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, increased to $3,079,000 and $11,952,000 for the three and twelve months ended December 31, 2011 compared to $2,854,000 and $10,815,000 for the same periods of 2010.
  • Operating earnings per share for the three months ended December 31, 2011 were $0.80 basic and dilutive compared to $0.74 basic and dilutive for the same period of 2010 or an increase of 8.1%. Operating earnings per share for the twelve months ended December 31, 2011 increased 10.6% to $3.12 basic and dilutive compared to $2.82 basic and dilutive for the same period of 2010.
  • Net interest margin was 4.78% for the three months ended December 31, 2011 compared to 4.66% for the corresponding period of 2010. For the twelve months ended December 31, 2011 the net interest margin was 4.70% compared to 4.57% for the twelve month 2010 period.
  • Return on average equity was 17.00% for the three months ended December 31, 2011 compared to 15.56% for the corresponding period of 2010. Earnings for the twelve months ended December 31, 2011 correlate to a return on average equity of 16.60% compared to 15.30% for the twelve month 2010 period.

"Although earnings remain stable we continue to deal with the challenging economy and credit cycle. Our focus moving forward will continue to be building core deposits, loan growth, and managing credit risk," 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, 2011 was $3,395,000 and $12,362,000 compared to $2,861,000 and $10,929,000 for the same periods of 2010. Results for the three and twelve month periods ended December 31, 2011 compared to 2010 were impacted by an increase in after-tax securities gains of $309,000 (from a gain of $7,000 to a gain of $316,000) for the three month periods and an increase in after-tax securities gains of $296,000 (from a gain of $114,000 to a gain of $410,000) for the twelve month periods. Basic and dilutive earnings per share for the three and twelve months ended December 31, 2011 were $0.88 and $3.22 compared to $0.75 and $2.85 for the corresponding periods of 2010. Return on average assets and return on average equity were 1.80% and 17.00% for the three months ended December 31, 2011 compared to 1.63% and 15.56% for the corresponding period of 2010. Earnings for the twelve months ended December 31, 2011 correlate to a return on average assets and a return on average equity of 1.69% and 16.60% compared to 1.56% and 15.30% for the twelve month 2010 period.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2011 was 4.78% and 4.70% compared to 4.66% and 4.57% for the corresponding periods of 2010. In addition, the net interest margin has increased compared to the linked quarter. The increase in net interest margin resulted primarily from a significant decrease in the cost of interest-bearing liabilities, as we continued to emphasize core deposit growth. These deposits represent a lower cost funding source than time deposits and comprise 70.3% of total deposits at December 31, 2011 compared to 63.4% at December 31, 2010. The average rate paid on total interest-bearing deposits decreased 35 and 39 basis points (bp) for the three and twelve months ended December 31, 2011 compared to the same periods of 2010. The decrease was led by the rate paid on time deposits decreasing 36 and 45 bp for the three and twelve months ended December 31, 2011 compared to the same periods of 2010. The duration of the time deposit portfolio, which was shortened over the past several years, is now being lengthened due to the apparent bottoming or near bottoming of deposit rates. FHLB long-term borrowings have been reduced by $10,500,000 since December 31, 2010 with cash on hand and short-term borrowings being utilized to pay off these borrowings carrying an average rate of 4.60% that matured during the three months ended December 31, 2011.

"Today's interest rate climate provides challenges to support a strong net interest margin. To maintain our margin we have attacked the challenge from both the earning asset and funding sides of the balance sheet. We continue to shorten the bond portfolio duration by utilizing shorter term corporate and agency bonds to offset the relatively longer duration of municipal bonds in the portfolio. While this action may limit current earnings somewhat, it also limits interest rate risk and will provide cash flow over the next few years as we anticipate a period of increasing rates. The yield on new loans, and investments, are at a lower level than the existing portfolio which has placed downward pressure on the yield on earning assets. Our focus on increasing core deposits has resulted in a decrease in the overall cost of interest-bearing liabilities which has offset the negative effects of a declining yield on earning assets," commented President Grafmyre.

Assets

Total assets increased $72,265,000 to $763,953,000 at December 31, 2011 compared to December 31, 2010. Net loans increased 4.7% to $428,805,000 at December 31, 2011 compared to December 31, 2010 as the economic environment has in general provided fewer loan opportunities. 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 and/or exceed our credit standards. During 2011 successful loan campaigns were undertaken to build home equity loans and lines of credit. The investment portfolio increased $54,503,000 from December 31, 2010 to December 31, 2011 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.

