Penns Woods Bancorp, Inc. (NASDAQ: PWOD)
Penns Woods Bancorp, Inc. achieved net
income of $6.8 million for the six months ended June 30, 2020,
resulting in basic and diluted earnings per share of $0.97.
Highlights
- Net income, as reported under GAAP,
for the three and six months ended June 30, 2020 was $3.8
million and $6.8 million, respectively compared to $4.2 and
$8.2 million for the same period of 2019. Results for the three and
six months ended June 30, 2020 compared to 2019 were impacted
by an increase in after-tax securities gains of $138,000 (from a
gain of $18,000 to a gain of $156,000) for the three month period
and $108,000 (from a gain of $70,000 to a gain of $178,000) for the
six month period.
- The provision for loan losses
increased $330,000 and $720,000, respectfully, for the three and
six months ended June 30, 2020, to $645,000 and $1,395,000 compared
to $315,000 and $675,000 for the 2019 periods. The increase
is the result of the economic uncertainty caused by the COVID-19
pandemic.
- Basic and diluted earnings per
share for the three and six months ended June 30, 2020 were $0.53
and $0.97, respectively, compared to basic and diluted earnings per
share of $0.60 and $1.16 for the three and six months ended June
30, 2019.
- Return on average assets was 0.85%
for the three months ended June 30, 2020, compared to 1.02% for the
corresponding period of 2019. Return on average assets was 0.79%
for the six months ended June 30, 2020, compared to 0.99% for the
corresponding period of 2019.
- Return on average equity was 9.59%
for the three months ended June 30, 2020, compared to 11.42% for
the corresponding period of 2019. Return on average equity was
8.75% for the six months ended June 30, 2020, compared to 11.27%
for the corresponding period of 2019.
COVID-19 Activity
- Approximately one third of employees working remotely.
- As of June 30, 2020, loan modification/deferral program in
place to defer payments up to 90 days for principal and/or interest
with $241.6 million in loan principal affected by this
program.
- All COVID-19 related loan deferrals meet the requirements to
not be considered a troubled debt restructuring.
- Participated in the Paycheck Protection Program ("PPP") by
primarily utilizing third parties to service and place the
loans.
- Significantly reduced deposit rates during the latter half of
March 2020 continuing through June 2020.
- Increased the provision for loan losses due to the economic
uncertainty caused by the COVID-19 pandemic.
- Net interest margin compression expected to continue as the
rate environment remains below historical levels.
- Total paycheck protection program loans held at June 30, 2020
total $12.3 million.
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 $3.6 million for the three months ended June 30,
2020 compared to $4.2 million for the same period of 2019.
Core earnings were $6.7 million for the six months ended June 30,
2020, compared to $8.1 million for the same period of 2019. Core
earnings per share for the three months ended June 30, 2020
were $0.51 basic and diluted, compared to $0.60 basic and diluted
core earnings per share for the same period of 2019. Core earnings
per share for the six months ended June 30, 2020 were $0.95 basic
and diluted, compared to $1.15 basic and diluted for the same
period of 2019. Core return on average assets and core return on
average equity were 0.81% and 9.19% for the three months ended June
30, 2020, compared to 1.01% and 11.37% for the corresponding period
of 2019. Core return on average assets and core return on average
equity were 0.77% and 8.52% for the six months ended June 30, 2020
compared to 0.98% and 11.18% for the corresponding period of 2019.
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 six
months ended June 30, 2020 was 3.01% and 3.09%, compared to 3.39%
and 3.37% for the corresponding periods of 2019. The decrease in
the net interest margin was driven by a decrease in the yield of
the investment portfolio of 64 and 63 basis points ("bps"),
respectively, for the three and six month periods. Further
compressing the net interest margin was the significant increase of
interest-bearing deposits within the earning asset portfolio. These
deposits carry a current yield of a few basis points with the
balance steadily increasing as commercial customers have received
PPP funding and retail customers have received stimulus funding.
Rates paid on interest-bearing liabilities were decreased during
the three months ended June 30, 2020 and will partially offset the
decline in earning asset yield.
Assets
Total assets increased $126.9 million to $1.8
billion at June 30, 2020 compared to June 30, 2019.
Net loans decreased $28.9 million to $1.3 billion at June 30,
2020 compared to June 30, 2019, as the COVID-19 business and
travel restrictions curtailed various lending activities such as
indirect auto, home equity, and commercial. Lending activity
began to rebound as business and travel restrictions were
lessened. The investment portfolio increased $17.9 million
from June 30, 2019 to June 30, 2020 due to increases in
the corporate and taxable municipal portfolios.
Non-performing Loans
The ratio of non-performing loans to total loans
ratio decreased to 0.82% at June 30, 2020 from 1.12% at
June 30, 2019 as non-performing loans have decreased to $11.1
million at June 30, 2020 from $15.4 million at June 30,
2019 primarily due to a commercial loan relationship that was
partially charged-off during the fourth quarter of 2019. 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 $312,000 for the six months ended June 30, 2020
impacted the allowance for loan losses, which was 0.96% of total
loans at June 30, 2020 compared to 1.02% at June 30, 2019.
