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

WILLIAMSPORT, Pa., Jan. 23, 2013 (GLOBE NEWSWIRE) -- In 2012 Penns Woods Bancorp, Inc. (Nasdaq:PWOD) continued their strong earnings and growth trend. Record earnings of $13,850,000 were achieved for the twelve month period ending December 31, 2012. The driving force behind the record net income was growth in loans and deposits with both reaching record levels. The strong levels of earnings and balance sheet growth led to a stock price that reached an all time high (adjusted for stock splits/dividends) during the fourth quarter of 2012.

Highlights

  • Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and bank owned life insurance gains on death benefit, decreased to $3,044,000 for the three months ended December 31, 2012 compared to $3,079,000 for the same period of 2011. Net income from core operations increased to $12,893,000 for the twelve months ended December 31, 2012 compared to $11,952,000 for the same period of 2011.
  • Operating earnings per share for the three months ended December 31, 2012 were $0.79 basic and dilutive compared to $0.80 basic and dilutive for the same period of 2011. Operating earnings per share for the twelve months ended December 31, 2012 were $3.36 basic and dilutive compared to $3.12 basic and dilutive for the same period of 2011, an increase of 7.7%.
  • Return on average assets was 1.46% for the three months ended December 31, 2012 compared to 1.80% for the three month period of 2011. Return on average assets was 1.70% for the twelve months ended December 31, 2012 compared to 1.69% for the twelve month period of 2011.
  • Return on average equity was 12.92% for the three months ended December 31, 2012 compared to 17.00% for the corresponding period of 2011. Return on average equity was 15.36% for the twelve months ended December 31, 2012 compared to 16.60% for the corresponding period of 2011.
  • The results for the three and twelve months ended December 31, 2012 were negatively impacted by $251,000 in expenses related to the announced acquisition of Luzerne National Bank Corporation.

"Our strategy of acquiring high quality earning assets, while using core deposits to fund their acquisition, is paying rewards as reflected in the strong financial metrics for the three and twelve month periods ended. Growth in the loan portfolio, in particular home equity products, and in the core deposit portfolio, led by NOW and money market accounts, are two of the primary drivers of this strategy. Combine this strategy with the knowledge and hard work of our employees and you have the recipe to our success," 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, 2012 was $3,096,000 and $13,850,000 compared to $3,395,000 and $12,362,000 for the same periods of 2011. Results for the three and twelve months ended December 31, 2012 compared to 2011 were impacted by a decrease in after-tax securities gains of $264,000 (from a gain of $316,000 to a gain of $52,000) for the three month periods and an increase in after-tax securities gains of $438,000 (from a gain of $410,000 to a gain of $848,000) for the twelve 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. Impacting the results for the three and twelve months ended December 31, 2012 was the recognition of $251,000 in expenses related to the announced acquisition of Luzerne National Bank Corporation. Basic and dilutive earnings per share for the three and twelve months ended December 31, 2012 were $0.81 and $3.61 compared to $0.88 and $3.22 for the corresponding periods of 2011. Return on average assets and return on average equity were 1.46% and 12.92% for the three months ended December 31, 2012 compared to 1.80% and 17.00% for the corresponding period of 2011. Earnings for the twelve months ended December 31, 2012 correlate to a return on average assets and a return on average equity of 1.70% and 15.36% compared to 1.69% and 16.60% for the corresponding period of 2011.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2012 was 4.29% and 4.45% compared to 4.78% and 4.70% 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 $2,257,000 to $34,099,000 for the twelve months ended December 31, 2012 compared to the corresponding period of 2011. Driving this increase is the growth in the loan portfolio of 17.5% coupled with the continued emphasis on core deposit growth. The loan growth was driven by several campaigns related to increasing our market share in home equity products. The primary funding for the loan growth was an increase in core deposits of 15.5%. These deposits represent a lower cost funding source than time deposits and comprise 73.62% of total deposits at December 31, 2012 compared to 70.34% at December 31, 2011. The average rate paid on total interest-bearing deposits decreased 23 and 28 basis points (bp) for the three and twelve months ended December 31, 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 28 and 33 bp for the three and twelve months ended December 31, 2012 compared to the same periods of 2011 and the rate paid on money markets decreased 32 and 37 bp for the three and twelve months ended December 31, 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 $15,000,000 since December 31, 2011 to fund a combination of loan growth and FHLB debt that matured. Long-term borrowings of $15,000,000 matured during the three months ended December 31, 2012 carrying an average rate of 4.18%, while $15,000,000 was obtained during the third quarter 2012 carrying an average rate of 0.90% and $15,000,000 was obtained during the fourth quarter 2012 carrying an average rate of 0.87%.

