Penns Woods Bancorp, Inc. (NASDAQ: PWOD)
Penns Woods Bancorp, Inc. achieved net
income of $7.0 million for the six months ended June 30, 2021,
resulting in basic and diluted earnings per share of $1.00.
Highlights
- Net income, as reported under GAAP,
for the three and six months ended June 30, 2021 was $3.6
million and $7.0 million, respectively, compared to $3.8 million
and $6.8 million for the same period of 2020. Results for the three
and six months ended June 30, 2021 compared to 2020 were
impacted by a decrease in after-tax securities gains of $45,000
(from a gain of $156,000 to a gain of $111,000) for the three month
period and an increase in after-tax securities gains of $27,000
(from a gain of $178,000 to a gain of $205,000) for the six month
period.
- The provision for loan losses
decreased $295,000 and $530,000, respectfully, for the three and
six months ended June 30, 2021, to $350,000 and $865,000 compared
to $645,000 and $1.4 million for the 2020 periods. The provision
for loan losses was elevated in 2020 due primarily to the
uncertainty caused by the COVID-19 pandemic.
- Basic and diluted earnings per
share for the three and six months ended June 30, 2021 were $0.51
and $1.00. Basic and diluted earnings per share for the three and
six months ended June 30, 2020 were $0.53 and $0.97.
- Return on average assets was 0.76%
for three months ended June 30, 2021, compared to 0.85% for the
corresponding period of 2020. Return on average assets was 0.75%
for the six months ended June 30, 2021, compared to 0.79% for the
corresponding period of 2020.
- Return on average equity was 8.70%
for the three months ended June 30, 2021, compared to 9.59% for the
corresponding period of 2020. Return on average equity was 8.69%
for the six months ended June 30, 2021, compared to 8.75% for the
corresponding period of 2020.
COVID-19 Activity
- Approximately one third of
employees working remotely.
- As of June 30, 2021, loan
modification/deferral program in place to defer payments up to 180
days for principal and/or interest with only $7.9 million in loan
principal remaining in deferral.
- 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
2021.
- Total paycheck protection program
loans originated to be held on balance sheet at June 30, 2021 total
$21.6 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 $3.5 million for the three months ended June 30,
2021 compared to $3.6 million for the same period of 2020. Core
earnings were $6.8 million for the six months ended June 30, 2021,
compared to $6.7 million for the same period of 2020. Core earnings
per share for the three months ended June 30, 2021 were $0.49
basic and diluted, compared to $0.51 basic and diluted core
earnings per share for the same period of 2020. Core earnings per
share for the six months ended June 30, 2021 were $0.97 basic and
diluted, compared to $0.95 basic and diluted for the same period of
2020. Core return on average assets and core return on average
equity were 0.74% and 8.43% for the three months ended June 30,
2021, compared to 0.81% and 9.19% for the corresponding period of
2020. Core return on average assets and core return on average
equity were 0.73% and 8.44% for the six months ended June 30, 2021
compared to 0.77% and 8.52% for the corresponding period of 2020. 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, 2021 was 2.78% and 2.83%, compared to 3.01%
and 3.09% for the corresponding period of 2020. The decrease in the
net interest margin was driven by a decrease in the yield of the
loan portfolio of 47 and 39 basis points ("bps"), while the
investment portfolio yield declined 50 and 62 bps, respectively,
during the current low interest rate environment. Further
compressing the net interest margin was the significant increase of
interest-bearing deposits. These deposits carry a current yield of
a few basis points as commercial customers have received PPP
funding and retail customers have received stimulus funding. Rates
paid on interest-bearing deposit liabilities decreased 54 and 56
bps as rates paid were decreased significantly during 2020 due to
the economic impact of COVID-19 prolonging the low interest rate
environment. These deposit rate decreases have partially offset the
decline in earning asset yield.
Assets
Total assets increased $56.5 million to $1.9
billion at June 30, 2021 compared to June 30, 2020.
Cash and cash equivalents increased significantly due to deposit
growth resulting from the various economic recovery programs
instituted at the state and federal levels that impacted both
commercial and retail customers, coupled with customers becoming
more risk averse and seeking safety in a bank deposit. Net loans
decreased $12.9 million to $1.3 billion at June 30, 2021
compared to June 30, 2020, 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 during
the second half of 2020 and continues to rebound in 2021. The
investment portfolio increased $7.7 million from June 30, 2020
to June 30, 2021 as a portion of the excess cash liquidity was
invested into short-term municipal bonds.
Non-performing Loans
The ratio of non-performing loans to total loans
ratio decreased to 0.59% at June 30, 2021 from 0.82% at
June 30, 2020 as non-performing loans have decreased to $7.9
million at June 30, 2021 from $11.1 million at June 30,
2020 primarily due to a commercial loan relationship that was
paid-off during the fourth quarter of 2020. 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
$230,000 for the six months ended June 30, 2021 impacted the
allowance for loan losses, which was 1.08% of total loans at
June 30, 2021 compared to 0.96% at June 30, 2020.
Deposits
Deposits increased $89.4 million to $1.6 billion
at June 30, 2021 compared to June 30, 2020.