Nonperforming Loans

Our nonperforming loans to total loans ratio has increased to 2.75% at December 31, 2011 from 1.50% at December 31, 2010. The increase in nonperforming loans is primarily the result of an increase in commercial loan delinquencies. The increase is centered on several loans that either are 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 to average loans for the twelve months ended December 31, 2011 of 0.37% increased from our historically low levels primarily due to a $1,500,000 partial charge-off related to a real-estate development loan during the second quarter of 2011. The allowance for loan losses was increased to 1.64% of total loans at December 31, 2011 from 1.45% of total loans at December 31, 2010 due to the general economic uncertainty and an increase in nonperforming loans.

Deposits

Deposits have grown 12.4%, or $64,156,000, to $581,664,000 at December 31, 2011 compared to December 31, 2010, with core deposits (total deposits excluding time deposits) increasing $80,910,000. Noninterest-bearing deposits have increased 24.6% to $111,354,000 at December 31, 2011 compared to December 31, 2010. Also playing a significant role in increasing core deposits was money market and NOW accounts with growth rates of 16.1% and 50.8%, respectively. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. In addition, over the past year we have implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration.

Shareholders' Equity

Shareholders' equity increased $13,840,000 to $80,460,000 at December 31, 2011 compared to December 31, 2010. The accumulated other comprehensive loss of $1,219,000 at December 31, 2011 is a result of an increase in unrealized gains on available for sale securities from an unrealized loss of $7,276,000 at December 31, 2010 to an unrealized gain of $2,914,000 at December 31, 2011. However, the level of accumulated other comprehensive loss at December 31, 2011 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 $20.97 at December 31, 2011 compared to $17.37 at December 31, 2010 and an equity to asset ratio of 10.53% at December 31, 2011 compared to 9.63% at December 31, 2010. Excluding accumulated other comprehensive loss, book value per share was $21.29 at December 31, 2011 compared to $19.90 at December 31, 2010. Dividends paid to shareholders were $0.46 and $1.84 for the three and twelve months ended December 31, 2011 and 2010.

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, 2010.

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,
  2011     2010   % Change
 
ASSETS
Noninterest-bearing balances $ 13,829 $ 9,467 46.1 %
Interest-bearing deposits in other financial institutions   56     26   115.4 %
Total cash and cash equivalents 13,885 9,493 46.3 %
 
Investment securities, available for sale, at fair value 270,097 215,565 25.3 %
Investment securities held to maturity (fair value of $55 and $83) 54 83 -34.9 %
Loans held for sale 3,787 6,658 -43.1 %
Loans 435,959 415,557 4.9 %
Less: Allowance for loan losses   7,154     6,035   18.5 %
Loans, net 428,805 409,522 4.7 %
Premises and equipment, net 7,707 7,658 0.6 %
Accrued interest receivable 3,905 3,765 3.7 %
Bank-owned life insurance 16,065 15,436 4.1 %
Investment in limited partnerships 3,544 4,205 -15.7 %
Goodwill 3,032 3,032 0.0 %
Deferred tax asset 7,991 11,897 -32.8 %
Other assets   5,081     4,374   16.2 %
TOTAL ASSETS $ 763,953   $ 691,688   10.4 %
 
LIABILITIES
Interest-bearing deposits $ 470,310 $ 428,161 9.8 %
Noninterest-bearing deposits   111,354     89,347   24.6 %
Total deposits 581,664 517,508 12.4 %
 
Short-term borrowings 29,598 27,299 8.4 %
Long-term borrowings, Federal Home Loan Bank (FHLB) 61,278 71,778 -14.6 %
Accrued interest payable 536 750 -28.5 %
Other liabilities   10,417     7,733   34.7 %
TOTAL LIABILITIES   683,493     625,068   9.3 %
 
SHAREHOLDERS' EQUITY
Common stock, par value $8.33, 10,000,000 shares authorized;
4,017,677 and 4,015,753 shares issued 33,480 33,464 0.0 %
Additional paid-in capital 18,115 18,064 0.3 %
Retained earnings 36,394 31,091 17.1 %
Accumulated other comprehensive loss:
Net unrealized gain (loss) on available for sale securities 2,914 (7,276 ) 140.0 %
Defined benefit plan (4,133 ) (2,413 ) -71.3 %
Less: Treasury stock at cost, 180,596 shares   (6,310 )   (6,310 ) 0.0 %
TOTAL SHAREHOLDERS' EQUITY   80,460     66,620   20.8 %
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 763,953   $ 691,688   10.4 %
 
 
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,
2011 2010 % Change 2011 2010 % Change
 
