PWOD Penns Woods Bancorp Inc

Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc., supported by deposit growth, achieved net income of $15.7 million for the twelve months ended December 31, 2019, resulting in basic and diluted earnings per share of $2.23 and $2.06, respectively.

Highlights

• Net income, as reported under GAAP, for the three and nine months ended December 31, 2019 was $2.8 million and $15.7 million, compared to $4.2 million and $14.7 million for the same periods of 2018.  Results for the three and twelve months ended December 31, 2019 compared to 2018 were impacted by an increase in after-tax securities gains of $516,000 (from a loss of $130,000 to a gain of $386,000) for the three month periods and $760,000 (from a loss of $169,000 to a gain of $591,000) for the twelve month periods.  In addition, during the three and twelve months ended December 31, 2019 a loss of $682,000 was incurred related to the sale of two former branch locations as these locations were replaced with the opening of two high profile locations in their market area during 2019.
• During the three and twelve months ended December 31, 2019 the Company incurred a partial charge off of a commercial relationship of $3.7 million resulting in an additional provision for loan losses of $1.4 million.
• Basic and diluted earnings per share for the three months ended December 31, 2019 were $0.40 and $0.39, respectively, compared to basic and diluted earnings per share of $0.59 for the three months ended December 31, 2018.
• Basic and diluted earnings per share for the twelve months ended December 31, 2019 were $2.23 and $2.06, respectively, compared to basic and diluted earnings per share of $2.09 for the twelve months ended December 31, 2018.
• Return on average assets was 0.68% for the three months ended December 31, 2019, compared to 1.02% for the corresponding period of 2018. Return on average assets was 0.94% for the twelve months ended December 31, 2019, compared to 0.94% for the corresponding period of 2018.
• Return on average equity was 7.22% for the three months ended December 31, 2019, compared to 11.77% for the corresponding period of 2018. Return on average equity was 10.54% for the twelve months ended December, 2019, compared to 10.72% 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 $2.4 million for the three months ended December 31, 2019 compared to $4.3 million for the same period of 2018. Core earnings increased to $15.1 million for the twelve months ended December 31, 2019, compared to $14.9 million for the same period of 2018. Core earnings per share for the three months ended December 31, 2019 was $0.35 basic and $0.33 diluted, compared to $0.61 basic and diluted core earnings per share for the same period of 2018. Core earnings per share for the twelve months ended December 31, 2019 was $2.14 basic and $1.98 diluted, compared to $2.11 basic and diluted for the same period of 2018. Core return on average assets and core return on average equity were 0.59% and 6.23% for the three months ended December 31, 2019, compared to 1.05% and 12.12% for the corresponding period of 2018.  Core return on average assets and core return on average equity were 0.90% and 10.14% for the twelve months ended December 31, 2019 compared to 0.95% and 10.84% 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 twelve months ended December 31, 2019 was 3.22% and 3.31%, compared to 3.33% and 3.31% for the corresponding periods of 2018. The decrease in the net interest margin was driven by an increase in the rate paid on interest-bearing liabilities of 37 bps and 44 bps for the three and twelve month periods.  The increase was driven by an increase in the rate paid on time deposits as time deposits were utilized as an attraction tool and to manage the duration of the interest-bearing liabilities portfolio.  Partially offsetting the increase in the rate paid on interest-bearing liabilities was an increase in the yield on earning assets of 2 and 27 basis points ("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.  Growth in the average balance of the investment portfolio of $17.7 million and $23.4 million for the three and nine month periods aided in limiting the impact of increased funding costs.

