8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

July 18, 2008

Date of Report (Date of earliest event reported)

PENNS WOODS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania	000-17077	23-2226454
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Ident. No.)
300 Market Street, P.O. Box 967, Williamsport, Pennsylvania		17703-0967
(Address of principal executive offices)		(Zip Code)

(570) 322-1111

 Registrant’s telephone number, including area code

N/A

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Item 2.02               Results of Operation and Financial Condition.

On July 18, 2008, Penns Woods Bancorp, Inc. distributed a press release announcing its earnings for the period ended June 30, 2008.  The press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01               Financial Statements and Exhibits.

(d)           Exhibits:

99.1      Press release, dated July 18, 2008, of Penns Woods Bancorp, Inc. announcing earnings for the period ended June 30, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	PENNS WOODS BANCORP, INC.
Dated:  July 23, 2008
	By:	/s/  Ronald A. Walko
		Ronald A. Walko
		President and Chief Executive Officer

2

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release, dated July 18, 2008, of Penns Woods Bancorp, Inc. announcing earnings for the period ended June 30, 2008

3

EX-99.1

Exhibit 99.1

Press Release – For Immediate Release

July 18, 2008

Penns Woods Bancorp, Inc. Reports Second Quarter 2008 Earnings

Jersey Shore, PA – Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported that net income from core operations (“operating earnings”), which excludes net securities gains and losses, increased 3.8% and 2.9% to $2,223,000 and $4,329,000 for the three and six months ended June 30, 2008 compared to $2,142,000 and $4,207,000 for the same periods of 2007.  In addition, second quarter 2008 operating earnings represent an increase of $117,000 or 5.6% from the first quarter 2008 results.  Operating earnings per share for the three months ended June 30, 2008 increased 5.5% to $0.58 basic ($0.57 dilutive) compared to $0.55 basic ($0.55 dilutive) for the three months ended June 30, 2007. Second quarter 2008 operating earnings per share represent an increase of 7.4% or $0.04 compared to operating earnings of $0.54 for the first quarter of 2008.  Operating earnings for the three and six month periods ended June 30, 2008 have been positively impacted by continued strong credit quality, deposit growth, solid non-interest income, an increasing net interest margin, and additional bank-owned life insurance.

Net income, as reported under U.S. generally accepted accounting principles, for the three and six months ended June 30, 2008 was $2,057,000 and $4,188,000 compared to $2,335,000 and $4,616,000 for the same periods of 2007.  Comparable results were impacted by a decrease in after-tax securities gains of $359,000 (from $193,000 to a loss of $166,000) and $550,000 (from $409,000 to a loss of $141,000) from 2007 to 2008 for the three and six month periods being compared.  Basic and dilutive earnings per share for the three and six months ended June 30, 2008 were $0.53 and $1.08 compared to $0.60 and $1.19 for the same corresponding periods of 2007.  Return on average assets and return on average equity were 1.30% and 11.73% for the three months ended June 30, 2008 compared to 1.58% and 12.57% for the corresponding period of 2007.  Earnings for the six months ended June 30, 2008 correlate to a return on average assets and return on average equity of 1.33% and 11.87% compared to 1.57% and 12.35% for the six month 2007 period.

The net interest margin for the three and six months ended June 30, 2008 was 4.01% and 3.95% as compared to 3.95% for each of the corresponding periods of 2007.  A decrease in the rate paid on interest bearing liabilities of 53 basis points (bp) and 33 bp for the three and six months ended June 30, 2008 compared to the same periods of 2007 positively impacted the net interest margin.  The decreasing cost of funds is primarily the result of the rate paid on time deposits decreasing 77 bp and 44 bp for the three and six month periods, respectively,

while the cost of short-term borrowings has decreased 164 bp and 163 bp over the same time periods.  The decreases are the result of Federal Open Market Committee actions coupled with our strategic decision to shorten the duration of the time deposit portfolio over the past year.  The shortening of the time deposit portfolio has resulted in an increased repricing frequency which has allowed for the majority of the portfolio to be repriced downward over the past six months.

