Penns Woods Bancorp, Inc. (NASDAQ:PWOD)
Penns Woods Bancorp, Inc., supported by
loan and deposit growth, achieved net income of $6.7 million, for
the six months ended June 30, 2018 resulting in basic and dilutive
earnings per share of $1.43.
Highlights
- Net income from core operations (“operating earnings”), which
is a non-generally accepted accounting principles (GAAP) measure of
net income excluding net securities gains or losses, was $3.5
million for the three months ended June 30, 2018 compared to
$3.1 million for the same period of 2017. Operating earnings
increased to $6.7 million for the six months ended June 30, 2018
compared to $5.6 million for the same period of 2017. Impacting the
level of operating earnings were several factors including the
continued shift of earning assets from the investment portfolio to
the loan portfolio as the balance sheet is actively managed to
reduce market risk and interest rate risk in a rising rate
environment. In addition, the effective tax rate has decreased due
to the "Tax Cuts and Jobs Act," which reduced the corporate tax
rate to 21% effective January 1, 2018.
- Operating earnings per share for the three months ended June
30, 2018 was $0.74 for basic and dilutive, an increase from $0.66
for basic and dilutive for the same period of 2017. Operating
earnings per share for the six month ended June 30, 2018 were $1.43
basic and dilutive compared to $1.20 basic and dilutive for the
same period of 2017.
- Return on average assets was 0.91% for the three months ended
June 30, 2018 compared to 0.88% for the corresponding period of
2017. Return on average assets was 0.89% for the six months ended
June 30, 2018 compared to 0.83% for the corresponding period of
2017.
- Return on average equity was 10.07% for the three months ended
June 30, 2018 compared to 8.79% for the corresponding period of
2017. Return on average equity was 9.68% for the six months ended
June 30, 2018 compared to 8.24% for the corresponding period of
2017.
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 six months ended June 30, 2018 was $3.5 million and
$6.7 million compared to $3.1 million and $5.8 million for the same
period of 2017. Results for the three and six months ended
June 30, 2018 compared to 2017 were impacted by an increase in
after-tax securities gains of $20,000 (from a loss of $8,000 to a
gain of $12,000) for the three month periods and a decrease in
after-tax securities gains of $143,000 (from a gain of $123,000 to
a loss of $20,000) for the six month periods. The impact of the Tax
Cuts and Jobs Act was the primary driver for the decrease in the
Company's effective tax rate to 17.40% and 16.50% for the three and
six month periods ended June 30, 2018 compared to 28.38% and 27.68%
for the prior year periods. Earnings per share for the three and
six months ended June 30, 2018 was $0.74 and $1.43 basic and
diluted, an increase from the 2017 basic and diluted earnings per
share of $0.65 and $1.22. Return on average assets and return on
average equity were 0.91% and 10.07% for the three months ended
June 30, 2018 compared to 0.88% and 8.79% for the corresponding
periods of 2017. Return on average assets and return on average
equity were 0.89% and 9.68% for the six months ended June 30, 2018
compared to 0.83% and 8.24% for the corresponding periods of
2017.
Net Interest Margin
The net interest margin for the three and six
months ended June 30, 2018 was 3.32% and 3.31% compared to 3.44%
and 3.42% for the corresponding period of 2017. The decrease in the
net interest margin was driven by an increase in the cost of
interest-bearing liabilities of 30 basis points ("bps") for the
three month period and 25 bps for the six month period primarily
from an increase in the rate paid on time deposits as the
liabilities are lengthened. The impact of the increased cost of
funds was limited by an increase in the yield on earning assets of
12 bps and 9 bps for the three and six month periods. The increase
in the yield on earning assets was driven by an increase in the
loan portfolio yield in conjunction with an increase in the average
loan portfolio of $177.4 million and $169.6 million respectively.
The loan growth was primarily funded by an increase in average
borrowings of $93.9 million and $88.2 million for the three and six
month periods along with growth in average total deposits of $45.0
million and $41.1 million respectively. Core deposits represent a
lower cost funding source than time deposits and comprise 78.80% of
total deposits at June 30, 2018 and 82.11% at June 30,
2017.
Assets
Total assets increased $207.9 million to $1.6
billion at June 30, 2018 compared to June 30, 2017. Net
loans increased $192.1 million to $1.3 billion at June 30,
2018 compared to June 30, 2017, primarily due to campaigns
related to increasing home equity product market share and indirect
auto lending. The investment portfolio decreased $7.9 million from
June 30, 2017 to June 30, 2018 due to our strategy to
reduce the investment portfolio duration through the selective
selling of bonds as opportunities develop. The combination of loan
portfolio growth and a decrease in the size of the investment
portfolio has resulted in shortening the overall earning asset
portfolio duration consistent with a strategy to reduce the
interest rate and market risk exposure to a rising rate
environment.
