Penns Woods Bancorp, Inc. (NASDAQ: PWOD)
Penns Woods Bancorp, Inc., supported by
loan and deposit growth, achieved net income of $14.7 million for
the twelve months ended December 31, 2018, resulting in basic and
diluted earnings per share of $3.14.
Highlights
- Net income, as reported under GAAP, for the three and twelve
months ended December 31, 2018 was $4.2 million and $14.7
million, compared to $0.7 million and $9.8 million for the same
period of 2017. Results for the three and twelve months ended
December 31, 2018 compared to 2017 were impacted by a decrease
in after-tax securities gains of $201,000 (from a gain of $71,000
to a loss of $130,000) for the three month periods and a decrease
in after-tax securities gains of $560,000 (from a gain of $391,000
to a loss of $169,000) for the twelve month periods. Impacting the
level of operating earnings were several factors, including the
continued shift in composition of the earning asset 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.
- Basic and diluted earnings per share for the three and twelve
months ended December 31, 2018 were $0.89 and $3.14, respectively,
an increase from basic earnings per share of $0.16 and diluted
earnings per share of $0.15 for the three months ended December 31,
2017 and basic and diluted earnings per share of $2.08 for the
twelve months ended December 31, 2017.
- Return on average assets was 1.02% for the three months ended
December 31, 2018, compared to 0.20% for the corresponding period
of 2017. Return on average assets was 0.94% for the twelve months
ended December 31, 2018, compared to 0.69% for the corresponding
period of 2017.
- Return on average equity was 11.77% for the three months ended
December 31, 2018, compared to 2.00% for the corresponding period
of 2017. Return on average equity was 10.72% for the twelve months
ended December 31, 2018, compared to 6.91% 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 from core operations (“adjusted
earnings”), which is a non-generally accepted accounting principles
(GAAP) measure of net income excluding net securities gains or
losses, was $4.3 million for the three months ended
December 31, 2018 compared to $3.4 million for the same period
of 2017. Operating earnings increased to $14.9 million for the
twelve months ended December 31, 2018, compared to $12.1 million
for the same period of 2017. The impact of the Tax Cuts and Jobs
Act was the primary driver for the decrease in the Company's
effective tax rate to 13.23% and 16.08% for the three and twelve
month periods ended December 31, 2018 compared to 84.71% and 43.29%
for the prior year periods (the passage of the "Tax Cuts and Jobs
Act" in 2017 caused a revaluation of our net deferred tax assets
resulting in a write-down of $2.7 million during the fourth quarter
of 2017). Operating earnings per share for the three months ended
December 31, 2018 was $0.92 basic and diluted, an increase from
$0.72 basic and $0.71 diluted operating earnings per share for the
same period of 2017. Operating earnings per share for the twelve
months ended December 31, 2018 was $3.17 basic and diluted,
compared to $2.57 basic and diluted for the same period of 2017.
Operating return on average assets and operating return on average
equity were 1.05% and 12.12% for the three months ended December
31, 2018, compared to 0.93% and 9.45% for the corresponding periods
of 2017. Operating return on average assets and operating return on
average equity were 0.95% and 10.84% for the twelve months ended
December 31, 2018 compared to 0.86% and 8.57% for the corresponding
periods of 2017.
Net Interest Margin
The net interest margin for the three and twelve
months ended December 31, 2018 was 3.33% and 3.31%, compared to
3.48% and 3.47% 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 53 basis points ("bps")
for the three month period and 37 bps for the twelve month period
primarily from an increase in the rate paid on time deposits as the
average maturity of such liabilities lengthened. The impact of the
increased cost of funds was limited by an increase in the yield on
earning assets of 27 bps and 14 bps for the three and twelve 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 $170.6 million and $176.0
million, respectively. The loan growth was primarily funded by an
increase in average borrowings of $122.5 million and $108.5 million
for the three and twelve month periods along with growth in average
total deposits of $62.7 million and $48.1 million, respectively for
the same periods.
Assets
Total assets increased $210.3 million to $1.7
billion at December 31, 2018 compared to December 31,
2017. Net loans increased $137.2 million to $1.4 billion at
December 31, 2018 compared to December 31, 2017,
primarily due to campaigns related to increasing home equity
product market share and indirect auto lending. The investment
portfolio increased $30.3 million from December 31, 2017 to
December 31, 2018 due to an increase in the taxable municipal
and restricted bank stock portfolios.
Non-performing Loans
The ratio of non-performing loans to total loans
ratio increased to 1.20% at December 31, 2018 from 0.58% at
December 31, 2017 as non-performing loans have increased to
$16.6 million at December 31, 2018 from $7.3 million at
December 31, 2017 primarily due to a commercial loan
relationship that became non-performing during the last three
months of 2018. 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 $756,000 for the twelve months
ended December 31, 2018 minimally impacted the allowance for loan
losses, which was 1.00% of total loans at December 31, 2018.
The majority of the loans charged-off had a specific allowance
within the allowance for loan losses.
Deposits
Deposits increased $73.6 million to $1.2 billion
at December 31, 2018 compared to December 31, 2017.