INTEREST AND DIVIDEND INCOME:
Loans including fees $ 6,428 $ 6,351 1.2 % $ 25,187 $ 25,513 -1.3 %
Investment securities:
Taxable 1,446 1,402 3.1 % 5,677 5,584 1.7 %
Tax-exempt 1,385 1,265 9.5 % 5,260 5,059 4.0 %
Dividend and other interest income   78   49 59.2 %   252   206 22.3 %
TOTAL INTEREST AND DIVIDEND INCOME   9,337   9,067 3.0 %   36,376   36,362 0.0 %
 
INTEREST EXPENSE:
Deposits 1,036 1,336 -22.5 % 4,566 6,055 -24.6 %
Short-term borrowings 45 68 -33.8 % 202 265 -23.8 %
Long-term borrowings, FHLB   661   815 -18.9 %   2,888   3,548 -18.6 %
TOTAL INTEREST EXPENSE   1,742   2,219 -21.5 %   7,656   9,868 -22.4 %
 
NET INTEREST INCOME 7,595 6,848 10.9 % 28,720 26,494 8.4 %
 
PROVISION FOR LOAN LOSSES   900   750 20.0 %   2,700   2,150 25.6 %
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   6,695   6,098 9.8 %   26,020   24,344 6.9 %
 
NON-INTEREST INCOME:
Service charges 483 568 -15.0 % 2,021 2,177 -7.2 %
Securities gains, net 479 11 4254.5 % 621 173 259.0 %
Bank-owned life insurance 138 194 -28.9 % 599 636 -5.8 %
Gain on sale of loans 280 235 19.1 % 1,130 949 19.1 %
Insurance commissions 303 203 49.3 % 933 970 -3.8 %
Brokerage commissions 200 249 -19.7 % 997 965 3.3 %
Other   528   425 24.2 %   1,918   1,589 20.7 %
TOTAL NON-INTEREST INCOME   2,411   1,885 27.9 %   8,219   7,459 10.2 %
 
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,751 2,435 13.0 % 10,479 10,214 2.6 %
Occupancy, net 300 293 2.4 % 1,262 1,240 1.8 %
Furniture and equipment 368 342 7.6 % 1,379 1,264 9.1 %
Pennsylvania shares tax 173 169 2.4 % 689 677 1.8 %
Amortization of investments in limited partnerships 165 210 -21.4 % 661 693 -4.6 %
FDIC deposit insurance 109 180 -39.4 % 525 737 -28.8 %
Other   1,286   1,183 8.7 %   4,969   4,667 6.5 %
TOTAL NON-INTEREST EXPENSE   5,152   4,812 7.1 %   19,964   19,492 2.4 %
 
INCOME BEFORE INCOME TAX PROVISION 3,954 3,171 24.7 % 14,275 12,311 16.0 %
INCOME TAX PROVISION   559   310 80.3 %   1,913   1,382 38.4 %
NET INCOME $ 3,395 $ 2,861 18.7 % $ 12,362 $ 10,929 13.1 %
 
EARNINGS PER SHARE - BASIC $ 0.88 $ 0.75 17.3 % $ 3.22 $ 2.85 13.0 %
 
EARNINGS PER SHARE - DILUTED $ 0.88 $ 0.75 17.3 % $ 3.22 $ 2.85 13.0 %
 
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC   3,836,802   3,834,710 0.1 %   3,836,036   3,834,255 0.0 %
 
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED   3,836,802   3,834,847 0.1 %   3,836,036   3,834,394 0.0 %
 
DIVIDENDS PER SHARE $ 0.46 $ 0.46 0.0 % $ 1.84 $ 1.84 0.0 %
 
 
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
           
For the Three Months Ended
(Dollars in Thousands) December 31, 2011 December 31, 2010
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 20,119 $ 289 5.70 % $ 18,540 $ 299 6.40 %
All other loans   414,356   6,237   5.97 %   399,300   6,154 6.11 %
Total loans   434,475   6,526   5.96 %   417,840   6,453 6.13 %
 
Taxable securities 141,805 1,524 4.30 % 117,162 1,450 4.95 %
Tax-exempt securities   123,960   2,098   6.77 %   108,909   1,917 7.04 %
Total securities   265,765   3,622   5.45 %   226,071   3,367 5.96 %
 
Interest-bearing deposits   645   -   0.00 %   6,640   1 0.06 %
 
Total interest-earning assets 700,885   10,148   5.76 % 650,551   9,821 6.01 %
 
Other assets   52,578   52,497
 
TOTAL ASSETS $ 753,463 $ 703,048
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 70,725 23 0.13 % $ 63,643 39 0.24 %
Super Now deposits 103,982 141 0.54 % 66,109 89 0.53 %
Money market deposits 125,259 229 0.73 % 105,524 289 1.09 %
Time deposits   173,931   643   1.47 %   199,004   919 1.83 %
Total interest-bearing deposits   473,897   1,036   0.87 %   434,280   1,336 1.22 %
 
