Penns Woods Bancorp, Inc. Reports Fourth Quarter and Year Ended 2022 Earnings

Rhea-AI Summary

Penns Woods Bancorp reported a net income of $17.4 million for the year ending December 31, 2022, up from $16.0 million in 2021. Earnings per share stood at $2.47, a rise from $2.27. However, financial results were affected by increased after-tax securities losses totaling $809,000 and a goodwill impairment charge of $653,000. The company’s net interest margin also improved to 3.24% for the year, driven by higher yields on earning assets. Core earnings rose to $18.2 million from $15.5 million, with a core return on average equity of 11.22%. Despite these gains, total assets and shareholder equity showed slight declines.

Positive

• Net income increased by $1.4 million year-over-year.
• Earnings per share rose to $2.47 from $2.27.
• Core earnings improved to $18.2 million from $15.5 million.
• Net interest margin increased to 3.24%, up from 2.85%.

Negative

• After-tax securities losses rose to $809,000 from a gain of $521,000.
• Goodwill impairment charge of $653,000 negatively impacted results.
• Total assets decreased by $55.4 million year-over-year.
• Shareholders' equity declined by $4.6 million.

WILLIAMSPORT, Pa., Jan. 30, 2023 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $17.4 million for the twelve months ended December 31, 2022, resulting in basic and diluted earnings per share of $2.47.

Highlights

• Net income, as reported under GAAP, for the three and twelve months ended December 31, 2022 was $4.5 million and $17.4 million, respectively, compared to $4.9 million and $16.0 million for the same periods of 2021. Results for the three and twelve months ended December 31, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $315,000 (from a gain of $284,000 to a loss of $31,000) for the three month period and an increase in after-tax securities losses of $809,000 (from a gain of $521,000 to a loss of $288,000) for the twelve month period. Three and twelve month results for the periods ended December 31, 2022 were impacted by a goodwill impairment charge of $653,000 (after-tax $516,000) related to the wealth management unit (The M Group) as a decline in stock market valuations during 2022 resulted in a decreased level of net income for this entity. Results for the twelve months ended December 31, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the twelve months ended December 31, 2022.
  
• The provision for loan losses increased $875,000 for the three months and $1.3 million for the twelve months ended December 31, 2022 to $575,000 and $1.9 million, respectively, compared to ($300,000) and $640,000 for the 2021 periods. The increases in the provision for loan losses were primarily due to the significant growth in the loan portfolio.
  
• Basic and diluted earnings per share for the three and twelve months ended December 31, 2022 were $0.64 and $2.47. Basic and diluted earnings per share for the three and twelve months ended December 31, 2021 were $0.69 and $2.27.
  
• Annualized return on average assets was 0.92% for three months ended December 31, 2022, compared to 1.02% for the corresponding period of 2021. Return on average assets was 0.90% for the twelve months ended December 31, 2022, compared to 0.85% for the corresponding period of 2021.
  
• Annualized return on average equity was 10.92% for the three months ended December 31, 2022, compared to 11.59% for the corresponding period of 2021. Return on average equity was 10.73% for the twelve months ended December 31, 2022, compared to 9.93% for the corresponding period of 2021.
  

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 and goodwill impairment, was $5.1 million for the three months ended December 31, 2022 compared to $4.6 million for the same period of 2021. Core earnings were $18.2 million for the twelve months ended December 31, 2022, compared to $15.5 million for the same period of 2021. Core earnings per share for the three months ended December 31, 2022 were $0.71 basic and diluted, compared to $0.65 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the twelve months ended December 31, 2022 were $2.58 basic and diluted, compared to $2.20 basic and diluted for the same period of 2021. Annualized core return on average assets and core return on average equity were 1.04% and 12.25% for the three months ended December 31, 2022, compared to 0.96% and 10.92% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.94% and 11.22% for the twelve months ended December 31, 2022 compared to 0.82% and 9.61% for the corresponding period of 2021. Core earnings for the twelve months ended December 31, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options along with an after-tax loss of $201,000 relating to a branch closure. 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 twelve months ended December 31, 2022 was 3.42% and 3.24%, compared to 2.90% and 2.85% for the corresponding periods of 2021. The increase in the net interest margin for the three and twelve month periods was driven by an increase in earning asset yield of 79 and 28 basis points ("bps") as the yield on earning assets increased during 2022 due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). The three and twelve month periods ended December 31, 2022 were impacted by an increase of 58 and 8 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates. The FOMC rate increases during 2022 and the utilization of excess on balance sheet liquidity during the first nine months of 2022 caused the rate paid on interest-bearing deposits to increase 19 and decrease 17 bps for the three months and twelve months ended December 31, 2022, respectively, compared to the comparable periods of 2021. The excess on balance sheet liquidity allowed deposit rates to be held at historically low levels for the majority of 2022 with rate increases occurring primarily during the fourth quarter of 2022.

