Penns Woods Bancorp, Inc. (Nasdaq:PWOD)
Penns Woods Bancorp, Inc. continued its solid earnings and
growth during the recently completed third quarter of 2013.
Earnings of $10,589,000 were achieved for the nine month period
ending September 30, 2013 resulting in basic and dilutive earnings
per share of $2.48.
Highlights
- Completion of the acquisition of Luzerne National Bank
Corporation ("Luzerne") effective June 1, 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, decreased to
$3,248,000 for the three months ended September 30, 2013 compared
to $3,372,000 for the same period of 2012. Net income from core
operations decreased to $9,099,000 for the nine months ended
September 30, 2013 compared to $9,849,000 for the same period of
2012.
- Operating earnings per share for the three months ended
September 30, 2013 were $0.67 basic and dilutive compared to $0.88
basic and dilutive for the same period of 2012. Operating earnings
per share for the nine months ended September 30, 2013 were $2.13
basic and dilutive compared to $2.57 basic and dilutive for the
same period of 2012.
- Return on average assets was 1.08% for the three months ended
September 30, 2013 compared to 1.77% for the corresponding period
of 2012. Return on average assets was 1.39% for the nine months
ended September 30, 2013 compared to 1.78% for the corresponding
period of 2012.
- Return on average equity was 10.39% for the three months ended
September 30, 2013 compared to 15.94% for the corresponding period
of 2012. Return on average equity was 12.90% for the nine months
ended September 30, 2013 compared to 16.25% for the corresponding
period of 2012.
- The results for the three and nine months ended September 30,
2013 were negatively impacted by one time expenses of $684,000 and
$1,307,000 related to the acquisition of Luzerne National Bank
Corporation.
"As expected the results for the three and nine months ended
September 30, 2013 have been impacted by the completed acquisition
of Luzerne National Bank Corporation into the Penns Woods Bancorp,
Inc. family. The acquisition was the primary driver of the balance
sheet growth, but was a drag on earnings for the period. We believe
that most acquisition related expenses are now behind us and look
forward to continuing the integration of Luzerne into the Penns
Woods family. In addition to the completed acquisition, we continue
to focus on the building of future revenue streams including
branches in Lewisburg and Loyalsock. The Loyalsock location, which
is expected to open during 2014, will also house the Mortgage
department on the upper floors as the growth in this business line
has expanded significantly over the past several years," said
Richard A. Grafmyre, CFP®, President and CEO.
A reconciliation of the non-GAAP financial measures of operating
earnings, operating return on assets, operating return on equity,
and operating earnings per share, described in the highlights, to
the comparable GAAP financial measures is included at the end of
this press release.
Net Income
Net income, as reported under GAAP, for the three and nine
months ended September 30, 2013 was $3,246,000 and $10,589,000
compared to $3,667,000 and $10,754,000 for the same period of 2012.
Results for the three and nine months ended September 30, 2013
compared to 2012 were impacted by an decrease in after-tax
securities gains of $297,000 (from a gain of $295,000 to a loss of
$2,000) for the three month periods and an increase in after-tax
securities gains of $694,000 (from a gain of $796,000 to a gain of
$1,490,000) for the nine month periods. 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 three and nine months ended September 30, 2013 was the
recognition of $684,000 and $1,307,000 in expenses related to the
acquisition of Luzerne National Bank Corporation. Basic and
dilutive earnings per share for the three and nine months ended
September 30, 2013 were $0.67 and $2.48 compared to $0.96 and $2.80
for the corresponding periods of 2012. Return on average assets and
return on average equity were 1.08% and 10.39% for the three months
ended September 30, 2013 compared to 1.77% and 15.94% for the
corresponding period of 2012. Return on average assets and return
on average equity were 1.39% and 12.90% for the nine months ended
September 30, 2013 compared to 1.78% and 16.25% for the
corresponding period of 2012.
