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Penns Woods Bancorp, Inc. Reports Second Quarter 2015 Operating Earnings

WILLIAMSPORT, Pa., July 20, 2015 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD) Penns Woods Bancorp, Inc. continued its solid earnings and growth achieving net income of $6,788,000 for the six months ended June 30, 2015 resulting in basic and dilutive earnings per share of $1.42.

Highlights

  • Net income from core operations (“operating earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains and bank owned life insurance gains on death benefits, decreased to $3,088,000 for the three months ended June 30, 2015 compared to $3,142,000 for the same period of 2014. Net income from core operations decreased slightly to $6,007,000 for the six months ended June 30, 2015 compared to $6,177,000 for the same period of 2014. Impacting the three and six months ended June 30, 2015 compared to 2014 were an increase in the provision for loan losses of $300,000 and $515,000 due to the level of charge-offs and significant loan portfolio growth. In addition, the investment portfolio has declined $48,557,000 from June 30, 2014 to June 30, 2015 as part of our strategy to position the balance sheet for a rising rate environment.
  • Operating earnings per share for the three months ended June 30, 2015 and 2014 were $0.65 for both basic and dilutive. Operating earnings per share for the six months ended June 30, 2015 were $1.25 basic and dilutive compared to $1.28 basic and dilutive for the same period of 2014.
  • Return on average assets was 1.07% for the three months ended June 30, 2015 compared to 1.13% for the corresponding period of 2014. Return on average assets was 1.07% for the six months ended June 30, 2015 compared to 1.14% for the corresponding period of 2014.
  • Return on average equity was 10.05% for the three months ended June 30, 2015 compared to 10.29% for the corresponding period of 2014. Return on average equity was 9.90% for the six months ended June 30, 2015 compared to 10.43% for the corresponding period of 2014.

“The six months ended June 30, 2015 have been eventful for the Penns Woods family. We continue to experience year over year double digit loan growth as we emphasis the addition of quality earning assets. In addition, the deposit portfolio has crossed the billion dollar mark with the growth being directly linked to the high level of professionalism and customer service provided by our employees. Our branch network will be expanding in the latter part of the year as we look forward to the opening of our new branch in Lewisburg and the relocation of our Spring Mills branch,” said Richard A. Grafmyre, CFP®, President and CEO.

A reconciliation of the non-GAAP financial measures of operating earnings, operating return on assets, operating return on equity, and operating earnings per share, described in the highlights, to the comparable GAAP financial measures is included at the end of this press release.

Net Income

Net income, as reported under GAAP, for the three and six months ended June 30, 2015 was $3,433,000 and $6,788,000 compared to $3,463,000 and $6,932,000 for the same period of 2014. Results for the three and six months ended June 30, 2015 compared to 2014 were impacted by an increase in after-tax securities gains of $24,000 (from a gain of $321,000 to a gain of $345,000) for the three month periods and an increase in the after-tax securities gains of $200,000 (from a gain of $581,000 to a gain of $781,000) for the six month periods. In addition, a gain of $174,000 on death benefits related to bank owned life insurance was recorded during the first quarter of 2014. Basic and dilutive earnings per share for the three and six months ended June 30, 2015 were $0.72 and $1.42 compared to $0.72 and $1.44 for the corresponding periods of 2014. Return on average assets and return on average equity were 1.07% and 10.05% for the three months ended June 30, 2015 compared to 1.13% and 10.29% for the corresponding period of 2014. Return on average assets and return on average equity were 1.07% and 9.90% for the six months ended June 30, 2015 compared to 1.14% and 10.43% for the corresponding period of 2014.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2015 was 3.64% and 3.66% compared to 3.84% and 3.88% for the corresponding periods of 2014. The decline in the net interest margin was driven by a decreasing yield on the loan and investment portfolios due to the continued low rate environment. The impact of the declining earning asset yield and decreasing investment portfolio balance was partially offset by a 14.19% growth in gross loans from June 30, 2014 to June 30, 2015 resulting in net interest income remaining flat compared to the comparable three month period of 2014. The loan growth was funded by an increase in core deposits, decrease in the investment portfolio, and an increase in borrowings. Core deposits represent a lower cost funding source than time deposits and comprise 78.16% of total deposits at June 30, 2015 and 77.30% at June 30, 2014. Limiting the positive impact on the net margin caused by the growth in core deposits was the lengthening of the time deposit portfolio as part of our strategy to prepare the balance sheet for a rising rate environment.