Noninterest-bearing deposits increased $59.0 million to $477.3
million at June 30, 2021 compared to June 30, 2020.
Driving deposit growth was the receipt of PPP funding by
commercial customers, stimulus funding by retail customers, and
customers becoming more risk averse and seeking safety in a bank
deposit. Emphasis remains 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. The increased level of deposits
have allowed for a decrease in short and long-term borrowings.
Shareholders’ Equity
Shareholders’ equity increased $7.3 million to
$166.8 million at June 30, 2021 compared to June 30,
2020. Accumulated other comprehensive loss of $1.4 million at
June 30, 2021 increased from a loss of $1.0 million at June 30,
2020 primarily as a result of a change in the net excess of the
projected benefit obligations under the defined benefit plan over
the fair value of the plan’s assets, resulting in an increase in
the net loss of $364,000. The current level of shareholders’ equity
equates to a book value per share of $23.63 at June 30, 2021
compared to $22.66 at June 30, 2020, and an equity to asset
ratio of 8.80% at June 30, 2021 compared to 8.68% at
June 30, 2020. Dividends declared for the six months
ended June 30, 2021 and 2020 were $0.64 per share,
respectively.
Penns Woods Bancorp, Inc. is the parent
company of Jersey Shore State Bank, which operates eighteen branch
offices providing financial services in Lycoming, Clinton, Centre,
Montour, Union, and Blair Counties, and Luzerne Bank, which
operates eight 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, 2020.
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 |
PENNS WOODS
BANCORP, INC.CONSOLIDATED BALANCE
SHEET(UNAUDITED)
|
|
June 30, |
(In Thousands, Except Share Data) |
|
2021 |
|
2020 |
|
% Change |
ASSETS: |
|
|
|
|
|
|
Noninterest-bearing
balances |
|
$ |
27,731 |
|
|
$ |
26,932 |
|
|
2.97 |
% |
Interest-bearing balances in
other financial
institutions |
|
199,389 |
|
|
188,242 |
|
|
5.92 |
% |
Federal funds
sold |
|
40,000 |
|
|
— |
|
|
n/a |
|
Total cash and cash
equivalents |
|
267,120 |
|
|
215,174 |
|
|
24.14 |
% |
|
|
|
|
|
|
|
Investment debt securities,
available for sale, at fair
value |
|
171,783 |
|
|
164,369 |
|
|
4.51 |
% |
Investment equity securities,
at fair value |
|
1,269 |
|
|
1,291 |
|
|
(1.70 |
)% |
Investment securities,
trading |
|
43 |
|
|
37 |
|
|
16.22 |
% |
Restricted investment in bank
stock, at fair value
|
|
15,120 |
|
|
14,849 |
|
|
1.83 |
% |
Loans held for
sale |
|
4,927 |
|
|
5,146 |
|
|
(4.26 |
)% |
Loans |
|
1,337,947 |
|
|
1,349,347 |
|
|
(0.84 |
)% |
Allowance for loan
losses |
|
(14,438 |
) |
|
(12,977 |
) |
|
11.26 |
% |
Loans, net |
|
1,323,509 |
|
|
1,336,370 |
|
|
(0.96 |
)% |
Premises and equipment,
net |
|
34,629 |
|
|
32,873 |
|
|
5.34 |
% |
Accrued interest
receivable |
|
8,363 |
|
|
8,068 |
|
|
3.66 |
% |
Bank-owned life
insurance |
|
34,005 |
|
|
29,368 |
|
|
15.79 |
% |
Investment in limited
partnerships |
|
4,795 |
|
|
1,596 |
|
|
200.44 |
% |
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
— |
% |
Intangibles |
|
568 |
|
|
777 |
|
|
(26.90 |
)% |
Operating lease right of use
asset |
|
2,946 |
|
|
3,231 |
|
|
(8.82 |
)% |
Deferred tax
asset |
|
3,624 |
|
|
3,284 |
|
|
10.35 |
% |
Other
assets |
|
5,065 |
|
|
4,827 |
|
|
4.93 |
% |
TOTAL
ASSETS |
|
$ |
1,894,870 |
|
|
$ |
1,838,364 |
|
|
3.07 |
