Penns Woods Bancorp, Inc. (NASDAQ: PWOD)
Penns Woods Bancorp, Inc., supported by
deposit growth, achieved net income of $12.8 million for the nine
months ended September 30, 2019, resulting in basic and diluted
earnings per share of $1.82.
Highlights
- Net income, as reported under GAAP, for the three and nine
months ended September 30, 2019 was $4.7 million and $12.8
million, compared to $3.8 million and $10.5 million for the same
periods of 2018. Results for the three and nine months ended
September 30, 2019 compared to 2018 were impacted by an
increase in after-tax securities gains of $153,000 (from a loss of
$19,000 to a gain of $134,000) for the three month periods and
$244,000 (from a loss of $39,000 to a gain of $205,000) for the
nine month periods.
- Basic and diluted earnings per share for the three and nine
months ended September 30, 2019 were $0.66 and $1.82, respectively,
an increase in basic and diluted earnings per share of $0.12 and
$0.33 as compared to the three and nine months ended September 30,
2018.
- Return on average assets was 1.10% for the three months ended
September 30, 2019, compared to 0.96% for the corresponding period
of 2018. Return on average assets was 1.02% for the nine months
ended September 30, 2019, compared to 0.91% for the corresponding
period of 2018.
- Return on average equity was 12.18% for the three months ended
September 30, 2019, compared to 10.94% for the corresponding period
of 2018. Return on average equity was 11.69% for the nine months
ended September 30, 2019, compared to 10.19% for the corresponding
period of 2018.
Net Income
Net income from core operations (“core
earnings”), which is a non-generally accepted accounting principles
(GAAP) measure of net income excluding net securities gains or
losses, was $4.5 million for the three months ended
September 30, 2019 compared to $3.8 million for the same
period of 2018. Core earnings increased to $12.6 million for the
nine months ended September 30, 2019, compared to $10.6 million for
the same period of 2018. Core earnings per share for the three
months ended September 30, 2019 was $0.64 basic and diluted,
an increase from $0.54 basic and diluted core earnings per share
for the same period of 2018. Core earnings per share for the nine
months ended September 30, 2019 was $1.80 basic and diluted,
compared to $1.50 basic and diluted for the same period of 2018.
Core return on average assets and core return on average equity
were 1.07% and 11.82% for the three months ended September 30,
2019, compared to 0.96% and 10.99% for the corresponding period of
2018. Core return on average assets and core return on
average equity were 1.01% and 11.49% for the nine months ended
September 30, 2019 compared to 0.91% and 10.23% for the
corresponding period of 2018. A reconciliation of the non-GAAP
financial measures of core earnings, core return on assets, core
return on equity, and core earnings per share described in this
press release to the comparable GAAP financial measures is included
at the end of this press release.
Net Interest Margin
The net interest margin for the three and nine
months ended September 30, 2019 was 3.32% and 3.34%, compared to
3.30% and 3.31% for the corresponding periods of 2018. The increase
in the net interest margin was driven by an increase in the yield
on earning assets of 29 and 37 basis points ("bps") for the three
and nine month periods. The impact of the increase in yield on
earning assets was limited by the increase in rate paid on
interest-bearing liabilities of 36 bps and 41 bps for the three and
nine 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 $31.3 million and
$79.3 million, respectively. The loan growth for the three and nine
month periods was primarily funded by an increase in average total
interest-bearing deposits of $112.9 million and $98.2 million,
respectively.
Assets
Total assets increased $2.7 million to $1.7
billion at September 30, 2019 compared to September 30,
2018. Net loans decreased $5.0 million to $1.4 billion at
September 30, 2019 compared to September 30, 2018, as the
municipal loan portfolio decreased and the indirect auto lending
portfolio remained constant. The investment portfolio increased
$15.8 million from September 30, 2018 to September 30,
2019 due to increases in the taxable municipal portfolio.
Non-performing Loans
The ratio of non-performing loans to total loans
ratio increased to 1.26% at September 30, 2019 from 0.64% at
September 30, 2018 as non-performing loans have increased to
$17.2 million at September 30, 2019 from $8.7 million at
September 30, 2018 primarily due to a commercial loan
relationship that became non-performing during the fourth quarter
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 $112,000 and $623,000 for the three and nine
months ended September 30, 2019 minimally impacted the allowance
for loan losses, which was 1.04% of total loans at
September 30, 2019. The majority of the loans charged-off had
a specific allowance within the allowance for loan losses.
