PWOD - Penns Woods Bancorp Inc. Reports Second Quarter 2020 Earnings

July, 22 2020 02:31 PM Penns Woods Bancorp Inc.

WILLIAMSPORT, Pa., July 22, 2020 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $6.8 million for the six months ended June 30, 2020, resulting in basic and diluted earnings per share of $0.97.

Highlights

Net income, as reported under GAAP, for the three and six months ended June 30, 2020 was $3.8 million and $6.8 million, respectively compared to $4.2 and $8.2 million for the same period of 2019. Results for the three and six months ended June 30, 2020 compared to 2019 were impacted by an increase in after-tax securities gains of $138,000 (from a gain of $18,000 to a gain of $156,000) for the three month period and $108,000 (from a gain of $70,000 to a gain of $178,000) for the six month period.
The provision for loan losses increased $330,000 and $720,000, respectfully, for the three and six months ended June 30, 2020, to $645,000 and $1,395,000 compared to $315,000 and $675,000 for the 2019 periods. The increase is the result of the economic uncertainty caused by the COVID-19 pandemic.
Basic and diluted earnings per share for the three and six months ended June 30, 2020 were $0.53 and $0.97, respectively, compared to basic and diluted earnings per share of $0.60 and $1.16 for the three and six months ended June 30, 2019.
Return on average assets was 0.85% for the three months ended June 30, 2020, compared to 1.02% for the corresponding period of 2019. Return on average assets was 0.79% for the six months ended June 30, 2020, compared to 0.99% for the corresponding period of 2019.
Return on average equity was 9.59% for the three months ended June 30, 2020, compared to 11.42% for the corresponding period of 2019. Return on average equity was 8.75% for the six months ended June 30, 2020, compared to 11.27% for the corresponding period of 2019.

COVID-19 Activity

Approximately one third of employees working remotely.
As of June 30, 2020, loan modification/deferral program in place to defer payments up to 90 days for principal and/or interest with $241.6 million in loan principal affected by this program.
All COVID-19 related loan deferrals meet the requirements to not be considered a troubled debt restructuring.
Participated in the Paycheck Protection Program ("PPP") by primarily utilizing third parties to service and place the loans.
Significantly reduced deposit rates during the latter half of March 2020 continuing through June 2020.
Increased the provision for loan losses due to the economic uncertainty caused by the COVID-19 pandemic.
Net interest margin compression expected to continue as the rate environment remains below historical levels.
Total paycheck protection program loans held at June 30, 2020 total $12.3 million.

Net Income

Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $3.6 million for the three months ended June 30, 2020 compared to $4.2 million for the same period of 2019. Core earnings were $6.7 million for the six months ended June 30, 2020, compared to $8.1 million for the same period of 2019. Core earnings per share for the three months ended June 30, 2020 were $0.51 basic and diluted, compared to $0.60 basic and diluted core earnings per share for the same period of 2019. Core earnings per share for the six months ended June 30, 2020 were $0.95 basic and diluted, compared to $1.15 basic and diluted for the same period of 2019. Core return on average assets and core return on average equity were 0.81% and 9.19% for the three months ended June 30, 2020, compared to 1.01% and 11.37% for the corresponding period of 2019. Core return on average assets and core return on average equity were 0.77% and 8.52% for the six months ended June 30, 2020 compared to 0.98% and 11.18% for the corresponding period of 2019. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2020 was 3.01% and 3.09%, compared to 3.39% and 3.37% for the corresponding periods of 2019. The decrease in the net interest margin was driven by a decrease in the yield of the investment portfolio of 64 and 63 basis points ("bps"), respectively, for the three and six month periods. Further compressing the net interest margin was the significant increase of interest-bearing deposits within the earning asset portfolio. These deposits carry a current yield of a few basis points with the balance steadily increasing as commercial customers have received PPP funding and retail customers have received stimulus funding. Rates paid on interest-bearing liabilities were decreased during the three months ended June 30, 2020 and will partially offset the decline in earning asset yield.

