PWOD Penns Woods Bancorp Inc

Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported that net income from core operations (�operating earnings�), which excludes net securities gains and losses, increased 9.6% and 5.3% to $2,545,000 and $6,873,000 for the three and nine months ended September 30, 2008 compared to $2,322,000 and $6,529,000 for the same periods of 2007. In addition, third quarter 2008 operating earnings represent an increase of $322,000 or 14.5% from the second quarter 2008 results. Operating earnings per share for the three months ended September 30, 2008 increased 10.0% to $0.66 basic and dilutive compared to $0.60 basic and dilutive for the three months ended September 30, 2007. In addition, third quarter 2008 operating earnings per share represent an increase of 13.8% or $0.08 compared to operating earnings of $0.58 for the second quarter of 2008. Operating earnings for the three and nine month periods ended September 30, 2008 have been positively impacted by continued emphasis on credit quality, deposit growth, solid non-interest income, an increasing net interest margin, and additional bank-owned life insurance. Net income, as reported under U.S. generally accepted accounting principles, for the three and nine months ended September 30, 2008 was $1,552,000 and $5,740,000 compared to $2,322,000 and $6,938,000 for the same periods of 2007. Comparable results were impacted by a decrease in after-tax securities gains of $993,000 (from $0 to a loss of $993,000) and $1,542,000 (from a gain of $409,000 to a loss of $1,133,000) from 2007 to 2008 for the three and nine month periods being compared. Included within the change in after-tax securities gains are other than temporary impairment charges relating to certain equity securities held in the investment portfolio for the three and nine month periods ended September 30, 2008 of $1,222,000 and $1,601,000. Basic and dilutive earnings per share for the three and nine months ended September 30, 2008 were $0.40 and $1.49 compared to $0.60 and $1.78 for the corresponding periods of 2007. Return on average assets and return on average equity were 0.98% and 9.43% for the three months ended September 30, 2008 compared to 1.57% and 13.21% for the corresponding period of 2007. Earnings for the nine months ended September 30, 2008 correlate to a return on average assets and return on average equity of 1.21% and 11.10% compared to 1.57% and 12.63% for the nine month 2007 period. The net interest margin for the three and nine months ended September 30, 2008 was 4.23% and 4.04% as compared to 3.98% and 3.96% for the corresponding periods of 2007. A decrease in the rate paid on interest bearing liabilities of 74 basis points (bp) and 47 bp for the three and nine months ended September 30, 2008 compared to the same periods of 2007 positively impacted the net interest margin. The decreasing cost of funds is primarily the result of the rate paid on time deposits decreasing 106 bp and 65 bp for the three and nine month periods, respectively, while the cost of short-term borrowings decreased 206 bp and 178 bp over the same time periods. The decreases are the result of Federal Open Market Committee actions coupled with our strategic decision to shorten the duration of the time deposit portfolio over the past year. The shortening of the time deposit portfolio has resulted in an increased repricing frequency which has allowed for the majority of the portfolio to be repriced downward over the past nine months. �Over the past year there has been much said in the media regarding the uncertain future of the economy and various financial institution troubles. The media has