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

Penns Woods Bancorp, Inc. achieved net income of $12.9 million for the nine months ended September 30, 2022, resulting in basic and diluted earnings per share of $1.83.

Highlights

Net income, as reported under GAAP, for the three and nine months ended September 30, 2022 was $5.3 million and $12.9 million, respectively, compared to $4.1 million and $11.2 million for the same periods of 2021. Results for the three and nine months ended September 30, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $199,000 (from a gain of $32,000 to a loss of $167,000) for the three month period and an increase in after-tax securities losses of $494,000 (from a gain of $236,000 to a loss of $258,000) for the nine month period. Results for the nine months ended September 30, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the nine months ended September 30, 2022.
The provision for loan losses increased $780,000 for the three months and $395,000 for the nine months ended September 30, 2022 to $855,000 and $1.3 million, respectively, compared to $75,000 and $940,000 for the 2021 periods. The increases in the provision for loan losses were primarily due to the significant growth in the loan portfolio.
Basic and diluted earnings per share for the three and nine months ended September 30, 2022 were $0.74 and $1.83. Basic and diluted earnings per share for the three and nine months ended September 30, 2021 were $0.58 and $1.58.
Annualized return on average assets was 1.09% for three months ended September 30, 2022, compared to 0.86% for the corresponding period of 2021. Annualized return on average assets was 0.89% for the nine months ended September 30, 2022, compared to 0.79% for the corresponding period of 2021.
Annualized return on average equity was 12.61% for the three months ended September 30, 2022, compared to 9.85% for the corresponding period of 2021. Annualized return on average equity was 10.48% for the nine months ended September 30, 2022, compared to 9.17% 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 $5.4 million for the three months ended September 30, 2022 compared to $4.1 million for the same period of 2021. Core earnings were $13.2 million for the nine months ended September 30, 2022, compared to $10.9 million for the same period of 2021. Core earnings per share for the three months ended September 30, 2022 were $0.77 basic and diluted, compared to $0.58 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the nine months ended September 30, 2022 were $1.87 basic and diluted, compared to $1.55 basic and diluted for the same period of 2021. Core return on average assets and core return on average equity were 1.12% and 13.02% for the three months ended September 30, 2022, compared to 0.86% and 9.78% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.91% and 10.69% for the nine months ended September 30, 2022 compared to 0.77% and 8.98% for the corresponding period of 2021. Core earnings for the nine months ended September 30, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options along with an after-tax loss of $201,000 relating to a branch closure. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2022 was 3.47% and 3.17%, compared to 2.85% and 2.84% for the corresponding periods of 2021. The increase in the net interest margin for the three and nine month periods was driven by a decline in the rate paid on interest-bearing deposits of 23 and 29 basis points ("bps") as rates paid decreased throughout 2021 and remained at historically low levels during 2022. Leading the decline in the rate paid on interest-bearing deposits were decreases of 84 and 91 bps in the rate paid on time deposits as time deposits issued prior to the COVID-19 pandemic matured. The increase in the earning asset yield was driven by an increase in yield on federal funds sold and interest-bearing deposits due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). For the three and nine months ended September 30, 2022 in comparison to the same periods of 2021, there was an increase in rate on federal funds sold of 186 and 70 bps, respectively, while the rate on interest bearing deposits increased 218 and 48 bps. The three month period ended September 30, 2022 was impacted by an increase of 18 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates.

Assets

Total assets decreased $5.7 million to $1.9 billion at September 30, 2022 compared to September 30, 2021. Cash and cash equivalents decreased $244.8 million as interest-bearing accounts in other financial institutions decreased $193.7 million and fed funds sold decreased $40.0 million as excess liquidity was primarily utilized to fund the growth in the loan portfolio. Net loans increased $212.8 million to $1.5 billion at September 30, 2022 compared to September 30, 2021, as an emphasis was placed on commercial loan growth and customers focused on obtaining funding prior to additional FOMC rate increases. The investment portfolio increased $21.2 million from September 30, 2021 to September 30, 2022 as a portion of the excess cash liquidity was invested primarily into short and medium-term municipal bonds with a maturity of 10 years or less.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.37% at September 30, 2022 from 0.58% at September 30, 2021 as non-performing loans have decreased to $5.7 million at September 30, 2022 from $7.8 million at September 30, 2021. The majority of non-performing loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have a specific allocation for any impairment recorded within the allowance for loan losses. Net loan charge-offs of $300,000 for the nine months ended September 30, 2022 impacted the allowance for loan losses, which was 0.97% of total loans at September 30, 2022 compared to 1.08% at September 30, 2021.