Non-performing Loans
The ratio of non-performing loans to total loans
ratio decreased to 0.51% at June 30, 2018 from 1.10%
June 30, 2017 as non-performing loans have decreased to $6.8
million at June 30, 2018 from $12.5 million at June 30,
2017. The level of non-performing loans decreased primarily as a
result of a large non-performing loan being paid off during the
quarter ended September 30, 2017. The majority of non-performing
loans involve loans that are either in a secured position and have
sureties with a strong underlying financial position or have a
specific allocation for any impairment recorded within the
allowance for loan losses. Net loan charge-offs of $319,000
for the six months ended June 30, 2018 minimally impacted the
allowance for loan losses which was 0.98% of total loans at
June 30, 2018. The majority of the loans charged-off had a
specific allowance within the allowance for loan losses.
Deposits
Deposits increased $39.9 million to $1.2 billion
at June 30, 2018 compared to June 30, 2017.
Noninterest-bearing deposits increased to $311.2 million at
June 30, 2018 compared to June 30, 2017. Driving
this growth is our commitment to easy-to-use products, community
involvement, and emphasis on customer service. While deposit
gathering efforts have centered on core deposits, the lengthening
of the time deposit portfolio continues to move forward as part of
the strategy to build balance sheet protection in a rising rate
environment.
Shareholders’ Equity
Shareholders’ equity increased $695,000 to
$139.1 million at June 30, 2018 compared to June 30,
2017. The change in accumulated other comprehensive loss from
$4.2 million at June 30, 2017 to $6.9 million at June 30,
2018 is a result of an increase in unrealized losses on available
for sale securities (from an unrealized loss of $16,000 at June 30,
2017 to an unrealized loss of $2,057,000 at June 30, 2018).
The amount of accumulated other comprehensive loss at June 30,
2018 was also impacted by the change in net excess of the projected
benefit obligation over the fair value of the plan assets of the
defined benefit pension plan resulting in an increase in the net
loss of $620,000, mainly due to the change in the corporate tax
rate from 2017 to 2018. The current level of shareholders’ equity
equates to a book value per share of $29.66 at June 30, 2018
compared to $29.53 at June 30, 2017 and an equity to asset
ratio of 8.68% at June 30, 2018 compared to 9.92% at
June 30, 2017. Excluding goodwill and intangibles, book value
per share was $25.74 at June 30, 2018 compared to $25.54 at
June 30, 2017. Dividends declared for the six months ended
June 30, 2018 and 2017 were $0.94 per share.
Penns Woods Bancorp, Inc. is the parent
company of Jersey Shore State Bank, which operates seventeen branch
offices providing financial services in Lycoming, Clinton, Centre,
Montour, and Union Counties, and Luzerne Bank, which operates nine
branch offices providing financial services in Luzerne County.
Investment and insurance products are offered through Jersey Shore
State Bank’s subsidiary, The M Group, Inc. D/B/A The
Comprehensive Financial Group. Insurance products are offered
through United Insurance Solutions, LLC a joint venture that is a
subsidiary of the holding company.
NOTE: This press release contains financial
information determined by methods other than in accordance with
U.S. Generally Accepted Accounting Principles (“GAAP”). Management
uses the non-GAAP measure of net income from core operations in its
analysis of the company’s performance. This measure, as used by the
Company, adjusts net income determined in accordance with GAAP to
exclude the effects of special items, including significant gains
or losses that are unusual in nature such as net securities gains
and losses. These certain items and their impact on the Company’s
performance are difficult to predict, management believes
presentation of financial measures excluding the impact of such
items provides useful supplemental information in evaluating the
operating results of the Company’s core businesses. These
disclosures should not be viewed as a substitute for net income
determined in accordance with GAAP, nor are they necessarily
comparable to non-GAAP performance measures that may be presented
by other companies.
This press release may contain certain
“forward-looking statements” including statements concerning plans,
objectives, future events or performance and assumptions and other
statements, which are statements other than statements of
historical fact. The Company cautions readers that the following
important factors, among others, may have affected and could in the
future affect actual results and could cause actual results for
subsequent periods to differ materially from those expressed in any
forward-looking statement made by or on behalf of the Company
herein: (i) the effect of changes in laws and regulations,
including federal and state banking laws and regulations, and the
associated costs of compliance with such laws and regulations
either currently or in the future as applicable; (ii) the
effect of changes in accounting policies and practices, as may be
adopted by the regulatory agencies as well as by the Financial
Accounting Standards Board, or of changes in the Company’s
organization, compensation and benefit plans; (iii) the effect
on the Company’s competitive position within its market area of the
increasing consolidation within the banking and financial services
industries, including the increased competition from larger
regional and out-of-state banking organizations as well as non-bank
providers of various financial services; (iv) the effect of
changes in interest rates; 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, 2017.
You should not place undue reliance on any
forward-looking statements. These statements speak only as of the
date of this press release, even if subsequently made available by
the Company on its website or otherwise. The Company undertakes no
obligation to update or revise these statements to reflect events
or circumstances occurring after the date of this press
release.
Previous press releases and additional
information can be obtained from the Company’s website at
www.pwod.com.
Contact: |
Richard A.