% |
|
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
|
Interest-bearing
deposits |
|
$ |
1,086,352 |
|
|
$ |
1,055,981 |
|
|
2.88 |
% |
Noninterest-bearing
deposits |
|
477,344 |
|
|
418,324 |
|
|
14.11 |
% |
Total deposits |
|
1,563,696 |
|
|
1,474,305 |
|
|
6.06 |
% |
|
|
|
|
|
|
|
Short-term
borrowings |
|
7,520 |
|
|
15,133 |
|
|
(50.31 |
)% |
Long-term
borrowings |
|
141,051 |
|
|
171,885 |
|
|
(17.94 |
)% |
Accrued interest
payable |
|
961 |
|
|
1,530 |
|
|
(37.19 |
)% |
Operating lease
liability |
|
2,992 |
|
|
3,263 |
|
|
(8.31 |
)% |
Other
liabilities |
|
11,815 |
|
|
12,640 |
|
|
(6.53 |
)% |
TOTAL
LIABILITIES |
|
1,728,035 |
|
|
1,678,756 |
|
|
2.94 |
% |
|
|
|
|
|
|
|
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;
7,541,627 and 7,522,573 shares issued; 7,061,402 and 7,042,348
shares
outstanding |
|
41,897 |
|
|
41,792 |
|
|
0.25 |
% |
Additional paid-in
capital |
|
53,205 |
|
|
51,956 |
|
|
2.40 |
% |
Retained
earnings |
|
85,281 |
|
|
78,910 |
|
|
8.07 |
% |
Accumulated other
comprehensive gain (loss): |
|
|
|
|
|
|
Net unrealized gain on available for sale
securities |
|
4,085 |
|
|
4,194 |
|
|
(2.60 |
)% |
Defined benefit
plan |
|
(5,523 |
) |
|
(5,159 |
) |
|
(7.06 |
)% |
Treasury stock at cost,
480,225 |
|
(12,115 |
) |
|
(12,115 |
) |
|
— |
% |
TOTAL PENNS WOODS BANCORP,
INC. SHAREHOLDERS'
EQUITY |
|
166,830 |
|
|
159,578 |
|
|
4.54 |
% |
Non-controlling
interest |
|
5 |
|
|
30 |
|
|
(83.33 |
)% |
TOTAL SHAREHOLDERS'
EQUITY |
|
166,835 |
|
|
159,608 |
|
|
4.53 |
% |
TOTAL LIABILITIES AND
SHAREHOLDERS’
EQUITY |
|
$ |
1,894,870 |
|
|
$ |
1,838,364 |
|
|
3.07 |
% |
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) |
|
2021 |
|
2020 |
|
% Change |
|
2021 |
|
2020 |
|
% Change |
INTEREST AND DIVIDEND INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Loans including
fees |
|
$ |
13,099 |
|
|
$ |
14,666 |
|
|
(10.68 |
)% |
|
$ |
26,444 |
|
|
$ |
29,323 |
|
|
(9.82 |
)% |
Investment securities: |
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
838 |
|
|
1,023 |
|
|
(18.08 |
)% |
|
1,657 |
|
|
2,033 |
|
|
(18.49 |
)% |
Tax-exempt |
|
164 |
|
|
169 |
|
|
(2.96 |
)% |
|
335 |
|
|
314 |
|
|
6.69 |
% |
Dividend and other interest
income |
|
305 |
|
|
186 |
|
|
63.98 |
% |
|
565 |
|
|
535 |
|
|
5.61 |
% |
TOTAL INTEREST AND DIVIDEND
INCOME |
|
14,406 |
|
|
16,044 |
|
|
(10.21 |
)% |
|
29,001 |
|
|
32,205 |
|
|
(9.95 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
1,489 |
|
|
2,802 |
|
|
(46.86 |
)% |
|
3,173 |
|
|
5,837 |
|
|
(45.64 |
)% |
Short-term
borrowings |
|
2 |
|
|
7 |
|
|
(71.43 |
)% |
|
4 |
|
|
29 |
|
|
(86.21 |
)% |
Long-term
borrowings |
|
820 |
|
|
985 |
|
|
(16.75 |
)% |
|
1,659 |
|
|
1,928 |
|
|
(13.95 |
)% |
TOTAL INTEREST
EXPENSE |
|
2,311 |
|
|
3,794 |
|
|
(39.09 |
)% |
|
4,836 |
|
|
7,794 |
|
|
(37.95 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST
INCOME |
|
12,095 |
|
|
12,250 |
|
|
(1.27 |
)% |
|
24,165 |
|
|
24,411 |
|
|
(1.01 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR LOAN
LOSSES |
|
350 |
|
|
645 |
|
|
(45.74 |
)% |
|
865 |
|
|
1,395 |
|
|
(37.99 |
)% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INTEREST INCOME AFTER
PROVISION FOR LOAN
LOSSES |
|
11,745 |
|
|
11,605 |
|
|
1.21 |
% |
|
23,300 |
|
|
23,016 |
|
|
1.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST INCOME: |
|
|
|
|
|
|
|
|
|
|
|
|
Service
charges |