Noninterest-bearing deposits increased $17.5 million to $320.8
million at December 31, 2018 compared to December 31,
2017. Driving deposit 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 average maturity of the time deposit portfolio
continues to move forward as part of the strategy to build balance
sheet protection in a rising interest rate environment.
Shareholders’ Equity
Shareholders’ equity increased $5.3 million to
$143.5 million at December 31, 2018 compared to
December 31, 2017. The change in accumulated other
comprehensive loss from $5.0 million at December 31, 2017 to
$6.6 million at December 31, 2018 is a result of an increase
in unrealized losses on available for sale securities (from an
unrealized gain of $54,000 at December 31, 2017 to an unrealized
loss of $1.4 million at December 31, 2018). The amount of
accumulated other comprehensive loss at December 31, 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
$356,000, 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 $30.59 at December 31, 2018 compared
to $29.47 at December 31, 2017 and an equity to asset ratio of
8.52% at December 31, 2018, compared to 9.37% at
December 31, 2017. Excluding goodwill and intangibles,
book value per share was $26.70 at December 31, 2018, compared
to $25.51 at December 31, 2017. Dividends declared for
the twelve months ended December 31, 2018 and 2017 were $1.88 per
share.
During the first quarter of 2019, the Company
expects to offer approximately $10.0 million of a new series of
non-cumulative, non-convertible preferred stock to a limited number
of accredited investors in a private placement transaction.
The preferred stock would be structured to qualify as Tier 1
capital for bank regulatory purposes. The proceeds of the
offering would be used for general corporate purposes, including
funding organic growth. There can be no assurance that the
offering will be completed during the first quarter of 2019 or
otherwise. Any shares of preferred stock offered and sold
will not be registered under the Securities Act of 1933 and may not
be offered or sold absent registration or an applicable exemption
from registration requirements.
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 ten
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. Because 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)
| |
|
December 31, |
|
(In Thousands, Except Share Data) |
|
2018 |
|
2017 |
|
% Change |
| ASSETS: |
|
|
|
|
|
|
| Noninterest-bearing
balances |
|
$ |
24,325 |
|
|
$ |
25,692 |
|
|
(5.32 |
)% |
| Interest-bearing
balances in other financial institutions |
|
42,417 |
|
|
1,551 |
|
|
2,634.82 |
% |
| Total
cash and cash equivalents |
|
66,742 |
|
|
27,243 |
|
|
144.99 |
% |
| Investment debt
securities, available for sale, at fair value |
|
134,285 |
|
|
108,627 |
|
|
23.62 |
% |
| Investment equity
securities, at fair value |
|
1,776 |
|
|
2,516 |
|
|
(29.41 |
)% |
| Investment securities,
trading |
|
36 |
|
|
190 |
|
|
(81.05 |
)% |
| Restricted investment
in bank stock, at fair value |
|
18,862 |
|
|
13,332 |
|
|
41.48 |
% |
| Loans held for
sale |
|
2,929 |
|
|
1,196 |
|
|
144.90 |
% |
| Loans |
|
1,384,757 |
|
|
1,246,614 |
|
|
11.08 |
% |
| Allowance for loan
losses |
|
(13,837 |
) |
|
(12,858 |
) |
|
7.61 |
% |
| Loans,
net |
|
1,370,920 |
|
|
1,233,756 |
|
|
11.12 |
% |
| Premises and equipment,
net |
|
27,580 |
|
|
27,386 |
|
|
0.71 |
% |
| Accrued interest