Grafmyre, Chief Executive Officer |
|
110
Reynolds Street |
|
Williamsport, PA 17702 |
|
570-322-1111 |
e-mail:
pwod@pwod.com |
THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT
ADJUSTMENT
PENNS WOODS
BANCORP, INC.CONSOLIDATED BALANCE
SHEET(UNAUDITED)
|
|
June 30, |
(In Thousands, Except Share Data) |
|
2018 |
|
2017 |
|
% Change |
ASSETS: |
|
|
|
|
|
|
Noninterest-bearing
balances |
|
$ |
26,134 |
|
|
$ |
26,223 |
|
|
(0.34 |
)% |
Interest-bearing
balances in other financial institutions |
|
29,873 |
|
|
11,979 |
|
|
149.38 |
% |
Total
cash and cash equivalents |
|
56,007 |
|
|
38,202 |
|
|
46.61 |
% |
|
|
|
|
|
|
|
Investment debt
securities, available for sale, at fair value |
|
118,876 |
|
|
126,749 |
|
|
(6.21 |
)% |
Investment equity
securities, at fair value |
|
2,438 |
|
|
2,474 |
|
|
(1.46 |
)% |
Investment securities,
trading |
|
243 |
|
|
213 |
|
|
14.08 |
% |
Restricted investment
in bank stock, at fair value |
|
16,716 |
|
|
9,281 |
|
|
80.11 |
% |
Loans held for
sale |
|
2,118 |
|
|
1,683 |
|
|
25.85 |
% |
Loans |
|
1,331,073 |
|
|
1,139,085 |
|
|
16.85 |
% |
Allowance for loan
losses |
|
(13,034 |
) |
|
(13,109 |
) |
|
(0.57 |
)% |
Loans,
net |
|
1,318,039 |
|
|
1,125,976 |
|
|
17.06 |
% |
Premises and equipment,
net |
|
27,385 |
|
|
25,497 |
|
|
7.40 |
% |
Accrued interest
receivable |
|
4,618 |
|
|
3,641 |
|
|
26.83 |
% |
Bank-owned life
insurance |
|
28,315 |
|
|
27,670 |
|
|
2.33 |
% |
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
— |
% |
Intangibles |
|
1,304 |
|
|
1,623 |
|
|
(19.65 |
)% |
Deferred tax asset |
|
4,941 |
|
|
8,139 |
|
|
(39.29 |
)% |
Other assets |
|
5,169 |
|
|
7,112 |
|
|
(27.32 |
)% |
TOTAL ASSETS |
|
$ |
1,603,273 |
|
|
$ |
1,395,364 |
|
|
14.90 |
% |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Interest-bearing
deposits |
|
$ |
879,825 |
|
|
$ |
851,056 |
|
|
3.38 |
% |
Noninterest-bearing
deposits |
|
311,194 |
|
|
300,054 |
|
|
3.71 |
% |
Total
deposits |
|
1,191,019 |
|
|
1,151,110 |
|
|
3.47 |
% |
|
|
|
|
|
|
|
Short-term
borrowings |
|
134,637 |
|
|
15,737 |
|
|
755.54 |
% |
Long-term
borrowings |
|
123,970 |
|
|
75,998 |
|
|
63.12 |
% |
Accrued interest
payable |
|
896 |
|
|
414 |
|
|
116.43 |
% |
Other
liabilities |
|
13,616 |
|
|
13,665 |
|
|
(0.36 |
)% |
TOTAL
LIABILITIES |
|
1,464,138 |
|
|
1,256,924 |
|
|
16.49 |
% |
|
|
|
|
|
|
|
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; 5,010,535 and 5,008,192 shares
issued |
|
41,753 |
|
|
41,735 |
|
|
0.04 |
% |
Additional paid-in
capital |
|
50,225 |
|
|
50,117 |
|
|
0.22 |
% |
Retained
earnings |
|
66,181 |
|
|
62,952 |
|
|
5.13 |
% |
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
Net
unrealized loss on available for sale securities |
|
(2,057 |
) |
|
(16 |
) |
|
12,756.25 |
% |
Defined
benefit plan |
|
(4,853 |
) |
|
(4,233 |
) |
|
(14.65 |
)% |
Treasury stock at cost,
320,150 |
|
(12,115 |
) |
|
(12,115 |
) |
|
— |
% |
TOTAL PENNS WOODS
BANCORP, INC. SHAREHOLDERS' EQUITY |
|
139,134 |
|
|
138,440 |
|
|
0.50 |
% |
Non-controlling
interest |
|
1 |
|
|
— |
|
|
100.00 |
% |
TOTAL SHAREHOLDERS'
EQUITY |
|
139,135 |
|
|
138,440 |
|
|
0.50 |
% |
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,603,273 |
|
|
$ |
1,395,364 |
|
|
14.90 |
% |
PENNS WOODS BANCORP,
INC.CONSOLIDATED STATEMENT OF
INCOME(UNAUDITED)
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(In Thousands, Except Per Share Data) |