“As with industry trends, the net interest margin continues to decrease each quarter by several basis points due to the low rate environment which is resulting in a decrease in the earning asset portfolio yield. Our focus on increasing the earning asset portfolio by adding quality short and intermediate term loans such as home equity loans, even though these new earning assets are at lower yields than legacy assets, has resulted in net interest income remaining flat. Interest and market risk within the investment portfolio continues to be reduced as the portfolio is being actively managed. We continue to follow our strategy of selling long-term municipal bonds that had a maturity date of 2025 or later and securities with a call date within five years. The strategic selling of bonds has provided funding that has been deployed primarily into loans with limited reinvestment into intermediate term corporate bonds and short and intermediate term municipal bonds. These actions do negatively impact current earnings, but the actions play a key role in our long-term asset liability management strategy as the earning asset portfolio is shortened to better prepare for a rising rate environment,” commented President Grafmyre.

Assets

Total assets increased $68,965,000 to $1,291,812,000 at June 30, 2015 compared to June 30, 2014. Net loans increased $119,092,000 to $966,613,000 at June 30, 2015 compared to June 30, 2014 primarily due to campaigns related to increasing home equity product market share during 2014 and 2015 and growth in the commercial portfolio. The investment portfolio decreased $48,557,000 from June 30, 2014 to June 30, 2015 due to our strategy to reduce the investment portfolio duration through the selective selling of bonds as opportunities develop. The combination of loan portfolio growth and a decrease in the size of the investment portfolio has resulted in a shortening of the overall earning asset portfolio duration consistent with a strategy to reduce the interest rate and market risk exposure to a rising rate environment.

Non-performing Loans

The non-performing loans to total loans ratio decreased to 0.99% at June 30, 2015 from 1.40% at June 30, 2014. The ratio decreased due to a decrease in non-performing loans and an increase in total loans from June 30, 2014 to June 30, 2015. The decrease in non-performing loans to $9,689,000 at June 30, 2015 from $11,979,000 at June 30, 2014 is primarily the result of a large commercial real estate loan that was removed from non-accrual status due to improved company performance and a solid payment history. The majority of non-performing loans are centered on several 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 $614,000 for the six months ended June 30, 2015 negatively impacted the allowance for loan losses which was 1.15% of total loans at June 30, 2015. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $25,642,000 to $1,007,468,000 at June 30, 2015 compared to June 30, 2014. Core deposits (total deposits excluding time deposits) increased $28,453,000, while higher cost time deposits decreased $2,811,000 due to our commitment to building complete banking relationships with our customers. Noninterest-bearing deposits increased $15,744,000 to $244,502,000 at June 30, 2015 compared to June 30, 2014. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. While deposit gathering efforts have centered on core deposits, the lengthening of the time deposit portfolio is in process as part of the strategy to build balance sheet protection in a rising rate environment.

Shareholders’ Equity

Shareholders’ equity decreased $804,000 to $134,998,000 at June 30, 2015 compared to June 30, 2014. The change from accumulated other comprehensive income of $635,000 at June 30, 2014 to accumulated other comprehensive loss of $3,170,000 at June 30, 2015 is primarily a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $3,360,000 at June 30, 2014 to an unrealized gain of $1,374,000 at June 30, 2015. The amount of accumulated other comprehensive loss at June 30, 2015 was also impacted by the change in net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan resulting in an increase in the net loss of $1,819,000 to $4,544,000 at June 30, 2015. The current level of shareholders’ equity equates to a book value per share of $28.33 at June 30, 2015 compared to $28.17 at June 30, 2014 and an equity to asset ratio of 10.45% at June 30, 2015 compared to 11.11% at June 30, 2014. Excluding goodwill and intangibles, book value per share was $24.47 at June 30, 2015 compared to $24.29 at June 30, 2014. Dividends declared for each of the three and six months ended June 30, 2015 and 2014 were $0.47 and $0.94 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates fourteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour 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.