Assets

Total assets decreased $19.4 million to $1.7 billion at December 31, 2019 compared to December 31, 2018.  Net loans decreased $27.3 million to $1.3 billion at December 31, 2019 compared to December 31, 2018, as the municipal loan portfolio decreased and the indirect auto lending portfolio remained constant. The investment portfolio increased $8.5 million from December 31, 2018 to December 31, 2019 due to increases in the corporate portfolio.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.94% at December 31, 2019 from 1.20% at December 31, 2018 as non-performing loans have decreased to $12.8 million at December 31, 2019 from $16.6 million at December 31, 2018 primarily due to a commercial loan relationship that became non-performing during the fourth quarter of 2018 and was partially charged-off during the fourth quarter of 2019 resulting in an additional provision for loan losses of $1.4 million. 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 $4.1 million and $4.7 million for the three and twelve months ended December 31, 2019 impacted the allowance for loan losses, which was 0.88% of total loans at December 31, 2019 compared to 1.00% at December 31, 2008.

Deposits

Deposits increased $104.1 million to $1.3 billion at December 31, 2019 compared to December 31, 2018.  Noninterest-bearing deposits increased $13.9 million to $334.7 million at December 31, 2019 compared to December 31, 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 $11.4 million to $155.0 million at December 31, 2019 compared to December 31, 2018. The change in accumulated other comprehensive loss from $6.6 million at December 31, 2018 to $2.8 million at December 31, 2019 is a result of an increase in unrealized gains on available for sale securities (from an unrealized loss of $1.4 million at December 31, 2018 to an unrealized gain of $2.5 million at December 31, 2019). The amount of accumulated other comprehensive loss at December 31, 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 a decrease in the net loss of $44,000. The current level of shareholders’ equity equates to a book value per share of $22.01 at December 31, 2019 compared to $20.39 at December 31, 2018, and an equity to asset ratio of 9.31% at December 31, 2019 compared to 8.52% at December 31, 2018. Dividends declared for the twelve months ended December 31, 2019 and 2018 were $1.25 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)

		December 31,
(In Thousands, Except Share Data)		2019				2018				% Change
ASSETS:
Noninterest-bearing balances		$	24,725			$	25,020			(1.18	)%
Interest-bearing balances in other financial institutions		23,864				41,722				(42.80	)%
Total cash and cash equivalents		48,589				66,742				(27.20	)%
Investment debt securities, available for sale, at fair value		148,619				134,285				10.67	%
Investment equity securities, at fair value		1,261				1,776				(29.00	)%
Investment securities, trading		51				36				41.67	%
Restricted investment in bank stock, at fair value		13,528				18,862				(28.28	)%
Loans held for sale.		4,232				2,929				44.49	%
Loans		1,355,544				1,384,757				(2.11	)%
Allowance for loan losses		(11,894		)		(13,837		)		(14.04	)%
Loans, net		1,343,650				1,370,920				(1.99	)%
Premises and equipment, net		32,929				27,580				19.39	%
Accrued interest receivable		5,246				5,334				(1.65	)%
Bank-owned life insurance		29,253				28,627				2.19	%
Goodwill		17,104				17,104				—	%
Intangibles		898				1,162				(22.72	)%
Operating lease right of use asset		4,154				—				n/a
Deferred tax asset		3,338				5,154				(35.23	)%
Other assets		12,471				4,260				192.75	%
TOTAL ASSETS		$	1,665,323			$	1,684,771			(1.15	)%
LIABILITIES:
Interest-bearing deposits		$	989,259			$	899,089			10.03	%
Noninterest-bearing deposits		334,746				320,814				4.34	%
Total deposits		1,324,005				1,219,903				8.53	%
Short-term borrowings.		4,920				167,865				(97.07	)%
Long-term borrowings.		161,920				138,942				16.54	%
Accrued interest payable.		1,671				1,150				45.30	%
Operating lease liability.		4,170				—				n/a
Other liabilities		13,655				13,367				2.15	%
TOTAL LIABILITIES		1,510,341				1,541,227				(2.00	)%
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; 7,520,740 and 7,517,547 shares issued; 7,040,515 and 7,037,322 shares outstanding		41,782				41,763				0.05	%
Additional paid-in capital		51,487				50,737				1.48	%
Retained earnings		76,583				69,787				9.74	%
Accumulated other comprehensive loss:
Net unrealized gain (loss) on available for sale securities		2,455				(1,360		)		280.51	%
Defined benefit plan		(5,232		)		(5,276		)		0.83	%
Treasury stock at cost, 480,225		(12,115		)		(12,115		)		—	%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY		154,960				143,536				7.96	%
Non-controlling interest		22				8				175.00	%
TOTAL SHAREHOLDERS' EQUITY		154,982				143,544				7.97	%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,665,323			$	1,684,771			(1.15	)%

