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Penns Woods Bancorp, Inc. Reports Second Quarter 2013 Operating Earnings

WILLIAMSPORT, Pa., July 19, 2013 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (Nasdaq:PWOD)

Penns Woods Bancorp, Inc. continued its strong earnings and growth during the recently completed second quarter of 2013. Earnings of $7,343,000 were achieved for the six month period ending June 30, 2013 resulting in basic and dilutive earnings per share of $1.84.

Highlights

  • Completion of the acquisition of Luzerne National Bank Corporation effective June 1, 2013 resulted in an increase in net loans of $254,057,000; investments of $21,140,000; deposits of $279,867,000; and assets of $329,209,000.
  • 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 benefits, decreased to $2,818,000 for the three months ended June 30, 2013 compared to $3,286,000 for the same period of 2012. Net income from core operations decreased to $5,851,000 for the six months ended June 30, 2013 compared to $6,477,000 for the same period of 2012.
  • Operating earnings per share for the three months ended June 30, 2013 were $0.68 basic and dilutive compared to $0.86 basic and dilutive for the same period of 2012. Operating earnings per share for the six months ended June 30, 2013 were $1.46 basic and dilutive compared to $1.69 basic and dilutive for the same period of 2012.
  • Return on average assets was 1.48% for the three months ended June 30, 2013 compared to 1.67% for the corresponding period of 2012. Return on average assets was 1.59% for the six months ended June 30, 2013 compared to 1.78% for the corresponding period of 2012.
  • Return on average equity was 13.54% for the three months ended June 30, 2013 compared to 15.48% for the corresponding period of 2012. Return on average equity was 14.45% for the six months ended June 30, 2013 compared to 16.42% for the corresponding period of 2012.
  • The results for the three and six months ended June 30, 2013 were negatively impacted by $535,000 and $623,000 in expenses related to the acquisition of Luzerne National Bank Corporation.

"The results for the three and six months ended June 30, 2013 have been impacted by the completed acquisition of Luzerne National Bank Corporation into the Penns Woods Bancorp, Inc. family. The acquisition not only resulted in a significant increase in assets, loans, and deposits, but also more than doubled the population residing within the counties we are located. Access to the population base and businesses located within Luzerne and Lackawanna Counties will allow us to continue our strategic path of growing our balance sheet by acquiring high quality earning assets funded by core deposit growth. In addition to the completed acquisition, we continue to invest in revenue streams for the future including planned branches in Lewisburg and Loyalsock, the expansion of our residential secondary market footprint, and growth in our commercial services department," said Richard A. Grafmyre, CFP®, President and CEO.

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

Net Income

Net income, as reported under GAAP, for the three and six months ended June 30, 2013 was $3,659,000 and $7,343,000 compared to $3,398,000 and $7,087,000 for the same period of 2012. Results for the three and six months ended June 30, 2013 compared to 2012 were impacted by an increase in after-tax securities gains of $729,000 (from a gain of $112,000 to a gain of $841,000) for the three month periods and an increase in after-tax securities gains of $991,000 (from a gain of $501,000 to a gain of $1,492,000) for the six 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 six months ended June 30, 2013 was the recognition of $535,000 and $623,000 in expenses related to the acquisition of Luzerne National Bank Corporation. Basic and dilutive earnings per share for the three and six months ended June 30, 2013 was $0.88 and $1.84 compared to $0.89 and $1.85 for the corresponding periods of 2012. Return on average assets and return on average equity were 1.48% and 13.54% for the three months ended June 30, 2013 compared to 1.67% and 15.48% for the corresponding period of 2012. Return on average assets and return on average equity were 1.59% and 14.45% for the six months ended June 30, 2013 compared to 1.78% and 16.42% for the corresponding period of 2012.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2013 was 4.09% and 4.26% compared to 4.47% and 4.59% for the corresponding periods of 2012. While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $927,000 and $1,369,000 for the three and six months ended June 30, 2013 compared to the corresponding period of 2012. Driving this increase is the growth in the loan and deposit portfolios for the six months ended June 30, 2013 compared to the corresponding period for 2012 primarily due to the acquisition of Luzerne National Bank Corporation, growth in home equity products, recognition of $528,000 in loan interest from the payoff of a nonaccrual loan in the first quarter of 2013, and the continued emphasis on core deposit growth. The primary funding for the loan growth was an increase in core deposits. These deposits represent a lower cost funding source than time deposits and comprise 75.03% of total deposits at June 30, 2013 compared to 72.89% at June 30, 2012. The continued growth in core deposits has led to the total cost of deposits decreasing to 54 bp for the six months ended June 30, 2013 from 75 bp for the corresponding period of 2012. FHLB long-term borrowings have been increased by $9,472,000 since June 30, 2012 to supplement the deposit funding of loan growth and FHLB debt that matured. Long-term borrowings of $5,528,000 matured during the six months ended June 30, 2013 carrying an average rate of 3.94%. The changes in the composition of the deposit and borrowing portfolios has led to the total cost of interest bearing funding decreasing to 77 bp for the six months ended June 30, 2013 from 109 bp at the corresponding period of 2012.