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 certain of these 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, 2014.

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.jssb.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) 2015 2014 % Change
ASSETS
Noninterest-bearing balances $20,428 $22,905 (10.81)%
Interest-bearing balances in other financial institutions 1,441 1,962 (26.55)%
Total cash and cash equivalents 21,869 24,867 (12.06)%
Investment securities, available for sale, at fair value 214,312 263,026 (18.52)%
Investment securities, trading 157 100.00%
Loans held for sale 2,107 1,827 15.33%
Loans 977,878 856,332 14.19%
Allowance for loan losses (11,265) (8,811) 27.85%
Loans, net 966,613 847,521 14.05%
Premises and equipment, net 20,816 21,007 (0.91)%
Accrued interest receivable 3,706 4,235 (12.49)%
Bank-owned life insurance 26,327 25,601 2.84%
Investment in limited partnerships 1,229 1,891 (35.01)%
Goodwill 17,104 17,104 %
Intangibles 1,294 1,621 (20.17)%
Deferred tax asset 8,772 6,807 28.87%
Other assets 7,506 7,340 2.26%
TOTAL ASSETS $1,291,812 $1,222,847 5.64%
LIABILITIES
Interest-bearing deposits $762,966 $753,068 1.31%
Noninterest-bearing deposits 244,502 228,758 6.88%
Total deposits 1,007,468 981,826 2.61%
Short-term borrowings 59,026 21,926 169.21%
Long-term borrowings 75,426 71,202 5.93%
Accrued interest payable 410 399 2.76%
Other liabilities 14,484 11,692 23.88%
TOTAL LIABILITIES 1,156,814 1,087,045 6.42%
SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued n/a
Common stock, par value $8.33, 15,000,000 shares authorized; 5,003,757 and 5,001,222 shares issued 41,698 41,676 0.05%
Additional paid-in capital 49,933 49,846 0.17%
Retained earnings 55,397 49,955 10.89%
Accumulated other comprehensive (loss) income:
Net unrealized gain on available for sale securities 1,374 3,360 (59.11)%
Defined benefit plan (4,544) (2,725) (66.75)%
Treasury stock at cost, 238,478 and 180,596 shares (8,860) (6,310) 40.41%
TOTAL SHAREHOLDERS’ EQUITY 134,998 135,802 (0.59)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,291,812 $1,222,847 5.64%


