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Penns Woods Bancorp, Inc. Reports Third Quarter 2015 Operating Earnings

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WILLIAMSPORT, Pa., Oct. 21, 2015 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. continued its solid earnings, supported by strong asset and deposit growth, achieving net income of $10,152,000 for the nine months ended September 30, 2015 resulting in basic and dilutive earnings per share of $2.12.

Highlights

  • Net income from core operations ("operating earnings"), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains and bank owned life insurance gains on death benefits, decreased to $3,039,000 for the three months ended September 30, 2015 compared to $3,377,000 for the same period of 2014.  Net income from core operations decreased to $9,046,000 for the nine months ended September 30, 2015 compared to $9,554,000 for the same period of 2014.  Impacting the three and nine months ended September 30, 2015 compared to 2014 were an increase in the provision for loan losses of $60,000 and $575,000 due to the level of charge-offs and significant loan portfolio growth.  In addition, the investment portfolio has declined $30,978,000 from September 30, 2014 to September 30, 2015 as part of our strategy to position the balance sheet for a rising rate environment.
  • Operating earnings per share for the three months ended September 30, 2015 and 2014 were $0.64 and $0.70 for both basic and dilutive.  Operating earnings per share for the nine months ended September 30, 2015 were $1.89 basic and dilutive compared to $1.98 basic and dilutive for the same period of 2014.
  • Return on average assets was 1.04% for the three months ended September 30, 2015 compared to 1.56% for the corresponding period of 2014.  Return on average assets was 1.06% for the nine months ended September 30, 2015 compared to 1.28% for the corresponding period of 2014.
  • Return on average equity was 9.89% for the three months ended September 30, 2015 compared to 13.95% for the corresponding period of 2014.  Return on average equity was 9.90% for the nine months ended September 30, 2015 compared to 11.63% for the corresponding period of 2014.

"The first nine months of 2015 have seen the Penns Woods Family continue on its proven path of success, while also preparing for the future.  Continued strong customer service and professionalism by our employees has led to double digit loan growth, deposit growth, and relationship building with our customers.  The future will entail the opening of a branch in Lewisburg during the fourth quarter of 2015 and the continued addition of technology driven products and services," 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 nine months ended September 30, 2015 was $3,364,000 and $10,152,000 compared to $4,793,000 and $11,725,000 for the same periods of 2014.  Results for the three and nine months ended September 30, 2015 compared to 2014 were impacted by a decrease in after-tax securities gains of $1,091,000 (from a gain of $1,416,000 to a gain of $325,000) for the three month periods and a decrease in the after-tax securities gains of $891,000 (from a gain of $1,997,000 to a gain of $1,106,000) for the nine 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 nine months ended September 30, 2015 were $0.71 and $2.12 compared to $0.99 and $2.43 for the corresponding periods of 2014.  Return on average assets and return on average equity were 1.04% and 9.89% for the three months ended September 30, 2015 compared to 1.56% and 13.95% for the corresponding period of 2014.  Return on average assets and return on average equity were 1.06% and 9.90% for the nine months ended September 30, 2015 compared to 1.28% and 11.63% for the corresponding period of 2014.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2015 was 3.55% and 3.63% compared to 3.78% and 3.84% for the corresponding periods of 2014.  The decline in the net interest margin was driven by a decreasing yield on the loan and investment portfolios due to the continued low rate environment.  The impact of the declining earning asset yield and decreasing investment portfolio balance was partially offset by a 12.45% growth in gross loans from September 30, 2014 to September 30, 2015 resulting in net interest income remaining flat compared to the comparable three and nine month periods of 2014. The loan growth was funded by an increase in core deposits, decrease in the investment portfolio, and an increase in borrowings.  Core deposits represent a lower cost funding source than time deposits and comprise 78.02% of total deposits at September 30, 2015 and 77.90% at September 30, 2014. 

