Form 8-K - Current report

0000716605False00007166052024-01-292024-01-29

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 25, 2024 

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			17703-0967
Williamsport			Pennsylvania			(Zip Code)
(Address of principal executive offices)

 

			(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:

 

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

 

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

 

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

 

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

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, $5.55 par value

PWOD

The Nasdaq Global Select Market

Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2) ☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

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Item 2.02                                           Results of Operation and Financial Condition.

 

On July 25, 2024, Penns Woods Bancorp, Inc. (the “Company”) distributed a press release announcing its earnings for the period ended June 30, 2024.  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 25, 2024, of Penns Woods Bancorp, Inc. announcing earnings for the period ended June 30, 2024.

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 25, 2024
						By:			/s/  Brian L. Knepp
									Brian L. Knepp
									President and Chief Financial Officer

 

EXHIBIT INDEX

 

Exhibit Number						Description
99.1						Press release, dated July 25, 2024, of Penns Woods Bancorp, Inc. announcing earnings for the period ended June 30, 2024.
104						Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).

Exhibit 99.1

Press Release — For Immediate Release

July 25, 2024

Penns Woods Bancorp, Inc. Reports Second Quarter 2024 Earnings

Williamsport, PA — July 25, 2024 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $9.2 million for the six months ended June 30, 2024, resulting in basic and diluted earnings per share of $1.22.

Highlights

•Net income, as reported under GAAP, for the three and six months ended June 30, 2024 was $5.4 million and $9.2 million, respectively, compared to $4.2 million and $8.8 million for the same periods of 2023. Results for the three and six months ended June 30, 2024 compared to 2023 were impacted by a increase in net interest income of $1.1 million and $577,000 as the cost of funds has stabilized, which led to a 14 basis point increase in the net interest margin for the second quarter of 2024 compared to the first quarter of 2024. The disposal of assets related to two former branch properties resulted in a one time after-tax loss of $261,000 for the six month period ended June 30, 2024.

•The allowance for credit losses was impacted for the three and six months ended June 30, 2024 by negative provisions for credit losses of $1.2 million and $1.0 million, respectively, compared to negative provisions for credit losses of $1.2 million and $1.1 million for the 2023 periods. The recognition of negative provisions for credit losses for all periods is due primarily to recoveries during the second quarter of 2024 and 2023 on a commercial loan. In addition, a minimal level of loan charge-offs contributed to the recognition of the negative provisions for credit losses.

•Basic and diluted earnings per share for the three and six months ended June 30, 2024 were $0.72 and $1.22, respectively, compared to basic and diluted earnings per share of $0.59 and $1.25 for the three and six month periods ended June 30, 2023.

•Annualized return on average assets was 0.97% for the three months ended June 30, 2024, compared to 0.80% for the corresponding period of 2023. Annualized return on average assets was 0.83% for the six months ended June 30, 2024, compared to 0.86% for the corresponding period of 2023.

•Annualized return on average equity was 11.12% for the three months ended June 30, 2024, compared to 9.53% for the corresponding period of 2023. Annualized return on average equity was 9.67% for the six months ended June 30, 2024, compared to 10.37% for the corresponding period of 2023.

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 $5.4 million and $9.2 million, respectively, for the three and six months ended June 30, 2024 compared to $4.2 million and $8.9 million for the same periods of 2023. Basic and diluted core earnings per share (non-GAAP) for the three and six months ended June 30, 2024 were $0.72 and $1.23, respectively, while basic and diluted core earnings per share for the same periods of 2023 were $0.60 and $1.26. Annualized core return on average assets and core return on average equity (non-GAAP) were 0.98% and 11.15%, respectively, for the three months ended June 30, 2024, compared to 0.80% and 9.60% for the corresponding period of 2023. Annualized core return on average assets and core return on average equity (non-GAAP) were 0.83% and 9.72%, respectively, for the six months ended June 30, 2024, compared to 0.86% and 10.44% for the corresponding period of 2023. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, core earnings per share and tangible book value per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