receivable |
|
5,334 |
|
|
4,321 |
|
|
23.44 |
% |
| Bank-owned life
insurance |
|
28,627 |
|
|
27,982 |
|
|
2.31 |
% |
| Goodwill |
|
17,104 |
|
|
17,104 |
|
|
— |
% |
| Intangibles |
|
1,162 |
|
|
1,462 |
|
|
(20.52 |
)% |
| Deferred tax asset |
|
5,154 |
|
|
4,388 |
|
|
17.46 |
% |
| Other assets |
|
4,260 |
|
|
4,989 |
|
|
(14.61 |
)% |
| TOTAL ASSETS |
|
$ |
1,684,771 |
|
|
$ |
1,474,492 |
|
|
14.26 |
% |
| LIABILITIES: |
|
|
|
|
|
|
| Interest-bearing
deposits |
|
$ |
899,089 |
|
|
$ |
843,004 |
|
|
6.65 |
% |
| Noninterest-bearing
deposits |
|
320,814 |
|
|
303,316 |
|
|
5.77 |
% |
| Total
deposits |
|
1,219,903 |
|
|
1,146,320 |
|
|
6.42 |
% |
| Short-term
borrowings |
|
167,865 |
|
|
100,748 |
|
|
66.62 |
% |
| Long-term
borrowings |
|
138,942 |
|
|
70,970 |
|
|
95.78 |
% |
| Accrued interest
payable |
|
1,150 |
|
|
502 |
|
|
129.08 |
% |
| Other liabilities |
|
13,367 |
|
|
17,758 |
|
|
(24.73 |
)% |
| TOTAL LIABILITIES |
|
1,541,227 |
|
|
1,336,298 |
|
|
15.34 |
% |
| 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; 5,011,698 and 5,009,339 shares
issued; 4,691,548 and 4,689,189 outstanding |
|
41,763 |
|
|
41,744 |
|
|
0.05 |
% |
| Additional paid-in
capital |
|
50,737 |
|
|
50,173 |
|
|
1.12 |
% |
| Retained earnings |
|
69,787 |
|
|
63,364 |
|
|
10.14 |
% |
| Accumulated other
comprehensive loss: |
|
|
|
|
|
|
| Net
unrealized loss on available for sale securities |
|
(1,360 |
) |
|
(54 |
) |
|
(2,418.52 |
)% |
| Defined
benefit plan |
|
(5,276 |
) |
|
(4,920 |
) |
|
(7.24 |
)% |
| Treasury stock at cost,
320,150 |
|
(12,115 |
) |
|
(12,115 |
) |
|
— |
% |
| TOTAL PENNS WOODS
BANCORP, INC. SHAREHOLDERS' EQUITY |
|
143,536 |
|
|
138,192 |
|
|
3.87 |
% |
| Non-controlling
interest |
|
8 |
|
|
2 |
|
|
300.00 |
% |
| TOTAL SHAREHOLDERS'
EQUITY |
|
143,544 |
|
|
138,194 |
|
|
3.87 |
% |
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,684,771 |
|
|
$ |
1,474,492 |
|
|
14.26 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
PENNS WOODS BANCORP,
INC.CONSOLIDATED STATEMENT OF
INCOME(UNAUDITED)
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
(In Thousands, Except Per Share Data) |
|
2018 |
|
2017 |
|
% Change |
|
2018 |
|
2017 |
|
% Change |
| INTEREST AND DIVIDEND
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
| Loans including
fees |
|
$ |
14,828 |
|
|
$ |
12,191 |
|
|
21.63 |
% |
|
$ |
54,000 |
|
|
$ |
45,833 |
|
|
17.82 |
% |
| Investment
securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
886 |
|
|
517 |
|
|
71.37 |
% |
|
2,784 |
|
|
2,182 |
|
|
27.59 |
% |
|
Tax-exempt |
|
182 |
|
|
278 |
|
|
(34.53 |
)% |
|
860 |
|
|
1,218 |
|
|
(29.39 |
)% |
| Dividend
and other interest income |
|
340 |
|
|
152 |
|
|
123.68 |
% |
|
1,102 |
|
|
744 |
|
|
48.12 |
% |
| TOTAL INTEREST AND
DIVIDEND INCOME |
|
16,236 |
|
|
13,138 |
|
|
23.58 |
% |
|
58,746 |
|
|
49,977 |
|
|
17.55 |
% |
| INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
| Deposits |
|
1,999 |
|
|
1,115 |
|
|
79.28 |
% |
|
6,370 |
|
|
4,083 |
|
|
56.01 |
% |
| Short-term
borrowings |
|
753 |
|
|
195 |
|
|
286.15 |
% |
|
1,757 |
|
|
234 |
|
|
650.85 |
% |
| Long-term
borrowings |
|
785 |
|
|
360 |
|
|
118.06 |
% |
|
2,809 |
|
|
1,580 |
|
|
77.78 |
% |
| TOTAL INTEREST
EXPENSE |
|
3,537 |
|
|
1,670 |
|
|
111.80 |
% |
|
10,936 |
|
|
5,897 |
|
|
85.45 |
% |
| NET INTEREST INCOME
. |
|
12,699 |
|
|
11,468 |
|
|
10.73 |
% |
|
47,810 |
|
|
44,080 |
|
|
8.46 |
% |