"The net interest margin has and will continue to encounter challenges as we move forward in the current low rate environment. We continue to add quality earning assets, but the earning assets being added are at a lower rate than the legacy earning assets that are maturing or are repricing lower at their rate reset dates. In addition, our investment portfolio strategy continues to focus on shortening the portfolio 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, while reducing risk in an upward rate environment in terms of interest rate and market value depreciation. 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 as market rates have stabilized at their current levels. During the second half of 2012, borrowings from the FHLB totaling $30 million at a blended rate of less than one percent were obtained. These borrowings replaced $15 million in higher cost FHLB borrowings that were maturing and provided additional funding for the growth in the loan and investment portfolios," commented President Grafmyre.

Assets

Total assets increased $92,582,000 to $856,535,000 at December 31, 2012 compared to December 31, 2011. Net loans increased 17.7% to $504,615,000 at December 31, 2012 compared to December 31, 2011 due in large part to campaigns related to increasing home equity product market share. 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. The investment portfolio increased $19,165,000 from December 31, 2011 to December 31, 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 2.29% at December 31, 2012 from 2.75% at December 31, 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 $2,062,000 for the twelve months ended December 31, 2012 represented 0.44% of average loans for the twelve months ended December 31, 2012. The allowance for loan losses decreased to 1.49% of total loans at December 31, 2012 from 1.64% at December 31, 2011 due to several large charge-offs and the increase in the loan portfolio.

Deposits

Deposits have grown 10.4%, or $60,362,000, to $642,026,000 at December 31, 2012 compared to December 31, 2011, with core deposits (total deposits excluding time deposits) increasing $63,532,000, while higher cost time deposits decreased $3,170,000. Noninterest-bearing deposits have increased 3.2% to $114,953,000 at December 31, 2012 compared to December 31, 2011. Also playing a significant role in increasing core deposits were NOW and money market accounts with growth rates of 28.1% and 16.4%, 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 $27 million in deposits during the first twelve months of its operation.