1

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Net Interest Margin

The net interest margin for the three and six months ended June 30, 2024 was 2.83% and 2.75% respectively, compared to 2.77% and 2.92% for the corresponding periods of 2023. The increase in the net interest margin for the three month period was driven by an increase in the rate paid on interest-earning assets of 74 basis points ("bps"), while the decrease in the net interest margin for the six month period was driven by a 120 bps increase in the rate paid on interest-bearing liabilities. The FOMC rate increases enacted over the past several years contributed to the increase in rate paid on interest-bearing liabilities as the rate paid on interest-bearing liabilities increased 86 bps and 120 bps for the three and six month periods ended June 30, 2024 compared to the same periods of 2023. Short-term borrowings decreased in volume, which offset the impact of an increase in rate paid, resulting in a decrease of $1.1 million and $580,000 in expense for the three and six month periods ended June 30, 2024 compared to the same periods of 2023. The rate paid on interest-bearing deposits increased 115 bps and 137 bps or $4.0 million and $8.6 million in expense for the three and six month periods ended June 30, 2024 compared to the corresponding periods of 2023 due to the FOMC rate actions, an increase in competition for deposits, and a migration of deposit balances from core deposits to higher rate time deposits. The rates paid on time deposits significantly contributed to the increase in funding costs as rates paid for the three and six month periods ended June 30, 2024 compared to the same periods of 2023 increased 119 bps and 150 bps, respectively, or $2.8 million and $6.0 million in expense, as deposit gathering campaigns continued to focus on time deposits with a maturity of five months. In addition, brokered deposits have been utilized to assist with funding 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 assets portfolio compared to the same periods in 2023. The average loan portfolio balance increased $120.8 million and $153.0 million for the three and six month periods ended June 30, 2024 compared to the same periods of 2023 as the average yield on the portfolio increased 73 bps and 76 bps resulting in an increase in taxable equivalent interest income of $4.7 million and $10.5 million for the periods. The three and six month periods ended June 30, 2024 were impacted by an increase of 78 bps and 79 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates, which resulted in an increase of taxable equivalent interest income of $434,000 and $897,000, respectively.

Assets

Total assets increased to $2.2 billion at June 30, 2024, an increase of $99.3 million compared to June 30, 2023.  Net loans increased $97.2 million to $1.9 billion at June 30, 2024 compared to June 30, 2023, as continued emphasis was placed on commercial loan growth coupled with growth in indirect auto lending. The investment portfolio increased $11.4 million from June 30, 2023 to June 30, 2024. Investment debt securities increased $13.1 million from June 30, 2023 to June 30, 2024 as fixed rate instruments with maturities of approximately ten years were added to the portfolio to lock in yields prior to anticipated FOMC actions to reduce interest rates. The decrease in total borrowings of $19.6 million to $363.5 million at June 30, 2024 was the result of increased utilization of brokered deposits which replaced short-term borrowings.

Non-performing Loans

The ratio of non-performing loans to total loans ratio increased to 0.36% at June 30, 2024 from 0.24% at June 30, 2023, as non-performing loans increased to $6.8 million at June 30, 2024 from $4.3 million at June 30, 2023. 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 $396,000 and $16,000 for the three and six months ended June 30, 2024, respectively, impacted the allowance for credit losses, which was 0.60% of total loans at June 30, 2024 compared to 0.66% at June 30, 2023. Exposure to non-owner occupied office space is minimal at $15.5 million at June 30, 2024 with none of these loans being delinquent.

Deposits

Deposits increased $94.3 million to $1.6 billion at June 30, 2024 compared to June 30, 2023. Noninterest-bearing deposits decreased $14.8 million to $461.1 million at June 30, 2024 compared to June 30, 2023.  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. Core deposits have remained stable at $1.2 billion over the past five quarters. Interest-bearing deposits increased $109.2 million from June 30, 2023 to June 30, 2024 primarily due to growth in the time deposit portfolio of $84.0 million as customers sought a higher rate of interest. Brokered deposit balances increased $41.3 million from June 20,2023 to June 30, 2024 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 throughout 2023 and 2024 with current efforts centered on five months.

