Penns Woods Bancorp, Inc. Reports Second Quarter 2022 Earnings

Rhea-AI Summary

Penns Woods Bancorp (PWOD) reported a net income of $7.7 million for the six months ending June 30, 2022, up from $7.0 million in 2021. Basic and diluted earnings per share increased to $1.08 from $1.00. Core earnings rose to $7.8 million, reflecting improvements in net interest margin, which reached 3.03%. However, the company faced challenges, including after-tax securities losses and a $201,000 loss from a branch closure. Total assets decreased to $1.9 billion, while deposits rose to $1.6 billion.

Positive

• Net income for six months increased 10% year-over-year.
• Earnings per share rose to $1.08 from $1.00.
• Core earnings improved to $7.8 million from $6.8 million.
• Net interest margin increased to 3.03%.

Negative

• After-tax securities losses totaled $296,000 for the six months.
• Branch closure resulted in a $201,000 loss.
• Total assets decreased by $3.1 million.

WILLIAMSPORT, Pa., July 21, 2022 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $7.7 million for the six months ended June 30, 2022, resulting in basic and diluted earnings per share of $1.08.

Highlights

• Net income, as reported under GAAP, for the three and six months ended June 30, 2022 was $4.2 million and $7.7 million, respectively, compared to $3.6 million and $7.0 million for the same periods of 2021. Results for the three and six months ended June 30, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $154,000 (from a gain of $111,000 to a loss of $43,000) for the three month period and an increase in after-tax securities losses of $296,000 (from a gain of $205,000 to a loss of $91,000) for the six month period. Results for the three and six months ended June 30, 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 six months ended June 30, 2022.
  
  
• The provision for loan losses decreased $20,000 and $385,000 for the three and six months ended June 30, 2022 to $330,000 and $480,000, respectively, compared to $350,000 and $865,000 for the 2021 periods. The provision for loan losses was elevated during 2021 due primarily to the uncertainty caused by the COVID-19 pandemic.
  
  
• Basic and diluted earnings per share for the three and six months ended June 30, 2022 were $0.60 and $1.08. Basic and diluted earnings per share for the three and six months ended June 30, 2021 were $0.51 and $1.00.
  
  
• Annualized return on average assets was 0.88% for three months ended June 30, 2022, compared to 0.76% for the corresponding period of 2021. Annualized return on average assets was 0.80% for the six months ended June 30, 2022, compared to 0.75% for the corresponding period of 2021.
  
  
• Annualized return on average equity was 10.15% for the three months ended June 30, 2022, compared to 8.70% for the corresponding period of 2021. Annualized return on average equity was 9.20% for the six months ended June 30, 2022, compared to 8.69% 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, was $4.3 million for the three months ended June 30, 2022 compared to $3.5 million for the same period of 2021. Core earnings were $7.8 million for the six months ended June 30, 2022, compared to $6.8 million for the same period of 2021. Core earnings per share for the three months ended June 30, 2022 were $0.61 basic and diluted, compared to $0.49 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the six months ended June 30, 2022 were $1.10 basic and diluted, compared to $0.97 basic and diluted for the same period of 2021. Core return on average assets and core return on average equity were 0.89% and 10.25% for the three months ended June 30, 2022, compared to 0.74% and 8.43% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.81% and 9.31% for the six months ended June 30, 2022 compared to 0.73% and 8.44% for the corresponding period of 2021. Core earnings for the three and six months ended June 30, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options while the six month period ended June 30, 2022 was also impacted negatively by 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 six months ended June 30, 2022 was 3.12% and 3.03%, compared to 2.78% and 2.83% for the corresponding periods of 2021. The increase in the net interest margin for the three and six month periods was driven by a decline in the rate paid on interest-bearing deposits of 29 and 33 basis points ("bps") as rates paid decreased throughout 2021 and remained at historically low levels during 2022. Leading the decline in the rate paid on interest-bearing deposits were decreases of 98 and 95 bps in the rate paid on time deposits as time deposits issued prior to the COVID-19 pandemic matured. The increase in the earning asset yield was driven by an increase in yield on federal funds sold and interest-bearing deposits due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). For the three and six months ended June 30, 2022 there was an increase in rate on federal funds sold of 57 and 30 bps, respectively, while the rate on interest bearing deposits increased 57 and 26 bps.