Deposits
Deposits increased $147.2 million to $1.5
billion at June 30, 2020 compared to June 30, 2019.
Noninterest-bearing deposits increased $95.6 million to $418.3
million at June 30, 2020 compared to June 30, 2019.
Driving deposit growth was the receipt of PPP funding by
commercial customers, stimulus funding by retail customers,
and customers becoming more risk adverse and seeking safety
in a bank deposit. Emphasis during 2020 has been on increasing the
utilization of electronic (internet and mobile) deposit banking
among our customers. Utilization of internet and mobile
banking has increased since the start of 2020 due to these efforts
coupled with a change in consumer behavior due to the business and
travel restrictions caused by the COVID-19 pandemic.
Shareholders’ Equity
Shareholders’ equity increased $8.1 million to
$159.6 million at June 30, 2020 compared to June 30,
2019. The change in accumulated other comprehensive loss from
$2.8 million at June 30, 2019 to $1.0 million at June 30,
2020 is a result of an increase in unrealized gains on available
for sale securities (from an unrealized gain of $2,419,000 at June
30, 2019 to an unrealized gain of $4.2 million at June 30,
2020). The amount of accumulated other comprehensive loss at
June 30, 2020 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 $43,000. The current level of shareholders’
equity equates to a book value per share of $22.66 at June 30,
2020 compared to $21.53 at June 30, 2019, and an equity to
asset ratio of 8.68% at June 30, 2020 compared to 8.85% at
June 30, 2019. Dividends declared for the six months
ended June 30, 2020 and 2019 were $0.64 per share and $0.63 per
share, respectively.
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;
(v) the effects of health emergencies, including the spread of
infectious diseases or pandemics; or (vi) 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, 2019.
You should not place undue reliance on any
forward-looking statements. These statements speak only as of
the date of this press release, even if subsequently made available
by the Company on its website or otherwise. The Company
undertakes no obligation to update or revise these statements to
reflect events or circumstances occurring after the date of this
press release.
Previous press releases and additional
information can be obtained from the Company’s website at
www.pwod.com.
Contact: |
Richard A. Grafmyre,
Chief Executive Officer |
|
110 Reynolds
Street |
|
Williamsport, PA
17702 |
|
570-322-1111 |
e-mail: pwod@pwod.com |
THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT
ADJUSTMENT
PENNS WOODS
BANCORP, INC.CONSOLIDATED BALANCE
SHEET(UNAUDITED)
|
|
June
30, |
(In Thousands, Except Share Data) |
|
2020 |
|
2019 |
|
% Change |
ASSETS: |
|
|
|
|
|
|
Noninterest-bearing balances |
|
$ |
26,932 |
|
|
$ |
21,102 |
|
|
27.63 |
% |
Interest-bearing balances in
other financial institutions |
|
188,242 |
|
|
58,423 |
|
|
222.21 |
% |
Total cash and cash equivalents |
|
215,174 |
|
|
79,525 |
|
|
170.57 |
% |
|
|
|
|
|
|
|
Investment debt securities,
available for sale, at fair value |
|
164,369 |
|
|
145,689 |
|
|
12.82 |
% |
Investment equity securities,
at fair value |
|
1,291 |
|
|
1,841 |
|
|
(29.88 |
)% |
Investment securities,
trading |
|
37 |
|
|
44 |
|
|
(15.91 |
)% |
Restricted investment in bank
stock, at fair value |
|
14,849 |
|
|
15,087 |