|
2018 |
|
2017 |
|
% Change |
|
2018 |
|
2017 |
|
% Change |
INTEREST AND DIVIDEND
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans including
fees |
|
$ |
12,997 |
|
|
$ |
11,109 |
|
|
17.00 |
% |
|
$ |
25,190 |
|
|
$ |
21,736 |
|
|
15.89 |
% |
Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
639 |
|
|
570 |
|
|
12.11 |
% |
|
1,185 |
|
|
1,112 |
|
|
6.56 |
% |
Tax-exempt |
|
230 |
|
|
323 |
|
|
(28.79 |
)% |
|
471 |
|
|
621 |
|
|
(24.15 |
)% |
Dividend
and other interest income |
|
245 |
|
|
207 |
|
|
18.36 |
% |
|
466 |
|
|
422 |
|
|
10.43 |
% |
TOTAL INTEREST AND
DIVIDEND INCOME |
|
14,111 |
|
|
12,209 |
|
|
15.58 |
% |
|
27,312 |
|
|
23,891 |
|
|
14.32 |
% |
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
1,490 |
|
|
1,008 |
|
|
47.82 |
% |
|
2,712 |
|
|
1,910 |
|
|
41.99 |
% |
Short-term
borrowings |
|
252 |
|
|
4 |
|
|
6,200.00 |
% |
|
476 |
|
|
8 |
|
|
5,850.00 |
% |
Long-term
borrowings |
|
666 |
|
|
373 |
|
|
78.55 |
% |
|
1,268 |
|
|
813 |
|
|
55.97 |
% |
TOTAL INTEREST
EXPENSE |
|
2,408 |
|
|
1,385 |
|
|
73.86 |
% |
|
4,456 |
|
|
2,731 |
|
|
63.16 |
% |
NET INTEREST
INCOME |
|
11,703 |
|
|
10,824 |
|
|
8.12 |
% |
|
22,856 |
|
|
21,160 |
|
|
8.02 |
% |
PROVISION FOR LOAN
LOSSES |
|
335 |
|
|
215 |
|
|
55.81 |
% |
|
495 |
|
|
545 |
|
|
(9.17 |
)% |
NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES |
|
11,368 |
|
|
10,609 |
|
|
7.15 |
% |
|
22,361 |
|
|
20,615 |
|
|
8.47 |
% |
NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges |
|
592 |
|
|
559 |
|
|
5.90 |
% |
|
1,143 |
|
|
1,087 |
|
|
5.15 |
% |
Debt securities gains
(losses), available for sale |
|
14 |
|
|
(12 |
) |
|
216.67 |
% |
|
5 |
|
|
185 |
|
|
(97.30 |
)% |
Equity securities gains
(losses) |
|
6 |
|
|
— |
|
|
100.00 |
% |
|
(28 |
) |
|
— |
|
|
(100.00 |
)% |
Securities (losses)
gains, trading |
|
(5 |
) |
|
— |
|
|
(100.00 |
)% |
|
(2 |
) |
|
2 |
|
|
(200.00 |
)% |
Bank-owned life
insurance |
|
158 |
|
|
161 |
|
|
(1.86 |
)% |
|
331 |
|
|
333 |
|
|
(0.60 |
)% |
Gain on sale of
loans |
|
400 |
|
|
503 |
|
|
(20.48 |
)% |
|
655 |
|
|
861 |
|
|
(23.93 |
)% |
Insurance
commissions |
|
64 |
|
|
99 |
|
|
(35.35 |
)% |
|
181 |
|
|
290 |
|
|
(37.59 |
)% |
Brokerage
commissions |
|
330 |
|
|
361 |
|
|
(8.59 |
)% |
|
673 |
|
|
692 |
|
|
(2.75 |
)% |
Debit card
income |
|
373 |
|
|
501 |
|
|
(25.55 |
)% |
|
706 |
|
|
935 |
|
|
(24.49 |
)% |
Other |
|
430 |
|
|
591 |
|
|
(27.24 |
)% |
|
779 |
|
|
1,029 |
|
|
(24.30 |
)% |
TOTAL NON-INTEREST
INCOME |
|
2,362 |
|
|
2,763 |
|
|
(14.51 |
)% |
|
4,443 |
|
|
5,414 |
|
|
(17.93 |
)% |
NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
4,919 |
|
|
4,608 |
|
|
6.75 |
% |
|
9,967 |
|
|
9,378 |
|
|
6.28 |
% |
Occupancy |
|
699 |
|
|
614 |
|
|
13.84 |
% |
|
1,440 |
|
|
1,252 |
|
|
15.02 |
% |
Furniture and
equipment |
|
801 |
|
|
664 |
|
|
20.63 |
% |
|
1,548 |
|
|
1,313 |
|
|
17.90 |
% |
Software
Amortization |
|
231 |
|
|
242 |
|
|
(4.55 |
)% |
|
296 |
|
|
515 |
|
|
(42.52 |
)% |
Pennsylvania shares
tax |
|
278 |
|
|
230 |
|
|
20.87 |
% |
|
555 |
|
|
468 |
|
|
18.59 |
% |
Professional
Fees |
|
649 |
|
|
550 |
|
|
18.00 |
% |
|
1,215 |
|
|
987 |
|
|
23.10 |
% |
Federal Deposit
Insurance Corporation deposit insurance |
|
200 |
|
|
150 |
|
|
33.33 |
% |
|
402 |
|
|
320 |
|
|
25.63 |
% |
Marketing |
|
268 |
|
|
204 |
|
|
31.37 |
% |
|
519 |
|
|
375 |