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)		2019				2018				% Change			2019				2018				% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	14,789			$	14,828			(0.26	)%		$	60,384			$	54,000			11.82	%
Investment securities:
Taxable		1,098				886				23.93	%		3,997				2,784				43.57	%
Tax-exempt		140				182				(23.08	)%		660				860				(23.26	)%
Dividend and other interest income		388				340				14.12	%		1,733				1,102				57.26	%
TOTAL INTEREST AND DIVIDEND INCOME		16,415				16,236				1.10	%		66,774				58,746				13.67	%
INTEREST EXPENSE:
Deposits		3,107				1,999				55.43	%		11,443				6,370				79.64	%
Short-term borrowings		3				753				(99.60	)%		793				1,757				(54.87	)%
Long-term borrowings		984				785				25.35	%		3,723				2,809				32.54	%
TOTAL INTEREST EXPENSE		4,094				3,537				15.75	%		15,959				10,936				45.93	%
NET INTEREST INCOME		12,321				12,699				(2.98	)%		50,815				47,810				6.29	%
PROVISION FOR LOAN LOSSES		1,700				760				123.68	%		2,735				1,735				57.64	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		10,621				11,939				(11.04	)%		48,080				46,075				4.35	%
NON-INTEREST INCOME:
Service charges		635				672				(5.51	)%		2,411				2,460				(1.99	)%
Debt securities gains (losses), available for sale		440				(30		)		1,566.67	%		640				(47		)		1,461.70	%
Equity securities gains (losses)		74				(126		)		158.73	%		89				(170		)		152.35	%
Securities gains (losses), trading		(25		)		(9		)		(177.78	)%		19				3				533.33	%
Bank-owned life insurance		140				166				(15.66	)%		574				662				(13.29	)%
Gain on sale of loans		508				465				9.25	%		1,754				1,518				15.55	%
Insurance commissions		87				99				(12.12	)%		433				365				18.63	%
Brokerage commissions		326				323				0.93	%		1,358				1,336				1.65	%
Debit card income		346				469				(26.23	)%		1,378				1,534				(10.17	)%
Other		376				400				(6.00	)%		1,796				1,800				(0.22	)%
TOTAL NON-INTEREST INCOME		2,907				2,429				19.68	%		10,452				9,461				10.47	%
NON-INTEREST EXPENSE:
Salaries and employee benefits		5,317				5,696				(6.65	)%		21,829				21,083				3.54	%
Occupancy		627				622				0.80	%		2,712				2,702				0.37	%
Furniture and equipment		827				764				8.25	%		3,248				3,092				5.05	%
Software amortization		242				208				16.35	%		871				712				22.33	%
Pennsylvania shares tax		285				275				3.64	%		1,148				1,108				3.61	%
Professional fees		640				432				48.15	%		2,474				2,106				17.47	%
Federal Deposit Insurance Corporation deposit insurance		97				251				(61.35	)%		578				890				(35.06	)%
Marketing.		192				3				6,300.00	%		425				767				(44.59	)%
Intangible amortization		62				71				(12.68	)%		264				300				(12.00	)%
Other		2,005				1,210				65.70	%		6,159				5,247				17.38	%
TOTAL NON-INTEREST EXPENSE		10,294				9,532				7.99	%		39,708				38,007				4.48	%
INCOME BEFORE INCOME TAX PROVISION		3,234				4,836				(33.13	)%		18,824				17,529				7.39	%
INCOME TAX PROVISION		397				640				(37.97	)%		3,138				2,819				11.32	%
NET INCOME		$	2,837			$	4,196			(32.39	)%		$	15,686			$	14,710			6.63	%
Earnings attributable to noncontrolling interest		4				—				n/a			14				6				133.33	%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'		$	2,833			$	4,196			(32.48	)%		$	15,672			$	14,704			6.58	%
EARNINGS PER SHARE - BASIC		$	0.40			$	0.59			(32.20	)%		$	2.23			$	2.09			6.70	%
EARNINGS PER SHARE - DILUTED		$	0.39			$	0.59			(33.90	)%		$	2.06			$	2.09			(1.44	)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC		7,039,968				7,036,688				0.05	%		7,038,714				7,035,381				0.05	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED		7,338,468				7,036,688				4.29	%		7,620,453				7,035,381				8.32	%
DIVIDENDS DECLARED PER SHARE		$	0.32			$	0.31			3.23	%		$	1.26			$	1.25			0.80	%