highlighted such items as sub prime lending, credit default swaps, liquidity concerns, credit quality, and the capitalization of financial institutions. We have maintained our distance from these issues as we have not been involved with either sub prime lending or credit default swaps. Our liquidity position remains stable with a net loan to deposit ratio of 85%, while core deposits have increased $29,898,000 since September 2007. In addition, we currently have available borrowing lines totaling approximately $125,000,000 with several market participants. Our capital position remains strong as our total capital to risk-weighted assets ratio of 16.8%, as with our other capital ratios, remains well in excess of the well capitalized levels established by the banking regulators. Although we have directly avoided these issues, the turbulence in the financial sector has caused the value of many of the financial stocks held within the equity segment of our investment portfolio to decline significantly over the past year. The amount of the declines has caused several of the holdings to be deemed other than temporarily impaired resulting in a write down in value of these holdings of $1,851,000 and $2,425,000 for the three and nine month periods ended September 30, 2008. We cannot predict the impact of additional economic turbulence on the portfolio; therefore, additional or prolonged economic uncertainty may lead to additional write downs as we move forward to the end of 2008 and into 2009. We are reviewing the impact of exiting certain positions in order to carry back the losses for tax purposes and offset the losses against gains that have been recognized over the past several years,� commented Ronald A. Walko, President and Chief Executive Officer of Penns Woods Bancorp, Inc. �Our credit quality continues to be stable with a nonperforming loans to total loans ratio of 0.25%, and annualized net loan charge-offs to average loans of only 0.05% for the three month period ended September 30, 2008. In addition, the allowance for loan losses to loans remains sound at 1.15% of total loans,� added Mr. Walko. Total assets increased $18,915,000 to $632,244,000 at September 30, 2008 compared to September 30, 2007. Net loans increased $13,656,000 despite a softening economy that has in general provided fewer loan opportunities. However, due to our credit quality position and overall balance sheet strength, we have been able to aggressively attract those loans that meet and/or exceed our credit standards. The investment portfolio decreased $3,679,000 from September 30, 2007 to September 30, 2008 due to a decrease in the market value of the portfolio. The majority of the price depreciation has occurred within the tax-exempt bond segment of the portfolio as the market for these bonds has dramatically softened. In addition, since September 30, 2007 the equity segment of the portfolio has experienced write downs of $3,259,000 ($1,851,000 during the three months ended September 30, 2008) due to the turbulence in the equity market, particularly the financial sector, which has caused several of our investments in regional and national financial institutions to be classified as other than temporarily impaired. Deposits have increased 6.4% or $25,717,000 to $430,571,000 at September 30, 2008 compared to September 30, 2007 with core deposits increasing 14.8% or $29,898,000. �The increase in deposits is being driven by several main factors. The first factor is our people who deliver excellent customer service and are actively involved within the communities that we serve. Second, the natural gas exploration that is occurring throughout our