Penns Woods Bancorp, Inc. Reports Fourth Quarter 2017 Earnings

WILLIAMSPORT, Pa., Jan. 30, 2018 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Penns Woods Bancorp, Inc., supported by loan and deposit growth, achieved net income of $9.8 million, for the twelve months ended December 31, 2017 resulting in basic and dilutive earnings per share of $2.08.

Highlights

  • On December 22, 2017, H.R.1, known as the “Tax Cuts and Jobs Act,” was signed into law. H.R.1, among other things, reduces the corporate income tax rate to 21%, effective January 1, 2018. As a result of passage of the new tax law, the revaluation of our net deferred tax assets (DTA) resulted in a write-down of $2.7 million. This is a one-time non-cash charge to the income tax provision that negatively impacted earnings per share by $0.58 per diluted share based on the weighted average share outstanding for the twelve months ended December 31, 2017.

  • Net income from core operations (“operating earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding certain non-recurring items, which for the period ended December 31, 2017 include net securities gains and the impact of the deferred tax asset revaluation, was $3.4 million for the three months ended December 31, 2017 compared to $2.7 million for the same period of 2016. Operating earnings increased to $12.1 million for the twelve months ended December 31, 2017 compared to $11.4 million for the same period of 2016. Impacting the level of operating earnings were several factors including the continued shift of earning assets from the investment portfolio to the loan portfolio as the balance sheet is actively managed to reduce market risk and interest rate risk in a rising rate environment. In addition, the effective tax rate has increased due to the conclusion of the ten year tax credit generation period of several low income elderly housing projects in our market footprint in which the company participates.

  • Operating earnings per share for the three months ended December 31, 2017 was $0.72 for basic and $0.71 dilutive, an increase from $0.56 for basic and dilutive for the same period of 2016. Operating earnings per share for the twelve months ended December 31, 2017 was $2.57 basic and dilutive compared to $2.40 basic and dilutive for the same period of 2016.

  • Return on average assets was 0.20% for the three months ended December 31, 2017 compared to 0.87% for the corresponding period of 2016. Return on average assets was 0.69% for the twelve months ended December 31, 2017 compared to 0.93% for the corresponding period of 2016.

  • Return on average equity was 2.00% for the three months ended December 31, 2017 compared to 8.43% for the corresponding period of 2016. Return on average equity was 6.91% for the twelve months ended December 31, 2017 compared to 8.96% for the corresponding period of 2016.

“The three and twelve month periods were negatively impacted by the Tax Cuts and Jobs Act as the passage of the act which reduces corporate tax rates beginning in 2018 required a write-down of the future benefit of our net deferred tax assets of $2.7 million or $0.58 per share. At our current level of operating earnings, we estimate to recoup the impact of the write-down in fifteen to eighteen months due to the incremental benefit of lower tax rates,” said Richard A. Grafmyre, CFP®, 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, 2017 was $716,000 and $9.8 million compared to $2.9 million and $12.5 million for the same period of 2016. Results for the three and twelve months ended December 31, 2017 compared to 2016 were impacted by a decrease in after-tax securities gains of $220,000 (from a gain of $291,000 to a gain of $71,000) for the three month periods and a decrease in after-tax securities gains of $711,000 (from a gain of $1.1 million to a gain of $391,000) for the twelve month periods. The impact for the three and twelve month periods ended December 31, 2017 of the Tax Cuts and Jobs Act was a write-down in the valuation of the net deferred tax assets of $2.7 million. Earnings per share for the three months ended December 31, 2017 was $0.16 basic and $0.15 diluted, a change from the 2016 basic and diluted earnings per share of $0.62. Basic and diluted earnings per share for the twelve months ended December 31, 2017 was $2.08 compared to $2.64 for the corresponding period of 2016. Return on average assets and return on average equity were 0.20% and 2.00% for the three months ended December 31, 2017 compared to 0.87% and 8.43% for the corresponding period of 2016. Return on average assets and return on average equity were 0.69% and 6.91% for the twelve months ended December 31, 2017 compared to 0.93% and 8.96% for the corresponding period of 2016.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2017 was 3.48% and 3.47% compared to 3.38% and 3.44% for the corresponding period of 2016. The increase in the net interest margin for the twelve month period was limited by a decreasing yield on the investment portfolio as higher yielding bonds continue to be redeemed at their call date and our strategic decision to continue repositioning the portfolio through active management. The impact of the declining investment portfolio yield and decreasing investment portfolio balance was offset by a 13.85% growth in gross loans from December 31, 2016 to December 31, 2017. The loan growth was primarily funded by an increase in short term borrowings and growth in core deposits of $40.0 million. Core deposits represent a lower cost funding source than time deposits and comprise 79.98% of total deposits at December 31, 2017 and 80.06% at December 31, 2016.