| PROVISION FOR LOAN
LOSSES |
|
760 |
|
|
125 |
|
|
508.00 |
% |
|
1,735 |
|
|
730 |
|
|
137.67 |
% |
| NET INTEREST INCOME
AFTER PROVISION FOR LOAN LOSSES |
|
11,939 |
|
|
11,343 |
|
|
5.25 |
% |
|
46,075 |
|
|
43,350 |
|
|
6.29 |
% |
| NON-INTEREST
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
| Service
charges |
|
672 |
|
|
585 |
|
|
14.87 |
% |
|
2,460 |
|
|
2,222 |
|
|
10.71 |
% |
| Debt securities
(losses) gains, available for sale |
|
(30 |
) |
|
113 |
|
|
(126.55 |
)% |
|
(47 |
) |
|
600 |
|
|
(107.83 |
)% |
| Equity securities
losses |
|
(126 |
) |
|
— |
|
|
n/a |
|
|
(170 |
) |
|
— |
|
|
n/a |
|
| Securities (losses)
gains, trading |
|
(9 |
) |
|
(6 |
) |
|
(50.00 |
)% |
|
3 |
|
|
(8 |
) |
|
(137.50 |
)% |
| Bank-owned life
insurance |
|
166 |
|
|
167 |
|
|
(0.60 |
)% |
|
662 |
|
|
666 |
|
|
(0.60 |
)% |
| Gain on sale of
loans |
|
465 |
|
|
358 |
|
|
29.89 |
% |
|
1,518 |
|
|
1,674 |
|
|
(9.32 |
)% |
| Insurance
commissions |
|
99 |
|
|
97 |
|
|
2.06 |
% |
|
365 |
|
|
496 |
|
|
(26.41 |
)% |
| Brokerage
commissions |
|
323 |
|
|
334 |
|
|
(3.29 |
)% |
|
1,336 |
|
|
1,378 |
|
|
(3.05 |
)% |
| Debit card income |
|
469 |
|
|
510 |
|
|
(8.04 |
)% |
|
1,534 |
|
|
1,960 |
|
|
(21.73 |
)% |
| Other |
|
400 |
|
|
431 |
|
|
(7.19 |
)% |
|
1,800 |
|
|
1,756 |
|
|
2.51 |
% |
| TOTAL NON-INTEREST
INCOME |
|
2,429 |
|
|
2,589 |
|
|
(6.18 |
)% |
|
9,461 |
|
|
10,744 |
|
|
(11.94 |
)% |
| NON-INTEREST
EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
5,696 |
|
|
4,883 |
|
|
16.65 |
% |
|
21,083 |
|
|
18,999 |
|
|
10.97 |
% |
| Occupancy |
|
622 |
|
|
592 |
|
|
5.07 |
% |
|
2,702 |
|
|
2,447 |
|
|
10.42 |
% |
| Furniture and
equipment |
|
764 |
|
|
786 |
|
|
(2.80 |
)% |
|
3,092 |
|
|
2,915 |
|
|
6.07 |
% |
| Software
Amortization |
|
208 |
|
|
224 |
|
|
(7.14 |
)% |
|
712 |
|
|
974 |
|
|
(26.90 |
)% |
| Pennsylvania shares
tax |
|
275 |
|
|
229 |
|
|
20.09 |
% |
|
1,108 |
|
|
925 |
|
|
19.78 |
% |
| Professional Fees |
|
432 |
|
|
537 |
|
|
(19.55 |
)% |
|
2,106 |
|
|
2,353 |
|
|
(10.50 |
)% |
| Federal Deposit
Insurance Corporation deposit insurance |
|
251 |
|
|
155 |
|
|
61.94 |
% |
|
890 |
|
|
669 |
|
|
33.03 |
% |
| Marketing |
|
3 |
|
|
268 |
|
|
(98.88 |
)% |
|
767 |
|
|
958 |
|
|
(19.94 |
)% |
| Intangible
amortization |
|
71 |
|
|
81 |
|
|
(12.35 |
)% |
|
300 |
|
|
337 |
|
|
(10.98 |
)% |
| Other |
|
1,210 |
|
|
1,493 |
|
|
(18.96 |
)% |
|
5,247 |
|
|
6,285 |
|
|
(16.52 |
)% |
| TOTAL NON-INTEREST
EXPENSE |
|
9,532 |
|
|
9,248 |
|
|
3.07 |
% |
|
38,007 |
|
|
36,862 |
|
|
3.11 |
% |
| INCOME BEFORE INCOME
TAX PROVISION |
|
4,836 |
|
|
4,684 |
|
|
3.25 |
% |
|
17,529 |
|
|
17,232 |
|
|
1.72 |
% |
| INCOME TAX
PROVISION |
|
640 |
|
|
3,968 |
|
|
(83.87 |
)% |
|
2,819 |
|
|
7,459 |
|
|
(62.21 |
)% |
| NET INCOME |
|
$ |
4,196 |
|
|
$ |
716 |
|
|
486.03 |
% |
|
$ |
14,710 |
|
|
$ |
9,773 |
|
|
50.52 |
% |
| Earnings attributable
to noncontrolling interest |
|
7 |
|
|
— |
|
|
— |
% |
|
6 |
|
|
— |
|
|
— |
% |
| NET INCOME AVAILABLE TO
COMMON SHAREHOLDERS' |
|
$ |
4,189 |
|
|
$ |
716 |
|
|
485.06 |
% |
|
$ |
14,704 |
|
|
$ |
9,773 |
|
|
50.46 |
% |
| EARNINGS PER SHARE -
BASIC |
|
$ |
0.89 |
|
|
$ |
0.16 |
|
|
456.25 |
% |
|
$ |
3.14 |
|
|
$ |
2.08 |
|
|
50.96 |
% |
| EARNINGS PER SHARE -
DILUTED |
|
$ |
0.89 |
|
|
$ |
0.15 |
|
|
493.33 |
% |
|
$ |
3.14 |
|
|
$ |
2.08 |
|
|
50.96 |
% |
| WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC |
|
4,691,125 |
