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January 24, 2014

Penns Woods Bancorp, Inc. Reports Fourth Quarter 2013 Operating Earnings

Williamsport, PA - January 24, 2014

Penns Woods Bancorp, Inc. continued its solid earnings and growth during the recently completed fourth quarter of 2013, achieving net income of $14,084,000 for the twelve months ended December 31, 2013 resulting in basic and dilutive earnings per share of $3.19.

 

Highlights

 

  • Completion of the acquisition of Luzerne National Bank Corporation ("Luzerne") effective June1, 2013 resulted in an increase in net loans of $254,057,000; investments of $21,140,000; deposits of $279,867,000; and assets of $329,209,000 at the time of acquisition.

 

  • Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and bank owned life insurance gains on death benefits, increased to $3,389,000 for the three months ended December31, 2013 compared to $3,044,000 for the same period of 2012. Net income from core operations decreased to $12,489,000 for the twelve months ended December 31, 2013 compared to $12,893,000 for the same period of 2012.

 

  • Operating earnings per share for the three months ended December31, 2013 were $0.70 basic and dilutive compared to $0.79 basic and dilutive for the same period of 2012. Operating earnings per share for the twelve months ended December 31, 2013 were $2.83 basic and dilutive compared to $3.36 basic and dilutive for the same period of 2012.

 

  • Return on average assets was 1.16% for the three months ended December31, 2013 compared to 1.46% for the corresponding period of 2012. Return on average assets was 1.32% for the twelve months ended December 31, 2013 compared to 1.70% for the corresponding period of 2012.

 

  • Return on average equity was 10.99% for the three months ended December31, 2013 compared to 12.92% for the corresponding period of 2012. Return on average equity was 12.36% for the twelve months ended December 31, 2013 compared to 15.36% for the corresponding period of 2012.

 

  • The results for the twelve months ended December 31, 2013 were negatively impacted by one time expenses of $1,307,000 related to the acquisition of Luzerne National Bank Corporation.

 

"The twelve months ended December 31, 2013 were impacted by the acquisition of Luzerne National Bank Corporation.  While the acquisition was a key driver of balance sheet growth, it was a drag on earnings due to the one-time charges related to the acquisition.  With these charges behind us, we will continue to focus on the continued integration of Luzerne into the Penns Woods family.  We also remain focused on building future revenue streams, with the current construction of a branch in Loyalsock scheduled to be completed during the first half of 2014.  In addition, the ground breaking for a branch in Lewisburg is expected to occur during the early part of 2014," 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 twelve months ended December 31, 2013 was $3,495,000 and $14,084,000 compared to $3,096,000 and $13,850,000 for the same period of 2012.  Results for the three and twelve months ended December 31, 2013 compared to 2012 were impacted by an increase in after-tax securities gains of $54,000 (from a gain of $52,000 to a gain of $106,000) for the three months ended and an increase in after-tax securities gains of $747,000 (from a gain of $848,000 to a gain of $1,595,000) for the twelve months ended.  In addition, a gain of $109,000 on death benefit related to bank owned life insurance was recorded during the first quarter of 2012.  Impacting the results for the twelve months ended December 31, 2013 was the recognition of $1,307,000 in expenses related to the acquisition of Luzerne.  Basic and dilutive earnings per share for the three and twelve months ended December 31, 2013 were $0.73 and $3.19 compared to $0.81 and $3.61 for the corresponding periods of 2012.  Return on average assets and return on average equity were 1.16% and 10.99% for the three months ended December 31, 2013 compared to 1.46% and 12.92% for the corresponding period of 2012.  Return on average assets and return on average equity were 1.32% and 12.36% for the twelve months ended December 31, 2013 compared to 1.70% and 15.36% for the corresponding period of 2012.

 

Net Interest Margin

 

The net interest margin for the three and twelve months ended December 31, 2013 was 3.98% and 4.13% compared to 4.29% and 4.45% for the corresponding periods of 2012.  While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $2,482,000 and $6,666,000 for the three and twelve months ended December 31, 2013 compared to the corresponding period of 2012.  Driving this increase is the growth in the loan and deposit portfolios for the twelve months ended December 31, 2013 compared to the corresponding period for 2012 primarily due to the acquisition of Luzerne, growth in home equity products, recognition of $528,000 in loan interest from the payoff of a nonaccrual loan in the first quarter of 2013, and the continued emphasis on core deposit growth.  The primary funding for the loan growth was an increase in core deposits.  These deposits represent a lower cost funding source than time deposits and comprise 75.83% of total deposits at December 31, 2013 compared to 73.62% at December 31, 2012.  The continued growth in core deposits has led to the total cost of deposits decreasing to 48 bp for the twelve months ended December 31, 2013 from 71 bp for the corresponding period of 2012.  FHLB long-term borrowings have decreased $5,528,000 since December 31, 2012.  The decrease is due to the maturity of $5,528,000 in long-term borrowings during the twelve months ended December 31, 2013 carrying an average rate of 3.94%.  The changes in the composition of the deposit and borrowing portfolios has led to the total cost of interest bearing funding decreasing to 69 bp for the twelve months ended December 31, 2013 from 103 bp at the corresponding period of 2012.