Assets

Total assets increased $125.9 million to $1.5 billion at December 31, 2017 compared to December 31, 2016. Net loans increased $151.5 million to $1.2 billion at December 31, 2017 compared to December 31, 2016 primarily due to campaigns related to increasing home equity product market share during 2017 and indirect auto lending. The investment portfolio decreased $8.9 million from December 31, 2016 to December 31, 2017 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 shortening 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 ratio decreased to 0.58% at December 31, 2017 from 1.06% December 31, 2016 as non-performing loans have decreased to $7.3 million at December 31, 2017 from $11.6 million at December 31, 2016. The level of non-performing loans decreased as a large non-performing loan was paid-off during the quarter ended September 30, 2017. The majority of non-performing loans are centered on 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 $768,000 for the twelve months ended December 31, 2017 minimally impacted the allowance for loan losses which was 1.03% of total loans at December 31, 2017. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $51.1 million to $1.1 billion at December 31, 2017 compared to December 31, 2016. Core deposits (total deposits excluding time deposits) increased $40.0 million due to our commitment to building complete banking relationships with our customers. Noninterest-bearing deposits remained stable at $303.3 million at December 31, 2017 compared to December 31, 2016. While deposit gathering efforts have centered on core deposits, the lengthening of the time deposit portfolio continues to move forward as part of the strategy to build balance sheet protection in a rising rate environment.

Shareholders’ Equity

Shareholders’ equity decreased $55,000 to $138.2 million at December 31, 2017 compared to December 31, 2016. Accumulated other comprehensive loss remained constant at $4.9 million at December 31, 2016 and December 31, 2017. The component of other accumulated comprehensive loss associated with unrealized losses on available for sale securities decreased from an unrealized loss of $639,000 at December 31, 2016 to an unrealized loss of $54,000 at December 31, 2017. The amount of accumulated other comprehensive loss at December 31, 2017 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 increase in the net loss of $179,000. In addition, the Tax Cuts and Jobs Act resulted in an additional loss of $810,000 related to the defined benefit pension plan component of accumulated other comprehensive loss. The current level of shareholders’ equity equates to a book value per share of $29.47 at December 31, 2017 compared to $29.20 at December 31, 2016 and an equity to asset ratio of 9.37% at December 31, 2017 compared to 10.25% at December 31, 2016. Excluding goodwill and intangibles, book value per share was $25.51 at December 31, 2017 compared to $25.21 at December 31, 2016. Dividends declared for the twelve months ended December 31, 2017 and 2016 were $1.88 per share.

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. 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.

The Company’s revaluation of its net deferred tax assets is management's reasonable estimate based on current guidance from authoritative sources. The final impact of the tax reform may differ from these estimates, due to, among other things, changes in interpretations and assumptions made by management and is subject to further clarifications and guidance. The reduction of the Company’s net deferred tax assets may vary materially from the amount reported. The Company does not anticipate future cash expenditures as a result of the reduction to the net deferred tax assets.

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, 2016.