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Shareholders’ Equity

Shareholders’ equity increased $22.7 million to $197.1 million at June 30, 2024 compared to June 30, 2023 due in part to a registered at-the-market offering that generated $8.3 million in capital during the second half of 2023.  During the three and six months ended June 30, 2024 there were no shares issued as part of the registered at-the-market offering. A total of 11,036 and 21,976 shares for net proceeds of $222,000 and $427,000 were issued as part of the Dividend Reinvestment Plan during the three and six months ended June 30 2024. Accumulated other comprehensive loss of $9.1 million at June 30, 2024 decreased from a loss of $13.8 million at June 30, 2023 as a result of a decrease in net unrealized loss on available for sale securities to $6.3 million at June 30, 2024 from a net unrealized loss of $9.8 million at June 30, 2023 coupled with a decrease in loss of $1.4 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $26.13 at June 30, 2024 compared to $24.69 at June 30, 2023, and an equity to asset ratio of 8.82% at June 30, 2024 and 8.17% at June 30, 2023. Tangible book value per share (a non-GAAP measure) increased to $23.93 at June 30, 2024 compared to $22.32 at June 30, 2023. Dividends declared for the three and six months ended June 30, 2024 and 2023 were $0.32 and $0.64 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, 2023.

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: [e-mail]

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PENNS WOODS BANCORP, INC.

CONSOLIDATED BALANCE SHEET

(UNAUDITED)

 

						June 30,
(In Thousands, Except Share and Per Share Data)						2024						2023						% Change
ASSETS:
Noninterest-bearing balances						$	24,996					$	32,265					(22.53)		%
Interest-bearing balances in other financial institutions						10,100						12,596						(19.82)		%
Total cash and cash equivalents						35,096						44,861						(21.77)		%
Investment debt securities, available for sale, at fair value						199,718						186,626						7.02		%
Investment equity securities, at fair value						1,105						1,143						(3.32)		%
Restricted investment in bank stock						22,781						24,438						(6.78)		%
Loans held for sale						4,444						3,049						45.75		%
Loans						1,866,288						1,769,403						5.48		%
Allowance for credit losses						(11,234)						(11,592)						(3.09)		%
Loans, net						1,855,054						1,757,811						5.53		%
Premises and equipment, net						28,966						31,180						(7.10)		%
Accrued interest receivable						11,281						9,498						18.77		%
Bank-owned life insurance						33,024						33,524						(1.49)		%
Investment in limited partnerships						7,240						8,402						(13.83)		%
Goodwill						16,450						16,450						—		%
Intangibles						158						260						(39.23)		%
Operating lease right of use asset						2,911						2,586						12.57		%
Deferred tax asset						4,433						6,332						(29.99)		%
Other assets						11,956						9,159						30.54		%
TOTAL ASSETS						$	2,234,617					$	2,135,319					4.65		%
LIABILITIES:
Interest-bearing deposits						$	1,187,001					$	1,077,820					10.13		%
Noninterest-bearing deposits						461,092						475,937						(3.12)		%
Total deposits						1,648,093						1,553,757						6.07		%
Short-term borrowings						106,407						180,410						(41.02)		%
Long-term borrowings						257,111						202,692						26.85		%
Accrued interest payable						5,474						2,129						157.12		%
Operating lease liability						2,983						2,642						12.91		%
Other liabilities						17,462						19,287						(9.46)		%
TOTAL LIABILITIES						2,037,530						1,960,917						3.91		%
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; 8,051,699 and 7,573,713 shares issued; 7,541,474 and 7,063,488 shares outstanding						44,730						42,077						6.31		%
Additional paid-in capital						62,608						54,869						14.10		%
Retained earnings						111,622						104,104						7.22		%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities						(6,328)						(9,753)						35.12		%
Defined benefit plan						(2,730)						(4,080)						33.09		%
Treasury stock at cost, 510,225 shares						(12,815)						(12,815)						—		%
TOTAL SHAREHOLDERS' EQUITY						197,087						174,402						13.01		%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY						$	2,234,617					$	2,135,319					4.65		%