 

"Mitigation of the continued compressing net interest margin remains one of our top priorities.  Our focus on increasing earning assets by adding quality loans, even though these new earning assets are lower rate than legacy assets, remains steadfast.  Many of the loans being added are short and intermediate in term, such as home equity products.  We continue to actively manage the investment portfolio in order to reduce interest rate and market risk. This is being undertaken primarily through the sale of long-term municipal bonds that have a maturity date of 2025 or later and securities with a call date within the next five years.  The efforts to sell municipal bonds have been tempered as the municipal bond market remains soft on longer maturity issues.  The proceeds of the bond sales are being deployed into loans and variable rate intermediate term corporate bonds and short and intermediate term municipal bonds.  The earning asset strategies do impact current earnings, but they play a key role in our long-term asset liability management strategy as the balance sheet is shortened to better prepare for a rising rate environment.  On the funding side of the balance sheet there is limited opportunity to reduce costs.  Our focus will continue to be on lower cost core deposits, with an eye toward the lengthening of select funding sources such as time deposits or borrowings as opportunities are presented," commented President Grafmyre.

 

Assets

 

Total assets increased $355,460,000 to $1,211,995,000 at December 31, 2013 compared to December 31, 2012 due primarily to the acquisition of Luzerne.  Net loans increased $303,585,000 to $808,200,000 at December 31, 2013 compared to December 31, 2012 due to the acquisition of Luzerne and campaigns related to increasing home equity product market share during 2012 and 2013.  The investment portfolio decreased $704,000 from December 31, 2012 to December 31, 2013 due to our strategy to reduce the investment portfolio duration through the selective selling of bonds as opportunities develop, and a change in the fair market value adjustment to an unrealized loss from an unrealized gain.  The decreases in value were partially offset by the acquisition of Luzerne.

 

Non-performing Loans

 

Our non-performing loans to total loans ratio decreased to 1.23% at December 31, 2013 from 2.29% at December 31, 2012.  The decrease in non-performing loans is primarily the result of several partial charge-offs and the payoff of a large construction loan that was on nonaccrual.  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 recoveries of $251,000 for the twelve months ended December 31, 2013 augmented the allowance for loan losses which was 1.24% of total loans at December 31, 2013.

 

Deposits

 

Deposits have increased $330,976,000 to $973,002,000 at December 31, 2013 compared to December 31, 2012, with core deposits (total deposits excluding time deposits) increasing $265,105,000, while higher cost time deposits only increased $65,871,000.  Noninterest-bearing deposits have increased $102,424,000 to $217,377,000 at December 31, 2013 compared to December 31, 2012.  Driving this growth is our acquisition of Luzerne in addition to our commitment to easy-to-use products, community involvement, and emphasis on customer service.  We have also successfully implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration.

 

Shareholders' Equity

 

Shareholders' equity increased $34,089,000 to $127,815,000 at December 31, 2013 compared to December 31, 2012.  The accumulated other comprehensive loss of $4,894,000 at December 31, 2013 is a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $10,164,000 at December 31, 2012 to an unrealized loss of $2,169,000 at December 31, 2013.  The amount of accumulated other comprehensive loss at December 31, 2013 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 a decrease in the net loss of $2,082,000 to $2,725,000 at December 31, 2013.  The current level of shareholders' equity equates to a book value per share of $26.52 at December 31, 2013 compared to $24.42 at December 31, 2012 and an equity to asset ratio of 10.55% at December 31, 2013 compared to 10.94% at December 31, 2012.  Excluding goodwill and intangibles, book value per share was $22.60 at December 31, 2013 compared to $23.63 at December 31, 2012.  Dividends declared for the three and twelve months ended December 31, 2013 were $0.47 and $2.13 per share, which includes a special cash dividend of $0.25 per share declared in the first quarter 2013, compared to $0.47 and $1.88 for the three and twelve months ended December 31, 2012.

 

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen 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 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 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, 2012.