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES

		Three Months Ended
		December 31, 2019											December 31, 2018
(Dollars in Thousands)		AverageBalance				Interest				AverageRate			AverageBalance				Interest				AverageRate
ASSETS:
Tax-exempt loans		$	55,727			$	446			3.21	%		$	73,726			$	553			2.98	%
All other loans		1,306,203				14,437				4.43	%		1,310,303				14,391				4.36	%
Total loans		1,361,930				14,883				4.38	%		1,384,029				14,944				4.28	%
Taxable securities		145,273				1,372				3.83	%		121,598				1,207				3.97	%
Tax-exempt securities		22,406				177				3.20	%		28,382				231				3.26	%
Total securities		167,679				1,549				3.75	%		149,980				1,438				3.84	%
Interest-bearing deposits		30,393				207				1.50	%		3,399				19				2.22	%
Total interest-earning assets		1,560,002				16,639				4.26	%		1,537,408				16,401				4.24	%
Other assets		108,235											97,798
TOTAL ASSETS		$	1,668,237										$	1,635,206
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	172,573			69				0.16	%		$	164,891			26				0.06	%
Super Now deposits		216,535				445				0.82	%		216,170				320				0.59	%
Money market deposits		229,486				535				0.94	%		239,919				400				0.66	%
Time deposits		375,838				2,058				2.20	%		283,663				1,253				1.75	%
Total interest-bearing deposits		994,432				3,107				1.25	%		904,643				1,999				0.88	%
Short-term borrowings		4,781				3				0.25	%		121,327				753				2.43	%
Long-term borrowings		162,241				984				2.30	%		138,942				785				2.21	%
Total borrowings		167,022				987				2.24	%		260,269				1,538				2.14	%
Total interest-bearing liabilities		1,161,454				4,094				1.39	%		1,164,912				3,537				2.31	%
Demand deposits		329,873											312,511
Other liabilities		19,693											15,448
Shareholders’ equity		157,217											142,335
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,668,237										$	1,635,206
Interest rate spread										2.87	%										3.04	%
Net interest income/margin						$	12,545			3.22	%						$	12,864			3.33	%

		Three Months Ended December 31,
		2019				2018
Total interest income		$	16,415			$	16,236
Total interest expense		4,094				3,537
Net interest income		12,321				12,699
Tax equivalent adjustment		224				165
Net interest income (fully taxable equivalent)		$	12,545			$	12,864