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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)						2024						2023						% Change						2024						2023						% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees						$	24,529					$	19,846					23.60		%				$	48,389					$	37,851					27.84		%
Investment securities:
Taxable						1,745						1,287						35.59		%				3,339						2,505						33.29		%
Tax-exempt						75						118						(36.44)		%				172						296						(41.89)		%
Dividend and other interest income						680						642						5.92		%				1,359						1,105						22.99		%
TOTAL INTEREST AND DIVIDEND INCOME						27,029						21,893						23.46		%				53,259						41,757						27.55		%
INTEREST EXPENSE:
Deposits						8,877						4,851						82.99		%				16,840						8,223						104.79		%
Short-term borrowings						1,087						2,232						(51.30)		%				3,092						3,672						(15.80)		%
Long-term borrowings						2,550						1,424						79.07		%				5,066						2,178						132.60		%
TOTAL INTEREST EXPENSE						12,514						8,507						47.10		%				24,998						14,073						77.63		%
NET INTEREST INCOME						14,515						13,386						8.43		%				28,261						27,684						2.08		%
RECOVERY OF CREDIT LOSSES						(1,177)						(1,180)						0.25		%				(1,039)						(1,109)						6.31		%
NET INTEREST INCOME AFTER RECOVERY OF CREDIT LOSSES						15,692						14,566						7.73		%				29,300						28,793						1.76		%
NON-INTEREST INCOME:
Service charges						499						516						(3.29)		%				1,014						1,012						0.20		%
Net debt securities losses, available for sale						(12)						(19)						36.84		%				(35)						(80)						56.25		%
Net equity securities (losses) gains						(7)						(20)						65.00		%				(17)						1						N/M
Bank-owned life insurance						187						166						12.65		%				650						722						(9.97)		%
Gain on sale of loans						300						244						22.95		%	.			605						475						27.37		%
Insurance commissions						127						115						10.43		%				280						280						—		%
Brokerage commissions						171						141						21.28		%				357						306						16.67		%
Loan broker income						268						317						(15.46)		%				490						487						0.62		%
Debit card income						368						340						8.24		%				697						675						3.26		%
Other						124						222						(44.14)		%				446						401						11.22		%
TOTAL NON-INTEREST INCOME						2,025						2,022						0.15		%				4,487						4,279						4.86		%
NON-INTEREST EXPENSE:
Salaries and employee benefits						6,400						6,312						1.39		%				12,822						12,488						2.67		%
Occupancy						758						772						(1.81)		%				1,663						1,638						1.53		%
Furniture and equipment						766						790						(3.04)		%				1,705						1,636						4.22		%
Software amortization						222						173						28.32		%				412						356						15.73		%
Pennsylvania shares tax						351						279						25.81		%				671						527						27.32		%
Professional fees						572						906						(36.87)		%				1,124						1,594						(29.49)		%
Federal Deposit Insurance Corporation deposit insurance						421						452						(6.86)		%				780						697						11.91		%
Marketing						78						272						(71.32)		%				149						427						(65.11)		%
Intangible amortization						25						32						(21.88)		%				51						67						(23.88)		%
Other						1,403						1,441						(2.64)		%				3,242						2,897						11.91		%
TOTAL NON-INTEREST EXPENSE						10,996						11,429						(3.79)		%				22,619						22,327						1.31		%
INCOME BEFORE INCOME TAX PROVISION						6,721						5,159						30.28		%				11,168						10,745						3.94		%
INCOME TAX PROVISION						1,331						988						34.72		%				1,970						1,916						2.82		%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'						$	5,390					$	4,171					29.23		%				$	9,198					$	8,829					4.18		%
EARNINGS PER SHARE - BASIC						$	0.72					$	0.59					22.03		%				$	1.22					$	1.25					(2.40)		%
EARNINGS PER SHARE - DILUTED						$	0.72					$	0.59					22.03		%				$	1.22					$	1.25					(2.40)		%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC						7,529,239						7,062,018						6.62		%				7,520,880						7,060,218						6.52		%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED						7,529,239						7,062,018						6.62		%				7,520,880						7,060,218						6.52		%

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PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES 

(UNAUDITED)