|
|
38.40 |
% |
Intangible
amortization |
|
78 |
|
|
86 |
|
|
(9.30 |
)% |
|
158 |
|
|
176 |
|
|
(10.23 |
)% |
Other |
|
1,394 |
|
|
1,715 |
|
|
(18.72 |
)% |
|
2,694 |
|
|
3,264 |
|
|
(17.46 |
)% |
TOTAL NON-INTEREST
EXPENSE |
|
9,517 |
|
|
9,063 |
|
|
5.01 |
% |
|
18,794 |
|
|
18,048 |
|
|
4.13 |
% |
INCOME BEFORE INCOME
TAX PROVISION |
|
4,213 |
|
|
4,309 |
|
|
(2.23 |
)% |
|
8,010 |
|
|
7,981 |
|
|
0.36 |
% |
INCOME TAX
PROVISION |
|
733 |
|
|
1,223 |
|
|
(40.07 |
)% |
|
1,322 |
|
|
2,209 |
|
|
(40.15 |
)% |
NET INCOME |
|
$ |
3,480 |
|
|
$ |
3,086 |
|
|
12.77 |
% |
|
$ |
6,688 |
|
|
$ |
5,772 |
|
|
15.87 |
% |
Earnings attributable
to noncontrolling interest |
|
— |
|
|
— |
|
|
— |
% |
|
(1 |
) |
|
— |
|
|
— |
% |
NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS' |
|
$ |
3,480 |
|
|
$ |
3,086 |
|
|
12.77 |
% |
|
$ |
6,689 |
|
|
$ |
5,772 |
|
|
15.89 |
% |
EARNINGS PER SHARE -
BASIC |
|
$ |
0.74 |
|
|
$ |
0.65 |
|
|
13.85 |
% |
|
$ |
1.43 |
|
|
$ |
1.22 |
|
|
17.21 |
% |
EARNINGS PER SHARE -
DILUTED |
|
$ |
0.74 |
|
|
$ |
0.65 |
|
|
13.85 |
% |
|
$ |
1.43 |
|
|
$ |
1.22 |
|
|
17.21 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC |
|
4,689,932 |
|
|
4,711,332 |
|
|
(0.45 |
)% |
|
4,689,656 |
|
|
4,723,003 |
|
|
(0.71 |
)% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED |
|
4,703,339 |
|
|
4,711,332 |
|
|
(0.17 |
)% |
|
4,689,656 |
|
|
4,723,003 |
|
|
(0.71 |
)% |
DIVIDENDS DECLARED PER
SHARE |
|
$ |
0.47 |
|
|
$ |
0.47 |
|
|
— |
% |
|
$ |
0.94 |
|
|
$ |
0.94 |
|
|
— |
% |
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Three Months Ended |
|
|
June 30, 2018 |
|
June 30, 2017 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt
loans |
|
$ |
75,859 |
|
|
$ |
563 |
|
|
2.98 |
% |
|
$ |
41,685 |
|
|
$ |
405 |
|
|
3.89 |
% |
All other
loans |
|
1,225,343 |
|
|
12,552 |
|
|
4.11 |
% |
|
1,082,165 |
|
|
10,842 |
|
|
4.02 |
% |
Total loans |
|
1,301,202 |
|
|
13,115 |
|
|
4.04 |
% |
|
1,123,850 |
|
|
11,247 |
|
|
4.01 |
% |
Taxable
securities |
|
93,024 |
|
|
871 |
|
|
3.75 |
% |
|
83,895 |
|
|
680 |
|
|
3.24 |
% |
Tax-exempt
securities |
|
40,300 |
|
|
291 |
|
|
2.89 |
% |
|
52,850 |
|
|
489 |
|
|
3.70 |
% |
Total
securities |
|
133,324 |
|
|
1,162 |
|
|
3.49 |
% |
|
136,745 |
|
|
1,169 |
|
|
3.42 |
% |
Interest-bearing
deposits |
|
3,034 |
|
|
13 |
|
|
1.72 |
% |
|
36,662 |
|
|
96 |
|
|
1.05 |
% |
Total interest-earning
assets |
|
1,437,560 |
|
|
14,290 |
|
|
3.99 |
% |
|
1,297,257 |
|
|
12,512 |
|
|
3.87 |
% |
Other assets |
|
97,034 |
|
|
|
|
|
|
100,356 |
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,534,594 |
|
|
|
|
|
|
$ |
1,397,613 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
165,231 |
|
|
16 |
|
|
0.04 |
% |
|
$ |
158,413 |
|
|
15 |
|
|
0.04 |
% |
Super Now
deposits |
|
234,731 |
|
|
242 |
|
|
0.41 |
% |
|
202,692 |
|
|
131 |
|
|
0.26 |
% |
Money market
deposits |
|
243,771 |
|
|
290 |
|
|
0.48 |
% |
|
288,035 |
|
|
255 |
|
|
0.36 |
% |
Time
deposits |
|
253,398 |
|
|
942 |
|
|
1.49 |
% |
|
205,418 |
|
|
607 |
|
|
1.19 |
% |
Total interest-bearing
deposits |
|
897,131 |
|
|
1,490 |
|
|
0.67 |
% |
|
854,558 |
|
|
1,008 |
|
|
0.47 |
% |
Short-term
borrowings |
|
56,530 |
|
|
252 |
|
|
1.76 |
% |
|
10,579 |
|
|
4 |
|
|
0.15 |
% |
Long-term
borrowings |
|
123,970 |
|
|
666 |
|
|
2.12 |
% |
|
75,998 |
|
|
373 |
|
|
1.95 |
% |
Total borrowings |
|
180,500 |