|
|
(1.58 |
)% |
Loans held for sale |
|
5,146 |
|
|
2,880 |
|
|
78.68 |
% |
Loans |
|
1,349,347 |
|
|
1,379,285 |
|
|
(2.17 |
)% |
Allowance for loan
losses |
|
(12,977 |
) |
|
(14,001 |
) |
|
(7.31 |
)% |
Loans, net |
|
1,336,370 |
|
|
1,365,284 |
|
|
(2.12 |
)% |
Premises and equipment,
net |
|
32,873 |
|
|
33,483 |
|
|
(1.82 |
)% |
Accrued interest
receivable |
|
8,068 |
|
|
5,708 |
|
|
41.35 |
% |
Bank-owned life
insurance |
|
29,368 |
|
|
28,955 |
|
|
1.43 |
% |
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
— |
% |
Intangibles |
|
777 |
|
|
1,022 |
|
|
(23.97 |
)% |
Operating lease right of use
asset |
|
3,231 |
|
|
4,279 |
|
|
(24.49 |
)% |
Deferred tax asset |
|
3,284 |
|
|
3,712 |
|
|
(11.53 |
)% |
Other assets |
|
6,423 |
|
|
6,887 |
|
|
(6.74 |
)% |
TOTAL ASSETS |
|
$ |
1,838,364 |
|
|
$ |
1,711,500 |
|
|
7.41 |
% |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Interest-bearing
deposits |
|
$ |
1,055,981 |
|
|
$ |
1,004,331 |
|
|
5.14 |
% |
Noninterest-bearing
deposits |
|
418,324 |
|
|
322,755 |
|
|
29.61 |
% |
Total deposits |
|
1,474,305 |
|
|
1,327,086 |
|
|
11.09 |
% |
|
|
|
|
|
|
|
Short-term
borrowings |
|
15,133 |
|
|
59,453 |
|
|
(74.55 |
)% |
Long-term
borrowings |
|
171,885 |
|
|
154,597 |
|
|
11.18 |
% |
Accrued interest
payable |
|
1,530 |
|
|
1,482 |
|
|
3.24 |
% |
Operating lease
liability |
|
3,263 |
|
|
4,286 |
|
|
(23.87 |
)% |
Other liabilities |
|
12,640 |
|
|
13,055 |
|
|
(3.18 |
)% |
TOTAL LIABILITIES |
|
1,678,756 |
|
|
1,559,959 |
|
|
7.62 |
% |
|
|
|
|
|
|
|
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; 7,522,573 and 7,519,347 shares
issued; 7,042,348 and 7,039,122 shares outstanding |
|
41,792 |
|
|
41,773 |
|
|
0.05 |
% |
Additional paid-in
capital |
|
51,956 |
|
|
51,087 |
|
|
1.70 |
% |
Retained earnings |
|
78,910 |
|
|
73,565 |
|
|
7.27 |
% |
Accumulated other
comprehensive loss: |
|
|
|
|
|
|
Net unrealized gain on available for sale securities |
|
4,194 |
|
|
2,419 |
|
|
73.38 |
% |
Defined benefit plan |
|
(5,159 |
) |
|
(5,202 |
) |
|
0.83 |
% |
Treasury stock at cost,
480,225 |
|
(12,115 |
) |
|
(12,115 |
) |
|
— |
% |
TOTAL PENNS WOODS BANCORP,
INC. SHAREHOLDERS' EQUITY |
|
159,578 |
|
|
151,527 |
|
|
5.31 |
% |
Non-controlling
interest |
|
30 |
|
|
14 |
|
|
114.29 |
% |
TOTAL SHAREHOLDERS'
EQUITY |
|
159,608 |
|
|
151,541 |
|
|
5.32 |
% |
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,838,364 |
|
|
$ |
1,711,500 |
|
|
7.41 |
% |
PENNS WOODS BANCORP,
INC.CONSOLIDATED STATEMENT OF
INCOME(UNAUDITED)
|
|
Three Months
Ended June 30, |
|
Six Months Ended June 30, |
(In Thousands, Except Per Share Data) |
|
2020 |
|
2019 |
|
% Change |
|
2020 |
|
2019 |
|
% Change |
INTEREST AND DIVIDEND
INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans including fees |
|
$ |
14,666 |
|
|
$ |
15,300 |
|
|
(4.14 |
)% |
|
$ |
29,323 |
|
|
$ |
30,169 |
|
|
(2.80 |
)% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
1,023 |
|
|
967 |
|
|
5.79 |
% |
|
2,033 |
|
|
1,901 |
|
|
6.94 |
% |
Tax-exempt |
|
169 |
|
|
179 |
|
|
(5.59 |
)% |
|
314 |
|
|
353 |
|
|
(11.05 |
)% |
Dividend and other interest income |
|
186 |
|
|
395 |
|
|
(52.91 |
)% |
|
535 |
|
|
852 |
|
|
(37.21 |
)% |
TOTAL INTEREST AND DIVIDEND
INCOME |
|
16,044 |
|
|
16,841 |
|
|
(4.73 |
)% |
|
32,205 |
|
|
33,275 |
|
|
(3.22 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
2,802 |
|
|
2,871 |
|
