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Penns Woods Bancorp, Inc. Reports Third Quarter 2012 Operating Earnings

WILLIAMSPORT, Pa., Oct. 18, 2012 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (Nasdaq:PWOD)

Highlights

  • Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and losses and bank owned life insurance gains on death benefit, increased to $3,372,000 for the three months ended September 30, 2012 compared to $3,145,000 for the same period of 2011. Net income from core operations increased to $9,849,000 for the nine months ended September 30, 2012 compared to $8,873,000 for the same period of 2011.
  • Operating earnings per share for the three months ended September 30, 2012 were $0.88 basic and dilutive compared to $0.82 basic and dilutive for the same period of 2011, an increase of 7.3%. Operating earnings per share for the nine months ended September 30, 2012 were $2.57 basic and dilutive compared to $2.31 basic and dilutive for the same period of 2011, an increase of 11.3%.
  • Return on average assets was 1.77% for the three months ended September 30, 2012 compared to 1.67% for the three month period of 2011. Return on average assets was 1.78% for the nine months ended September 30, 2012 compared to 1.65% for the nine month period of 2011.
  • Return on average equity was 15.94% for the three months ended September 30, 2012 compared to 16.49% for the corresponding period of 2011. Return on average equity was 16.25% for the nine months ended September 30, 2012 compared to 16.46% for the corresponding period of 2011.

"The continued growth in loans and deposits is the result of the effort of our employees who remain focused on building relationships. Core deposits and home equity loans and lines have been utilized as the building blocks of the relationship. These building blocks play a significant role in generating the strong financial metrics being reported of net income, earnings per share, return on equity, and return on assets," 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 nine months ended September 30, 2012 was $3,667,000 and $10,754,000 compared to $3,150,000 and $8,967,000 for the same periods of 2011. Results for the three and nine months ended September 30, 2012 compared to 2011 were impacted by an increase in after-tax securities gains of $290,000 (from a gain of $5,000 to a gain of $295,000) for the three month periods and an increase in after-tax securities gains of $702,000 (from a gain of $94,000 to a gain of $796,000) for the nine month periods. In addition, a gain of $109,000 on death benefit related to bank owned life insurance was recorded during the first quarter of 2012. Basic and dilutive earnings per share for the three and nine months ended September 30, 2012 were $0.96 and $2.80 compared to $0.82 and $2.34 for the corresponding periods of 2011. Return on average assets and return on average equity were 1.77% and 15.94% for the three months ended September 30, 2012 compared to 1.67% and 16.49% for the corresponding period of 2011. Earnings for the nine months ended September 30, 2012 correlate to a return on average assets and a return on average equity of 1.78% and 16.25% compared to 1.65% and 16.46% for the corresponding period of 2011.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2012 was 4.34% and 4.51% compared to 4.55% and 4.67% for the corresponding periods of 2011. While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $2,058,000 to $25,493,000 for the nine months ended September 30, 2012 compared to the corresponding period of 2011. Driving this increase is the continued emphasis on core deposit growth. These deposits represent a lower cost funding source than time deposits and comprise 73.53% of total deposits at September 30, 2012 compared to 70.28% at September 30, 2011. The average rate paid on total interest-bearing deposits decreased 29 and 31 basis points (bp) for the three and nine months ended September 30, 2012 compared to the same periods of 2011. The decrease in the rate paid on total interest-bearing deposits was led by a decrease in the rate paid on time deposits and money markets. The rate paid on time deposits decreased 32 and 35 bp for the three and nine months ended September 30, 2012 compared to the same periods of 2011 and the rate paid on money markets decreased 42 and 39 bp for the three and nine months ended September 30, 2012 compared to the same periods of 2011. The duration of the time deposit portfolio, which was shortened over the past several years, continues to be slowly lengthened due to the apparent bottoming or near bottoming of deposit rates. FHLB long-term borrowings have been increased by $4,500,000 since September 30, 2011. Long-term borrowings of $10,500,000 matured during the three months ended December 31, 2011 carrying an average rate of 4.60%, while $15,000,000 was obtained during the three months ended September 30, 2012 carrying an average rate of 0.90% to fund a combination of loan growth and FHLB debt that will be maturing during the fourth quarter.