|
|
918 |
|
|
2.01 |
% |
|
86,577 |
|
|
377 |
|
|
1.73 |
% |
Total interest-bearing
liabilities |
|
1,077,631 |
|
|
2,408 |
|
|
0.89 |
% |
|
941,135 |
|
|
1,385 |
|
|
0.59 |
% |
Demand deposits |
|
302,742 |
|
|
|
|
|
|
300,311 |
|
|
|
|
|
Other
liabilities |
|
16,024 |
|
|
|
|
|
|
15,801 |
|
|
|
|
|
Shareholders’
equity |
|
138,197 |
|
|
|
|
|
|
140,366 |
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,534,594 |
|
|
|
|
|
|
$ |
1,397,613 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
3.10 |
% |
|
|
|
|
|
3.28 |
% |
Net interest
income/margin |
|
|
|
$ |
11,882 |
|
|
3.32 |
% |
|
|
|
$ |
11,127 |
|
|
3.44 |
% |
|
|
Three Months Ended June 30, |
|
|
2018 |
|
2017 |
Total interest
income |
|
$ |
14,111 |
|
|
$ |
12,209 |
|
Total interest
expense |
|
2,408 |
|
|
1,385 |
|
Net interest
income |
|
11,703 |
|
|
10,824 |
|
Tax equivalent
adjustment |
|
179 |
|
|
303 |
|
Net interest income
(fully taxable equivalent) |
|
$ |
11,882 |
|
|
$ |
11,127 |
|
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Six Months Ended |
|
|
June 30, 2018 |
|
June 30, 2017 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt
loans |
|
$ |
75,548 |
|
|
$ |
1,130 |
|
|
3.02 |
% |
|
$ |
41,959 |
|
|
$ |
821 |
|
|
3.95 |
% |
All other
loans |
|
1,205,945 |
|
|
24,297 |
|
|
4.06 |
% |
|
1,069,896 |
|
|
21,194 |
|
|
3.99 |
% |
Total loans |
|
1,281,493 |
|
|
25,427 |
|
|
4.00 |
% |
|
1,111,855 |
|
|
22,015 |
|
|
3.99 |
% |
Taxable
securities |
|
88,670 |
|
|
1,630 |
|
|
3.68 |
% |
|
86,591 |
|
|
1,365 |
|
|
3.15 |
% |
Tax-exempt
securities |
|
41,225 |
|
|
596 |
|
|
2.89 |
% |
|
49,779 |
|
|
941 |
|
|
3.78 |
% |
Total
securities |
|
129,895 |
|
|
2,226 |
|
|
3.43 |
% |
|
136,370 |
|
|
2,306 |
|
|
3.38 |
% |
Interest-bearing
deposits |
|
2,603 |
|
|
21 |
|
|
1.63 |
% |
|
34,924 |
|
|
169 |
|
|
0.98 |
% |
Total interest-earning
assets |
|
1,413,991 |
|
|
27,674 |
|
|
3.94 |
% |
|
1,283,149 |
|
|
24,490 |
|
|
3.85 |
% |
Other assets |
|
97,318 |
|
|
|
|
|
|
99,934 |
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,511,309 |
|
|
|
|
|
|
$ |
1,383,083 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
164,140 |
|
|
32 |
|
|
0.04 |
% |
|
$ |
157,423 |
|
|
30 |
|
|
0.04 |
% |
Super Now
deposits |
|
230,930 |
|
|
449 |
|
|
0.39 |
% |
|
196,032 |
|
|
237 |
|
|
0.24 |
% |
Money market
deposits |
|
240,127 |
|
|
500 |
|
|
0.42 |
% |
|
275,529 |
|
|
446 |
|
|
0.33 |
% |
Time
deposits |
|
244,805 |
|
|
1,731 |
|
|
1.43 |
% |
|
207,722 |
|
|
1,197 |
|
|
1.16 |
% |
Total interest-bearing
deposits |
|
880,002 |
|
|
2,712 |
|
|
0.62 |
% |
|
836,706 |
|
|
1,910 |
|
|
0.46 |
% |
Short-term
borrowings |
|
59,152 |
|
|
476 |
|
|
1.60 |
% |
|
10,962 |
|
|
8 |
|
|
0.15 |
% |
Long-term
borrowings |
|
119,274 |
|
|
1,268 |
|
|
2.11 |
% |
|
79,258 |
|
|
813 |
|
|
2.04 |
% |
Total borrowings |
|
178,426 |
|
|
1,744 |
|
|
1.94 |
% |
|
90,220 |
|
|
821 |
|
|
1.81 |
% |
Total interest-bearing
liabilities |
|
1,058,428 |
|
|
4,456 |
|
|
0.84 |
% |
|
926,926 |
|
|
2,731 |
|
|
0.59 |
% |
Demand deposits |
|
298,011 |
|
|
|
|
|
|
300,207 |
|
|
|
|
|
Other
liabilities |
|
16,645 |
|
|
|
|
|
|
15,770 |
|
|
|
|
|
Shareholders’
equity |
|
138,225 |
|
|
|
|
|
|
140,180 |
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,511,309 |
|
|
|
|
|
|
$ |
1,383,083 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
3.10 |
% |
|
|
|
|
|
3.26 |
% |