|
(2.40 |
)% |
|
5,837 |
|
|
5,171 |
|
|
12.88 |
% |
Short-term
borrowings |
|
7 |
|
|
178 |
|
|
(96.07 |
)% |
|
29 |
|
|
783 |
|
|
(96.30 |
)% |
Long-term
borrowings |
|
985 |
|
|
879 |
|
|
12.06 |
% |
|
1,928 |
|
|
1,730 |
|
|
11.45 |
% |
TOTAL INTEREST EXPENSE |
|
3,794 |
|
|
3,928 |
|
|
(3.41 |
)% |
|
7,794 |
|
|
7,684 |
|
|
1.43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME |
|
12,250 |
|
|
12,913 |
|
|
(5.13 |
)% |
|
24,411 |
|
|
25,591 |
|
|
(4.61 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN
LOSSES |
|
645 |
|
|
315 |
|
|
104.76 |
% |
|
1,395 |
|
|
675 |
|
|
106.67 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES |
|
11,605 |
|
|
12,598 |
|
|
(7.88 |
)% |
|
23,016 |
|
|
24,916 |
|
|
(7.63 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Service charges |
|
312 |
|
|
592 |
|
|
(47.30 |
)% |
|
861 |
|
|
1,154 |
|
|
(25.39 |
)% |
Debt securities gains
(losses), available for sale |
|
186 |
|
|
(2 |
) |
|
9,400.00 |
% |
|
207 |
|
|
11 |
|
|
1,781.82 |
% |
Equity securities
gains |
|
11 |
|
|
22 |
|
|
(50.00 |
)% |
|
31 |
|
|
65 |
|
|
(52.31 |
)% |
Securities gains (losses),
trading |
|
1 |
|
|
3 |
|
|
(66.67 |
)% |
|
(13 |
) |
|
13 |
|
|
(200.00 |
)% |
Bank-owned life
insurance |
|
144 |
|
|
123 |
|
|
17.07 |
% |
|
336 |
|
|
291 |
|
|
15.46 |
% |
Gain on sale of
loans |
|
1,028 |
|
|
347 |
|
|
196.25 |
% |
|
1,472 |
|
|
663 |
|
|
122.02 |
% |
Insurance
commissions |
|
92 |
|
|
119 |
|
|
(22.69 |
)% |
|
219 |
|
|
253 |
|
|
(13.44 |
)% |
Brokerage
commissions |
|
186 |
|
|
356 |
|
|
(47.75 |
)% |
|
555 |
|
|
679 |
|
|
(18.26 |
)% |
Debit card income |
|
310 |
|
|
389 |
|
|
(20.31 |
)% |
|
584 |
|
|
699 |
|
|
(16.45 |
)% |
Other |
|
351 |
|
|
520 |
|
|
(32.50 |
)% |
|
806 |
|
|
895 |
|
|
(9.94 |
)% |
TOTAL NON-INTEREST
INCOME |
|
2,621 |
|
|
2,469 |
|
|
6.16 |
% |
|
5,058 |
|
|
4,723 |
|
|
7.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
5,230 |
|
|
5,523 |
|
|
(5.31 |
)% |
|
10,897 |
|
|
11,024 |
|
|
(1.15 |
)% |
Occupancy |
|
626 |
|
|
668 |
|
|
(6.29 |
)% |
|
1,328 |
|
|
1,447 |
|
|
(8.22 |
)% |
Furniture and
equipment |
|
828 |
|
|
784 |
|
|
5.61 |
% |
|
1,688 |
|
|
1,536 |
|
|
9.90 |
% |
Software
amortization |
|
236 |
|
|
188 |
|
|
25.53 |
% |
|
486 |
|
|
395 |
|
|
23.04 |
% |
Pennsylvania shares
tax |
|
323 |
|
|
285 |
|
|
13.33 |
% |
|
608 |
|
|
578 |
|
|
5.19 |
% |
Professional fees |
|
658 |
|
|
727 |
|
|
(9.49 |
)% |
|
1,280 |
|
|
1,249 |
|
|
2.48 |
% |
Federal Deposit Insurance
Corporation deposit insurance |
|
185 |
|
|
236 |
|
|
(21.61 |
)% |
|
379 |
|
|
504 |
|
|
(24.80 |
)% |
Marketing |
|
56 |
|
|
33 |
|
|
69.70 |
% |
|
109 |
|
|
135 |
|
|
(19.26 |
)% |
Intangible
amortization |
|
59 |
|
|
69 |
|
|
(14.49 |
)% |
|
121 |
|
|
140 |
|
|
(13.57 |
)% |
Other |
|
1,410 |
|
|
1,546 |
|
|
(8.80 |
)% |
|
2,825 |
|
|
2,865 |
|
|
(1.40 |
)% |
TOTAL NON-INTEREST
EXPENSE |
|
9,611 |
|
|
10,059 |
|
|
(4.45 |
)% |
|
19,721 |
|
|
19,873 |
|
|
(0.76 |
)% |
INCOME BEFORE INCOME TAX
PROVISION |
|
4,615 |
|
|
5,008 |
|
|
(7.85 |
)% |
|
8,353 |
|
|
9,766 |
|
|
(14.47 |
)% |
INCOME TAX
PROVISION |
|
851 |
|
|
759 |
|
|
12.12 |
% |
|
1,512 |
|
|
1,571 |
|
|
(3.76 |
)% |
NET INCOME |
|
$ |
3,764 |
|
|
$ |
4,249 |
|
|
(11.41 |
)% |
|
$ |
6,841 |
|
|
$ |
8,195 |
|
|
(16.52 |
)% |
Earnings attributable to
noncontrolling interest |
|
4 |
|
|
4 |
|
|
n/a |
|
8 |
|
|
6 |
|
|
33.33 |
% |