"The net interest margin has and will continue to encounter challenges. Legacy earning assets are maturing or are repricing lower at their rate reset dates at the same time that new earning assets are being added at substantially lower rates due to the current interest rate environment. In addition, our strategy is to shorten both the loan and investment portfolios so that we will have an increased level of cash flow when interest rates begin to increase. This strategy does limit current earnings, but serves a key role in our long-term asset liability management strategy. On the funding side of the balance sheet there is limited ability to reduce costs as deposit rates have previously been reduced with limited room for reductions remaining, although there is $15 million in FHLB debt that is maturing during October 2012 with a substantial interest expense reduction anticipated after the funds are replaced," commented President Grafmyre.

Assets

Total assets increased $87,956,000 to $840,606,000 at September 30, 2012 compared to September 30, 2011. Net loans increased 12.9% to $477,530,000 at September 30, 2012 compared to September 30, 2011 as the economic environment has in general provided fewer loan opportunities over the past year. Housing, transportation, and all other facets related to the Marcellus Shale natural gas exploration are creating loan opportunities and we are aggressively attempting to attract those loans that meet or exceed our credit standards. During 2012 several successful loan campaigns were undertaken to build home equity loans and lines of credit. The investment portfolio increased $29,564,000 from September 30, 2011 to September 30, 2012 due to a combination of market value increases and the purchase of short maturity bonds that have been utilized to reduce the portfolio duration and to provide current cash flow.

Non-performing Loans

Our non-performing loans to total loans ratio has decreased to 2.48% at September 30, 2012 from 3.34% at September 30, 2011. The decrease in non-performing loans is primarily the result of a decrease in commercial loan delinquencies due to several partial charge-offs and the receipt of collateral in lieu of payment with the collateral now carried as other real estate owned. 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 $1,433,000 for the nine months ended September 30, 2012 represented 0.31% of average loans for the nine months ended September 30, 2012. The allowance for loan losses was increased to 1.55% of total loans at September 30, 2012 from 1.48% at September 30, 2011 due to the general economic uncertainty that persists.

Deposits

Deposits have grown 11.4%, or $65,810,000, to $641,110,000 at September 30, 2012 compared to September 30, 2011, with core deposits (total deposits excluding time deposits) increasing $67,071,000, while higher cost time deposits decreased $1,261,000. Noninterest-bearing deposits have increased 10.0% to $115,285,000 at September 30, 2012 compared to September 30, 2011. Also playing a significant role in increasing core deposits were money market and NOW accounts with growth rates of 21.3% and 21.6%, respectively. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. We have also successfully implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration. In addition our newest branch, Danville, opened in January 2012 and has gathered approximately $25 million in deposits during the first nine months of its operation.

Shareholders' Equity

Shareholders' equity increased $15,207,000 to $93,779,000 at September 30, 2012 compared to September 30, 2011. The accumulated other comprehensive gain of $6,715,000 at September 30, 2012 is a result of an increase in unrealized gains on available for sale securities from an unrealized gain of $950,000 at September 30, 2011 to an unrealized gain of $10,848,000 at September 30, 2012. However, the amount of accumulated other comprehensive gain at September 30, 2012 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 $1,720,000. The current level of shareholders' equity equates to a book value per share of $24.43 at September 30, 2012 compared to $20.48 at September 30, 2011 and an equity to asset ratio of 11.16% at September 30, 2012 compared to 10.44% at September 30, 2011. Excluding accumulated other comprehensive gain/loss, book value per share was $22.68 at September 30, 2012 compared to $20.86 at September 30, 2011. Dividends per share paid to shareholders were $0.47 and $1.41 for the three and nine months ended September 30, 2012 compared to $0.46 and $1.38 for the three and nine months ended September 30, 2011.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour Counties. Investment and insurance products are offered through the 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, 2011.

