WILLIAMSPORT, Pa., Oct. 25, 2023 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $11.1 million for the nine months ended September 30, 2023, resulting in basic and diluted earnings per share of $1.56 and $1.53.

Highlights

  • Net income, as reported under GAAP, for the three and nine months ended September 30, 2023 was $2.2 million and $11.1 million, compared to $5.3 million and $12.9 million for the same periods of 2022. Results for the three and nine months ended September 30, 2023 compared to 2022 were impacted by a decrease in net interest income of $2.2 million and $1.2 million as interest expense increased significantly due to the velocity and magnitude of the rate increases enacted by the Federal Open Market Committee ("FOMC"). In addition, results were impacted by a decrease in after-tax securities losses of $77,000 (from a loss of $167,000 to a loss of $90,000) for the three month period and a decrease in after-tax securities losses of $106,000 (from a loss of $258,000 to a loss of $152,000) for the nine month period. Bank-owned life insurance income increased due to a gain on death benefit of $380,000 during the nine months ended September 30, 2023, while an after-tax loss of $201,000 related to a branch closure negatively impacted the nine months ended September 30, 2022.

  • The provision for credit losses increased $537,000 for the three months ended September 30, 2023 and decreased $1.1 million for the nine months ended September 30, 2023 due to a provision of $1.4 million and $263,000, respectively, for the 2023 periods compared to a provision of $835,000 and $1.3 million for the 2022 periods. The decrease for the nine month periods was due primarily to a recovery on a commercial loan during the second quarter of 2023. The increase in the provision for credit losses for the 2023 three month period was due primarily to loan portfolio growth as loan portfolio credit metrics continue to improve and loan net charge-offs remain at a low level.

  • Basic earnings per share for the three and nine months ended September 30, 2023 were $0.31 and $1.56, while the diluted earnings per share were $0.31 and $1.53 for the periods. Basic and diluted earnings per share for the three and nine months ended September 30, 2022 were $0.74 and $1.83.

  • Annualized return on average assets was 0.41% for three months ended September 30, 2023, compared to 1.09% for the corresponding period of 2022. Annualized return on average assets was 0.70% for the nine months ended September 30, 2023, compared to 0.89% for the corresponding period of 2022.

  • Annualized return on average equity was 5.06% for the three months ended September 30, 2023, compared to 12.61% for the corresponding period of 2022. Annualized return on average equity was 8.58% for the nine months ended September 30, 2023, compared to 10.48% for the corresponding period of 2022.

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 $2.3 million and $11.2 million for the three and nine months ended September 30, 2023 compared to $5.4 million and $13.2 million for the same periods of 2022. Basic core earnings per share for the three and nine months ended September 30, 2023 was $0.33 and $1.59, while the diluted core earnings per share was $0.32 and $1.55, compared to $0.77 and $1.87 basic and diluted core earnings per share for the same periods of 2022. Annualized core return on average assets and core return on average equity were 0.43% and 5.26% for the three months ended September 30, 2023, compared to 1.12% and 13.02% for the corresponding periods of 2022. Core return on average assets and core return on average equity were 0.71% and 8.69% for the nine months ended September 30, 2023 compared to 0.91% and 10.69% for the corresponding periods of 2022. 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 nine months ended September 30, 2023 was 2.65% and 2.82%, compared to 3.47% and 3.17% for the corresponding periods of 2022. The decrease in the net interest margin for the three and nine month periods was driven by an increase in the rate paid on interest-bearing liabilities of 239 and 189 basis points ("bps"), respectively. The FOMC rate increases during 2022 and 2023 contributed to the increases in rate paid on interest-bearing liabilities as the rate paid on short-term borrowings increased 429 bps and 467 bps for the three and nine month periods ended September 30, 2023 compared to the same periods of 2022. Short-term borrowings increased in volume and rate paid as this funding source was utilized to provide funding for the growth in the loan portfolio, resulting in an increase of $2.4 million and $6.1 million in expense for the three and nine month periods ended September 30, 2023 compared to the same periods of 2022. The rate paid on interest-bearing deposits increased 207 and 154 bps for the three and nine month periods ended September 30, 2023 compared to the corresponding periods of 2022 due to the FOMC rate actions and an increase in competition for deposits. The rates paid on time deposits significantly contributed to the increase in funding costs as rates paid for the three and nine month periods ended September 30, 2023 compared to the same periods of 2022 increased 328 bps and 259 bps, respectively, as deposit gathering campaigns initiated in the latter part of 2022 continued throughout 2023. In addition, brokered deposits have been utilized to assist with the funding of the loan portfolio growth and contributed to the increase in time deposit funding costs. Partially offsetting the increase in funding cost was an increase in the yield on interest-earning assets and growth in the average balance of the earning asset portfolio compared to the same periods in 2022. The average loan portfolio balance increased $276.8 million and $278.2 million for the three and nine month periods, respectively, as the average yield on the portfolio increased 87 and 76 bps for the same periods. The three and nine month periods ended September 30, 2023 were impacted by an increase of 113 and 101 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates.