Assets

Total assets increased $55.4 million to $2.0 billion at December 31, 2022 compared to December 31, 2021.  Cash and cash equivalents decreased $223.5 million as interest-bearing accounts in other financial institutions decreased $181.7 million and fed funds sold decreased $50.0 million as excess liquidity was primarily utilized to fund the growth in the loan portfolio. Net loans increased $246.1 million to $1.6 billion at December 31, 2022 compared to December 31, 2021, as an emphasis was placed on commercial loan growth coupled with a significant increase in indirect auto lending. The investment portfolio increased $31.8 million from December 31, 2021 to December 31, 2022 as a portion of the excess cash liquidity was invested primarily into short and medium-term municipal bonds with a maturity of 10 years or less.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.30% at December 31, 2022 from 0.45% at December 31, 2021, as non-performing loans decreased to $4.9 million at December 31, 2022 from $6.3 million at December 31, 2021. 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 $449,000 for the twelve months ended December 31, 2022 impacted the allowance for loan losses, which was 0.95% of total loans at December 31, 2022 compared to 1.02% at December 31, 2021.

Deposits

Deposits decreased $64.9 million to $1.6 billion at December 31, 2022 compared to December 31, 2021. Noninterest-bearing deposits increased $24.7 million to $519.1 million at December 31, 2022 compared to December 31, 2021.  Driving core deposit gathering efforts was the continued emphasis 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. Interest-bearing deposits decreased $89.6 million primarily due to a reduction in the Money Market Account portfolio coupled with the maturity of higher cost time deposits. A campaign to attract time deposits with a maturity of ten to twenty-four months was started during the latter part of 2022.

Shareholders’ Equity

Shareholders’ equity decreased $4.6 million to $167.7 million at December 31, 2022 compared to December 31, 2021.  Accumulated other comprehensive loss of $14.0 million at December 31, 2022 increased from a loss of $1.1 million at December 31, 2021 as a result of a $9.8 million net unrealized loss on available for sale securities at December 31, 2022 (compared to an unrealized gain of $2.4 million at December 31, 2021) coupled with a increase in loss of $654,000 in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $23.76 at December 31, 2022 compared to $24.37 at December 31, 2021, and an equity to asset ratio of 8.40% at December 31, 2022 and 8.88% at December 31, 2021. Dividends declared for the twelve months ended December 31, 2022 and 2021 were $1.28 per share.

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, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products.  Investment and insurance products are offered through Jersey Shore State 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 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, 2021.

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

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

		December 31,
(In Thousands, Except Share and Per Share Data)		2022				2021				% Change
ASSETS:
Noninterest-bearing balances		$	27,390			$	19,233			42.41	%
Interest-bearing balances in other financial institutions			12,943				194,629			(93.35	)%
Federal funds sold			—				50,000			(100.00	)%
Total cash and cash equivalents			40,333				263,862			(84.71	)%
Investment debt securities, available for sale, at fair value			193,673				166,410			16.38	%
Investment equity securities, at fair value			1,142				1,288			(11.34	)%
Restricted investment in bank stock, at fair value			19,171				14,531			31.93	%
Loans held for sale			3,298				3,725			(11.46	)%
Loans			1,639,731				1,392,147			17.78	%
Allowance for loan losses			(15,637	)			(14,176	)		10.31	%
Loans, net			1,624,094				1,377,971			17.86	%
Premises and equipment, net			31,844				34,025			(6.41	)%
Accrued interest receivable			9,481				8,048			17.81	%
Bank-owned life insurance			34,452				33,768			2.03	%
Investment in limited partnerships			4,783				4,607			3.82	%
Goodwill			16,450				17,104			(3.82	)%
Intangibles			327				480			(31.88	)%
Operating lease right of use asset			2,651				2,851			(7.02	)%
Deferred tax asset			6,868				2,946			133.13	%
Other assets			7,640				9,193			(16.89	)%
TOTAL ASSETS		$	1,996,207			$	1,940,809			2.85	%
LIABILITIES:
Interest-bearing deposits		$	1,037,397			$	1,126,955			(7.95	)%
Noninterest-bearing deposits			519,063				494,360			5.00	%
Total deposits			1,556,460				1,621,315			(4.00	)%
Short-term borrowings			153,349				5,747			2,568.33	%
Long-term borrowings			102,783				125,963			(18.40	)%
Accrued interest payable			603				651			(7.37	)%
Operating lease liability			2,708				2,898			(6.56	)%
Other liabilities			12,639				11,961			5.67	%
TOTAL LIABILITIES			1,828,542				1,768,535			3.39	%
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; 7,566,810 and 7,550,272 shares issued; 7,056,585 and 7,070,047 shares outstanding			42,039				41,945			0.22	%
Additional paid-in capital			54,252				53,795			0.85	%
Retained earnings			98,147				89,761			9.34	%
Accumulated other comprehensive (loss) gain:
Net unrealized (loss) gain on available for sale securities			(9,819	)			2,373			(513.78	)%
Defined benefit plan			(4,139	)			(3,485	)		(18.77	)%
Treasury stock at cost, 510,225 and 480,225			(12,815	)			(12,115	)		5.78	%
TOTAL SHAREHOLDERS' EQUITY			167,665				172,274			(2.68	)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,996,207			$	1,940,809			2.85	%