Deposits
Deposits increased $121.9 million to $1.3
billion at September 30, 2019 compared to September 30,
2018. Noninterest-bearing deposits increased $14.2 million to
$327.3 million at September 30, 2019 compared to
September 30, 2018. Driving deposit growth is our
commitment to easy-to-use products, community involvement, and
emphasis on customer service. Deposit gathering efforts have
centered on core deposits as building customer relationships
remains the focus. The time deposit portfolio has increased
as time deposits have been used as a customer attraction
tool. The increase in deposits has resulted in a significant
reduction in the use of short-term borrowings.
Shareholders’ Equity
Shareholders’ equity increased $14.5 million to
$155.1 million at September 30, 2019 compared to
September 30, 2018. The change in accumulated other
comprehensive loss from $7.5 million at September 30, 2018 to
$1.9 million at September 30, 2019 is a result of an increase
in unrealized gains on available for sale securities (from an
unrealized loss of $2.7 million at September 30, 2018 to an
unrealized gain of $3.3 million at September 30, 2019). The
amount of accumulated other comprehensive loss at
September 30, 2019 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 $345,000. The current level of
shareholders’ equity equates to a book value per share of $22.03 at
September 30, 2019 compared to $19.97 at September 30,
2018, and an equity to asset ratio of 9.27% at September 30,
2019 compared to 8.41% at September 30, 2018. Dividends
declared for the nine months ended September 30, 2019 and 2018 were
$0.94 per share.
On September 30, 2019, the Company completed a
three-for-two stock split (the “Stock Split”) of the Company’s
common stock. As a result of the Stock Split, effective at
11:59 p.m. on September 30, 2019, each share of the Company’s
common stock issued at that time was changed into one and one-half
shares of the Company’s common stock with a stated par value of
$5.55 per share. All share and per share amounts in this
release, including in the accompanying financial statements and
information, have been restated for all periods presented to give
retroactive effect to the Stock Split.
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. 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, 2018.
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)
|
|
September
30, |
(In Thousands, Except Share Data) |
|
2019 |
|
2018 |
|
% Change |
ASSETS: |
|
|
|
|
|
|
Noninterest-bearing balances |
|
$ |
25,990 |
|
|
$ |
33,675 |
|
|
(22.82 |
)% |
Interest-bearing balances in
other financial institutions |
|
31,351 |
|
|
38,672 |
|
|
(18.93 |
)% |
Total cash and cash equivalents |
|
57,341 |
|
|
72,347 |
|
|
(20.74 |
)% |
|
|
|
|
|
|
|
|
Investment debt securities,
available for sale, at fair value |
|
149,075 |
|
|
128,905 |
|
|
15.65 |
% |
Investment equity securities,
at fair value |
|
1,820 |
|
|
1,902 |
|
|
(4.31 |
)% |
Investment securities,
trading |
|
47 |
|
|
45 |
|
|
4.44 |
% |
Restricted investment in bank
stock, at fair value |
|
13,502 |
|
|
17,834 |
|
|
(24.29 |
)% |
Loans held for sale |
|
1,868 |
|
|
3,727 |
|
|
(49.88 |
)% |
Loans |
|
1,364,984 |
|
|
1,369,105 |
|
|
(0.30 |
)% |
Allowance for loan losses |
|
(14,249 |
) |
|
(13,343 |
