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Penns Woods Bancorp, Inc. Reports Second Quarter 2020 Earnings

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WILLIAMSPORT, Pa., July 22, 2020 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Penns Woods Bancorp, Inc. achieved net income of $6.8 million for the six months ended June 30, 2020, resulting in basic and diluted earnings per share of $0.97.

Highlights

  • Net income, as reported under GAAP, for the three and six months ended June 30, 2020 was $3.8 million and $6.8 million,  respectively compared to $4.2 and $8.2 million for the same period of 2019. Results for the three and six months ended June 30, 2020 compared to 2019 were impacted by an increase in after-tax securities gains of $138,000 (from a gain of $18,000 to a gain of $156,000) for the three month period and $108,000 (from a gain of $70,000 to a gain of $178,000) for the six month period.

  • The provision for loan losses increased $330,000 and $720,000, respectfully, for the three and six months ended June 30, 2020, to $645,000 and $1,395,000 compared to $315,000 and $675,000 for the 2019 periods.  The increase is the result of the economic uncertainty caused by the COVID-19 pandemic.

  • Basic and diluted earnings per share for the three and six months ended June 30, 2020 were $0.53 and $0.97, respectively, compared to basic and diluted earnings per share of $0.60 and $1.16 for the three and six months ended June 30, 2019.

  • Return on average assets was 0.85% for the three months ended June 30, 2020, compared to 1.02% for the corresponding period of 2019. Return on average assets was 0.79% for the six months ended June 30, 2020, compared to 0.99% for the corresponding period of 2019.

  • Return on average equity was 9.59% for the three months ended June 30, 2020, compared to 11.42% for the corresponding period of 2019. Return on average equity was 8.75% for the six months ended June 30, 2020, compared to 11.27% for the corresponding period of 2019.

COVID-19 Activity

  • Approximately one third of employees working remotely.

  • As of June 30, 2020, loan modification/deferral program in place to defer payments up to 90 days for principal and/or interest with $241.6 million in loan principal affected by this program.

  • All COVID-19 related loan deferrals meet the requirements to not be considered a troubled debt restructuring.

  • Participated in the Paycheck Protection Program ("PPP") by primarily utilizing third parties to service and place the loans.

  • Significantly reduced deposit rates during the latter half of March 2020 continuing through June 2020.

  • Increased the provision for loan losses due to the economic uncertainty caused by the COVID-19 pandemic.

  • Net interest margin compression expected to continue as the rate environment remains below historical levels.

  • Total paycheck protection program loans held at June 30, 2020 total $12.3 million.

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 $3.6 million for the three months ended June 30, 2020 compared to $4.2 million for the same period of 2019.  Core earnings were $6.7 million for the six months ended June 30, 2020, compared to $8.1 million for the same period of 2019. Core earnings per share for the three months ended June 30, 2020 were $0.51 basic and diluted, compared to $0.60 basic and diluted core earnings per share for the same period of 2019. Core earnings per share for the six months ended June 30, 2020 were $0.95 basic and diluted, compared to $1.15 basic and diluted for the same period of 2019. Core return on average assets and core return on average equity were 0.81% and 9.19% for the three months ended June 30, 2020, compared to 1.01% and 11.37% for the corresponding period of 2019. Core return on average assets and core return on average equity were 0.77% and 8.52% for the six months ended June 30, 2020 compared to 0.98% and 11.18% for the corresponding period of 2019. 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, 2020 was 3.01% and 3.09%, compared to 3.39% and 3.37% for the corresponding periods of 2019. The decrease in the net interest margin was driven by a decrease in the yield of the investment portfolio of 64 and 63 basis points ("bps"), respectively, for the three and six month periods. Further compressing the net interest margin was the significant increase of interest-bearing deposits within the earning asset portfolio. These deposits carry a current yield of a few basis points with the balance steadily increasing as commercial customers have received PPP funding and retail customers have received stimulus funding. Rates paid on interest-bearing liabilities were decreased during the three months ended June 30, 2020 and will partially offset the decline in earning asset yield.