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

		Three Months Ended December 31,											Twelve Months Ended December 31,
(In Thousands, Except Share and Per Share Data)		2022				2021				% Change			2022				2021				% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	16,973			$	13,406			26.61	%		$	58,682			$	53,232			10.24	%
Investment securities:
Taxable			1,084				790			37.22	%			3,634				3,281			10.76	%
Tax-exempt			229				160			43.13	%			823				655			25.65	%
Dividend and other interest income			319				343			(7.00	)%			1,789				1,246			43.58	%
TOTAL INTEREST AND DIVIDEND INCOME			18,605				14,699			26.57	%			64,928				58,414			11.15	%
INTEREST EXPENSE:
Deposits			1,499				1,064			40.88	%			3,690				5,545			(33.45	)%
Short-term borrowings			978				2			n/m				1,007				9			n/m
Long-term borrowings			580				712			(18.54	)%			2,451				3,142			(21.99	)%
TOTAL INTEREST EXPENSE			3,057				1,778			71.93	%			7,148				8,696			(17.80	)%
NET INTEREST INCOME			15,548				12,921			20.33	%			57,780				49,718			16.22	%
PROVISION (RECOVERY) FOR LOAN LOSSES			575				(300	)		291.67	%			1,910				640			198.44	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			14,973				13,221			13.25	%			55,870				49,078			13.84	%
NON-INTEREST INCOME:
Service charges			540				485			11.34	%			2,103				1,703			23.49	%
Debt securities (losses) gains, available for sale			(51	)			376			(113.56	)%			(219	)			699			(131.33	)%
Net equity securities gains (losses}			12				(16	)		175.00	%			(146	)			(40	)		(265.00	)%
Bank-owned life insurance			163				302			(46.03	)%			664				916			(27.51	)%
Gain on sale of loans			226				440			(48.64	)%	.		1,131				2,474			(54.28	)%
Insurance commissions			105				117			(10.26	)%			491				553			(11.21	)%
Brokerage commissions			120				188			(36.17	)%			620				851			(27.14	)%
Loan broker income			324				715			(54.69	)%			1,674				2,164			(22.64	)%
Debit card income			384				345			11.30	%			1,464				1,511			(3.11	)%
Other			258				243			6.17	%			931				838			11.10	%
TOTAL NON-INTEREST INCOME			2,081				3,195			(34.87	)%			8,713				11,669			(25.33	)%
NON-INTEREST EXPENSE:
Salaries and employee benefits			5,846				5,907			(1.03	)%			24,267				23,014			5.44	%
Occupancy			700				771			(9.21	)%			3,080				3,209			(4.02	)%
Furniture and equipment			834				859			(2.91	)%			3,288				3,522			(6.64	)%
Software amortization			180				236			(23.73	)%			840				868			(3.23	)%
Pennsylvania shares tax			333				253			31.62	%			1,452				1,350			7.56	%
Professional fees			688				550			25.09	%			2,434				2,432			0.08	%
Federal Deposit Insurance Corporation deposit insurance			248				258			(3.88	)%			938				963			(2.60	)%
Marketing			255				111			129.73	%			690				545			26.61	%
Intangible amortization			35				44			(20.45	)%			154				191			(19.37	)%
Goodwill impairment			653				—			n/a				653				—			n/a
Other			1,479				1,270			16.46	%			5,202				4,811			8.13	%
TOTAL NON-INTEREST EXPENSE			11,251				10,259			9.67	%			42,998				40,905			5.12	%
INCOME BEFORE INCOME TAX PROVISION			5,803				6,157			(5.75	)%			21,585				19,842			8.78	%
INCOME TAX PROVISION			1,294				1,278			1.25	%			4,163				3,794			9.73	%
NET INCOME		$	4,509			$	4,879			(7.58	)%		$	17,422			$	16,048			8.56	%
Earnings attributable to noncontrolling interest			—				—			—	%			—				15			(100.00	)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'		$	4,509			$	4,879			(7.58	)%		$	17,422			$	16,033			8.66	%
EARNINGS PER SHARE - BASIC		$	0.64			$	0.69			(7.25	)%		$	2.47			$	2.27			8.81	%
EARNINGS PER SHARE - DILUTED		$	0.64			$	0.69			(7.25	)%		$	2.47			$	2.27			8.81	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			7,055,181				7,068,327			(0.19	)%			7,059,437				7,061,818			(0.03	)%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			7,055,181				7,068,327			(0.19	)%			7,059,437				7,061,818			(0.03	)%