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)
(In Thousands, Except Share Data) September 30,
2012 2011 % Change
ASSETS
Noninterest-bearing balances $ 13,243 $ 11,658 13.6%
Interest-bearing deposits in other financial institutions 7,901 17 46376.5%
Total cash and cash equivalents 21,144 11,675 81.1%
Investment securities, available for sale, at fair value 296,255 266,637 11.1%
Investment securities held to maturity (fair value of $0 and $54) -- 54 -100.0%
Loans held for sale 2,285 3,623 -36.9%
Loans 485,051 429,344 13.0%
Allowance for loan losses (7,521) (6,355) 18.3%
Loans, net 477,530 422,989 12.9%
Premises and equipment, net 8,247 7,533 9.5%
Accrued interest receivable 4,255 3,802 11.9%
Bank-owned life insurance 16,238 15,929 1.9%
Investment in limited partnerships 3,048 3,709 -17.8%
Goodwill 3,032 3,032 0.0%
Deferred tax asset 3,878 8,087 -52.0%
Other assets 4,694 5,580 -15.9%
TOTAL ASSETS $ 840,606 $752,650 11.7%
LIABILITIES
Interest-bearing deposits $ 525,825 $ 470,517 11.8%
Noninterest-bearing deposits 115,285 104,783 10.0%
Total deposits 641,110 575,300 11.4%
Short-term borrowings 17,932 17,584 2.0%
Long-term borrowings, Federal Home Loan Bank (FHLB) 76,278 71,778 6.3%
Accrued interest payable 501 616 -18.7%
Other liabilities 11,006 8,800 25.1%
TOTAL LIABILITIES 746,827 674,078 10.8%
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued -- -- 0.0%
Common stock, par value $8.33, 15,000,000 shares authorized;
4,018,777 and 4,017,251 shares issued 33,489 33,477 0.0%
Additional paid-in capital 18,148 18,103 0.2%
Retained earnings 41,737 34,765 20.1%
Accumulated other comprehensive gain (loss):
Net unrealized gain on available for sale securities 10,848 950 1041.9%
Defined benefit plan (4,133) (2,413) -71.3%
Treasury stock at cost, 180,596 shares (6,310) (6,310) 0.0%
TOTAL SHAREHOLDERS' EQUITY 93,779 78,572 19.4%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 840,606 $752,650 11.7%
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In Thousands, Except Per Share Data)
Three Months Ended
September 30,
Nine Months Ended
September 30,
2012 2011 % Change 2012 2011 % Change
INTEREST AND DIVIDEND INCOME:
Loans including fees $ 6,346 $ 6,327 0.3% $ 18,954 $ 18,759 1.0%
Investment securities:
Taxable 1,486 1,445 2.8% 4,477 4,231 5.8%
Tax-exempt 1,339 1,336 0.2% 4,127 3,875 6.5%
Dividend and other interest income 96 65 47.7% 274 174 57.5%
TOTAL INTEREST AND DIVIDEND INCOME 9,267 9,173 1.0% 27,832 27,039 2.9%
INTEREST EXPENSE:
Deposits 902 1,154 -21.8% 2,797 3,530 -20.8%
Short-term borrowings 38 58 -34.5% 100 157 -36.3%
Long-term borrowings, FHLB 637 751 -15.2% 1,877 2,227 -15.7%
TOTAL INTEREST EXPENSE 1,577 1,963 -19.7% 4,774 5,914 -19.3%
NET INTEREST INCOME 7,690 7,210 6.7% 23,058 21,125 9.2%
PROVISION FOR LOAN LOSSES 600 600 0.0% 1,800 1,800 0.0%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 7,090 6,610 7.3% 21,258 19,325 10.0%
NON-INTEREST INCOME:
Service charges 489 508 -3.7% 1,394 1,538 -9.4%
Securities gains, net 447 8 5487.5% 1,206 142 749.3%