Assets

Total assets increased $126.9 million to $1.8 billion at June 30, 2020 compared to June 30, 2019.  Net loans decreased $28.9 million to $1.3 billion at June 30, 2020 compared to June 30, 2019, as the COVID-19 business and travel restrictions curtailed various lending activities such as indirect auto, home equity, and commercial.  Lending activity began to rebound as business and travel restrictions were lessened.  The investment portfolio increased $17.9 million from June 30, 2019 to June 30, 2020 due to increases in the corporate and taxable municipal portfolios.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.82% at June 30, 2020 from 1.12% at June 30, 2019 as non-performing loans have decreased to $11.1 million at June 30, 2020 from $15.4 million at June 30, 2019 primarily due to a commercial loan relationship that was partially charged-off during the fourth quarter of 2019. 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 $312,000 for the six months ended June 30, 2020 impacted the allowance for loan losses, which was 0.96% of total loans at June 30, 2020 compared to 1.02% at June 30, 2019.

Deposits

Deposits increased $147.2 million to $1.5 billion at June 30, 2020 compared to June 30, 2019.  Noninterest-bearing deposits increased $95.6 million to $418.3 million at June 30, 2020 compared to June 30, 2019.  Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers,  and customers becoming  more risk adverse and seeking safety in a bank deposit. Emphasis during 2020 has been 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.

Shareholders' Equity

Shareholders' equity increased $8.1 million to $159.6 million at June 30, 2020 compared to June 30, 2019. The change in accumulated other comprehensive loss from $2.8 million at June 30, 2019 to $1.0 million at June 30, 2020 is a result of an increase in unrealized gains on available for sale securities (from an unrealized gain of $2,419,000 at June 30, 2019 to an unrealized gain of $4.2 million at June 30, 2020). The amount of accumulated other comprehensive loss at June 30, 2020 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 a decrease in the net loss of $43,000. The current level of shareholders' equity equates to a book value per share of $22.66 at June 30, 2020 compared to $21.53 at June 30, 2019, and an equity to asset ratio of 8.68% at June 30, 2020 compared to 8.85% at June 30, 2019. Dividends declared for the six months ended June 30, 2020 and 2019 were $0.64 per share and $0.63 per share, respectively.

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, and Union Counties, and Luzerne Bank, which operates nine 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.  Insurance products are offered through United Insurance Solutions, LLC, a joint venture that is a subsidiary of the holding company.

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, 2019.

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 

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

    June 30,
(In Thousands, Except Share Data)   2020   2019   % Change
ASSETS:            
Noninterest-bearing balances    $ 26,932     $ 21,102     27.63 %
Interest-bearing balances in other financial institutions    188,242     58,423     222.21 %
Total cash and cash equivalents    215,174     79,525     170.57 %
             
Investment debt securities, available for sale, at fair value    164,369     145,689     12.82 %
Investment equity securities, at fair value    1,291     1,841     (29.88 )%
Investment securities, trading    37     44     (15.91 )%
Restricted investment in bank stock, at fair value    14,849     15,087     (1.58 )%
Loans held for sale    5,146     2,880     78.68 %
Loans    1,349,347     1,379,285     (2.17 )%
Allowance for loan losses    (12,977 )   (14,001 )   (7.31 )%
Loans, net    1,336,370     1,365,284     (2.12 )%
Premises and equipment, net    32,873     33,483     (1.82 )%
Accrued interest receivable    8,068     5,708     41.35 %
Bank-owned life insurance    29,368     28,955     1.43 %
Goodwill   17,104     17,104     %
Intangibles    777     1,022     (23.97 )%
Operating lease right of use asset    3,231     4,279     (24.49 )%
Deferred tax asset    3,284     3,712     (11.53 )%
Other assets    6,423     6,887     (6.74 )%
TOTAL ASSETS    $ 1,838,364     $ 1,711,500     7.41 %
             
LIABILITIES:            
Interest-bearing deposits    $ 1,055,981     $ 1,004,331     5.14 %
Noninterest-bearing deposits    418,324     322,755     29.61 %
Total deposits    1,474,305     1,327,086     11.09 %
             
Short-term borrowings    15,133     59,453     (74.55 )%
Long-term borrowings    171,885     154,597     11.18 %
Accrued interest payable    1,530     1,482     3.24 %
Operating lease liability    3,263     4,286     (23.87 )%
Other liabilities    12,640     13,055     (3.18 )%
TOTAL LIABILITIES    1,678,756     1,559,959     7.62 %
             