"As seen in the compression of the net interest margin, the margin has and will continue to encounter challenges as we move forward in the current rate environment. We continue to follow our strategic direction to add quality earning assets, even though these new earning assets are being added are at a lower rate than the legacy earning assets that are maturing or are repricing lower at their rate reset dates. Efforts are being undertaken to shorten the investment portfolio duration in order to reduce interest rate and market risk in the future. This is being undertaken primarily through purchases of variable rate and intermediate term corporate bonds. The earning asset strategies do limit current earnings, but they play a key role in our long-term asset liability management strategy. On the funding side of the balance sheet there is limited opportunity to reduce costs. Our focus will continue to be on lower cost core deposits, with an eye toward the lengthening of select funding sources as opportunities are presented," commented President Grafmyre.

Assets

Total assets increased $388,525,000 to $1,206,958,000 at June 30, 2013 compared to June 30, 2012. Net loans increased to $777,557,000 at June 30, 2013 compared to June 30, 2012 due to the acquisition of Luzerne National Bank Corporation and campaigns related to increasing home equity product market share during 2012 and 2013. The investment portfolio increased $16,168,000 from June 30, 2012 to June 30, 2013 due primarily to the acquisition of Luzerne National Bank Corporation and the purchase of short maturity bonds that have been utilized to reduce the portfolio duration and to provide current cash flow. In addition, we continue to follow our strategy to reduce the investment portfolio duration through the selective selling of bonds as opportunities develop.

Non-performing Loans

Our non-performing loans to total loans ratio has decreased to 0.83% at June 30, 2013 from 1.87% at June 30, 2012. The decrease in non-performing loans is primarily the result of several partial charge-offs and the payoff of a large construction loan that was on nonaccrual. 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 recoveries of $712,000 for the six months ended June 30, 2013 augmented the allowance for loan losses which was 1.19% of total loans at June 30, 2013.

Deposits

Deposits have increased $314,194,000 to $955,361,000 at June 30, 2013 compared to June 30, 2012, with core deposits (total deposits excluding time deposits) increasing $249,484,000, while higher cost time deposits only increased $64,710,000. Noninterest-bearing deposits have increased $93,334,000 to $211,096,000 at June 30, 2013 compared to June 30, 2012. Driving this growth is our acquisition of Luzerne National Bank Corporation in addition to 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.

Shareholders' Equity

Shareholders' equity increased $37,817,000 to $125,928,000 at June 30, 2013 compared to June 30, 2012. The accumulated other comprehensive loss of $4,521,000 at June 30, 2013 is a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $7,058,000 at June 30, 2012 to an unrealized gain of $286,000 at June 30, 2013. The amount of accumulated other comprehensive loss at June 30, 2013 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 June 30, 2013. The current level of shareholders' equity equates to a book value per share of $26.14 at June 30, 2013 compared to $22.96 at June 30, 2012 and an equity to asset ratio of 10.43% at June 30, 2013 compared to 10.77% at June 30, 2012. Excluding goodwill and intangibles, book value per share was $22.17 at June 30, 2013 compared to $22.17 at June 30, 2012. Dividends declared for the three and six months ended June 30, 2013 were $0.47 and $1.19 per share, which includes a special cash dividend of $0.25 per share declared in the first quarter 2013, compared to $0.47 and $0.94 for the three and six months ended June 30, 2012.