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) 2015 2014 % Change 2015 2014 % Change
INTEREST AND DIVIDEND INCOME:
Loans including fees $9,752 $8,912 9.43% $19,075 $17,725 7.62%
Investment securities:
Taxable 885 1,406 (37.06)% 1,899 2,864 (33.69)%
Tax-exempt 744 892 (16.59)% 1,511 1,823 (17.11)%
Dividend and other interest income 148 147 0.68% 441 274 60.95%
TOTAL INTEREST AND DIVIDEND INCOME 11,529 11,357 1.51% 22,926 22,686 1.06%
INTEREST EXPENSE:
Deposits 785 741 5.94% 1,528 1,499 1.93%
Short-term borrowings 28 12 133.33% 47 27 74.07%
Long-term borrowings 494 473 4.44% 1,018 942 8.07%
TOTAL INTEREST EXPENSE 1,307 1,226 6.61% 2,593 2,468 5.06%
NET INTEREST INCOME 10,222 10,131 0.90% 20,333 20,218 0.57%
PROVISION FOR LOAN LOSSES 600 300 100.00% 1,300 785 65.61%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,622 9,831 (2.13)% 19,033 19,433 (2.06)%
NON-INTEREST INCOME:
Service charges 598 607 (1.48)% 1,151 1,202 (4.24)%
Securities gains, available for sale 526 487 8.01% 1,187 880 34.89%
Securities losses, trading (4) (100.00)% (4) (100.00)%
Bank-owned life insurance 171 181 (5.52)% 359 551 (34.85)%
Gain on sale of loans 482 421 14.49% 781 711 9.85%
Insurance commissions 204 283 (27.92)% 438 703 (37.70)%
Brokerage commissions 294 251 17.13% 539 522 3.26%
Other 786 699 12.45% 1,866 1,571 18.78%
TOTAL NON-INTEREST INCOME 3,057 2,929 4.37% 6,317 6,140 2.88%
NON-INTEREST EXPENSE:
Salaries and employee benefits 4,301 4,167 3.22% 8,771 8,670 1.16%
Occupancy 564 552 2.17% 1,192 1,182 0.85%
Furniture and equipment 643 648 (0.77)% 1,238 1,319 (6.14)%
Pennsylvania shares tax 243 262 (7.25)% 467 506 (7.71)%
Amortization of investments in limited partnerships 166 166 % 331 331 %
Federal Deposit Insurance Corporation deposit insurance 230 201 14.43% 445 379 17.41%
Marketing 145 126 15.08% 274 236 16.10%
Intangible amortization 80 88 (9.09)% 162 180 (10.00)%
Other 2,049 2,212 (7.37)% 4,009 4,262 (5.94)%
TOTAL NON-INTEREST EXPENSE 8,421 8,422 (0.01)% 16,889 17,065 (1.03)%
INCOME BEFORE INCOME TAX PROVISION 4,258 4,338 (1.84)% 8,461 8,508 (0.55)%
INCOME TAX PROVISION 825 875 (5.71)% 1,673 1,576 6.15%
NET INCOME $3,433 $3,463 (0.87)% $6,788 $6,932 (2.08)%
EARNINGS PER SHARE - BASIC AND DILUTED $0.72 $0.72 % $1.42 $1.44 (1.39)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED 4,779,687 4,820,193 (0.84)% 4,790,536 4,819,886 (0.61)%
DIVIDENDS DECLARED PER SHARE $0.47 $0.47 % $0.94 $0.94 %


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
Three Months Ended
June 30, 2015 June 30, 2014
(Dollars in Thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Tax-exempt loans $39,977 $388 3.89% $26,040 $286 4.41%
All other loans 921,769 9,496 4.13% 805,971 8,723 4.34%
Total loans 961,746 9,884 4.12% 832,011 9,009 4.34%
Federal funds sold % 128 %
Taxable securities 130,730 1,030 3.15% 175,374 1,540 3.51%
Tax-exempt securities 87,509 1,127 5.15% 98,589 1,352 5.66%
Total securities 218,239 2,157 3.95% 273,963 2,892 4.27%
Interest-bearing deposits 3,781 3 0.32% 14,396 13 0.36%
Total interest-earning assets 1,183,766 12,044 4.08% 1,120,498 11,914 4.27%
Other assets 98,039 105,066
TOTAL ASSETS $1,281,805 $1,225,564
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings $143,305 14 0.04% $141,837 20 0.06%
Super Now deposits 187,828 124 0.26% 189,473 150 0.32%
Money market deposits 209,624 143 0.27% 211,788 138 0.26%
Time deposits 220,851 504 0.92% 225,548 433 0.77%
Total interest-bearing deposits 761,608 785 0.41% 768,646 741 0.39%
Short-term borrowings 39,166 28 0.28% 15,422 11 0.29%
Long-term borrowings 81,924 494 2.39% 71,202 474 2.63%
Total borrowings 121,090 522 1.71% 86,624 485 2.22%
Total interest-bearing liabilities 882,698 1,307 0.59% 855,270 1,226 0.57%
Demand deposits 244,205 220,975
Other liabilities 18,231 14,651
Shareholders’ equity- 136,671 134,668
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,281,805 $1,225,564
Interest rate spread 3.49% 3.70%
Net interest income/margin $10,737 3.64% $10,688 3.84%