Assets

Total assets increased $126.9 million to $1.8 billion at June 30, 2020 compared to June 30, 2019. Net loans decreased $28.9 million to $1.3 billion at June 30, 2020 compared to June 30, 2019, as the COVID-19 business and travel restrictions curtailed various lending activities such as indirect auto, home equity, and commercial. Lending activity began to rebound as business and travel restrictions were lessened. The investment portfolio increased $17.9 million from June 30, 2019 to June 30, 2020 due to increases in the corporate and taxable municipal portfolios.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.82% at June 30, 2020 from 1.12% at June 30, 2019 as non-performing loans have decreased to $11.1 million at June 30, 2020 from $15.4 million at June 30, 2019 primarily due to a commercial loan relationship that was partially charged-off during the fourth quarter of 2019. The majority of non-performing loans involve 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 $312,000 for the six months ended June 30, 2020 impacted the allowance for loan losses, which was 0.96% of total loans at June 30, 2020 compared to 1.02% at June 30, 2019.

Deposits

Deposits increased $147.2 million to $1.5 billion at June 30, 2020 compared to June 30, 2019. Noninterest-bearing deposits increased $95.6 million to $418.3 million at June 30, 2020 compared to June 30, 2019. Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers, and customers becoming more risk adverse and seeking safety in a bank deposit. Emphasis during 2020 has been on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic.

Shareholders’ Equity

Shareholders’ equity increased $8.1 million to $159.6 million at June 30, 2020 compared to June 30, 2019. The change in accumulated other comprehensive loss from $2.8 million at June 30, 2019 to $1.0 million at June 30, 2020 is a result of an increase in unrealized gains on available for sale securities (from an unrealized gain of $2,419,000 at June 30, 2019 to an unrealized gain of $4.2 million at June 30, 2020). The amount of accumulated other comprehensive loss at June 30, 2020 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 a decrease in the net loss of $43,000. The current level of shareholders’ equity equates to a book value per share of $22.66 at June 30, 2020 compared to $21.53 at June 30, 2019, and an equity to asset ratio of 8.68% at June 30, 2020 compared to 8.85% at June 30, 2019. Dividends declared for the six months ended June 30, 2020 and 2019 were $0.64 per share and $0.63 per share, respectively.

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. Because 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.

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; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) 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, 2019.

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

570-322-1111

e-mail: pwod@pwod.com

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)



June 30,
(In Thousands, Except Share Data)

2020

2019

% Change
ASSETS:






Noninterest-bearing balances

$
26,932


$
21,102


27.63
%
Interest-bearing balances in other financial institutions

188,242


58,423


222.21
%
Total cash and cash equivalents

215,174


79,525


170.57
%







Investment debt securities, available for sale, at fair value

164,369


145,689


12.82
%
Investment equity securities, at fair value

1,291


1,841


(29.88
)%
Investment securities, trading

37


44


(15.91
)%
Restricted investment in bank stock, at fair value

14,849


15,087


(1.58
)%
Loans held for sale

5,146


2,880


78.68
%
Loans

1,349,347


1,379,285


(2.17
)%
Allowance for loan losses

(12,977
)

(14,001
)

(7.31
)%
Loans, net

1,336,370


1,365,284


(2.12
)%
Premises and equipment, net

32,873


33,483


(1.82
)%
Accrued interest receivable

8,068


5,708


41.35
%
Bank-owned life insurance

29,368


28,955


1.43
%
Goodwill

17,104


17,104


—
%
Intangibles

777


1,022


(23.97
)%
Operating lease right of use asset

3,231


4,279


(24.49
)%
Deferred tax asset

3,284


3,712


(11.53
)%
Other assets

6,423


6,887


(6.74
)%
TOTAL ASSETS

$
1,838,364


$
1,711,500


7.41
%







LIABILITIES:






Interest-bearing deposits

$
1,055,981


$
1,004,331


5.14
%
Noninterest-bearing deposits

418,324


322,755


29.61
%
Total deposits

1,474,305


1,327,086


11.09
%







Short-term borrowings

15,133


59,453


(74.55
)%
Long-term borrowings

171,885


154,597


11.18
%
Accrued interest payable

1,530


1,482


3.24
%
Operating lease liability

3,263


4,286


(23.87
)%
Other liabilities

12,640


13,055


(3.18
)%
TOTAL LIABILITIES

1,678,756


1,559,959


7.62
%







SHAREHOLDERS’ EQUITY:






Preferred stock, no par value, 3,000,000 shares authorized; no shares issued

—


—


n/a
Common stock, par value $5.55, 22,500,000 shares authorized; 7,522,573 and 7,519,347 shares issued; 7,042,348 and 7,039,122 shares outstanding

41,792


41,773


0.05
%
Additional paid-in capital

51,956


51,087


1.70
%
Retained earnings

78,910


73,565


7.27
%
Accumulated other comprehensive loss:






Net unrealized gain on available for sale securities

4,194


2,419


73.38
%
Defined benefit plan

(5,159
)

(5,202
)

0.83
%
Treasury stock at cost, 480,225

(12,115
)

(12,115
)

—
%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY

159,578


151,527


5.31
%
Non-controlling interest

30


14


114.29
%
TOTAL SHAREHOLDERS' EQUITY

159,608


151,541


5.32
%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
1,838,364


$
1,711,500


7.41
%

PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)



Three Months Ended June 30,

Six Months Ended June 30,
(In Thousands, Except Per Share Data)

2020

2019

% Change

2020

2019

% Change
INTEREST AND DIVIDEND INCOME:












Loans including fees

$
14,666


$
15,300


(4.14
)%

$
29,323


$
30,169


(2.80
)%
Investment securities:












Taxable

1,023


967


5.79
%

2,033


1,901


6.94
%
Tax-exempt

169


179


(5.59
)%

314


353


(11.05
)%
Dividend and other interest income

186


395


(52.91
)%

535


852


(37.21
)%
TOTAL INTEREST AND DIVIDEND INCOME

16,044


16,841


(4.73
)%

32,205


33,275


(3.22
)%













INTEREST EXPENSE:












Deposits

2,802


2,871


(2.40
)%

5,837


5,171


12.88
%
Short-term borrowings

7


178


(96.07
)%

29


783


(96.30
)%
Long-term borrowings

985


879


12.06
%

1,928


1,730


11.45
%
TOTAL INTEREST EXPENSE

3,794


3,928


(3.41
)%

7,794


7,684


1.43
%













NET INTEREST INCOME

12,250


12,913


(5.13
)%

24,411


25,591


(4.61
)%













PROVISION FOR LOAN LOSSES

645


315


104.76
%

1,395


675


106.67
%













NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

11,605


12,598


(7.88
)%

23,016


24,916


(7.63
)%













NON-INTEREST INCOME:












Service charges

312


592


(47.30
)%

861


1,154


(25.39
)%
Debt securities gains (losses), available for sale

186


(2
)

9,400.00
%

207


11


1,781.82
%
Equity securities gains

11


22


(50.00
)%

31


65


(52.31
)%
Securities gains (losses), trading

1


3


(66.67
)%

(13
)

13


(200.00
)%
Bank-owned life insurance

144


123


17.07
%

336


291


15.46
%
Gain on sale of loans

1,028


347


196.25
%

1,472


663


122.02
%
Insurance commissions

92


119


(22.69
)%

219


253


(13.44
)%
Brokerage commissions

186


356


(47.75
)%

555


679


(18.26
)%
Debit card income

310


389


(20.31
)%

584


699


(16.45
)%
Other

351


520


(32.50
)%

806


895


(9.94
)%
TOTAL NON-INTEREST INCOME

2,621


2,469


6.16
%

5,058


4,723


7.09
%













NON-INTEREST EXPENSE:












Salaries and employee benefits

5,230


5,523


(5.31
)%

10,897


11,024


(1.15
)%
Occupancy

626


668


(6.29
)%

1,328


1,447


(8.22
)%
Furniture and equipment

828


784


5.61
%

1,688


1,536


9.90
%
Software amortization

236


188


25.53
%

486


395


23.04
%
Pennsylvania shares tax

323


285


13.33
%

608


578


5.19
%
Professional fees

658


727


(9.49
)%

1,280


1,249


2.48
%
Federal Deposit Insurance Corporation deposit insurance

185


236


(21.61
)%

379


504


(24.80
)%
Marketing

56


33


69.70
%

109


135


(19.26
)%
Intangible amortization

59


69


(14.49
)%

121


140


(13.57
)%
Other

1,410


1,546


(8.80
)%

2,825


2,865


(1.40
)%
TOTAL NON-INTEREST EXPENSE

9,611


10,059


(4.45
)%

19,721


19,873


(0.76
)%
INCOME BEFORE INCOME TAX PROVISION

4,615


5,008


(7.85
)%

8,353


9,766


(14.47
)%
INCOME TAX PROVISION

851


759


12.12
%

1,512


1,571


(3.76
)%
NET INCOME

$
3,764


$
4,249


(11.41
)%

$
6,841


$
8,195


(16.52
)%
Earnings attributable to noncontrolling interest

4


4


n/a

8


6


33.33
%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'

$
3,760


$
4,245


(11.43
)%

$
6,833


$
8,189


(16.56
)%
EARNINGS PER SHARE - BASIC

$
0.53


$
0.60


(11.67
)%

$
0.97


$
1.16


(16.38
)%
EARNINGS PER SHARE - DILUTED

$
0.53


$
0.60


(11.67
)%

$
0.97


$
1.16


(16.38
)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC

7,041,629


7,038,503


0.04
%

7,041,185


7,038,068


0.04
%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED

7,041,629


7,038,503


0.04
%

7,041,185


7,038,068


0.04
%
DIVIDENDS DECLARED PER SHARE

$
0.32


$
0.31


3.23
%

$
0.64


$
0.63


1.59
%

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES



Three Months Ended


June 30, 2020

June 30, 2019
(Dollars in Thousands)

Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate
ASSETS:












Tax-exempt loans

$
44,916


$
348


3.12
%

$
71,193


$
548


3.09
%
All other loans

1,294,745


14,391


4.47
%

1,313,388


14,867


4.54
%
Total loans

1,339,661


14,739


4.43
%

1,384,581


15,415


4.47
%













Taxable securities

147,352


1,193


3.29
%

130,802


1,300


4.03
%
Tax-exempt securities

28,280


213


3.06
%

27,971


227


3.29
%
Total securities

175,632


1,406


3.26
%

158,773


1,527


3.90
%













Interest-bearing deposits

144,948


16


0.04
%

10,431


62


2.38
%













Total interest-earning assets

1,660,241


16,161


3.92
%

1,553,785


17,004


4.39
%













Other assets

116,750






113,443


















TOTAL ASSETS

$
1,776,991






$
1,667,228


















LIABILITIES AND SHAREHOLDERS’ EQUITY:












Savings

$
190,243


67


0.14
%

$
170,142


51


0.12
%
Super Now deposits

251,691


409


0.65
%

246,454


453


0.74
%
Money market deposits

229,362


418


0.73
%

249,169


596


0.96
%
Time deposits

362,545


1,908


2.12
%

335,721


1,771


2.12
%
Total interest-bearing deposits

1,033,841


2,802


1.09
%

1,001,486


2,871


1.15
%













Short-term borrowings

11,174


7


0.83
%

32,086


178


2.23
%
Long-term borrowings

171,895


985


2.21
%

147,571


879


2.24
%
Total borrowings

183,069


992


2.12
%

179,657


1,057


2.23
%













Total interest-bearing liabilities

1,216,910


3,794


1.24
%

1,181,143


3,928


1.31
%













Demand deposits

384,591






317,623





Other liabilities

18,583






19,747





Shareholders’ equity

156,907






148,715


















TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
1,776,991






$
1,667,228





Interest rate spread





2.68
%





3.08
%
Net interest income/margin



$
12,367


3.01
%



$
13,076


3.39
%



Three Months Ended June 30,


2020

2019
Total interest income

$
16,044


$
16,841

Total interest expense

3,794


3,928

Net interest income

12,250


12,913

Tax equivalent adjustment

117


163

Net interest income (fully taxable equivalent)

$
12,367


$
13,076

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES



Six Months Ended


June 30, 2020

June 30, 2019
(Dollars in Thousands)

Average Balance

Interest

Average Rate

Average Balance

Interest

Average Rate
ASSETS:












Tax-exempt loans

$
48,346


$
752


3.13
%

$
71,874


$
1,087


3.05
%
All other loans

1,299,893


28,729


4.44
%

1,313,121


29,310


4.50
%
Total loans

1,348,239


29,481


4.40
%

1,384,995


30,397


4.43
%













Taxable securities

145,070


2,466


3.46
%

128,431


2,650


4.18
%
Tax-exempt securities

26,027


397


3.10
%

27,344


447


3.31
%
Total securities

171,097


2,863


3.40
%

155,775


3,097


4.03
%













Interest-bearing deposits

85,832


102


0.24
%

8,493


103


2.45
%













Total interest-earning assets

1,605,168


32,446


4.07
%

1,549,263


33,597


4.38
%













Other assets

114,085






112,806


















TOTAL ASSETS

$
1,719,253






$
1,662,069


















LIABILITIES AND SHAREHOLDERS’ EQUITY:












Savings

$
184,042


158


0.17
%

$
168,543


81


0.10
%
Super Now deposits

235,758


833


0.71
%

239,022


832


0.70
%
Money market deposits

220,035


895


0.82
%

245,307


1,068


0.88
%
Time deposits

370,902


3,951


2.14
%

317,782


3,190


2.02
%
Total interest-bearing deposits

1,010,737


5,837


1.16
%

970,654


5,171


1.07
%













Short-term borrowings

11,011


29


0.53
%

63,881


783


2.47
%
Long-term borrowings

166,024


1,928


2.34
%

145,890


1,730


2.24
%
Total borrowings

177,035


1,957


2.22
%

209,771


2,513


2.31
%













Total interest-bearing liabilities

1,187,772


7,794


1.32
%

1,180,425


7,684


1.29
%













Demand deposits

355,704






315,380





Other liabilities

19,551






20,953





Shareholders’ equity

156,226






145,311


















TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

$
1,719,253






$
1,662,069





Interest rate spread





2.75
%





3.09
%
Net interest income/margin



$
24,652


3.09
%



$
25,913


3.37
%



Six Months Ended June 30,


2020

2019
Total interest income

$
32,205


$
33,275

Total interest expense

7,794


7,684

Net interest income

24,411


25,591

Tax equivalent adjustment

241


322

Net interest income (fully taxable equivalent)

$
24,652


$
25,913

(Dollars in Thousands, Except Per Share Data)

Quarter Ended


6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019
Operating Data










Net income

$
3,760


$
3,073


$
2,833


$
4,650


$
4,245

Net interest income

12,250


12,161


12,321


12,903


12,913

Provision for loan losses

645


750


1,700


360


315

Net security gains

198


28


489


170


23

Non-interest income, excluding net security gains

2,423


2,409


2,418


2,652


2,446

Non-interest expense

9,611


10,110


10,294


9,541


10,059












Performance Statistics










Net interest margin

3.01
%

3.19
%

3.22
%

3.32
%

3.39
%
Annualized return on average assets

0.85
%

0.74
%

0.68
%

1.10
%

1.02
%
Annualized return on average equity

9.60
%

7.83
%

7.22
%

12.18
%

11.42
%
Annualized net loan charge-offs to average loans

0.05
%

0.04
%

1.19
%

0.03
%

0.03
%
Net charge-offs

168


144


4,055


112


106

Efficiency ratio

65.10
%

68.96
%

69.42
%

60.98
%

65.04
%











Per Share Data










Basic earnings per share

$
0.53


$
0.44


$
0.40


$
0.66


$
0.60

Diluted earnings per share

0.53


0.43


0.39


0.66


0.60

Dividend declared per share

0.32


0.32


0.32


0.31


0.31

Book value

22.66


22.23


22.01


22.03


21.53

Common stock price:










High

27.75


35.36


35.58


30.93


30.17

Low

20.01


19.05


29.68


26.87


26.03

Close

22.71


24.30


35.58


30.83


30.17

Weighted average common shares:










Basic

7,042


7,041


7,040


7,037


7,038

Fully Diluted

7,042


7,103


7,338


7,037


7,038

End-of-period common shares:










Issued

7,523


7,521


7,521


7,518


7,518

Treasury

480


480


480


480


480

(Dollars in Thousands, Except Per Share Data)