Shareholders' Equity

Shareholders' equity increased $13,266,000 to $93,726,000 at December 31, 2012 compared to December 31, 2011. The accumulated other comprehensive gain of $5,357,000 at December 31, 2012 is a result of an increase in unrealized gains on available for sale securities from an unrealized gain of $2,914,000 at December 31, 2011 to an unrealized gain of $10,164,000 at December 31, 2012. However, the amount of accumulated other comprehensive gain at December 31, 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 $674,000 to $4,807,000 at December 31, 2012. The current level of shareholders' equity equates to a book value per share of $24.42 at December 31, 2012 compared to $20.97 at December 31, 2011 and an equity to asset ratio of 10.94% at December 31, 2012 compared to 10.53% at December 31, 2011. Excluding accumulated other comprehensive gain/loss, book value per share was $23.02 at December 31, 2012 compared to $21.29 at December 31, 2011. Dividends per share paid to shareholders were $0.47 and $1.88 for the three and twelve months ended December 31, 2012 compared to $0.46 and $1.84 for the three and twelve months ended December 31, 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) December 31,
2012 2011 % Change
ASSETS
Noninterest-bearing balances $ 12,695 $ 13,829 -8.2%
Interest-bearing deposits in other financial institutions 2,447 56 4269.6%
Total cash and cash equivalents 15,142 13,885 9.1%
Investment securities, available for sale, at fair value 289,316 270,097 7.1%
Investment securities held to maturity (fair value of $0 and $55) -- 54 -100.0%
Loans held for sale 3,774 3,787 -0.3%
Loans 512,232 435,959 17.5%
Allowance for loan losses (7,617) (7,154) 6.5%
Loans, net 504,615 428,805 17.7%
Premises and equipment, net 8,348 7,707 8.3%
Accrued interest receivable 4,099 3,905 5.0%
Bank-owned life insurance 16,362 16,065 1.8%
Investment in limited partnerships 2,883 3,544 -18.7%
Goodwill 3,032 3,032 0.0%
Deferred tax asset 4,731 7,991 -40.8%
Other assets 4,233 5,081 -16.7%
TOTAL ASSETS $856,535 $763,953 12.1%
LIABILITIES
Interest-bearing deposits $ 527,073 $ 470,310 12.1%
Noninterest-bearing deposits 114,953 111,354 3.2%
Total deposits 642,026 581,664 10.4%
Short-term borrowings 33,204 29,598 12.2%
Long-term borrowings, Federal Home Loan Bank (FHLB) 76,278 61,278 24.5%
Accrued interest payable 366 536 -31.7%
Other liabilities 10,935 10,417 5.0%
TOTAL LIABILITIES 762,809 683,493 11.6%
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; 4,019,112 and 4,017,677 shares issued 33,492 33,480 0.0%
Additional paid-in capital 18,157 18,115 0.2%
Retained earnings 43,030 36,394 18.2%
Accumulated other comprehensive gain (loss):
Net unrealized gain on available for sale securities 10,164 2,914 248.8%
Defined benefit plan (4,807) (4,133) -16.3%
Treasury stock at cost, 180,596 shares (6,310) (6,310) 0.0%
TOTAL SHAREHOLDERS' EQUITY 93,726 80,460 16.5%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $856,535 $763,953 12.1%
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In Thousands, Except Per Share Data) Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 % Change 2012 2011 % Change
INTEREST AND DIVIDEND INCOME:
Loans including fees $ 6,418 $ 6,428 -0.2% $ 25,372 $ 25,187 0.7%
Investment securities:
Taxable 1,463 1,446 1.2% 5,940 5,677 4.6%
Tax-exempt 1,302 1,385 -6.0% 5,429 5,260 3.2%
Dividend and other interest income 92 78 17.9% 366 252 45.2%
TOTAL INTEREST AND DIVIDEND INCOME 9,275 9,337 -0.7% 37,107 36,376 2.0%
INTEREST EXPENSE:
Deposits 848 1,036 -18.1% 3,645 4,566 -20.2%
Short-term borrowings 37 45 -17.8% 137 202 -32.2%
Long-term borrowings, FHLB 552 661 -16.5% 2,429 2,888 -15.9%
TOTAL INTEREST EXPENSE 1,437 1,742 -17.5% 6,211 7,656 -18.9%
NET INTEREST INCOME 7,838 7,595 3.2% 30,896 28,720 7.6%
PROVISION FOR LOAN LOSSES 725 900 -19.4% 2,525 2,700 -6.5%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 7,113 6,695 6.2% 28,371 26,020 9.0%
NON-INTEREST INCOME:
Service charges 500 483 3.5% 1,894 2,021 -6.3%
Securities gains, net 79 479 -83.5% 1,285 621 106.9%
Bank-owned life insurance 131 138 -5.1% 670 599 11.9%
Gain on sale of loans 333 280 18.9% 1,386 1,130 22.7%
Insurance commissions 304 303 0.3% 1,357 933 45.4%
Brokerage commissions 214 200 7.0% 912 997 -8.5%
Other 724 528 37.1% 2,596 1,918 35.3%