|
379 |
|
|
312 |
|
|
21.47 |
% |
|
762 |
|
|
861 |
|
|
(11.50 |
)% |
Debt securities gains,
available for
sale |
|
137 |
|
|
186 |
|
|
(26.34 |
)% |
|
275 |
|
|
207 |
|
|
32.85 |
% |
Equity securities gains
(losses) |
|
4 |
|
|
10 |
|
|
(60.00 |
% |
|
(19 |
) |
|
30 |
|
|
(163.33 |
)% |
Securities (losses) gains,
trading |
|
(1 |
) |
|
— |
|
|
n/a |
|
|
3 |
|
|
(14 |
) |
|
121.43 |
% |
Bank-owned life
insurance |
|
162 |
|
|
144 |
|
|
12.50 |
% |
|
335 |
|
|
336 |
|
|
(0.30 |
)% |
Gain on sale of
loans |
|
670 |
|
|
1,028 |
|
|
(34.82 |
)% |
|
1,578 |
|
|
1,472 |
|
|
7.20 |
% |
Insurance
commissions |
|
150 |
|
|
92 |
|
|
63.04 |
% |
|
307 |
|
|
219 |
|
|
40.18 |
% |
Brokerage
commissions |
|
207 |
|
|
186 |
|
|
11.29 |
% |
|
426 |
|
|
555 |
|
|
(23.24 |
)% |
Debit card
income |
|
398 |
|
|
310 |
|
|
28.39 |
% |
|
778 |
|
|
584 |
|
|
33.22 |
% |
Other |
|
803 |
|
|
353 |
|
|
127.48 |
% |
|
1,078 |
|
|
808 |
|
|
33.42 |
% |
TOTAL NON-INTEREST
INCOME |
|
2,909 |
|
|
2,621 |
|
|
10.99 |
% |
|
5,523 |
|
|
5,058 |
|
|
9.19 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-INTEREST EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee
benefits |
|
5,672 |
|
|
5,230 |
|
|
8.45 |
% |
|
11,270 |
|
|
10,897 |
|
|
3.42 |
% |
Occupancy |
|
717 |
|
|
626 |
|
|
14.54 |
% |
|
1,693 |
|
|
1,328 |
|
|
27.48 |
% |
Furniture and
equipment |
|
971 |
|
|
828 |
|
|
17.27 |
% |
|
1,780 |
|
|
1,688 |
|
|
5.45 |
% |
Software
amortization |
|
208 |
|
|
236 |
|
|
(11.86 |
)% |
|
406 |
|
|
486 |
|
|
(16.46 |
)% |
Pennsylvania shares
tax |
|
372 |
|
|
323 |
|
|
15.17 |
% |
|
724 |
|
|
608 |
|
|
19.08 |
% |
Professional
fees |
|
684 |
|
|
658 |
|
|
3.95 |
% |
|
1,267 |
|
|
1,280 |
|
|
(1.02 |
)% |
Federal Deposit Insurance
Corporation deposit
insurance |
|
264 |
|
|
185 |
|
|
42.70 |
% |
|
485 |
|
|
379 |
|
|
27.97 |
% |
Marketing |
|
140 |
|
|
56 |
|
|
150.00 |
% |
|
203 |
|
|
109 |
|
|
86.24 |
% |
Intangible
amortization |
|
50 |
|
|
59 |
|
|
(15.25 |
)% |
|
103 |
|
|
121 |
|
|
(14.88 |
)% |
Other |
|
1,170 |
|
|
1,410 |
|
|
(17.02 |
)% |
|
2,268 |
|
|
2,825 |
|
|
(19.72 |
)% |
TOTAL NON-INTEREST
EXPENSE |
|
10,248 |
|
|
9,611 |
|
|
6.63 |
% |
|
20,199 |
|
|
19,721 |
|
|
2.42 |
% |
INCOME BEFORE INCOME TAX
PROVISION |
|
4,406 |
|
|
4,615 |
|
|
(4.53 |
)% |
|
8,624 |
|
|
8,353 |
|
|
3.24 |
% |
INCOME TAX
PROVISION |
|
813 |
|
|
851 |
|
|
(4.47 |
)% |
|
1,584 |
|
|
1,512 |
|
|
4.76 |
% |
NET
INCOME |
|
$ |
3,593 |
|
|
$ |
3,764 |
|
|
(4.54 |
)% |
|
$ |
7,040 |
|
|
$ |
6,841 |
|
|
2.91 |
% |
Earnings attributable to
noncontrolling
interest |
|
5 |
|
|
4 |
|
|
25.00 |
% |
|
11 |
|
|
8 |
|
|
37.50 |
% |
NET INCOME AVAILABLE TO COMMON
SHAREHOLDERS' |
|
$ |
3,588 |
|
|
$ |
3,760 |
|
|
(4.57 |
)% |
|
$ |
7,029 |
|
|
$ |
6,833 |
|
|
2.87 |
% |
EARNINGS PER SHARE - BASIC
|
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
(3.77 |
)% |
|
$ |
1.00 |
|
|
$ |
0.97 |
|
|
3.09 |
% |
EARNINGS PER SHARE -
DILUTED |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
(3.77 |
)% |
|
$ |
1.00 |
|
|
$ |
0.97 |
|
|
3.09 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING -
BASIC |
|
7,059,667 |
|
|
7,041,629 |
|
|
0.26 |
% |
|
7,057,404 |
|
|
7,041,185 |
|
|
0.23 |
% |
WEIGHTED AVERAGE SHARES
OUTSTANDING -
DILUTED |
|
7,059,667 |
|
|
7,041,629 |
|
|
0.26 |
% |
|
7,057,404 |
|
|
7,041,185 |
|
|
0.23 |
% |
DIVIDENDS DECLARED PER
SHARE |
|
$ |