) |
|
6.79 |
% |
Loans, net |
|
1,350,735 |
|
|
1,355,762 |
|
|
(0.37 |
)% |
Premises and equipment,
net |
|
33,366 |
|
|
27,361 |
|
|
21.95 |
% |
Accrued interest
receivable |
|
5,267 |
|
|
5,353 |
|
|
(1.61 |
)% |
Bank-owned life insurance |
|
29,107 |
|
|
28,472 |
|
|
2.23 |
% |
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
— |
% |
Intangibles |
|
960 |
|
|
1,233 |
|
|
(22.14 |
)% |
Operating lease right of use
asset |
|
4,217 |
|
|
— |
|
|
n/a |
|
Deferred tax asset |
|
3,744 |
|
|
5,310 |
|
|
(29.49 |
)% |
Other assets |
|
4,942 |
|
|
4,993 |
|
|
(1.02 |
)% |
TOTAL ASSETS |
|
$ |
1,673,095 |
|
|
$ |
1,670,348 |
|
|
0.16 |
% |
|
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
|
Interest-bearing deposits |
|
$ |
1,005,078 |
|
|
$ |
897,366 |
|
|
12.00 |
% |
Noninterest-bearing
deposits |
|
327,329 |
|
|
313,111 |
|
|
4.54 |
% |
Total deposits |
|
1,332,407 |
|
|
1,210,477 |
|
|
10.07 |
% |
|
|
|
|
|
|
|
|
Short-term borrowings |
|
5,987 |
|
|
164,465 |
|
|
(96.36 |
)% |
Long-term borrowings |
|
162,290 |
|
|
138,970 |
|
|
16.78 |
% |
Accrued interest payable |
|
1,666 |
|
|
1,051 |
|
|
58.52 |
% |
Operating lease liability |
|
4,228 |
|
|
— |
|
|
n/a |
|
Other liabilities |
|
11,437 |
|
|
14,846 |
|
|
(22.96 |
)% |
TOTAL LIABILITIES |
|
1,518,015 |
|
|
1,529,809 |
|
|
(0.77 |
)% |
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY: |
|
|
|
|
|
|
|
Preferred stock, no par value,
3,000,000 shares authorized; no shares issued |
|
— |
|
|
— |
|
|
n/a |
|
Common stock, par value $5.55,
22,500,000 shares authorized; 7,517,796 and 7,516,594 shares
issued; 7,037,571 and 7,036,369 shares outstanding |
|
41,777 |
|
|
41,757 |
|
|
0.05 |
% |
Additional paid-in
capital |
|
51,290 |
|
|
50,577 |
|
|
1.41 |
% |
Retained earnings |
|
76,009 |
|
|
67,802 |
|
|
12.10 |
% |
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
|
Net unrealized gain (loss) on available for sale securities |
|
3,266 |
|
|
(2,663 |
) |
|
222.64 |
% |
Defined benefit plan |
|
(5,165 |
) |
|
(4,820 |
) |
|
(7.16 |
)% |
Treasury stock at cost,
480,225 |
|
(12,115 |
) |
|
(12,115 |
) |
|
— |
% |
TOTAL PENNS WOODS BANCORP,
INC. SHAREHOLDERS' EQUITY |
|
155,062 |
|
|
140,538 |
|
|
10.33 |
% |
Non-controlling interest |
|
18 |
|
|
1 |
|
|
1,700.00 |
% |
TOTAL SHAREHOLDERS'
EQUITY |
|
155,080 |
|
|
140,539 |
|
|
10.35 |
% |
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,673,095 |
|
|
$ |
1,670,348 |
|
|
0.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
PENNS WOODS BANCORP,
INC.CONSOLIDATED STATEMENT OF
INCOME(UNAUDITED)
|
|
Three Months
Ended September 30, |
|
Nine Months Ended September 30, |
(In Thousands, Except Per Share Data) |
|
2019 |
|
2018 |
|
% Change |
|
2019 |
|
2018 |
|
% Change |
INTEREST AND DIVIDEND
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans including fees |
|
$ |
15,426 |
|
|
$ |
13,982 |
|
|
10.33 |
% |
|
$ |
45,595 |
|
|
$ |
39,172 |
|
|
16.40 |
% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
998 |
|
|
713 |
|
|
39.97 |
% |
|
2,899 |
|
|
1,898 |
|
|
52.74 |
% |
Tax-exempt |
|
167 |
|
|
207 |
|
|
(19.32 |
)% |
|
520 |
|
|
678 |
|
|
(23.30 |
)% |
Dividend and other interest income |
|
493 |
|
|
296 |
|
|
66.55 |
% |
|
1,345 |
|
|
762 |
|
|
76.51 |
% |
TOTAL INTEREST AND DIVIDEND
INCOME |
|
17,084 |
|
|
15,198 |