 

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: pwod@pwod.com

 

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

 

 

 

December 31,

 

(In Thousands, Except Share Data)

 

2013

 

2012

 

% Change

ASSETS

 

 

 

 

 

 

Noninterest-bearing balances.....................................................................

 

$

23,723

 

 

$

12,695

 

 

86.87

%

Interest-bearing deposits in other financial institutions.........................

 

770

 

 

2,447

 

 

(68.53

)%

Federal funds sold.........................................................................................

 

113

 

 

-

 

 

n/a

Total cash and cash equivalents.............................................................

 

24,606

 

 

15,142

 

 

62.50

%

 

 

 

 

 

 

 

Investment securities, available for sale, at fair value............................

 

288,612

 

 

289,316

 

 

(0.24

)%

Loans held for sale........................................................................................

 

1,626

 

 

3,774

 

 

(56.92

)%

Loans...............................................................................................................

 

818,344

 

 

512,232

 

 

59.76

%

Allowance for loan losses............................................................................

 

(10,144

)

 

(7,617

)

 

33.18

%

Loans, net...................................................................................................

 

808,200

 

 

504,615

 

 

60.16

%

Premises and equipment, net.......................................................................

 

20,184

 

 

8,348

 

 

141.78

%

Accrued interest receivable.........................................................................

 

4,696

 

 

4,099

 

 

14.56

%

Bank-owned life insurance..........................................................................

 

25,410

 

 

16,362

 

 

55.30

%

Investment in limited partnerships.............................................................

 

2,221

 

 

2,883

 

 

(22.96

)%

Goodwill.........................................................................................................

 

17,104

 

 

3,032

 

 

464.12

%

Intangibles......................................................................................................

 

1,801

 

 

-

 

 

n/a

Deferred tax asset.........................................................................................

 

9,889

 

 

4,731

 

 

109.03

%

Other assets....................................................................................................

 

7,646

 

 

4,233

 

 

80.63

%

TOTAL ASSETS............................................................................................

 

$

1,211,995

 

 

$

856,535

 

 

41.50

%

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

Interest-bearing deposits..............................................................................

 

$

755,625

 

 

$

527,073

 

 

43.36

%

Noninterest-bearing deposits......................................................................

 

217,377

 

 

114,953

 

 

89.10

%

Total deposits.............................................................................................

 

973,002

 

 

642,026

 

 

51.55

%

 

 

 

 

 

 

 

Short-term borrowings.................................................................................

 

26,716

 

 

33,204

 

 

(19.54

)%

Long-term borrowings..................................................................................

 

71,202

 

 

76,278

 

 

(6.65

)%

Accrued interest payable.............................................................................

 

405

 

 

366

 

 

10.66

%

Other liabilities..............................................................................................

 

12,855

 

 

10,935

 

 

17.56

%

TOTAL LIABILITIES................................................................................

 

1,084,180

 

 

762,809

 

 

42.13

%

 

 

 

 

 

 

 

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; 4,999,929 and 4,019,112 shares issued.....................................................

 

41,665

 

 

33,492

 

 

24.40

%

Additional paid-in capital............................................................................

 

49,800

 

 

18,157

 

 

174.27

%

Retained earnings..........................................................................................

 

47,554

 

 

43,030

 

 

10.51

%

Accumulated other comprehensive (loss) income:

 

 

 

 

 

 

Net unrealized (loss) gain on available for sale securities.................

 

(2,169

)

 

10,164

 

 

(121.34

)%

Defined benefit plan.................................................................................

 

(2,725

)

 

(4,807

)

 

(43.31

)%

Treasury stock at cost, 180,596 shares......................................................

 

(6,310

)

 

(6,310

)

 

-

%

TOTAL SHAREHOLDERS' EQUITY.....................................................

 

127,815

 

 

93,726

 

 

36.37

%

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......................

 

$

1,211,995

 

 

$

856,535

 

 

41.50

%

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

 

 

 

Three Months Ended December 31,

 

 

Twelve Months Ended December 31,

 

(In Thousands, Except Per Share Data)

 

2013

 

2012

 

% Change

 

2013

 

2012

 

% Change

INTEREST AND DIVIDEND INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Loans including fees....................................................

 

$

9,097

 

 

$

6,418

 

 

41.74

%

 

$

32,353

 

 

$

25,372

 

 

27.51

%

Investment securities:

 

 

 

 

 

 

 

 

 

 

 

 

Taxable....................................................................

 

1,514

 

 

1,463

 

 

3.49

%

 

6,034

 

 

5,940

 

 

1.58

%

Tax-exempt..............................................................

 

1,049

 

 

1,302

 

 

(19.43

)%

 

4,602

 

 

5,429

 

 

(15.23

)%

Dividend and other interest income..........................