footprint is impacting deposit levels as residents within our footprint seek out a trusted advisor. The economic upheaval is also playing a role in our increasing deposit levels as we are experiencing cases of depositors transferring funds from larger regional and national financial institutions and brokerages to their hometown bank,� commented Mr. Walko. Shareholders� equity decreased $11,991,000 to $59,561,000 at September 30, 2008 as accumulated comprehensive loss increased $11,282,000, and $941,000 in common stock was strategically repurchased as part of the previously announced stock buyback plan, while net income outpaced dividends paid. The decrease in accumulated other comprehensive income is a result of a decline in the market value of certain securities held in the investment portfolio at September 30, 2008 compared to September 30, 2007 resulting in a net unrealized loss of $12,347,000 at September 30, 2008 compared to a net unrealized loss of $1,861,000 at September 30, 2007, 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 $15.47 at September 30, 2008 compared to $18.46 at September 30, 2007 and an equity to asset ratio of 9.42% at September 30, 2008. Book value per share, excluding accumulated other comprehensive income, was $19.03 at September 30, 2008 compared to $19.08 at September 30, 2007. During the three and nine months ended September 30, 2008 cash dividends of $0.46 and $1.38 per share were paid to shareholders compared to $0.45 and $1.33 for the comparable periods of 2007. �Building shareholder value remains at the top of our priorities. Accomplishing this task will require the continued commitment to the keys to our success: sound balance sheet growth, income diversification, and prudent capital management. These keys are being met as illustrated by a nearly 15% increase in core deposits over the past year, growth in non-interest income from sources such as insurance and annuity sales, debit and credit card interchange fees, and the continuation of being deemed well capitalized according to regulatory guidelines. In addition, the strength of our core operating earnings coupled with the purchase of 27,726 treasury shares and a dividend of $1.38 per share during the first nine months of 2008 has allowed capital to be maintained at a level that provides for future asset growth, while providing a dividend yield in excess of 5%,� commented Mr. Walko. 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) September 30, � 2008 � � 2007 � % Change � � ASSETS Noninterest-bearing balances $ 12,538 $ 13,228 -5.2 % Interest-bearing deposits in other financial institutions � 16 � � 15 � 6.7 % Total cash and cash equivalents 12,554 13,243 -5.2 % � Investment securities, available for sale, at fair value 201,220 204,758 -1.7 % Investment securities held to maturity (fair value of $136 and $278) 135 276 -51.1 % Loans held for sale 4,987 6,503 -23.3 % Loans 371,547 357,715 3.9 % Less: Allowance for loan losses � 4,268 � � 4,092 � 4.3 % Loans, net 367,279 353,623 3.9 % Premises and equipment, net 7,835 6,841 14.5 % Accrued interest receivable 3,451 3,274 5.4 % Bank-owned life insurance 13,457 12,275 9.6 % Investment in limited partnerships 4,905 4,447 10.3 % Goodwill 3,032 3,032 0.0 % Other assets � 13,389 � � 5,057 � 164.8 % TOTAL ASSETS $ 632,244 � $ 613,329 � 3.1 % � LIABILITIES Interest-bearing deposits $ 356,985 $ 331,864 7.6 % Noninterest-bearing deposits � 73,586 � � 72,990 � 0.8 % Total deposits 430,571 404,854 6.4 % � Short-term borrowings 48,429 44,793 8.1 % Long-term borrowings, Federal Home Loan Bank (FHLB) 86,778 86,378 0.5 % Accrued interest payable 1,371 1,838 -25.4 % Other liabilities � 5,534 � � 3,914 � 41.4 % TOTAL LIABILITIES � 572,683 � � 541,777 � 5.7 % � SHAREHOLDERS' EQUITY Common stock, par value $8.33, 10,000,000 shares authorized; 4,009,546 and 4,006,084 shares issued 33,413 33,384 0.1 % Additional paid-in capital 17,944 17,869 0.4 % Retained earnings 27,680 27,552 0.5 % Accumulated other comprehensive loss: Net unrealized loss on available for sale securities (12,347 ) (1,861 ) 563.5 % Defined benefit plan (1,375 ) (579 ) 137.5 % Less: Treasury stock at cost, 159,028 and 128,802 shares � (5,754 ) � (4,813 ) 19.6 % TOTAL SHAREHOLDERS' EQUITY � 59,561 � � 71,552 � -16.8 % TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 632,244 � $ 613,329 � 3.1 % PENNS WOODS BANCORP, INC. CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) � (In Thousands, Except Per Share Data) � Three Months Ended Nine Months Ended September 30, September 30, 2008 � 2007 � % Change 2008 � 2007 � % Change � INTEREST AND DIVIDEND INCOME: Loans including fees $ 6,311 $ 6,621 -4.7 % $ 18,936 $ 19,560 -3.2 % Investment Securities: Taxable 1,391 964 44.3 % 3,857 2,711 42.3 % Tax-exempt 1,205 1,108 8.8 % 3,641 3,271 11.3 % Dividend and other interest income � 201 � � 284 -29.2 % 658 � � 907 -27.5 % TOTAL INTEREST AND DIVIDEND INCOME � 9,108 � � 8,977 1.5 % 27,092 � � 26,449 2.4 % � INTEREST EXPENSE: Deposits 2,410 2,835 -15.0 % 7,502 8,215 -8.7 % Short-term borrowings 310 368 -15.8 % 996 1,100 -9.5 % Long-term borrowings, FHLB � 875 � � 909 -3.7 % 3,044 � � 2,735 11.3 % TOTAL INTEREST EXPENSE � 3,595 � � 4,112 -12.6 % 11,542 � � 12,050 -4.2 % � NET INTEREST INCOME 5,513 4,865 13.3 % 15,550 14,399 8.0 % � PROVISION FOR LOAN LOSSES � 110 � � 10 1000.0 % 230 � � 60 283.3 % � NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES � 5,403 � � 4,855 11.3 % 15,320 � � 14,339 6.8 % � NON-INTEREST INCOME: Deposit service charges 594 546 8.8 % 1,704 1,654 3.0 % Securities (losses) gains, net (1,504 ) - N/A (1,717 ) 619 -377.4 % Bank-owned life insurance 121 109 11.0 % 367 310 18.4 % Gain on sale of loans 314 282 11.3 % 678 654 3.7 % Insurance commissions 416 625 -33.4 % 1,482 1,613 -8.1 % Other � 531 � � 444 19.6 % 1,493 � � 1,316 13.4 % TOTAL NON-INTEREST INCOME � 472 � � 2,006 -76.5 % 4,007 � � 6,166 -35.0 % � NON-INTEREST EXPENSE: Salaries and employee benefits 2,355 2,330 1.1 % 7,275 6,912 5.3 % Occupancy, net 315 319 -1.3 % 967 987 -2.0 % Furniture and equipment 304 267 13.9 % 876 850 3.1 % Pennsylvania shares tax 105 160 -34.4 % 315 482 -34.6 % Amortization of investments in limited partnerships 178 220 -19.1 % 534 503 6.2 % Other � 1,194 � � 1,134 5.3 % 3,440 � � 3,164 8.7 % TOTAL NON-INTEREST EXPENSE � 4,451 � � 4,430 0.5 % 13,407 � � 12,898 3.9 % � INCOME BEFORE INCOME TAX (BENEFIT) PROVISION 1,424 2,431 -41.4 % 5,920 7,607 -22.2 % INCOME TAX (BENEFIT) PROVISION � (128 ) � 109 -217.4 % 180 � � 669 -73.1 % NET INCOME $ 1,552 � $ 2,322 -33.2 % $ 5,740 � $ 6,938 -17.3 % � EARNINGS PER SHARE - BASIC $ 0.40 � $ 0.60 -33.3 % $ 1.49 � $ 1.78 -16.3 % � EARNINGS PER SHARE - DILUTED $ 0.40 � $ 0.60 -33.3 % $ 1.49 � $ 1.78 -16.3 % � WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC � 3,855,348 � � 3,881,488 -0.7 % 3,865,317 � � 3,889,310 -0.6 % � WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED � 3,855,458 � � 3,881,676 -0.7 % 3,865,463 � � 3,889,573 -0.6 % � DIVIDENDS PER SHARE $ 0.46 � $ 0.45 2.2 % $ 1.38 � $ 1.33 3.8 % PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES � � For the Three Months Ended (Dollars in Thousands) September 30, 2008 � September 30, 2007 Average Balance � Interest � AverageRate Average Balance � Interest � Average Rate ASSETS: Tax-exempt loans $ 9,108 $ 148 6.46 % $ 7,652 $ 