“The continued uncertainty over the future of the economy and credit markets has led to turbulence in the financial sector causing the value of many financial stocks to decline significantly over the past year.  While our stock price has held relatively steady, many of the financial institution stocks held within our investment portfolio have experienced significant price declines.  The amount of the declines has caused several of our holdings to be deemed other than temporarily impaired resulting in a write down in value of these holdings of $366,000 and $574,000 for the three and six month periods ended June 30, 2008.  As we look into the future, there is much uncertainty as to the length and severity of the current economic turbulence.  This turbulence may result in additional write downs through the balance of 2008.  If write downs are necessary, we may decide to exit or reduce certain positions so that the losses can be carried back for tax purposes and offset against gains that have been recognized over the past several years,” commented Ronald A. Walko, President and Chief Executive Officer of Penns Woods Bancorp, Inc.  “We have maintained our distance from the issues that are causing much of the financial sector turbulence.  We have not engaged in sub prime lending nor have we invested in high risk bonds.  We continually stress asset quality in our investment and loan portfolios.  In fact, our commitment to sound lending practices and credit standards has produced a nonperforming loans to total loans ratio of 0.25%, and annualized net loan charge-offs to average loans of only 0.01% for the three month period ended June 30, 2008.  In addition, the allowance for loan losses to loans remains sound at 1.15% of total loans,” added Mr. Walko.

Total assets increased $47,932,000 to $634,504,000 at June 30, 2008 compared to June 30, 2007.  Net loans increased $9,735,000 despite a softening economy that has in general provided fewer loan opportunities.  However, due to our sound credit quality and overall balance sheet strength, we have been able to aggressively attract those loans that meet and/or exceed our credit standards.  The growth in the investment portfolio of $27,861,000 from June 30, 2007 to June 30, 2008 was driven by a strategic initiative in the latter portion of 2007 to increase net interest income by purchasing fixed rate instruments in anticipation of the decreasing rate environment continuing into 2008.  In addition, the characteristics of the instruments purchased complemented the existing portfolio and serve as a means to reduce the level of prepayment risk in the portfolio.

Deposits have increased 7.9% or $32,018,000 to $437,921,000 at June 30, 2008 compared to June 30, 2007 with core deposits increasing $22,788,000.  “Driving the increase in deposits has been a focus on targeted versus mass marketing, the impact of natural gas exploration throughout our footprint, and our willingness to work with local municipalities to provide products that fit their specific needs.  In addition, we have started a campaign that focuses on the opening of specific types of accounts and the cross selling of related services such as debit cards and internet banking,” commented Mr. Walko.

Shareholders’ equity decreased $5,198,000 to $64,522,000 at June 30, 2008 as accumulated comprehensive income decreased $5,201,000, and $1,028,000 in treasury stock was strategically purchased as part of the previously announced stock buyback plan, while net income outpaced dividends paid.  The decrease in accumulated comprehensive income is a result of a decline in the market value of certain securities held in the investment portfolio at June 30, 2008 compared to June 30, 2007, and the net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan.  The current level of shareholders’ equity equates to a book value per share of $16.72 at June 30, 2008 compared to $17.93 at June 30, 2007 and an equity to asset ratio of 10.17% at June 30, 2008.  Book value per share, excluding accumulated comprehensive income, was $19.11 at June 30, 2008 compared to $18.97 at June 30, 2007.  During the three and six months ended June 30, 2008 cash dividends of $0.46 and $0.92 per share were paid to shareholders compared to $0.44 and $0.88 for the comparable periods of 2007.