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; 7,522,573 and 7,519,347 shares issued; 7,042,348 and 7,039,122 shares outstanding    41,792     41,773     0.05 %
Additional paid-in capital    51,956     51,087     1.70 %
Retained earnings    78,910     73,565     7.27 %
Accumulated other comprehensive loss:            
Net unrealized gain on available for sale securities    4,194     2,419     73.38 %
Defined benefit plan    (5,159 )   (5,202 )   0.83 %
Treasury stock at cost, 480,225    (12,115 )   (12,115 )   %
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY    159,578     151,527     5.31 %
Non-controlling interest    30     14     114.29 %
TOTAL SHAREHOLDERS' EQUITY    159,608     151,541     5.32 %
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY    $ 1,838,364     $ 1,711,500     7.41 %



PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)

    Three Months Ended June 30,   Six Months Ended June 30,
(In Thousands, Except Per Share Data)   2020   2019   % Change   2020   2019   % Change
INTEREST AND DIVIDEND INCOME:                        
Loans including fees    $ 14,666     $ 15,300     (4.14 )%   $ 29,323     $ 30,169     (2.80 )%
Investment securities:                        
Taxable    1,023     967     5.79 %   2,033     1,901     6.94 %
Tax-exempt    169     179     (5.59 )%   314     353     (11.05 )%
Dividend and other interest income    186     395     (52.91 )%   535     852     (37.21 )%
TOTAL INTEREST AND DIVIDEND INCOME    16,044     16,841     (4.73 )%   32,205     33,275     (3.22 )%
                         
INTEREST EXPENSE:                        
Deposits    2,802     2,871     (2.40 )%   5,837     5,171     12.88 %
Short-term borrowings    7     178     (96.07 )%   29     783     (96.30 )%
Long-term borrowings    985     879     12.06 %   1,928     1,730     11.45 %
TOTAL INTEREST EXPENSE   3,794     3,928     (3.41 )%   7,794     7,684     1.43 %
                         
NET INTEREST INCOME    12,250     12,913     (5.13 )%   24,411     25,591     (4.61 )%
                         
PROVISION FOR LOAN LOSSES    645     315     104.76 %   1,395     675     106.67 %
                         
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES    11,605     12,598     (7.88 )%   23,016     24,916     (7.63 )%
                         
NON-INTEREST INCOME:                        
Service charges    312     592     (47.30 )%   861     1,154     (25.39 )%
Debt securities gains (losses), available for sale    186     (2 )   9,400.00 %   207     11     1,781.82 %
Equity securities gains    11     22     (50.00 )%   31     65     (52.31 )%
Securities gains (losses), trading    1     3     (66.67 )%   (13 )   13     (200.00 )%
Bank-owned life insurance    144     123     17.07 %   336     291     15.46 %
Gain on sale of loans    1,028     347     196.25 %   1,472     663     122.02 %
Insurance commissions    92     119     (22.69 )%   219     253     (13.44 )%
Brokerage commissions    186     356     (47.75 )%   555     679     (18.26 )%
Debit card income    310     389     (20.31 )%   584     699     (16.45 )%
Other    351     520     (32.50 )%   806     895     (9.94 )%
TOTAL NON-INTEREST INCOME    2,621     2,469     6.16 %   5,058     4,723     7.09 %
                         