Net Interest Margin
The net interest margin for the three and nine months ended
September 30, 2013 was 4.07% and 4.19% compared to 4.34% and 4.51%
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 $2,814,000 and $4,184,000
for the three and nine months ended September 30, 2013 compared to
the corresponding period of 2012. Driving this increase is the
growth in the loan and deposit portfolios for the nine months ended
September 30, 2013 compared to the corresponding period for 2012
primarily due to the acquisition of Luzerne National Bank
Corporation, 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 75.55% of total
deposits at September 30, 2013 compared to 73.53% at September 30,
2012. The continued growth in core deposits has led to the
total cost of deposits decreasing to 50 bp for the nine months
ended September 30, 2013 from 73 bp for the corresponding period of
2012. FHLB long-term borrowings have decreased $5,528,000
since September 30, 2012. The decrease is due to the maturity
of $5,528,000 in long-term borrowings during the nine months ended
September 30, 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
72 bp for the nine months ended September 30, 2013 from 107 bp at
the corresponding period of 2012.
"The current rate environment has caused compression of the net
margin and will continue to challenge the net interest margin as we
move forward. Our strategy to mitigate the earnings impact of
the compressing net interest margin remains focused on increasing
earning assets by adding quality loans to the earning asset
portfolio, even though these new earning assets are at a lower rate
than the legacy earning assets that they are replacing. We
continue to shorten the investment portfolio duration in order to
reduce interest rate and market risk in the future. This is being
undertaken primarily through the sale of long-term municipal bonds
that have a maturity date of 2025 or later. The proceeds of
the bond sales are being deployed into loans and variable rate and
intermediate term corporate 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 adjusted 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 $363,484,000 to $1,204,090,000 at
September 30, 2013 compared to September 30, 2012 due primarily to
the acquisition of Luzerne National Bank Corporation. Net
loans increased to $796,533,000 at September 30, 2013 compared to
September 30, 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 $10,872,000 from
September 30, 2012 to September 30, 2013 due to our strategy to
reduce the investment portfolio duration through the selective
selling of bonds as opportunities develop partially offset by the
acquisition of Luzerne National Bank Corporation.
Non-performing Loans
Our non-performing loans to total loans ratio has decreased to
0.75% at September 30, 2013 from 2.48% at September 30,
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 $338,000 for the nine months ended September 30, 2013
augmented the allowance for loan losses which was 1.19% of total
loans at September 30, 2013.
Deposits
Deposits have increased $334,411,000 to $975,521,000 at
September 30, 2013 compared to September 30, 2012, with core
deposits (total deposits excluding time deposits) increasing
$265,620,000, while higher cost time deposits only increased
$68,791,000. Noninterest-bearing deposits have increased
$100,089,000 to $215,374,000 at September 30, 2013 compared to
September 30, 2012. Driving this growth is our acquisition of
Luzerne National Bank Corporation 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 $32,073,000 to $125,852,000 at
September 30, 2013 compared to September 30, 2012. The
accumulated other comprehensive loss of $5,606,000 at September 30,
2013 is a result of a decrease in unrealized gains on available for
sale securities from an unrealized gain of $10,848,000 at September
30, 2012 to an unrealized loss of $799,000 at September 30,
2013. The amount of accumulated other comprehensive loss at
September 30, 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 an increase
in the net loss of $674,000 to $4,807,000 at September 30,
2013. The current level of shareholders' equity equates to a
book value per share of $26.12 at September 30, 2013 compared to
$24.43 at September 30, 2012 and an equity to asset ratio of 10.45%
at September 30, 2013 compared to 11.16% at September 30,
2012. Excluding goodwill and intangibles, book value per share
was $22.17 at September 30, 2013 compared to $23.64 at September
30, 2012. Dividends declared for the three and nine months
ended September 30, 2013 were $0.47 and $1.66 per share, which
includes a special cash dividend of $0.25 per share declared in the
first quarter 2013, compared to $0.47 and $1.41 for the three and
nine months ended September 30, 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 nine branch offices
providing financial services in Luzerne and Lackawanna 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 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.
THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT
| PENNS WOODS BANCORP,
INC. |
| CONSOLIDATED BALANCE
SHEET |
|
(UNAUDITED) |
| |
|
|
|
| (In Thousands, Except Share Data) |
September 30, |
| |
2013 |
2012 |
% Change |
| ASSETS |
|
|
|
| Noninterest-bearing balances |
$ 23,073 |
$ 13,243 |
74.23% |
| Interest-bearing deposits in other financial
institutions |
9,776 |
7,901 |
23.73% |
| Federal funds sold |
195 |
-- |
n/a |
| Total cash and cash
equivalents |
33,044 |
21,144 |
56.28% |
| |
|
|
|
| Investment securities, available for sale, at
fair value |
285,383 |
296,255 |
-3.67% |
| Loans held for sale |
1,588 |
2,285 |
-30.50% |
| Loans |
806,163 |
485,051 |
66.20% |
| Allowance for loan losses |
(9,630) |
(7,521) |
28.04% |
| Loans, net |
796,533 |
477,530 |
66.80% |
| Premises and equipment, net |
18,352 |
8,247 |
122.53% |
| Accrued interest receivable |
4,639 |
4,255 |
9.02% |
| Bank-owned life insurance |
25,216 |
16,238 |
55.29% |
| Investment in limited partnerships |
2,387 |
3,048 |
-21.69% |
| Goodwill |
17,104 |
3,032 |
464.12% |
| Intangibles |
1,892 |
-- |
n/a |
| Deferred tax asset |
10,389 |
3,878 |
167.90% |
| Other assets |
7,563 |
4,694 |
61.12% |
| TOTAL ASSETS |
$ 1,204,090 |
$ 840,606 |
43.24% |
| |
|
|
|
| LIABILITIES |
|
|
|
| Interest-bearing deposits |
$ 760,147 |
$ 525,825 |
44.56% |
| Noninterest-bearing deposits |
215,374 |
115,285 |
86.82% |
| Total deposits |
975,521 |
641,110 |
52.16% |
| |
|
|
|
| Short-term borrowings |
15,060 |
17,932 |
-16.02% |
| Long-term borrowings, Federal Home Loan Bank
(FHLB) |
70,750 |
76,278 |
-7.25% |
| Accrued interest payable |
435 |
501 |
-13.17% |
| Other liabilities |
16,472 |
11,006 |
49.66% |
| TOTAL LIABILITIES |
1,078,238 |
746,827 |
44.38% |
| |
|
|
|
| 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; 4,999,483 and 4,018,777 shares issued |
41,662 |
33,489 |
24.41% |
| Additional paid-in capital |
49,782 |
18,148 |
174.31% |
| Retained earnings |
46,324 |
41,737 |
10.99% |
| Accumulated other comprehensive (loss)
income: |
|
|
|
| Net unrealized (loss)
gain on available for sale securities |
(799) |
10,848 |
-107.37% |
| Defined benefit plan |
(4,807) |
(4,133) |
-16.31% |
| Treasury stock at cost, 180,596 shares |
(6,310) |
(6,310) |
0.00% |
| TOTAL SHAREHOLDERS'
EQUITY |
125,852 |
93,779 |
34.20% |
| TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
$ 1,204,090 |
$ 840,606 |
43.24% |
| |
| 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, |
| |
2013 |
2012 |
% Change |
2013 |
2012 |
% Change |
| INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
| Loans including fees |
$ 9,211 |
$ 6,346 |
45.15% |
$ 23,256 |
$ 18,954 |
22.70% |
| Investment securities: |
|
|
|
|
|
|
| Taxable |
1,570 |
1,486 |
5.65% |
4,520 |
4,477 |
0.96% |
| Tax-exempt |
1,124 |
1,339 |
-16.06% |
3,553 |
4,127 |