 

102

 

 

92

 

 

10.87

%

 

310

 

 

366

 

 

(15.30

)%

TOTAL INTEREST AND DIVIDEND INCOME.........

 

11,762

 

 

9,275

 

 

26.81

%

 

43,299

 

 

37,107

 

 

16.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

Deposits.......................................................................

 

815

 

 

848

 

 

(3.89

)%

 

3,221

 

 

3,645

 

 

(11.63

)%

Short-term borrowings.................................................

 

18

 

 

37

 

 

(51.35

)%

 

81

 

 

137

 

 

(40.88

)%

Long-term borrowings..................................................

 

482

 

 

552

 

 

(12.68

)%

 

1,962

 

 

2,429

 

 

(19.23

)%

TOTAL INTEREST EXPENSE....................................

 

1,315

 

 

1,437

 

 

(8.49

)%

 

5,264

 

 

6,211

 

 

(15.25

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME...........................................

 

10,447

 

 

7,838

 

 

33.29

%

 

38,035

 

 

30,896

 

 

23.11

%

 

 

 

 

 

 

 

 

 

 

 

 

 

PROVISION FOR LOAN LOSSES..............................

 

600

 

 

725

 

 

(17.24

)%

 

2,275

 

 

2,525

 

 

(9.90

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES............................................................

 

9,847

 

 

7,113

 

 

38.44

%

 

35,760

 

 

28,371

 

 

26.04

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST INCOME:

 

 

 

 

 

 

 

 

 

 

 

 

Service charges............................................................

 

656

 

 

500

 

 

31.20

%

 

2,307

 

 

1,894

 

 

21.81

%

Securities gains, net......................................................

 

160

 

 

79

 

 

102.53

%

 

2,417

 

 

1,285

 

 

88.09

%

Bank-owned life insurance..........................................

 

196

 

 

131

 

 

49.62

%

 

677

 

 

670

 

 

1.04

%

Gain on sale of loans...................................................

 

234

 

 

333

 

 

(29.73

)%

 

1,438

 

 

1,386

 

 

3.75

%

Insurance commissions................................................

 

287

 

 

304

 

 

(5.59

)%

 

1,084

 

 

1,357

 

 

(20.12

)%

Brokerage commissions...............................................

 

221

 

 

214

 

 

3.27

%

 

1,018

 

 

912

 

 

11.62

%

Other............................................................................

 

1,178

 

 

724

 

 

62.71

%

 

3,101

 

 

2,596

 

 

19.45

%

TOTAL NON-INTEREST INCOME............................

 

2,932

 

 

2,285

 

 

28.32

%

 

12,042

 

 

10,100

 

 

19.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

NON-INTEREST EXPENSE:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits....................................

 

4,390

 

 

2,956

 

 

48.51

%

 

15,415

 

 

11,762

 

 

31.06

%

Occupancy...................................................................

 

603

 

 

307

 

 

96.42

%

 

1,905

 

 

1,270

 

 

50.00

%

Furniture and equipment..............................................

 

573

 

 

394

 

 

45.43

%

 

1,815

 

 

1,452

 

 

25.00

%

Pennsylvania shares tax...............................................

 

247

 

 

169

 

 

46.15

%

 

864

 

 

674

 

 

28.19

%

Amortization of investments in limited partnerships....

 

165

 

 

165

 

 

-

%

 

661

 

 

661

 

 

-

%

Federal Deposit Insurance Corporation deposit insurance.....................................................................

 

173

 

 

119

 

 

45.38

%

 

594

 

 

468

 

 

26.92

%

Marketing.....................................................................

 

146

 

 

121

 

 

20.66

%

 

517

 

 

516

 

 

0.19

%

Intangible amortization................................................

 

91

 

 

-

 

 

n/a

 

213

 

 

-

 

 

n/a

Other............................................................................

 

2,088

 

 

1,527

 

 

36.74

%

 

8,283

 

 

5,220

 

 

58.68

%

TOTAL NON-INTEREST EXPENSE...........................

 

8,476

 

 

5,758

 

 

47.20

%

 

30,267

 

 

22,023

 

 

37.43

%

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAX PROVISION.........

 

4,303

 

 

3,640

 

 

18.21

%

 

17,535

 

 

16,448

 

 

6.61

%

INCOME TAX PROVISION........................................

 

808

 

 

544

 

 

48.53

%

 

3,451

 

 

2,598

 

 

32.83

%

NET INCOME.............................................................

 

$

3,495

 

 

$

3,096

 

 

12.89

%

 

$

14,084

 

 

$

13,850

 

 

1.69

%

 

 

 

 

 

 

 

 

 

 

 

 

 

EARNINGS PER SHARE - BASIC AND DILUTED....