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
570-322-1111e-mail: pwod@pwod.com

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT


PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
December 31,
(In Thousands, Except Share Data) 2017 2016 % Change
ASSETS:
Noninterest-bearing balances $25,692 $26,766 (4.01)%
Interest-bearing balances in other financial institutions 1,551 16,905 (90.83)%
Total cash and cash equivalents 27,243 43,671 (37.62)%
Investment securities, available for sale, at fair value 124,475 133,492 (6.75)%
Investment securities, trading 190 58 227.59%
Loans held for sale 1,196 1,953 (38.76)%
Loans 1,245,126 1,093,681 13.85%
Allowance for loan losses (12,858) (12,896) (0.29)%
Loans, net 1,232,268 1,080,785 14.02%
Premises and equipment, net 27,386 24,275 12.82%
Accrued interest receivable 4,321 3,672 17.67%
Bank-owned life insurance 27,982 27,332 2.38%
Goodwill 17,104 17,104 %
Intangibles 1,462 1,799 (18.73)%
Deferred tax asset 4,388 8,397 (47.74)%
Other assets 6,477 6,052 7.02%
TOTAL ASSETS $1,474,492 $1,348,590 9.34%
LIABILITIES:
Interest-bearing deposits $843,004 $791,937 6.45%
Noninterest-bearing deposits 303,316 303,277 0.01%
Total deposits 1,146,320 1,095,214 4.67%
Short-term borrowings 100,748 13,241 660.88%
Long-term borrowings 70,970 85,998 (17.47)%
Accrued interest payable 502 455 10.33%
Other liabilities 17,758 15,433 15.07%
TOTAL LIABILITIES 1,336,298 1,210,341 10.41%
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; 5,009,339 and 5,007,109 shares issued 41,744 41,726 0.04%
Additional paid-in capital 50,173 50,075 0.20%
Retained earnings 63,364 61,610 2.85%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities (54) (639) (91.55)%
Defined benefit plan (4,920) (4,289) (14.71)%
Treasury stock at cost, 320,150 and 272,452 shares (12,115) (10,234) 18.38%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY 138,192 138,249 (0.04)%
Non controlling interest 2 100.00%
TOTAL SHAREHOLDERS' EQUITY 138,194 138,249 (0.04)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,474,492 $1,348,590 9.34%