						Three Months Ended
						June 30, 2024																		June 30, 2023
(Dollars in Thousands)						Average  Balance (1)						Interest						Average  Rate						Average  Balance (1)						Interest						Average  Rate
ASSETS:
Tax-exempt loans (3)						$	68,826					$	493					2.88		%				$	66,613					$	461					2.78		%
All other loans						1,790,712						24,140						5.42		%				1,672,111						19,482						4.67		%
Total loans (2)						1,859,538						24,633						5.33		%				1,738,724						19,943						4.60		%
Taxable securities						203,687						2,296						4.58		%				190,862						1,807						3.84		%
Tax-exempt securities (3)						12,896						95						3.00		%				23,310						150						2.61		%
Total securities						216,583						2,391						4.49		%				214,172						1,957						3.71		%
Interest-bearing balances in other financial institutions						10,783						129						4.81		%				9,961						122						4.91		%
Total interest-earning assets						2,086,904						27,153						5.24		%				1,962,857						22,022						4.50		%
Other assets						129,783																		133,239
TOTAL ASSETS						$	2,216,687																	$	2,096,096
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings						$	218,430					261						0.48		%				$	232,889					155						0.27		%
Super Now deposits						218,200						1,086						2.00		%				271,438						913						1.35		%
Money market deposits						310,323						2,594						3.36		%				293,682						1,665						2.27		%
Time deposits						448,571						4,936						4.43		%				261,947						2,118						3.24		%
Total interest-bearing deposits						1,195,524						8,877						2.99		%				1,059,956						4,851						1.84		%
Short-term borrowings						79,190						1,087						5.52		%				169,723						2,232						5.27		%
Long-term borrowings						260,312						2,550						3.94		%				182,719						1,424						3.13		%
Total borrowings						339,502						3,637						4.31		%				352,442						3,656						4.16		%
Total interest-bearing liabilities						1,535,026						12,514						3.28		%				1,412,398						8,507						2.42		%
Demand deposits						459,876																		484,607
Other liabilities						27,880																		24,059
Shareholders’ equity						193,905																		175,032
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY						$	2,216,687																	$	2,096,096
Interest rate spread (3)																		1.96		%																2.08		%
Net interest income/margin (3)												$	14,639					2.83		%										$	13,515					2.77		%

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 June 30,
						2024						2023
Total interest income						$	27,029					$	21,893
Total interest expense						12,514						8,507
Net interest income (GAAP)						14,515						13,386
Tax equivalent adjustment						124						129
Net interest income (fully taxable equivalent) (non-GAAP)						$	14,639					$	13,515

6

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PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES 

(UNAUDITED)

						Six Months Ended
						June 30, 2024																		June 30, 2023
(Dollars in Thousands)						Average  Balance (1)						Interest						Average  Rate						Average  Balance (1)						Interest						Average  Rate
ASSETS:
Tax-exempt loans (3)						$	69,026					$	956					2.78		%				$	65,669					$	909					2.79		%
All other loans						1,786,399						47,634						5.36		%				1,636,798						37,133						4.57		%
Total loans (2)						1,855,425						48,590						5.27		%				1,702,467						38,042						4.51		%
Taxable securities						201,981						4,440						4.42		%				186,168						3,386						3.67		%
Tax-exempt securities (3)						14,712						218						2.98		%				28,409						375						2.66		%
Total securities						216,693						4,658						4.32		%				214,577						3,761						3.53		%
Interest-bearing balances in other financial institutions						10,491						258						4.95		%				9,985						224						4.52		%
Total interest-earning assets						2,082,609						53,506						5.17		%				1,927,029						42,027						4.20		%
Other assets						130,370																		132,561
TOTAL ASSETS						$	2,212,979																	$	2,059,590
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings						$	218,576					529						0.49		%				$	238,067					275						0.23		%
Super Now deposits						217,035						2,170						2.01		%				318,669						1,852						1.17		%
Money market deposits						301,515						4,953						3.30		%				291,719						2,945						2.04		%
Time deposits						427,870						9,188						4.32		%				225,414						3,151						2.82		%
Total interest-bearing deposits						1,164,996						16,840						2.91		%				1,073,869						8,223						1.54		%
Short-term borrowings						111,770						3,092						5.60		%				145,871						3,672						5.09		%
Long-term borrowings						260,004						5,066						3.92		%				151,169						2,178						2.91		%
Total borrowings						371,774						8,158						4.42		%				297,040						5,850						3.98		%
Total interest-bearing liabilities						1,536,770						24,998						3.27		%				1,370,909						14,073						2.07		%
Demand deposits						455,877																		491,356
Other liabilities						30,178																		27,050
Shareholders’ equity						190,154																		170,275
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY						$	2,212,979																	$	2,059,590
Interest rate spread (3)																		1.90		%																2.13		%
Net interest income/margin (3)												$	28,508					2.75		%										$	27,954					2.92		%