NON-INTEREST EXPENSE:                        
Salaries and employee benefits   5,230     5,523     (5.31 )%   10,897     11,024     (1.15 )%
Occupancy    626     668     (6.29 )%   1,328     1,447     (8.22 )%
Furniture and equipment    828     784     5.61 %   1,688     1,536     9.90 %
Software amortization    236     188     25.53 %   486     395     23.04 %
Pennsylvania shares tax    323     285     13.33 %   608     578     5.19 %
Professional fees    658     727     (9.49 )%   1,280     1,249     2.48 %
Federal Deposit Insurance Corporation deposit insurance    185     236     (21.61 )%   379     504     (24.80 )%
Marketing    56     33     69.70 %   109     135     (19.26 )%
Intangible amortization    59     69     (14.49 )%   121     140     (13.57 )%
Other    1,410     1,546     (8.80 )%   2,825     2,865     (1.40 )%
TOTAL NON-INTEREST EXPENSE    9,611     10,059     (4.45 )%   19,721     19,873     (0.76 )%
INCOME BEFORE INCOME TAX PROVISION    4,615     5,008     (7.85 )%   8,353     9,766     (14.47 )%
INCOME TAX PROVISION    851     759     12.12 %   1,512     1,571     (3.76 )%
NET INCOME    $ 3,764     $ 4,249     (11.41 )%   $ 6,841     $ 8,195     (16.52 )%
Earnings attributable to noncontrolling interest    4     4     n/a   8     6     33.33 %
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'   $ 3,760     $ 4,245     (11.43 )%   $ 6,833     $ 8,189     (16.56 )%
EARNINGS PER SHARE - BASIC    $ 0.53     $ 0.60     (11.67 )%   $ 0.97     $ 1.16     (16.38 )%
EARNINGS PER SHARE - DILUTED    $ 0.53     $ 0.60     (11.67 )%   $ 0.97     $ 1.16     (16.38 )%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC    7,041,629     7,038,503     0.04 %   7,041,185     7,038,068     0.04 %
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED    7,041,629     7,038,503     0.04 %   7,041,185     7,038,068     0.04 %
DIVIDENDS DECLARED PER SHARE    $ 0.32     $ 0.31     3.23 %   $ 0.64     $ 0.63     1.59 %



PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES

    Three Months Ended
    June 30, 2020   June 30, 2019
(Dollars in Thousands)   Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
ASSETS:                        
Tax-exempt loans    $ 44,916     $ 348     3.12 %   $ 71,193     $ 548     3.09 %
All other loans    1,294,745     14,391     4.47 %   1,313,388     14,867     4.54 %
Total loans    1,339,661     14,739     4.43 %   1,384,581     15,415     4.47 %
                         
Taxable securities    147,352     1,193     3.29 %   130,802     1,300     4.03 %
Tax-exempt securities    28,280     213     3.06 %   27,971     227     3.29 %
Total securities    175,632     1,406     3.26 %   158,773     1,527     3.90 %
                         
Interest-bearing deposits    144,948     16     0.04 %   10,431     62     2.38 %
                         
Total interest-earning assets    1,660,241     16,161     3.92 %   1,553,785     17,004     4.39 %
                         
Other assets    116,750             113,443          
                         
TOTAL ASSETS    $ 1,776,991             $ 1,667,228          
                         
LIABILITIES AND SHAREHOLDERS' EQUITY:                        
Savings    $ 190,243     67     0.14 %   $ 170,142     51     0.12 %
Super Now deposits    251,691     409     0.65 %   246,454     453     0.74 %
Money market deposits    229,362     418     0.73 %   249,169     596     0.96 %
Time deposits    362,545     1,908     2.12 %   335,721     1,771     2.12 %
Total interest-bearing deposits    1,033,841     2,802     1.09 %   1,001,486     2,871     1.15 %
                         
Short-term borrowings    11,174     7     0.83 %   32,086     178     2.23 %
Long-term borrowings    171,895     985     2.21 %   147,571     879     2.24 %
Total borrowings   183,069     992     2.12 %   179,657     1,057     2.23 %
                         
Total interest-bearing liabilities    1,216,910     3,794     1.24 %   1,181,143     3,928     1.31 %
                         
Demand deposits   384,591             317,623          
Other liabilities    18,583             19,747          
Shareholders' equity    156,907             148,715          
                         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,776,991             $ 1,667,228          
Interest rate spread            2.68 %           3.08 %
Net interest income/margin        $ 12,367     3.01 %       $ 13,076     3.39 %


    Three Months Ended June 30,
    2020   2019
Total interest income    $ 16,044     $ 16,841  
Total interest expense    3,794     3,928  
Net interest income    12,250     12,913  
Tax equivalent adjustment    117     163  
Net interest income (fully taxable equivalent)    $ 12,367     $ 13,076  



PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES

    Six Months Ended
    June 30, 2020   June 30, 2019
(Dollars in Thousands)   Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
ASSETS:                        
Tax-exempt loans    $ 48,346     $ 752     3.13 %   $ 71,874     $ 1,087     3.05 %
All other loans    1,299,893     28,729     4.44 %   1,313,121     29,310     4.50 %
Total loans    1,348,239     29,481     4.40 %   1,384,995     30,397     4.43 %
                         
