832,886 |
| 0.0 | % | ||||
DIVIDENDS PER SHARE |
| $ | 0.46 |
| $ | 0.46 |
| 0.0 | % | $ | 1.84 |
| $ | 1.84 |
| 0.0 | % |
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
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| For the Three Months Ended |
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| December 31, 2010 |
| December 31, 2009 |
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(Dollars in Thousands) |
| Average Balance |
| Interest |
| Average Rate |
| Average Balance |
| Interest |
| Average Rate |
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ASSETS: |
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Tax-exempt loans |
| $ | 18,540 |
| $ | 299 |
| 6.40 | % | $ | 16,829 |
| $ | 284 |
| 6.70 | % |
All other loans |
| 399,300 |
| 6,154 |
| 6.11 | % | 395,335 |
| 6,356 |
| 6.38 | % | ||||
Total loans |
| 417,840 |
| 6,453 |
| 6.13 | % | 412,164 |
| 6,640 |
| 6.39 | % | ||||
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Taxable securities |
| 117,162 |
| 1,450 |
| 4.95 | % | 104,527 |
| 1,348 |
| 5.16 | % | ||||
Tax-exempt securities |
| 108,909 |
| 1,917 |
| 7.04 | % | 108,901 |
| 1,905 |
| 7.00 | % | ||||
Total securities |
| 226,071 |
| 3,367 |
| 5.96 | % | 213,428 |
| 3,253 |
| 6.10 | % | ||||
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Interest bearing deposits |
| 6,640 |
| 1 |
| 0.06 | % | 2,094 |
| — |
| 0.00 | % | ||||
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Total interest-earning assets |
| 650,551 |
| 9,821 |
| 6.01 | % | 627,686 |
| 9,893 |
| 6.27 | % | ||||
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Other assets |
| 52,497 |
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| 53,435 |
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TOTAL ASSETS |
| $ | 703,048 |
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| $ | 681,121 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY: |
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Savings |
| $ | 63,643 |
| 39 |
| 0.24 | % | $ | 59,952 |
| 69 |
| 0.46 | % | ||
Super Now deposits |
| 66,109 |
| 89 |
| 0.53 | % | 63,227 |
| 120 |
| 0.75 | % | ||||
Money market deposits |
| 105,524 |
| 289 |
| 1.09 | % | 74,315 |
| 303 |
| 1.62 | % | ||||
Time deposits |
| 199,004 |
| 919 |
| 1.83 | % | 223,966 |
| 1,435 |
| 2.54 | % | ||||
Total interest-bearing deposits |
| 434,280 |
| 1,336 |
| 1.22 | % | 421,460 |
| 1,927 |
| 1.81 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 18,030 |
| 68 |
| 1.50 | % | 16,217 |
| 78 |
| 1.88 | % | ||||
Long-term borrowings, FHLB |
| 78,191 |
| 815 |
| 4.08 | % | 86,778 |
| 937 |
| 4.23 | % | ||||
Total borrowings |
| 96,221 |
| 883 |
| 3.59 | % | 102,995 |
| 1,015 |
| 3.86 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total interest-bearing liabilities |
| 530,501 |
| 2,219 |
| 1.65 | % | 524,455 |
| 2,942 |
| 2.22 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Demand deposits |
| 90,980 |
|
|
|
|
| 78,027 |
|
|
|
|
| ||||
Other liabilities |
| 8,032 |
|
|
|
|
| 10,714 |
|
|
|
|
| ||||
Shareholders’ equity |
| 73,535 |
|
|
|
|
| 67,925 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 703,048 |
|
|
|
|
| $ | 681,121 |
|
|
|
|
| ||
Interest rate spread |
|
|
|
|
| 4.36 | % |
|
|
|
| 4.05 | % | ||||
Net interest income/margin |
|
|
| $ | 7,602 |
| 4.66 | % |
|
| $ | 6,951 |
| 4.42 | % | ||
|
| For the Three Months Ended |
| ||||
|
| Decemeber 31, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
Total interest income |
| $ | 9,067 |