|
|
4,688,744 |
|
|
0.05 |
% |
|
4,690,254 |
|
|
4,705,602 |
|
|
(0.33 |
)% |
| WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED |
|
4,691,125 |
|
|
4,782,244 |
|
|
(1.91 |
)% |
|
4,690,254 |
|
|
4,705,602 |
|
|
(0.33 |
)% |
| DIVIDENDS DECLARED PER
SHARE |
|
$ |
0.47 |
|
|
$ |
0.47 |
|
|
— |
% |
|
$ |
1.88 |
|
|
$ |
1.88 |
|
|
— |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
| |
|
Three Months Ended |
| |
|
December 31, 2018 |
|
December 31, 2017 |
|
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
| ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| Tax-exempt
loans |
|
$ |
73,726 |
|
|
$ |
553 |
|
|
2.98 |
% |
|
$ |
62,012 |
|
|
$ |
609 |
|
|
3.90 |
% |
| All other loans |
|
1,310,303 |
|
|
14,391 |
|
|
4.36 |
% |
|
1,151,374 |
|
|
11,789 |
|
|
4.06 |
% |
| Total loans |
|
1,384,029 |
|
|
14,944 |
|
|
4.28 |
% |
|
1,213,386 |
|
|
12,398 |
|
|
4.05 |
% |
| Taxable securities |
|
121,598 |
|
|
1,207 |
|
|
3.97 |
% |
|
80,109 |
|
|
650 |
|
|
3.25 |
% |
| Tax-exempt
securities |
|
28,382 |
|
|
231 |
|
|
3.26 |
% |
|
47,788 |
|
|
421 |
|
|
3.52 |
% |
| Total securities |
|
149,980 |
|
|
1,438 |
|
|
3.84 |
% |
|
127,897 |
|
|
1,071 |
|
|
3.35 |
% |
| Interest-bearing
deposits |
|
3,399 |
|
|
19 |
|
|
2.22 |
% |
|
6,318 |
|
|
19 |
|
|
1.19 |
% |
| Total interest-earning
assets |
|
1,537,408 |
|
|
16,401 |
|
|
4.24 |
% |
|
1,347,601 |
|
|
13,488 |
|
|
3.97 |
% |
| Other assets |
|
97,798 |
|
|
|
|
|
|
101,907 |
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
1,635,206 |
|
|
|
|
|
|
$ |
1,449,508 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
| Savings |
|
$ |
164,891 |
|
|
26 |
|
|
0.06 |
% |
|
$ |
159,204 |
|
|
17 |
|
|
0.04 |
% |
| Super Now deposits |
|
216,170 |
|
|
320 |
|
|
0.59 |
% |
|
206,005 |
|
|
151 |
|
|
0.29 |
% |
| Money market
deposits |
|
239,919 |
|
|
400 |
|
|
0.66 |
% |
|
263,003 |
|
|
236 |
|
|
0.36 |
% |
| Time deposits |
|
283,663 |
|
|
1,253 |
|
|
1.75 |
% |
|
220,331 |
|
|
711 |
|
|
1.28 |
% |
| Total interest-bearing
deposits |
|
904,643 |
|
|
1,999 |
|
|
0.88 |
% |
|
848,543 |
|
|
1,115 |
|
|
0.52 |
% |
| Short-term
borrowings |
|
121,327 |
|
|
753 |
|
|
2.43 |
% |
|
62,394 |
|
|
195 |
|
|
1.23 |
% |
| Long-term
borrowings |
|
138,942 |
|
|
785 |
|
|
2.21 |
% |
|
75,373 |
|
|
360 |
|
|
1.87 |
% |
| Total borrowings |
|
260,269 |
|
|
1,538 |
|
|
2.31 |
% |
|
137,767 |
|
|
555 |
|
|
1.58 |
% |
| Total interest-bearing
liabilities |
|
1,164,912 |
|
|
3,537 |
|
|
1.20 |
% |
|
986,310 |
|
|
1,670 |
|
|
0.67 |
% |
| Demand deposits |
|
312,511 |
|
|
|
|
|
|
305,867 |
|
|
|
|
|
| Other liabilities |
|
15,448 |
|
|
|
|
|
|
14,258 |
|
|
|
|
|
| Shareholders’
equity |
|
142,335 |
|
|
|
|
|
|
143,073 |
|
|
|
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY . |
|
$ |
1,635,206 |
|
|
|
|
|
|
$ |
1,449,508 |
|
|
|
|
|
| Interest rate
spread |
|
|
|
|
|
3.04 |
% |
|
|
|
|
|
3.30 |
% |
| Net interest
income/margin |
|
|
|
$ |
12,864 |
|
|
3.33 |
% |
|
|
|
$ |
11,818 |
|
|
3.48 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
| |
|
2018 |
|
2017 |
| Total interest
income |
|
$ |
16,236 |
|
|
$ |
13,138 |
|
| Total interest
expense |
|
3,537 |
|
|
1,670 |
|
| Net interest
income |
|
12,699 |
|
|
11,468 |
|
| Tax equivalent
adjustment |
|
165 |
|
|
350 |
|
| Net interest income
(fully taxable equivalent) |
|
$ |
12,864 |
|
|
$ |
11,818 |
|
| |
|
|
|
|
|
|
|
|
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
| |