Taxable securities    145,070     2,466     3.46 %   128,431     2,650     4.18 %
Tax-exempt securities    26,027     397     3.10 %   27,344     447     3.31 %
Total securities    171,097     2,863     3.40 %   155,775     3,097     4.03 %
                         
Interest-bearing deposits    85,832     102     0.24 %   8,493     103     2.45 %
                         
Total interest-earning assets    1,605,168     32,446     4.07 %   1,549,263     33,597     4.38 %
                         
Other assets    114,085             112,806          
                         
TOTAL ASSETS    $ 1,719,253             $ 1,662,069          
                         
LIABILITIES AND SHAREHOLDERS' EQUITY:                        
Savings    $ 184,042     158     0.17 %   $ 168,543     81     0.10 %
Super Now deposits    235,758     833     0.71 %   239,022     832     0.70 %
Money market deposits    220,035     895     0.82 %   245,307     1,068     0.88 %
Time deposits    370,902     3,951     2.14 %   317,782     3,190     2.02 %
Total interest-bearing deposits    1,010,737     5,837     1.16 %   970,654     5,171     1.07 %
                         
Short-term borrowings    11,011     29     0.53 %   63,881     783     2.47 %
Long-term borrowings    166,024     1,928     2.34 %   145,890     1,730     2.24 %
Total borrowings   177,035     1,957     2.22 %   209,771     2,513     2.31 %
                         
Total interest-bearing liabilities    1,187,772     7,794     1.32 %   1,180,425     7,684     1.29 %
                         
Demand deposits   355,704             315,380          
Other liabilities    19,551             20,953          
Shareholders' equity    156,226             145,311          
                         
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 1,719,253             $ 1,662,069          
Interest rate spread            2.75 %           3.09 %
Net interest income/margin        $ 24,652     3.09 %       $ 25,913     3.37 %


    Six Months Ended June 30,
    2020   2019
Total interest income    $ 32,205     $ 33,275  
Total interest expense    7,794     7,684  
Net interest income    24,411     25,591  
Tax equivalent adjustment    241     322  
Net interest income (fully taxable equivalent)    $ 24,652     $ 25,913  


(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Operating Data                    
Net income    $ 3,760     $ 3,073     $ 2,833     $ 4,650     $ 4,245  
Net interest income    12,250     12,161     12,321     12,903     12,913  
Provision for loan losses    645     750     1,700     360     315  
Net security gains    198     28     489     170     23  
Non-interest income, excluding net security gains    2,423     2,409     2,418     2,652     2,446  
Non-interest expense    9,611     10,110     10,294     9,541     10,059  
                     
Performance Statistics                    
Net interest margin    3.01 %   3.19 %   3.22 %   3.32 %   3.39 %
Annualized return on average assets    0.85 %   0.74 %   0.68 %   1.10 %   1.02 %
Annualized return on average equity    9.60 %   7.83 %   7.22 %   12.18 %   11.42 %
Annualized net loan charge-offs to average loans    0.05 %   0.04 %   1.19 %   0.03 %   0.03 %
Net charge-offs    168     144     4,055     112     106  
Efficiency ratio    65.10 %   68.96 %   69.42 %   60.98 %   65.04 %
                     
Per Share Data                    
Basic earnings per share    $ 0.53     $ 0.44     $ 0.40     $ 0.66     $ 0.60  
Diluted earnings per share   0.53     0.43     0.39     0.66     0.60  
Dividend declared per share    0.32     0.32     0.32     0.31     0.31  
Book value    22.66     22.23     22.01     22.03     21.53  
Common stock price:                    
High    27.75     35.36     35.58     30.93     30.17  
Low    20.01     19.05     29.68     26.87     26.03  
Close    22.71     24.30     35.58     30.83     30.17  
Weighted average common shares:                    
Basic    7,042     7,041     7,040     7,037     7,038  
Fully Diluted    7,042     7,103     7,338     7,037     7,038  
End-of-period common shares:                    
Issued    7,523     7,521     7,521     7,518     7,518  
Treasury   480     480     480     480     480  


