EX-99.1 2 ex991-1q22.htm EX-99.1 Document

Exhibit 99.1
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Press Release — For Immediate Release
April 21, 2022

Penns Woods Bancorp, Inc. Reports First Quarter 2022 Earnings

Williamsport, PA — April 21, 2022 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $3.4 million for the three months ended March 31, 2022, resulting in basic and diluted earnings per share of $0.49.

Highlights

•Net income, as reported under GAAP, for the three months ended March 31, 2022 was $3.4 million compared to $3.4 million for the same period of 2021. Results for the three months ended March 31, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $142,000 (from a gain of $94,000 to a loss of $48,000) for the three month period. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted the three months ended March 31, 2022.

•The provision for loan losses decreased $365,000 for the three months ended March 31, 2022 to $150,000 compared to $515,000 for the 2021 period. The provision for loan losses was elevated in 2021 due primarily to the uncertainty caused by the COVID-19 pandemic.

•Basic and diluted earnings per share for the three months ended March 31, 2022 were $0.49. Basic and diluted earnings per share for the three ended March 31, 2021 were $0.49.

•Annualized return on average assets was 0.72% for three months ended March 31, 2022, compared to 0.75% for the corresponding period of 2021.

•Annualized return on average equity was 8.17% for the three months ended March 31, 2022, compared to 8.59% 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 $3.5 million for the three months ended March 31, 2022 compared to $3.3 million for the same period of 2021. Core earnings per share for the three months ended March 31, 2022 were $0.48 basic and diluted, compared to $0.47 basic and diluted core earnings per share for the same period of 2021. Core return on average assets and core return on average equity were 0.73% and 8.28% for the three months ended March 31, 2022, compared to 0.73% and 8.35% for the corresponding period of 2021. Core earnings for the three months ended March 31, 2022 were 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 months ended March 31, 2022 was 2.93%, compared to 2.88% for the corresponding period of 2021. The increase in the net interest margin for the three month period was driven by a decline in the rate paid on interest-bearing deposits of 35 basis points ("bps") as rates paid decreased throughout 2021 and through the first three months of 2022. Leading the decline in the rate paid on interest-bearing deposits was a 94 bps decline in the rate paid on time deposits as time deposits issued prior to the COVID-19 pandemic matured. Offsetting the decrease in rates paid on the interest bearing liabilities
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was a decrease in the yield of the loan portfolio of 26 bps coupled with the yield on the investment portfolio declining 32 bps as legacy earning assets were paid down or matured.

Assets

Total assets increased $20.6 million to $1.9 billion at March 31, 2022 compared to March 31, 2021.  Cash and cash equivalents decreased $58.9 million as interest-bearing accounts in other financial institutions decreased $106.1 million which was partially offset by an increase of $50.0 million in federal funds sold. Net loans increased $70.2 million to $1.4 billion at March 31, 2022 compared to March 31, 2021, as the economy continued recovering from the various negative economic impact caused by the COVID-19 pandemic and an emphasis was placed on commercial loan growth. The investment portfolio increased $7.5 million from March 31, 2021 to March 31, 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 0.38% at March 31, 2022 from 0.69% at March 31, 2021 as non-performing loans have decreased to $5.3 million at March 31, 2022 from $9.3 million at March 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 $303,000 for the three months ended March 31, 2022 impacted the allowance for loan losses, which was 1.00% of total loans at March 31, 2022 compared to 1.06% at March 31, 2021.

Deposits

Deposits increased $48.0 million to $1.6 billion at March 31, 2022 compared to March 31, 2021. Noninterest-bearing deposits increased $35.2 million to $514.1 million at March 31, 2022 compared to March 31, 2021.  Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers, and customers becoming more risk averse and seeking safety in a bank deposit. Emphasis remains 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. The increased level of deposits has allowed for a $28.2 million decrease in long-term borrowings.