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 
(UNAUDITED)

		Three Months Ended
		December 31, 2022									December 31, 2021
(Dollars in Thousands)		Average  Balance(1)			Interest			Average  Rate			Average  Balance(1)			Interest			Average  Rate
ASSETS:
Tax-exempt loans (3)		$	61,756		$	408		2.62	%		$	46,583		$	317		2.70	%
All other loans			1,546,338			16,651		4.27	%			1,320,972			13,156		3.95	%
Total loans (2)			1,608,094			17,059		4.21	%			1,367,555			13,473		3.91	%
Federal funds sold			—			—		—	%			47,391			85		0.71	%
Taxable securities			167,405			1,329		3.22	%			148,434			978		2.67	%
Tax-exempt securities (3)			41,167			290		2.86	%			38,043			202		2.15	%
Total securities			208,572			1,619		3.15	%			186,477			1,180		2.57	%
Interest-bearing deposits			5,797			74		5.06	%			184,591			70		0.15	%
Total interest-earning assets			1,822,463			18,752		4.09	%			1,786,014			14,808		3.30	%
Other assets			128,084									130,859
TOTAL ASSETS		$	1,950,547								$	1,916,873
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	249,793			66		0.10	%		$	233,791			22		0.04	%
Super Now deposits			385,060			623		0.64	%			345,653			206		0.24	%
Money market deposits			268,519			509		0.75	%			301,651			211		0.28	%
Time deposits			144,491			301		0.83	%			218,260			625		1.14	%
Total interest-bearing deposits			1,047,863			1,499		0.57	%			1,099,355			1,064		0.38	%
Short-term borrowings			97,585			978		3.98	%			7,255			2		0.11	%
Long-term borrowings			102,814			580		2.24	%			125,991			712		2.25	%
Total borrowings			200,399			1,558		3.09	%			133,246			714		2.13	%
Total interest-bearing liabilities			1,248,262			3,057		0.97	%			1,232,601			1,778		0.57	%
Demand deposits			517,977									496,478
Other liabilities			19,151									19,463
Shareholders’ equity			165,157									168,331
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,950,547								$	1,916,873
Interest rate spread (3)								3.12	%								2.73	%
Net interest income/margin (3)					$	15,695		3.42	%					$	13,030		2.90	%

1. Information on this table has been calculated using average daily balance sheets to obtain average balances.
2. Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3. Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%

	Three Months Ended December 31,
	2022			2021
Total interest income	$	18,605		$	14,699
Total interest expense		3,057			1,778
Net interest income (GAAP)		15,548			12,921
Tax equivalent adjustment		147			109
Net interest income (fully taxable equivalent) (non-GAAP)	$	15,695		$	13,030

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 
(UNAUDITED)