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS' |
|
$ |
3,760 |
|
|
$ |
4,245 |
|
|
(11.43 |
)% |
|
$ |
6,833 |
|
|
$ |
8,189 |
|
|
(16.56 |
)% |
EARNINGS PER SHARE -
BASIC |
|
$ |
0.53 |
|
|
$ |
0.60 |
|
|
(11.67 |
)% |
|
$ |
0.97 |
|
|
$ |
1.16 |
|
|
(16.38 |
)% |
EARNINGS PER SHARE -
DILUTED |
|
$ |
0.53 |
|
|
$ |
0.60 |
|
|
(11.67 |
)% |
|
$ |
0.97 |
|
|
$ |
1.16 |
|
|
(16.38 |
)% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - BASIC |
|
7,041,629 |
|
|
7,038,503 |
|
|
0.04 |
% |
|
7,041,185 |
|
|
7,038,068 |
|
|
0.04 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING - DILUTED |
|
7,041,629 |
|
|
7,038,503 |
|
|
0.04 |
% |
|
7,041,185 |
|
|
7,038,068 |
|
|
0.04 |
% |
DIVIDENDS DECLARED PER
SHARE |
|
$ |
0.32 |
|
|
$ |
0.31 |
|
|
3.23 |
% |
|
$ |
0.64 |
|
|
$ |
0.63 |
|
|
1.59 |
% |
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Three Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt loans |
|
$ |
44,916 |
|
|
$ |
348 |
|
|
3.12 |
% |
|
$ |
71,193 |
|
|
$ |
548 |
|
|
3.09 |
% |
All other loans |
|
1,294,745 |
|
|
14,391 |
|
|
4.47 |
% |
|
1,313,388 |
|
|
14,867 |
|
|
4.54 |
% |
Total loans |
|
1,339,661 |
|
|
14,739 |
|
|
4.43 |
% |
|
1,384,581 |
|
|
15,415 |
|
|
4.47 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
147,352 |
|
|
1,193 |
|
|
3.29 |
% |
|
130,802 |
|
|
1,300 |
|
|
4.03 |
% |
Tax-exempt
securities |
|
28,280 |
|
|
213 |
|
|
3.06 |
% |
|
27,971 |
|
|
227 |
|
|
3.29 |
% |
Total securities |
|
175,632 |
|
|
1,406 |
|
|
3.26 |
% |
|
158,773 |
|
|
1,527 |
|
|
3.90 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
144,948 |
|
|
16 |
|
|
0.04 |
% |
|
10,431 |
|
|
62 |
|
|
2.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,660,241 |
|
|
16,161 |
|
|
3.92 |
% |
|
1,553,785 |
|
|
17,004 |
|
|
4.39 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
116,750 |
|
|
|
|
|
|
113,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,776,991 |
|
|
|
|
|
|
$ |
1,667,228 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
190,243 |
|
|
67 |
|
|
0.14 |
% |
|
$ |
170,142 |
|
|
51 |
|
|
0.12 |
% |
Super Now deposits |
|
251,691 |
|
|
409 |
|
|
0.65 |
% |
|
246,454 |
|
|
453 |
|
|
0.74 |
% |
Money market
deposits |
|
229,362 |
|
|
418 |
|
|
0.73 |
% |
|
249,169 |
|
|
596 |
|
|
0.96 |
% |
Time deposits |
|
362,545 |
|
|
1,908 |
|
|
2.12 |
% |
|
335,721 |
|
|
1,771 |
|
|
2.12 |
% |
Total interest-bearing
deposits |
|
1,033,841 |
|
|
2,802 |
|
|
1.09 |
% |
|
1,001,486 |
|
|
2,871 |
|
|
1.15 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings |
|
11,174 |
|
|
7 |
|
|
0.83 |
% |
|
32,086 |
|
|
178 |
|
|
2.23 |
% |
Long-term
borrowings |
|
171,895 |
|
|
985 |
|
|
2.21 |
% |
|
147,571 |
|
|
879 |
|
|
2.24 |
% |
Total borrowings |
|
183,069 |
|
|
992 |
|
|
2.12 |
% |
|
179,657 |
|
|
1,057 |
|
|
2.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,216,910 |
|
|
3,794 |
|
|
1.24 |
% |
|
1,181,143 |
|
|
3,928 |
|
|
1.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
384,591 |
|
|
|
|
|
|
317,623 |
|
|
|
|
|
Other liabilities |
|
18,583 |
|
|
|
|
|
|
19,747 |
|
|
|
|
|
Shareholders’
equity |
|
156,907 |
|
|
|
|
|
|
148,715 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,776,991 |
|
|
|
|
|
|
$ |
1,667,228 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
2.68 |
% |
|
|
|
|
|
3.08 |
% |
Net interest
income/margin |
|
|
|
$ |
12,367 |
|
|
3.01 |
% |
|
|
|
$ |
13,076 |
|
|
3.39 |
% |
|
|