TOTAL NON-INTEREST INCOME 2,285 2,411 -5.2% 10,100 8,219 22.9%
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,956 2,751 7.5% 11,762 10,479 12.2%
Occupancy, net 307 300 2.3% 1,270 1,262 0.6%
Furniture and equipment 394 368 7.1% 1,452 1,379 5.3%
Pennsylvania shares tax 169 173 -2.3% 674 689 -2.2%
Amortization of investments in limited partnerships 165 165 0.0% 661 661 0.0%
FDIC deposit insurance 119 109 9.2% 468 525 -10.9%
Other 1,648 1,286 28.1% 5,736 4,969 15.4%
TOTAL NON-INTEREST EXPENSE 5,758 5,152 11.8% 22,023 19,964 10.3%
INCOME BEFORE INCOME TAX PROVISION 3,640 3,954 -7.9% 16,448 14,275 15.2%
INCOME TAX PROVISION 544 559 -2.7% 2,598 1,913 35.8%
NET INCOME $ 3,096 $ 3,395 -8.8% $ 13,850 $ 12,362 12.0%
EARNINGS PER SHARE - BASIC $ 0.81 $ 0.88 -8.0% $ 3.61 $ 3.22 12.1%
EARNINGS PER SHARE - DILUTED $ 0.81 $ 0.88 -8.0% $ 3.61 $ 3.22 12.1%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 3,838,290 3,836,802 0.0% 3,837,751 3,836,036 0.0%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 3,838,290 3,836,802 0.0% 3,837,751 3,836,036 0.0%
DIVIDENDS PER SHARE $ 0.47 $ 0.46 2.2% $ 1.88 $ 1.84 2.2%
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Three Months Ended
(Dollars in Thousands) December 31, 2012 December 31, 2011
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 22,171 $ 286 5.13% $ 20,119 $ 289 5.70%
All other loans 482,586 6,229 5.13% 414,356 6,237 5.97%
Total loans 504,757 6,515 5.13% 434,475 6,526 5.96%
Taxable securities 161,669 1,551 3.84% 141,805 1,524 4.30%
Tax-exempt securities 132,624 1,973 5.95% 123,960 2,098 6.77%
Total securities 294,293 3,524 4.79% 265,765 3,622 5.45%
Interest-bearing deposits 2,514 4 0.63% 645 -- 0.00%
Total interest-earning assets 801,564 10,043 4.99% 700,885 10,148 5.76%
Other assets 46,860 52,578
TOTAL ASSETS $ 848,424 $ 753,463
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 80,341 21 0.10% $ 70,725 23 0.13%
Super Now deposits 125,396 158 0.50% 103,982 141 0.54%
Money market deposits 149,691 154 0.41% 125,259 229 0.73%
Time deposits 172,334 515 1.19% 173,931 643 1.47%
Total interest-bearing deposits 527,762 848 0.64% 473,897 1,036 0.87%
Short-term borrowings 25,926 37 0.57% 21,268 45 0.84%
Long-term borrowings, FHLB 71,821 552 3.01% 64,245 661 4.03%
Total borrowings 97,747 589 2.36% 85,513 706 3.23%
Total interest-bearing liabilities 625,509 1,437 0.91% 559,410 1,742 1.23%
Demand deposits 116,314 105,607
Other liabilities 10,736 8,562
Shareholders' equity 95,865 79,884
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 848,424 $ 753,463
Interest rate spread 4.08% 4.53%
Net interest income/margin $ 8,606 4.29% $ 8,406 4.78%
For the Three Months Ended
December 31,
2012 2011
Total interest income $ 9,275 $ 9,337
Total interest expense 1,437 1,742
Net interest income 7,838 7,595
Tax equivalent adjustment 768 811
Net interest income (fully taxable equivalent) $ 8,606 $ 8,406
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Twelve Months Ended
(Dollars in Thousands) December 31, 2012 December 31, 2011
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 23,857 $ 1,195 5.01% $ 20,267 $ 1,213 5.99%
All other loans 446,569 24,583 5.50% 405,391 24,386 6.02%
Total loans 470,426 25,778 5.48% 425,658 25,599 6.01%
Taxable securities 158,765 6,298 3.97% 130,647 5,926 4.54%
Tax-exempt securities 131,637 8,226 6.25% 113,184 7,970 7.04%
Total securities 290,402 14,524 5.00% 243,831 13,896 5.70%
Interest-bearing deposits 6,621 8 0.12% 9,074 3 0.03%
Total interest-earning assets 767,449 40,310 5.25% 678,563 39,498 5.82%
Other assets 49,070 53,207
TOTAL ASSETS $ 816,519 $ 731,770
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 78,724 65 0.08% $ 70,178 121 0.17%
Super Now deposits 118,515 610 0.51% 88,556 473 0.53%
Money market deposits 145,339 734 0.51% 121,458 1,063 0.88%
Time deposits 173,274 2,236 1.29% 179,336 2,909 1.62%
Total interest-bearing deposits 515,852 3,645 0.71% 459,528 4,566 0.99%
Short-term borrowings 20,961 137 0.65% 18,117 202 1.11%
Long-term borrowings, FHLB 64,994 2,429 3.68% 69,879 2,888 4.08%
Total borrowings 85,955 2,566 2.94% 87,996 3,090 3.47%
Total interest-bearing liabilities 601,807 6,211 1.03% 547,524 7,656 1.39%
Demand deposits 113,431 99,917
Other liabilities 11,126 9,852
Shareholders' equity 90,155 74,477
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 816,519 $ 731,770