|
Twelve Months Ended |
| |
|
December 31, 2018 |
|
December 31, 2017 |
|
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
| ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
| Tax-exempt loans |
|
$ |
74,923 |
|
|
$ |
2,242 |
|
|
2.99 |
% |
|
$ |
49,982 |
|
|
$ |
1,924 |
|
|
3.85 |
% |
| All other loans |
|
1,250,521 |
|
|
52,229 |
|
|
4.18 |
% |
|
1,099,465 |
|
|
44,563 |
|
|
4.05 |
% |
| Total loans |
|
1,325,444 |
|
|
54,471 |
|
|
4.11 |
% |
|
1,149,447 |
|
|
46,487 |
|
|
4.04 |
% |
| Taxable securities |
|
100,915 |
|
|
3,828 |
|
|
3.79 |
% |
|
84,079 |
|
|
2,689 |
|
|
3.20 |
% |
| Tax-exempt
securities |
|
36,279 |
|
|
1,089 |
|
|
3.00 |
% |
|
50,169 |
|
|
1,845 |
|
|
3.68 |
% |
| Total securities |
|
137,194 |
|
|
4,917 |
|
|
3.58 |
% |
|
134,248 |
|
|
4,534 |
|
|
3.38 |
% |
| Interest-bearing
deposits |
|
3,005 |
|
|
58 |
|
|
1.93 |
% |
|
22,461 |
|
|
237 |
|
|
1.06 |
% |
| Total interest-earning
assets |
|
1,465,643 |
|
|
59,446 |
|
|
4.06 |
% |
|
1,306,156 |
|
|
51,258 |
|
|
3.92 |
% |
| Other assets |
|
97,577 |
|
|
|
|
|
|
100,481 |
|
|
|
|
|
| TOTAL ASSETS |
|
$ |
1,563,220 |
|
|
|
|
|
|
$ |
1,406,637 |
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| LIABILITIES AND
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
| Savings |
|
$ |
164,844 |
|
|
75 |
|
|
0.05 |
% |
|
$ |
157,851 |
|
|
62 |
|
|
0.04 |
% |
| Super Now deposits |
|
225,885 |
|
|
1,033 |
|
|
0.46 |
% |
|
200,436 |
|
|
528 |
|
|
0.26 |
% |
| Money market
deposits |
|
240,541 |
|
|
1,214 |
|
|
0.50 |
% |
|
274,546 |
|
|
949 |
|
|
0.35 |
% |
| Time deposits |
|
259,286 |
|
|
4,048 |
|
|
1.56 |
% |
|
210,608 |
|
|
2,544 |
|
|
1.21 |
% |
| Total interest-bearing
deposits |
|
890,556 |
|
|
6,370 |
|
|
0.72 |
% |
|
843,441 |
|
|
4,083 |
|
|
0.48 |
% |
| Short-term
borrowings |
|
85,086 |
|
|
1,757 |
|
|
2.04 |
% |
|
25,984 |
|
|
234 |
|
|
0.89 |
% |
| Long-term
borrowings |
|
128,127 |
|
|
2,809 |
|
|
2.16 |
% |
|
78,745 |
|
|
1,580 |
|
|
1.98 |
% |
| Total borrowings |
|
213,213 |
|
|
4,566 |
|
|
2.11 |
% |
|
104,729 |
|
|
1,814 |
|
|
1.71 |
% |
| Total interest-bearing
liabilities |
|
1,103,769 |
|
|
10,936 |
|
|
0.99 |
% |
|
948,170 |
|
|
5,897 |
|
|
0.62 |
% |
| Demand deposits |
|
303,606 |
|
|
|
|
|
|
302,651 |
|
|
|
|
|
| Other liabilities |
|
18,742 |
|
|
|
|
|
|
14,398 |
|
|
|
|
|
| Shareholders’
equity |
|
137,103 |
|
|
|
|
|
|
141,418 |
|
|
|
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,563,220 |
|
|
|
|
|
|
$ |
1,406,637 |
|
|
|
|
|
| Interest rate
spread |
|
|
|
|
|
3.07 |
% |
|
|
|
|
|
3.30 |
% |
| Net interest
income/margin |
|
|
|
$ |
48,510 |
|
|
3.31 |
% |
|
|
|
$ |
45,361 |
|
|
3.47 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Twelve Months Ended December 31, |
| |
|
2018 |
|
2017 |
| Total interest
income |
|
$ |
58,746 |
|
|
$ |
49,977 |
|
| Total interest
expense |
|
10,936 |
|
|
5,897 |
|
| Net interest
income |
|
47,810 |
|
|
44,080 |
|
| Tax equivalent
adjustment |
|
700 |
|
|
1,281 |
|
| Net interest income
(fully taxable equivalent) |
|
$ |
48,510 |
|
|
$ |
45,361 |
|
| |
|
|
|
|
|
|
|
|
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
| |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Operating
Data |
|
|
|
|
|
|
|
|
|
|
| Net income |
|
$ |
4,189 |
|
|
$ |
3,826 |
|
|
$ |
3,480 |
|
|
$ |
3,208 |
|
|
$ |
716 |
|
| Net
interest income |
|
12,699 |
|
|
12,255 |
|
|
11,703 |
|
|
11,153 |
|
|
11,468 |
|
| Provision