Deposits

Deposits decreased $2.6 million to $1.6 billion at September 30, 2022 compared to September 30, 2021. Noninterest-bearing deposits increased $55.5 million to $537.4 million at September 30, 2022 compared to September 30, 2021. Driving core deposit growth was the continued emphasis on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. Interest-bearing deposits decreased $58.1 million due to the maturity of higher cost time deposits.

Shareholders' Equity

Shareholders' equity decreased $4.0 million to $164.5 million at September 30, 2022 compared to September 30, 2021. Accumulated other comprehensive loss of $14.6 million at September 30, 2022 increased from a loss of $2.0 million at September 30, 2021 as a result of a $11.1 million net unrealized loss on available for sale securities at September 30, 2022 compared to an unrealized gain of $3.5 million at September 30, 2021 coupled with a decrease in loss of $2.0 million in the defined benefit plan obligation. The current level of shareholders' equity equates to a book value per share of $23.32 at September 30, 2022 compared to $23.84 at September 30, 2021, and an equity to asset ratio of 8.63% at September 30, 2022 and 8.82% at September 30, 2021. Dividends declared for the nine months ended September 30, 2022 and 2021 were $0.96 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates seventeen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products. Investment and insurance products are offered through Jersey Shore State Bank's subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

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

This press release may contain certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact. The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company's organization, compensation and benefit plans; (iii) the effect on the Company's competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies. For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

You should not place undue reliance on any forward-looking statements. These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise. The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

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

Contact:	Richard A. Grafmyre, Chief Executive Officer
	110 Reynolds Street
	Williamsport, PA 17702
	570-322-1111	e-mail: pwod@pwod.com

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

	September 30,
(In Thousands, Except Share and Per Share Data)		2022			2021		% Change
ASSETS:
Noninterest-bearing balances	$	24,418		$	35,523		(31.26	)%
Interest-bearing balances in other financial institutions		12,444			206,124		(93.96	)%
Federal funds sold		—			40,000		(100.00	)%
Total cash and cash equivalents		36,862			281,647		(86.91	)%

Investment debt securities, available for sale, at fair value		188,196			166,760		12.85	%
Investment equity securities, at fair value		1,130			1,303		(13.28	)%
Restricted investment in bank stock, at fair value		14,539			14,649		(0.75	)%
Loans held for sale		2,485			3,246		(23.44	)%
Loans		1,560,700			1,347,225		15.85	%
Allowance for loan losses		(15,211	)		(14,557	)	4.49	%
Loans, net		1,545,489			1,332,668		15.97	%
Premises and equipment, net		32,227			34,434		(6.41	)%
Accrued interest receivable		8,647			8,529		1.38	%
Bank-owned life insurance		34,288			33,836		1.34	%
Investment in limited partnerships		4,771			5,014		(4.85	)%
Goodwill		17,104			17,104		—	%
Intangibles		361			524		(31.11	)%
Operating lease right of use asset		2,699			2,899		(6.90	)%
Deferred tax asset		7,187			4,049		77.50	%
Other assets		9,131			4,129		121.14	%
TOTAL ASSETS	$	1,905,116		$	1,910,791		(0.30	)%

LIABILITIES:
Interest-bearing deposits	$	1,053,012		$	1,111,144		(5.23	)%
Noninterest-bearing deposits		537,403			481,875		11.52	%
Total deposits		1,590,415			1,593,019		(0.16	)%

Short-term borrowings		30,901			9,404		228.59	%
Long-term borrowings		102,829			126,007		(18.39	)%
Accrued interest payable		427			828		(48.43	)%
Operating lease liability		2,753			2,947		(6.58	)%
Other liabilities		13,302			10,105		31.64	%
TOTAL LIABILITIES		1,740,627			1,742,310		(0.10	)%

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; 7,563,200 and 7,545,922 shares issued; 7,052,975 and 7,065,697 shares outstanding		42,019			41,921		0.23	%
Additional paid-in capital		53,958			53,508		0.84	%
Retained earnings		95,896			87,146		10.04	%
Accumulated other comprehensive (loss) gain:
Net unrealized (loss) gain on available for sale securities		(11,125	)		3,504		(417.49	)%
Defined benefit plan		(3,444	)		(5,486	)	37.22	%
Treasury stock at cost, 510,225 and 480,225		(12,815	)		(12,115	)	5.78	%
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY		164,489			168,478		(2.37	)%
Non-controlling interest		—			3		(100.00	)%
TOTAL SHAREHOLDERS' EQUITY		164,489			168,481		(2.37	)%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,905,116		$	1,910,791		(0.30	)%