0.32 |
|
|
$ |
0.32 |
|
|
— |
% |
|
$ |
0.64 |
|
|
$ |
0.64 |
|
|
— |
% |
PENNS WOODS BANCORP,
INC.AVERAGE BALANCES AND INTEREST
RATES
|
|
Three Months Ended |
|
|
June 30, 2021 |
|
June 30, 2020 |
(Dollars in Thousands) |
|
Average Balance |
|
Interest |
|
Average Rate |
|
Average Balance |
|
Interest |
|
Average Rate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt
loans |
|
$ |
46,926 |
|
|
$ |
334 |
|
|
2.85 |
% |
|
$ |
44,916 |
|
|
$ |
348 |
|
|
3.12 |
% |
All other
loans |
|
1,285,853 |
|
|
12,835 |
|
|
4.00 |
% |
|
1,294,745 |
|
|
14,391 |
|
|
4.47 |
% |
Total
loans |
|
1,332,779 |
|
|
13,169 |
|
|
3.96 |
% |
|
1,339,661 |
|
|
14,739 |
|
|
4.43 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds
sold |
|
25,538 |
|
|
45 |
|
|
0.71 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
securities |
|
148,415 |
|
|
1,051 |
|
|
2.87 |
% |
|
147,352 |
|
|
1,193 |
|
|
3.29 |
% |
Tax-exempt
securities |
|
36,469 |
|
|
208 |
|
|
2.31 |
% |
|
28,280 |
|
|
213 |
|
|
3.06 |
% |
Total
securities |
|
184,884 |
|
|
1,259 |
|
|
2.76 |
% |
|
175,632 |
|
|
1,406 |
|
|
3.26 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
218,868 |
|
|
48 |
|
|
0.09 |
% |
|
144,948 |
|
|
16 |
|
|
0.04 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,762,069 |
|
|
14,521 |
|
|
3.31 |
% |
|
1,660,241 |
|
|
16,161 |
|
|
3.92 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
128,402 |
|
|
|
|
|
|
116,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
1,890,471 |
|
|
|
|
|
|
$ |
1,776,991 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
225,625 |
|
|
28 |
|
|
0.05 |
% |
|
$ |
190,243 |
|
|
67 |
|
|
0.14 |
% |
Super Now
deposits |
|
285,672 |
|
|
208 |
|
|
0.29 |
% |
|
251,691 |
|
|
409 |
|
|
0.65 |
% |
Money market
deposits |
|
309,749 |
|
|
256 |
|
|
0.33 |
% |
|
229,362 |
|
|
418 |
|
|
0.73 |
% |
Time
deposits |
|
256,345 |
|
|
997 |
|
|
1.56 |
% |
|
362,545 |
|
|
1,908 |
|
|
2.12 |
% |
Total interest-bearing
deposits |
|
1,077,391 |
|
|
1,489 |
|
|
0.55 |
% |
|
1,033,841 |
|
|
2,802 |
|
|
1.09 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings |
|
7,047 |
|
|
2 |
|
|
0.11 |
% |
|
11,174 |
|
|
7 |
|
|
0.83 |
% |
Long-term
borrowings |
|
141,076 |
|
|
820 |
|
|
2.33 |
% |
|
171,895 |
|
|
985 |
|
|
2.21 |
% |
Total
borrowings |
|
148,123 |
|
|
822 |
|
|
2.23 |
% |
|
183,069 |
|
|
992 |
|
|
2.12 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,225,514 |
|
|
2,311 |
|
|
0.76 |
% |
|
1,216,910 |
|
|
3,794 |
|
|
1.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits |
|
482,513 |
|
|
|
|
|
|
384,591 |
|
|
|
|
|
Other
liabilities |
|
17,384 |
|
|
|
|
|
|
18,583 |
|
|
|
|
|
Shareholders’
equity |
|
165,060 |
|
|
|
|
|
|
156,907 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’
EQUITY |
|
$ |
1,890,471 |
|
|
|
|
|
|
$ |
1,776,991 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
2.55 |
% |
|
|
|
|
|
2.68 |
% |
Net interest
income/margin |
|
|
|
$ |
12,210 |
|
|
2.78 |
% |
|
|
|
$ |
12,367 |
|
|
3.01 |
% |
|
|
Three Months Ended June 30, |
|
|
2021 |
|
2020 |
Total interest
income |
|
$ |
14,406 |
|
|
$ |
16,044 |
|
Total interest
expense |
|
2,311 |
|
|
3,794 |
|
Net interest
income |
|
12,095 |
|
|
12,250 |
|
Tax equivalent
adjustment |
|
115 |
|
|
117 |
|
Net interest income (fully
taxable
equivalent) |
|
$ |
12,210 |
|
|
$ |
12,367 |
|
|
|
Six Months Ended |
|
|
June 30, 2021 |
|
June 30, 2020 |