Bank-owned life insurance 138 148 -6.8% 539 461 16.9%
Gain on sale of loans 527 359 46.8% 1,053 850 23.9%
Insurance commissions 295 241 22.4% 1,053 630 67.1%
Brokerage commissions 239 241 -0.8% 698 797 -12.4%
Other 636 485 31.1% 1,872 1,390 34.7%
TOTAL NON-INTEREST INCOME 2,771 1,990 39.2% 7,815 5,808 34.6%
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,939 2,621 12.1% 8,806 7,728 13.9%
Occupancy, net 317 313 1.3% 963 962 0.1%
Furniture and equipment 355 354 0.3% 1,058 1,011 4.6%
Pennsylvania shares tax 169 172 -1.7% 505 516 -2.1%
Amortization of investments in limited partnerships 165 165 0.0% 496 496 0.0%
FDIC deposit insurance 111 43 158.1% 349 416 -16.1%
Other 1,402 1,300 7.8% 4,088 3,683 11.0%
TOTAL NON-INTEREST EXPENSE 5,458 4,968 9.9% 16,265 14,812 9.8%
INCOME BEFORE INCOME TAX PROVISION 4,403 3,632 21.2% 12,808 10,321 24.1%
INCOME TAX PROVISION 736 482 52.7% 2,054 1,354 51.7%
NET INCOME $ 3,667 $ 3,150 16.4% $ 10,754 $ 8,967 19.9%
EARNINGS PER SHARE - BASIC $ 0.96 $ 0.82 16.5% $ 2.80 $ 2.34 19.8%
EARNINGS PER SHARE - DILUTED $ 0.96 $ 0.82 16.5% $ 2.80 $ 2.34 19.8%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 3,837,925 3,836,244 0.0% 3,837,570 3,835,778 0.0%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 3,837,925 3,836,244 0.0% 3,837,570 3,835,778 0.0%
DIVIDENDS PER SHARE $ 0.47 $ 0.46 2.2% $ 1.41 $ 1.38 2.2%
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Three Months Ended
(Dollars in Thousands) September 30, 2012 September 30, 2011
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 22,916 $ 302 5.24% $ 20,211 $ 311 6.10%
All other loans 452,370 6,147 5.41% 407,346 6,122 5.96%
Total loans 475,286 6,449 5.40% 427,557 6,433 5.97%
Taxable securities 162,822 1,580 3.88% 139,510 1,509 4.33%
Tax-exempt securities 132,996 2,029 6.10% 117,917 2,024 6.87%
Total securities 295,818 3,609 4.88% 257,427 3,533 5.49%
Interest-bearing deposits 8,966 2 0.09% 15,734 1 0.03%
Total interest-earning assets 780,070 10,060 5.14% 700,718 9,967 5.66%
Other assets 48,096 53,323
TOTAL ASSETS $ 828,166 $ 754,041
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 81,413 16 0.08% $ 72,704 28 0.15%
Super Now deposits 120,135 158 0.52% 98,094 141 0.57%
Money market deposits 151,307 173 0.45% 128,012 280 0.87%
Time deposits 171,245 555 1.29% 173,825 705 1.61%
Total interest-bearing deposits 524,100 902 0.68% 472,635 1,154 0.97%
Short-term borrowings 18,607 38 0.81% 17,357 58 1.33%
Long-term borrowings, FHLB 65,517 637 3.80% 71,778 751 4.09%
Total borrowings 84,124 675 3.14% 89,135 809 3.56%
Total interest-bearing liabilities 608,224 1,577 1.02% 561,770 1,963 1.38%
Demand deposits 116,582 104,017
Other liabilities 11,355 11,821
Shareholders' equity 92,005 76,433
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 828,166 $ 754,041
Interest rate spread 4.12% 4.28%
Net interest income/margin $ 8,483 4.34% $ 8,004 4.55%
For the Three Months Ended
September 30,
2012 2011
Total interest income $ 9,267 $ 9,173
Total interest expense 1,577 1,963
Net interest income 7,690 7,210