|
|
12.41 |
% |
|
50,359 |
|
|
42,510 |
|
|
18.46 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
3,165 |
|
|
1,659 |
|
|
90.78 |
% |
|
8,336 |
|
|
4,371 |
|
|
90.71 |
% |
Short-term borrowings |
|
7 |
|
|
528 |
|
|
(98.67 |
)% |
|
790 |
|
|
1,004 |
|
|
(21.31 |
)% |
Long-term borrowings |
|
1,009 |
|
|
756 |
|
|
33.47 |
% |
|
2,739 |
|
|
2,024 |
|
|
35.33 |
% |
TOTAL INTEREST EXPENSE |
|
4,181 |
|
|
2,943 |
|
|
42.07 |
% |
|
11,865 |
|
|
7,399 |
|
|
60.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME |
|
12,903 |
|
|
12,255 |
|
|
5.29 |
% |
|
38,494 |
|
|
35,111 |
|
|
9.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN LOSSES |
|
360 |
|
|
480 |
|
|
(25.00 |
)% |
|
1,035 |
|
|
975 |
|
|
6.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES |
|
12,543 |
|
|
11,775 |
|
|
6.52 |
% |
|
37,459 |
|
|
34,136 |
|
|
9.73 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
622 |
|
|
645 |
|
|
(3.57 |
)% |
|
1,776 |
|
|
1,788 |
|
|
(0.67 |
)% |
Debt securities gains
(losses), available for sale |
|
189 |
|
|
(22 |
) |
|
959.09 |
% |
|
200 |
|
|
(17 |
) |
|
1,276.47 |
% |
Equity securities (losses)
gains |
|
(21 |
) |
|
(16 |
) |
|
(31.25 |
)% |
|
44 |
|
|
(44 |
) |
|
200.00 |
% |
Securities gains, trading |
|
2 |
|
|
14 |
|
|
(85.71 |
)% |
|
15 |
|
|
12 |
|
|
25.00 |
% |
Bank-owned life insurance |
|
143 |
|
|
165 |
|
|
(13.33 |
)% |
|
434 |
|
|
496 |
|
|
(12.50 |
)% |
Gain on sale of loans |
|
583 |
|
|
398 |
|
|
46.48 |
% |
|
1,246 |
|
|
1,053 |
|
|
18.33 |
% |
Insurance commissions |
|
93 |
|
|
85 |
|
|
9.41 |
% |
|
346 |
|
|
266 |
|
|
30.08 |
% |
Brokerage commissions |
|
353 |
|
|
340 |
|
|
3.82 |
% |
|
1,032 |
|
|
1,013 |
|
|
1.88 |
% |
Debit card income |
|
333 |
|
|
359 |
|
|
(7.24 |
)% |
|
1,032 |
|
|
1,065 |
|
|
(3.10 |
)% |
Other |
|
525 |
|
|
621 |
|
|
(15.46 |
)% |
|
1,420 |
|
|
1,400 |
|
|
1.43 |
% |
TOTAL NON-INTEREST INCOME |
|
2,822 |
|
|
2,589 |
|
|
9.00 |
% |
|
7,545 |
|
|
7,032 |
|
|
7.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
5,488 |
|
|
5,420 |
|
|
1.25 |
% |
|
16,512 |
|
|
15,387 |
|
|
7.31 |
% |
Occupancy |
|
638 |
|
|
640 |
|
|
(0.31 |
)% |
|
2,085 |
|
|
2,080 |
|
|
0.24 |
% |
Furniture and equipment |
|
885 |
|
|
780 |
|
|
13.46 |
% |
|
2,421 |
|
|
2,328 |
|
|
3.99 |
% |
Software amortization |
|
234 |
|
|
208 |
|
|
12.50 |
% |
|
629 |
|
|
504 |
|
|
24.80 |
% |
Pennsylvania shares tax |
|
285 |
|
|
278 |
|
|
2.52 |
% |
|
863 |
|
|
833 |
|
|
3.60 |
% |
Professional fees |
|
585 |
|
|
459 |
|
|
27.45 |
% |
|
1,834 |
|
|
1,674 |
|
|
9.56 |
% |
Federal Deposit Insurance
Corporation deposit insurance |
|
— |
|
|
237 |
|
|
(100.00 |
)% |
|
504 |
|
|
639 |
|
|
(21.13 |
)% |
Marketing |
|
98 |
|
|
245 |
|
|
(60.00 |
)% |
|
233 |
|
|
764 |
|
|
(69.50 |
)% |
Intangible amortization |
|
62 |
|
|
71 |
|
|
(12.68 |
)% |
|
202 |
|
|
229 |
|
|
(11.79 |
)% |
Other |
|
1,266 |
|
|
1,343 |
|
|
(5.73 |
)% |
|
4,131 |
|
|
4,037 |
|
|
2.33 |
% |
TOTAL NON-INTEREST
EXPENSE |
|
9,541 |
|
|
9,681 |
|
|
(1.45 |
)% |
|
29,414 |
|
|
28,475 |
|
|
3.30 |
% |
INCOME BEFORE INCOME TAX
PROVISION |
|
5,824 |
|
|
4,683 |
|
|
24.36 |
% |
|
15,590 |
|
|
12,693 |
|
|
22.82 |
% |
INCOME TAX PROVISION |
|
1,170 |
|
|
857 |
|
|
36.52 |
% |
|
2,741 |
|
|
2,179 |
|
|
25.79 |
% |
NET INCOME |
|
$ |
4,654 |
|
|
$ |
3,826 |
|
