PWOD Penns Woods Bancorp Inc

Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported that net income from core operations (�operating earnings�), which excludes net security gains and losses, increased to $2,383,000 and $8,913,000 for the three and twelve months ended December 31, 2007 compared to $2,100,000 and $8,539,000 for the same periods of 2006. Operating earnings per share for the three months ended December 31, 2007 increased 13.0% or $0.07 to $0.61 basic and dilutive compared to the three months ended December 31, 2006. Operating earnings for the fourth quarter of 2007 represent a $0.01 basic and dilutive increase from the previous three month period as core earnings continued to build upon the $0.05 increase from the second to third quarters of 2007. In addition, the $0.01 growth in operating earnings per share represents the fourth consecutive quarter of increases. Operating earnings for the twelve months ended December 31, 2007 were positively impacted by continued strong credit quality, which has led to a reduction in the provision for loan losses, strong noninterest income of 17.3% of core revenue (interest income and noninterest income excluding net security gains and losses), and a reduction in tax expense due to a shift in the investment portfolio to tax-exempt bonds and additional federal tax credits related to low income housing partnerships. The impact of these items resulted in basic and dilutive operating earnings increasing 5.5% to $2.29 for the twelve months ended December 31, 2007 compared to $2.17 for the twelve months ended December 31, 2006. Net income, as reported under U.S. Generally Accepted Accounting Principles, for the three and twelve months ended December 31, 2007 was $1,939,000 and $8,877,000 as compared to $2,294,000 and $9,647,000 for the same periods of 2006. Comparable results were impacted by a decrease in after-tax securities gains of $638,000 (from $194,000 to a loss of $444,000) and $1,144,000 (from $1,108,000 to a loss of $36,000) from 2006 to 2007 for the three and twelve month periods being compared. Basic and dilutive earnings per share for the three months ended December 31, 2007 were $0.50 compared to $0.59 for the three months ended December 31, 2006. The twelve months ended December 31, 2007 had basic and dilutive earnings per share of $2.28 compared to $2.45 for the twelve months ended December 31, 2006. Return on average assets and return on average equity were 1.25% and 10.68% for the three months ended December 31, 2007 as compared to 1.56% and 12.18% for the corresponding period of 2006. Earnings for the twelve months ended December 31, 2007 correlate to a return on average assets and return on average equity of 1.49% and 12.14% as compared to 1.67% and 12.93% for the twelve months ended December 31, 2006. The net interest margin for the three and twelve months ended December 31, 2007 was 3.93% and 3.95% as compared to 3.97% and 4.06% for the corresponding periods of 2006. The minimal decrease in the net interest margin was due to the cost of interest bearing liabilities continuing to increase at a rate greater than the increase in the yield on earning assets over the past twelve months. However, for the three month period ended December 31, 2007 compared to the same period of 2006, the interest rate spread between the yield on earning assets and the cost of interest bearing liabilities improved by 5 basis points (�bp�). The increase in the cost of interest bearing liabilities was driven