| $ | 9,148 |
|
Total interest expense |
| 2,219 |
| 2,942 |
| ||
|
|
|
|
|
| ||
Net interest income |
| 6,848 |
| 6,206 |
| ||
Tax equivalent adjustment |
| 754 |
| 745 |
| ||
|
|
|
|
|
| ||
Net interest income (fully taxable equivalent) |
| $ | 7,602 |
| $ | 6,951 |
|
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
|
| For the Twelve Months Ended |
| ||||||||||||||
|
| December 31, 2010 |
| December 31, 2009 |
| ||||||||||||
(Dollars in Thousands) |
| Average Balance |
| Interest |
| Average Rate |
| Average Balance |
| Interest |
| Average Rate |
| ||||
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Tax-exempt loans |
| $ | 33,962 |
| $ | 1,212 |
| 3.57 | % | $ | 16,688 |
| $ | 1,100 |
| 6.59 | % |
All other loans |
| 382,091 |
| 24,713 |
| 6.47 | % | 382,433 |
| 24,842 |
| 6.50 | % | ||||
Total loans |
| 416,053 |
| 25,925 |
| 6.23 | % | 399,121 |
| 25,942 |
| 6.50 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Taxable securities |
| 113,714 |
| 5,784 |
| 5.09 | % | 103,338 |
| 5,617 |
| 5.44 | % | ||||
Tax-exempt securities |
| 108,658 |
| 7,665 |
| 7.05 | % | 104,800 |
| 7,583 |
| 7.24 | % | ||||
Total securities |
| 222,372 |
| 13,449 |
| 6.05 | % | 208,138 |
| 13,200 |
| 6.34 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Interest bearing deposits |
| 8,782 |
| 6 |
| 0.07 | % | 1,938 |
| 1 |
| 0.05 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total interest-earning assets |
| 647,207 |
| 39,380 |
| 6.08 | % | 609,197 |
| 39,143 |
| 6.43 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other assets |
| 53,734 |
|
|
|
|
| 54,642 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
TOTAL ASSETS |
| $ | 700,941 |
|
|
|
|
| $ | 663,839 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Savings |
| $ | 64,477 |
| 183 |
| 0.28 | % | $ | 60,815 |
| 313 |
| 0.51 | % | ||
Super Now deposits |
| 65,080 |
| 385 |
| 0.59 | % | 58,591 |
| 507 |
| 0.87 | % | ||||
Money market deposits |
| 100,112 |
| 1,167 |
| 1.17 | % | 62,906 |
| 1,227 |
| 1.95 | % | ||||
Time deposits |
| 208,274 |
| 4,320 |
| 2.07 | % | 219,264 |
| 6,237 |
| 2.84 | % | ||||
Total interest-bearing deposits |
| 437,943 |
| 6,055 |
| 1.38 | % | 401,576 |
| 8,284 |
| 2.06 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Short-term borrowings |
| 15,371 |
| 265 |
| 1.72 | % | 27,641 |
| 396 |
| 1.42 | % | ||||
Long-term borrowings, FHLB |
| 83,901 |
| 3,548 |
| 4.17 | % | 86,778 |
| 3,718 |
| 4.23 | % | ||||
Total borrowings |
| 99,272 |
| 3,813 |
| 3.79 | % | 114,419 |
| 4,114 |
| 3.55 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total interest-bearing liabilities |
| 537,215 |
| 9,868 |
| 1.83 | % | 515,995 |
| 12,398 |
| 2.39 | % | ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Demand deposits |
| 84,158 |
|
|
|
|
| 74,618 |
|
|
|
|
| ||||
Other liabilities |
| 8,118 |
|
|
|
|
| 10,169 |
|
|
|
|
| ||||
Shareholders’ equity |
| 71,450 |
|
|
|
|
| 63,057 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
| $ | 700,941 |
|
|
|
|
| $ | 663,839 |
|
|
|
|
| ||
Interest rate spread |
|
|
|
|
| 4.25 | % |
|
|
|
| 4.04 | % | ||||
Net interest income/margin |
|
|
| $ | 29,512 |
| 4.57 | % |
|
| $ | 26,745 |
| 4.40 | % | ||
|
| For the Twelve Months Ended |
| ||||
|
| December 31, |
| ||||
|
| 2010 |
| 2009 |
| ||
|
|
|
|
|
| ||
Total interest income |
| $ | 36,362 |
| $ | 36,191 |
|
Total interest expense |
| 9,868 |
| 12,398 |
| ||
|
|
|
|
|
| ||
Net interest income |
| 26,494 |
| 23,793 |
| ||
Tax equivalent adjustment |