“Our commitment to building shareholder value through sound balance sheet growth, income diversification, and prudent capital management remains steadfast.  Over the past year we have grown the balance sheet by building our deposit base which has been utilized to fund solid well collateralized loans.  Growth in non-interest income from sources such as insurance and annuity sales, debit and credit card interchange fees, and title insurance has aided in reducing the dependence on net interest income to provide for bottom line net income.  The strength of our core operating earnings coupled with the purchase of 18,516 treasury shares and a dividend of $0.92 per share during the first six months of 2008 has allowed capital to be maintained at a level that provides for future asset growth, while providing a dividend yield in excess of 5%,” commented Mr. Walko.  The range of closing prices for Penns Woods Bancorp, Inc. stock was between $30.01 and $33.15 during the three month periods and $29.66 and $33.47 for the six month periods ended June 30 2008.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, and Centre Counties.  Investment and insurance

products are offered through the bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

NOTE:  This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”).  Management uses the non-GAAP measure of net income from core operations in its analysis of the company’s performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature. Because certain of these items and their impact on the Company’s performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company’s core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release may contain certain “forward-looking statements” including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact.  The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein:  (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; and (v) the effect of changes in the business cycle and downturns in the local, regional or national economies.

Previous press releases and additional information can be obtained from the Company’s website at www.jssb.com.

Contact:	Ronald A. Walko, President and Chief Executive Officer
	115 South Main Street
	Jersey Shore, PA 17740
	570-322-1111	email-jssb@jssb.com

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

	June 30,
(In Thousands, Except Share Data)	2008			2007			% Change
ASSETS
Noninterest-bearing balances	$	17,193		$	11,315		51.9	%
Interest-bearing deposits in other financial institutions	16			16			0.0	%
Total cash and cash equivalents	17,209			11,331			51.9	%
Investment securities, available for sale, at fair value	209,284			181,308			15.4	%
Investment securities held to maturity (fair value of $161 and $277)	160			275			-41.8	%
Loans held for sale	3,590			5,345			-32.8	%
Loans	365,955			356,175			2.7	%
Less: Allowance for loan losses	4,207			4,162			1.1	%
Loans, net	361,748			352,013			2.8	%
Premises and equipment, net	7,449			6,964			7.0	%
Accrued interest receivable	3,322			3,015			10.2	%
Bank-owned life insurance	13,319			12,149			9.6	%
Investment in limited partnerships	5,083			4,666			8.9	%
Goodwill	3,032			3,032			0.0	%
Other assets	10,308			6,474			59.2	%
TOTAL ASSETS	$	634,504		$	586,572		8.2	%
LIABILITIES
Interest-bearing deposits	$	358,013		$	335,903		6.6	%
Noninterest-bearing deposits	79,908			70,000			14.2	%
Total deposits	437,921			405,903			7.9	%
Short-term borrowings	48,081			28,359			69.5	%
Long-term borrowings, Federal Home Loan Bank (FHLB)	76,778			76,378			0.5	%
Accrued interest payable	1,463			1,647			-11.2	%
Other liabilities	5,739			4,565			25.7	%
TOTAL LIABILITIES	569,982			516,852			10.3	%
SHAREHOLDERS’ EQUITY
Common stock, par value $8.33, 10,000,000 shares authorized; 4,008,833 and 4,005,342 shares issued	33,407			33,378			0.1	%
Additional paid-in capital	17,930			17,852			0.4	%
Retained earnings	27,898			26,974			3.4	%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities	(7,860		)	(3,455		)	127.5	%
Defined benefit plan	(1,375		)	(579		)	137.5	%
Less: Treasury stock at cost, 149,818 and 117,802 shares	(5,478		)	(4,450		)	23.1	%
TOTAL SHAREHOLDERS’ EQUITY	64,522			69,720			-7.5	%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	634,504		$	586,572		8.2	%