"We, as with the financial industry, continue to experience a declining net interest margin due to the low rate environment which has resulted in a decrease in the yield of the earning asset portfolio.  We have maintained our focus on adding quality earning assets such as short and intermediate term loans which has led to growth in the home equity segment of the loan portfolio.  Despite the growth in earning assets, net interest income has remained flat as higher yielding legacy assets continue to mature or reprice to lower yields and new earning assets are added at lower yields than the existing portfolio.  Selective selling of bonds within the investment portfolio continues to occur as interest and market risk within the investment portfolio continues to be reduced.  This active management has resulted in a reduction of long-term municipal bonds within the portfolio and has provided funding for the growth of the loan portfolio.  The reduction in size of the investment portfolio does negatively impact current earnings, but the actions play a key role in our long-term asset liability management strategy," commented President Grafmyre.

Assets

Total assets increased $72,170,000 to $1,299,292,000 at September 30, 2015 compared to September 30, 2014.  Net loans increased $108,687,000 to $990,164,000 at September 30, 2015 compared to September 30, 2014 primarily due to campaigns related to increasing home equity product market share during 2014 and 2015 and growth in the commercial loan portfolio.  The investment portfolio decreased $30,978,000 from September 30, 2014 to September 30, 2015 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 decreased to 0.86% at September 30, 2015 from 1.38% at September 30, 2014.  The ratio decreased due to a decrease in non-performing loans and an increase in total loans from September 30, 2014 to September 30, 2015.  The decrease in non-performing loans to $8,608,000 at September 30, 2015 from $12,294,000 at September 30, 2014 is primarily the result of a large commercial real estate loan that was removed from non-accrual status due to improved company performance and a solid payment history.  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 $910,000 for the nine months ended September 30, 2015 negatively impacted the allowance for loan losses which was 1.15% of total loans at September 30, 2015.  The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $15,673,000 to $1,004,801,000 at September 30, 2015 compared to September 30, 2014.  Core deposits (total deposits excluding time deposits) increased $13,452,000 due to our commitment to building complete banking relationships with our customers.  Noninterest-bearing deposits increased $15,260,000 to $247,848,000 at September 30, 2015 compared to September 30, 2014.  Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service.  While deposit gathering efforts have centered on core deposits, the lengthening of the time deposit portfolio is in process as part of the strategy to build balance sheet protection in a rising rate environment.

Shareholders' Equity

Shareholders' equity decreased $1,427,000 to $135,577,000 at September 30, 2015 compared to September 30, 2014.  Since September 30, 2014 treasury stock purchases of $2,687,000 for 61,804 shares were completed as part of the stock repurchase plan.  The change in accumulated other comprehensive loss from $211,000 at September 30, 2014 to $3,100,000 at September 30, 2015 is a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $2,514,000 at September 30, 2014 to an unrealized gain of $1,418,000 at September 30, 2015.  The amount of accumulated other comprehensive loss at September 30, 2015 was also impacted by the change in net excess of the projected benefit obligation over the fair value of the plan assets of the defined benefit pension plan resulting in an increase in the net loss of $1,793,000 to $4,518,000 at September 30, 2015.  The current level of shareholders' equity equates to a book value per share of $28.54 at September 30, 2015 compared to $28.49 at September 30, 2014 and an equity to asset ratio of 10.43% at September 30, 2015 compared to 11.16% at September 30, 2014.  Excluding goodwill and intangibles, book value per share was $24.66 at September 30, 2015 compared to $24.61 at September 30, 2014.  Dividends declared for each of the three and nine months ended September 30, 2015 and 2014 were $0.47 and $1.41 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates fourteen 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, 2014.