Quarter Ended


6/30/2020

3/31/2020

12/31/2019

9/30/2019

6/30/2019
Financial Condition Data:










General










Total assets

$
1,838,364


$
1,688,508


$
1,665,323


$
1,673,095


$
1,711,500

Loans, net

1,336,370


1,336,900


1,343,650


1,350,735


1,365,284

Goodwill

17,104


17,104


17,104


17,104


17,104

Intangibles

777


836


898


960


1,022

Total deposits

1,474,305


1,326,734


1,324,005


1,332,407


1,327,086

Noninterest-bearing

418,324


332,759


334,746


327,329


322,755

Savings

195,964


183,929


176,732


171,370


171,992

NOW

268,348


229,919


218,605


219,466


238,410

Money Market

247,753


204,832


216,038


239,926


238,352

Time Deposits

343,915


375,295


377,884


374,316


355,577

Total interest-bearing deposits

1,055,980


993,975


989,259


1,005,078


1,004,331












Core deposits*

1,130,389


951,439


946,121


958,091


971,509

Shareholders’ equity

159,578


156,562


154,960


155,061


151,527












Asset Quality










Non-performing loans

$
11,097


$
11,300


$
12,421


$
17,208


$
15,383

Non-performing loans to total assets

0.60
%

0.67
%

0.75
%

1.03
%

0.90
%
Allowance for loan losses

12,977


12,500


11,894


14,249


14,001

Allowance for loan losses to total loans

0.96
%

0.93
%

0.88
%

1.04
%

1.02
%
Allowance for loan losses to non-performing loans

116.94
%

110.62
%

95.76
%

82.80
%

91.02
%
Non-performing loans to total loans

0.82
%

0.84
%

0.92
%

1.26
%

1.12
%











Capitalization










Shareholders’ equity to total assets

8.68
%

9.27
%

9.31
%

9.27
%

8.85
%

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures



Three Months Ended June 30,

Six Months Ended June 30,
(Dollars in Thousands, Except Per Share Data)

2020

2019

2020

2019
GAAP net income

$
3,760


$
4,245


$
6,833


$
8,189

Less: net securities gains, net of tax

156


18


178


70

Non-GAAP core earnings

$
3,604


$
4,227


$
6,655


$
8,119












Three Months Ended June 30,

Six Months Ended June 30,


2020

2019

2020

2019
Return on average assets (ROA)

0.85
%

1.02
%

0.79
%

0.99
%
Less: net securities gains, net of tax

0.04
%

0.01
%

0.02
%

0.01
%
Non-GAAP core ROA

0.81
%

1.01
%

0.77
%

0.98
%











Three Months Ended June 30,

Six Months Ended June 30,


2020

2019

2020

2019
Return on average equity (ROE)

9.59
%

11.42
%

8.75
%

11.27
%
Less: net securities gains, net of tax

0.40
%

0.05
%

0.23
%

0.09
%
Non-GAAP core ROE

9.19
%

11.37
%

8.52
%

11.18
%











Three Months Ended June 30,

Six Months Ended June 30,


2020

2019

2020

2019
Basic earnings per share (EPS)

$
0.53


$
0.60


$
0.97


$
1.16

Less: net securities gains, net of tax

0.02


—


0.02


0.01

Non-GAAP basic core EPS

$
0.51


$
0.60


$
0.95


$
1.15








Three Months Ended June 30,

Six Months Ended June 30,


2020

2019

2020

2019
Diluted EPS

$
0.53


$
0.60


$
0.97


$
1.16

Less: net securities gains, net of tax

0.02


—


0.02


0.01

Non-GAAP diluted core EPS

$
0.51


$
0.60


$
0.95


$
1.15

Loan Deferrals

(In Thousands)

Amount
Commercial, financial, and agricultural

$
28,482

Real estate mortgage:


Residential

66,133

Commercial

132,217

Construction

7,250

Consumer automobile loans

283

Other consumer installment loans

7,243

Total loan deferrals

$
241,608

Company Name:	Penns Woods Bancorp Inc.
Stock Symbol:	PWOD
Market:	NASDAQ
Website:	pwod.com

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