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

	Three Months Ended							Six Months Ended
	June 30,							June 30,
(In Thousands, Except Per Share Data)	2008			2007		% Change		2008			2007		% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees	$	6,246		$	6,516	-4.1	%	$	12,625		$	12,939	-2.4	%
Investment Securities:
Taxable	1,276			924		38.1	%	2,466			1,747		41.2	%
Tax-exempt	1,210			1,052		15.0	%	2,436			2,163		12.6	%
Dividend and other interest income	204			301		-32.2	%	457			623		-26.6	%
TOTAL INTEREST AND DIVIDEND INCOME	8,936			8,793		1.6	%	17,984			17,472		2.9	%
INTEREST EXPENSE:
Deposits	2,551			2,868		-11.1	%	5,092			5,380		-5.4	%
Short-term borrowings	257			227		13.2	%	686			732		-6.3	%
Long-term borrowings, FHLB	972			904		7.5	%	2,169			1,826		18.8	%
TOTAL INTEREST EXPENSE	3,780			3,999		-5.5	%	7,947			7,938		0.1	%
NET INTEREST INCOME	5,156			4,794		7.6	%	10,037			9,534		5.3	%
PROVISION FOR LOAN LOSSES	60			10		500.0	%	120			50		140.0	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	5,096			4,784		6.5	%	9,917			9,484		4.6	%
NON-INTEREST INCOME:
Deposit service charges	540			567		-4.8	%	1,110			1,108		0.2	%
Securities (losses) gains, net	(251		)	293		-185.7	%	(213		)	619		-134.4	%
Bank-owned life insurance	91			86		5.8	%	246			201		22.4	%
Gain on sale of loans	212			234		-9.4	%	364			372		-2.2	%
Insurance commissions	486			550		-11.6	%	1,066			988		7.9	%
Other	543			456		19.1	%	962			872		10.3	%
TOTAL NON-INTEREST INCOME	1,621			2,186		-25.8	%	3,535			4,160		-15.0	%
NON-INTEREST EXPENSE:
Salaries and employee benefits	2,469			2,301		7.3	%	4,920			4,582		7.4	%
Occupancy, net	314			337		-6.8	%	652			668		-2.4	%
Furniture and equipment	287			297		-3.4	%	572			583		-1.9	%
Pennsylvania shares tax	105			161		-34.8	%	210			322		-34.8	%
Amortization of investments in limited partnerships	178			142		25.4	%	356			283		25.8	%
Other	1,158			1,102		5.1	%	2,246			2,030		10.6	%
TOTAL NON-INTEREST EXPENSE	4,511			4,340		3.9	%	8,956			8,468		5.8	%
INCOME BEFORE INCOME TAX PROVISION	2,206			2,630		-16.1	%	4,496			5,176		-13.1	%
INCOME TAX PROVISION	149			295		-49.5	%	308			560		-45.0	%
NET INCOME	$	2,057		$	2,335	-11.9	%	$	4,188		$	4,616	-9.3	%
EARNINGS PER SHARE - BASIC	$	0.53		$	0.60	-11.7	%	$	1.08		$	1.19	-9.2	%
EARNINGS PER SHARE - DILUTED	$	0.53		$	0.60	-11.7	%	$	1.08		$	1.19	-9.2	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	3,865,977			3,889,139		-0.6	%	3,870,359			3,893,286		-0.6	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	3,866,115			3,889,401		-0.6	%	3,870,523			3,893,586		-0.6	%
DIVIDENDS PER SHARE	$	0.46		$	0.44	4.5	%	$	0.92		$	0.88	4.5	%