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)
 
  September 30,
(In Thousands, Except Share Data) 2015 2014 % Change
ASSETS      
Noninterest-bearing balances  $17,304  $19,556  (11.52)%
Interest-bearing balances in other financial institutions 951  5,686  (83.27)%
Total cash and cash equivalents  18,255  25,242  (27.68)%
Investment securities, available for sale, at fair value  202,593  233,634  (13.29)%
Investment securities, trading 63    100.00%
Loans held for sale 1,029  1,602  (35.77)%
Loans 1,001,653  890,727  12.45%
Allowance for loan losses (11,489) (9,250) 24.21%
Loans, net  990,164  881,477  12.33%
Premises and equipment, net  21,433  21,509  (0.35)%
Accrued interest receivable 4,093  4,298  (4.77)%
Bank-owned life insurance 26,499  25,781  2.78%
Investment in limited partnerships  1,064  1,725  (38.32)%
Goodwill 17,104  17,104  %
Intangibles  1,316  1,538  (14.43)%
Deferred tax asset 8,618  7,036  22.48%
Other assets  7,061  6,176  14.33%
TOTAL ASSETS $1,299,292  $1,227,122  5.88%
LIABILITIES      
Interest-bearing deposits $756,953  $756,540  0.05%
Noninterest-bearing deposits 247,848  232,588  6.56%
Total deposits  1,004,801  989,128  1.58%
Short-term borrowings  51,690  17,213  200.30%
Long-term borrowings  91,051  71,202  27.88%
Accrued interest payable  460  411  11.92%
Other liabilities 15,713  12,164  29.18%
TOTAL LIABILITIES 1,163,715  1,090,118  6.75%
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; 5,004,372 and 5,001,972 shares issued 41,702  41,682  0.05%
Additional paid-in capital  49,959  49,871  0.18%
Retained earnings 56,523  52,482  7.70%
Accumulated other comprehensive loss:      
Net unrealized gain on available for sale securities  1,418  2,514  (43.60)%
Defined benefit plan (4,518) (2,725) (65.80)%
Treasury stock at cost, 254,144 and 192,340 shares (9,507) (6,820) 39.40%
TOTAL SHAREHOLDERS' EQUITY  135,577  137,004  (1.04)%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $1,299,292  $1,227,122  5.88%

 

PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
 
  Three Months Ended September 30, Nine Months Ended September 30,
(In Thousands, Except Per Share Data) 2015 2014 % Change 2015 2014 % Change
INTEREST AND DIVIDEND INCOME:            
Loans including fees $9,862  $9,298  6.07% $28,937  $27,023  7.08%
Investment securities:            
Taxable  829  1,198  (30.80)% 2,728  4,062  (32.84)%
Tax-exempt 676  837  (19.24)% 2,187  2,660  (17.78)%
Dividend and other interest income 156  127  22.83% 597  401  48.88%
TOTAL INTEREST AND DIVIDEND INCOME 11,523  11,460  0.55% 34,449  34,146  0.89%
INTEREST EXPENSE:            
Deposits 800  748  6.95% 2,328  2,247  3.60%
Short-term borrowings 31  5  520.00% 78  32  143.75%
Long-term borrowings 458  489  (6.34)% 1,476  1,431  3.14%
TOTAL INTEREST EXPENSE 1,289  1,242  3.78% 3,882  3,710  4.64%
NET INTEREST INCOME 10,234  10,218  0.16% 30,567  30,436  0.43%
PROVISION FOR LOAN LOSSES  520  460  13.04% 1,820  1,245  46.18%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES  9,714  9,758  (0.45)% 28,747  29,191  (1.52)%
NON-INTEREST INCOME:            
Service charges 621  620  0.16% 1,772  1,822  (2.74)%
Securities gains, available for sale 526  2,145  (75.48)% 1,713  3,025  (43.37)%
Securities losses, trading  (33)   (100.00)% (37)   (100.00)%
Bank-owned life insurance  182  185  (1.62)% 541  736  (26.49)%
Gain on sale of loans 524  602  (12.96)% 1,305  1,313  (0.61)%
Insurance commissions  185  212  (12.74)% 623  915  (31.91)%
Brokerage commissions  297  282  5.32% 836  804  3.98%
Other  835  878  (4.90)% 2,701  2,449  10.29%
TOTAL NON-INTEREST INCOME 3,137  4,924  (36.29)% 9,454  11,064  (14.55)%
NON-INTEREST EXPENSE:            
Salaries and employee benefits 4,302  4,126  4.27% 13,073  12,796  2.16%
Occupancy 529  547  (3.29)% 1,721  1,729  (0.46)%
Furniture and equipment 686  591  16.07% 1,924  1,910  0.73%
Pennsylvania shares tax  244  232  5.17% 711  738  (3.66)%
Amortization of investments in limited partnerships  165  165  % 496  496  %
Federal Deposit Insurance Corporation deposit insurance  209  193  8.29% 654  572  14.34%
Marketing 160  144  11.11% 434  380  14.21%
Intangible amortization  73  82  (10.98)% 235  263  (10.65)%
Other  2,162  2,233  (3.18)% 6,171  6,494  (4.97)%
TOTAL NON-INTEREST EXPENSE 8,530  8,313  2.61% 25,419  25,378  0.16%
INCOME BEFORE INCOME TAX PROVISION 4,321  6,369  (32.16)% 12,782  14,877  (14.08)%
INCOME TAX PROVISION 957  1,576  (39.28)% 2,630  3,152  (16.56)%
NET INCOME $3,364  $4,793  (29.81)% $10,152  $11,725  (13.42)%
EARNINGS PER SHARE - BASIC AND DILUTED  $0.71  $0.99  (28.28)% $2.12  $2.43  (12.76)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED 4,761,576  4,820,346  (1.22)% 4,780,776  4,820,041  (0.81)%
DIVIDENDS DECLARED PER SHARE  $0.47  $0.47  % $1.41  $1.41  %





PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
 
  Three Months Ended
  September 30, 2015 September 30, 2014
(Dollars in Thousands) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
ASSETS:            
Tax-exempt loans $43,562  $423  3.85% $30,567  $337  4.38%
All other loans 947,665  9,583  4.01% 844,062  9,076  4.27%
Total loans 991,227  10,006  4.00% 874,629  9,413  4.27%
Federal funds sold     %     %
Taxable securities 125,618  982  3.13% 153,280  1,319  3.44%
Tax-exempt securities 80,535  1,024  5.09% 93,825  1,268  5.41%
Total securities 206,153  2,006  3.89% 247,105  2,587  4.19%
Interest-bearing deposits 3,216  3  0.37% 11,140  6  0.21%
Total interest-earning assets  1,200,596  12,015  3.98% 1,132,874  12,006  4.21%
Other assets  97,363      97,596     
TOTAL ASSETS $1,297,959      $1,230,470     
             
LIABILITIES AND SHAREHOLDERS' EQUITY:            
Savings  $143,353  14  0.04% $141,558  16  0.04%
Super Now deposits 193,659  126  0.26% 181,011  142  0.31%
Money market deposits 210,029  145  0.27% 212,377  145  0.27%
Time deposits 219,306  515  0.93% 219,257  445  0.81%
Total interest-bearing deposits 766,347  800  0.41% 754,203  748  0.39%
Short-term borrowings  40,801  31  0.30% 21,250  12  0.22%
Long-term borrowings  81,880  458  2.19% 71,202  482  2.65%
Total borrowings  122,681  489  1.56% 92,452  494  2.09%
Total interest-bearing liabilities 889,028  1,289  0.57% 846,655  1,242  0.58%
Demand deposits 256,264      233,415     
Other liabilities 16,619      12,926     
Shareholders' equity 136,048      137,474     
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,297,959      $1,230,470     
Interest rate spread     3.41%     3.63%
Net interest income/margin   $10,726  3.55%   $10,764  3.78%
   
   
  Three Months Ended
September 30,
  2015 2014
Total interest income  $11,523  $11,460 
Total interest expense 1,289  1,242 
Net interest income  10,234  10,218 
Tax equivalent adjustment  492  546 
Net interest income (fully taxable equivalent) $10,726  $10,764 