Short-term borrowings 21,268 45 0.84 % 18,030 68 1.50 %
Long-term borrowings, FHLB   64,245   661   4.03 %   78,191   815 4.08 %
Total borrowings   85,513   706   3.23 %   96,221   883 3.59 %
 
Total interest-bearing liabilities 559,410   1,742   1.23 % 530,501   2,219 1.65 %
 
Demand deposits 105,607 90,980
Other liabilities 8,562 8,032
Shareholders' equity   79,884   73,535
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 753,463 $ 703,048
Interest rate spread   4.53 % 4.36 %
Net interest income/margin $ 8,406   4.78 % $ 7,602 4.66 %
 
 
For the Three Months Ended
December 31,
 
2011 2010
 
Total interest income $ 9,337 $ 9,067
Total interest expense   1,742   2,219  
 
Net interest income 7,595 6,848
Tax equivalent adjustment   811   754  
 
Net interest income (fully taxable equivalent) $ 8,406 $ 7,602  
 
 
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
           
For the Twelve Months Ended
(Dollars in Thousands) December 31, 2011 December 31, 2010
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 20,267 $ 1,213 5.99 % $ 18,287 $ 1,212 6.63 %
All other loans   405,391   24,386   6.02 %   397,766   24,713 6.21 %
Total loans   425,658   25,599   6.01 %   416,053   25,925 6.23 %
 
Taxable securities 130,647 5,926 4.54 % 113,714 5,784 5.09 %
Tax-exempt securities   113,184   7,970   7.04 %   108,658   7,665 7.05 %
Total securities   243,831   13,896   5.70 %   222,372   13,449 6.05 %
 
Interest-bearing deposits   9,074   3   0.03 %   8,782   6 0.07 %
 
Total interest-earning assets 678,563   39,498   5.82 % 647,207   39,380 6.08 %
 
Other assets   53,207   53,734
 
TOTAL ASSETS $ 731,770 $ 700,941
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 70,178 121 0.17 % $ 64,477 183 0.28 %
Super Now deposits 88,556 473 0.53 % 65,080 385 0.59 %
Money market deposits 121,458 1,063 0.88 % 100,112 1,167 1.17 %
Time deposits   179,336   2,909   1.62 %   208,274   4,320 2.07 %
Total interest-bearing deposits   459,528   4,566   0.99 %   437,943   6,055 1.38 %
 
Short-term borrowings 18,117 202 1.11 % 15,371 265 1.72 %
Long-term borrowings, FHLB   69,879   2,888   4.08 %   83,901   3,548 4.17 %
Total borrowings   87,996   3,090   3.47 %   99,272   3,813 3.79 %
 
Total interest-bearing liabilities 547,524   7,656   1.39 % 537,215   9,868 1.83 %
 
Demand deposits 99,917 84,158
Other liabilities 9,852 8,118
Shareholders' equity   74,477   71,450
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 731,770 $ 700,941
Interest rate spread   4.43 % 4.25 %
Net interest income/margin $ 31,842   4.70 % $ 29,512 4.57 %
 
 
For the Twelve Months Ended
December 31,
 
2011 2010
 
Total interest income $ 36,376 $ 36,362
Total interest expense   7,656   9,868  
 
Net interest income 28,720 26,494
Tax equivalent adjustment   3,122   3,018  
 
Net interest income (fully taxable equivalent) $ 31,842 $ 29,512  
 
 
Quarter Ended
       

(Dollars in Thousands, Except Per Share Data)

  

12/31/2011

    

9/30/2011

    

6/30/2011

    

3/31/2011

    

12/31/2010

                           

Operating Data

                            
                           
Net income $ 3,395   $ 3,150   $ 2,964   $ 2,853   $ 2,861
Net interest income   7,595     7,210     6,918     6,997     6,848
Provision for loan losses   900     600     600     600     750
Net security gains   479     8     9     125     11
Non-interest income, ex. net security gains   1,932     1,982     1,864     1,820     1,874
Non-interest expense   5,152     4,968     4,856     4,988     4,812
                           

Performance Statistics

                            
                           
Net interest margin   4.78%     4.55%     4.58%     4.86%     4.66%
Annualized return on average assets   1.80%     1.67%     1.64%     1.65%     1.63%
Annualized return on average equity   17.00%     16.49%     16.29%     16.62%     15.56%
Annualized net loan charge-offs to avg loans   0.09%     0.01%     1.41%     0.00%     0.18%
Net charge-offs (recoveries)   101     8     1,477     (5)     193
Efficiency ratio   54.1%     54.1%     55.3%     56.6%     55.2%
                           