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES

	For the Three Months Ended
	June 30, 2008						June 30, 2007
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
ASSETS:
Tax-exempt loans	$	8,506	$	135	6.31	%	$	7,819	$	120	6.16	%
All other loans	358,980		6,157		6.82	%	353,019		6,437		7.31	%
Total loans	367,486		6,292		6.81	%	360,838		6,557		7.29	%
Taxable securities	105,295		1,480		5.62	%	83,328		1,209		5.80	%
Tax-exempt securities	108,670		1,833		6.75	%	100,403		1,594		6.35	%
Total securities	213,965		3,313		6.19	%	183,731		2,803		6.10	%
Interest bearing deposits	34		—		0.00	%	1,230		16		5.22	%
Total interest-earning assets	581,485		9,605		6.58	%	545,799		9,376		6.88	%
Other assets	50,186						43,594
TOTAL ASSETS	$	631,671					$	589,393
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings	$	61,197	115		0.75	%	$	59,906	110		0.74	%
Super Now deposits	54,327		183		1.34	%	47,531		153		1.29	%
Money Market deposits	26,803		146		2.17	%	26,346		158		2.41	%
Time deposits	209,539		2,107		4.00	%	205,554		2,447		4.77	%
Total Deposits	351,866		2,551		2.88	%	339,337		2,868		3.39	%
Short-term borrowings	41,319		257		2.45	%	22,239		227		4.09	%
Long-term borrowings	85,789		972		4.43	%	77,971		904		4.65	%
Total borrowings	127,108		1,229		3.79	%	100,210		1,131		4.53	%
Total interest-bearing liabilities	478,974		3,780		3.12	%	439,547		3,999		3.65	%
Demand deposits	73,485						68,677
Other liabilities	9,095						6,888
Shareholders’ equity	70,117						74,281
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	631,671					$	589,393
Interest rate spread					3.46	%					3.23	%
Net interest income/margin			$	5,825	4.01	%			$	5,377	3.95	%

	For the Three Months Ended
	June 30,
	2008		2007
Total interest income	$	8,936	$	8,793
Total interest expense	3,780		3,999
Net interest income	5,156		4,794
Tax equivalent adjustment	669		583
Net interest income (fully taxable equivalent)	$	5,825	$	5,377

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES

	For the Six Months Ended
	June 30, 2008						June 30, 2007
	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
ASSETS:
Tax-exempt loans	$	8,277	$	262	6.37	%	$	8,022	$	247	6.21	%
All other loans	356,830		12,453		7.02	%	352,829		12,776		7.30	%
Total loans	365,107		12,715		7.00	%	360,851		13,023		7.28	%
Taxable securities	103,013		2,923		5.68	%	82,952		2,353		5.67	%
Tax-exempt securities	111,630		3,691		6.61	%	101,588		3,277		6.45	%
Total securities	214,643		6,614		6.16	%	184,540		5,630		6.10	%
Interest bearing deposits	19		—		0.00	%	629		17		5.45	%
Total interest-earning assets	579,769		19,329		6.69	%	546,020		18,670		6.88	%
Other assets	49,325						41,723
TOTAL ASSETS	$	629,094					$	587,743
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings	$	59,880	224		0.75	%	$	59,454	215		0.73	%
Super Now deposits	50,347		338		1.35	%	46,196		302		1.32	%
Money Market deposits	25,064		273		2.19	%	24,962		283		2.29	%
Time deposits	200,233		4,257		4.28	%	195,712		4,580		4.72	%
Total Deposits	335,524		5,092		3.05	%	326,324		5,380		3.32	%
Short-term borrowings	46,216		686		2.95	%	32,206		732		4.58	%
Long-term borrowings	95,661		2,169		4.48	%	79,339		1,826		4.64	%
Total borrowings	141,877		2,855		3.99	%	111,545		2,558		4.62	%
Total interest-bearing liabilities	477,401		7,947		3.33	%	437,869		7,938		3.66	%
Demand deposits	71,864						68,446
Other liabilities	9,280						6,673
Shareholders’ equity	70,549						74,755
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	629,094					$	587,743
Interest rate spread					3.36	%					3.22	%
Net interest income/margin			$	11,382	3.95	%			$	10,732	3.95	%

	For the Six Months Ended
	June 30,
	2008		2007
Total interest income	$	17,984	$	17,472
Total interest expense	7,947		7,938
Net interest income	10,037		9,534
Tax equivalent adjustment	1,345		1,198
Net interest income (fully taxable equivalent)	$	11,382	$	10,732