Shareholders’ Equity

Shareholders’ equity increased $4.4 million to $168.4 million at March 31, 2022 compared to March 31, 2021.  Accumulated other comprehensive loss of $6.5 million at March 31, 2022 increased from a loss of $2.5 million at March 31, 2021 as a result of a increase of $6.2 million in the net unrealized losses on available for sale securities and a change in the defined benefit plan of $2.1 million. The current level of shareholders’ equity equates to a book value per share of $23.81 at March 31, 2022 compared to $23.25 at March 31, 2021, and an equity to asset ratio of 8.79% at March 31, 2022 and 8.65% at March 31, 2021. Dividends declared for the three months ended March 31, 2022 and 2021 were $0.32 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
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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
 570-322-1111e-mail: pwod@pwod.com

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PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
 
 March 31,
(In Thousands, Except Share Data)20222021% Change
ASSETS:   
Noninterest-bearing balances$25,717 $28,539 (9.89)%
Interest-bearing balances in other financial institutions143,086 249,149 (42.57)%
Federal funds sold50,000 — n/a
Total cash and cash equivalents218,803 277,688 (21.21)%
Investment debt securities, available for sale, at fair value175,674 166,895 5.26 %
Investment equity securities, at fair value1,193 1,265 (5.69)%
Investment securities, trading36 44 (18.18)%
Restricted investment in bank stock, at fair value 13,795 15,032 (8.23)%
Loans held for sale1,360 2,568 (47.04)%
Loans1,405,966 1,335,899 5.24 %
Allowance for loan losses(14,023)(14,202)(1.26)%
Loans, net1,391,943 1,321,697 5.31 %
Premises and equipment, net33,259 34,910 (4.73)%
Accrued interest receivable8,129 8,583 (5.29)%
Bank-owned life insurance33,953 33,839 0.34 %
Investment in limited partnerships4,600 4,655 (1.18)%
Goodwill17,104 17,104 — %
Intangibles437 618 (29.29)%
Operating lease right of use asset2,795 3,088 (9.49)%
Deferred tax asset4,569 3,717 22.92 %
Other assets9,159 4,489 104.03 %
TOTAL ASSETS$1,916,809 $1,896,192 1.09 %
LIABILITIES:   
Interest-bearing deposits$1,098,265 $1,085,448 1.18 %
Noninterest-bearing deposits514,130 478,916 7.35 %
Total deposits1,612,395 1,564,364 3.07 %
Short-term borrowings6,634 6,650 (0.24)%
Long-term borrowings112,918 141,094 (19.97)%
Accrued interest payable471 988 (52.33)%
Operating lease liability2,847 3,130 (9.04)%
Other liabilities13,117 15,903 (17.52)%
TOTAL LIABILITIES1,748,382 1,732,129 0.94 %
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; 7,554,567 and 7,537,242 shares issued; 7,074,342 and 7,057,017 shares outstanding41,969 41,873 0.23 %
Additional paid-in capital54,191 52,818 2.60 %
Retained earnings90,928 83,948 8.31 %
Accumulated other comprehensive (loss) gain:  
Net unrealized (loss) gain on available for sale securities(3,074)3,095 (199.32)%
Defined benefit plan(3,472)(5,560)37.55 %
Treasury stock at cost, 480,225 (12,115)(12,115)— %
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY168,427 164,059 2.66 %
Non-controlling interest— 4 (100.00)%
TOTAL SHAREHOLDERS' EQUITY168,427 164,063 2.66 %
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,916,809 $1,896,192 1.09 %
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PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended March 31,
(In Thousands, Except Per Share Data)20222021% Change
INTEREST AND DIVIDEND INCOME:   
Loans including fees$13,038 $13,345 (2.30)%
Investment securities:   
Taxable737 819 (10.01)%
Tax-exempt164 171 (4.09)%
Dividend and other interest income336 260 29.23 %
TOTAL INTEREST AND DIVIDEND INCOME14,275 14,595 (2.19)%
INTEREST EXPENSE:   
Deposits788 1,684 (53.21)%
Short-term borrowings1 2 (50.00)%
Long-term borrowings633 839 (24.55)%
TOTAL INTEREST EXPENSE1,422 2,525 (43.68)%
NET INTEREST INCOME12,853 12,070 6.49 %
PROVISION FOR LOAN LOSSES150 515 (70.87)%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES12,703 11,555 9.94 %
NON-INTEREST INCOME:   
Service charges495 383 29.24 %
Debt securities (losses) gains, available for sale(2)138 (101.45)%
Equity securities losses(58)(23)(152.17)%
Securities (losses) gains, trading(1)4 (125.00)%
Bank-owned life insurance170 173 (1.73)%
Gain on sale of loans345 908 (62.00)%
Insurance commissions170 157 8.28 %
Brokerage commissions200 219 (8.68)%
Loan broker income541 181 198.90 %
Debit card income345 380 (9.21)%
Other207 94 120.21 %
TOTAL NON-INTEREST INCOME2,412 2,614 (7.73)%
NON-INTEREST EXPENSE:   
Salaries and employee benefits6,264 5,598 11.90 %
Occupancy910 976 (6.76)%
Furniture and equipment892 809 10.26 %
Software amortization253 198 27.78 %
Pennsylvania shares tax389 352 10.51 %
Professional fees538 583 (7.72)%
Federal Deposit Insurance Corporation deposit insurance202 221 (8.60)%
Marketing64 63 1.59 %
Intangible amortization44 53 (16.98)%
Other1,451 1,098 32.15 %
TOTAL NON-INTEREST EXPENSE11,007 9,951 10.61 %
INCOME BEFORE INCOME TAX PROVISION4,108 4,218 (2.61)%
INCOME TAX PROVISION676 771 (12.32)%
NET INCOME$3,432 $3,447 (0.44)%
Earnings attributable to noncontrolling interest— 6 (100.00)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'$3,432 $3,441 (0.26)%
EARNINGS PER SHARE - BASIC $0.49 $0.49 — %
EARNINGS PER SHARE - DILUTED$0.49 $0.49 — %
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC7,072,575 7,055,116 0.25 %
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED7,072,575 7,055,116 0.25 %