Assets

Total assets decreased $3.1 million to $1.9 billion at June 30, 2022 compared to June 30, 2021.  Cash and cash equivalents decreased $176.1 million as interest-bearing accounts in other financial institutions decreased $174.9 million. Net loans increased $151.2 million to $1.5 billion at June 30, 2022 compared to June 30, 2021, as an emphasis was placed on commercial loan growth and customers focused on obtaining funding prior to additional FOMC rate increases. The investment portfolio increased $18.9 million from June 30, 2021 to June 30, 2022 as a portion of the excess cash liquidity was invested primarily into short-term municipal bonds with a maturity of five years or less.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.34% at June 30, 2022 from 0.59% at June 30, 2021 as non-performing loans have decreased to $5.1 million at June 30, 2022 from $7.9 million at June 30, 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 $263,000 for the six months ended June 30, 2022 impacted the allowance for loan losses, which was 0.97% of total loans at June 30, 2022 compared to 1.08% at June 30, 2021.

Deposits

Deposits increased $25.9 million to $1.6 billion at June 30, 2022 compared to June 30, 2021. Noninterest-bearing deposits increased $46.9 million to $524.3 million at June 30, 2022 compared to June 30, 2021.  Driving deposit growth 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 due to the maturity of higher cost time deposits. The increased level of deposits has allowed for a $28.2 million decrease in long-term borrowings.

Shareholders’ Equity

Shareholders’ equity decreased $781,000 to $166.1 million at June 30, 2022 compared to June 30, 2021.  Accumulated other comprehensive loss of $9.7 million at June 30, 2022 increased from a loss of $1.4 million at June 30, 2021 as a result of a $6.2 million net unrealized loss on available for sale securities at June 30, 2022 compared to a unrealized gain of $4.1 million at June 30, 2021 coupled with a decrease in loss of $2.1 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $23.56 at June 30, 2022 compared to $23.63 at June 30, 2021, and an equity to asset ratio of 8.78% at June 30, 2022 and 8.80% at June 30, 2021. Dividends declared for the six months ended June 30, 2022 and 2021 were $0.64 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)

		June 30,
(In Thousands, Except Share and Per Share Data)			2022				2021			% Change
ASSETS:
Noninterest-bearing balances		$	26,540			$	27,731			(4.29	)%
Interest-bearing balances in other financial institutions			24,452				199,389			(87.74	)%
Federal funds sold			40,000				40,000			—	%
Total cash and cash equivalents			90,992				267,120			(65.94	)%
Investment debt securities, available for sale, at fair value			192,438				171,783			12.02	%
Investment equity securities, at fair value			1,153				1,269			(9.14	)%
Investment securities, trading			33				43			(23.26	)%
Restricted investment in bank stock, at fair value			13,458				15,120			(10.99	)%
Loans held for sale			3,857				4,927			(21.72	)%
Loans			1,489,132				1,337,947			11.30	%
Allowance for loan losses			(14,393	)			(14,438	)		0.31	%
Loans, net			1,474,739				1,323,509			11.43	%
Premises and equipment, net			32,671				34,629			(5.65	)%
Accrued interest receivable			8,246				8,363			(1.40	)%
Bank-owned life insurance			34,115				34,005			0.32	%
Investment in limited partnerships			4,901				4,795			2.21	%
Goodwill			17,104				17,104			—	%
Intangibles			396				568			(30.28	)%
Operating lease right of use asset			2,747				2,946			(6.75	)%
Deferred tax asset			5,689				3,624			56.98	%
Other assets			9,267				5,065			82.96	%
TOTAL ASSETS		$	1,891,806			$	1,894,870			(0.16	)%
LIABILITIES:
Interest-bearing deposits		$	1,065,291			$	1,086,352			(1.94	)%
Noninterest-bearing deposits			524,288				477,344			9.83	%
Total deposits			1,589,579				1,563,696			1.66	%
Short-term borrowings			5,464				7,520			(27.34	)%
Long-term borrowings			112,874				141,051			(19.98	)%
Accrued interest payable			452				961			(52.97	)%
Operating lease liability			2,800				2,992			(6.42	)%
Other liabilities			14,583				11,815			23.43	%
TOTAL LIABILITIES			1,725,752				1,728,035			(0.13	)%
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; 7,559,165 and 7,541,627 shares issued; 7,048,940 and 7,061,042 shares outstanding			41,995				41,897			0.23	%
Additional paid-in capital			53,651				53,205			0.84	%
Retained earnings			92,903				85,281			8.94	%
Accumulated other comprehensive (loss) gain:
Net unrealized (loss) gain on available for sale securities			(6,222	)			4,085			(252.31	)%
Defined benefit plan			(3,458	)			(5,523	)		37.39	%
Treasury stock at cost, 510,225 and 480,225			(12,815	)			(12,115	)		5.78	%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY			166,054				166,830			(0.47	)%
Non-controlling interest			—				5			(100.00	)%
TOTAL SHAREHOLDERS' EQUITY			166,054				166,835			(0.47	)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,891,806			$	1,894,870			(0.16	)%