Assets

Total assets increased to $2.2 billion at September 30, 2023, an increase of $271.4 million compared to September 30, 2022.  Net loans increased $260.1 million to $1.8 billion at September 30, 2023 compared to September 30, 2022, as an emphasis was placed on commercial loan growth coupled with growth in indirect auto lending. The investment portfolio increased $7.2 million from September 30, 2022 to September 30, 2023 as restricted investment in bank stock increased $10.8 million resulting from the requirement to hold additional stock in the Federal Home Loan Bank of Pittsburgh ("FHLB") due to an increase in the level of borrowings from the FHLB. The increase in total borrowings of $277.7 million to $411.4 million at September 30, 2023 was utilized to provide funding for the growth in the loan portfolio.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.20% at September 30, 2023 from 0.37% at September 30, 2022, as non-performing loans decreased to $3.7 million at September 30, 2023 from $5.7 million at September 30, 2022. 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 been classified as individually evaluated loans that have a specific allocation recorded within the allowance for credit losses. Net loan recoveries of $316,000 for the nine months ended September 30, 2023 impacted the allowance for credit losses, which was 0.71% of total loans at September 30, 2023 compared to 0.97% at September 30, 2022 (prior to the adoption of CECL).

Deposits

Deposits decreased $23.1 million to $1.6 billion at September 30, 2023 compared to September 30, 2022. Noninterest-bearing deposits decreased $65.9 million to $471.5 million at September 30, 2023 compared to September 30, 2022.  Core deposits declined as deposits migrated from core deposit accounts into time deposits as market rates increased due to the FOMC rate increases and increased competition for deposits. Core deposit gathering efforts remained focused on increasing the utilization of electronic (internet and mobile) deposit banking by our customers. Interest-bearing deposits increased $42.7 million from September 30, 2022 to September 30, 2023 primarily due to increased utilization of brokered deposits of $101.2 million as this funding source was utilized to supplement funding loan portfolio growth, while reducing the need to draw upon available borrowing lines. A campaign to attract time deposits with a maturity of five to twenty-four months commenced during the latter part of 2022 and has continued during the first nine months of 2023 with current efforts centered on five to twelve months.

Shareholders’ Equity

Shareholders’ equity increased $10.1 million to $174.5 million at September 30, 2023 compared to September 30, 2022.  During the three months ended September 30, 2023 the Company sold 34,411 shares of common stock, for net proceeds of $752,000, in a registered at-the-market offering. An additional 8,349 shares for net proceeds of $200,000 were issued as part of the Dividend Reinvestment Plan during the three months ended September 30, 2023. Accumulated other comprehensive loss of $14.9 million at September 30, 2023 increased from a loss of $14.6 million at September 30, 2022 as a result of a $10.9 million net unrealized loss on available for sale securities at September 30, 2023 compared to an unrealized loss of $11.1 million at September 30, 2022 coupled with an increase in loss of $607,000 in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $24.55 at September 30, 2023 compared to $23.32 at September 30, 2022, and an equity to asset ratio of 8.02% at September 30, 2023 and 8.63% at September 30, 2022. Dividends declared for the nine months ended September 30, 2023 and 2022 were $0.96 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates sixteen 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, 2022.