for loan losses |
|
760 |
|
|
480 |
|
|
335 |
|
|
160 |
|
|
125 |
|
| Net
security (losses) gains |
|
(165 |
) |
|
(24 |
) |
|
15 |
|
|
(40 |
) |
|
107 |
|
|
Non-interest income, ex. net security (losses) gains |
|
2,594 |
|
|
2,613 |
|
|
2,347 |
|
|
2,368 |
|
|
2,482 |
|
|
Non-interest expense |
|
9,532 |
|
|
9,681 |
|
|
9,517 |
|
|
9,524 |
|
|
9,248 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Performance
Statistics |
|
|
|
|
|
|
|
|
|
|
| Net
interest margin |
|
3.33 |
% |
|
3.30 |
% |
|
3.32 |
% |
|
3.31 |
% |
|
3.48 |
% |
|
Annualized return on average assets |
|
1.02 |
% |
|
0.96 |
% |
|
0.91 |
% |
|
0.86 |
% |
|
0.20 |
% |
|
Annualized return on average equity |
|
11.77 |
% |
|
10.94 |
% |
|
10.07 |
% |
|
9.18 |
% |
|
2.00 |
% |
|
Annualized net loan charge-offs to average loans |
|
0.08 |
% |
|
0.05 |
% |
|
0.04 |
% |
|
0.06 |
% |
|
0.07 |
% |
| Net
charge-offs |
|
266 |
|
|
171 |
|
|
137 |
|
|
182 |
|
|
200 |
|
|
Efficiency ratio |
|
61.9 |
% |
|
64.6 |
% |
|
67.2 |
% |
|
69.8 |
% |
|
65.7 |
% |
| |
|
|
|
|
|
|
|
|
|
|
| Per Share
Data |
|
|
|
|
|
|
|
|
|
|
| Basic
earnings per share |
|
$ |
0.89 |
|
|
$ |
0.82 |
|
|
$ |
0.74 |
|
|
$ |
0.68 |
|
|
$ |
0.16 |
|
| Diluted
earnings per share |
|
0.89 |
|
|
0.82 |
|
|
0.74 |
|
|
0.68 |
|
|
0.15 |
|
| Dividend
declared per share |
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
|
0.47 |
|
| Book
value |
|
30.59 |
|
|
29.96 |
|
|
29.66 |
|
|
29.45 |
|
|
29.47 |
|
| Common
stock price: |
|
|
|
|
|
|
|
|
|
|
| High |
|
44.18 |
|
|
46.27 |
|
|
46.92 |
|
|
45.56 |
|
|
49.79 |
|
| Low |
|
38.66 |
|
|
43.22 |
|
|
41.29 |
|
|
39.61 |
|
|
45.65 |
|
|
Close |
|
40.24 |
|
|
43.45 |
|
|
44.78 |
|
|
42.31 |
|
|
46.58 |
|
| Weighted
average common shares: |
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
4,691 |
|
|
4,691 |
|
|
4,690 |
|
|
4,689 |
|
|
4,689 |
|
| Fully
Diluted |
|
4,691 |
|
|
4,691 |
|
|
4,703 |
|
|
4,689 |
|
|
4,782 |
|
|
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
|
Issued |
|
5,012 |
|
|
5,011 |
|
|
5,011 |
|
|
5,010 |
|
|
5,009 |
|
|
Treasury |
|
320 |
|
|
320 |
|
|
320 |
|
|
320 |
|
|
320 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
| |
|
12/31/2018 |
|
9/30/2018 |
|
6/30/2018 |
|
3/31/2018 |
|
12/31/2017 |
| Financial
Condition Data: |
|
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
| Total assets |
|
$ |
1,684,771 |
|
|
$ |
1,670,348 |
|
|
$ |
1,603,273 |
|
|
$ |
1,526,745 |
|
|
$ |
1,474,492 |
|
| Loans,
net |
|
1,370,920 |
|
|
1,355,762 |
|
|
1,318,039 |
|
|
1,267,912 |
|
|
1,233,756 |
|
|
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
Intangibles |
|
1,162 |
|
|
1,233 |
|
|
1,304 |
|
|
1,382 |
|
|
1,462 |
|
| Total
deposits |
|
1,219,903 |
|
|
1,210,477 |
|
|
1,191,019 |
|
|
1,192,454 |
|
|
1,146,320 |
|
|
Noninterest-bearing |
|
320,814 |
|
|
313,111 |
|
|
311,194 |
|
|
304,261 |
|
|
303,316 |
|
|
Savings |
|
166,063 |
|
|
164,449 |
|
|
166,183 |
|
|
166,243 |
|
|
160,698 |
|
|
NOW |
|
207,819 |
|
|
223,963 |
|
|
216,109 |
|
|
240,259 |
|
|
215,021 |
|
| Money
Market |
|
238,596 |
|
|
238,131 |
|
|
245,081 |
|
|
235,381 |
|
|
237,818 |
|
| Time
Deposits |
|
286,611 |
|
|
270,823 |
|
|
252,452 |
|
|
246,310 |
|
|
229,467 |
|
| Total
interest-bearing deposits |
|
899,089 |
|
|
897,366 |
|
|
879,825 |
|
|
888,193 |
|
|
843,004 |
|
| Core
deposits* |
|
933,292 |
|
|
939,654 |
|
|
938,567 |
|
|
946,144 |
|
|
916,853 |
|
|
Shareholders’ equity |
|
143,536 |
|