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

		Three Months Ended June 30,											Six Months Ended June 30,
(In Thousands, Except Share and Per Share Data)			2022				2021			% Change				2022				2021			% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	13,620			$	13,099			3.98	%		$	26,658			$	26,444			0.81	%
Investment securities:
Taxable			864				838			3.10	%			1,601				1,657			(3.38	)%
Tax-exempt			194				164			18.29	%			358				335			6.87	%
Dividend and other interest income			506				305			65.90	%			842				565			49.03	%
TOTAL INTEREST AND DIVIDEND INCOME			15,184				14,406			5.40	%			29,459				29,001			1.58	%
INTEREST EXPENSE:
Deposits			710				1,489			(52.32	)%			1,498				3,173			(52.79	)%
Short-term borrowings			2				2			—	%			3				4			(25.00	)%
Long-term borrowings			625				820			(23.78	)%			1,258				1,659			(24.17	)%
TOTAL INTEREST EXPENSE			1,337				2,311			(42.15	)%			2,759				4,836			(42.95	)%
NET INTEREST INCOME			13,847				12,095			14.49	%			26,700				24,165			10.49	%
PROVISION FOR LOAN LOSSES			330				350			(5.71	)%			480				865			(44.51	)%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			13,517				11,745			15.09	%			26,220				23,300			12.53	%
NON-INTEREST INCOME:
Service charges			509				379			34.30	%			1,004				762			31.76	%
Debt securities (losses) gains, available for sale			(10	)			137			(107.30	)%			(12	)			275			(104.36	)%
Equity securities (losses) gains			(41	)			4			(1,125.00	)%			(99	)			(19	)		(421.05	)%
Securities (losses) gains, trading			(3	)			(1	)		(200.00	)%			(4	)			3			(233.33	)%
Bank-owned life insurance			161				162			(0.62	)%			331				335			(1.19	)%
Gain on sale of loans			266				670			(60.30	)%	.		611				1,578			(61.28	)%
Insurance commissions			107				150			(28.67	)%			277				307			(9.77	)%
Brokerage commissions			158				207			(23.67	)%			358				426			(15.96	)%
Loan broker income			371				238			55.88	%			912				677			34.71	%
Debit card income			391				398			(1.76	)%			736				778			(5.40	)%
Other			228				565			(59.65	)%			435				401			8.48	%
TOTAL NON-INTEREST INCOME			2,137				2,909			(26.54	)%			4,549				5,523			(17.64	)%
NON-INTEREST EXPENSE:
Salaries and employee benefits			6,141				5,672			8.27	%			12,405				11,270			10.07	%
Occupancy			740				717			3.21	%			1,650				1,693			(2.54	)%
Furniture and equipment			746				971			(23.17	)%			1,638				1,780			(7.98	)%
Software amortization			219				208			5.29	%			472				406			16.26	%
Pennsylvania shares tax			396				372			6.45	%			785				724			8.43	%
Professional fees			582				684			(14.91	)%			1,120				1,267			(11.60	)%
Federal Deposit Insurance Corporation deposit insurance			228				264			(13.64	)%			430				485			(11.34	)%
Marketing			220				140			57.14	%			284				203			39.90	%
Intangible amortization			41				50			(18.00	)%			85				103			(17.48	)%
Other			1,107				1,170			(5.38	)%			2,558				2,268			12.79	%
TOTAL NON-INTEREST EXPENSE			10,420				10,248			1.68	%			21,427				20,199			6.08	%
INCOME BEFORE INCOME TAX PROVISION			5,234				4,406			18.79	%			9,342				8,624			8.33	%
INCOME TAX PROVISION			1,003				813			23.37	%			1,679				1,584			6.00	%
NET INCOME		$	4,231			$	3,593			17.76	%		$	7,663			$	7,040			8.85	%
Earnings attributable to noncontrolling interest			—				5			(100.00	)%			—				11			(100.00	)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'		$	4,231			$	3,588			17.92	%		$	7,663			$	7,029			9.02	%
EARNINGS PER SHARE - BASIC		$	0.60			$	0.51			17.65	%		$	1.08			$	1.00			8.00	%
EARNINGS PER SHARE - DILUTED		$	0.60			$	0.51			17.65	%		$	1.08			$	1.00			8.00	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			7,059,045				7,059,667			(0.01	)%			7,065,772				7,057,404			0.12	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			7,059,045				7,059,667			(0.01	)%			7,065,772				7,057,404			0.12	%