primarily by the cost of time deposits increasing 24 bp for the three months ended December 31, 2007 and 62 bp for the twelve month period as compared to the previous year. The increase in cost of time deposits was impacted by the Federal Open Market Committee rate increases during 2006, utilization of brokered deposits, and our strategic decision to gather time deposits as part of marketing campaigns associated with branch promotions. Loan growth and a shift in the investment portfolio toward tax-exempt bonds paved the way for the increase in yield on earning assets of 21 bp for the twelve month period ended December 31 2007 as compared to 2006. �During the fourth quarter, the financial sector has been negatively impacted as one large institution after another announced sub prime loan related write downs. We, as a community bank, take pride in not participating in subprime lending or the purchase of investment securities with subprime loans as underlying collateral. However, we, as with other banks and individuals, do invest in financial sector companies with the majority of these investments currently having a market value below our cost basis. As a result, we determined that certain equity investments had declined in value to a point that their market price recovery would not occur in the near term and therefore was deemed to be other than temporary in nature. This decision resulted in a fourth quarter charge of $834,000 to earnings to reduce our carrying value of these investments,� commented Ronald A. Walko, President and Chief Executive Officer of Penns Woods Bancorp, Inc. �Regarding the asset quality of the loan portfolio, our continued commitment to sound lending practices and credit standards has produced a nonperforming loans to total loans ratio of only 0.37% at December 31, 2007 and annualized net loan charge-offs to average loans of only 0.06% for the twelve month period, while maintaining a sound allowance for loan losses to loans of 1.15% compared to 1.16% at December 31, 2006,� added Mr. Walko. Total assets increased $35,853,000 to $628,138,000 at December 31, 2007 compared to December 31, 2006. A softening economic environment coupled with our credit quality standards led to net loans remaining stable at $356,348,000. Growth in the investment portfolio of $29,249,000 from December 31, 2006 to December 31, 2007 was primarily the result of a leverage strategy initiated during the latter part of 2007. Total deposits decreased to $389,022,000 at December 31, 2007 compared to $395,191,000 at December 31, 2006 as higher cost brokered time deposits were reduced by $16,194,000 to $8,834,000 at December 31, 2007. �In light of the loan environment, the investment leverage strategy allowed us to grow quality earning assets at a spread to our funding cost that was accretive to both the return on equity and return on assets, while providing sufficient liquidity for future needs,� commented Mr. Walko. Shareholders� equity decreased $4,035,000 to $70,559,000 at December 31, 2007 as accumulated comprehensive income decreased $5,094,000, and $972,000 in treasury stock was strategically purchased as part of the previously announced stock buyback plan, while net income outpaced dividends paid. The decrease in accumulated comprehensive income is the result of a decrease in market value of certain securities held in the investment portfolio at December 31, 2007 compared to December 31, 2006, and the net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan. The