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES

		Twelve Months Ended
		December 31, 2019											December 31, 2018
(Dollars in Thousands)		AverageBalance				Interest				AverageRate			AverageBalance				Interest				AverageRate
ASSETS:
Tax-exempt loans		$	66,435			$	2,038			3.07	%		$	74,923			$	2,242			2.99	%
All other loans		1,309,806				58,774				4.49	%		1,250,521				52,229				4.18	%
Total loans		1,376,241				60,812				4.42	%		1,325,444				54,471				4.11	%
Taxable securities		134,935				5,306				3.99	%		100,915				3,828				3.79	%
Tax-exempt securities		25,702				835				3.29	%		36,279				1,089				3.00	%
Total securities		160,637				6,141				3.88	%		137,194				4,917				3.58	%
Interest-bearing deposits		21,161				310				2.00	%		3,005				58				1.93	%
Total interest-earning assets		1,558,039				67,263				4.33	%		1,465,643				59,446				4.06	%
Other assets		111,839											97,577
TOTAL ASSETS		$	1,669,878										$	1,563,220
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	169,832			216				0.13	%		$	164,844			75				0.05	%
Super Now deposits		231,816				1,758				0.76	%		225,885				1,033				0.46	%
Money market deposits		239,317				2,184				0.91	%		240,541				1,214				0.50	%
Time deposits		345,635				7,285				2.11	%		259,286				4,048				1.56	%
Total interest-bearing deposits		986,600				11,443				1.16	%		890,556				6,370				0.72	%
Short-term borrowings		34,897				793				2.27	%		85,086				1,757				2.06	%
Long-term borrowings		155,841				3,723				2.25	%		128,127				2,809				2.19	%
Total borrowings		190,738				4,516				2.25	%		213,213				4,566				2.14	%
Total interest-bearing liabilities		1,177,338				15,959				1.34	%		1,103,769				10,936				0.99	%
Demand deposits		321,443											303,606
Other liabilities		22,379											18,742
Shareholders’ equity		148,718											137,103
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,669,878										$	1,563,220
Interest rate spread										2.99	%										3.07	%
Net interest income/margin						$	51,304			3.31	%						$	48,510			3.31	%

		Twelve Months Ended December 31,
		2019				2018
Total interest income		$	66,774			$	58,746
Total interest expense		15,959				10,936
Net interest income		50,815				47,810
Tax equivalent adjustment		489				700
Net interest income (fully taxable equivalent)		$	51,304			$	48,510

(Dollars in Thousands, Except Per Share Data)		Quarter Ended
		12/31/2019				9/30/2019				6/30/2019				3/31/2019				12/31/2018
Operating Data
Net income		$	2,833			$	4,650			$	4,245			$	3,944			$	4,196
Net interest income		12,321				12,903				12,913				12,678				12,699
Provision for loan losses		1,700				360				315				360				760
Net security gains (losses)		489				170				23				66				(165		)
Non-interest income, ex. net security gains (losses)		2,418				2,652				2,446				2,188				2,594
Non-interest expense		10,294				9,541				10,059				9,814				9,532
Performance Statistics
Net interest margin		3.22		%		3.32		%		3.39		%		3.37		%		3.33		%
Annualized return on average assets.		0.68		%		1.10		%		1.02		%		0.95		%		1.02		%
Annualized return on average equity		7.22		%		12.18		%		11.42		%		10.93		%		11.77		%
Annualized net loan charge-offs to average loans.		1.19		%		0.03		%		0.03		%		0.12		%		0.08		%
Net charge-offs		4,055				112				106				405				266
Efficiency ratio		69.4		%		61.0		%		65.0		%		65.5		%		61.9		%
Per Share Data
Basic earnings per share		$	0.40			$	0.66			$	0.61			$	0.56			$	0.59
Diluted earnings per share		0.39				0.66				0.61				0.56				0.59
Dividend declared per share		0.32				0.31				0.31				0.31				0.31
Book value.		22.01				22.03				21.53				20.89				20.39
Common stock price:
High		35.58				30.93				30.17				29.67				29.45
Low		29.68				26.87				26.03				23.23				25.77
Close.		35.58				30.83				30.17				27.40				26.83
Weighted average common shares:
Basic		7,040				7,037				7,038				7,038				7,037
Fully Diluted		7,338				7,037				7,038				7,038				7,037
End-of-period common shares:
Issued		7,521				7,518				7,518				7,518				7,518
Treasury		480				480				480				480				480