-13.91% |
| Dividend and other
interest income |
74 |
96 |
-22.92% |
208 |
274 |
-24.09% |
| TOTAL INTEREST AND DIVIDEND INCOME |
11,979 |
9,267 |
29.27% |
31,537 |
27,832 |
13.31% |
| |
|
|
|
|
|
|
| INTEREST EXPENSE: |
|
|
|
|
|
|
| Deposits |
855 |
902 |
-5.21% |
2,406 |
2,797 |
-13.98% |
| Short-term borrowings |
16 |
38 |
-57.89% |
63 |
100 |
-37.00% |
| Long-term borrowings, FHLB |
479 |
637 |
-24.80% |
1,480 |
1,877 |
-21.15% |
| TOTAL INTEREST EXPENSE |
1,350 |
1,577 |
-14.39% |
3,949 |
4,774 |
-17.28% |
| |
|
|
|
|
|
|
| NET INTEREST INCOME |
10,629 |
7,690 |
38.22% |
27,588 |
23,058 |
19.65% |
| |
|
|
|
|
|
|
| PROVISION FOR LOAN LOSSES |
600 |
600 |
0.00% |
1,675 |
1,800 |
-6.94% |
| |
|
|
|
|
|
|
| NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES |
10,029 |
7,090 |
41.45% |
25,913 |
21,258 |
21.90% |
| |
|
|
|
|
|
|
| NON-INTEREST INCOME: |
|
|
|
|
|
|
| Service charges |
671 |
489 |
37.22% |
1,651 |
1,394 |
18.44% |
| Securities (losses) gains, net |
(3) |
447 |
-100.67% |
2,257 |
1,206 |
87.15% |
| Bank-owned life insurance |
199 |
138 |
44.20% |
481 |
539 |
-10.76% |
| Gain on sale of loans |
551 |
527 |
4.55% |
1,204 |
1,053 |
14.34% |
| Insurance commissions |
286 |
295 |
-3.05% |
797 |
1,053 |
-24.31% |
| Brokerage commissions |
250 |
239 |
4.60% |
797 |
698 |
14.18% |
| Other |
888 |
636 |
39.62% |
1,923 |
1,872 |
2.72% |
| TOTAL NON-INTEREST INCOME |
2,842 |
2,771 |
2.56% |
9,110 |
7,815 |
16.57% |
| |
|
|
|
|
|
|
| NON-INTEREST EXPENSE: |
|
|
|
|
|
|
| Salaries and employee benefits |
4,515 |
2,939 |
53.62% |
11,025 |
8,806 |
25.20% |
| Occupancy |
554 |
317 |
74.76% |
1,302 |
963 |
35.20% |
| Furniture and equipment |
422 |
355 |
18.87% |
1,242 |
1,058 |
17.39% |
| Pennsylvania shares tax |
225 |
169 |
33.14% |
617 |
505 |
22.18% |
| Amortization of investments in limited
partnerships |
165 |
165 |
0.00% |
496 |
496 |
0.00% |
| Federal Deposit Insurance Corporation deposit
insurance |
173 |
111 |
55.86% |
421 |
349 |
20.63% |
| Marketing |
156 |
132 |
18.18% |
371 |
405 |
-8.40% |
| Intangible amortization |
91 |
-- |
n/a |
122 |
-- |
n/a |
| Other |
2,674 |
1,270 |
110.55% |
6,195 |
3,683 |
68.21% |
| TOTAL NON-INTEREST EXPENSE |
8,975 |
5,458 |
64.44% |
21,791 |
16,265 |
33.97% |
| |
|
|
|
|
|
|
| INCOME BEFORE INCOME TAX PROVISION |
3,896 |
4,403 |
-11.51% |
13,232 |
12,808 |
3.31% |
| INCOME TAX PROVISION |
650 |
736 |
-11.68% |
2,643 |
2,054 |
28.68% |
| NET INCOME |
$ 3,246 |
$ 3,667 |
-11.48% |
$ 10,589 |
$ 10,754 |
-1.53% |
| |
|
|
|
|
|
|
| EARNINGS PER SHARE - BASIC |
$ 0.67 |
$ 0.96 |
-30.21% |
$ 2.48 |
$ 2.80 |
-11.43% |
| |
|
|
|
|
|
|
| EARNINGS PER SHARE - DILUTED |
$ 0.67 |
$ 0.96 |
-30.21% |
$ 2.48 |
$ 2.80 |
-11.43% |
| |
|
|
|
|
|
|
| WEIGHTED AVERAGE SHARES OUTSTANDING -
BASIC |
4,818,494 |
3,837,925 |
25.55% |
4,272,989 |
3,837,570 |
11.35% |