	Quarter Ended
(Dollars in Thousands, Except Per Share Data)	6/30/2008			3/31/2008			12/31/2007			9/30/2007			6/30/2007
Operating Data
Net income	$	2,057		$	2,131		$	1,939		$	2,322		$	2,335
Net interest income	5,156			4,881			5,103			4,865			4,794
Provision for loan losses	60			60			90			10			10
Net security gains (losses)	(251		)	38			(673		)	—			293
Non-interest income, ex. net security gains (losses)	1,872			1,876			1,985			2,006			1,893
Non-interest expense	4,511			4,445			4,418			4,430			4,340
Performance Statistics
Net interest margin	4.01		%	3.87		%	3.93		%	3.98		%	3.95		%
Annualized return on average assets	1.30		%	1.36		%	1.25		%	1.57		%	1.58		%
Annualized return on average equity	11.73		%	12.01		%	10.68		%	13.21		%	12.57		%
Annualized net loan charge-offs to avg loans	0.01		%	0.04		%	0.06		%	0.09		%	0.05		%
Net charge-offs	7			36			52			80			49
Efficiency ratio	64.2			65.8			62.3			64.5			64.9
Per Share Data
Basic earnings per share	$	0.53		$	0.55		$	0.50		$	0.60		$	0.60
Diluted earnings per share	0.53			0.55			0.50			0.60			0.60
Dividend declared per share	0.46			0.46			0.46			0.45			0.44
Book value	16.72			17.86			18.21			18.46			17.93
Common stock price:
High	33.15			33.47			32.50			35.00			35.00
Low	30.01			29.66			30.33			30.80			33.86
Close	31.25			33.15			32.50			31.99			34.24
Weighted average common shares:
Basic	3,866			3,875			3,878			3,881			3,889
Fully Diluted	3,866			3,875			3,878			3,882			3,889
End-of-period common shares:
Issued	4,009			4,008			4,007			4,006			4,005
Treasury	150			136			131			129			118

	Quarter Ended
(Dollars in Thousands, Except Per Share Data)	6/30/2008			3/31/2008			12/31/2007			9/30/2007			6/30/2007
Financial Condition Data:
General
Total assets	$	634,504		$	631,016		$	628,138		$	613,329		$	586,572
Loans, net	361,748			353,455			356,348			353,623			352,013
Intangibles	3,032			3,032			3,032			3,032			3,032
Total deposits	437,921			396,125			389,022			404,854			405,903
Noninterest-bearing	79,908			71,662			74,671			72,990			70,000
Savings	62,847			59,985			56,757			59,883			59,798
NOW	52,948			50,193			50,883			47,129			48,555
Money Market	28,860			25,110			21,029			22,295			23,422
Time Deposits	213,358			189,175			185,682			202,557			204,128
Total interest-bearing deposits	358,013			324,463			314,351			331,864			335,903
Core deposits*	224,563			206,950			203,340			202,297			201,775
Shareholders’ equity	64,522			69,154			70,559			71,552			69,720
Asset Quality
Non-performing assets	$	909		$	1,427		$	1,320		$	1,013		$	1,098
Non-performing assets to total assets	0.14		%	0.23		%	0.21		%	0.17		%	0.19		%
Allowance for loan losses	4,207			4,154			4,130			4,092			4,162
Allowance for loan losses to total loans	1.15		%	1.16		%	1.15		%	1.14		%	1.17		%
Allowance for loan losses to non-performing loans	462.82		%	291.10		%	312.88		%	403.95		%	379.05		%
Non-performing loans to total loans	0.25		%	0.40		%	0.37		%	0.28		%	0.31		%
Capitalization
Shareholders’ equity to total assets	10.17		%	10.96		%	11.23		%	11.67		%	11.89		%

* Core deposits are defined as total deposits less time deposits