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) 2017 2016 % Change 2017 2016 % Change
INTEREST AND DIVIDEND INCOME:
Loans including fees $12,191 $10,694 14.00% $45,833 $42,056 8.98%
Investment securities:
Taxable 517 600 (13.83)% 2,182 2,424 (9.98)%
Tax-exempt 278 296 (6.08)% 1,218 1,498 (18.69)%
Dividend and other interest income 152 168 (9.52)% 744 835 (10.90)%
TOTAL INTEREST AND DIVIDEND INCOME 13,138 11,758 11.74% 49,977 46,813 6.76%
INTEREST EXPENSE:
Deposits 1,115 923 20.80% 4,083 3,547 15.11%
Short-term borrowings 195 5 3,800.00% 234 46 408.70%
Long-term borrowings 360 493 (26.98)% 1,580 1,974 (19.96)%
TOTAL INTEREST EXPENSE 1,670 1,421 17.52% 5,897 5,567 5.93%
NET INTEREST INCOME 11,468 10,337 10.94% 44,080 41,246 6.87%
PROVISION FOR LOAN LOSSES 125 330 (62.12)% 730 1,196 (38.96)%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 11,343 10,007 13.35% 43,350 40,050 8.24%
NON-INTEREST INCOME:
Service charges 585 571 2.45% 2,222 2,249 (1.20)%
Securities gains, available for sale 113 437 (74.14)% 600 1,611 (62.76)%
Securities (losses) gains, trading (6) 4 (250.00)% (8) 58 (113.79)%
Bank-owned life insurance 167 167 % 666 684 (2.63)%
Gain on sale of loans 358 411 (12.90)% 1,674 2,102 (20.36)%
Insurance commissions 97 191 (49.21)% 496 795 (37.61)%
Brokerage commissions 334 281 18.86% 1,378 1,098 25.50%
Debit card income 510 483 5.59% 1,960 1,896 3.38%
Other 431 311 38.59% 1,756 1,620 8.40%
TOTAL NON-INTEREST INCOME 2,589 2,856 (9.35)% 10,744 12,113 (11.30)%
NON-INTEREST EXPENSE:
Salaries and employee benefits 4,883 4,380 11.48% 18,999 17,813 6.66%
Occupancy 592 593 (0.17)% 2,447 2,223 10.08%
Furniture and equipment 786 751 4.66% 2,915 2,793 4.37%
Software Amortization 224 306 (26.80)% 974 1,256 (22.45)%
Pennsylvania shares tax 229 175 30.86% 925 873 5.96%
Professional Fees 537 584 (8.05)% 2,353 2,096 12.26%
Federal Deposit Insurance Corporation deposit insurance 155 97 59.79% 669 767 (12.78)%
Debit Card Expense 124 148 (16.22)% 602 604 (0.33)%
Marketing 268 172 55.81% 958 740 29.46%
Intangible amortization 81 89 (8.99)% 337 366 (7.92)%
Other 1,369 1,330 2.93% 5,683 5,560 2.21%
TOTAL NON-INTEREST EXPENSE 9,248 8,625 7.22% 36,862 35,091 5.05%
INCOME BEFORE INCOME TAX PROVISION 4,684 4,238 10.52% 17,232 17,072 0.94%
INCOME TAX PROVISION 3,968 1,290 207.60% 7,459 4,597 62.26%
NET INCOME $716 $2,948 (75.71)% $9,773 $12,475 (21.66)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' $716 $2,948 (75.71)% $9,773 $12,475 (21.66)%
EARNINGS PER SHARE - BASIC $0.16 $0.62 (74.19)% $2.08 $2.64 (21.21)%
EARNINGS PER SHARE - DILUTED $0.15 $0.62 (75.81)% $2.08 $2.64 (21.21)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 4,688,744 4,734,304 (0.96)% 4,705,602 4,735,457 (0.63)%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 4,782,244 4,734,304 1.01% 4,705,602 4,735,457 (0.63)%
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, 2017 December 31, 2016
(Dollars in Thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Tax-exempt loans $62,012 $609 3.90% $43,039 $420 3.88%
All other loans 1,151,374 11,789 4.06% 1,038,973 10,417 3.99%
Total loans 1,213,386 12,398 4.05% 1,082,012 10,837 3.98%
Taxable securities 80,109 650 3.25% 92,611 728 3.14%
Tax-exempt securities 47,788 421 3.52% 45,735 449 3.93%
Total securities 127,897 1,071 3.35% 138,346 1,177 3.40%
Interest-bearing deposits 6,318 19 1.19% 31,176 40 0.51%
Total interest-earning assets 1,347,601 13,488 3.97% 1,251,534 12,054 3.83%
Other assets 101,907 99,837
TOTAL ASSETS $1,449,508 $1,351,371
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings $159,204 17 0.04% $152,109 15 0.04%
Super Now deposits 206,005 151 0.29% 177,918 101 0.23%
Money market deposits 263,003 236 0.36% 247,876 178 0.29%
Time deposits 220,331 711 1.28% 220,967 629 1.13%
Total interest-bearing deposits 848,543 1,115 0.52% 798,870 923 0.46%
Short-term borrowings 62,394 195 1.23% 13,291 5 0.15%
Long-term borrowings 75,373 360 1.87% 89,151 493 2.17%
Total borrowings 137,767 555 1.58% 102,442 498 1.91%
Total interest-bearing liabilities 986,310 1,670 0.67% 901,312 1,421 0.62%
Demand deposits 305,867 292,955
Other liabilities 14,258 17,232
Shareholders’ equity 143,073 139,872
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,449,508 $1,351,371
Interest rate spread 3.30% 3.21%
Net interest income/margin $11,818 3.48% $10,633 3.38%


Three Months Ended December 31,
2017 2016
Total interest income $13,138 $11,758
Total interest expense 1,670 1,421
Net interest income 11,468 10,337
Tax equivalent adjustment 350 296
Net interest income (fully taxable equivalent) $11,818 $10,633