Three Months Ended June 30,
2015 2014
Total interest income $11,529 $11,357
Total interest expense 1,307 1,226
Net interest income 10,222 10,131
Tax equivalent adjustment 515 557
Net interest income (fully taxable equivalent) $10,737 $10,688


Six Months Ended
June 30, 2015 June 30, 2014
(Dollars in Thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Tax-exempt loans $38,303 $771 4.06% $26,714 $592 4.47%
All other loans 906,693 18,566 4.13% 798,552 17,334 4.38%
Total loans 944,996 19,337 4.13% 825,266 17,926 4.38%
Federal funds sold % 344 %
Taxable securities 137,041 2,333 3.40% 176,046 3,116 3.54%
Tax-exempt securities 87,667 2,289 5.22% 97,864 2,762 5.64%
Total securities 224,708 4,622 4.11% 273,910 5,878 4.29%
Interest-bearing deposits 5,152 7 0.27% 10,000 22 0.44%
Total interest-earning assets 1,174,856 23,966 4.11% 1,109,520 23,826 4.32%
Other assets 97,043 105,718
TOTAL ASSETS $1,271,899 $1,215,238
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings $142,537 29 0.04% $140,803 51 0.07%
Super Now deposits 189,125 253 0.27% 183,174 307 0.34%
Money market deposits 207,446 279 0.27% 209,314 272 0.26%
Time deposits 218,824 967 0.89% 228,846 869 0.77%
Total interest-bearing deposits 757,932 1,528 0.41% 762,137 1,499 0.40%
Short-term borrowings 33,728 47 0.28% 17,749 27 0.31%
Long-term borrowings 82,961 1,018 2.44% 71,202 942 2.63%
Total borrowings 116,689 1,065 1.82% 88,951 969 2.17%
Total interest-bearing liabilities 874,621 2,593 0.59% 851,088 2,468 0.58%
Demand deposits 242,488 216,588
Other liabilities 17,687 14,642
Shareholders’ equity 137,103 132,920
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,271,899 $1,215,238
Interest rate spread 3.52% 3.74%
Net interest income/margin $21,373 3.66% $21,358 3.88%


Six Months Ended June 30,
2015 2014
Total interest income $22,926 $22,686
Total interest expense 2,593 2,468
Net interest income 20,333 20,218
Tax equivalent adjustment 1,040 1,140
Net interest income (fully taxable equivalent) $21,373 $21,358


(Dollars in Thousands, Except Per Share Data) Quarter Ended
6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Operating Data
Net income $3,433 $3,355 $2,883 $4,793 $3,463
Net interest income 10,222 10,111 10,208 10,218 10,131
Provision for loan losses 600 700 1,605 460 300
Net security gains 522 661 490 2,145 487
Non-interest income, ex. net security gains 2,535 2,599 2,954 2,779 2,442
Non-interest expense 8,421 8,468 8,512 8,313 8,422
Performance Statistics
Net interest margin 3.64% 3.69% 3.73% 3.78% 3.83%
Annualized return on average assets 1.07% 1.06% 0.93% 1.56% 1.13%
Annualized return on average equity 10.05% 9.76% 8.33% 13.95% 10.29%
Annualized net loan charge-offs to average loans 0.07% 0.20% 0.12% 0.01% %
Net charge-offs 161 453 276 21 9
Efficiency ratio 65.3% 66.0% 64.0% 63.3% 66.3%
Per Share Data
Basic earnings per share $0.72 $0.70 $0.60 $0.99 $0.72
Diluted earnings per share 0.72 0.70 0.60 0.99 0.72
Dividend declared per share 0.47 0.47 0.47 0.47 0.47
Book value 28.33 28.57 28.30 28.49 28.17
Common stock price:
High 48.28 48.91 49.26 48.79 48.37
Low 41.84 44.41 42.18 42.25 43.21
Close 44.09 48.91 49.26 42.25 47.10
Weighted average common shares:
Basic 4,780 4,802 4,805 4,820 4,820
Fully Diluted 4,780 4,802 4,805 4,820 4,820
End-of-period common shares:
Issued 5,004 5,003 5,003 5,002 5,001
Treasury 238 207 198 192 181