118 6.12 % All other loans � 364,926 � 6,213 � 6.77 % � 354,032 � 6,543 7.33 % Total loans � 374,034 � 6,361 � 6.77 % � 361,684 � 6,661 7.31 % � Taxable securities 107,751 1,592 5.91 % 91,788 1,247 5.43 % Tax-exempt securities � 103,431 � 1,826 � 7.06 % � 95,383 � 1,679 7.04 % Total securities � 211,182 � 3,418 � 6.47 % � 187,171 � 2,926 6.25 % � Interest bearing deposits � 34 � - � 0.00 % � 40 � 1 9.92 % � Total interest-earning assets 585,250 � 9,779 � 6.66 % 548,895 � 9,588 6.95 % � Other assets � 50,225 � 43,706 � TOTAL ASSETS $ 635,475 $ 592,601 � LIABILITIES AND SHAREHOLDERS' EQUITY: Savings $ 62,792 120 0.76 % $ 60,262 114 0.75 % Super Now deposits 52,970 175 1.31 % 46,531 153 1.30 % Money Market deposits 34,915 208 2.37 % 23,183 131 2.24 % Time deposits � 205,346 � 1,907 � 3.69 % � 203,690 � 2,437 4.75 % Total Deposits � 356,023 � 2,410 � 2.69 % � 333,666 � 2,835 3.37 % � Short-term borrowings 51,215 310 2.38 % 32,910 368 4.44 % Long-term borrowings � 79,061 � 875 � 4.33 % � 77,791 � 909 4.64 % Total borrowings � 130,276 � 1,185 � 3.57 % � 110,701 � 1,277 4.58 % � Total interest-bearing liabilities 486,299 � 3,595 � 2.93 % 444,367 � 4,112 3.67 % � Demand deposits 75,863 70,689 Other liabilities 7,467 7,249 Shareholders' equity � 65,846 � 70,296 � TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 635,475 $ 592,601 Interest rate spread � 3.73 % 3.28 % Net interest income/margin $ 6,184 � 4.23 % $ 5,476 3.98 % � � For the Three Months Ended September 30, � 2008 2007 � Total interest income $ 9,108 $ 8,977 Total interest expense � 3,595 � 4,112 � � Net interest income 5,513 4,865 Tax equivalent adjustment � 671 � 611 � � Net interest income (fully taxable equivalent) $ 6,184 $ 5,476 � PENNS WOODS BANCORP, INC. AVERAGE BALANCES AND INTEREST RATES � � � � � For the Nine Months Ended (Dollars in Thousands) September 30, 2008 September 30, 2007 Average Balance Interest AverageRate Average Balance Interest Average Rate ASSETS: Tax-exempt loans $ 8,534 $ 411 6.43 % $ 7,913 $ 365 6.17 % All other loans � 359,570 � 18,665 � 6.93 % � 353,219 � 19,320 7.31 % Total loans � 368,104 � 19,076 � 6.92 % � 361,132 � 19,685 7.29 % � Taxable securities 104,604 4,514 5.75 % 85,930 3,600 5.59 % Tax-exempt securities � 108,877 � 5,517 � 6.76 % � 99,497 � 4,956 6.64 % Total securities � 213,481 � 10,031 � 6.27 % � 185,427 � 8,556 6.15 % � Interest bearing deposits � 13 � 1 � 10.28 % � 431 � 18 5.58 % � Total interest-earning assets 581,598 � 29,108 � 6.68 % 546,990 � 28,259 6.90 % � Other assets � 49,638 � 42,390 � TOTAL ASSETS $ 631,236 $ 589,380 � LIABILITIES AND SHAREHOLDERS' EQUITY: Savings $ 60,857 343 0.75 % $ 59,726 329 0.74 % Super Now deposits 51,228 513 1.34 % 46,309 455 1.31 % Money Market deposits 28,372 481 2.26 % 24,362 414 2.27 % Time deposits � 201,950 � 6,165 � 4.08 % � 198,401 � 7,017 4.73 % Total Deposits � 342,407 � 7,502 � 2.93 % � 328,798 � 8,215 3.34 % � Short-term borrowings 47,894 996 2.75 % 32,443 1,100 4.53 % Long-term borrowings � 90,088 � 3,044 � 4.44 % � 78,818 � 2,735 4.64 % Total borrowings � 137,982 � 4,040 � 3.85 % � 111,261 � 3,835 4.61 % � Total interest-bearing liabilities 480,389 � 11,542 � 3.19 % 440,059 � 12,050 3.66 % � Demand deposits 73,205 69,203 Other liabilities 8,672 6,866 Shareholders' equity � 68,970 � 73,252 � TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 631,236 $ 589,380 Interest rate spread � 3.49 % 3.24 % Net interest income/margin $ 17,566 � 4.04 % $ 16,209 3.96 % � � For the Nine Months Ended September 30, � 2008 2007 � Total interest income $ 27,092 $ 26,449 Total interest expense � 11,542 � 12,050 � � Net interest income 15,550 14,399 Tax equivalent adjustment � 