Three Months Ended June 30, |
|
|
2020 |
|
2019 |
Total interest income |
|
$ |
16,044 |
|
|
$ |
16,841 |
|
Total interest
expense |
|
3,794 |
|
|
3,928 |
|
Net interest income |
|
12,250 |
|
|
12,913 |
|
Tax equivalent
adjustment |
|
117 |
|
|
163 |
|
Net interest income (fully
taxable equivalent) |
|
$ |
12,367 |
|
|
$ |
13,076 |
|
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Six Months Ended |
|
|
June 30, 2020 |
|
June 30, 2019 |
(Dollars in Thousands) |
|
AverageBalance |
|
Interest |
|
AverageRate |
|
AverageBalance |
|
Interest |
|
AverageRate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt loans |
|
$ |
48,346 |
|
|
$ |
752 |
|
|
3.13 |
% |
|
$ |
71,874 |
|
|
$ |
1,087 |
|
|
3.05 |
% |
All other loans |
|
1,299,893 |
|
|
28,729 |
|
|
4.44 |
% |
|
1,313,121 |
|
|
29,310 |
|
|
4.50 |
% |
Total loans |
|
1,348,239 |
|
|
29,481 |
|
|
4.40 |
% |
|
1,384,995 |
|
|
30,397 |
|
|
4.43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable securities |
|
145,070 |
|
|
2,466 |
|
|
3.46 |
% |
|
128,431 |
|
|
2,650 |
|
|
4.18 |
% |
Tax-exempt
securities |
|
26,027 |
|
|
397 |
|
|
3.10 |
% |
|
27,344 |
|
|
447 |
|
|
3.31 |
% |
Total securities |
|
171,097 |
|
|
2,863 |
|
|
3.40 |
% |
|
155,775 |
|
|
3,097 |
|
|
4.03 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
85,832 |
|
|
102 |
|
|
0.24 |
% |
|
8,493 |
|
|
103 |
|
|
2.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,605,168 |
|
|
32,446 |
|
|
4.07 |
% |
|
1,549,263 |
|
|
33,597 |
|
|
4.38 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets |
|
114,085 |
|
|
|
|
|
|
112,806 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS |
|
$ |
1,719,253 |
|
|
|
|
|
|
$ |
1,662,069 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
184,042 |
|
|
158 |
|
|
0.17 |
% |
|
$ |
168,543 |
|
|
81 |
|
|
0.10 |
% |
Super Now deposits |
|
235,758 |
|
|
833 |
|
|
0.71 |
% |
|
239,022 |
|
|
832 |
|
|
0.70 |
% |
Money market
deposits |
|
220,035 |
|
|
895 |
|
|
0.82 |
% |
|
245,307 |
|
|
1,068 |
|
|
0.88 |
% |
Time deposits |
|
370,902 |
|
|
3,951 |
|
|
2.14 |
% |
|
317,782 |
|
|
3,190 |
|
|
2.02 |
% |
Total interest-bearing
deposits |
|
1,010,737 |
|
|
5,837 |
|
|
1.16 |
% |
|
970,654 |
|
|
5,171 |
|
|
1.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings |
|
11,011 |
|
|
29 |
|
|
0.53 |
% |
|
63,881 |
|
|
783 |
|
|
2.47 |
% |
Long-term
borrowings |
|
166,024 |
|
|
1,928 |
|
|
2.34 |
% |
|
145,890 |
|
|
1,730 |
|
|
2.24 |
% |
Total borrowings |
|
177,035 |
|
|
1,957 |
|
|
2.22 |
% |
|
209,771 |
|
|
2,513 |
|
|
2.31 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,187,772 |
|
|
7,794 |
|
|
1.32 |
% |
|
1,180,425 |
|
|
7,684 |
|
|
1.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
355,704 |
|
|
|
|
|
|
315,380 |
|
|
|
|
|
Other liabilities |
|
19,551 |
|
|
|
|
|
|
20,953 |
|
|
|
|
|
Shareholders’
equity |
|
156,226 |
|
|
|
|
|
|
145,311 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
1,719,253 |
|
|
|
|
|
|
$ |
1,662,069 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
2.75 |
% |
|
|
|
|
|
3.09 |
% |
Net interest
income/margin |
|
|
|
$ |
24,652 |
|
|
3.09 |
% |
|
|
|
$ |
25,913 |
|
|
3.37 |
% |
|
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
Total interest income |
|
$ |
32,205 |
|
|
$ |
33,275 |
|
Total interest
expense |
|
7,794 |
|
|
7,684 |
|
Net interest income |
|
24,411 |
|
|
25,591 |
|
Tax equivalent
adjustment |
|
241 |
|
|