(Dollars in Thousands, Except Per Share Data)		Quarter Ended
		12/31/2019				9/30/2019				6/30/2019				3/31/2019				12/31/2018
Financial Condition Data:
General
Total assets		$	1,665,323			$	1,673,095			$	1,711,500			$	1,704,708			$	1,684,771
Loans, net		1,343,650				1,350,735				1,365,284				1,370,678				1,370,920
Goodwill		17,104				17,104				17,104				17,104				17,104
Intangibles		898				960				1,022				1,091				1,162
Total deposits		1,324,005				1,332,407				1,327,086				1,309,061				1,219,903
Noninterest-bearing.		334,746				327,329				322,755				321,657				320,814
Savings		176,732				171,370				171,992				170,005				166,063
NOW		218,605				219,466				238,410				253,475				207,819
Money Market.		216,038				239,926				238,352				244,753				238,596
Time Deposits		377,884				374,316				355,577				319,171				286,611
Total interest-bearing deposits		989,259				1,005,078				1,004,331				987,404				899,089
Core deposits*		946,121				958,091				971,509				989,890				933,292
Shareholders’ equity		154,960				155,061				151,527				147,026				143,536
Asset Quality
Non-performing loans		$	12,758			$	17,208			$	15,383			$	15,794			$	16,572
Non-performing loans to total assets		0.77		%		1.03		%		0.90		%		0.93		%		0.98		%
Allowance for loan losses		11,894				14,249				14,001				13,792				13,837
Allowance for loan losses to total loans		0.88		%		1.04		%		1.02		%		1.00		%		1.00		%
Allowance for loan losses to non-performing loans		93.23		%		82.80		%		91.02		%		87.32		%		83.50		%
Non-performing loans to total loans		0.94		%		1.26		%		1.12		%		1.14		%		1.20		%
Capitalization
Shareholders’ equity to total assets		9.31		%		9.27		%		8.85		%		8.62		%		8.52		%
* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures

		Three Months EndedDecember 31,								Twelve Months EndedDecember 31,
(Dollars in Thousands, Except Per Share Data)		2019				2018				2019				2018
GAAP net income		$	2,833			$	4,189			$	15,672			$	14,704
Less: net securities gains (losses), net of tax		386				(130		)		591				(169		)
Non-GAAP core earnings		$	2,447			$	4,319			$	15,081			$	14,873
		Three Months EndedDecember 31,								Twelve Months EndedDecember 31,
		2019				2018				2019				2018
Return on average assets (ROA)		0.68		%		1.02		%		0.94		%		0.94		%
Less: net securities gains (losses), net of tax		0.09		%		(0.03		)%		0.04		%		(0.01		)%
Non-GAAP core ROA		0.59		%		1.05		%		0.90		%		0.95		%
		Three Months EndedDecember 31,								Twelve Months EndedDecember 31,
		2019				2018				2019				2018
Return on average equity (ROE)		7.22		%		11.77		%		10.54		%		10.72		%
Less: net securities gains (losses), net of tax		0.99		%		(0.35		)%		0.40		%		(0.12		)%
Non-GAAP core ROE.		6.23		%		12.12		%		10.14		%		10.84		%
		Three Months EndedDecember 31,								Twelve Months EndedDecember 31,
		2019				2018				2019				2018
Basic earnings per share (EPS)		$	0.40			$	0.59			$	2.23			$	2.09
Less: net securities gains (losses), net of tax		0.05				(0.02		)		0.09				(0.02		)
Non-GAAP basic core EPS		$	0.35			$	0.61			$	2.14			$	2.11
		Three Months EndedDecember 31,								Twelve Months EndedDecember 31,
		2019				2018				2019				2018
Diluted EPS		$	0.39			$	0.59			$	2.06			$	2.09
Less: net securities gains (losses), net of tax		0.06				(0.02		)		0.08				(0.02		)
Non-GAAP diluted core EPS		$	0.33			$	0.61			$	1.98			$	2.11