| 3,018 |
| 2,952 |
| ||
|
|
|
|
|
| ||
Net interest income (fully taxable equivalent) |
| $ | 29,512 |
| $ | 26,745 |
|
|
| Quarter Ended |
| |||||||||||||
(Dollars in Thousands, Except Per Share Data) |
| 12/31/2010 |
| 9/30/2010 |
| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating Data |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net income |
| $ | 2,861 |
| $ | 2,848 |
| $ | 2,772 |
| $ | 2,448 |
| $ | 2,500 |
|
Net interest income |
| 6,848 |
| 6,758 |
| 6,590 |
| 6,298 |
| 6,206 |
| |||||
Provision for loan losses |
| 750 |
| 700 |
| 400 |
| 300 |
| 335 |
| |||||
Net security gains (losses) |
| 11 |
| 109 |
| 56 |
| (3 | ) | 116 |
| |||||
Non-interest income, ex. net security gains (losses) |
| 1,874 |
| 1,761 |
| 1,952 |
| 1,699 |
| 1,958 |
| |||||
Non-interest expense |
| 4,812 |
| 4,704 |
| 4,990 |
| 4,986 |
| 5,185 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Performance Statistics |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Net interest margin |
| 4.66 | % | 4.56 | % | 4.56 | % | 4.49 | % | 4.42 | % | |||||
Annualized return on average assets |
| 1.63 | % | 1.60 | % | 1.58 | % | 1.42 | % | 1.47 | % | |||||
Annualized return on average equity |
| 15.56 | % | 15.51 | % | 15.76 | % | 14.31 | % | 14.72 | % | |||||
Annualized net loan charge-offs to avg loans |
| 0.18 | % | 0.26 | % | 0.21 | % | 0.09 | % | 0.15 | % | |||||
Net charge-offs |
| 193 |
| 268 |
| 217 |
| 93 |
| 157 |
| |||||
Efficiency ratio |
| 55.2 | % | 55.2 | % | 58.4 | % | 62.4 | % | 63.5 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Per Share Data |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Basic earnings per share |
| $ | 0.75 |
| $ | 0.74 |
| $ | 0.72 |
| $ | 0.64 |
| $ | 0.65 |
|
Diluted earnings per share |
| 0.75 |
| 0.74 |
| 0.72 |
| 0.64 |
| 0.65 |
| |||||
Dividend declared per share |
| 0.46 |
| 0.46 |
| 0.46 |
| 0.46 |
| 0.46 |
| |||||
Book value |
| 17.37 |
| 19.64 |
| 18.42 |
| 17.73 |
| 17.45 |
| |||||
Common stock price: |
|
|
|
|
|
|
|
|
|
|
| |||||
High |
| 41.26 |
| 33.15 |
| 34.50 |
| 34.03 |
| 33.24 |
| |||||
Low |
| 31.97 |
| 29.41 |
| 26.76 |
| 30.04 |
| 30.37 |
| |||||
Close |
| 39.80 |
| 33.05 |
| 30.42 |
| 33.55 |
| 32.44 |
| |||||
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
| |||||
Basic |
| 3,835 |
| 3,834 |
| 3,834 |
| 3,834 |
| 3,834 |
| |||||
Fully Diluted |
| 3,835 |
| 3,834 |
| 3,834 |
| 3,834 |
| 3,834 |
| |||||
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
| |||||
Issued |
| 4,016 |
| 4,015 |
| 4,014 |
| 4,014 |
| 4,013 |
| |||||
Treasury |
| 181 |
| 181 |
| 181 |
| 179 |
| 179 |
| |||||
|
| Quarter Ended |
| |||||||||||||
(Dollars in Thousands, Except Per Share Data) |
| 12/31/2010 |
| 9/30/2010 |
| 6/30/2010 |
| 3/31/2010 |
| 12/31/2009 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Financial Condition Data: |
|
|
|
|
|
|
|
|
|
|
| |||||
General |
|
|
|
|
|
|
|
|
|
|
| |||||
Total assets |
| $ | 691,688 |
| $ | 713,496 |
| $ | 710,291 |
| $ | 695,755 |
| $ | 676,204 |
|
Loans, net |
| 409,522 |
| 407,394 |
| 406,913 |
| 405,055 |
| 400,872 |
| |||||
Intangibles |
| 3,032 |
| 3,032 |
| 3,032 |
| 3,032 |
| 3,032 |
| |||||
Total deposits |
| 517,508 |
| 534,170 |
| 529,981 |
| 521,040 |
| 497,287 |
| |||||
Noninterest-bearing |
| 89,347 |
| 92,128 |
| 87,979 |
| 80,913 |
| 79,899 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Savings |
| 64,258 |
| 66,763 |
| 66,789 |
| 64,255 |
| 60,827 |
| |||||
NOW |
| 67,505 |
| 66,957 |
| 65,802 |
| 64,362 |