|
21.64 |
% |
|
$ |
12,849 |
|
|
$ |
10,514 |
|
|
22.21 |
% |
Earnings attributable to
noncontrolling interest |
|
4 |
|
|
— |
|
|
n/a |
|
|
10 |
|
|
(1 |
) |
|
(1,100.00 |
)% |
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS' |
|
$ |
4,650 |
|
|
$ |
3,826 |
|
|
21.54 |
% |
|
$ |
12,839 |
|
|
$ |
10,515 |
|
|
22.10 |
% |
EARNINGS PER SHARE -
BASIC |
|
$ |
0.66 |
|
|
$ |
0.54 |
|
|
22.22 |
% |
|
$ |
1.82 |
|
|
$ |
1.49 |
|
|
22.15 |
% |
EARNINGS PER SHARE -
DILUTED |
|
$ |
0.66 |
|
|
$ |
0.54 |
|
|
22.22 |
% |
|
$ |
1.82 |
|
|
$ |
1.49 |
|
|
22.15 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC |
|
7,037,055 |
|
|
7,035,840 |
|
|
0.02 |
% |
|
7,036,181 |
|
|
7,034,940 |
|
|
0.02 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED |
|
7,037,055 |
|
|
7,035,840 |
|
|
0.02 |
% |
|
7,036,181 |
|
|
7,034,940 |
|
|
0.02 |
% |
DIVIDENDS DECLARED PER
SHARE |
|
$ |
0.31 |
|
|
$ |
0.31 |
|
|
— |
% |
|
$ |
0.94 |
|
|
$ |
0.94 |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt loans |
|
$ |
66,617 |
|
|
$ |
505 |
|
|
3.04 |
% |
|
$ |
75,182 |
|
|
$ |
559 |
|
|
2.95 |
% |
All other loans |
|
1,317,964 |
|
|
15,027 |
|
|
4.57 |
% |
|
1,278,149 |
|
|
13,541 |
|
|
4.20 |
% |
Total loans |
|
1,384,581 |
|
|
15,532 |
|
|
4.50 |
% |
|
1,353,331 |
|
|
14,100 |
|
|
4.13 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
137,394 |
|
|
1,284 |
|
|
3.79 |
% |
|
104,321 |
|
|
991 |
|
|
3.80 |
% |
Tax-exempt securities |
|
25,769 |
|
|
211 |
|
|
3.32 |
% |
|
34,444 |
|
|
262 |
|
|
3.04 |
% |
Total securities |
|
163,163 |
|
|
1,495 |
|
|
3.72 |
% |
|
138,765 |
|
|
1,253 |
|
|
3.61 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
36,853 |
|
|
207 |
|
|
2.25 |
% |
|
3,403 |
|
|
18 |
|
|
2.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,584,597 |
|
|
17,234 |
|
|
4.37 |
% |
|
1,495,499 |
|
|
15,371 |
|
|
4.08 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
101,318 |
|
|
|
|
|
|
|
99,132 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,685,915 |
|
|
|
|
|
|
|
$ |
1,594,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
169,628 |
|
|
66 |
|
|
0.16 |
% |
|
$ |
166,181 |
|
|
17 |
|
|
0.04 |
% |
Super Now deposits |
|
232,918 |
|
|
481 |
|
|
0.83 |
% |
|
225,677 |
|
|
264 |
|
|
0.46 |
% |
Money market deposits |
|
237,362 |
|
|
581 |
|
|
0.98 |
% |
|
241,977 |
|
|
314 |
|
|
0.51 |
% |
Time deposits |
|
370,229 |
|
|
2,037 |
|
|
2.21 |
% |
|
263,399 |
|
|
1,064 |
|
|
1.60 |
% |
Total interest-bearing
deposits |
|
1,010,137 |
|
|
3,165 |
|
|
1.26 |
% |
|
897,234 |
|
|
1,659 |
|
|
0.73 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
7,990 |
|
|
7 |
|
|
0.35 |
% |
|
99,867 |
|
|
528 |
|
|
2.07 |
% |
Long-term borrowings |
|
169,017 |
|
|
1,009 |
|
|
2.26 |
% |
|
134,731 |
|
|
756 |
|
|
2.19 |
% |
Total borrowings |
|
177,007 |
|
|
1,016 |
|
|
2.18 |
% |
|
234,598 |
|
|
1,284 |
|
|
2.14 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,187,144 |
|
|
4,181 |
|
|
1.39 |
% |
|
1,131,832 |
|
|
2,943 |
|
|
1.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
324,940 |
|
|
|
|
|
|
|
305,707 |
|
|
|
|
|
|
Other liabilities |
|
21,151 |
|
|
|
|
|
|
|
17,156 |
|
|
|
|
|
|
Shareholders’ equity |
|
152,680 |
|
|
|
|
|
|
|
139,936 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,685,915 |
|
|
|
|
|
|
|
$ |
1,594,631 |
|