(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    6/30/2020   3/31/2020   12/31/2019   9/30/2019   6/30/2019
Financial Condition Data:                    
General                    
Total assets    $ 1,838,364     $ 1,688,508     $ 1,665,323     $ 1,673,095     $ 1,711,500  
Loans, net    1,336,370     1,336,900     1,343,650     1,350,735     1,365,284  
Goodwill    17,104     17,104     17,104     17,104     17,104  
Intangibles    777     836     898     960     1,022  
Total deposits    1,474,305     1,326,734     1,324,005     1,332,407     1,327,086  
Noninterest-bearing    418,324     332,759     334,746     327,329     322,755  
Savings    195,964     183,929     176,732     171,370     171,992  
NOW    268,348     229,919     218,605     219,466     238,410  
Money Market    247,753     204,832     216,038     239,926     238,352  
Time Deposits    343,915     375,295     377,884     374,316     355,577  
Total interest-bearing deposits    1,055,980     993,975     989,259     1,005,078     1,004,331  
                     
Core deposits*    1,130,389     951,439     946,121     958,091     971,509  
Shareholders' equity    159,578     156,562     154,960     155,061     151,527  
                     
Asset Quality                    
Non-performing loans    $ 11,097     $ 11,300     $ 12,421     $ 17,208     $ 15,383  
Non-performing loans to total assets    0.60 %   0.67 %   0.75 %   1.03 %   0.90 %
Allowance for loan losses    12,977     12,500     11,894     14,249     14,001  
Allowance for loan losses to total loans    0.96 %   0.93 %   0.88 %   1.04 %   1.02 %
Allowance for loan losses to non-performing loans    116.94 %   110.62 %   95.76 %   82.80 %   91.02 %
Non-performing loans to total loans    0.82 %   0.84 %   0.92 %   1.26 %   1.12 %
                     
Capitalization                    
Shareholders' equity to total assets    8.68 %   9.27 %   9.31 %   9.27 %   8.85 %

* Core deposits are defined as total deposits less time deposits


Reconciliation of GAAP and Non-GAAP Financial Measures

    Three Months Ended
June 30,
  Six Months Ended
June 30,
(Dollars in Thousands, Except Per Share Data)   2020   2019   2020   2019
GAAP net income    $ 3,760     $ 4,245     $ 6,833     $ 8,189  
Less: net securities gains, net of tax   156     18     178     70  
Non-GAAP core earnings    $ 3,604     $ 4,227     $ 6,655     $ 8,119  
                 
    Three Months Ended
June 30,
  Six Months Ended
June 30,
    2020   2019   2020   2019
Return on average assets (ROA)    0.85 %   1.02 %   0.79 %   0.99 %
Less: net securities gains, net of tax   0.04 %   0.01 %   0.02 %   0.01 %
Non-GAAP core ROA    0.81 %   1.01 %   0.77 %   0.98 %
                 
    Three Months Ended
June 30,
  Six Months Ended
June 30,
    2020   2019   2020   2019
Return on average equity (ROE)    9.59 %   11.42 %   8.75 %   11.27 %
Less: net securities gains, net of tax   0.40 %   0.05 %   0.23 %   0.09 %
Non-GAAP core ROE    9.19 %   11.37 %   8.52 %   11.18 %
                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2020   2019   2020   2019
Basic earnings per share (EPS)    $ 0.53     $ 0.60     $ 0.97     $ 1.16  
Less: net securities gains, net of tax   0.02         0.02     0.01  
Non-GAAP basic core EPS   $ 0.51     $ 0.60     $ 0.95     $ 1.15  
         
    Three Months Ended
June 30,
  Six Months Ended
June 30,
    2020   2019   2020   2019
Diluted EPS    $ 0.53     $ 0.60     $ 0.97     $ 1.16  
Less: net securities gains, net of tax   0.02         0.02     0.01  
Non-GAAP diluted core EPS    $ 0.51     $ 0.60     $ 0.95     $ 1.15  

Loan Deferrals

(In Thousands)   Amount
Commercial, financial, and agricultural    $ 28,482  
Real estate mortgage:    
Residential    66,133  
Commercial    132,217  
Construction    7,250  
Consumer automobile loans    283  
Other consumer installment loans    7,243  
Total loan deferrals    $ 241,608  

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