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, and Luzerne Bank, which operates nine branch offices providing financial services in Luzerne and Lackawanna 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, 2012.

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) June 30,
2013 2012 % Change
ASSETS
Noninterest-bearing balances $ 26,888 $ 16,052 67.51%
Interest-bearing deposits in other financial institutions 1,417 21 6647.62%
Total cash and cash equivalents 28,305 16,073 76.10%
Federal funds sold 134 -- n/a
Investment securities, available for sale, at fair value 311,289 295,121 5.48%
Loans held for sale 5,409 3,496 54.72%
Loans 786,961 465,342 69.11%
Allowance for loan losses (9,404) (7,438) 26.43%
Loans, net 777,557 457,904 69.81%
Premises and equipment, net 17,101 8,229 107.81%
Accrued interest receivable 4,999 4,071 22.80%
Bank-owned life insurance 25,022 16,101 55.41%
Investment in limited partnerships 2,552 3,213 -20.57%
Goodwill 17,104 3,032 464.12%
Intangibles 1,984 -- n/a
Deferred tax asset 9,906 5,960 66.21%
Other assets 5,596 5,233 6.94%
TOTAL ASSETS $ 1,206,958 $ 818,433 47.47%
LIABILITIES
Interest-bearing deposits $ 744,265 $ 523,405 42.20%
Noninterest-bearing deposits 211,096 117,762 79.26%
Total deposits 955,361 641,167 49.00%
Short-term borrowings 39,000 17,855 118.43%
Long-term borrowings, Federal Home Loan Bank (FHLB) 70,750 61,278 15.46%
Accrued interest payable 442 490 -9.80%
Other liabilities 15,477 9,532 62.37%
TOTAL LIABILITIES 1,081,030 730,322 48.02%
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;
4,998,881 and 4,018,386 shares issued 41,657 33,486 24.40%
Additional paid-in capital 49,759 18,136 174.37%
Retained earnings 45,343 39,874 13.72%
Accumulated other comprehensive (loss) income:
Net unrealized gain on available for sale securities 286 7,058 -95.95%
Defined benefit plan (4,807) (4,133) -16.31%
Treasury stock at cost, 180,596 shares (6,310) (6,310) 0.00%
TOTAL SHAREHOLDERS' EQUITY 125,928 88,111 42.92%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,206,958 $ 818,433 47.47%
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In Thousands, Except Per Share Data) Three Months Ended Six Months Ended
June 30, June 30,