Net interest
income/margin |
|
|
|
$ |
23,218 |
|
|
3.31 |
% |
|
|
|
$ |
21,759 |
|
|
3.42 |
% |
|
|
Six Months Ended June 30, |
|
|
2018 |
|
2017 |
Total interest
income |
|
$ |
27,312 |
|
|
$ |
23,891 |
|
Total interest
expense |
|
4,456 |
|
|
2,731 |
|
Net interest
income |
|
22,856 |
|
|
21,160 |
|
Tax equivalent
adjustment |
|
362 |
|
|
599 |
|
Net interest income
(fully taxable equivalent) |
|
$ |
23,218 |
|
|
$ |
21,759 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
|
9/30/2017 |
|
6/30/2017 |
Operating
Data |
|
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
3,480 |
|
|
$ |
3,208 |
|
|
$ |
716 |
|
|
$ |
3,284 |
|
|
$ |
3,086 |
|
Net
interest income |
|
11,703 |
|
|
11,153 |
|
|
11,468 |
|
|
11,452 |
|
|
10,824 |
|
Provision
for loan losses |
|
335 |
|
|
160 |
|
|
125 |
|
|
60 |
|
|
215 |
|
Net
security gains (losses) |
|
15 |
|
|
(40 |
) |
|
107 |
|
|
298 |
|
|
(12 |
) |
Non-interest income, ex. net security gains (losses) |
|
2,347 |
|
|
2,368 |
|
|
2,482 |
|
|
2,442 |
|
|
2,775 |
|
Non-interest expense |
|
9,517 |
|
|
9,524 |
|
|
9,248 |
|
|
9,566 |
|
|
9,063 |
|
Performance
Statistics |
|
|
|
|
|
|
|
|
|
|
Net
interest margin |
|
3.32 |
% |
|
3.31 |
% |
|
3.48 |
% |
|
3.57 |
% |
|
3.44 |
% |
Annualized return on average assets |
|
0.91 |
% |
|
0.86 |
% |
|
0.20 |
% |
|
0.93 |
% |
|
0.88 |
% |
Annualized return on average equity |
|
10.07 |
% |
|
9.18 |
% |
|
2.00 |
% |
|
9.43 |
% |
|
8.79 |
% |
Annualized net loan charge-offs to average loans |
|
0.04 |
% |
|
0.06 |
% |
|
0.07 |
% |
|
0.08 |
% |
|
— |
% |
Net
charge-offs |
|
137 |
|
|
182 |
|
|
200 |
|
|
236 |
|
|
11 |
|
Efficiency ratio |
|
67.2 |
% |
|
69.8 |
% |
|
65.7 |
% |
|
68.3 |
% |
|
65.9 |
% |
Per Share
Data |
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share |
|
$ |
0.74 |
|
|
$ |
0.68 |
|
|
$ |
0.16 |
|
|
$ |
0.70 |
|
|
$ |
0.65 |
|
Diluted
earnings per share |
|
0.74 |
|
|
0.68 |
|
|
0.15 |
|
|
0.70 |
|
|
0.65 |
|
Dividend
declared per share |
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
Book
value |
|
29.66 |
|
|
29.45 |
|
|
29.47 |
|
|
29.79 |
|
|
29.53 |
|
Common
stock price: |
|
|
|
|
|
|
|
|
|
|
High |
|
46.92 |
|
|
45.56 |
|
|
49.79 |
|
|
46.47 |
|
|
43.60 |
|
Low |
|
41.29 |
|
|
39.61 |
|
|
45.65 |
|
|
41.08 |
|
|
38.17 |
|
Close |
|
44.78 |
|
|
42.31 |
|
|
46.58 |
|
|
46.47 |
|
|
41.18 |
|
Weighted
average common shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
4,690 |
|
|
4,689 |
|
|
4,689 |
|
|
4,688 |
|
|
4,711 |
|
Fully
Diluted |
|
4,703 |
|
|
4,689 |
|
|
4,782 |
|
|
4,688 |
|
|
4,711 |
|
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
Issued |
|
5,011 |
|
|
5,010 |
|
|
5,009 |
|
|
5,009 |
|
|
5,008 |
|
Treasury |
|
320 |
|
|
320 |
|
|
320 |
|
|
320 |
|
|
320 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
|
9/30/2017 |
|
6/30/2017 |
Financial
Condition Data: |
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
Total
assets |
|
$ |
1,603,273 |
|
|
$ |
1,526,745 |
|
|
$ |
1,474,492 |
|
|
$ |
1,430,197 |
|
|
$ |
1,395,364 |
|
Loans,
net |
|
1,318,039 |
|
|
1,267,912 |
|
|
1,232,268 |
|
|
1,176,781 |
|
|
1,125,976 |
|
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
Intangibles |
|
1,304 |
|
|
1,382 |
|
|
1,462 |
|
|
1,543 |
|
|
1,623 |
|
Total
deposits |
|
1,191,019 |
|
|
1,192,454 |
|
|
1,146,320 |
|
|
1,153,996 |
|
|
1,151,110 |
|
Noninterest-bearing |
|
311,194 |
|