 

  Nine Months Ended
  September 30, 2015 September 30, 2014
(Dollars in Thousands) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
ASSETS:            
Tax-exempt loans $39,901  $1,194  4.00% $28,042  $929  4.43%
All other loans 920,675  28,149  4.09% 813,859  26,410  4.34%
Total loans 960,576  29,343  4.08% 841,901  27,339  4.34%
Federal funds sold     % 228    %
Taxable securities 133,191  3,316  3.32% 168,376  4,435  3.51%
Tax-exempt securities 85,263  3,314  5.18% 96,503  4,030  5.57%
Total securities 218,454  6,630  4.05% 264,879  8,465  4.26%
Interest-bearing deposits 4,500  9  0.27% 11,364  28  0.33%
Total interest-earning assets  1,183,530  35,982  4.06% 1,118,372  35,832  4.28%
Other assets  97,151      102,001     
TOTAL ASSETS $1,280,681      $1,220,373     
             
LIABILITIES AND SHAREHOLDERS' EQUITY:            
Savings  $142,812  43  0.04% $141,057  67  0.06%
Super Now deposits 190,653  379  0.27% 182,445  449  0.33%
Money market deposits 208,317  424  0.27% 210,346  417  0.27%
Time deposits 218,987  1,482  0.90% 225,615  1,314  0.78%
Total interest-bearing deposits 760,769  2,328  0.41% 759,463  2,247  0.40%
Short-term borrowings  36,111  78  0.29% 18,929  32  0.23%
Long-term borrowings  82,597  1,476  2.36% 71,202  1,431  2.65%
Total borrowings  118,708  1,554  1.73% 90,131  1,463  2.14%
Total interest-bearing liabilities 879,477  3,882  0.59% 849,594  3,710  0.58%
Demand deposits 247,130      222,259     
Other liabilities 17,327      14,065     
Shareholders' equity 136,747      134,455     
                 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $1,280,681      $1,220,373     
Interest rate spread     3.47%     3.70%
Net interest income/margin   $32,100  3.63%   $32,122  3.84%
   
   
  Nine Months Ended
September 30,
  2015 2014
Total interest income  $34,449  $34,146 
Total interest expense 3,882  3,710 
Net interest income  30,567  30,436 
Tax equivalent adjustment  1,533  1,686 
Net interest income (fully taxable equivalent) $32,100  $32,122 

 

(Dollars in Thousands, Except Per Share Data) Quarter Ended
  9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014
Operating Data          
Net income $3,364  $3,433  $3,355  $2,883  $4,793 
Net interest income 10,234  10,222  10,111  10,208  10,218 
Provision for loan losses 520  600  700  1,605  460 
Net security gains  493  522  661  490  2,145 
Non-interest income, excluding net security gains 2,644  2,535  2,599  2,954  2,779 
Non-interest expense 8,530  8,421  8,468  8,512  8,313 
           
Performance Statistics          
Net interest margin 3.55% 3.64% 3.69% 3.73% 3.78%
Annualized return on average assets  1.04% 1.07% 1.06% 0.93% 1.56%
Annualized return on average equity  9.89% 10.05% 9.76% 8.33% 13.95%
Annualized net loan charge-offs to average loans  0.12% 0.07% 0.20% 0.12% 0.01%
Net charge-offs 296  161  453  276  21 
Efficiency ratio  65.7% 65.3% 66.0% 64.0% 63.3%
           
Per Share Data          
Basic earnings per share $0.71  $0.72  $0.70  $0.60  $0.99 
Diluted earnings per share 0.71  0.72  0.70  0.60  0.99 
Dividend declared per share 0.47  0.47  0.47  0.47  0.47 
Book value  28.54  28.33  28.57  28.30  28.49 
Common stock price:          
High  44.56  48.28  48.91  49.26  48.79 
Low 40.41  41.84  44.41  42.18  42.25 
Close  40.92  44.09  48.91  49.26  42.25 
Weighted average common shares:          
Basic 4,762  4,780  4,802  4,805  4,820 
Fully Diluted 4,762  4,780  4,802  4,805  4,820 
End-of-period common shares:          
Issued 5,004  5,004  5,003  5,003  5,002 
Treasury 254  238  207  198  192 
   