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%

						Six months ended June 30,
						2024						2023
Total interest income						$	53,259					$	41,757
Total interest expense						24,998						14,073
Net interest income (GAAP)						28,261						27,684
Tax equivalent adjustment						247						270
Net interest income (fully taxable equivalent) (non-GAAP)						$	28,508					$	27,954

7

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(Dollars in Thousands, Except Per Share Data, Unaudited)						Quarter Ended
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
Operating Data
Net income						$	5,390					$	3,808					$	5,555					$	2,224					$	4,171
Net interest income						14,515						13,746						13,948						13,332						13,386
(Recovery) provision for credit losses						(1,177)						138						(1,742)						1,372						(1,180)
Net security losses						(19)						(33)						(18)						(81)						(39)
Non-interest income, excluding net security losses						2,044						2,495						2,239						1,956						2,061
Non-interest expense						10,996						11,623						10,997						11,172						11,429
Performance Statistics
Net interest margin						2.83		%				2.69		%				2.73		%				2.65		%				2.77		%
Annualized cost of total deposits						2.14		%				2.01		%				1.89		%				1.64		%				1.26		%
Annualized non-interest income to average assets						0.37		%				0.45		%				0.41		%				0.35		%				0.39		%
Annualized non-interest expense to average assets						1.98		%				2.10		%				2.02		%				2.07		%				2.18		%
Annualized return on average assets						0.97		%				0.69		%				1.02		%				0.41		%				0.80		%
Annualized return on average equity						11.12		%				8.03		%				12.60		%				5.06		%				9.53		%
Annualized net loan (recoveries) charge-offs to average loans						(0.09)		%				0.08		%				(0.05)		%				0.01		%				(0.11)		%
Net (recoveries) charge-offs						(396)						380						(209)						33						(472)
Efficiency ratio						66.25		%				71.41		%				67.78		%				72.76		%				73.78		%
Per Share Data
Basic earnings per share						$	0.72					$	0.51					$	0.77					$	0.31					$	0.59
Diluted earnings per share						0.72						0.51						0.77						0.31						0.59
Dividend declared per share						0.32						0.32						0.32						0.32						0.32
Book value						26.13						25.72						25.51						24.55						24.69
Tangible book value						23.93						23.50						23.29						22.20						22.32
Common stock price:
High						21.08						22.64						23.64						27.17						27.34
Low						17.17						18.44						20.05						20.70						21.95
Close						20.55						19.41						22.51						21.08						25.03
Weighted average common shares:
Basic						7,529						7,513						7,255						7,072						7,062
Fully Diluted						7,529						7,513						7,255						7,229						7,062
End-of-period common shares:
Issued						8,052						8,036						8,019						7,620						7,574
Treasury						(510)						(510)						(510)						(510)						(510)

8

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(Dollars in Thousands, Unaudited)						Quarter Ended
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
Financial Condition Data:
General
Total assets						$	2,234,617					$	2,210,116					$	2,204,809					$	2,176,468					$	2,135,319
Loans, net						1,855,054						1,843,805						1,828,318						1,805,571						1,757,811
Goodwill						16,450						16,450						16,450						16,450						16,450
Intangibles						158						184						210						235						260
Total deposits						1,648,093						1,618,562						1,589,493						1,567,267						1,553,757
Noninterest-bearing						461,092						471,451						471,173						471,507						475,937
Savings						218,354						220,932						219,287						226,897						229,108
NOW						209,906						208,073						214,888						220,730						238,353
Money Market						320,101						299,916						299,353						291,889						296,957
Time Deposits						310,187						292,372						260,067						249,550						226,224
Brokered Deposits						128,453						125,818						124,725						106,694						87,178
Total interest-bearing deposits						1,187,001						1,147,111						1,118,320						1,095,760						1,077,820
Core deposits*						1,209,453						1,200,372						1,204,701						1,211,023						1,240,355
Shareholders’ equity						197,087						193,517						191,556						174,540						174,402
Asset Quality
Non-performing loans						$	6,784					$	7,958					$	3,148					$	3,683					$	4,276
Non-performing loans to total assets						0.30		%				0.36		%				0.14		%				0.17		%				0.20		%
Allowance for credit losses on loans						11,234						11,542						11,446						12,890						11,592
Allowance for credit losses on loans to total loans						0.60		%				0.62		%				0.62		%				0.71		%				0.66		%
Allowance for credit losses on loans to non-performing loans						165.60		%				145.04		%				363.60		%				349.99		%				271.09		%
Non-performing loans to total loans						0.36		%				0.43		%				0.17		%				0.20		%				0.24		%
Capitalization
Shareholders’ equity to total assets						8.82		%				8.76		%				8.69		%				8.02		%				8.17		%