Twelve Months Ended
December 31, 2017 December 31, 2016
(Dollars in Thousands) Average
Balance
Interest Average
Rate
Average
Balance
Interest Average
Rate
ASSETS:
Tax-exempt loans $49,982 $1,924 3.85% $47,782 $1,852 3.87%
All other loans 1,099,465 44,563 4.05% 1,009,384 40,834 4.05%
Total loans 1,149,447 46,487 4.04% 1,057,166 42,686 4.04%
Taxable securities 84,079 2,689 3.20% 94,887 3,072 3.24%
Tax-exempt securities 50,169 1,845 3.68% 53,638 2,270 4.23%
Total securities 134,248 4,534 3.38% 148,525 5,342 3.60%
Interest-bearing deposits 22,461 237 1.06% 36,592 187 0.51%
Total interest-earning assets 1,306,156 51,258 3.92% 1,242,283 48,215 3.88%
Other assets 100,481 99,500
TOTAL ASSETS $1,406,637 $1,341,783
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings $157,851 62 0.04% $151,397 58 0.04%
Super Now deposits 200,436 528 0.26% 187,106 458 0.24%
Money market deposits 274,546 949 0.35% 238,175 648 0.27%
Time deposits 210,608 2,544 1.21% 221,498 2,383 1.08%
Total interest-bearing deposits 843,441 4,083 0.48% 798,176 3,547 0.44%
Short-term borrowings 25,984 234 0.89% 18,518 46 0.25%
Long-term borrowings 78,745 1,580 1.98% 90,554 1,974 2.14%
Total borrowings 104,729 1,814 1.71% 109,072 2,020 1.82%
Total interest-bearing liabilities 948,170 5,897 0.62% 907,248 5,567 0.61%
Demand deposits 302,651 279,130
Other liabilities 14,398 16,152
Shareholders’ equity 141,418 139,253
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,406,637 $1,341,783
Interest rate spread 3.30% 3.27%
Net interest income/margin $45,361 3.47% $42,648 3.44%


Twelve Months Ended December 31,
2017 2016
Total interest income $49,977 $46,813
Total interest expense 5,897 5,567
Net interest income 44,080 41,246
Tax equivalent adjustment 1,281 1,402
Net interest income (fully taxable equivalent) $45,361 $42,648


(Dollars in Thousands, Except Per Share Data) Quarter Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Operating Data
Net income $716 $3,284 $3,086 $2,686 $2,948
Net interest income 11,468 11,452 10,824 10,336 10,337
Provision for loan losses 125 60 215 330 330
Net security gains (losses) 107 298 (12) 199 441
Non-interest income, excluding net security gains 2,482 2,442 2,775 2,452 2,415
Non-interest expense 9,248 9,566 9,063 8,985 8,625
Performance Statistics
Net interest margin 3.48% 3.57% 3.44% 3.40% 3.38%
Annualized return on average assets 0.20% 0.93% 0.88% 0.79% 0.87%
Annualized return on average equity 2.00% 9.43% 8.79% 7.69% 8.43%
Annualized net loan charge-offs to average loans 0.07% 0.08% % 0.12% 0.06%
Net charge-offs 200 236 11 321 152
Efficiency ratio 65.7% 68.3% 65.9% 69.6% 66.9%
Per Share Data
Basic earnings per share $0.16 $0.70 $0.65 $0.57 $0.62
Diluted earnings per share 0.15 0.70 0.65 0.56 0.62
Dividend declared per share 0.47 0.47 0.47 0.47 0.47
Book value 29.47 29.79 29.53 29.38 29.20
Common stock price:
High 49.79 46.47 43.60 49.45 52.03
Low 45.65 41.08 38.17 43.28 41.00
Close 46.58 46.47 41.18 43.45 50.50
Weighted average common shares:
Basic 4,689 4,688 4,711 4,735 4,734
Fully Diluted 4,782 4,688 4,711 4,761 4,734
End-of-period common shares:
Issued 5,009 5,009 5,008 5,008 5,007
Treasury 320 320 320 272 272