   
(Dollars in Thousands, Except Per Share Data) Quarter Ended
  9/30/2015 6/30/2015 3/31/2015 12/31/2014 9/30/2014
Financial Condition Data:          
General          
Total assets  $1,299,292  $1,291,812  $1,268,833  $1,245,011  $1,227,122 
Loans, net 990,164  966,613  933,044  905,000  881,477 
Goodwill  17,104  17,104  17,104  17,104  17,104 
Intangibles  1,316  1,294  1,373  1,456  1,538 
Total deposits  1,004,801  1,007,468  996,489  981,419  989,128 
Noninterest-bearing  247,848  244,502  246,231  243,378  232,588 
Savings 143,224  143,415  143,222  139,278  141,170 
NOW 188,444  188,092  186,788  177,970  183,056 
Money Market  204,475  211,412  204,352  204,535  213,725 
Time Deposits  220,810  220,047  215,896  216,258  218,589 
Total interest-bearing deposits  756,953  762,966  750,258  738,041  756,540 
Core deposits* 783,991  787,421  780,593  765,161  770,539 
Shareholders' equity 135,577  134,998  137,004  135,967  137,004 
           
Asset Quality          
Non-performing assets  $8,608  $9,689  $11,157  $12,248  $12,294 
Non-performing loans to total assets  0.66% 0.75% 0.88% 0.98% 1.00%
Allowance for loan losses  11,489  11,265  10,826  10,579  9,250 
Allowance for loan losses to total loans 1.15% 1.15% 1.15% 1.16% 1.04%
Allowance for loan losses to non-performing loans 133.47% 116.27% 97.03% 86.37% 75.24%
Non-performing loans to total loans 0.86% 0.99% 1.18% 1.34% 1.38%
           
Capitalization          
Shareholders' equity to total assets  10.43% 10.45% 10.80% 10.92% 11.16%
                
* Core deposits are defined as total deposits less time deposits



Reconciliation of GAAP and Non-GAAP Financial Measures
 
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
(Dollars in Thousands, Except Per Share Data) 2015 2014 2015 2014
GAAP net income $3,364  $4,793  $10,152  $11,725 
Less: net securities and bank-owned life insurance gains, net of tax  325  1,416  1,106  2,171 
Non-GAAP operating earnings $3,039  $3,377  $9,046  $9,554 
         
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015 2014 2015 2014
Return on average assets (ROA)  1.04% 1.56% 1.06% 1.28%
Less: net securities and bank-owned life insurance gains, net of tax  0.10% 0.46% 0.12% 0.24%
Non-GAAP operating ROA 0.94% 1.10% 0.94% 1.04%
         
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015 2014 2015 2014
Return on average equity (ROE) 9.89% 13.95% 9.90% 11.63%
Less: net securities and bank-owned life insurance gains, net of tax  0.95% 4.12% 1.08% 2.16%
Non-GAAP operating ROE 8.94% 9.83% 8.82% 9.47%
         
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015 2014 2015 2014
Basic earnings per share (EPS)  $0.71  $0.99  $2.12  $2.43 
Less: net securities and bank-owned life insurance gains, net of tax  0.07  0.29  0.23  0.45 
Non-GAAP basic operating EPS $0.64  $0.70  $1.89  $1.98 
     
  Three Months Ended
September 30,
 Nine Months Ended
September 30,
  2015 2014 2015 2014
Dilutive EPS $0.71  $0.99  $2.12  $2.43 
Less: net securities and bank-owned life insurance gains, net of tax  0.07  0.29  0.23  0.45 
Non-GAAP dilutive operating EPS $0.64  $0.70  $1.89  $1.98 

 

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