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

		Three Months Ended
		June 30, 2022									June 30, 2021
(Dollars in Thousands)		Average  Balance			Interest			Average  Rate			Average  Balance			Interest			Average  Rate
ASSETS:
Tax-exempt loans		$	52,886		$	331		2.51	%		$	46,926		$	334		2.85	%
All other loans			1,394,631			13,358		3.84	%			1,285,853			12,835		4.00	%
Total loans			1,447,517			13,689		3.79	%			1,332,779			13,169		3.96	%
Federal funds sold			48,352			154		1.28	%			25,538			45		0.71	%
Taxable securities			154,484			1,048		2.75	%			148,415			1,051		2.87	%
Tax-exempt securities			45,824			245		2.17	%			36,469			208		2.31	%
Total securities			200,308			1,293		2.62	%			184,884			1,259		2.76	%
Interest-bearing deposits			102,172			168		0.66	%			218,868			48		0.09	%
Total interest-earning assets			1,798,349			15,304		3.42	%			1,762,069			14,521		3.31	%
Other assets			131,117									128,402
TOTAL ASSETS		$	1,929,466								$	1,890,471
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	248,063			24		0.04	%		$	225,625			28		0.05	%
Super Now deposits			388,002			239		0.25	%			285,672			208		0.29	%
Money market deposits			304,636			210		0.28	%			309,749			256		0.33	%
Time deposits			164,301			237		0.58	%			256,345			997		1.56	%
Total interest-bearing deposits			1,105,002			710		0.26	%			1,077,391			1,489		0.55	%
Short-term borrowings			5,636			2		0.14	%			7,047			2		0.11	%
Long-term borrowings			112,901			625		2.22	%			141,076			820		2.33	%
Total borrowings			118,537			627		2.12	%			148,123			822		2.23	%
Total interest-bearing liabilities			1,223,539			1,337		0.44	%			1,225,514			2,311		0.76	%
Demand deposits			518,467									482,513
Other liabilities			20,708									17,384
Shareholders’ equity			166,752									165,060
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,929,466								$	1,890,471
Interest rate spread								2.98	%								2.55	%
Net interest income/margin					$	13,967		3.12	%					$	12,210		2.78	%

		Three Months Ended June 30,
			2022			2021
Total interest income		$	15,184		$	14,406
Total interest expense			1,337			2,311
Net interest income (GAAP)			13,847			12,095
Tax equivalent adjustment			120			115
Net interest income (fully taxable equivalent) (non-GAAP)		$	13,967		$	12,210