current level of shareholders� equity equates to a book value per share of $18.21 at December 31, 2007 compared to $19.12 at December 31, 2006 and an equity to asset ratio of 11.24% at December 31, 2007. Book value per share, excluding accumulated comprehensive income, was $19.12 at December 31, 2007 compared to $18.72 at December 31, 2006. During the three and twelve months ended December 31, 2007 cash dividends of $0.46 and $1.79 per share were paid to shareholders compared to $0.44 and $1.73 for the three and twelve months ended December 31, 2006. �We remain committed to providing a healthy dividend yield in excess of four percent and conducting stock repurchases on the open market. The current dividend yield in excess of 5.5%, coupled with the purchase of 28,530 shares on the open market during 2007, illustrates our commitment to building shareholder value. The strength of our earnings has allowed us to continue and maintain these programs,� commented Mr. Walko. The range of closing prices for Penns Woods Bancorp, Inc. stock was between $30.33 and $32.50 during the three months ended December 31, 2007 and between $30.33 and $37.75 during the twelve months ended December 31, 2007. Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, and Centre Counties. Investment and insurance products are offered through the bank�s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group. NOTE: This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Management uses the non-GAAP measure of net income from core operations in its analysis of the company's performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature. 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. 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) � � � (In Thousands, Except Share Data) December 31, � 2007 � � 2006 � % Change � � ASSETS Noninterest-bearing balances $ 15,417 $ 15,348 0.4 % Interest-bearing deposits in other financial institutions � 16 � � 25 � -36.0 % Total cash and cash equivalents 15,433 15,373 0.4 % � Investment securities, available for sale, at fair value 214,455 185,200 15.8 % Investment securities held to maturity (fair value of $279 and $286) 277 283 -2.1 % Loans held for sale 4,214 3,716 13.4 % Loans 360,478 360,384 0.0 % Less: Allowance for loan losses � 4,130 � � 4,185 � -1.3 % Loans, net 356,348 356,199 0.0 % Premises and equipment, net 6,774 6,737 0.5 % Accrued interest receivable 3,343 2,939 13.7 % Bank-owned life insurance 12,375 11,346 9.1 % Investment in limited partnerships 5,439 4,950 9.9 % Goodwill 3,032 3,032 0.0 % Other assets � 6,448 � � 2,510 � 156.9 % TOTAL ASSETS $ 628,138 � $ 592,285 � 6.1 % � LIABILITIES Interest-bearing deposits $ 314,351 $ 322,031 -2.4 % Noninterest-bearing deposits � 74,671 � � 73,160 � 2.1 % Total deposits 389,022 395,191 -1.6 % � Short-term borrowings 55,315 34,697 59.4 % Long-term borrowings, Federal Home Loan Bank (FHLB) 106,378 82,878 28.4 % Accrued interest payable 1,744 1,532 13.8 % Other liabilities � 5,120 � � 3,393 � 50.9 % TOTAL LIABILITIES � 557,579 � � 517,691 � 7.7 % � SHAREHOLDERS' EQUITY Common stock, par value $8.33, 10,000,000 shares authorized; 4,006,934 and 4,003,514 shares issued 33,391 33,362 0.1 % Additional paid-in capital 17,888 17,810 0.4 % Retained earnings 27,707 25,783 7.5 % Accumulated other comprehensive income (loss): Net unrealized (loss) gain on available for sale securities (2,159 ) 2,139 -200.9 % Defined benefit plan (1,375 ) (579 ) 137.5 % Less: Treasury stock at cost, 131,302 