Tax equivalent adjustment 793 794
Net interest income (fully taxable equivalent) $ 8,483 $ 8,004
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Nine Months Ended
(Dollars in Thousands) September 30, 2012 September 30, 2011
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 21,977 $ 909 5.52% $ 20,302 $ 924 6.09%
All other loans 436,921 18,354 5.61% 402,384 18,149 6.03%
Total loans 458,898 19,263 5.61% 422,686 19,073 6.03%
Taxable securities 157,791 4,747 4.01% 126,887 4,402 4.63%
Tax-exempt securities 131,306 6,253 6.35% 109,552 5,871 7.15%
Total securities 289,097 11,000 5.07% 236,439 10,273 5.79%
Interest-bearing deposits 8,098 4 0.07% 11,916 3 0.03%
Total interest-earning assets 756,093 30,267 5.34% 671,041 29,349 5.84%
Other assets 49,702 53,405
TOTAL ASSETS $ 805,795 $ 724,446
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 78,180 44 0.08% $ 69,994 98 0.19%
Super Now deposits 116,205 452 0.52% 83,357 331 0.53%
Money market deposits 143,878 580 0.54% 120,177 835 0.93%
Time deposits 173,578 1,721 1.32% 181,158 2,266 1.67%
Total interest-bearing deposits 511,841 2,797 0.73% 454,686 3,530 1.04%
Short-term borrowings 19,293 100 0.69% 17,055 157 1.23%
Long-term borrowings, FHLB 62,701 1,877 3.93% 71,778 2,227 4.09%
Total borrowings 81,994 1,977 3.17% 88,833 2,384 3.54%
Total interest-bearing liabilities 593,835 4,774 1.07% 543,519 5,914 1.45%
Demand deposits 112,464 98,000
Other liabilities 11,258 10,272
Shareholders' equity 88,238 72,655
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 805,795 $ 724,446
Interest rate spread 4.27% 4.39%
Net interest income/margin $ 25,493 4.51% $23,435 4.67%
For the Nine Months Ended
September 30,
2012 2011
Total interest income $ 27,832 $ 27,039
Total interest expense 4,774 5,914
Net interest income 23,058 21,125
Tax equivalent adjustment 2,435 2,310
Net interest income (fully taxable equivalent) $ 25,493 $ 23,435
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
Operating Data
Net income $ 3,667 $ 3,398 $ 3,689 $ 3,395 $ 3,150
Net interest income 7,690 7,698 7,670 7,595 7,210
Provision for loan losses 600 600 600 900 600
Net security gains 447 170 589 479 8
Non-interest income, ex. net security gains 2,324 2,111 2,174 1,932 1,982
Non-interest expense 5,458 5,343 5,464 5,152 4,968
Performance Statistics
Net interest margin 4.34% 4.47% 4.72% 4.78% 4.55%
Annualized return on average assets 1.77% 1.67% 1.91% 1.80% 1.67%
Annualized return on average equity 15.94% 15.48% 17.39% 17.00% 16.49%
Annualized net loan charge-offs to avg loans 0.44% 0.79% 0.01% 0.09% 0.01%
Net charge-offs 517 907 9 101 8
Efficiency ratio 54.5% 54.5% 55.5% 54.1% 54.1%
Per Share Data
Basic earnings per share $ 0.96 $ 0.89 $ 0.96 $ 0.88 $ 0.82
Diluted earnings per share 0.96 0.89 0.96 0.88 0.82
Dividend declared per share 0.47 0.47 0.47 0.46 0.46
Book value 24.43 22.96 22.22 20.97 20.48
Common stock price:
High 44.60 39.90 41.67 39.30 36.56
Low 37.78 36.72 36.20 32.01 31.07
Close 44.33 39.81 40.88 38.78 32.75
Weighted average common shares:
Basic 3,838 3,838 3,837 3,837 3,836
Fully Diluted 3,838 3,838 3,837 3,837 3,836
End-of-period common shares:
Issued 4,019 4,018 4,018 4,018 4,017
Treasury 181 181 181 181 181
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
Financial Condition Data:
General
Total assets $ 840,606 $ 818,433 $ 793,114 $ 763,953 $ 752,650
Loans, net 477,530 457,904 435,832 428,805 422,989
Intangibles 3,032 3,032 3,032 3,032 3,032
Total deposits 641,110 641,167 621,542 581,664 575,300
Noninterest-bearing 115,285 117,762 116,271 111,354 104,783
Savings 81,479 81,479 77,253 71,646 73,376
NOW 125,572 115,972 108,904 101,808 103,264
Money Market 149,054 152,114 141,830 124,335 122,896
Time Deposits 169,720 173,840 177,284 172,521 170,981
Total interest-bearing deposits 525,825 523,405 505,271 470,310 470,517
Core deposits* 471,390 467,327 444,258 409,143 404,319
Shareholders' equity 93,779 88,111 85,279 80,460 78,572
Asset Quality
Non-performing assets $ 12,041 $ 8,725 $ 11,308 $ 12,009 $ 14,344
Non-performing assets to total assets 1.43% 1.07% 1.43% 1.57% 1.91%
Allowance for loan losses 7,521 7,438 7,745 7,154 6,355
Allowance for loan losses to total loans 1.55% 1.60% 1.75% 1.64% 1.48%
Allowance for loan losses to non-performing loans 62.46% 85.25% 68.49% 59.57% 44.30%
Non-performing loans to total loans 2.48% 1.87% 2.55% 2.75% 3.34%
Capitalization
Shareholders' equity to total assets 11.16% 10.77% 10.75% 10.53% 10.44%
* Core deposits are defined as total deposits less time deposits
Reconciliation of GAAP and Non-GAAP Financial Measures
(Dollars in Thousands, Except Per Share Data) Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
GAAP net income $ 3,667 $ 3,150 $ 10,754 $ 8,967
Less: net securities and bank-owned life insurance gains, net of tax 295 5 905 94
Non-GAAP operating earnings $ 3,372 $ 3,145 $ 9,849 $ 8,873
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Return on average assets (ROA) 1.77% 1.67% 1.78% 1.65%
Less: net securities and bank-owned life insurance gains, net of tax 0.14% 0.00% 0.15% 0.02%
Non-GAAP operating ROA 1.63% 1.67% 1.63% 1.63%
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Return on average equity (ROE) 15.94% 16.49% 16.25% 16.46%
Less: net securities and bank-owned life insurance gains, net of tax 1.28% 0.03% 1.37% 0.18%
Non-GAAP operating ROE 14.66% 16.46% 14.88% 16.28%
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Basic earnings per share (EPS) $ 0.96 $ 0.82 $ 2.80 $ 2.34
Less: net securities and bank-owned life insurance gains, net of tax 0.08 0.00 0.23 0.03
Non-GAAP basic operating EPS $ 0.88 $ 0.82 $ 2.57 $ 2.31
Three Months Ended Nine Months Ended
September 30, September 30,
2012 2011 2012 2011
Dilutive EPS $ 0.96 $ 0.82 $ 2.80 $ 2.34
Less: net securities and bank-owned life insurance gains, net of tax 0.08 0.00 0.23 0.03
Non-GAAP dilutive operating EPS $ 0.88 $ 0.82 $ 2.57 $ 2.31
CONTACT: Richard A. Grafmyre, President and Chief Executive Officer 300 Market Street Williamsport, PA 17701 570-322-1111 e-mail: jssb@jssb.comSource:Penns Woods Bancorp, Inc.