|
140,538 |
|
|
139,134 |
|
|
138,192 |
|
|
138,192 |
|
| |
|
|
|
|
|
|
|
|
|
|
| Asset
Quality |
|
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
|
$ |
16,572 |
|
|
$ |
8,739 |
|
|
$ |
7,132 |
|
|
$ |
7,641 |
|
|
$ |
7,268 |
|
|
Non-performing loans to total assets |
|
0.98 |
% |
|
0.52 |
% |
|
0.44 |
% |
|
0.50 |
% |
|
0.49 |
% |
| Allowance
for loan losses |
|
13,837 |
|
|
13,343 |
|
|
13,034 |
|
|
12,836 |
|
|
12,858 |
|
| Allowance
for loan losses to total loans |
|
1.00 |
% |
|
0.97 |
% |
|
0.98 |
% |
|
1.00 |
% |
|
1.03 |
% |
| Allowance
for loan losses to non-performing loans |
|
83.50 |
% |
|
152.68 |
% |
|
182.75 |
% |
|
167.99 |
% |
|
176.91 |
% |
|
Non-performing loans to total loans |
|
1.20 |
% |
|
0.64 |
% |
|
0.54 |
% |
|
0.60 |
% |
|
0.58 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity to total assets |
|
8.52 |
% |
|
8.41 |
% |
|
8.68 |
% |
|
9.05 |
% |
|
9.37 |
% |
| |
| * Core
deposits are defined as total deposits less time deposits |
|
|
|
|
Reconciliation of GAAP and Non-GAAP
Financial Measures
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
|
(Dollars in Thousands, Except Per Share Data) |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| GAAP net income |
|
$ |
4,189 |
|
|
$ |
716 |
|
|
$ |
14,704 |
|
|
$ |
9,773 |
|
| Less: net securities
(losses) gains, net of tax |
|
(130 |
) |
|
71 |
|
|
(169 |
) |
|
391 |
|
| Add: Effect of deferred
tax asset revaluation |
|
— |
|
|
2,734 |
|
|
— |
|
|
2,734 |
|
| Non-GAAP operating
earnings |
|
$ |
4,319 |
|
|
$ |
3,379 |
|
|
$ |
14,873 |
|
|
$ |
12,116 |
|
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Return on average
assets (ROA) |
|
1.02 |
% |
|
0.20 |
% |
|
0.94 |
% |
|
0.69 |
% |
| Less: net securities
(losses) gains, net of tax |
|
(0.03 |
)% |
|
0.02 |
% |
|
(0.01 |
)% |
|
0.02 |
% |
| Add: Effect of deferred
tax asset revaluation |
|
— |
% |
|
0.75 |
% |
|
— |
% |
|
0.19 |
% |
| Non-GAAP operating
ROA |
|
1.05 |
% |
|
0.93 |
% |
|
0.95 |
% |
|
0.86 |
% |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Return on average
equity (ROE) |
|
11.77 |
% |
|
2.00 |
% |
|
10.72 |
% |
|
6.91 |
% |
| Less: net securities
(losses) gains, net of tax |
|
(0.35 |
)% |
|
0.20 |
% |
|
(0.12 |
)% |
|
0.27 |
% |
| Add: Effect of deferred
tax asset revaluation |
|
— |
% |
|
7.65 |
% |
|
— |
% |
|
1.93 |
% |
| Non-GAAP operating
ROE |
|
12.12 |
% |
|
9.45 |
% |
|
10.84 |
% |
|
8.57 |
% |
| |
|
|
|
|
|
|
|
|
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Basic earnings per
share (EPS) |
|
$ |
0.89 |
|
|
$ |
0.16 |
|
|
$ |
3.14 |
|
|
$ |
2.08 |
|
| Less: net securities
(losses) gains, net of tax |
|
(0.03 |
) |
|
0.02 |
|
|
(0.03 |
) |
|
0.09 |
|
| Add: Effect of deferred
tax asset revaluation |
|
— |
|
|
0.58 |
|
|
— |
|
|
0.58 |
|
| Non-GAAP basic
operating EPS |
|
$ |
0.92 |
|
|
$ |
0.72 |
|
|
$ |
3.17 |
|
|
$ |
2.57 |
|
| |
|
|
|
|
| |
|
Three Months Ended December 31, |
|
Twelve Months Ended December 31, |
| |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
| Diluted EPS |
|
$ |
0.89 |
|
|
$ |
0.15 |
|
|
$ |
3.14 |
|
|
$ |
2.08 |
|
| Less: net securities
(losses) gains, net of tax |
|
(0.03 |
) |
|
0.02 |
|
|
(0.03 |
) |
|
0.09 |
|
| Add: Effect of deferred
tax asset revaluation |
|
— |
|
|
0.58 |
|
|
— |
|
|
0.58 |
|
| Non-GAAP diluted
operating EPS |
|
$ |
0.92 |
|
|
$ |
0.71 |
|
|
$ |
3.17 |
|
|
$ |
2.57 |
|
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