|
304,261 |
|
|
303,316 |
|
|
310,830 |
|
|
300,054 |
|
Savings |
|
166,183 |
|
|
166,243 |
|
|
160,698 |
|
|
156,437 |
|
|
158,101 |
|
NOW |
|
216,109 |
|
|
240,259 |
|
|
215,021 |
|
|
203,744 |
|
|
199,917 |
|
Money
Market |
|
245,081 |
|
|
235,381 |
|
|
237,818 |
|
|
274,528 |
|
|
287,140 |
|
Time
Deposits |
|
252,452 |
|
|
246,310 |
|
|
229,467 |
|
|
208,457 |
|
|
205,898 |
|
Total
interest-bearing deposits |
|
879,825 |
|
|
888,193 |
|
|
843,004 |
|
|
843,166 |
|
|
851,056 |
|
Core
deposits* |
|
938,567 |
|
|
946,144 |
|
|
916,853 |
|
|
945,539 |
|
|
945,212 |
|
Shareholders’ equity |
|
139,134 |
|
|
138,192 |
|
|
138,192 |
|
|
139,669 |
|
|
138,440 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
|
$ |
6,818 |
|
|
$ |
7,641 |
|
|
$ |
7,268 |
|
|
$ |
8,317 |
|
|
$ |
12,498 |
|
Non-performing loans to total assets |
|
0.43 |
% |
|
0.50 |
% |
|
0.49 |
% |
|
0.58 |
% |
|
0.90 |
% |
Allowance
for loan losses |
|
13,034 |
|
|
12,836 |
|
|
12,858 |
|
|
12,933 |
|
|
13,109 |
|
Allowance
for loan losses to total loans |
|
0.98 |
% |
|
1.00 |
% |
|
1.03 |
% |
|
1.09 |
% |
|
1.15 |
% |
Allowance
for loan losses to non-performing loans |
|
191.17 |
% |
|
167.99 |
% |
|
176.91 |
% |
|
157.05 |
% |
|
104.56 |
% |
Non-performing loans to total loans |
|
0.51 |
% |
|
0.60 |
% |
|
0.58 |
% |
|
0.69 |
% |
|
1.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity to total assets |
|
8.68 |
% |
|
9.05 |
% |
|
9.37 |
% |
|
9.77 |
% |
|
9.92 |
% |
* Core deposits are defined as total deposits less time
deposits
Reconciliation of GAAP and Non-GAAP
Financial Measures
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
(Dollars in Thousands, Except Per Share Data) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
GAAP net
income |
|
$ |
3,480 |
|
|
$ |
3,086 |
|
|
$ |
6,689 |
|
|
$ |
5,772 |
|
Less: net securities
gains (losses), net of tax |
|
12 |
|
|
|
(8 |
) |
|
|
(20 |
) |
|
123 |
|
Non-GAAP operating
earnings |
|
$ |
3,468 |
|
|
$ |
3,094 |
|
|
$ |
6,709 |
|
|
$ |
5,649 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Return on average
assets (ROA) |
|
0.91 |
% |
|
|
0.88 |
% |
|
|
0.89 |
% |
|
0.83 |
% |
Less: net securities
gains (losses), net of tax |
|
0.01 |
% |
|
|
— |
% |
|
|
— |
% |
|
0.01 |
% |
Non-GAAP operating
ROA |
|
0.90 |
% |
|
|
0.88 |
% |
|
|
0.89 |
% |
|
0.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Return on average
equity (ROE) |
|
10.07 |
% |
|
|
8.79 |
% |
|
|
9.68 |
% |
|
8.24 |
% |
Less: net securities
gains (losses), net of tax |
|
0.03 |
% |
|
|
(0.03 |
)% |
|
|
(0.03 |
)% |
|
0.18 |
% |
Non-GAAP operating
ROE |
|
10.04 |
% |
|
|
8.82 |
% |
|
|
9.71 |
% |
|
8.06 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Basic earnings per
share (EPS) |
|
$ |
0.74 |
|
|
$ |
0.65 |
|
|
$ |
1.43 |
|
|
$ |
1.22 |
|
Less: net securities
gains (losses), net of tax |
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
0.02 |
|
Non-GAAP basic
operating EPS |
|
$ |
0.74 |
|
|
$ |
0.66 |
|
|
$ |
1.43 |
|
|
$ |
1.20 |
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Dilutive EPS |
|
$ |
0.74 |
|
|
$ |
0.65 |
|
|
$ |
1.43 |
|
|
$ |
1.22 |
|
Less: net securities
gains (losses), net of tax |
|
— |
|
|
|
(0.01 |
) |
|
|
— |
|
|
0.02 |
|
Non-GAAP dilutive
operating EPS |
|
$ |
0.74 |
|
|
$ |
0.66 |
|
|
$ |
1.43 |
|
|
$ |
1.20 |
|
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