Per Share Data

                            
                           
Basic earnings per share $ 0.88   $ 0.82   $ 0.78   $ 0.74   $ 0.75
Diluted earnings per share   0.88     0.82     0.78     0.74     0.75
Dividend declared per share   0.46     0.46     0.46     0.46     0.46
Book value   20.97     20.48     19.27     17.99     17.37
Common stock price:                            
High   39.30     36.56     39.30     40.08     41.26
Low   32.01     31.07     33.33     35.46     31.97
Close   38.78     32.75     34.36     38.93     39.80
Weighted average common shares:                            
Basic   3,837     3,836     3,836     3,835     3,835
Fully Diluted   3,837     3,836     3,836     3,835     3,835
End-of-period common shares:                            
Issued   4,018     4,017     4,017     4,016     4,016
Treasury   181     181     181     181     181
 
 
Quarter Ended
       

(Dollars in Thousands, Except Per Share Data)

  

12/31/2011

    

9/30/2011

    

6/30/2011

    

3/31/2011

    

12/31/2010

                           

Financial Condition Data:

                            

General

                            
Total assets $ 763,953   $ 752,650   $ 744,986   $ 693,337   $ 691,688
Loans, net   428,805     422,989     413,397     405,453     409,522
Intangibles   3,032     3,032     3,032     3,032     3,032
Total deposits   581,664     575,300     569,833     528,717     517,508
Noninterest-bearing   111,354     104,783     100,104     95,278     89,347
                           
Savings   71,646     73,376     71,923     69,095     64,258
NOW   101,808     103,264     91,285     70,763     67,505
Money Market   124,335     122,896     129,004     108,104     107,123
Time Deposits   172,521     170,981     177,517     185,477     189,275
Total interest-bearing deposits   470,310     470,517     469,729     433,439     428,161
                           
Core deposits*   409,143     404,319     392,316     343,240     328,233
Shareholders' equity   80,460     78,572     73,906     68,998     66,620
                           

Asset Quality

                            
                           
Non-performing assets $ 12,009   $ 14,344   $ 10,911   $ 12,900   $ 6,215
Non-performing assets to total assets   1.57%     1.91%     1.46%     1.86%     0.90%
Allowance for loan losses   7,154     6,355     5,764     6,640     6,035
Allowance for loan losses to total loans   1.64%     1.48%     1.38%     1.61%     1.45%

Allowance for loan losses to non-performing loans

  59.57%     44.30%     52.83%     51.47%     97.10%
Non-performing loans to total loans   2.75%     3.34%     2.60%     3.13%     1.50%
                           

Capitalization

                            
                           
Shareholders' equity to total assets   10.53%     10.44%     9.92%     9.95%     9.63%
 

* 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,
  2011     2010     2011     2010  
GAAP net income $ 3,395 $ 2,861 $ 12,362 $ 10,929
Less: net securities gains, net of tax   316     7     410     114  
Non-GAAP operating earnings $ 3,079   $ 2,854   $ 11,952   $ 10,815  
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2011     2010     2011     2010  
Return on average assets (ROA) 1.80 % 1.63 % 1.69 % 1.56 %
Less: net securities gains, net of tax   0.17 %   0.01 %   0.06 %   0.02 %
Non-GAAP operating ROA   1.63 %   1.62 %   1.63 %   1.54 %
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2011     2010     2011     2010  
Return on average equity (ROE) 17.00 % 15.56 % 16.60 % 15.30 %
Less: net securities gains, net of tax   1.58 %   0.04 %   0.55 %   0.16 %
Non-GAAP operating ROE   15.42 %   15.52 %   16.05 %   15.14 %
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2011     2010     2011     2010  
Basic earnings per share (EPS) $ 0.88 $ 0.75 $ 3.22 $ 2.85
Less: net securities gains, net of tax   0.08     0.01     0.10     0.03  
Non-GAAP basic operating EPS $ 0.80   $ 0.74   $ 3.12   $ 2.82  
 
Three Months Ended Twelve Months Ended
December 31, December 31,
  2011     2010     2011     2010  
Dilutive EPS $ 0.88 $ 0.75 $ 3.22 $ 2.85
Less: net securities gains, net of tax   0.08     0.01     0.10     0.03  
Non-GAAP dilutive operating EPS $ 0.80   $ 0.74   $ 3.12   $ 2.82  

Penns Woods Bancorp, Inc.
Richard A. Grafmyre, President and Chief Executive Officer
570-322-1111
jssb@jssb.com