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
 570-322-1111e-mail: pwod@pwod.com


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

  September 30,
(In Thousands, Except Share and Per Share Data)  2023   2022  % Change
ASSETS:      
Noninterest-bearing balances $26,651  $24,418  9.14%
Interest-bearing balances in other financial institutions  8,939   12,444  (28.17)%
Total cash and cash equivalents  35,590   36,862  (3.45)%
       
Investment debt securities, available for sale, at fair value  184,667   188,196  (1.88)%
Investment equity securities, at fair value  1,072   1,130  (5.13)%
Restricted investment in bank stock, at fair value  25,289   14,539  73.94%
Loans held for sale  4,083   2,485  64.31%
Loans  1,818,461   1,560,700  16.52%
Allowance for credit losses  (12,890)  (15,211) (15.26)%
Loans, net  1,805,571   1,545,489  16.83%
Premises and equipment, net  30,746   32,227  (4.60)%
Accrued interest receivable  10,500   8,647  21.43%
Bank-owned life insurance  33,695   34,288  (1.73)%
Investment in limited partnerships  8,275   4,771  73.44%
Goodwill  16,450   17,104  (3.82)%
Intangibles  235   361  (34.90)%
Operating lease right of use asset  2,562   2,699  (5.08)%
Deferred tax asset  6,961   7,187  (3.14)%
Other assets  10,772   9,131  17.97%
TOTAL ASSETS $2,176,468  $1,905,116  14.24%
       
LIABILITIES:      
Interest-bearing deposits $1,095,760  $1,053,012  4.06%
Noninterest-bearing deposits  471,507   537,403  (12.26)%
Total deposits  1,567,267   1,590,415  (1.46)%
       
Short-term borrowings  193,746   30,901  526.99%
Long-term borrowings  217,645   102,829  111.66%
Accrued interest payable  2,716   427  536.07%
Operating lease liability  2,619   2,753  (4.87)%
Other liabilities  17,935   13,302  34.83%
TOTAL LIABILITIES  2,001,928   1,740,627  15.01%
       
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; 7,620,250 and 7,563,200 shares issued; 7,110,025 and 7,052,975 shares outstanding  42,335   42,019  0.75%
Additional paid-in capital  55,890   53,958  3.58%
Retained earnings  104,067   95,896  8.52%
Accumulated other comprehensive loss:      
Net unrealized loss on available for sale securities  (10,886)  (11,125) 2.15%
Defined benefit plan  (4,051)  (3,444) (17.62)%
Treasury stock at cost, 510,225  (12,815)  (12,815) —%
TOTAL SHAREHOLDERS' EQUITY  174,540   164,489  6.11%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $2,176,468  $1,905,116  14.24%

    

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

  Three Months Ended September 30, Nine Months Ended September 30,
(In Thousands, Except Share and Per Share Data)  2023   2022  % Change  2023   2022  % Change
INTEREST AND DIVIDEND INCOME:            
Loans including fees $21,720  $15,051  44.31% $59,571  $41,709  42.83%
Investment securities:            
Taxable  1,365   949  43.84%  3,870   2,550  51.76%
Tax-exempt  114   236  (51.69)%  410   594  (30.98)%
Dividend and other interest income  722   628  14.97%  1,827   1,470  24.29%
TOTAL INTEREST AND DIVIDEND INCOME  23,921   16,864  41.85%  65,678   46,323  41.78%
             
INTEREST EXPENSE:            
Deposits  6,463   693  832.61%  14,686   2,191  570.29%
Short-term borrowings  2,412   26  n/m  6,084   29  n/m
Long-term borrowings  1,714   613  179.61%  3,892   1,871  108.02%
TOTAL INTEREST EXPENSE  10,589   1,332  694.97%  24,662   4,091  502.84%
             
NET INTEREST INCOME  13,332   15,532  (14.16)%  41,016   42,232  (2.88)%
             
Provision for loan credit losses  1,331   855  55.67%  726   1,335  (45.62)%
Provision (recovery) for off balance sheet credit exposures  41   —  n/a  (463)  —  n/a
TOTAL PROVISION FOR CREDIT LOSSES  1,372   855  60.47%  263   1,335  (80.30)%
             
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES  11,960   14,677  (18.51)%  40,753   40,897  (0.35)%
             
NON-INTEREST INCOME:            
Service charges  545   559  (2.50)%  1,557   1,563  (0.38)%
Debt securities losses, available for sale  (78)  (156) 50.00%  (158)  (168) 5.95%
Net equity securities losses  (36)  (55) 34.55%  (35)  (158) 77.85%
Bank-owned life insurance  170   170  —%  892   501  78.04%
Gain on sale of loans  290   294  (1.36)%. 765   905  (15.47)%
Insurance commissions  136   109  24.77%  416   386  7.77%
Brokerage commissions  142   142  —%  448   500  (10.40)%
Loan broker income  241   438  (44.98)%  728   1,350  (46.07)%
Debit card income  320   344  (6.98)%  995   1,080  (7.87)%
Other  145   238  (39.08)%  546   673  (18.87)%
TOTAL NON-INTEREST INCOME  1,875   2,083  (9.99)%  6,154   6,632  (7.21)%
             