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

		Six Months Ended
		June 30, 2022									June 30, 2021
(Dollars in Thousands)		Average  Balance			Interest			Average  Rate			Average  Balance			Interest			Average  Rate
ASSETS:
Tax-exempt loans		$	50,775		$	639		2.54	%		$	46,177		$	684		2.99	%
All other loans			1,372,810			26,153		3.84	%			1,289,660			25,904		4.05	%
Total loans			1,423,585			26,792		3.80	%			1,335,837			26,588		4.01	%
Federal funds sold			49,171			247		1.01	%			12,840			45		0.71	%
Taxable securities			149,489			1,968		2.67	%			146,740			2,083		2.88	%
Tax-exempt securities			43,416			453		2.12	%			36,420			424		2.36	%
Total securities			192,905			2,421		2.54	%			183,160			2,507		2.78	%
Interest-bearing deposits			129,704			228		0.35	%			207,495			94		0.09	%
Total interest-earning assets			1,795,365			29,688		3.34	%			1,739,332			29,234		3.39	%
Other assets			128,624									126,418
TOTAL ASSETS		$	1,923,989								$	1,865,750
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	244,528			46		0.04	%		$	220,161			72		0.07	%
Super Now deposits			379,496			434		0.23	%			287,444			475		0.33	%
Money market deposits			301,744			396		0.26	%			307,885			523		0.34	%
Time deposits			177,487			622		0.71	%			255,408			2,103		1.66	%
Total interest-bearing deposits			1,103,255			1,498		0.27	%			1,070,898			3,173		0.60	%
Short-term borrowings			5,416			3		0.11	%			6,368			4		0.13	%
Long-term borrowings			114,077			1,258		2.23	%			141,279			1,659		2.37	%
Total borrowings			119,493			1,261		2.13	%			147,647			1,663		2.27	%
Total interest-bearing liabilities			1,222,748			2,759		0.46	%			1,218,545			4,836		0.80	%
Demand deposits			512,441									464,237
Other liabilities			22,184									21,227
Shareholders’ equity			166,616									161,741
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	1,923,989								$	1,865,750
Interest rate spread								2.88	%								2.59	%
Net interest income/margin					$	26,929		3.03	%					$	24,398		2.83	%

		Six Months Ended June 30,
			2022			2021
Total interest income		$	29,459		$	29,001
Total interest expense			2,759			4,836
Net interest income			26,700			24,165
Tax equivalent adjustment			229			233
Net interest income (fully taxable equivalent)		$	26,929		$	24,398

(Dollars in Thousands, Except Per Share Data, Unaudited)		Quarter Ended
		6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Operating Data
Net income		$	4,231			$	3,432			$	4,879			$	4,125			$	3,588
Net interest income			13,847				12,853				12,921				12,632				12,095
Provision for loan losses			330				150				(300	)			75				350
Net security (losses) gains			(54	)			(61	)			360				40				140
Non-interest income, excluding net security gains			2,191				2,473				2,835				2,911				2,769
Non-interest expense			10,420				11,007				10,259				10,447				10,248
Performance Statistics
Net interest margin			3.12	%			2.93	%			2.90	%			2.85	%			2.78	%
Annualized return on average assets			0.88	%			0.72	%			1.02	%			0.86	%			0.76	%
Annualized return on average equity			10.15	%			8.17	%			11.59	%			9.85	%			8.70	%
Annualized net loan (recoveries) charge-offs to average loans			(0.01	)%			0.09	%			0.02	%			(0.01	)%			0.03	%
Net (recoveries) charge-offs			(40	)			303				81				(44	)			114
Efficiency ratio			64.72	%			71.53	%			64.83	%			66.93	%			68.61	%
Per Share Data
Basic earnings per share		$	0.60			$	0.49			$	0.69			$	0.58			$	0.51
Diluted earnings per share			0.60				0.49				0.69				0.58				0.51
Dividend declared per share			0.32				0.32				0.32				0.32				0.32
Book value			23.56				23.81				24.37				23.84				23.63
Common stock price:
High			24.35				24.67				24.65				24.42				26.51
Low			22.34				23.64				23.50				22.78				23.03
Close			23.09				24.43				23.65				23.92				23.82
Weighted average common shares:
Basic			7,059				7,073				7,068				7,064				7,060
Fully Diluted			7,059				7,073				7,068				7,064				7,060
End-of-period common shares:
Issued			7,559				7,555				7,550				7,546				7,542
Treasury			(510	)			(480	)			(480	)			(480	)			(480	)