|
|
|
|
|
Interest rate spread |
|
|
|
|
|
2.98 |
% |
|
|
|
|
|
3.05 |
% |
Net interest
income/margin |
|
|
|
$ |
13,053 |
|
|
3.32 |
% |
|
|
|
$ |
12,428 |
|
|
3.30 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
|
2019 |
|
2018 |
Total interest income |
|
$ |
17,084 |
|
|
$ |
15,198 |
|
Total interest expense |
|
4,181 |
|
|
2,943 |
|
Net interest income |
|
12,903 |
|
|
12,255 |
|
Tax equivalent adjustment |
|
150 |
|
|
173 |
|
Net interest income (fully
taxable equivalent) |
|
$ |
13,053 |
|
|
$ |
12,428 |
|
|
|
|
|
|
|
|
|
|
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Nine Months Ended |
|
|
September 30, 2019 |
|
September 30, 2018 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt loans |
|
$ |
69,973 |
|
|
$ |
1,592 |
|
|
3.04 |
% |
|
$ |
75,389 |
|
|
$ |
1,689 |
|
|
2.99 |
% |
All other loans |
|
1,315,022 |
|
|
44,337 |
|
|
4.51 |
% |
|
1,230,313 |
|
|
37,838 |
|
|
4.11 |
% |
Total loans |
|
1,384,995 |
|
|
45,929 |
|
|
4.43 |
% |
|
1,305,702 |
|
|
39,527 |
|
|
4.05 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
131,451 |
|
|
3,934 |
|
|
4.05 |
% |
|
93,944 |
|
|
2,621 |
|
|
3.72 |
% |
Tax-exempt
securities |
|
26,813 |
|
|
658 |
|
|
3.32 |
% |
|
38,940 |
|
|
858 |
|
|
2.94 |
% |
Total securities |
|
158,264 |
|
|
4,592 |
|
|
3.92 |
% |
|
132,884 |
|
|
3,479 |
|
|
3.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
18,050 |
|
|
310 |
|
|
2.30 |
% |
|
2,872 |
|
|
39 |
|
|
1.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,561,309 |
|
|
50,831 |
|
|
4.36 |
% |
|
1,441,458 |
|
|
43,045 |
|
|
3.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
109,278 |
|
|
|
|
|
|
|
97,930 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,670,587 |
|
|
|
|
|
|
|
$ |
1,539,388 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
168,909 |
|
|
147 |
|
|
0.12 |
% |
|
$ |
164,828 |
|
|
49 |
|
|
0.04 |
% |
Super Now deposits |
|
236,965 |
|
|
1,313 |
|
|
0.74 |
% |
|
229,159 |
|
|
713 |
|
|
0.42 |
% |
Money market
deposits |
|
242,630 |
|
|
1,649 |
|
|
0.91 |
% |
|
240,751 |
|
|
814 |
|
|
0.45 |
% |
Time deposits |
|
335,456 |
|
|
5,227 |
|
|
2.08 |
% |
|
251,071 |
|
|
2,795 |
|
|
1.49 |
% |
Total interest-bearing
deposits |
|
983,960 |
|
|
8,336 |
|
|
1.13 |
% |
|
885,809 |
|
|
4,371 |
|
|
0.66 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings |
|
45,046 |
|
|
790 |
|
|
2.34 |
% |
|
72,873 |
|
|
1,004 |
|
|
1.82 |
% |
Long-term
borrowings |
|
153,684 |
|
|
2,739 |
|
|
2.24 |
% |
|
124,483 |
|
|
2,024 |
|
|
2.14 |
% |
Total borrowings |
|
198,730 |
|
|
3,529 |
|
|
2.26 |
% |
|
197,356 |
|
|
3,028 |
|
|
2.02 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,182,690 |
|
|
11,865 |
|
|
1.32 |
% |
|
1,083,165 |
|
|
7,399 |
|
|
0.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
318,602 |
|
|
|
|
|
|
|
300,604 |
|
|
|
|
|
|
Other liabilities |
|
22,705 |
|
|
|
|
|
|
|
18,070 |
|
|
|
|
|
|
Shareholders’
equity |
|
146,590 |
|
|
|
|
|
|
|
137,549 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,670,587 |
|
|
|
|
|
|
|
$ |
1,539,388 |
|
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
3.04 |
% |
|
|
|
|
|
3.08 |
% |
Net interest
income/margin |
|
|
|
$ |
38,966 |
|
|
3.34 |
% |
|
|
|
$ |
35,646 |
|
|
3.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
Total interest income |
|
$ |
50,359 |
