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

WILLIAMSPORT, Pa., Jan. 26, 2016 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Penns Woods Bancorp, Inc. continued its solid earnings, supported by strong asset and deposit growth, achieving net income of $13,898,000 for the twelve months ended December 31, 2015 resulting in basic and dilutive earnings per share of $2.91.

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, increased to $3,156,000 for the three months ended December 31, 2015 compared to $2,560,000 for the same period of 2014. Net income from core operations increased to $12,202,000 for the twelve months ended December 31, 2015 compared to $12,114,000 for the same period of 2014. Impacting the three and twelve months ended December 31, 2015 compared to 2014 were a decrease in the provision for loan losses of $1,125,000 and $550,000 due to the reduction in charge-offs partially offset by the loan portfolio growth. In addition, the investment portfolio has declined $55,983,000 from December 31, 2014 to December 31, 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 December 31, 2015 and 2014 were $0.66 and $0.53 for both basic and dilutive. Operating earnings per share for the twelve months ended December 31, 2015 were $2.56 basic and dilutive compared to $2.52 basic and dilutive for the same period of 2014.
  • Return on average assets was 1.15% for the three months ended December 31, 2015 compared to 0.93% for the corresponding period of 2014. Return on average assets was 1.08% for the twelve months ended December 31, 2015 compared to 1.19% for the corresponding period of 2014.
  • Return on average equity was 10.73% for the three months ended December 31, 2015 compared to 8.33% for the corresponding period of 2014. Return on average equity was 10.11% for the twelve months ended December 31, 2015 compared to 10.79% for the corresponding period of 2014.

“The past twelve months have seen the Penns Woods Family expand our foot print and balance sheet, while preparing for the future. During the fourth quarter of 2015 JSSB expanded its market coverage in Lewisburg with the opening of a branch that will serve as the hub for our southernmost locations. The loan portfolio experienced double digit growth, while the deposit portfolio also experienced solid growth. Supporting the footprint expansion and balance sheet growth was the continued hard work and dedication of our employees,” 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 twelve months ended December 31, 2015 was $3,746,000 and $13,898,000 compared to $2,883,000 and $14,608,000 for the same periods of 2014. Results for the three and twelve months ended December 31, 2015 compared to 2014 were impacted by an increase in after-tax securities gains of $267,000 (from a gain of $323,000 to a gain of $590,000) for the three month periods and a decrease in after-tax securities gains of $624,000 (from a gain of $2,320,000 to a gain of $1,696,000) for the twelve 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 twelve months ended December 31, 2015 were $0.79 and $2.91 compared to $0.60 and $3.03 for the corresponding periods of 2014. Return on average assets and return on average equity were 1.15% and 10.73% for the three months ended December 31, 2015 compared to 0.93% and 8.33% for the corresponding period of 2014. Return on average assets and return on average equity were 1.08% and 10.11% for the twelve months ended December 31, 2015 compared to 1.19% and 10.79% for the corresponding period of 2014.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2015 was 3.55% and 3.61% compared to 3.73% and 3.81% 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 and a reduction in the size of the investment portfolio as it is positioned for a rising rate environment. The impact of the declining earning asset yield and decreasing investment portfolio balance was offset by a 14.16% growth in gross loans from December 31, 2014 to December 31, 2015 resulting in net interest income remaining flat compared to the comparable three and twelve month periods 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 78.55% of total deposits at December 31, 2015 and 77.96% at December 31, 2014.

“Due to the low rate environment, we continue to experience a declining yield on earning assets as legacy assets are replaced and new earning assets are added at current interest rates. While this results in a lower than historical earning asset yield, we have maintained a flat level of net interest income by focusing on adding quality earning assets such as short and intermediate term loans which has led to growth in the home equity segment of the loan portfolio. The investment portfolio is being actively managed to reduce exposure to a rising rate environment. This has resulted in the selective selling of bonds, primarily long- term municipal bonds, within the investment portfolio as interest and market risk within the investment portfolio continues to be reduced. Proceeds from the reduction of the investment portfolio have been used to fund the significant growth within the loan portfolio. The reduction in size of the investment portfolio does negatively impact current earnings, but the actions play a key role in our long-term asset liability management strategy,” commented President Grafmyre.