 

$

0.73

 

 

$

0.81

 

 

(9.88

)%

 

$

3.19

 

 

$

3.61

 

 

(11.63

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED...............................................

 

4,819,048

 

 

3,838,290

 

 

25.55

%

 

4,410,626

 

 

3,837,751

 

 

14.93

%

 

 

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS DECLARED PER SHARE......................

 

$

0.47

 

 

$

0.47

 

 

-

%

 

$

2.13

 

 

$

1.88

 

 

13.30

%

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES 

 

 

 

Three Months Ended

 

 

 

December 31, 2013

 

 

December 31, 2012

 

(Dollars in Thousands)

 

Average 

Balance

 

Interest

 

Average 

Rate

 

Average 

Balance

 

Interest

 

Average 

Rate

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt loans..........................................

 

$

25,849

 

 

$

297

 

 

4.56

%

 

$

22,171

 

 

$

286

 

 

5.13

%

All other loans...............................................

 

786,740

 

 

8,901

 

 

4.49

%

 

482,586

 

 

6,229

 

 

5.13

%

Total loans......................................................

 

812,589

 

 

9,198

 

 

4.49

%

 

504,757

 

 

6,515

 

 

5.13

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold.........................................

 

444

 

 

-

 

 

-

%

 

-

 

 

-

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities.........................................

 

181,709

 

 

1,612

 

 

3.55

%

 

161,669

 

 

1,551

 

 

3.84

%

Tax-exempt securities..................................

 

107,494

 

 

1,589

 

 

5.91

%

 

132,624

 

 

1,973

 

 

5.95

%

Total securities..............................................

 

289,203

 

 

3,201

 

 

4.43

%

 

294,293

 

 

3,524

 

 

4.79

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits..............................

 

4,922

 

 

4

 

 

0.32

%

 

2,514

 

 

4

 

 

0.63

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets........................

 

1,107,158

 

 

12,403

 

 

4.45

%

 

801,564

 

 

10,043

 

 

4.99

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets....................................................

 

96,201

 

 

 

 

 

 

46,860

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS............................................

 

$

1,203,359

 

 

 

 

 

 

$

848,424

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

Savings............................................................

 

$

138,553

 

 

44

 

 

0.13

%

 

$

80,341

 

 

21

 

 

0.10

%

Super Now deposits......................................

 

165,735

 

 

166

 

 

0.40

%

 

125,396

 

 

158

 

 

0.50

%

Money market deposits................................

 

208,591

 

 

140

 

 

0.27

%

 

149,691

 

 

154

 

 

0.41

%

Time deposits.................................................

 

235,718

 

 

465

 

 

0.78

%

 

172,334

 

 

515

 

 

1.19

%

Total interest-bearing deposits....................

 

748,597

 

 

815

 

 

0.43

%

 

527,762

 

 

848

 

 

0.64

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings..................................

 

25,385

 

 

18

 

 

0.33

%

 

25,926

 

 

37

 

 

0.57

%

Long-term borrowings..................................

 

70,755

 

 

482

 

 

2.67

%

 

71,821

 

 

552

 

 

3.01

%

Total borrowings...........................................

 

96,140

 

 

500

 

 

2.05

%

 

97,747

 

 

589

 

 

2.36

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities..................

 

844,737

 

 

1,315

 

 

0.62

%

 

625,509

 

 

1,437

 

 

0.91

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits...........................................

 

213,368

 

 

 

 

 

 

116,314

 

 

 

 

 

Other liabilities..............................................

 

18,070

 

 

 

 

 

 

10,736

 

 

 

 

 

Shareholders' equity.....................................

 

127,184

 

 

 

 

 

 

95,865

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......................

 

$

1,203,359

 

 

 

 

 

 

$

848,424

 

 

 

 

 

Interest rate spread........................................

 

 

 

 

 

3.83

%

 

 

 

 

 

4.08

%

Net interest income/margin..........................

 

 

 

$

11,088

 

 

3.98

%

 

 

 

$

8,606

 

 

4.29

%

 

 

 

 

Three Months Ended December 31,

 

 

2013

 

2012

Total interest income...................................................

 

$

11,762

 

 

$

9,275

 

Total interest expense.................................................

 

1,315

 

 

1,437

 

Net interest income......................................................

 

10,447

 

 

7,838

 

Tax equivalent adjustment.........................................

 

641

 

 

768

 

Net interest income (fully taxable equivalent).......