		Twelve Months Ended
		December 31, 2022									December 31, 2021
(Dollars in Thousands)		Average  Balance(1)			Interest			Average  Rate			Average  Balance(1)			Interest			Average  Rate
ASSETS:
Tax-exempt loans (3)		$	55,364		$	1,441		2.60	%		$	46,312		$	1,308		2.82	%
All other loans			1,439,550			57,544		4.00	%			1,299,321			52,199		4.02	%
Total loans (2)			1,494,914			58,985		3.95	%			1,345,633			53,507		3.98	%
Federal funds sold			32,863			465		1.41	%			28,395			202		0.71	%
Taxable securities			156,584			4,455		2.88	%			148,066			4,083		2.80	%
Tax-exempt securities (3)			44,301			1,042		2.38	%			36,993			829		2.27	%
Total securities			200,885			5,497		2.77	%			185,059			4,912		2.69	%
Interest-bearing deposits			74,401			503		0.68	%			201,273			242		0.12	%
Total interest-earning assets			1,803,063			65,450		3.63	%			1,760,360			58,863		3.35	%
Other assets			128,213									129,582
TOTAL ASSETS		$	1,931,276								$	1,889,942
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	247,003			138		0.06	%		$	225,637			116		0.05	%
Super Now deposits			387,370			1,344		0.35	%			307,446			900		0.29	%
Money market deposits			289,820			1,105		0.38	%			305,883			972		0.32	%
Time deposits			161,982			1,103		0.68	%			244,341			3,557		1.46	%
Total interest-bearing deposits			1,086,175			3,690		0.34	%			1,083,307			5,545		0.51	%
Short-term borrowings			29,315			1,007		3.44	%			7,178			9		0.13	%
Long-term borrowings			110,027			2,451		2.23	%			135,474			3,142		2.32	%
Total borrowings			139,342			3,458		2.48	%			142,652			3,151		2.21	%
Total interest-bearing liabilities			1,225,517			7,148		0.58	%			1,225,959			8,696		0.71	%
Demand deposits			519,189									478,984
Other liabilities			24,182									23,568
Shareholders’ equity			162,388									161,431
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,931,276								$	1,889,942
Interest rate spread (3)								3.05	%								2.64	%
Net interest income/margin (3)					$	58,302		3.24	%					$	50,167		2.85	%

1. Information on this table has been calculated using average daily balance sheets to obtain average balances.
2. Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3. Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%

	Twelve Months Ended December 31,
	2022			2021
Total interest income	$	64,928		$	58,414
Total interest expense		7,148			8,696
Net interest income		57,780			49,718
Tax equivalent adjustment		522			449
Net interest income (fully taxable equivalent) (non-GAAP)	$	58,302		$	50,167

(Dollars in Thousands, Except Share and Per Share Data, Unaudited)		Quarter Ended
		12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Operating Data
Net income		$	4,509			$	5,250			$	4,231			$	3,432			$	4,879
Net interest income			15,548				15,532				13,847				12,853				12,921
Provision (credit) for loan losses			575				855				330				150				(300	)
Net security (losses) gains			(39	)			(211	)			(54	)			(61	)			360
Non-interest income, excluding net security (losses) gains			2,120				2,294				2,191				2,473				2,835
Non-interest expense			11,251				10,320				10,420				11,007				10,259
Performance Statistics
Net interest margin			3.42	%			3.47	%			3.12	%			2.93	%			2.90	%
Annualized return on average assets			0.92	%			1.09	%			0.88	%			0.72	%			1.02	%
Annualized return on average equity			10.92	%			12.61	%			10.15	%			8.17	%			11.59	%
Annualized net loan charge-offs (recoveries) to average loans			0.04	%			0.01	%			(0.01	)%			0.09	%			0.02	%
Net charge-offs (recoveries)			149				37				(40	)			303				81
Efficiency ratio			59.79	%			57.70	%			64.72	%			71.53	%			64.83	%
Per Share Data
Basic earnings per share		$	0.64			$	0.74			$	0.60			$	0.49			$	0.69
Diluted earnings per share			0.64				0.74				0.60				0.49				0.69
Dividend declared per share			0.32				0.32				0.32				0.32				0.32
Book value			23.76				23.32				23.56				23.81				24.37
Common stock price:
High			26.89				24.29				24.35				24.67				24.65
Low			23.15				22.02				22.34				23.64				23.50
Close			26.62				22.91				23.09				24.43				23.65
Weighted average common shares:
Basic			7,055				7,051				7,059				7,073				7,068
Fully Diluted			7,055				7,051				7,059				7,073				7,068
End-of-period common shares:
Issued			7,567				7,563				7,559				7,555				7,550
Treasury			(510	)			(510	)			(510	)			(480	)			(480	)