(Dollars in Thousands) |
|
Average Balance |
|
Interest |
|
Average Rate |
|
Average Balance |
|
Interest |
|
Average Rate |
ASSETS: |
|
|
|
|
|
|
|
|
|
|
|
|
Tax-exempt
loans |
|
$ |
46,177 |
|
|
$ |
684 |
|
|
2.99 |
% |
|
$ |
48,346 |
|
|
$ |
752 |
|
|
3.13 |
% |
All other
loans |
|
1,289,660 |
|
|
25,904 |
|
|
4.05 |
% |
|
1,299,893 |
|
|
28,729 |
|
|
4.44 |
% |
Total
loans |
|
1,335,837 |
|
|
26,588 |
|
|
4.01 |
% |
|
1,348,239 |
|
|
29,481 |
|
|
4.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal funds
sold |
|
12,840 |
|
|
45 |
|
|
0.71 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable
securities |
|
146,740 |
|
|
2,083 |
|
|
2.88 |
% |
|
145,070 |
|
|
2,466 |
|
|
3.46 |
% |
Tax-exempt
securities |
|
36,420 |
|
|
424 |
|
|
2.36 |
% |
|
26,027 |
|
|
397 |
|
|
3.10 |
% |
Total
securities |
|
183,160 |
|
|
2,507 |
|
|
2.78 |
% |
|
171,097 |
|
|
2,863 |
|
|
3.40 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing
deposits |
|
207,495 |
|
|
94 |
|
|
0.09 |
% |
|
85,832 |
|
|
102 |
|
|
0.24 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-earning
assets |
|
1,739,332 |
|
|
29,234 |
|
|
3.39 |
% |
|
1,605,168 |
|
|
32,446 |
|
|
4.07 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
assets |
|
126,418 |
|
|
|
|
|
|
114,085 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL
ASSETS |
|
$ |
1,865,750 |
|
|
|
|
|
|
$ |
1,719,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’
EQUITY: |
|
|
|
|
|
|
|
|
|
|
|
|
Savings |
|
$ |
220,161 |
|
|
72 |
|
|
0.07 |
% |
|
$ |
184,042 |
|
|
158 |
|
|
0.17 |
% |
Super Now
deposits |
|
287,444 |
|
|
475 |
|
|
0.33 |
% |
|
235,758 |
|
|
833 |
|
|
0.71 |
% |
Money market
deposits |
|
307,885 |
|
|
523 |
|
|
0.34 |
% |
|
220,035 |
|
|
895 |
|
|
0.82 |
% |
Time
deposits |
|
255,408 |
|
|
2,103 |
|
|
1.66 |
% |
|
370,902 |
|
|
3,951 |
|
|
2.14 |
% |
Total interest-bearing
deposits |
|
1,070,898 |
|
|
3,173 |
|
|
0.60 |
% |
|
1,010,737 |
|
|
5,837 |
|
|
1.16 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term
borrowings |
|
6,368 |
|
|
4 |
|
|
0.13 |
% |
|
11,011 |
|
|
29 |
|
|
0.53 |
% |
Long-term
borrowings |
|
141,279 |
|
|
1,659 |
|
|
2.37 |
% |
|
166,024 |
|
|
1,928 |
|
|
2.34 |
% |
Total
borrowings |
|
147,647 |
|
|
1,663 |
|
|
2.27 |
% |
|
177,035 |
|
|
1,957 |
|
|
2.22 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total interest-bearing
liabilities |
|
1,218,545 |
|
|
4,836 |
|
|
0.80 |
% |
|
1,187,772 |
|
|
7,794 |
|
|
1.32 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand
deposits |
|
464,237 |
|
|
|
|
|
|
355,704 |
|
|
|
|
|
Other
liabilities |
|
21,227 |
|
|
|
|
|
|
19,551 |
|
|
|
|
|
Shareholders’
equity |
|
161,741 |
|
|
|
|
|
|
156,226 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND
SHAREHOLDERS’
EQUITY |
|
$ |
1,865,750 |
|
|
|
|
|
|
$ |
1,719,253 |
|
|
|
|
|
Interest rate
spread |
|
|
|
|
|
2.59 |
% |
|
|
|
|
|
2.75 |
% |
Net interest
income/margin |
|
|
|
$ |
24,398 |
|
|
2.83 |
% |
|
|
|
$ |
24,652 |
|
|
3.09 |
% |
|
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
Total interest
income |
|
$ |
29,001 |
|
|
$ |
32,205 |
|
Total interest
expense |
|
4,836 |
|
|
7,794 |
|
Net interest
income |
|
24,165 |
|
|
24,411 |
|
Tax equivalent
adjustment |
|
233 |
|
|
241 |
|
Net interest income (fully
taxable
equivalent) |
|
$ |
24,398 |
|
|
$ |
24,652 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2021 |