 

$

11,088

 

 

$

8,606

 

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES 

 

 

 

Twelve Months Ended

 

 

 

December 31, 2013

 

 

December 31, 2012

 

(Dollars in Thousands)

 

Average 

Balance

 

Interest

 

Average 

Rate

 

Average 

Balance

 

Interest

 

Average 

Rate

ASSETS:

 

 

 

 

 

 

 

 

 

 

 

 

Tax-exempt loans.........................................

 

$

24,934

 

 

$

1,056

 

 

4.24

%

 

$

23,857

 

 

$

1,195

 

 

5.01

%

All other loans...............................................

 

662,394

 

 

31,656

 

 

4.78

%

 

446,569

 

 

24,583

 

 

5.50

%

Total loans.....................................................

 

687,328

 

 

32,712

 

 

4.76

%

 

470,426

 

 

25,778

 

 

5.48

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Federal funds sold........................................

 

226

 

 

-

 

 

-

%

 

-

 

 

-

 

 

-

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable securities.........................................

 

176,674

 

 

6,326

 

 

3.58

%

 

158,765

 

 

6,298

 

 

3.97

%

Tax-exempt securities..................................

 

116,697

 

 

6,973

 

 

5.98

%

 

131,637

 

 

8,226

 

 

6.25

%

Total securities..............................................

 

293,371

 

 

13,299

 

 

4.53

%

 

290,402

 

 

14,524

 

 

5.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits.............................

 

6,946

 

 

18

 

 

0.26

%

 

6,621

 

 

8

 

 

0.12

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-earning assets.......................

 

987,871

 

 

46,029

 

 

4.66

%

 

767,449

 

 

40,310

 

 

5.25

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Other assets....................................................

 

76,593

 

 

 

 

 

 

49,070

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL ASSETS............................................

 

$

1,064,464

 

 

 

 

 

 

$

816,519

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY:

 

 

 

 

 

 

 

 

 

 

 

 

Savings...........................................................

 

$

118,125

 

 

140

 

 

0.12

%

 

$

78,724

 

 

65

 

 

0.08

%

Super Now deposits......................................

 

154,131

 

 

687

 

 

0.45

%

 

118,515

 

 

610

 

 

0.51

%

Money market deposits................................

 

183,460

 

 

548

 

 

0.30

%

 

145,339

 

 

734

 

 

0.51

%

Time deposits................................................

 

209,517

 

 

1,846

 

 

0.88

%

 

173,274

 

 

2,236

 

 

1.29

%

Total interest-bearing deposits...................

 

665,233

 

 

3,221

 

 

0.48

%

 

515,852

 

 

3,645

 

 

0.71

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Short-term borrowings.................................

 

22,281

 

 

81

 

 

0.38

%

 

20,961

 

 

137

 

 

0.65

%

Long-term borrowings..................................

 

72,140

 

 

1,962

 

 

2.68

%

 

64,994

 

 

2,429

 

 

3.68

%

Total borrowings...........................................

 

94,421

 

 

2,043

 

 

2.14

%

 

85,955

 

 

2,566

 

 

2.94

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total interest-bearing liabilities.................

 

759,654

 

 

5,264

 

 

0.69

%

 

601,807

 

 

6,211

 

 

1.03

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits...........................................

 

174,909

 

 

 

 

 

 

113,431

 

 

 

 

 

Other liabilities.............................................

 

15,962

 

 

 

 

 

 

11,126

 

 

 

 

 

Shareholders' equity....................................

 

113,939

 

 

 

 

 

 

90,155

 

 

 

 

 

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......................

 

$

1,064,464

 

 

 

 

 

 

$

816,519

 

 

 

 

 

Interest rate spread.......................................

 

 

 

 

 

3.97

%

 

 

 

 

 

4.22

%

Net interest income/margin.........................

 

 

 

$

40,765

 

 

4.13

%

 

 

 

$

34,099

 

 

4.45

%

 

 

 

 

Twelve Months Ended December 31,

 

 

2013

 

2012

Total interest income...................................................

 

$

43,299

 

 

$

37,107

 

Total interest expense.................................................

 

5,264

 

 

6,211

 

Net interest income......................................................

 

38,035

 

 

30,896

 

Tax equivalent adjustment.........................................

 

2,730

 

 

3,203

 

Net interest income (fully taxable equivalent).......

 

$

40,765

 

 

$

34,099

 

 

(Dollars in Thousands, Except Per Share Data)

 

Quarter Ended

 

 

12/31/2013

 

9/30/2013

 

6/30/2013

 

3/31/2013

 

12/31/2012

Operating Data

 

 

 

 

 

 

 

 

 

 

Net income.........................................................