Quarter Ended
(Dollars in Thousands, Except Per Share Data) 6/30/2015 3/31/2015 12/31/2014 9/30/2014 6/30/2014
Financial Condition Data:
General
Total assets $1,291,812 $1,268,833 $1,245,011 $1,227,122 $1,222,847
Loans, net 966,613 933,044 905,000 881,477 847,521
Goodwill 17,104 17,104 17,104 17,104 17,104
Intangibles 1,294 1,373 1,456 1,538 1,621
Total deposits 1,007,468 996,489 981,419 989,128 981,826
Noninterest-bearing 244,502 246,231 243,378 232,588 228,758
Savings 143,415 143,222 139,278 141,170 141,362
NOW 188,092 186,788 177,970 183,056 176,066
Money Market 211,412 204,352 204,535 213,725 212,782
Time Deposits 220,047 215,896 216,258 218,589 222,858
Total interest-bearing deposits 762,966 750,258 738,041 756,540 753,068
Core deposits* 787,421 780,593 765,161 770,539 758,968
Shareholders’ equity 134,998 137,004 135,967 137,004 135,802
Asset Quality
Non-performing assets $9,689 $11,157 $12,248 $12,294 $11,979
Non-performing assets to total assets 0.75% 0.88% 0.98% 1.00% 0.98%
Allowance for loan losses 11,265 10,826 10,579 9,250 8,811
Allowance for loan losses to total loans 1.15% 1.15% 1.16% 1.04% 1.03%
Allowance for loan losses to non-performing loans 116.27% 97.03% 86.37% 75.24% 73.55%
Non-performing loans to total loans 0.99% 1.18% 1.34% 1.38% 1.40%
Capitalization
Shareholders’ equity to total assets 10.45% 10.80% 10.92% 11.16% 11.11%

* 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) 2015 2014 2015 2014
GAAP net income $3,433 $3,463 $6,788 $6,932
Less: net securities and bank-owned life insurance gains, net of tax 345 321 781 755
Non-GAAP operating earnings $3,088 $3,142 $6,007 $6,177
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Return on average assets (ROA) 1.07% 1.13% 1.07% 1.14%
Less: net securities and bank-owned life insurance gains, net of tax 0.11% 0.10% 0.13% 0.12%
Non-GAAP operating ROA 0.96% 1.03% 0.94% 1.02%
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Return on average equity (ROE) 10.05% 10.29% 9.90% 10.43%
Less: net securities and bank-owned life insurance gains, net of tax 1.01% 0.96% 1.14% 1.14%
Non-GAAP operating ROE 9.04% 9.33% 8.76% 9.29%
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Basic earnings per share (EPS) $0.72 $0.72 $1.42 $1.44
Less: net securities and bank-owned life insurance gains, net of tax 0.07 0.07 0.17 0.16
Non-GAAP basic operating EPS $0.65 $0.65 $1.25 $1.28
Three Months Ended June 30, Six Months Ended June 30,
2015 2014 2015 2014
Dilutive EPS $0.72 $0.72 $1.42 $1.44
Less: net securities and bank-owned life insurance gains, net of tax 0.07 0.07 0.17 0.16
Non-GAAP dilutive operating EPS $0.65 $0.65 $1.25 $1.28


Contact: Richard A. Grafmyre, President and Chief Executive Officer 300 Market Street Williamsport, PA 17701 570-322-1111 e-mail: pwod@pwod.com

Source:Penns Woods Bancorp, Inc.