|
3/31/2021 |
|
12/31/2020 |
|
9/30/2020 |
|
6/30/2020 |
Operating
Data |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
3,588 |
|
|
$ |
3,441 |
|
|
$ |
3,901 |
|
|
$ |
4,472 |
|
|
$ |
3,760 |
|
Net interest
income |
|
12,095 |
|
|
12,070 |
|
|
11,967 |
|
|
11,845 |
|
|
12,250 |
|
Provision for loan
losses |
|
350 |
|
|
515 |
|
|
585 |
|
|
645 |
|
|
645 |
|
Net security
gains |
|
140 |
|
|
119 |
|
|
374 |
|
|
1,011 |
|
|
196 |
|
Non-interest income, excluding net security
gains |
|
2,769 |
|
|
2,495 |
|
|
2,701 |
|
|
3,024 |
|
|
2,423 |
|
Non-interest
expense |
|
10,248 |
|
|
9,951 |
|
|
9,640 |
|
|
9,707 |
|
|
9,611 |
|
|
|
|
|
|
|
|
|
|
|
|
Performance
Statistics |
|
|
|
|
|
|
|
|
|
|
Net interest
margin |
|
2.78 |
% |
|
2.88 |
% |
|
2.81 |
% |
|
2.76 |
% |
|
3.01 |
% |
Annualized return on average
assets |
|
0.76 |
% |
|
0.75 |
% |
|
0.85 |
% |
|
0.97 |
% |
|
0.85 |
% |
Annualized return on average
equity |
|
8.70 |
% |
|
8.59 |
% |
|
9.55 |
% |
|
11.05 |
% |
|
9.60 |
% |
Annualized net loan charge-offs to average
loans |
|
0.03 |
% |
|
0.04 |
% |
|
0.06 |
% |
|
0.06 |
% |
|
0.05 |
% |
Net
charge-offs |
|
114 |
|
|
116 |
|
|
211 |
|
|
193 |
|
|
168 |
|
Efficiency
ratio |
|
68.61 |
% |
|
67.96 |
% |
|
65.36 |
% |
|
64.89 |
% |
|
65.10 |
% |
|
|
|
|
|
|
|
|
|
|
|
Per Share
Data |
|
|
|
|
|
|
|
|
|
|
Basic earnings per
share |
|
$ |
0.51 |
|
|
$ |
0.49 |
|
|
$ |
0.55 |
|
|
$ |
0.63 |
|
|
$ |
0.53 |
|
Diluted earnings per
share |
|
0.51 |
|
|
0.49 |
|
|
0.55 |
|
|
0.63 |
|
|
0.53 |
|
Dividend declared per
share |
|
0.32 |
|
|
0.32 |
|
|
0.32 |
|
|
0.32 |
|
|
0.32 |
|
Book value |
|
23.63 |
|
|
23.25 |
|
|
23.27 |
|
|
23.05 |
|
|
22.66 |
|
Common stock price: |
|
|
|
|
|
|
|
|
|
|
High |
|
26.51 |
|
|
27.78 |
|
|
27.30 |
|
|
22.83 |
|
|
27.75 |
|
Low |
|
23.03 |
|
|
20.55 |
|
|
19.61 |
|
|
19.61 |
|
|
20.01 |
|
Close |
|
23.82 |
|
|
24.09 |
|
|
26.01 |
|
|
19.85 |
|
|
22.71 |
|
Weighted average common shares: |
|
|
|
|
|
|
|
|
|
|
Basic |
|
7,060 |
|
|
7,055 |
|
|
7,050 |
|
|
7,045 |
|
|
7,042 |
|
Fully Diluted |
|
7,060 |
|
|
7,055 |
|
|
7,050 |
|
|
7,045 |
|
|
7,042 |
|
End-of-period common shares: |
|
|
|
|
|
|
|
|
|
|
Issued |
|
7,542 |
|
|
7,537 |
|
|
7,533 |
|
|
7,528 |
|
|
7,523 |
|
Treasury |
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
|
480 |
|
(Dollars in Thousands, Except Per Share Data) |
|
Quarter Ended |
|
|
6/30/2021 |
|
3/31/2021 |
|
12/31/2020 |
|
9/30/2020 |
|
6/30/2020 |
Financial Condition
Data: |
|
|
|
|
|
|
|
|
|
|
General |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
$ |
1,894,870 |
|
|
$ |
1,896,192 |
|
|
$ |
1,834,643 |
|
|
$ |
1,840,779 |
|
|
$ |
1,838,364 |
|
Loans, net |
|
1,323,509 |
|
|
1,321,697 |
|
|
1,330,524 |
|
|
1,335,711 |
|
|
1,336,370 |
|
Goodwill |
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
|
17,104 |
|
Intangibles |
|
568 |
|
|
618 |
|
|
671 |
|
|
724 |
|
|
777 |
|
Total deposits |
|
1,563,696 |
|
|
1,564,364 |
|
|
1,494,443 |
|
|
1,491,810 |
|
|
1,474,305 |
|
Noninterest-bearing |
|
477,344 |
|
|
478,916 |
|
|
449,357 |
|
|
434,248 |
|
|
418,324 |
|
Savings |
|
226,573 |
|
|
224,890 |
|
|
209,924 |
|
|
202,781 |
|
|
195,964 |
|
NOW |
|
296,450 |
|
|
290,355 |
|
|
287,775 |
|
|
268,463 |
|
|
268,348 |
|
Money Market |
|
301,405 |
|
|
324,207 |
|
|
283,742 |
|
|
274,480 |
|
|
247,753 |
|
Time Deposits |
|
261,924 |
|
|
245,996 |
|
|