NON-INTEREST EXPENSE:            
Salaries and employee benefits  6,290   6,016  4.55%  18,778   18,421  1.94%
Occupancy  784   730  7.40%  2,422   2,380  1.76%
Furniture and equipment  867   816  6.25%  2,503   2,454  2.00%
Software amortization  237   188  26.06%  593   660  (10.15)%
Pennsylvania shares tax  280   334  (16.17)%  807   1,119  (27.88)%
Professional fees  719   626  14.86%  2,313   1,746  32.47%
Federal Deposit Insurance Corporation deposit insurance  425   260  63.46%  1,122   690  62.61%
Marketing  167   151  10.60%  594   435  36.55%
Intangible amortization  25   34  (26.47)%  92   119  (22.69)%
Other  1,378   1,165  18.28%  4,275   3,723  14.83%
TOTAL NON-INTEREST EXPENSE  11,172   10,320  8.26%  33,499   31,747  5.52%
INCOME BEFORE INCOME TAX PROVISION  2,663   6,440  (58.65)%  13,408   15,782  (15.04)%
INCOME TAX PROVISION  439   1,190  (63.11)%  2,355   2,869  (17.92)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' $2,224  $5,250  (57.64)% $11,053  $12,913  (14.40)%
EARNINGS PER SHARE - BASIC $0.31  $0.74  (58.11)% $1.56  $1.83  (14.75)%
EARNINGS PER SHARE - DILUTED $0.31  $0.74  (58.11)% $1.53  $1.83  (16.39)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC  7,072,440   7,051,228  0.30%  7,064,336   7,060,871  0.05%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED  7,228,940   7,051,228  2.52%  7,220,836   7,060,871  2.27%


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

  Three Months Ended
  September 30, 2023 September 30, 2022
(Dollars in Thousands) Average 
Balance (1)		 Interest Average 
Rate		 Average 
Balance (1)		 Interest Average 
Rate
ASSETS:            
Tax-exempt loans (3) $68,243 $462 2.69% $58,735 $394 2.66%
All other loans  1,730,669  21,355 4.90%  1,463,330  14,740 4.00%
Total loans (2)  1,798,912  21,817 4.81%  1,522,065  15,134 3.94%
             
Federal funds sold  —  — —%  33,641  218 2.57%
             
Taxable securities  193,019  1,945 4.09%  159,721  1,158 2.94%
Tax-exempt securities (3)  20,777  144 2.81%  49,177  299 2.47%
Total securities  213,796  2,089 3.96%  208,898  1,457 2.83%
             
Interest-bearing balances in other financial institutions  11,868  142 4.75%  34,202  201 2.33%
             
Total interest-earning assets  2,024,576  24,048 4.72%  1,798,806  17,010 3.76%
             
Other assets  131,451      130,576    
             
TOTAL ASSETS $2,156,027     $1,929,382    
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:            
Savings $225,357  181 0.32% $249,083  26 0.04%
Super Now deposits  244,387  1,174 1.91%  405,173  287 0.28%
Money market deposits  294,006  1,862 2.51%  287,660  200 0.28%
Time deposits  342,450  3,246 3.76%  148,968  180 0.48%
Total interest-bearing deposits  1,106,200  6,463 2.32%  1,090,884  693 0.25%
             
Short-term borrowings  173,364  2,412 5.52%  8,062  26 1.23%
Long-term borrowings  204,901  1,714 3.32%  109,269  613 2.23%
Total borrowings  378,265  4,126 4.33%  117,331  639 2.16%
             
Total interest-bearing liabilities  1,484,465  10,589 2.83%  1,208,215  1,332 0.44%
             
Demand deposits  471,494      533,681    
Other liabilities  24,193      21,008    
Shareholders’ equity  175,875      166,478    
             
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $2,156,027     $1,929,382    
Interest rate spread (3)     1.89%     3.32%
Net interest income/margin (3)   $13,459 2.65%   $15,678 3.47%