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PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 
(UNAUDITED)
 Three Months Ended
 March 31, 2022March 31, 2021
(Dollars in Thousands)Average 
Balance		InterestAverage 
Rate		Average 
Balance		InterestAverage 
Rate
ASSETS:      
Tax-exempt loans$47,974 $308 2.60 %$45,534 $349 3.11 %
All other loans1,351,414 12,795 3.84 %1,293,395 13,069 4.10 %
Total loans1,399,388 13,103 3.80 %1,338,929 13,418 4.06 %
Federal funds sold50,000 93 0.75 %— — — %
Taxable securities144,438 920 2.58 %145,047 1,033 2.89 %
Tax-exempt securities40,981 208 2.06 %36,369 216 2.41 %
Total securities185,419 1,128 2.47 %181,416 1,249 2.79 %
Interest-bearing deposits157,541 60 0.15 %195,995 46 0.10 %
Total interest-earning assets1,792,348 14,384 3.25 %1,716,340 14,713 3.48 %
Other assets127,421 124,074   
TOTAL ASSETS$1,919,769   $1,840,414   
LIABILITIES AND SHAREHOLDERS’ EQUITY:      
Savings$240,953 22 0.04 %$214,636 44 0.08 %
Super Now deposits370,895 195 0.21 %289,236 267 0.37 %
Money market deposits298,820 186 0.25 %306,000 267 0.35 %
Time deposits190,819 385 0.82 %254,460 1,106 1.76 %
Total interest-bearing deposits1,101,487 788 0.29 %1,064,332 1,684 0.64 %
Short-term borrowings5,194 1 0.08 %5,680 2 0.14 %
Long-term borrowings115,267 633 2.23 %141,483 839 2.40 %
Total borrowings120,461 634 2.13 %147,163 841 2.32 %
Total interest-bearing liabilities1,221,948 1,422 0.47 %1,211,495 2,525 0.85 %
Demand deposits506,348 445,759  
Other liabilities23,357 22,872  
Shareholders’ equity168,116 160,288  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,919,769  $1,840,414  
Interest rate spread  2.78 %  2.63 %
Net interest income/margin $12,962 2.93 % $12,188 2.88 %
Three Months Ended March 31,
 20222021
Total interest income$14,275 $14,595 
Total interest expense1,422 2,525 
Net interest income (GAAP)12,853 12,070 
Tax equivalent adjustment109 118 
Net interest income (fully taxable equivalent) (non-GAAP)$12,962 $12,188 