| |
|
|
|
|
|
|
| WEIGHTED AVERAGE SHARES OUTSTANDING -
DILUTED |
4,818,494 |
3,837,925 |
25.55% |
4,272,989 |
3,837,570 |
11.35% |
| |
|
|
|
|
|
|
| DIVIDENDS DECLARED PER SHARE |
$ 0.47 |
$ 0.47 |
0.00% |
$ 1.66 |
$ 1.41 |
17.73% |
| |
| PENNS WOODS BANCORP,
INC. |
| AVERAGE BALANCES AND
INTEREST RATES |
| |
|
|
|
|
|
|
| |
For the Three Months
Ended |
| (Dollars in Thousands) |
September 30, 2013 |
September 30, 2012 |
| |
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
| ASSETS: |
|
|
|
|
|
|
| Tax-exempt loans |
$ 22,688 |
$ 263 |
4.60% |
$ 22,916 |
$ 302 |
5.24% |
| All other loans |
774,355 |
9,037 |
4.63% |
452,370 |
6,147 |
5.41% |
| Total loans |
797,043 |
9,300 |
4.63% |
475,286 |
6,449 |
5.40% |
| |
|
|
|
|
|
|
| Federal funds sold |
355 |
-- |
0.00% |
-- |
-- |
0.00% |
| |
|
|
|
|
|
|
| Taxable securities |
184,325 |
1,637 |
3.55% |
162,822 |
1,580 |
3.88% |
| Tax-exempt securities |
112,432 |
1,703 |
6.06% |
132,996 |
2,029 |
6.10% |
| Total securities |
296,757 |
3,340 |
4.50% |
295,818 |
3,609 |
4.88% |
| |
|
|
|
|
|
|
| Interest-bearing deposits |
10,783 |
7 |
0.26% |
8,966 |
2 |
0.09% |
| |
|
|
|
|
|
|
| Total interest-earning assets |
1,104,938 |
12,647 |
4.55% |
780,070 |
10,060 |
5.14% |
| |
|
|
|
|
|
|
| Other assets |
94,928 |
|
|
48,096 |
|
|
| |
|
|
|
|
|
|
| TOTAL ASSETS |
$ 1,199,866 |
|
|
$ 828,166 |
|
|
| |
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
| Savings |
$ 141,526 |
44 |
0.12% |
$ 81,413 |
16 |
0.08% |
| Super Now deposits |
163,422 |
177 |
0.43% |
120,135 |
158 |
0.52% |
| Money market deposits |
207,684 |
144 |
0.28% |
151,307 |
173 |
0.45% |
| Time deposits |
238,551 |
490 |
0.81% |
171,245 |
555 |
1.29% |
| Total interest-bearing deposits |
751,183 |
855 |
0.45% |
524,100 |
902 |
0.68% |
| |
|
|
|
|
|
|
| Short-term borrowings |
20,568 |
16 |
0.31% |
18,607 |
38 |
0.81% |
| Long-term borrowings, FHLB |
70,750 |
479 |
2.65% |
65,517 |
637 |
3.80% |
| Total borrowings |
91,318 |
495 |
2.12% |
84,124 |
675 |
3.14% |
| |
|
|
|
|
|
|
| Total interest-bearing liabilities |
842,501 |
1,350 |
0.63% |
608,224 |
1,577 |
1.02% |
| |
|
|
|
|
|
|
| Demand deposits |
214,897 |
|
|
116,582 |
|
|
| Other liabilities |
17,513 |
|
|
11,355 |
|
|
| Shareholders' equity |
124,955 |
|
|
92,005 |
|
|
| |
|
|
|
|
|
|
| TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
$ 1,199,866 |
|
|
$ 828,166 |
|
|
| Interest rate spread |
|
|
3.92% |
|
|
4.12% |
| Net interest income/margin |
|
$ 11,297 |
4.07% |
|
$ 8,483 |
4.34% |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
For the Three Months Ended |
|
|
|
| |
|
September 30, |
|
|
|
| |
|
2013 |
2012 |
|
|
|
| Total interest income |
|
$ 11,979 |
$ 9,267 |
|
|
|
| Total interest expense |
|
1,350 |
1,577 |
|
|
|
| Net interest income |
|
10,629 |
7,690 |
|
|
|
| Tax equivalent adjustment |
|
668 |