 

$

3,495

 

 

$

3,246

 

 

$

3,659

 

 

$

3,684

 

 

$

3,096

 

Net interest income...........................................

 

10,447

 

 

10,629

 

 

8,754

 

 

8,205

 

 

7,838

 

Provision for loan losses.................................

 

600

 

 

600

 

 

575

 

 

500

 

 

725

 

Net security gains (losses)...............................

 

160

 

 

(3

)

 

1,274

 

 

986

 

 

79

 

Non-interest income, ex. net security gains..

 

2,772

 

 

2,845

 

 

2,261

 

 

1,747

 

 

2,206

 

Non-interest expense.......................................

 

8,476

 

 

8,975

 

 

6,965

 

 

5,851

 

 

5,758

 

 

 

 

 

 

 

 

 

 

 

 

Performance Statistics

 

 

 

 

 

 

 

 

 

 

Net interest margin...........................................

 

3.99

%

 

4.07

%

 

4.09

%

 

4.46

%

 

4.29

%

Annualized return on average assets.............

 

1.16

%

 

1.08

%

 

1.48

%

 

1.72

%

 

1.46

%

Annualized return on average equity............

 

10.99

%

 

10.39

%

 

13.54

%

 

15.51

%

 

12.92

%

Annualized net loan charge-offs (recoveries) to average loans..........................

 

0.04

%

 

0.19

%

 

-

%

 

(0.55

)%

 

0.50

%

Net charge-offs (recoveries)...........................

 

87

 

 

374

 

 

1

 

 

(713

)

 

629

 

Efficiency ratio.................................................

 

63.5

%

 

66.6

%

 

63.2

%

 

58.8

%

 

57.3

%

 

 

 

 

 

 

 

 

 

 

 

Per Share Data

 

 

 

 

 

 

 

 

 

 

Basic earnings per share..................................

 

$

0.73

 

 

$

0.67

 

 

$

0.88

 

 

$

0.96

 

 

$

0.81

 

Diluted earnings per share...............................

 

0.73

 

 

0.67

 

 

0.88

 

 

0.96

 

 

0.81

 

Dividend declared per share...........................

 

0.47

 

 

0.47

 

 

0.47

 

 

0.72

 

 

0.47

 

Book value.........................................................

 

26.52

 

 

26.12

 

 

26.14

 

 

24.23

 

 

24.42

 

Common stock price:

 

 

 

 

 

 

 

 

 

 

High................................................................

 

53.99

 

 

49.89

 

 

41.86

 

 

41.45

 

 

45.27

 

Low................................................................

 

47.03

 

 

42.76

 

 

39.44

 

 

38.50

 

 

37.16

 

Close..............................................................

 

51.00

 

 

49.82

 

 

41.86

 

 

40.97

 

 

37.41

 

Weighted average common shares:

 

 

 

 

 

 

 

 

 

 

Basic..............................................................

 

4,819

 

 

4,818

 

 

4,151

 

 

3,839

 

 

3,838

 

Fully Diluted.................................................

 

4,819

 

 

4,818

 

 

4,151

 

 

3,839

 

 

3,838

 

End-of-period common shares:

 

 

 

 

 

 

 

 

 

 

Issued.............................................................

 

5,000

 

 

4,999

 

 

4,999

 

 

4,020

 

 

4,019

 

Treasury........................................................

 

181

 

 

181

 

 

181

 

 

181

 

 

181

 

 

 

 

Quarter Ended

(Dollars in Thousands, Except Per Share Data)

 

12/31/2013

 

9/30/2013

 

6/30/2013

 

3/31/2013

 

12/31/2012

Financial Condition Data:

 

 

 

 

 

 

 

 

 

 

General

 

 

 

 

 

 

 

 

 

 

Total assets.....................................................

 

$

1,211,995

 

 

$

1,204,090

 

 

$

1,206,958

 

 

$

852,997

 

 

$

856,535

 

Loans, net........................................................

 

808,200

 

 

796,533

 

 

777,557

 

 

503,592

 

 

504,615

 

Goodwill.........................................................

 

17,104

 

 

17,104

 

 

17,104

 

 

3,032

 

 

3,032

 

Intangibles......................................................

 

1,801

 

 

1,892

 

 

1,984

 

 

-

 

 

-

 

Total deposits.................................................

 

973,002

 

 

975,521

 

 

955,361

 

 

659,304

 

 

642,026

 

Noninterest-bearing.................................

 

217,377

 

 

215,374

 

 

211,096

 

 

120,471

 

 

114,953

 

 

 

 

 

 

 

 

 

 

 

 

Savings.......................................................