|
|
$ |
42,510 |
|
Total interest expense |
|
11,865 |
|
|
7,399 |
|
Net interest income |
|
38,494 |
|
|
35,111 |
|
Tax equivalent adjustment |
|
472 |
|
|
535 |
|
Net interest income (fully
taxable equivalent) |
|
$ |
38,966 |
|
|
$ |
35,646 |
|
|
|
|
|
|
|
|
|
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
9/30/2019 |
|
6/30/2019 |
|
3/31/2019 |
|
12/31/2018 |
|
9/30/2018 |
Operating
Data |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
4,650 |
|
|
$ |
4,245 |
|
|
$ |
3,944 |
|
|
$ |
4,189 |
|
|
$ |
3,826 |
|
Net interest income |
|
12,903 |
|
|
12,913 |
|
|
12,678 |
|
|
12,699 |
|
|
12,255 |
|
Provision for loan losses |
|
360 |
|
|
315 |
|
|
360 |
|
|
760 |
|
|
480 |
|
Net security gains (losses) |
|
170 |
|
|
23 |
|
|
66 |
|
|
(165 |
) |
|
(24 |
) |
Non-interest income, ex. net security gains (losses) |
|
2,652 |
|
|
2,446 |
|
|
2,188 |
|
|
2,594 |
|
|
2,613 |
|
Non-interest expense |
|
9,541 |
|
|
10,059 |
|
|
9,814 |
|
|
9,532 |
|
|
9,681 |
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Statistics |
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
3.32 |
% |
|
3.39 |
% |
|
3.37 |
% |
|
3.33 |
% |
|
3.30 |
% |
Annualized return on average assets |
|
1.10 |
% |
|
1.02 |
% |
|
0.95 |
% |
|
1.02 |
% |
|
0.96 |
% |
Annualized return on average equity |
|
12.18 |
% |
|
11.42 |
% |
|
10.93 |
% |
|
11.77 |
% |
|
10.94 |
% |
Annualized net loan charge-offs to average loans |
|
0.03 |
% |
|
0.03 |
% |
|
0.12 |
% |
|
0.08 |
% |
|
0.05 |
% |
Net charge-offs |
|
112 |
|
|
106 |
|
|
405 |
|
|
266 |
|
|
171 |
|
Efficiency ratio |
|
61.0 |
% |
|
65.0 |
% |
|
65.5 |
% |
|
61.9 |
% |
|
64.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.66 |
|
|
$ |
0.61 |
|
|
$ |
0.56 |
|
|
$ |
0.59 |
|
|
$ |
0.55 |
|
Diluted earnings per share |
|
0.66 |
|
|
0.61 |
|
|
0.56 |
|
|
0.59 |
|
|
0.55 |
|
Dividend declared per share |
|
0.31 |
|
|
0.31 |
|
|
0.31 |
|
|
0.31 |
|
|
0.31 |
|
Book value |
|
22.03 |
|
|
21.53 |
|
|
20.89 |
|
|
20.39 |
|
|
19.97 |
|
Common stock price: |
|
|
|
|
|
|
|
|
|
|
High |
|
30.93 |
|
|
30.17 |
|
|
29.67 |
|
|
29.45 |
|
|
30.85 |
|
Low |
|
26.87 |
|
|
26.03 |
|
|
23.23 |
|
|
25.77 |
|
|
28.81 |
|
Close |
|
30.83 |
|
|
30.17 |
|
|
27.40 |
|
|
26.83 |
|
|
28.97 |
|
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,037 |
|
|
7,038 |
|
|
7,038 |
|
|
7,037 |
|
|
7,037 |
|
Fully Diluted |
|
7,037 |
|
|
7,038 |
|
|
7,038 |
|
|
7,037 |
|
|
7,037 |
|
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
Issued |
|
7,518 |
|
|
7,518 |
|
|
7,518 |
|
|
7,518 |
|
|
7,517 |
|
Treasury |
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
9/30/2019 |
|
6/30/2019 |
|
3/31/2019 |
|
12/31/2018 |
|
9/30/2018 |
Financial Condition
Data: |
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,673,095 |
|
|
$ |
1,711,500 |
|
|
$ |
1,704,708 |
|
|
$ |
1,684,771 |
|
|
$ |
1,670,348 |
|
Loans, net |
|
1,350,735 |
|
|
1,365,284 |
|
|
1,370,678 |
|
|
1,370,920 |
|
|
1,355,762 |
|
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
Intangibles |
|
960 |
|
|
1,022 |
|
|
1,091 |
|
|
1,162 |
|
|
1,233 |
|
Total deposits |
|
1,332,407 |
|
|
1,327,086 |
|
|
1,309,061 |
|
|
1,219,903 |
|
|
1,210,477 |
|
Noninterest-bearing |
|
327,329 |
|
|
322,755 |
|
|
321,657 |
|
|
320,814 |
|
|
313,111 |
|
Savings |
|
171,370 |
|
|
171,992 |