263,645 |
|
|
311,838 |
|
|
343,915 |
|
Total interest-bearing
deposits |
|
1,086,352 |
|
|
1,085,448 |
|
|
1,045,086 |
|
|
1,057,562 |
|
|
1,055,980 |
|
|
|
|
|
|
|
|
|
|
|
|
Core deposits* |
|
1,301,772 |
|
|
1,318,368 |
|
|
1,230,798 |
|
|
1,179,972 |
|
|
1,130,389 |
|
Shareholders’
equity |
|
166,830 |
|
|
164,059 |
|
|
164,142 |
|
|
162,422 |
|
|
159,578 |
|
|
|
|
|
|
|
|
|
|
|
|
Asset
Quality |
|
|
|
|
|
|
|
|
|
|
Non-performing
loans |
|
$ |
7,931 |
|
|
$ |
9,272 |
|
|
$ |
10,334 |
|
|
$ |
10,553 |
|
|
$ |
11,097 |
|
Non-performing loans to total
assets |
|
0.42 |
% |
|
0.49 |
% |
|
0.56 |
% |
|
0.57 |
% |
|
0.60 |
% |
Allowance for loan
losses |
|
14,438 |
|
|
14,202 |
|
|
13,803 |
|
|
13,429 |
|
|
12,977 |
|
Allowance for loan losses to total
loans |
|
1.08 |
% |
|
1.06 |
% |
|
1.03 |
% |
|
1.00 |
% |
|
0.96 |
% |
Allowance for loan losses to non-performing
loans |
|
182.05 |
% |
|
153.17 |
% |
|
133.57 |
% |
|
127.25 |
% |
|
116.94 |
% |
Non-performing loans to total
loans |
|
0.59 |
% |
|
0.69 |
% |
|
0.77 |
% |
|
0.78 |
% |
|
0.82 |
% |
|
|
|
|
|
|
|
|
|
|
|
Capitalization |
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity to total
assets |
|
8.80 |
% |
|
8.65 |
% |
|
8.95 |
% |
|
8.82 |
% |
|
8.68 |
% |
* Core deposits are defined as total deposits less time
deposits
Reconciliation of GAAP and Non-GAAP
Financial Measures
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
(Dollars in Thousands, Except Per Share Data) |
|
2021 |
|
2020 |
|
2021 |
|
2020 |
GAAP net
income |
|
$ |
3,588 |
|
|
$ |
3,760 |
|
|
$ |
7,029 |
|
|
$ |
6,833 |
|
Less: net securities gains,
net of tax |
|
|
111 |
|
|
|
156 |
|
|
|
205 |
|
|
|
178 |
|
Non-GAAP core
earnings |
|
$ |
3,477 |
|
|
$ |
3,604 |
|
|
$ |
6,824 |
|
|
$ |
6,655 |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Return on average assets
(ROA) |
|
0.76 |
% |
|
0.85 |
% |
|
0.75 |
% |
|
0.79 |
% |
Less: net securities gains,
net of tax |
|
0.02 |
% |
|
0.04 |
% |
|
0.02 |
% |
|
0.02 |
% |
Non-GAAP core
ROA |
|
0.74 |
% |
|
0.81 |
% |
|
0.73 |
% |
|
0.77 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Return on average equity
(ROE) |
|
8.70 |
% |
|
9.59 |
% |
|
8.69 |
% |
|
8.75 |
% |
Less: net securities gains,
net of tax |
|
0.27 |
% |
|
0.40 |
% |
|
0.25 |
% |
|
0.23 |
% |
Non-GAAP core
ROE |
|
8.43 |
% |
|
9.19 |
% |
|
8.44 |
% |
|
8.52 |
% |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Basic earnings per share
(EPS) |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
$ |
1.00 |
|
|
$ |
0.97 |
|
Less: net securities gains,
net of tax |
|
0.02 |
|
|
0.02 |
|
|
0.03 |
|
|
0.02 |
|
Non-GAAP basic core
EPS |
|
$ |
0.49 |
|
|
$ |
0.51 |
|
|
$ |
0.97 |
|
|
$ |
0.95 |
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
Diluted
EPS |
|
$ |
0.51 |
|
|
$ |
0.53 |
|
|
$ |
1.00 |
|
|
$ |
0.97 |
|
Less: net securities gains,
net of tax |
|
0.02 |
|
|
0.02 |
|
|
0.03 |
|
|
0.02 |
|
Non-GAAP diluted core
EPS |
|
$ |
0.49 |
|
|
$ |
0.51 |
|
|
$ |
0.97 |
|
|
$ |
0.95 |
|
COVID-19 Loan Deferrals as of June 30, 2021
(In Thousands) |
|
Amount |
Commercial, financial, and
agricultural |
|
$ |
140 |
|
Real estate mortgage: |
|
|
Residential |
|
892 |
|
Commercial |
|
6,890 |
|
Consumer automobile
loans |
|
— |
|
Other consumer installment
loans |
|
9 |
|
Total loan deferrals
|
|
$ |
7,931 |
|
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