Assets

Total assets increased $75,046,000 to $1,320,057,000 at December 31, 2015 compared to December 31, 2014. Net loans increased $128,163,000 to $1,033,163,000 at December 31, 2015 compared to December 31, 2014 primarily due to campaigns related to increasing home equity product market share during 2014 and 2015 and growth in the commercial loan portfolio. The investment portfolio decreased $55,983,000 from December 31, 2014 to December 31, 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 ratio of non-performing loans to total loans decreased to 0.90% at December 31, 2015 from 1.34% at December 31, 2014. The ratio decreased due to a decrease in non-performing loans and an increase in total loans from December 31, 2014 to December 31, 2015. The decrease in non-performing loans to $9,446,000 at December 31, 2015 from $12,248,000 at December 31, 2014 is primarily the result of a payoff of a large commercial real estate loan and the resolution of several smaller commercial real estate loans. 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 $835,000 for the twelve months ended December 31, 2015 impacted the allowance for loan losses which was 1.15% of total loans at December 31, 2015 compared to 1.16% at December 31, 2014. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $50,461,000 to $1,031,880,000 at December 31, 2015 compared to December 31, 2014. Core deposits (total deposits excluding time deposits) increased $45,343,000 due to our commitment to building complete banking relationships with our customers. Noninterest-bearing deposits increased $36,705,000 to $280,083,000 at December 31, 2015 compared to December 31, 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 $312,000 to $136,279,000 at December 31, 2015 compared to December 31, 2014. Since December 31, 2014, treasury stock purchases of $2,603,000 for 60,018 shares were completed as part of the stock repurchase plan. The change in accumulated other comprehensive loss from $1,667,000 at December 31, 2014 to $3,799,000 at December 31, 2015 is a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $2,930,000 at December 31, 2014 to an unrealized gain of $258,000 at December 31, 2015. The amount of accumulated other comprehensive loss at December 31, 2015 was also impacted by the change in net excess of the projected benefit obligation over the fair value of the plan assets of the defined benefit pension plan resulting in an decrease in the net loss of $540,000 to $4,057,000 at December 31, 2015. The current level of shareholders’ equity equates to a book value per share of $28.71 at December 31, 2015 compared to $28.30 at December 31, 2014 and an equity to asset ratio of 10.32% at December 31, 2015 compared to 10.92% at December 31, 2014. Excluding goodwill and intangibles, book value per share was $24.84 at December 31, 2015 compared to $24.44 at December 31, 2014. Dividends declared for each of the three and twelve months ended December 31, 2015 and 2014 were $0.47 and $1.88 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates fifteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, and Union 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)
December 31,
(In Thousands, Except Share Data) 2015 2014 % Change
ASSETS
Noninterest-bearing balances$22,044 $19,403 13.61%
Interest-bearing balances in other financial institutions 752 505 48.91%
Total cash and cash equivalents 22,796 19,908 14.51%
Investment securities, available for sale, at fair value 176,157 232,213 (24.14)%
Investment securities, trading 73 100.00%
Loans held for sale 757 550 37.64%
Loans 1,045,207 915,579 14.16%
Allowance for loan losses (12,044) (10,579) 13.85%
Loans, net 1,033,163 905,000 14.16%
Premises and equipment, net 21,830 21,109 3.42%
Accrued interest receivable 3,686 3,912 (5.78)%
Bank-owned life insurance 26,667 25,959 2.73%
Investment in limited partnerships 899 1,560 (42.37)%
Goodwill 17,104 17,104 — %
Intangibles 1,240 1,456 (14.84)%
Deferred tax asset 8,990 8,101 10.97%
Other assets 6,695 8,139 (17.74)%
TOTAL ASSETS$1,320,057 $1,245,011 6.03%
LIABILITIES
Interest-bearing deposits$751,797 $738,041 1.86%
Noninterest-bearing deposits 280,083 243,378 15.08%
Total deposits 1,031,880 981,419 5.14%
Short-term borrowings 46,638 40,818 14.26%
Long-term borrowings 91,025 71,176 27.89%
Accrued interest payable 426 381 11.81%
Other liabilities 13,809 15,250 (9.45)%
TOTAL LIABILITIES 1,183,778 1,109,044 6.74%
SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 3,000,000 shares authorized; no shares issuedn/a
Common stock, par value $8.33, 15,000,000 shares authorized; 5,004,984 and 5,002,649 shares issued 41,708 41,688 0.05%
Additional paid-in capital 49,992 49,896 0.19%
Retained earnings 58,038 53,107 9.29%
Accumulated other comprehensive loss:
Net unrealized gain on available for sale securities 258 2,930 (91.19)%
Defined benefit plan (4,057) (4,597) 11.75%
Treasury stock at cost, 257,852 and 197,834 shares (9,660) (7,057) 36.89%
TOTAL SHAREHOLDERS’ EQUITY 136,279 135,967 0.23%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,320,057 $1,245,011 6.03%


PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended December 31,
Twelve Months Ended December 31,
(In Thousands, Except Per Share Data) 2015 2014 % Change 2015 2014 % Change
INTEREST AND DIVIDEND INCOME:
Loans including fees$10,197 $9,472 7.65%$39,134 $36,495 7.23%
Investment securities:
Taxable 698 1,049 (33.46)% 3,426 5,111 (32.97)%
Tax-exempt 608 793 (23.33)% 2,795 3,453 (19.06)%
Dividend and other interest income 172 146 17.81% 769 547 40.59%
TOTAL INTEREST AND DIVIDEND INCOME 11,675 11,460 1.88% 46,124 45,606 1.14%
INTEREST EXPENSE:
Deposits 801 748 7.09% 3,129 2,995 4.47%
Short-term borrowings 38 22 72.73% 116 54 114.81%
Long-term borrowings 498 482 3.32% 1,974 1,913 3.19%
TOTAL INTEREST EXPENSE 1,337 1,252 6.79% 5,219 4,962 5.18%
NET INTEREST INCOME 10,338 10,208 1.27% 40,905 40,644 0.64%
PROVISION FOR LOAN LOSSES 480 1,605 (70.09)% 2,300 2,850 (19.30)%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 9,858 8,603 14.59% 38,605 37,794 2.15%
NON-INTEREST INCOME:
Service charges 611 597 2.35% 2,383 2,419 (1.49)%
Securities gains, available for sale 879 490 79.39% 2,592 3,515 (26.26)%
Securities gains (losses), trading 15 n/a (22)n/a
Bank-owned life insurance 179 187 (4.28)% 720 923 (21.99)%
Gain on sale of loans 438 490 (10.61)% 1,743 1,803 (3.33)%
Insurance commissions 158 231 (31.60)% 781 1,146 (31.85)%
Brokerage commissions 228 273 (16.48)% 1,064 1,077 (1.21)%
Other 803 1,176 (31.72)% 3,504 3,625 (3.34)%
TOTAL NON-INTEREST INCOME 3,311 3,444 (3.86)% 12,765 14,508 (12.01)%
NON-INTEREST EXPENSE:
Salaries and employee benefits 3,950 4,477 (11.77)% 17,023 17,273 (1.45)%
Occupancy 527 572 (7.87)% 2,248 2,301 (2.30)%
Furniture and equipment 698 626 11.50% 2,622 2,536 3.39%
Pennsylvania shares tax 243 169 43.79% 954 907 5.18%
Amortization of investments in limited partnerships 165 165 — % 661 661 — %
Federal Deposit Insurance Corporation deposit insurance 213 174 22.41% 867 746 16.22%
Marketing 178 152 17.11% 612 532 15.04%
Intangible amortization 76 83 (8.43)% 311 345 (9.86)%
Other 2,267 2,094 8.26% 8,438 8,589 (1.76)%
TOTAL NON-INTEREST EXPENSE 8,317 8,512 (2.29)% 33,736 33,890 (0.45)%
INCOME BEFORE INCOME TAX PROVISION 4,852 3,535 37.26% 17,634 18,412 (4.23)%
INCOME TAX PROVISION 1,106 652 69.63% 3,736 3,804 (1.79)%
NET INCOME$3,746 $2,883 29.93%$13,898 $14,608 (4.86)%
EARNINGS PER SHARE - BASIC AND DILUTED$0.79 $0.60 31.67%$2.91 $3.03 (3.96)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED 4,746,910 4,804,600 (1.20)% 4,772,239 4,816,149 (0.91)%
DIVIDENDS DECLARED PER SHARE$0.47 $0.47 — %$1.88 $1.88 — %