793 |
|
|
|
| Net interest income (fully taxable
equivalent) |
|
$ 11,297 |
$ 8,483 |
|
|
|
| |
| PENNS WOODS BANCORP,
INC. |
| AVERAGE BALANCES AND
INTEREST RATES |
| |
|
|
|
|
|
|
| |
For the Nine Months
Ended |
| (Dollars in Thousands) |
September 30, 2013 |
September 30, 2012 |
| |
Average Balance |
Interest |
Average Rate |
Average Balance |
Interest |
Average Rate |
| ASSETS: |
|
|
|
|
|
|
| Tax-exempt loans |
$ 22,069 |
$ 761 |
4.61% |
$ 21,977 |
$ 909 |
5.52% |
| All other loans |
623,047 |
22,754 |
4.88% |
436,921 |
18,354 |
5.61% |
| Total loans |
645,116 |
23,515 |
4.87% |
458,898 |
19,263 |
5.61% |
| |
|
|
|
|
|
|
| Federal funds sold |
152 |
-- |
0.00% |
-- |
-- |
0.00% |
| |
|
|
|
|
|
|
| Taxable securities |
174,977 |
4,714 |
3.59% |
157,791 |
4,747 |
4.01% |
| Tax-exempt securities |
119,799 |
5,383 |
5.99% |
131,306 |
6,253 |
6.35% |
| Total securities |
294,776 |
10,097 |
4.57% |
289,097 |
11,000 |
5.07% |
| |
|
|
|
|
|
|
| Interest-bearing deposits |
7,628 |
14 |
0.25% |
8,098 |
4 |
0.07% |
| |
|
|
|
|
|
|
| Total interest-earning assets |
947,672 |
33,626 |
4.74% |
756,093 |
30,267 |
5.34% |
| |
|
|
|
|
|
|
| Other assets |
69,942 |
|
|
49,702 |
|
|
| |
|
|
|
|
|
|
| TOTAL ASSETS |
$ 1,017,614 |
|
|
$ 805,795 |
|
|
| |
|
|
|
|
|
|
| LIABILITIES AND SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
| Savings |
$ 111,242 |
96 |
0.12% |
$ 78,180 |
44 |
0.08% |
| Super Now deposits |
150,220 |
521 |
0.46% |
116,205 |
452 |
0.52% |
| Money market deposits |
174,991 |
408 |
0.31% |
143,878 |
580 |
0.54% |
| Time deposits |
200,688 |
1,381 |
0.92% |
173,578 |
1,721 |
1.32% |
| Total interest-bearing deposits |
637,141 |
2,406 |
0.50% |
511,841 |
2,797 |
0.73% |
| |
|
|
|
|
|
|
| Short-term borrowings |
21,235 |
63 |
0.40% |
19,293 |
100 |
0.69% |
| Long-term borrowings, FHLB |
72,607 |
1,480 |
2.69% |
62,701 |
1,877 |
3.93% |
| Total borrowings |
93,842 |
1,543 |
2.17% |
81,994 |
1,977 |
3.17% |
| |
|
|
|
|
|
|
| Total interest-bearing liabilities |
730,983 |
3,949 |
0.72% |
593,835 |
4,774 |
1.07% |
| |
|
|
|
|
|
|
| Demand deposits |
161,948 |
|
|
112,464 |
|
|
| Other liabilities |
15,208 |
|
|
11,258 |
|
|
| Shareholders' equity |
109,475 |
|
|
88,238 |
|
|
| |
|
|
|
|
|
|
| TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY |
$ 1,017,614 |
|
|
$ 805,795 |
|
|
| Interest rate spread |
|
|
4.02% |
|
|
4.27% |
| Net interest income/margin |
|
$ 29,677 |
4.19% |
|
$ 25,493 |
4.51% |
| |
|
|
|
|
|
|
| |
|
|
|
|
|
|
| |
|
For the Nine Months Ended |
|
|
|
| |
|
September 30, |
|
|
|
| |
|
2013 |
2012 |
|
|
|
| Total interest income |
|
$ 31,537 |
$ 27,832 |
|
|
|
| Total interest expense |
|
3,949 |
4,774 |
|
|
|
| Net interest income |
|
27,588 |
23,058 |
|
|
|
| Tax equivalent adjustment |
|
2,089 |
2,435 |
|
|
|
| Net interest income (fully taxable
equivalent) |
|