2,016 � 1,810 � � Net interest income (fully taxable equivalent) $ 17,566 $ 16,209 � Quarter Ended � (Dollars in Thousands, Except Per Share Data) � 9/30/2008 � � 6/30/2008 � � 3/31/2008 � � 12/31/2007 � � 9/30/2007 � Operating Data Net income $ 1,552 � $ 2,057 � $ 2,131 � $ 1,939 � $ 2,322 � Net interest income � 5,513 � � 5,156 � � 4,881 � � 5,103 � � 4,865 � Provision for loan losses � 110 � � 60 � � 60 � � 90 � � 10 � Net security gains (losses) � (1,504 ) � (251 ) � 38 � � (673 ) � - � Non-interest income, ex. net security gains (losses) � 1,976 � � 1,872 � � 1,876 � � 1,985 � � 2,006 � Non-interest expense � 4,451 � � 4,511 � � 4,445 � � 4,418 � � 4,430 � � Performance Statistics � Net interest margin � 4.23 % � 4.01 % � 3.87 % � 3.93 % � 3.98 % Annualized return on average assets � 0.98 % � 1.30 % � 1.36 % � 1.25 % � 1.57 % Annualized return on average equity � 9.43 % � 11.73 % � 12.01 % � 10.68 % � 13.21 % Annualized net loan charge-offs to avg loans � 0.05 % � 0.01 % � 0.04 % � 0.06 % � 0.09 % Net charge-offs � 49 � � 7 � � 36 � � 52 � � 80 � Efficiency ratio � 59.4 � � 64.2 � � 65.8 � � 62.3 � � 64.5 � � Per Share Data � Basic earnings per share $ 0.40 � $ 0.53 � $ 0.55 � $ 0.50 � $ 0.60 � Diluted earnings per share � 0.40 � � 0.53 � � 0.55 � � 0.50 � � 0.60 � Dividend declared per share � 0.46 � � 0.46 � � 0.46 � � 0.46 � � 0.45 � Book value � 15.47 � � 16.72 � � 17.86 � � 18.21 � � 18.46 � Common stock price: � � � � � � � � � � High � 35.00 � � 33.15 � � 33.47 � � 32.50 � � 35.00 � Low � 29.00 � � 30.01 � � 29.66 � � 30.33 � � 30.80 � Close � 29.00 � � 31.25 � � 33.15 � � 32.50 � � 31.99 � Weighted average common shares: � � � � � � � � � � Basic � 3,855 � � 3,866 � � 3,875 � � 3,878 � � 3,881 � Fully Diluted � 3,855 � � 3,866 � � 3,875 � � 3,878 � � 3,882 � End-of-period common shares: � � � � � � � � � � Issued � 4,010 � � 4,009 � � 4,008 � � 4,007 � � 4,006 � Treasury � 159 � � 150 � � 136 � � 131 � � 129 � Quarter Ended � (Dollars in Thousands, Except Per Share Data) � 9/30/2008 � � 6/30/2008 � � 3/31/2008 � � 12/31/2007 � � 9/30/2007 � Financial Condition Data: General Total assets $ 632,244 � $ 634,504 � $ 631,016 � $ 628,138 � $ 613,329 � Loans, net � 367,279 � � 361,748 � � 353,455 � � 356,348 � � 353,623 � Intangibles � 3,032 � � 3,032 � � 3,032 � � 3,032 � � 3,032 � Total deposits � 430,571 � � 437,921 � � 396,125 � � 389,022 � � 404,854 � Noninterest-bearing � 73,586 � � 79,908 � � 71,662 � � 74,671 � � 72,990 � � Savings � 62,591 � � 62,847 � � 59,985 � � 56,757 � � 59,883 � NOW � 56,391 � � 52,948 � � 50,193 � � 50,883 � � 47,129 � Money Market � 39,627 � � 28,860 � � 25,110 � � 21,029 � � 22,295 � Time Deposits � 198,376 � � 213,358 � � 189,175 � � 185,682 � � 202,557 � Total interest-bearing deposits � 356,985 � � 358,013 � � 324,463 � � 314,351 � � 331,864 � � Core deposits* � 232,195 � � 224,563 � � 206,950 � � 203,340 � � 202,297 � Shareholders' equity � 59,561 � � 64,522 � � 69,154 � � 70,559 � � 71,552 � � Asset Quality � Non-performing assets $ 941 � $ 909 � $ 1,427 � $ 1,320 � $ 1,013 � Non-performing assets to total assets � 0.15 % � 0.14 % � 0.23 % � 0.21 % � 0.17 % Allowance for loan losses � 4,268 � � 4,207 � � 4,154 � � 4,130 � � 4,092 � Allowance for loan losses to total loans � 1.15 % � 1.15 % � 1.16 % � 1.15 % � 1.14 % Allowance for loan losses to non-performing loans � 453.56 % � 462.82 % � 291.10 % � 312.88 % � 403.95 % Non-performing loans to total loans � 0.25 % � 0.25 % � 0.40 % � 0.37 % � 0.28 % � Capitalization � Shareholders' equity to total assets � 9.42 % � 10.17 % � 10.96 % � 11.23 % � 11.67 % � * Core deposits are defined as total deposits less time deposits