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
Three Months Ended
December 31, 2015December 31, 2014
Average Average Average Average
(Dollars in Thousands)BalanceInterestRateBalanceInterestRate
ASSETS:
Tax-exempt loans$ 52,329 $485 3.68%$ 33,700 $366 4.30%
All other loans 967,751 9,877 4.05% 873,090 9,230 4.19%
Total loans 1,020,080 10,362 4.03% 906,790 9,596 4.20%
Federal funds sold—%—%
Taxable securities 108,835 867 3.19% 142,639 1,191 3.34%
Tax-exempt securities 77,447 921 4.76% 89,301 1,202 5.38%
Total securities 186,282 1,788 3.84% 231,940 2,393 4.13%
Interest-bearing deposits 3,463 3 0.34% 5,232 4 0.30%
Total interest-earning assets 1,209,825 12,153 3.99% 1,143,962 11,993 4.17%
Other assets 97,197 96,111
TOTAL ASSETS$ 1,307,022 $ 1,240,073
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings$ 143,774 14 0.04%$ 139,145 14 0.04%
Super Now deposits 177,733 112 0.25% 181,588 134 0.29%
Money market deposits 204,092 129 0.25% 209,235 144 0.27%
Time deposits 224,435 546 0.97% 217,371 456 0.83%
Total interest-bearing deposits 750,034 801 0.42% 747,339 748 0.40%
Short-term borrowings 47,212 38 0.32% 32,468 22 0.27%
Long-term borrowings 91,025 498 2.14% 71,177 482 2.65%
Total borrowings 138,237 536 1.52% 103,645 504 1.90%
Total interest-bearing liabilities 888,271 1,337 0.59% 850,984 1,252 0.58%
Demand deposits 262,599 237,026
Other liabilities 16,455 13,672
Shareholders’ equity 139,697 138,391
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,307,022 $1,240,073
Interest rate spread 3.40% 3.59%
Net interest income/margin
$10,816 3.55% $10,741 3.73%
Three Months Ended December 31,
2015 2014
Total interest income$ 11,675 $11,460
Total interest expense 1,337 1,252
Net interest income 10,338 10,208
Tax equivalent adjustment 478 533
Net interest income (fully taxable equivalent)$ 10,816 $10,741


Twelve Months Ended
December 31, 2015
December 31, 2014

(Dollars in Thousands)
Average
Balance

Interest
Average
Rate
Average
Balance

Interest
Average
Rate
ASSETS:
Tax-exempt loans$ 43,395 $ 1,679 3.87%$ 29,461 $ 1,295 4.40%
All other loans 932,179 38,026 4.08% 828,796 35,640 4.30%
Total loans 975,574 39,705 4.07% 858,257 36,935 4.30%
Federal funds sold—% 170 —%
Taxable securities 127,052 4,183 3.29% 161,889 5,626 3.48%
Tax-exempt securities 83,293 4,235 5.08% 94,688 5,232 5.53%
Total securities 210,345 8,418 4.00% 256,577 10,858 4.23%
Interest-bearing deposits 4,238 12 0.28% 9,318 32 0.34%
Total interest-earning assets 1,190,157 48,135 4.04% 1,124,322 47,825 4.25%
Other assets 97,103 100,983
TOTAL ASSETS$1,287,260 $1,225,305
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings$ 143,055 56 0.04%$ 140,575 81 0.06%
Super Now deposits 187,396 491 0.26% 182,229 583 0.32%
Money market deposits 207,252 554 0.27% 210,066 561 0.27%
Time deposits 220,360 2,028 0.92% 223,537 1,770 0.79%
Total interest-bearing deposits 758,063 3,129 0.41% 756,407 2,995 0.40%
Short-term borrowings 38,909 116 0.30% 22,342 54 0.24%
Long-term borrowings 84,721 1,974 2.30% 71,195 1,913 2.65%
Total borrowings 123,630 2,090 1.67% 93,537 1,967 2.07%
Total interest-bearing liabilities 881,693 5,219 0.59% 849,944 4,962 0.58%
Demand deposits 251,029 225,981
Other liabilities 17,047 13,933
Shareholders’ equity 137,491 135,447
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,287,260 $1,225,305
Interest rate spread 3.45% 3.67%
Net interest income/margin $42,916 3.61% $42,863 3.81%


Twelve Months Ended December 31,
2015 2014
Total interest income$ 46,124 $ 45,606
Total interest expense 5,219 4,962
Net interest income 40,905 40,644
Tax equivalent adjustment 2,011 2,219
Net interest income (fully taxable equivalent)$ 42,916 $ 42,863