$ 29,677 |
$ 25,493 |
|
|
|
| |
|
| |
Quarter
Ended |
| |
|
|
|
|
|
| (Dollars in Thousands, Except Per Share
Data) |
9/30/2013 |
6/30/2013 |
3/31/2013 |
12/31/2012 |
9/30/2012 |
| |
|
|
|
|
|
| Operating Data |
|
|
|
|
|
| Net income |
$ 3,246 |
$ 3,659 |
$ 3,684 |
$ 3,096 |
$ 3,667 |
| Net interest income |
10,629 |
8,754 |
8,205 |
7,838 |
7,690 |
| Provision for loan losses |
600 |
575 |
500 |
725 |
600 |
| Net security (losses)
gains |
(3) |
1,274 |
986 |
79 |
447 |
| Non-interest income, ex. net
security gains |
2,845 |
2,261 |
1,747 |
2,206 |
2,324 |
| Non-interest expense |
8,975 |
6,965 |
5,851 |
5,758 |
5,458 |
| |
|
|
|
|
|
| Performance Statistics |
|
|
|
|
|
| Net interest margin |
4.07% |
4.09% |
4.46% |
4.29% |
4.34% |
| Annualized return on average
assets |
1.08% |
1.48% |
1.72% |
1.46% |
1.77% |
| Annualized return on average
equity |
10.39% |
13.54% |
15.51% |
12.92% |
15.94% |
| Annualized net loan charge-offs
(recoveries) to average loans |
0.19% |
0.00% |
-0.55% |
0.50% |
0.44% |
| Net charge-offs
(recoveries) |
374 |
1 |
(713) |
629 |
517 |
| Efficiency ratio |
66.6% |
63.2% |
58.8% |
57.3% |
54.5% |
| |
|
|
|
|
|
| Per Share Data |
|
|
|
|
|
| Basic earnings per share |
$ 0.67 |
$ 0.88 |
$ 0.96 |
$ 0.81 |
$ 0.96 |
| Diluted earnings per share |
0.67 |
0.88 |
0.96 |
0.81 |
0.96 |
| Dividend declared per
share |
0.47 |
0.47 |
0.72 |
0.47 |
0.47 |
| Book value |
26.12 |
26.14 |
24.23 |
24.42 |
24.43 |
| Common stock price: |
|
|
|
|
|
| High |
49.89 |
41.86 |
41.45 |
45.27 |
44.60 |
| Low |
42.76 |
39.44 |
38.50 |
37.16 |
37.78 |
| Close |
49.82 |
41.86 |
40.97 |
37.41 |
44.33 |
| Weighted average common
shares: |
|
|
|
|
|
| Basic |
4,818 |
4,151 |
3,839 |
3,838 |
3,838 |
| Fully Diluted |
4,818 |
4,151 |
3,839 |
3,838 |
3,838 |
| End-of-period common
shares: |
|
|
|
|
|
| Issued |
4,999 |
4,999 |
4,020 |
4,019 |
4,019 |
| Treasury |
181 |
181 |
181 |
181 |
181 |
| |
|
| |
Quarter
Ended |
| |
|
|
|
|
|
| (Dollars in Thousands, Except Per Share
Data) |
9/30/2013 |
6/30/2013 |
3/31/2013 |
12/31/2012 |
9/30/2012 |
| |
|
|
|
|
|
| Financial Condition
Data: |
|
|
|
|
|
| General |
|
|
|
|
|
| Total assets |
$ 1,204,090 |
$ 1,206,958 |
$ 852,997 |
$ 856,535 |
$ 840,606 |
| Loans, net |
796,533 |
777,557 |
503,592 |
504,615 |
477,530 |
| Goodwill |
17,104 |
17,104 |
3,032 |
3,032 |
3,032 |
| Intangibles |
1,892 |
1,984 |
-- |
-- |
-- |
| Total deposits |
975,521 |
955,361 |
659,304 |
642,026 |
641,110 |
| Noninterest-bearing |
215,374 |
211,096 |
120,471 |
114,953 |
115,285 |
| |
|
|
|
|
|
| Savings |
142,193 |
140,667 |
86,556 |
82,546 |
81,479 |
| NOW |
169,974 |
161,972 |
140,626 |
130,454 |
125,572 |
| Money Market |
209,469 |
203,076 |
143,847 |
144,722 |
149,054 |
| Time Deposits |
238,511 |
238,550 |
167,804 |
169,351 |
169,720 |
| Total interest-bearing
deposits |
760,147 |