322 |
|
Net interest income (fully
taxable equivalent) |
|
$ |
24,652 |
|
|
$ |
25,913 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2020 |
|
3/31/2020 |
|
12/31/2019 |
|
9/30/2019 |
|
6/30/2019 |
Operating
Data |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,760 |
|
|
$ |
3,073 |
|
|
$ |
2,833 |
|
|
$ |
4,650 |
|
|
$ |
4,245 |
|
Net interest income |
|
12,250 |
|
|
12,161 |
|
|
12,321 |
|
|
12,903 |
|
|
12,913 |
|
Provision for loan losses |
|
645 |
|
|
750 |
|
|
1,700 |
|
|
360 |
|
|
315 |
|
Net security gains |
|
198 |
|
|
28 |
|
|
489 |
|
|
170 |
|
|
23 |
|
Non-interest income, excluding net security gains |
|
2,423 |
|
|
2,409 |
|
|
2,418 |
|
|
2,652 |
|
|
2,446 |
|
Non-interest expense |
|
9,611 |
|
|
10,110 |
|
|
10,294 |
|
|
9,541 |
|
|
10,059 |
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Statistics |
|
|
|
|
|
|
|
|
|
|
Net interest margin |
|
3.01 |
% |
|
3.19 |
% |
|
3.22 |
% |
|
3.32 |
% |
|
3.39 |
% |
Annualized return on average assets |
|
0.85 |
% |
|
0.74 |
% |
|
0.68 |
% |
|
1.10 |
% |
|
1.02 |
% |
Annualized return on average equity |
|
9.60 |
% |
|
7.83 |
% |
|
7.22 |
% |
|
12.18 |
% |
|
11.42 |
% |
Annualized net loan charge-offs to average loans |
|
0.05 |
% |
|
0.04 |
% |
|
1.19 |
% |
|
0.03 |
% |
|
0.03 |
% |
Net charge-offs |
|
168 |
|
|
144 |
|
|
4,055 |
|
|
112 |
|
|
106 |
|
Efficiency ratio |
|
65.10 |
% |
|
68.96 |
% |
|
69.42 |
% |
|
60.98 |
% |
|
65.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data |
|
|
|
|
|
|
|
|
|
|
Basic earnings per share |
|
$ |
0.53 |
|
|
$ |
0.44 |
|
|
$ |
0.40 |
|
|
$ |
0.66 |
|
|
$ |
0.60 |
|
Diluted earnings per share |
|
0.53 |
|
|
0.43 |
|
|
0.39 |
|
|
0.66 |
|
|
0.60 |
|
Dividend declared per share |
|
0.32 |
|
|
0.32 |
|
|
0.32 |
|
|
0.31 |
|
|
0.31 |
|
Book value |
|
22.66 |
|
|
22.23 |
|
|
22.01 |
|
|
22.03 |
|
|
21.53 |
|
Common stock price: |
|
|
|
|
|
|
|
|
|
|
High |
|
27.75 |
|
|
35.36 |
|
|
35.58 |
|
|
30.93 |
|
|
30.17 |
|
Low |
|
20.01 |
|
|
19.05 |
|
|
29.68 |
|
|
26.87 |
|
|
26.03 |
|
Close |
|
22.71 |
|
|
24.30 |
|
|
35.58 |
|
|
30.83 |
|
|
30.17 |
|
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,042 |
|
|
7,041 |
|
|
7,040 |
|
|
7,037 |
|
|
7,038 |
|
Fully Diluted |
|
7,042 |
|
|
7,103 |
|
|
7,338 |
|
|
7,037 |
|
|
7,038 |
|
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
Issued |
|
7,523 |
|
|
7,521 |
|
|
7,521 |
|
|
7,518 |
|
|
7,518 |
|
Treasury |
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2020 |
|
3/31/2020 |
|
12/31/2019 |
|
9/30/2019 |
|
6/30/2019 |
Financial Condition
Data: |
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,838,364 |
|
|
$ |
1,688,508 |
|
|
$ |
1,665,323 |
|
|
$ |
1,673,095 |
|
|
$ |
1,711,500 |
|
Loans, net |
|
1,336,370 |
|
|
1,336,900 |
|
|
1,343,650 |
|
|
1,350,735 |
|
|
1,365,284 |
|
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
Intangibles |
|
777 |
|
|
836 |
|
|
898 |
|
|
960 |
|
|
1,022 |
|
Total deposits |
|
1,474,305 |
|
|
1,326,734 |
|
|
1,324,005 |
|
|
1,332,407 |
|
|
1,327,086 |
|
Noninterest-bearing |
|
418,324 |
|
|
332,759 |
|
|
334,746 |
|
|
327,329 |
|
|
322,755 |
|
Savings |
|
195,964 |
|
|
183,929 |
|
|
176,732 |
|
|
171,370 |
|
|
171,992 |
|
NOW |
|
268,348 |
|
|
229,919 |
|
|
218,605 |
|
|
219,466 |
|
|
238,410 |
|
Money Market |
|
247,753 |
|
|
204,832 |
|
|
216,038 |
|
|
239,926 |
|
|
238,352 |
|
Time Deposits |
|
343,915 |
|
|
375,295 |
|