and 102,772 shares � (4,893 ) � (3,921 ) 24.8 % TOTAL SHAREHOLDERS' EQUITY � 70,559 � � 74,594 � -5.4 % TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 628,138 � $ 592,285 � 6.1 % PENNS WOODS BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) � � � � � � � (In Thousands, Except Per Share Data) Three Months Ended Twelve Months Ended December 31, December 31, � 2007 � � 2006 % Change � � 2007 � � 2006 % Change � � INTEREST AND DIVIDEND INCOME: Loans including fees $ 6,539 $ 6,628 -1.3 % $ 26,099 $ 24,878 4.9 % Investment Securities: Taxable 1,387 886 56.5 % 4,098 3,577 14.6 % Tax-exempt 1,086 1,034 5.0 % 4,357 4,027 8.2 % Dividend and other interest income � 488 � � 289 68.9 % � 1,395 � � 1,271 9.8 % TOTAL INTEREST AND DIVIDEND INCOME � 9,500 � � 8,837 7.5 % � 35,949 � � 33,753 6.5 % � INTEREST EXPENSE: Deposits 2,736 2,656 3.0 % 10,951 8,908 22.9 % Short-term borrowings 539 282 91.1 % 1,639 1,503 9.0 % Long-term borrowings, FHLB � 1,122 � � 955 17.5 % � 3,857 � � 3,799 1.5 % TOTAL INTEREST EXPENSE � 4,397 � � 3,893 12.9 % � 16,447 � � 14,210 15.7 % � NET INTEREST INCOME 5,103 4,944 3.2 % 19,502 19,543 -0.2 % � PROVISION FOR LOAN LOSSES � 90 � � 150 -40.0 % � 150 � � 635 -76.4 % � NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES � 5,013 � � 4,794 4.6 % � 19,352 � � 18,908 2.3 % � NON-INTEREST INCOME: Deposit service charges 592 593 -0.2 % 2,246 2,366 -5.1 % Securities gains (losses), net (673 ) 294 -328.9 % (54 ) 1,679 -103.2 % Bank-owned life insurance 100 102 -2.0 % 410 374 9.6 % Gain on sale of loans 267 229 16.6 % 921 853 8.0 % Insurance commissions 609 549 10.9 % 2,222 2,281 -2.6 % Other � 417 � � 322 29.5 % � 1,733 � � 1,476 17.4 % TOTAL NON-INTEREST INCOME � 1,312 � � 2,089 -37.2 % � 7,478 � � 9,029 -17.2 % � NON-INTEREST EXPENSE: Salaries and employee benefits 2,166 2,213 -2.1 % 9,078 8,833 2.8 % Occupancy, net 319 311 2.6 % 1,306 1,137 14.9 % Furniture and equipment 276 307 -10.1 % 1,126 1,201 -6.2 % Pennsylvania shares tax 161 151 6.6 % 643 598 7.5 % Other � 1,496 � � 1,204 24.3 % � 5,163 � � 4,560 13.2 % TOTAL NON-INTEREST EXPENSE � 4,418 � � 4,186 5.5 % � 17,316 � � 16,329 6.0 % � INCOME BEFORE INCOME TAX PROVISION 1,907 2,697 -29.3 % 9,514 11,608 -18.0 % INCOME TAX (BENEFIT) PROVISION � (32 ) � 403 -107.9 % � 637 � � 1,961 -67.5 % NET INCOME $ 1,939 � $ 2,294 -15.5 % $ 8,877 � $ 9,647 -8.0 % � EARNINGS PER SHARE - BASIC $ 0.50 � $ 0.59 -15.3 % $ 2.28 � $ 2.45 -6.9 % � EARNINGS PER SHARE - DILUTED $ 0.50 � $ 0.59 -15.3 % $ 2.28 � $ 2.45 -6.9 % � WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC � 3,878,127 � � 3,909,226 -0.8 % � 3,886,277 � � 3,934,138 -1.2 % � WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED � 3,878,287 � � 3,909,693 -0.8 % � 3,886,514 � � 3,934,617 -1.2 % � DIVIDENDS PER SHARE $ 0.46 � $ 0.44 4.5 % $ 1.79 � $ 1.73 3.5 % � PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES � � For the Three Months Ended December 31, 2007 � December 31, 2006 Average Balance � Interest � Average Rate Average Balance � Interest � Average Rate ASSETS: Tax-exempt loans $ 7,663 $ 120 6.21 % $ 8,265 $ 126 6.05 % All other loans � 354,473 � 6,460 � 7.23 % � 362,467 � 6,545 7.16 % Total loans � 362,136 � 6,580 � 7.21 % � 370,732 � 6,671 7.14 % � Taxable securities 115,883 1,874 6.47 % 85,588 1,173 5.48 % Tax-exempt securities � 100,416 � 1,645 � 6.55 % � 97,798 � 1,566 6.41 % Total securities � 216,299 � 3,519 � 6.51 % � 183,386 � 2,739 5.97 % � Interest bearing deposits � 91 � 1 � 4.36 % � 125 � 2 6.35 % � Total interest-earning assets 578,526 � 10,100 � 6.95 % 554,243 � 9,412 6.75 % � Other assets � 43,219 � 34,168 � TOTAL ASSETS $ 621,745 $ 588,411 � LIABILITIES AND SHAREHOLDERS' EQUITY: Savings $ 55,693 100 0.71 % $ 58,422 112 0.76 % Super Now deposits 47,446 156 1.30 % 45,689 167 1.45 % Money Market deposits 22,610 125 2.19 % 23,059 125 2.15 % Time deposits � 196,925 � 2,355 � 4.74 % � 198,484 � 2,252 4.50 % Total Deposits � 322,674 � 2,736 � 3.36 % � 325,654 � 2,656 3.24 % � Short-term borrowings 49,792 539 4.29 % 25,111 282 4.46 % Long-term borrowings � 97,356 � 1,122 � 4.57 % � 82,878 � 955 4.57 % Total borrowings � 147,148 � 1,661 � 4.48 % � 107,989 � 1,237 4.54 % � Total interest-bearing liabilities 469,822 � 4,397 � 3.71 % 433,643 � 3,893 3.56 % � Demand deposits 72,179 72,035 Other liabilities 7,085 7,408 Shareholders' equity � 72,659 � 75,325 � TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 621,745 $ 588,411 Interest rate spread � 3.24 % 3.19 % Net interest income/margin $ 5,703 � 3.93 % $ 5,519 3.97 % � � For the Three Months Ended December 31, � 2007 2006 � Total interest income $ 9,500 $ 8,837 Total interest expense � 4,397 � 3,893 � � Net interest income 5,103 4,944 Tax equivalent adjustment � 600 � 575 � � Net interest income (fully taxable equivalent) $ 5,703 $ 5,519 � � � PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES � � � � � � For the Twelve Months Ended December 31, 2007 December 31, 2006 Average Balance Interest Average Rate Average Balance Interest Average Rate ASSETS: Tax-exempt loans $ 7,857 $ 485 6.17 % $ 8,173 $ 503 6.15 % All other loans � 353,528 � 25,779 � 7.29 % � 344,524 � 24,545 7.12 % Total loans � 361,385 � 26,264 � 7.27 % � 352,697 � 25,048 7.10 % � Taxable securities 93,480 5,474 5.86 % 91,767 4,837 5.27 % Tax-exempt securities � 99,728 � 6,602 � 6.62 % � 92,692 � 6,102 6.58 % Total securities � 193,208 � 12,076 � 6.25 % � 184,459 � 10,939 5.93 % � Interest bearing deposits � 345 � 19 � 5.51 % � 152 � 11 7.24 % � Total interest-earning assets 554,938 � 38,359 � 6.91 % 537,308 � 35,998 6.70 % � Other assets � 42,602 � 40,413 � TOTAL ASSETS $ 597,540 $ 577,721 � LIABILITIES AND SHAREHOLDERS' EQUITY: Savings $ 58,710 428 0.73 % $ 61,958 509 0.82 % Super Now deposits 46,596 611 1.31 % 47,294 655 1.38 % Money Market deposits 23,920 540 2.26 % 23,905 493 2.06 % Time deposits � 198,029 � 9,372 � 4.73 % � 176,521 � 7,251 4.11 % Total Deposits � 327,255 � 10,951 � 3.35 % � 309,678 � 8,908 2.88 % � Short-term borrowings 36,816 1,639 4.45 % 34,612 1,503 4.34 % Long-term borrowings � 83,490 � 3,857 � 4.62 % � 83,237 � 3,799 4.56 % Total borrowings � 120,306 � 5,496 � 4.57 % � 117,849 � 5,302 4.50 % � Total interest-bearing liabilities 447,561 � 16,447 � 3.67 % 427,527 � 14,210 3.32 % � Demand deposits 69,953 69,668 Other liabilities 6,924 5,899 Shareholders' equity � 73,102 � 74,627 � TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 597,540 $ 577,721 Interest rate spread � 3.24 % 3.38 % Net interest income/margin $ 21,912 � 3.95 % $ 21,788 4.06 % � � For the Twelve Months Ended December 31, � 2007 2006 � Total interest income $ 35,949 $ 33,753 Total interest expense � 16,447 � 14,210 � � Net interest income 19,502 19,543 Tax equivalent adjustment � 2,410 � 2,245 � � Net interest income (fully taxable equivalent) $ 21,912 $ 21,788 � � Quarter Ended � (Dollars in Thousands, Except Per Share Data) � 12/31/2007 � � 9/30/2007 � � 6/30/2007 � � 3/31/2007 � � 12/31/2006 � � Operating Data � Net income $ 1,939 � $ 2,322 � $ 2,335 � $ 2,281 � $ 2,294 � Net interest income � 5,103 � � 4,865 � � 4,794 � � 4,740 � � 4,944 � Provision for loan losses � 90 � � 10 � � 10 � � 40 � � 150 � Net security (losses) gains � (673 ) � - � � 293 � � 326 � � 294 � Non-interest income, ex. net security (loss)gains � 1,985 � � 2,006 � � 1,893 � � 1,648 � � 1,795 � Non-interest expense � 4,418 � � 4,430 � � 4,340 � � 4,128 � � 4,186 � � Performance Statistics � Net interest margin � 3.93 % � 3.98 % � 3.95 % � 3.95 % � 3.97 % Annualized return on average assets � 1.25 % � 1.57 % � 1.58 % � 1.56 % � 1.56 % Annualized return on average equity � 10.68 % � 13.21 % � 12.57 % � 12.13 % � 12.18 % Annualized net loan charge-offs to avg loans � 0.06 % � 0.09 % � 0.05 % � 0.03 % � 0.01 % Net charge-offs � 52 � � 80 � � 49 � � 24 � � 10 � Efficiency ratio � 62.3 � � 64.5 � � 64.9 � � 64.6 � � 62.1 � � Per Share Data � Basic earnings per share $ 0.50 � $ 0.60 � $ 0.60 � $ 0.59 � $ 0.59 � Diluted earnings per share � 0.50 � � 0.60 � � 0.60 � � 0.59 � � 0.59 � Dividend declared per share � 0.46 � � 0.45 � � 0.44 � � 0.44 � � 0.44 � Book value � 18.21 � � 18.46 � � 17.93 � � 19.06 � � 19.12 � Common stock price: High � 32.50 � � 35.00 � � 35.00 � � 37.75 � � 38.59 � Low � 30.33 � � 30.80 � � 33.86 � � 35.00 � � 36.20 � Close � 32.50 � � 31.99 � � 34.24 � � 35.50 � � 37.80 � Weighted average common shares: Basic � 3,878 � � 3,881 � � 3,889 � � 3,897 � � 3,909 � Fully Diluted � 3,878 � � 3,882 � � 3,889 � � 3,898 � � 3,910 � End-of-period common shares: Issued � 4,007 � � 4,006 � � 4,005 � � 4,005 � � 4,004 � Treasury � 131 � � 129 � � 118 � � 113 � � 103 � � Quarter Ended � (Dollars in Thousands, Except Per Share Data) 12/31/2007 � 9/30/2007 � 6/30/2007 � 3/31/2007 � 12/31/2006 � � � � Financial Condition Data: General Total assets $ 628,138 � � $ 613,329 � � $ 586,572 � � $ 586,591 � � $ 592,285 � Loans, net � 356,348 � � � 353,623 � � � 352,013 � � � 353,373 � � � 356,199 � Intangibles � 3,032 � � � 3,032 � � � 3,032 � � � 3,032 � � � 3,032 � Total deposits � 389,022 � � � 404,854 � � � 405,903 � � � 384,849 � � � 395,191 � Noninterest-bearing � 74,671 � � � 72,990 � � � 70,000 � � � 70,928 � � � 73,160 � � Savings � 56,757 � � � 59,883 � � � 59,798 � � � 60,496 � � � 59,289 � NOW � 50,883 � � � 47,129 � � � 48,555 � � � 48,427 � � � 46,156 � Money Market � 21,029 � � � 22,295 � � � 23,422 � � � 24,124 � � � 23,137 � Time Deposits � 185,682 � � � 202,557 � � � 204,128 � � � 180,874 � � � 193,449 � Total interest-bearing deposits � 314,351 � � � 331,864 � � � 335,903 � � � 313,921 � � � 322,031 � � Core deposits* � 203,340 � � � 202,297 � � � 201,775 � � � 203,975 � � � 201,742 � Shareholders' equity � 70,559 � � � 71,552 � � � 69,720 � � � 74,182 � � � 74,594 � � Asset Quality � Non-performing assets $ 1,320 � � $ 1,013 � � $ 1,098 � � $ 1,019 � � $ 489 � Non-performing assets to total assets � 0.21 % � � 0.17 % � � 0.19 % � � 0.17 % � � 0.08 % Allowance for loan losses � 4,130 � � � 4,092 � � � 4,162 � � � 4,201 � � � 4,185 � Allowance for loan losses to total loans � 1.15 % � � 1.14 % � � 1.17 % � � 1.17 % � � 1.16 % Allowance for loan losses to non-performing loans � 312.88 % � � 403.95 % � � 379.05 % � � 412.27 % � � 855.83 % Non-performing loans to total loans � 0.37 % � � 0.28 % � � 0.31 % � � 0.28 % � � 0.14 % � Capitalization � Shareholders' equity to total assets � 11.23 % � � 11.67 % � � 11.89 % � � 12.65 % � � 12.59 % � * Core deposits are defined as total deposits less time deposits