(Dollars in Thousands, Except Per Share Data)Quarter Ended
12/31/20159/30/20156/30/20153/31/201512/31/2014
Operating Data
Net income$ 3,746 $3,364 $3,433 $3,355 $2,883
Net interest income 10,338 10,234 10,222 10,111 10,208
Provision for loan losses 480 520 600 700 1,605
Net security gains 894 493 522 661 490
Non-interest income, excluding net security gains 2,417 2,644 2,535 2,599 2,954
Non-interest expense 8,317 8,530 8,421 8,468 8,512
Performance Statistics
Net interest margin 3.55% 3.55% 3.64% 3.69% 3.73%
Annualized return on average assets 1.15% 1.04% 1.07% 1.06% 0.93%
Annualized return on average equity 10.73% 9.89% 10.05% 9.76% 8.33%
Annualized net loan (recoveries) charge-offs to
average loans
(0.03) 0.12% 0.07% 0.20% 0.12%
Net (recoveries) charge-offs (75) 296 161 453 276
Efficiency ratio 64.6% 65.7% 65.3% 66.0% 64.0%
Per Share Data
Basic earnings per share$ 0.79 $0.71 $0.72 $0.70 $0.60
Diluted earnings per share 0.79 0.71 0.72 0.70 0.60
Dividend declared per share 0.47 0.47 0.47 0.47 0.47
Book value 28.71 28.54 28.33 28.57 28.30
Common stock price:
High 45.28 44.56 48.28 48.91 49.26
Low 40.47 40.41 41.84 44.41 42.18
Close 42.46 40.92 44.09 48.91 49.26
Weighted average common shares:
Basic 4,747 4,762 4,780 4,802 4,805
Fully Diluted 4,747 4,762 4,780 4,802 4,805
End-of-period common shares:
Issued 5,005 5,004 5,004 5,003 5,003
Treasury 258 254 238 207 198


(Dollars in Thousands, Except Per Share Data)Quarter Ended
12/31/20159/30/20156/30/20153/31/201512/31/2014
Financial Condition Data:
General
Total assets$ 1,320,057 $ 1,299,292 $ 1,291,812 $ 1,268,833 $ 1,245,011
Loans, net 1,033,163 990,164 966,613 933,044 905,000
Goodwill 17,104 17,104 17,104 17,104 17,104
Intangibles 1,240 1,316 1,294 1,373 1,456
Total deposits 1,031,880 1,004,801 1,007,468 996,489 981,419
Noninterest-bearing 280,083 247,848 244,502 246,231 243,378
Savings 144,561 143,224 143,415 143,222 139,278
NOW 176,078 188,444 188,092 186,788 177,970
Money Market 209,782 204,475 211,412 204,352 204,535
Time Deposits 221,376 220,810 220,047 215,896 216,258
Total interest-bearing deposits 751,797 756,953 762,966 750,258 738,041
Core deposits* 810,504 783,991 787,421 780,593 765,161
Shareholders’ equity 136,279 135,577 134,998 137,004 135,967
Asset Quality
Non-performing loans$ 9,446 $ 8,608 $ 9,689 $ 11,157 $ 12,248
Non-performing loans to total assets 0.72% 0.66% 0.75% 0.88% 0.98%
Allowance for loan losses 12,044 11,489 11,265 10,826 10,579
Allowance for loan losses to total loans 1.15% 1.15% 1.15% 1.15% 1.16%
Allowance for loan losses to non-performing loans 127.50% 133.47% 116.27% 97.03% 86.37%
Non-performing loans to total loans 0.90% 0.86% 0.99% 1.18% 1.34%
Capitalization
Shareholders’ equity to total assets 10.32% 10.43% 10.45% 10.80% 10.92%
* Core deposits are defined as total deposits less time deposits


Reconciliation of GAAP and Non-GAAP Financial Measures
Three Months Ended
December 31,
Twelve Months Ended
December 31,
(Dollars in Thousands, Except Per Share Data) 2015 2014 2015 2014
GAAP net income$ 3,746 $ 2,883 $ 13,898 $ 14,608
Less: net securities and bank-owned life insurance gains, net of tax 590 323 1,696 2,494
Non-GAAP operating earnings$ 3,156 $ 2,560 $ 12,202 $ 12,114
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 2015 2014
Return on average assets (ROA) 1.15% 0.93% 1.08% 1.19%
Less: net securities and bank-owned life insurance gains, net of tax 0.18% 0.10% 0.13% 0.20%
Non-GAAP operating ROA 0.97% 0.83% 0.95% 0.99%
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 2015 2014
Return on average equity (ROE) 10.73% 8.33% 10.11% 10.79%
Less: net securities and bank-owned life insurance gains, net of tax 1.69% 0.93% 1.24% 1.85%
Non-GAAP operating ROE 9.04% 7.40% 8.87% 8.94%
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015201420152014
Basic earnings per share (EPS) $0.79 $0.60 $2.91 $3.03
Less: net securities and bank-owned life insurance gains, net of tax 0.13 0.07 0.35 0.51
Non-GAAP basic operating EPS $0.66 $0.53 $2.56 $2.52
Three Months Ended
December 31,
Twelve Months Ended
December 31,
2015 2014 2015 2014
Dilutive EPS $0.79 $0.60 $2.91 $3.03
Less: net securities and bank-owned life insurance gains, net of tax 0.13 0.07 0.35 0.51
Non-GAAP dilutive operating EPS $0.66 $0.53 $2.56 $2.52



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.