2013

2012
% Change
2013

2012
% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees $ 7,277 $ 6,294 15.62% $ 14,045 $ 12,608 11.40%
Investment securities:
Taxable 1,507 1,517 -0.66% 2,950 2,991 -1.37%
Tax-exempt 1,162 1,383 -15.98% 2,429 2,788 -12.88%
Dividend and other interest income 72 86 -16.28% 134 178 -24.72%
TOTAL INTEREST AND DIVIDEND INCOME 10,018 9,280 7.95% 19,558 18,565 5.35%
INTEREST EXPENSE:
Deposits 760 934 -18.63% 1,551 1,895 -18.15%
Short-term borrowings 22 28 -21.43% 47 62 -24.19%
Long-term borrowings, FHLB 482 620 -22.26% 1,001 1,240 -19.27%
TOTAL INTEREST EXPENSE 1,264 1,582 -20.10% 2,599 3,197 -18.71%
NET INTEREST INCOME 8,754 7,698 13.72% 16,959 15,368 10.35%
PROVISION FOR LOAN LOSSES 575 600 -4.17% 1,075 1,200 -10.42%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 8,179 7,098 15.23% 15,884 14,168 12.11%
NON-INTEREST INCOME:
Service charges 538 458 17.47% 980 905 8.29%
Securities gains, net 1,274 170 649.41% 2,260 759 197.76%
Bank-owned life insurance 144 133 8.27% 282 401 -29.68%
Gain on sale of loans 302 343 -11.95% 653 526 24.14%
Insurance commissions 247 316 -21.84% 511 758 -32.59%
Brokerage commissions 299 247 21.05% 547 459 19.17%
Other 731 614 19.06% 1,035 1,236 -16.26%
TOTAL NON-INTEREST INCOME 3,535 2,281 54.98% 6,268 5,044 24.27%
NON-INTEREST EXPENSE:
Salaries and employee benefits 3,442 2,850 20.77% 6,510 5,867 10.96%
Occupancy 397 318 24.84% 748 646 15.79%
Furniture and equipment 412 357 15.41% 820 703 16.64%
Pennsylvania shares tax 208 167 24.55% 392 336 16.67%
Amortization of investments in limited partnerships 166 166 0.00% 331 331 0.00%
FDIC deposit insurance 119 115 3.48% 248 238 4.20%
Marketing 120 140 -14.29% 215 273 -21.25%
Intangible amortization 31 -- n/a 31 -- n/a
Other 2,070 1,230 68.29% 3,521 2,413 45.92%
TOTAL NON-INTEREST EXPENSE 6,965 5,343 30.36% 12,816 10,807 18.59%
INCOME BEFORE INCOME TAX PROVISION 4,749 4,036 17.67% 9,336 8,405 11.08%
INCOME TAX PROVISION 1,090 638 70.85% 1,993 1,318 51.21%
NET INCOME $ 3,659 $ 3,398 7.68% $ 7,343 $ 7,087 3.61%
EARNINGS PER SHARE - BASIC $ 0.88 $ 0.89 -1.12% $ 1.84 $ 1.85 -0.54%
EARNINGS PER SHARE - DILUTED $ 0.88 $ 0.89 -1.12% $ 1.84 $ 1.85 -0.54%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 4,151,035 3,837,579 8.17% 3,995,716 3,837,391 4.13%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 4,151,035 3,837,579 8.17% 3,995,716 3,837,391 4.13%
DIVIDENDS DECLARED PER SHARE $ 0.47 $ 0.47 0.00% $ 1.19 $ 0.94 26.60%
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Three Months Ended
(Dollars in Thousands) June 30, 2013 June 30, 2012
Average Balance
Interest

Average Rate
Average Balance
Interest
Average Rate
ASSETS:
Tax-exempt loans $ 21,480 $ 249 4.65% $ 21,621 $ 298 5.54%
All other loans 596,206 7,113 4.79% 435,918 6,097 5.63%
Total loans 617,686 7,362 4.78% 457,539 6,395 5.62%
Federal funds sold 98 -- 0.00% -- -- 0.00%
Taxable securities 178,827 1,573 3.52% 163,294 1,601 3.92%
Tax-exempt securities 119,655 1,761 5.89% 130,313 2,095 6.43%
Total securities 298,482 3,334 4.47% 293,607 3,696 5.04%
Interest-bearing deposits 8,339 6 0.29% 13,285 2 0.06%
Total interest-earning assets 924,605 10,702 4.64% 764,431 10,093 5.30%
Other assets 65,956 50,251
TOTAL ASSETS $ 990,561 $ 814,682
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 107,027 27 0.10% $ 79,465 16 0.08%
Super Now deposits 149,635 171 0.46% 120,066 153 0.51%
Money market deposits 172,228 129 0.30% 152,858 202 0.53%
Time deposits 191,046 433 0.91% 172,431 563 1.31%
Total interest-bearing deposits 619,936 760 0.49% 524,820 934 0.72%
Short-term borrowings 21,777 22 0.40% 17,222 28 0.65%
Long-term borrowings, FHLB 71,237 482 2.68% 61,278 620 4.00%
Total borrowings 93,014 504 2.14% 78,500 648 3.27%
Total interest-bearing liabilities 712,950 1,264 0.71% 603,320 1,582 1.05%
Demand deposits 153,840 112,683
Other liabilities 15,652 10,889
Shareholders' equity 108,120 87,790
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 990,562 $ 814,682
Interest rate spread 3.93% 4.25%
Net interest income/margin $ 9,438 4.09% $ 8,511 4.47%
For the Three Months Ended
June 30,
2013 2012
Total interest income $ 10,018 $ 9,280
Total interest expense 1,264 1,582
Net interest income 8,754 7,698
Tax equivalent adjustment 684 813
Net interest income (fully taxable equivalent) $ 9,438 $ 8,511
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
For the Six Months Ended
(Dollars in Thousands) June 30, 2013 June 30, 2012
Average Balance
Interest