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(Dollars in Thousands, Except Per Share Data, Unaudited)Quarter Ended
3/31/202212/31/20219/30/20216/30/20213/31/2021
Operating Data 
Net income$3,432 $4,879 $4,125 $3,588 $3,441 
Net interest income12,853 12,921 12,632 12,095 12,070 
Provision for loan losses150 (300)75 350 515 
Net security (losses) gains(61)360 40 140 119 
Non-interest income, excluding net security gains2,473 2,835 2,911 2,769 2,495 
Non-interest expense11,007 10,259 10,447 10,248 9,951 
Performance Statistics
Net interest margin2.93 %2.90 %2.85 %2.78 %2.88 %
Annualized return on average assets0.72 %1.02 %0.86 %0.76 %0.75 %
Annualized return on average equity8.17 %11.59 %9.85 %8.70 %8.59 %
Annualized net loan charge-offs (recoveries) to average loans0.09 %0.02 %(0.01)%0.03 %0.04 %
Net charge-offs (recoveries)303 81 (44)114 116 
Efficiency ratio71.53 %64.83 %66.93 %68.61 %67.96 %
Per Share Data
Basic earnings per share$0.49 $0.69 $0.58 $0.51 $0.49 
Diluted earnings per share0.49 0.69 0.58 0.51 0.49 
Dividend declared per share0.32 0.32 0.32 0.32 0.32 
Book value23.81 24.37 23.84 23.63 23.25 
Common stock price:
High24.67 24.65 24.42 26.51 27.78 
Low23.64 23.50 22.78 23.03 20.55 
Close24.43 23.65 23.92 23.82 24.09 
Weighted average common shares:
Basic7,073 7,068 7,064 7,060 7,055 
Fully Diluted7,073 7,068 7,064 7,060 7,055 
End-of-period common shares:
Issued7,555 7,550 7,546 7,542 7,537 
Treasury480 480 480 480 480 
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(Dollars in Thousands, Except Per Share Data, Unaudited)Quarter Ended
3/31/202212/31/20219/30/20216/30/20213/31/2021
Financial Condition Data:     
General     
Total assets$1,916,809$1,940,809$1,910,791$1,894,870$1,896,192
Loans, net1,391,9431,377,9711,332,6681,323,5091,321,697
Goodwill17,10417,10417,10417,10417,104
Intangibles437480524568618
Total deposits1,612,3951,621,3151,593,0191,563,6961,564,364
Noninterest-bearing514,130494,360481,875477,344478,916
Savings236,312236,312231,189226,573224,890
NOW245,661366,399340,441296,450290,355
Money Market299,166318,877305,156301,405324,207
Time Deposits173,600205,367234,358261,924245,996
Total interest-bearing deposits1,098,2651,126,9551,111,1441,086,3521,085,448
Core deposits*1,438,7951,415,9481,358,6611,301,7721,318,368
Shareholders’ equity168,427172,274168,478166,830164,059
Asset Quality
Non-performing loans$5,281$6,250$7,763$7,931$9,272
Non-performing loans to total assets0.28%0.32%0.41%0.42%0.49%
Allowance for loan losses14,02314,17614,55714,43814,202
Allowance for loan losses to total loans1.00%1.02%1.08%1.08%1.06%
Allowance for loan losses to non-performing loans
265.54%226.82%187.52%182.05%153.17%
Non-performing loans to total loans0.38%0.45%0.58%0.59%0.69%
Capitalization
Shareholders’ equity to total assets8.79%8.88%8.82%8.80%8.65%

* Core deposits are defined as total deposits less time deposits
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Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Three Months Ended March 31,
(Dollars in Thousands, Except Per Share Data)20222021
GAAP net income$3,432$3,441
Less: net securities (losses) gains, net of tax(48)94
Non-GAAP core earnings$3,480$3,347
 Three Months Ended March 31,
 20222021
Return on average assets (ROA)0.72 %0.75 %
Less: net securities (losses) gains, net of tax(0.01)%0.02 %
Non-GAAP core ROA0.73 %0.73 %
 Three Months Ended March 31,
 20222021
Return on average equity (ROE)8.17 %8.59 %
Less: net securities (losses) gains, net of tax(0.11)%0.24 %
Non-GAAP core ROE8.28 %8.35 %
 Three Months Ended March 31,
 20222021
Basic earnings per share (EPS)$0.49 $0.49 
Less: net securities (losses) gains, net of tax0.01 0.02 
Non-GAAP basic core EPS$0.48 $0.47 
 Three Months Ended March 31,
 20222021
Diluted EPS$0.49 $0.49 
Less: net securities (losses) gains, net of tax0.01 0.02 
Non-GAAP diluted core EPS$0.48 $0.47 




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