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 September 30,
   2023  2022
Total interest income $23,921 $16,864
Total interest expense  10,589  1,332
Net interest income (GAAP)  13,332  15,532
Tax equivalent adjustment  127  146
Net interest income (fully taxable equivalent) (non-GAAP) $13,459 $15,678


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

  Nine Months Ended
  September 30, 2023 September 30, 2022
(Dollars in Thousands) Average 
Balance (1)		 Interest Average 
Rate		 Average 
Balance (1)		 Interest Average 
Rate
ASSETS:            
Tax-exempt loans (3) $66,372 $1,371 2.76% $53,269 $1,033 2.59%
All other loans  1,668,596  58,488 4.69%  1,403,504  40,893 3.90%
Total loans (2)  1,734,968  59,859 4.61%  1,456,773  41,926 3.85%
             
Federal funds sold  —  — —%  43,938  465 1.41%
             
Taxable securities  188,477  5,331 3.78%  152,937  3,126 2.76%
Tax-exempt securities (3)  25,837  519 2.69%  45,357  752 2.24%
Total securities  214,314  5,850 3.65%  198,294  3,878 2.64%
             
Interest-bearing balances in other financial institutions  10,619  366 4.61%  97,520  429 0.59%
             
Total interest-earning assets  1,959,901  66,075 4.41%  1,796,525  46,698 3.48%
             
Other assets  132,133      129,048    
             
TOTAL ASSETS $2,092,034     $1,925,573    
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:            
Savings $233,784  456 0.26% $246,063  72 0.04%
Super Now deposits  293,636  3,026 1.38%  388,149  721 0.25%
Money market deposits  292,490  4,807 2.20%  296,998  596 0.27%
Time deposits  264,855  6,397 3.23%  167,876  802 0.64%
Total interest-bearing deposits  1,084,765  14,686 1.81%  1,099,086  2,191 0.27%
             
Short-term borrowings  155,136  6,084 5.26%  6,308  29 0.59%
Long-term borrowings  169,276  3,892 3.07%  112,457  1,871 2.22%
Total borrowings  324,412  9,976 4.12%  118,765  1,900 2.14%
             
Total interest-bearing liabilities  1,409,177  24,662 2.34%  1,217,851  4,091 0.45%
             
Demand deposits  484,662      519,599    
Other liabilities  26,334      23,814    
Shareholders’ equity  171,861      164,309    
             
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $2,092,034     $1,925,573    
Interest rate spread (3)     2.07%     3.03%
Net interest income/margin (3)   $41,413 2.82%   $42,607 3.17%

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%

  Nine Months Ended September 30,
   2023  2022
Total interest income $65,678 $46,323
Total interest expense  24,662  4,091
Net interest income  41,016  42,232
Tax equivalent adjustment  397  375
Net interest income (fully taxable equivalent) (non-GAAP) $41,413 $42,607


(Dollars in Thousands, Except Per Share Data, Unaudited) Quarter Ended
  9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022
Operating Data          
Net income $2,224  $4,171  $4,658  $4,509  $5,250 
Net interest income  13,332   13,386   14,298   15,548   15,532 
Provision (recovery) for credit losses  1,372   (1,180)  71   575   855 
Net security losses  (114)  (39)  (40)  (39)  (211)
Non-interest income, excluding net security losses  1,989   2,061   2,297   2,120   2,294 
Non-interest expense  11,172   11,429   10,898   11,251   10,320 
           
Performance Statistics          
Net interest margin  2.65%  2.77%  3.10%  3.42%  3.47%
Annualized return on average assets  0.41%  0.80%  0.92%  0.92%  1.09%
Annualized return on average equity  5.06%  9.53%  11.12%  10.92%  12.61%
Annualized net loan charge-offs (recoveries) to average loans  0.01% (0.11)%  0.03%  0.04%  0.01%
Net charge-offs (recoveries)  33   (472)  123   149   37 
Efficiency ratio  72.76%  73.78%  65.46%  59.79%  57.70%
           