Interest rate spread 4.22% 4.43%
Net interest income/margin $ 34,099 4.45% $ 31,842 4.70%
For the Twelve Months Ended
December 31,
2012 2011
Total interest income $ 37,107 $ 36,376
Total interest expense 6,211 7,656
Net interest income 30,896 28,720
Tax equivalent adjustment 3,203 3,122
Net interest income (fully taxable equivalent) $ 34,099 $ 31,842
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Operating Data
Net income $ 3,096 $ 3,667 $ 3,398 $ 3,689 $ 3,395
Net interest income 7,838 7,690 7,698 7,670 7,595
Provision for loan losses 725 600 600 600 900
Net security gains 79 447 170 589 479
Non-interest income, ex. net security gains 2,206 2,324 2,111 2,174 1,932
Non-interest expense 5,758 5,458 5,343 5,464 5,152
Performance Statistics
Net interest margin 4.29% 4.34% 4.47% 4.72% 4.78%
Annualized return on average assets 1.46% 1.77% 1.67% 1.91% 1.80%
Annualized return on average equity 12.92% 15.94% 15.48% 17.39% 17.00%
Annualized net loan charge-offs to avg loans 0.50% 0.44% 0.79% 0.01% 0.09%
Net charge-offs 629 517 907 9 101
Efficiency ratio 57.3% 54.5% 54.5% 55.5% 54.1%
Per Share Data
Basic earnings per share $ 0.81 $ 0.96 $ 0.89 $ 0.96 $ 0.88
Diluted earnings per share 0.81 0.96 0.89 0.96 0.88
Dividend declared per share 0.47 0.47 0.47 0.47 0.46
Book value 24.42 24.43 22.96 22.22 20.97
Common stock price:
High 45.27 44.60 39.90 41.67 39.30
Low 37.16 37.78 36.72 36.20 32.01
Close 37.41 44.33 39.81 40.88 38.78
Weighted average common shares:
Basic 3,838 3,838 3,838 3,837 3,837
Fully Diluted 3,838 3,838 3,838 3,837 3,837
End-of-period common shares:
Issued 4,019 4,019 4,018 4,018 4,018
Treasury 181 181 181 181 181
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 12/31/2012 9/30/2012 6/30/2012 3/31/2012 12/31/2011
Financial Condition Data:
General
Total assets $ 856,535 $ 840,606 $ 818,433 $ 793,114 $ 763,953
Loans, net 504,615 477,530 457,904 435,832 428,805
Intangibles 3,032 3,032 3,032 3,032 3,032
Total deposits 642,026 641,110 641,167 621,542 581,664
Noninterest-bearing 114,953 115,285 117,762 116,271 111,354
Savings 82,546 81,479 81,479 77,253 71,646
NOW 130,454 125,572 115,972 108,904 101,808
Money Market 144,722 149,054 152,114 141,830 124,335
Time Deposits 169,351 169,720 173,840 177,284 172,521
Total interest-bearing deposits 527,073 525,825 523,405 505,271 470,310
Core deposits* 472,675 471,390 467,327 444,258 409,143
Shareholders' equity 93,726 93,779 88,111 85,279 80,460
Asset Quality
Non-performing assets $ 11,706 $ 12,041 $ 8,725 $ 11,308 $ 12,009
Non-performing assets to total assets 1.37% 1.43% 1.07% 1.43% 1.57%
Allowance for loan losses 7,617 7,521 7,438 7,745 7,154
Allowance for loan losses to total loans 1.49% 1.55% 1.60% 1.75% 1.64%
Allowance for loan losses to non-performing loans 65.07% 62.46% 85.25% 68.49% 59.57%
Non-performing loans to total loans 2.29% 2.48% 1.87% 2.55% 2.75%
Capitalization
Shareholders' equity to total assets 10.94% 11.16% 10.77% 10.75% 10.53%
* 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 Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
GAAP net income $ 3,096 $ 3,395 $ 13,850 $ 12,362
Less: net securities and bank-owned life insurance gains, net of tax 52 316 957 410
Non-GAAP operating earnings $ 3,044 $ 3,079 $ 12,893 $ 11,952
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Return on average assets (ROA) 1.46% 1.80% 1.70% 1.69%
Less: net securities and bank-owned life insurance gains, net of tax 0.02% 0.17% 0.12% 0.06%
Non-GAAP operating ROA 1.44% 1.63% 1.58% 1.63%
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Return on average equity (ROE) 12.92% 17.00% 15.36% 16.60%
Less: net securities and bank-owned life insurance gains, net of tax 0.22% 1.58% 1.06% 0.55%
Non-GAAP operating ROE 12.70% 15.42% 14.30% 16.05%
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Basic earnings per share (EPS) $ 0.81 $ 0.88 $ 3.61 $ 3.22
Less: net securities and bank-owned life insurance gains, net of tax 0.02 0.08 0.25 0.10
Non-GAAP basic operating EPS $ 0.79 $ 0.80 $ 3.36 $ 3.12
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Dilutive EPS $ 0.81 $ 0.88 $ 3.61 $ 3.22
Less: net securities and bank-owned life insurance gains, net of tax 0.02 0.08 0.25 0.10
Non-GAAP dilutive operating EPS $ 0.79 $ 0.80 $ 3.36 $ 3.12

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.