(Dollars in Thousands, Except Share and Per Share Data, Unaudited)		Quarter Ended
		12/31/2022				9/30/2022				6/30/2022				3/31/2022				12/31/2021
Financial Condition Data:
General
Total assets		$	1,996,207			$	1,905,116			$	1,891,806			$	1,916,809			$	1,940,809
Loans, net			1,624,094				1,545,489				1,474,739				1,391,943				1,377,971
Goodwill			16,450				17,104				17,104				17,104				17,104
Intangibles			327				361				396				437				480
Total deposits			1,556,460				1,590,415				1,589,579				1,612,395				1,621,315
Noninterest-bearing			519,063				537,403				524,288				514,130				494,360
Savings			247,952				249,532				249,057				245,661				236,312
NOW			372,574				392,140				353,102				379,838				366,399
Money Market			270,589				268,532				309,453				299,166				318,877
Time Deposits			146,282				142,808				153,679				173,600				205,367
Total interest-bearing deposits			1,037,397				1,053,012				1,065,291				1,098,265				1,126,955
Core deposits*			1,410,178				1,447,607				1,435,900				1,438,795				1,415,948
Shareholders’ equity			167,665				164,489				166,054				168,427				172,274
Asset Quality
Non-performing loans		$	4,890			$	5,743			$	5,100			$	5,281			$	6,250
Non-performing loans to total assets			0.24	%			0.30	%			0.27	%			0.28	%			0.32	%
Allowance for loan losses			15,637				15,211				14,393				14,023				14,176
Allowance for loan losses to total loans			0.95	%			0.97	%			0.97	%			1.00	%			1.02	%
Allowance for loan losses to non-performing loans			319.78	%			264.86	%			282.22	%			265.54	%			226.82	%
Non-performing loans to total loans			0.30	%			0.37	%			0.34	%			0.38	%			0.45	%
Capitalization
Shareholders’ equity to total assets			8.40	%			8.63	%			8.78	%			8.79	%			8.88	%

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)

		Three Months Ended December 31,								Twelve Months Ended December 31,
(Dollars in Thousands, Except Per Share Data)		2022				2021				2022				2021
GAAP net income		$	4,509			$	4,879			$	17,422			$	16,033
Net securities losses (gains), net of tax			31				(284	)			288				(521	)
Goodwill impairment			516				—				516				—
Non-GAAP core earnings		$	5,056			$	4,595			$	18,226			$	15,512
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Return on average assets (ROA)			0.92	%			1.02	%			0.90	%			0.85	%
Net securities losses (gains), net of tax			0.01	%			(0.06	)%			0.01	%			(0.03	)%
Goodwill impairment			0.11	%			—	%			0.03	%			—	%
Non-GAAP core ROA			1.04	%			0.96	%			0.94	%			0.82	%
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Return on average equity (ROE)			10.92	%			11.59	%			10.73	%			9.93	%
Net securities losses (gains), net of tax			0.08	%			(0.67	)%			0.17	%			(0.32	)%
Goodwill impairment			1.25	%			—	%			0.32	%			—	%
Non-GAAP core ROE			12.25	%			10.92	%			11.22	%			9.61	%
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Basic earnings per share (EPS)		$	0.64			$	0.69			$	2.47			$	2.27
Net securities losses (gains), net of tax			—				(0.04	)			0.04				(0.07	)
Goodwill impairment			0.07				—				0.07				—
Non-GAAP basic core EPS		$	0.71			$	0.65			$	2.58			$	2.20
		Three Months Ended December 31,								Twelve Months Ended December 31,
		2022				2021				2022				2021
Diluted EPS		$	0.64			$	0.69			$	2.47			$	2.27
Net securities losses (gains), net of tax			—				(0.04	)			0.04				(0.07	)
Goodwill impairment			0.07				—				0.07				—
Non-GAAP diluted core EPS		$	0.71			$	0.65			$	2.58			$	2.20

FAQ

What were Penns Woods Bancorp's earnings per share for 2022?

The earnings per share for Penns Woods Bancorp in 2022 were $2.47.

How did total assets change for Penns Woods Bancorp by December 31, 2022?

Total assets decreased by $55.4 million, totaling $2.0 billion.

What was the net income reported by Penns Woods Bancorp in 2022?

Penns Woods Bancorp reported a net income of $17.4 million for 2022.

What impact did goodwill impairment have on Penns Woods Bancorp's financial results?

Goodwill impairment resulted in a charge of $653,000, negatively affecting net income.

How did core earnings for Penns Woods Bancorp change in 2022?

Core earnings increased to $18.2 million in 2022 from $15.5 million in 2021.