Average Rate
Average Balance
Interest
Average Rate
ASSETS:
Tax-exempt loans $ 21,860 $ 498 4.59% $ 21,574 $ 607 5.66%
All other loans 546,033 13,716 5.07% 429,040 12,207 5.72%
Total loans 567,893 14,214 5.05% 450,614 12,814 5.72%
Federal funds sold 49 -- 0.00% -- -- 0.00%
Taxable securities 170,226 3,076 3.61% 155,247 3,167 4.08%
Tax-exempt securities 123,543 3,680 5.96% 130,452 4,224 6.48%
Total securities 293,769 6,756 4.60% 285,699 7,391 5.17%
Interest-bearing deposits 6,024 8 0.27% 7,660 2 0.05%
Total interest-earning assets 867,735 20,978 4.86% 743,973 20,207 5.45%
Other assets 57,369 50,517
TOTAL ASSETS $ 925,104 $ 794,490
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 95,848 52 0.11% $ 76,546 27 0.07%
Super Now deposits 143,509 344 0.48% 114,218 295 0.52%
Money market deposits 158,374 264 0.34% 140,122 407 0.58%
Time deposits 181,443 891 0.99% 174,754 1,166 1.34%
Total interest-bearing deposits 579,174 1,551 0.54% 505,640 1,895 0.75%
Short-term borrowings 21,574 47 0.44% 19,640 62 0.63%
Long-term borrowings, FHLB 73,550 1,001 2.71% 61,278 1,240 4.00%
Total borrowings 95,124 1,048 2.19% 80,918 1,302 3.18%
Total interest-bearing liabilities 674,298 2,599 0.77% 586,558 3,197 1.09%
Demand deposits 135,035 110,382
Other liabilities 14,164 11,216
Shareholders' equity 101,607 86,334
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 925,104 $ 794,490
Interest rate spread 4.09% 4.36%
Net interest income/margin $ 18,379 4.26% $ 17,010 4.59%
For the Six Months Ended
June 30,
2013 2012
Total interest income $ 19,558 $ 18,565
Total interest expense 2,599 3,197
Net interest income 16,959 15,368
Tax equivalent adjustment 1,420 1,642
Net interest income (fully taxable equivalent) $ 18,379 $ 17,010
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
Operating Data
Net income $ 3,659 $ 3,684 $ 3,096 $ 3,667 $ 3,398
Net interest income 8,754 8,205 7,838 7,690 7,698
Provision for loan losses 575 500 725 600 600
Net security gains 1,274 986 79 447 170
Non-interest income, ex. net security gains 2,261 1,747 2,206 2,324 2,111
Non-interest expense 6,965 5,851 5,758 5,458 5,343
Performance Statistics
Net interest margin 4.09% 4.46% 4.29% 4.34% 4.47%
Annualized return on average assets 1.48% 1.72% 1.46% 1.77% 1.67%
Annualized return on average equity 13.54% 15.51% 12.92% 15.94% 15.48%
Annualized net loan charge-offs (recoveries) to average loans 0.00% -0.55% 0.50% 0.44% 0.79%
Net charge-offs (recoveries) 1 (713) 629 517 907
Efficiency ratio 63.2% 58.8% 57.3% 54.5% 54.5%
Per Share Data
Basic earnings per share $ 0.88 $ 0.96 $ 0.81 $ 0.96 $ 0.89
Diluted earnings per share 0.88 0.96 0.81 0.96 0.89
Dividend declared per share 0.47 0.72 0.47 0.47 0.47
Book value 26.14 24.23 24.42 24.43 22.96
Common stock price:
High 41.86 41.45 45.27 44.60 39.90
Low 39.44 38.50 37.16 37.78 36.72
Close 41.86 40.97 37.41 44.33 39.81
Weighted average common shares:
Basic 4,151 3,839 3,838 3,838 3,838
Fully Diluted 4,151 3,839 3,838 3,838 3,838
End-of-period common shares:
Issued 4,999 4,020 4,019 4,019 4,018
Treasury 181 181 181 181 181
Quarter Ended
(Dollars in Thousands, Except Per Share Data) 6/30/2013 3/31/2013 12/31/2012 9/30/2012 6/30/2012
Financial Condition Data:
General
Total assets $ 1,206,958 $ 852,997 $ 856,535 $ 840,606 $ 818,433
Loans, net 777,557 503,592 504,615 477,530 457,904
Goodwill 17,104 3,032 3,032 3,032 3,032
Intangibles 1,984 -- -- -- --
Total deposits 955,361 659,304 642,026 641,110 641,167
Noninterest-bearing 211,096 120,471 114,953 115,285 117,762
Savings 140,667 86,556 82,546 81,479 81,479
NOW 161,972 140,626 130,454 125,572 115,972
Money Market 203,076 143,847 144,722 149,054 152,114
Time Deposits 238,550 167,804 169,351 169,720 173,840
Total interest-bearing deposits 744,265 538,833 527,073 525,825 523,405
Core deposits* 716,811 491,500 472,675 471,390 467,327
Shareholders' equity 125,928 93,013 93,726 93,779 88,111
Asset Quality
Non-performing assets $ 6,515 $ 9,059 $ 11,706 $ 12,041 $ 8,725
Non-performing assets to total assets 0.54% 1.06% 1.37% 1.43% 1.07%
Allowance for loan losses 9,404 8,830 7,617 7,521 7,438
Allowance for loan losses to total loans 1.19% 1.72% 1.49% 1.55% 1.60%
Allowance for loan losses to non-performing loans 144.34% 97.47% 65.07% 62.46% 85.25%
Non-performing loans to total loans 0.83% 1.77% 2.29% 2.48% 1.87%
Capitalization
Shareholders' equity to total assets 10.43% 10.90% 10.94% 11.16% 10.77%
* 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 Six Months Ended
June 30, June 30,
2013 2012 2013 2012
GAAP net income $ 3,659 $ 3,398 $ 7,343 $ 7,087
Less: net securities and bank-owned life insurance gains, net of tax 841 112 1,492 610
Non-GAAP operating earnings $ 2,818 $ 3,286 $ 5,851 $ 6,477
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Return on average assets (ROA) 1.48% 1.67% 1.59% 1.78%
Less: net securities and bank-owned life insurance gains, net of tax 0.34% 0.06% 0.33% 0.15%
Non-GAAP operating ROA 1.14% 1.61% 1.26% 1.63%
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Return on average equity (ROE) 13.54% 15.48% 14.45% 16.42%
Less: net securities and bank-owned life insurance gains, net of tax 3.11% 0.51% 2.93% 1.42%
Non-GAAP operating ROE 10.43% 14.97% 11.52% 15.00%
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Basic earnings per share (EPS) $ 0.88 $ 0.89 $ 1.84 $ 1.85
Less: net securities and bank-owned life insurance gains, net of tax 0.20 0.03 0.38 0.16
Non-GAAP basic operating EPS $ 0.68 $ 0.86 $ 1.46 $ 1.69
Three Months Ended Six Months Ended
June 30, June 30,
2013 2012 2013 2012
Dilutive EPS $ 0.88 $ 0.89 $ 1.84 $ 1.85
Less: net securities and bank-owned life insurance gains, net of tax 0.20 0.03 0.38 0.16
Non-GAAP dilutive operating EPS $ 0.68 $ 0.86 $ 1.46 $ 1.69

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.