|
|
170,005 |
|
|
166,063 |
|
|
164,449 |
|
NOW |
|
219,466 |
|
|
238,410 |
|
|
253,475 |
|
|
207,819 |
|
|
223,963 |
|
Money Market |
|
239,926 |
|
|
238,352 |
|
|
244,753 |
|
|
238,596 |
|
|
238,131 |
|
Time Deposits |
|
374,316 |
|
|
355,577 |
|
|
319,171 |
|
|
286,611 |
|
|
270,823 |
|
Total interest-bearing deposits |
|
1,005,078 |
|
|
1,004,331 |
|
|
987,404 |
|
|
899,089 |
|
|
897,366 |
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits* |
|
958,091 |
|
|
971,509 |
|
|
989,890 |
|
|
933,292 |
|
|
939,654 |
|
Shareholders’ equity |
|
155,062 |
|
|
151,527 |
|
|
147,026 |
|
|
143,536 |
|
|
140,538 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
|
$ |
17,208 |
|
|
$ |
15,383 |
|
|
$ |
15,794 |
|
|
$ |
16,572 |
|
|
$ |
8,739 |
|
Non-performing loans to total assets |
|
1.03 |
% |
|
0.90 |
% |
|
0.93 |
% |
|
0.98 |
% |
|
0.52 |
% |
Allowance for loan losses |
|
14,249 |
|
|
14,001 |
|
|
13,792 |
|
|
13,837 |
|
|
13,343 |
|
Allowance for loan losses to total loans |
|
1.04 |
% |
|
1.02 |
% |
|
1.00 |
% |
|
1.00 |
% |
|
0.97 |
% |
Allowance for loan losses to non-performing loans |
|
82.80 |
% |
|
91.02 |
% |
|
87.32 |
% |
|
83.50 |
% |
|
152.68 |
% |
Non-performing loans to total loans |
|
1.26 |
% |
|
1.12 |
% |
|
1.14 |
% |
|
1.20 |
% |
|
0.64 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity to total assets |
|
9.27 |
% |
|
8.85 |
% |
|
8.62 |
% |
|
8.52 |
% |
|
8.41 |
% |
* Core deposits are defined as total deposits less time
deposits
Reconciliation of GAAP and Non-GAAP
Financial Measures
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
(Dollars in Thousands, Except Per Share Data) |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
GAAP net income |
|
$ |
4,650 |
|
|
$ |
3,826 |
|
|
$ |
12,839 |
|
|
$ |
10,515 |
|
Less: net securities gains
(losses), net of tax |
|
134 |
|
|
(19 |
) |
|
205 |
|
|
(39 |
) |
Non-GAAP core earnings |
|
$ |
4,516 |
|
|
$ |
3,845 |
|
|
$ |
12,634 |
|
|
$ |
10,554 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Return on average assets
(ROA) |
|
1.10 |
% |
|
0.96 |
% |
|
1.02 |
% |
|
0.91 |
% |
Less: net securities gains
(losses), net of tax |
|
0.03 |
% |
|
— |
% |
|
0.01 |
% |
|
— |
% |
Non-GAAP core ROA |
|
1.07 |
% |
|
0.96 |
% |
|
1.01 |
% |
|
0.91 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Return on average equity
(ROE) |
|
12.18 |
% |
|
10.94 |
% |
|
11.69 |
% |
|
10.19 |
% |
Less: net securities gains
(losses), net of tax |
|
0.36 |
% |
|
(0.05 |
)% |
|
0.20 |
% |
|
(0.04 |
)% |
Non-GAAP core ROE |
|
11.82 |
% |
|
10.99 |
% |
|
11.49 |
% |
|
10.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Basic earnings per share
(EPS) |
|
$ |
0.66 |
|
|
$ |
0.54 |
|
|
$ |
1.82 |
|
|
$ |
1.49 |
|
Less: net securities gains
(losses), net of tax |
|
0.02 |
|
|
— |
|
|
0.02 |
|
|
(0.01 |
) |
Non-GAAP basic core EPS |
|
$ |
0.64 |
|
|
$ |
0.54 |
|
|
$ |
1.80 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
Diluted EPS |
|
$ |
0.66 |
|
|
$ |
0.54 |
|
|
$ |
1.82 |
|
|
$ |
1.49 |
|
Less: net securities gains
(losses), net of tax |
|
0.02 |
|
|
— |
|
|
0.02 |
|
|
(0.01 |
) |
Non-GAAP diluted core EPS |
|
$ |
0.64 |
|
|
$ |
0.54 |
|
|
$ |
1.80 |
|
|
$ |
1.50 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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