744,265 |
538,833 |
527,073 |
525,825 |
| |
|
|
|
|
|
| Core deposits* |
737,010 |
716,811 |
491,500 |
472,675 |
471,390 |
| Shareholders' equity |
125,852 |
125,928 |
93,013 |
93,726 |
93,779 |
| |
|
|
|
|
|
| Asset Quality |
|
|
|
|
|
| |
|
|
|
|
|
| Non-performing assets |
$ 6,064 |
$ 6,515 |
$ 9,059 |
$ 11,706 |
$ 12,041 |
| Non-performing assets to total
assets |
0.50% |
0.54% |
1.06% |
1.37% |
1.43% |
| Allowance for loan losses |
9,630 |
9,404 |
8,830 |
7,617 |
7,521 |
| Allowance for loan losses to
total loans |
1.19% |
1.19% |
1.72% |
1.49% |
1.55% |
| Allowance for loan losses to
non-performing loans |
158.81% |
144.34% |
97.47% |
65.07% |
62.46% |
| Non-performing loans to total
loans |
0.75% |
0.83% |
1.77% |
2.29% |
2.48% |
| |
|
|
|
|
|
| Capitalization |
|
|
|
|
|
| |
|
|
|
|
|
| Shareholders' equity to total
assets |
10.45% |
10.43% |
10.90% |
10.94% |
11.16% |
| |
|
|
|
|
|
| * Core deposits are
defined as total deposits less time deposits |
|
| |
| Reconciliation of GAAP
and Non-GAAP Financial Measures |
| |
|
|
|
|
| (Dollars in Thousands, Except Per Share
Data) |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| GAAP net income |
$ 3,246 |
$ 3,667 |
$ 10,589 |
$ 10,754 |
| Less: net securities and bank-owned life
insurance (losses) gains, net of tax |
(2) |
295 |
1,490 |
905 |
| Non-GAAP operating earnings |
$ 3,248 |
$ 3,372 |
$ 9,099 |
$ 9,849 |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Return on average assets (ROA) |
1.08% |
1.77% |
1.39% |
1.78% |
| Less: net securities and bank-owned life
insurance (losses) gains, net of tax |
0.00% |
0.14% |
0.20% |
0.15% |
| Non-GAAP operating ROA |
1.08% |
1.63% |
1.19% |
1.63% |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Return on average equity (ROE) |
10.39% |
15.94% |
12.90% |
16.25% |
| Less: net securities and bank-owned life
insurance (losses) gains, net of tax |
-0.01% |
1.28% |
1.82% |
1.37% |
| Non-GAAP operating ROE |
10.40% |
14.66% |
11.08% |
14.88% |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Basic earnings per share (EPS) |
$ 0.67 |
$ 0.96 |
$ 2.48 |
$ 2.80 |
| Less: net securities and bank-owned life
insurance (losses) gains, net of tax |
-- |
0.08 |
0.35 |
0.23 |
| Non-GAAP basic operating EPS |
$ 0.67 |
$ 0.88 |
$ 2.13 |
$ 2.57 |
| |
|
|
|
|
| |
Three Months Ended |
Nine Months Ended |
| |
September 30, |
September 30, |
| |
2013 |
2012 |
2013 |
2012 |
| Dilutive EPS |
$ 0.67 |
$ 0.96 |
$ 2.48 |
$ 2.80 |
| Less: net securities and bank-owned life
insurance (losses) gains, net of tax |
-- |
0.08 |
0.35 |
0.23 |
| Non-GAAP dilutive operating EPS |
$ 0.67 |
$ 0.88 |
$ 2.13 |
$ 2.57 |
CONTACT: Richard A. Grafmyre
President and Chief Executive Officer
300 Market Street
Williamsport, PA 17701
570-322-1111 e-mail: jssb@jssb.com
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