(Dollars in Thousands, Except Per Share Data, Unaudited)		Quarter Ended
		6/30/2022				3/31/2022				12/31/2021				9/30/2021				6/30/2021
Financial Condition Data:
General
Total assets		$	1,891,806			$	1,916,809			$	1,940,809			$	1,910,791			$	1,894,870
Loans, net			1,474,739				1,391,943				1,377,971				1,332,668				1,323,509
Goodwill			17,104				17,104				17,104				17,104				17,104
Intangibles			396				437				480				524				568
Total deposits			1,589,579				1,612,395				1,621,315				1,593,019				1,563,696
Noninterest-bearing			524,288				514,130				494,360				481,875				477,344
Savings			249,057				245,661				236,312				231,189				226,573
NOW			353,102				379,838				366,399				340,441				296,450
Money Market			309,453				299,166				318,877				305,156				301,405
Time Deposits			153,679				173,600				205,367				234,358				261,924
Total interest-bearing deposits			1,065,291				1,098,265				1,126,955				1,111,144				1,086,352
Core deposits*			1,435,900				1,438,795				1,415,948				1,358,661				1,301,772
Shareholders’ equity			166,054				168,427				172,274				168,478				166,830
Asset Quality
Non-performing loans		$	5,100			$	5,281			$	6,250			$	7,763			$	7,931
Non-performing loans to total assets			0.27%				0.28%				0.32%				0.41%				0.42%
Allowance for loan losses			14,393				14,023				14,176				14,557				14,438
Allowance for loan losses to total loans			0.97%				1.00%				1.02%				1.08%				1.08%
Allowance for loan losses to non-performing loans			282.22%				265.54%				226.82%				187.52%				182.05%
Non-performing loans to total loans			0.34%				0.38%				0.45%				0.58%				0.59%
Capitalization
Shareholders’ equity to total assets			8.78%				8.79%				8.88%				8.82%				8.80%

* Core deposits are defined as total deposits less time deposits

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

		Three Months Ended June 30,								Six Months Ended June 30,
(Dollars in Thousands, Except Per Share Data)			2022				2021				2022				2021
GAAP net income		$	4,231			$	3,588			$	7,663			$	7,029
Less: net securities (losses) gains, net of tax			(43	)			111				(91	)			205
Non-GAAP core earnings		$	4,274			$	3,477			$	7,754			$	6,824
		Three Months Ended June 30,								Six Months Ended June 30,
			2022				2021				2022				2021
Return on average assets (ROA)			0.88	%			0.76	%			0.80	%			0.75	%
Less: net securities (losses) gains, net of tax			(0.01	)%			0.02	%			(0.01	)%			0.02	%
Non-GAAP core ROA			0.89	%			0.74	%			0.81	%			0.73	%
		Three Months Ended June 30,								Six Months Ended June 30,
			2022				2021				2022				2021
Return on average equity (ROE)			10.15	%			8.70	%			9.20	%			8.69	%
Less: net securities (losses) gains, net of tax			(0.10	)%			0.27	%			(0.11	)%			0.25	%
Non-GAAP core ROE			10.25	%			8.43	%			9.31	%			8.44	%
		Three Months Ended June 30,								Six Months Ended June 30,
			2022				2021				2022				2021
Basic earnings per share (EPS)		$	0.60			$	0.51			$	1.08			$	1.00
Less: net securities (losses) gains, net of tax			(0.01	)			0.02				(0.02	)			0.03
Non-GAAP basic core EPS		$	0.61			$	0.49			$	1.10			$	0.97
		Three Months Ended June 30,								Six Months Ended June 30,
			2022				2021				2022				2021
Diluted EPS		$	0.60			$	0.51			$	1.08			$	1.00
Less: net securities (losses) gains, net of tax			(0.01	)			0.02				(0.02	)			0.03
Non-GAAP diluted core EPS		$	0.61			$	0.49			$	1.10			$	0.97

FAQ

What was Penns Woods Bancorp's net income for the six months ended June 30, 2022?

Penns Woods Bancorp's net income for the six months ended June 30, 2022, was $7.7 million.

How much did earnings per share increase for PWOD in 2022?

Earnings per share for PWOD increased to $1.08 for the six months ended June 30, 2022, up from $1.00 in 2021.

What challenges did Penns Woods Bancorp face in the first half of 2022?

Penns Woods Bancorp faced after-tax securities losses and incurred a loss due to a branch closure.

What was the net interest margin for PWOD for the six months ended June 30, 2022?

The net interest margin for PWOD was 3.03% for the six months ended June 30, 2022.