| 64,361 |
| |||||
Money Market |
| 107,123 |
| 105,147 |
| 101,301 |
| 94,725 |
| 74,634 |
| |||||
Time Deposits |
| 189,275 |
| 203,175 |
| 208,110 |
| 216,785 |
| 217,566 |
| |||||
Total interest-bearing deposits |
| 428,161 |
| 442,042 |
| 442,002 |
| 440,127 |
| 417,388 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Core deposits* |
| 328,233 |
| 330,995 |
| 321,871 |
| 304,255 |
| 279,721 |
| |||||
Shareholders’ equity |
| 66,620 |
| 75,323 |
| 70,603 |
| 67,972 |
| 66,916 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Asset Quality |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Non-performing assets |
| $ | 6,215 |
| $ | 6,918 |
| $ | 6,646 |
| $ | 3,863 |
| $ | 4,456 |
|
Non-performing assets to total assets |
| 0.90 | % | 0.97 | % | 0.94 | % | 0.56 | % | 0.66 | % | |||||
Allowance for loan losses |
| 6,035 |
| 5,479 |
| 5,047 |
| 4,864 |
| 4,657 |
| |||||
Allowance for loan losses to total loans |
| 1.45 | % | 1.33 | % | 1.23 | % | 1.19 | % | 1.15 | % | |||||
Allowance for loan losses to non-performing loans |
| 97.10 | % | 79.20 | % | 75.94 | % | 125.91 | % | 104.51 | % | |||||
Non-performing loans to total loans |
| 1.50 | % | 1.68 | % | 1.61 | % | 0.94 | % | 1.10 | % | |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Capitalization |
|
|
|
|
|
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Shareholders’ equity to total assets |
| 9.63 | % | 10.56 | % | 9.94 | % | 9.77 | % | 9.90 | % | |||||
* Core deposits are defined as total deposits less time deposits
Reconciliation of GAAP and non-GAAP Financial Measures
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
(Dollars in Thousands, Except Per Share Data) |
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
GAAP net income |
| $ | 2,861 |
| $ | 2,500 |
| $ | 10,929 |
| $ | 6,093 |
|
Less: securities gains (losses), net of tax |
| 7 |
| 77 |
| 114 |
| (3,198 | ) | ||||
Non-GAAP operating earnings |
| $ | 2,854 |
| $ | 2,423 |
| $ | 10,815 |
| $ | 9,291 |
|
|
| Three Months Ended |
| Twelve Months Ended |
| ||||
|
| December 31, |
| December 31, |
| ||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
|
Return on average assets (ROA) |
| 1.63 | % | 1.47 | % | 1.56 | % | 0.92 | % |
Less: securities gains (losses), net of tax |
| 0.01 | % | 0.05 | % | 0.02 | % | -0.48 | % |
Non-GAAP operating ROA |
| 1.62 | % | 1.42 | % | 1.54 | % | 1.40 | % |
|
| Three Months Ended |
| Twelve Months Ended |
| ||||
|
| December 31, |
| December 31, |
| ||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
|
Return on average equity (ROE) |
| 15.56 | % | 14.72 | % | 15.30 | % | 9.66 | % |
Less: securities gains (losses), net of tax |
| 0.04 | % | 0.45 | % | 0.16 | % | -5.07 | % |
Non-GAAP operating ROE |
| 15.52 | % | 14.27 | % | 15.14 | % | 14.73 | % |
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
Basic earnings per share (EPS) |
| $ | 0.75 |
| $ | 0.65 |
| $ | 2.85 |
| $ | 1.59 |
|
Less: securities gains (losses), net of tax |
| 0.01 |
| 0.02 |
| 0.03 |
| (0.83 | ) | ||||
Non-GAAP basic operating EPS |
| $ | 0.74 |
| $ | 0.63 |
| $ | 2.82 |
| $ | 2.42 |
|
|
| Three Months Ended |
| Twelve Months Ended |
| ||||||||
|
| December 31, |
| December 31, |
| ||||||||
|
| 2010 |
| 2009 |
| 2010 |
| 2009 |
| ||||
Dilutive EPS |
| $ | 0.75 |
| $ | 0.65 |
| $ | 2.85 |
| $ | 1.59 |
|
Less: securities gains (losses), net of tax |
| 0.01 |
| 0.02 |
| 0.03 |
| (0.83 | ) | ||||
Non-GAAP dilutive operating EPS |
| $ | 0.74 |
| $ | 0.63 |
| $ | 2.82 |
| $ | 2.42 |
|