|
377,884 |
|
|
374,316 |
|
|
355,577 |
|
Total interest-bearing deposits |
|
1,055,980 |
|
|
993,975 |
|
|
989,259 |
|
|
1,005,078 |
|
|
1,004,331 |
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits* |
|
1,130,389 |
|
|
951,439 |
|
|
946,121 |
|
|
958,091 |
|
|
971,509 |
|
Shareholders’ equity |
|
159,578 |
|
|
156,562 |
|
|
154,960 |
|
|
155,061 |
|
|
151,527 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Non-performing loans |
|
$ |
11,097 |
|
|
$ |
11,300 |
|
|
$ |
12,421 |
|
|
$ |
17,208 |
|
|
$ |
15,383 |
|
Non-performing loans to total assets |
|
0.60 |
% |
|
0.67 |
% |
|
0.75 |
% |
|
1.03 |
% |
|
0.90 |
% |
Allowance for loan losses |
|
12,977 |
|
|
12,500 |
|
|
11,894 |
|
|
14,249 |
|
|
14,001 |
|
Allowance for loan losses to total loans |
|
0.96 |
% |
|
0.93 |
% |
|
0.88 |
% |
|
1.04 |
% |
|
1.02 |
% |
Allowance for loan losses to non-performing loans |
|
116.94 |
% |
|
110.62 |
% |
|
95.76 |
% |
|
82.80 |
% |
|
91.02 |
% |
Non-performing loans to total loans |
|
0.82 |
% |
|
0.84 |
% |
|
0.92 |
% |
|
1.26 |
% |
|
1.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity to total assets |
|
8.68 |
% |
|
9.27 |
% |
|
9.31 |
% |
|
9.27 |
% |
|
8.85 |
% |
* Core deposits are defined as total deposits less time
deposits
Reconciliation of GAAP and Non-GAAP
Financial Measures
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
(Dollars in Thousands, Except Per Share Data) |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
GAAP net income |
|
$ |
3,760 |
|
|
$ |
4,245 |
|
|
$ |
6,833 |
|
|
$ |
8,189 |
|
Less: net securities gains,
net of tax |
|
156 |
|
|
18 |
|
|
178 |
|
|
70 |
|
Non-GAAP core
earnings |
|
$ |
3,604 |
|
|
$ |
4,227 |
|
|
$ |
6,655 |
|
|
$ |
8,119 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Return on average assets
(ROA) |
|
0.85 |
% |
|
1.02 |
% |
|
0.79 |
% |
|
0.99 |
% |
Less: net securities gains,
net of tax |
|
0.04 |
% |
|
0.01 |
% |
|
0.02 |
% |
|
0.01 |
% |
Non-GAAP core ROA |
|
0.81 |
% |
|
1.01 |
% |
|
0.77 |
% |
|
0.98 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Return on average equity
(ROE) |
|
9.59 |
% |
|
11.42 |
% |
|
8.75 |
% |
|
11.27 |
% |
Less: net securities gains,
net of tax |
|
0.40 |
% |
|
0.05 |
% |
|
0.23 |
% |
|
0.09 |
% |
Non-GAAP core ROE |
|
9.19 |
% |
|
11.37 |
% |
|
8.52 |
% |
|
11.18 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Basic earnings per share
(EPS) |
|
$ |
0.53 |
|
|
$ |
0.60 |
|
|
$ |
0.97 |
|
|
$ |
1.16 |
|
Less: net securities gains,
net of tax |
|
0.02 |
|
|
— |
|
|
0.02 |
|
|
0.01 |
|
Non-GAAP basic core EPS |
|
$ |
0.51 |
|
|
$ |
0.60 |
|
|
$ |
0.95 |
|
|
$ |
1.15 |
|
|
|
|
|
|
|
|
Three Months EndedJune 30, |
|
Six Months EndedJune 30, |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
Diluted EPS |
|
$ |
0.53 |
|
|
$ |
0.60 |
|
|
$ |
0.97 |
|
|
$ |
1.16 |
|
Less: net securities gains,
net of tax |
|
0.02 |
|
|
— |
|
|
0.02 |
|
|
0.01 |
|
Non-GAAP diluted core
EPS |
|
$ |
0.51 |
|
|
$ |
0.60 |
|
|
$ |
0.95 |
|
|
$ |
1.15 |
|
Loan Deferrals
(In Thousands) |
|
Amount |
Commercial, financial, and agricultural |
|
$ |
28,482 |
|
Real estate mortgage: |
|
|
Residential |
|
66,133 |
|
Commercial |
|
132,217 |
|
Construction |
|
7,250 |
|
Consumer automobile
loans |
|
283 |
|
Other consumer installment
loans |
|
7,243 |
|
Total loan
deferrals |
|
$ |
241,608 |
|
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