(Dollars in Thousands, Except Per Share Data) Quarter Ended
12/31/2017 9/30/2017 6/30/2017 3/31/2017 12/31/2016
Financial Condition Data:
General
Total assets $1,474,492 $1,430,197 $1,395,364 $1,400,708 $1,348,590
Loans, net 1,232,268 1,176,781 1,125,976 1,098,195 1,080,785
Goodwill 17,104 17,104 17,104 17,104 17,104
Intangibles 1,462 1,543 1,623 1,709 1,799
Total deposits 1,146,320 1,153,996 1,151,110 1,160,664 1,095,214
Noninterest-bearing 303,316 310,830 300,054 312,392 303,277
Savings 160,698 156,437 158,101 159,652 153,788
NOW 215,021 203,744 199,917 205,011 174,653
Money Market 237,818 274,528 287,140 278,443 245,121
Time Deposits 229,467 208,457 205,898 205,166 218,375
Total interest-bearing deposits 843,004 843,166 851,056 848,272 791,937
Core deposits* 916,853 945,539 945,212 955,498 876,839
Shareholders’ equity 138,192 139,669 138,440 139,113 138,249
Asset Quality
Non-performing loans $7,268 $8,317 $12,498 $10,871 $11,626
Non-performing loans to total assets 0.49% 0.58% 0.90% 0.78% 0.86%
Allowance for loan losses 12,858 12,933 13,109 12,905 12,896
Allowance for loan losses to total loans 1.03% 1.09% 1.15% 1.16% 1.18%
Allowance for loan losses to non-performing loans 176.91% 157.05% 104.56% 118.72% 110.92%
Non-performing loans to total loans 0.58% 0.69% 1.10% 0.98% 1.06%
Capitalization
Shareholders’ equity to total assets 9.37% 9.77% 9.92% 9.93% 10.25%

* 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) 2017 2016 2017 2016
GAAP net income $716 $2,948 $9,773 $12,475
Less: net securities gains, net of tax 71 291 391 1,102
Add: Effect of deferred tax asset revaluation 2,734 2,734
Non-GAAP operating earnings $3,379
$2,657
$12,116
$11,373
Three Months Ended December 31, Twelve Months Ended December 31,
2017 2016 2017 2016
Return on average assets (ROA) 0.20% 0.87% 0.69% 0.93%
Less: net securities gains, net of tax 0.02% 0.08% 0.02% 0.08%
Add: Effect of deferred tax asset revaluation 0.75% % 0.19% %
Non-GAAP operating ROA 0.93% 0.79% 0.86% 0.85%
Three Months Ended December 31, Twelve Months Ended December 31,
2017 2016 2017 2016
Return on average equity (ROE) 2.00% 8.43% 6.91% 8.96%
Less: net securities gains, net of tax 0.20% 0.83% 0.27% 0.79%
Add: Effect of deferred tax asset revaluation 7.65% % 1.93% %
Non-GAAP operating ROE 9.45% 7.60% 8.57% 8.17%
Three Months Ended December 31, Twelve Months Ended December 31,
2017 2016 2017 2016
Basic earnings per share (EPS) $0.16 $0.62 $2.08 $2.64
Less: net securities gains, net of tax 0.02 0.06 0.09 0.24
Add: Effect of deferred tax asset revaluation 0.58 0.58
Non-GAAP basic operating EPS $0.72 $0.56 $2.57 $2.40
Three Months Ended December 31, Twelve Months Ended December 31,
2017 2016 2017 2016
Dilutive EPS $0.15 $0.62 $2.08 $2.64
Less: net securities gains, net of tax 0.02 0.06 0.09 0.24
Add: Effect of deferred tax asset revaluation 0.58 0.58
Non-GAAP dilutive operating EPS $0.71 $0.56 $2.57 $2.40


Source:Penns Woods Bancorp, Inc.