 

138,621

 

 

142,193

 

 

140,667

 

 

86,556

 

 

82,546

 

NOW...........................................................

 

177,996

 

 

169,974

 

 

161,972

 

 

140,626

 

 

130,454

 

Money Market...........................................

 

203,786

 

 

209,469

 

 

203,076

 

 

143,847

 

 

144,722

 

Time Deposits...........................................

 

235,222

 

 

238,511

 

 

238,550

 

 

167,804

 

 

169,351

 

Total interest-bearing deposits...............

 

755,625

 

 

760,147

 

 

744,265

 

 

538,833

 

 

527,073

 

 

 

 

 

 

 

 

 

 

 

 

Core deposits*................................................

 

737,780

 

 

737,010

 

 

716,811

 

 

491,500

 

 

472,675

 

Shareholders' equity.....................................

 

127,815

 

 

125,852

 

 

125,928

 

 

93,013

 

 

93,726

 

 

 

 

 

 

 

 

 

 

 

 

Asset Quality

 

 

 

 

 

 

 

 

 

 

Non-performing assets..................................

 

$

10,029

 

 

$

6,064

 

 

$

6,515

 

 

$

9,059

 

 

$

11,706

 

Non-performing assets to total assets.........

 

0.83

%

 

0.50

%

 

0.54

%

 

1.06

%

 

1.37

%

Allowance for loan losses............................

 

10,144

 

 

9,630

 

 

9,404

 

 

8,830

 

 

7,617

 

Allowance for loan losses to total loans....

 

1.24

%

 

1.19

%

 

1.19

%

 

1.72

%

 

1.49

%

Allowance for loan losses to non-performing loans............................................

 

101.15

%

 

158.81

%

 

144.34

%

 

97.47

%

 

65.07

%

Non-performing loans to total loans...........

 

1.23

%

 

0.75

%

 

0.83

%

 

1.77

%

 

2.29

%

 

 

 

 

 

 

 

 

 

 

 

Capitalization

 

 

 

 

 

 

 

 

 

 

Shareholders' equity to total assets............

 

10.55

%

 

10.45

%

 

10.43

%

 

10.90

%

 

10.94

%

 

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

(Dollars in Thousands, Except Per Share Data)

 

2013

 

2012

 

2013

 

2012

GAAP net income.........................................................................

 

$

3,495

 

 

$

3,096

 

 

$

14,084

 

 

$

13,850

 

Less: net securities and bank-owned life insurance (losses) gains, net of tax............................................................................

 

106

 

 

52

 

 

1,595

 

 

957

 

Non-GAAP operating earnings..................................................

 

$

3,389

 

 

$

3,044

 

 

$

12,489

 

 

$

12,893

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2013

 

2012

 

2013

 

2012

Return on average assets (ROA)................................................

 

1.16

%

 

1.46

%

 

1.32

%

 

1.70

%

Less: net securities and bank-owned life insurance (losses) gains, net of tax............................................................................

 

0.03

%

 

0.02

%

 

0.15

%

 

0.12

%

Non-GAAP operating ROA.........................................................

 

1.13

%

 

1.44

%

 

1.17

%

 

1.58

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2013

 

2012

 

2013

 

2012

Return on average equity (ROE)................................................

 

10.99

%

 

12.92

%

 

12.36

%

 

15.36

%

Less: net securities and bank-owned life insurance (losses) gains, net of tax............................................................................

 

0.33

%

 

0.22

%

 

1.40

%

 

1.06

%

Non-GAAP operating ROE.........................................................

 

10.66

%

 

12.70

%

 

10.96

%

 

14.30

%

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2013

 

2012

 

2013

 

2012

Basic earnings per share (EPS)..................................................

 

$

0.73

 

 

$

0.81

 

 

$

3.19

 

 

$

3.61

 

Less: net securities and bank-owned life insurance (losses) gains, net of tax............................................................................

 

0.03

 

 

0.02

 

 

0.36

 

 

0.25

 

Non-GAAP basic operating EPS................................................

 

$

0.70

 

 

$

0.79

 

 

$

2.83

 

 

$

3.36

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

 

2013

 

2012

 

2013

 

2012

Dilutive EPS..................................................................................

 

$

0.73

 

 

$

0.81

 

 

$

3.19

 

 

$

3.61

 

Less: net securities and bank-owned life insurance (losses) gains, net of tax............................................................................

 

0.03

 

 

0.02

 

 

0.36

 

 

0.25

 

Non-GAAP dilutive operating EPS............................................

 

$

0.70

 

 

$

0.79

 

 

$

2.83

 

 

$

3.36

 

 

View All

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