Per Share Data          
Basic earnings per share $0.31  $0.59  $0.66  $0.64  $0.74 
Diluted earnings per share  0.31   0.59   0.64   0.64   0.74 
Dividend declared per share  0.32   0.32   0.32   0.32   0.32 
Book value  24.55   24.70   24.64   23.76   23.32 
Common stock price:          
High  27.17   27.34   27.77   26.89   24.29 
Low  20.70   21.95   21.90   23.15   22.02 
Close  21.08   25.03   23.10   26.62   22.91 
Weighted average common shares:          
Basic  7,072   7,062   7,058   7,055   7,051 
Fully Diluted  7,229   7,062   7,334   7,055   7,051 
End-of-period common shares:          
Issued  7,620   7,574   7,570   7,567   7,563 
Treasury  (510)  (510)  (510)  (510)  (510)



(Dollars in Thousands) Quarter Ended
  9/30/2023 6/30/2023 3/31/2023 12/31/2022 9/30/2022
Financial Condition Data:          
General          
Total assets $2,176,468  $2,135,319  $2,065,143  $2,000,080  $1,905,116 
Loans, net  1,805,571   1,757,811   1,688,289   1,624,094   1,545,489 
Goodwill  16,450   16,450   16,450   16,450   17,104 
Intangibles  235   260   292   327   361 
Total deposits  1,567,267   1,553,757   1,638,835   1,556,460   1,590,415 
Noninterest-bearing  471,507   475,937   502,352   519,063   537,403 
Savings  226,897   229,108   239,526   247,952   249,532 
NOW  220,730   238,353   363,548   372,574   392,140 
Money Market  291,889   296,957   300,273   270,589   268,532 
Time Deposits  249,550   226,224   191,203   137,949   137,348 
Brokered Deposits  106,694   87,178   41,933   8,333   5,460 
Total interest-bearing deposits  1,095,760   1,077,820   1,136,483   1,037,397   1,053,012 
           
Core deposits*  1,211,023   1,240,355   1,405,699   1,410,178   1,447,607 
Shareholders’ equity  174,540   174,402   173,970   167,665   164,489 
           
Asset Quality          
Non-performing loans $3,683  $4,276  $4,766  $4,890  $5,743 
Non-performing loans to total assets  0.17%  0.20%  0.23%  0.24%  0.30%
Allowance for loan losses  12,890   11,592   11,734   15,637   15,211 
Allowance for loan losses to total loans  0.71%  0.66%  0.69%  0.95%  0.97%
Allowance for loan losses to non-performing loans  349.99%  271.09%  246.20%  319.78%  264.86%
Non-performing loans to total loans  0.20%  0.24%  0.28%  0.30%  0.37%
           
Capitalization          
Shareholders’ equity to total assets  8.02%  8.17%  8.42%  8.40%  8.63%

* Core deposits are defined as total deposits less time deposits and brokered deposits.


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

  Three Months Ended September 30, Nine Months Ended September 30,
(Dollars in Thousands, Except Per Share Data)  2023   2022   2023   2022 
GAAP net income $2,224  $5,250  $11,053  $12,913 
Net securities losses, net of tax  90   167   152   258 
Non-GAAP core earnings $2,314  $5,417  $11,205  $13,171 
         
  Three Months Ended September 30, Nine Months Ended September 30,
   2023   2022   2023   2022 
Return on average assets (ROA)  0.41%  1.09%  0.70%  0.89%
Net securities losses, net of tax  0.02%  0.03%  0.01%  0.02%
Non-GAAP core ROA  0.43%  1.12%  0.71%  0.91%
         
  Three Months Ended September 30, Nine Months Ended September 30,
   2023   2022   2023   2022 
Return on average equity (ROE)  5.06%  12.61%  8.58%  10.48%
Net securities losses, net of tax  0.20%  0.41%  0.11%  0.21%
Non-GAAP core ROE  5.26%  13.02%  8.69%  10.69%
         
  Three Months Ended September 30, Nine Months Ended September 30,
   2023   2022   2023   2022 
Basic earnings per share (EPS) $0.31  $0.74  $1.56  $1.83 
Net securities losses, net of tax  0.02   0.03   0.03   0.04 
Non-GAAP basic core EPS $0.33  $0.77  $1.59  $1.87 
     
  Three Months Ended September 30, Nine Months Ended September 30,
   2023   2022   2023   2022 
Diluted EPS $0.31  $0.74  $1.53  $1.83 
Net securities losses, net of tax  0.01   0.03   0.02   0.04 
Non-GAAP diluted core EPS $0.32  $0.77  $1.55  $1.87 

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Source: Penns Woods Bancorp, Inc.

2023 GlobeNewswire, Inc., source Press Releases