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

9

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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, Unaudited)						2024						2023						2024						2023
GAAP net income						$	5,390					$	4,171					$	9,198					$	8,829
Net securities losses, net of tax						15						31						41						62
Non-GAAP core earnings						$	5,405					$	4,202					$	9,239					$	8,891
						Three Months Ended June 30,												Six Months Ended June 30,
						2024						2023						2024						2023
Return on average assets (ROA)						0.97		%				0.80		%				0.83		%				0.86		%
Net securities losses, net of tax						0.01		%				—		%				—		%				—		%
Non-GAAP core ROA						0.98		%				0.80		%				0.83		%				0.86		%
						Three Months Ended June 30,												Six Months Ended June 30,
						2024						2023						2024						2023
Return on average equity (ROE)						11.12		%				9.53		%				9.67		%				10.37		%
Net securities losses, net of tax						0.03		%				0.07		%				0.05		%				0.07		%
Non-GAAP core ROE						11.15		%				9.60		%				9.72		%				10.44		%
						Three Months Ended June 30,												Six Months Ended June 30,
						2024						2023						2024						2023
Basic earnings per share (EPS)						$	0.72					$	0.59					$	1.22					$	1.25
Net securities losses, net of tax						—						0.01						0.01						0.01
Non-GAAP basic core EPS						$	0.72					$	0.60					$	1.23					$	1.26
						Three Months Ended June 30,												Six Months Ended June 30,
						2024						2023						2024						2023
Diluted EPS						$	0.72					$	0.59					$	1.22					$	1.25
Net securities losses, net of tax						—						0.01						0.01						0.01
Non-GAAP diluted core EPS						$	0.72					$	0.60					$	1.23					$	1.26

(Dollars in Thousands, Except Share and Per Share Data, Unaudited)						Quarter Ended
						6/30/2024						3/31/2024						12/31/2023						9/30/2023						6/30/2023
Total shareholders' equity						$	197,087					$	193,517					$	191,556					$	174,540					$	174,402
Goodwill						(16,450)						(16,450)						(16,450)						(16,450)						(16,450)
Intangibles						(158)						(184)						(210)						(235)						(260)
Tangible shareholders' equity						$	180,479					$	176,883					$	174,896					$	157,855					$	157,692
Shares outstanding						7,541,474						7,525,372						7,508,994						7,110,025						7,063,488
Book value per share						$	26.13					$	25.72					$	25.51					$	24.55					$	24.69
Tangible book value per share						$	23.93					$	23.50					$	23.29					$	22.20					$	22.32

10

Cover Document	Jan. 29, 2024
Cover [Abstract]
Title of 12(b) Security	Common stock, $5.55 par value
City Area Code	(570)
Entity Address, Address Line One	300 Market Street
Entity Incorporation, State or Country Code	PA
Entity Registrant Name	PENNS WOODS BANCORP, INC.
Document Type	8-K
Document Period End Date	Jul. 25, 2024
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false
Entity File Number	000-17077
Entity Tax Identification Number	23-2226454
Entity Address, Address Line Two	P.O. Box 967
Entity Address, Postal Zip Code	17703-0967
Entity Address, City or Town	Williamsport
Entity Address, State or Province	PA
Local Phone Number	322-1111
Trading Symbol	PWOD
Security Exchange Name	NASDAQ
Entity Central Index Key	0000716605
Amendment Flag	false

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