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)		2022			2021		% Change				2022			2021		% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees	$	15,051		$	13,382		12.47	%		$	41,709		$	39,826		4.73	%
Investment securities:
Taxable		949			834		13.79	%			2,550			2,491		2.37	%
Tax-exempt		236			160		47.50	%			594			495		20.00	%
Dividend and other interest income		628			338		85.80	%			1,470			903		62.79	%
TOTAL INTEREST AND DIVIDEND INCOME		16,864			14,714		14.61	%			46,323			43,715		5.97	%

INTEREST EXPENSE:
Deposits		693			1,308		(47.02	)%			2,191			4,481		(51.10	)%
Short-term borrowings		26			3		766.67	%			29			7		314.29	%
Long-term borrowings		613			771		(20.49	)%			1,871			2,430		(23.00	)%
TOTAL INTEREST EXPENSE		1,332			2,082		(36.02	)%			4,091			6,918		(40.86	)%

NET INTEREST INCOME		15,532			12,632		22.96	%			42,232			36,797		14.77	%

PROVISION FOR LOAN LOSSES		855			75		1,040.00	%			1,335			940		42.02	%

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES		14,677			12,557		16.88	%			40,897			35,857		14.06	%

NON-INTEREST INCOME:
Service charges		559			456		22.59	%			1,563			1,218		28.33	%
Debt securities (losses) gains, available for sale		(156	)		48		(425.00	)%			(168	)		323		(152.01	)%
Net equity securities losses		(55	)		(8	)	(587.50	)%			(158	)		(24	)	(558.33	)%
Bank-owned life insurance		170			279		(39.07	)%			501			614		(18.40	)%
Gain on sale of loans		294			456		(35.53	)%	.		905			2,034		(55.51	)%
Insurance commissions		109			129		(15.50	)%			386			436		(11.47	)%
Brokerage commissions		142			237		(40.08	)%			500			663		(24.59	)%
Loan broker income		438			772		(43.26	)%			1,350			1,449		(6.83	)%
Debit card income		344			388		(11.34	)%			1,080			1,166		(7.38	)%
Other		238			194		22.68	%			673			595		13.11	%
TOTAL NON-INTEREST INCOME		2,083			2,951		(29.41	)%			6,632			8,474		(21.74	)%

NON-INTEREST EXPENSE:
Salaries and employee benefits		6,016			5,837		3.07	%			18,421			17,107		7.68	%
Occupancy		730			745		(2.01	)%			2,380			2,438		(2.38	)%
Furniture and equipment		816			883		(7.59	)%			2,454			2,663		(7.85	)%
Software amortization		188			226		(16.81	)%			660			632		4.43	%
Pennsylvania shares tax		334			373		(10.46	)%			1,119			1,097		2.01	%
Professional fees		626			615		1.79	%			1,746			1,882		(7.23	)%
Federal Deposit Insurance Corporation deposit insurance		260			220		18.18	%			690			705		(2.13	)%
Marketing		151			231		(34.63	)%			435			434		0.23	%
Intangible amortization		34			44		(22.73	)%			119			147		(19.05	)%
Other		1,165			1,273		(8.48	)%			3,723			3,541		5.14	%
TOTAL NON-INTEREST EXPENSE		10,320			10,447		(1.22	)%			31,747			30,646		3.59	%
INCOME BEFORE INCOME TAX PROVISION		6,440			5,061		27.25	%			15,782			13,685		15.32	%
INCOME TAX PROVISION		1,190			932		27.68	%			2,869			2,516		14.03	%
NET INCOME	$	5,250		$	4,129		27.15	%		$	12,913		$	11,169		15.61	%
Earnings attributable to noncontrolling interest		—			4		(100.00	)%			—			15		(100.00	)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'	$	5,250		$	4,125		27.27	%		$	12,913		$	11,154		15.77	%
EARNINGS PER SHARE - BASIC	$	0.74		$	0.58		27.59	%		$	1.83		$	1.58		15.82	%
EARNINGS PER SHARE - DILUTED	$	0.74		$	0.58		27.59	%		$	1.83		$	1.58		15.82	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC		7,051,228			7,063,994		(0.18	)%			7,060,871			7,059,625		0.02	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED		7,051,228			7,063,994		(0.18	)%			7,060,871			7,059,625		0.02	%

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

	Three Months Ended
	September 30, 2022						September 30, 2021
(Dollars in Thousands)	Average Balance(1)		Interest		Average Rate		Average Balance(1)		Interest		Average Rate
ASSETS:
Tax-exempt loans (3)	$	58,735	$	394	2.66	%	$	46,193	$	307	2.64	%
All other loans		1,463,330		14,740	4.00	%		1,296,790		13,139	4.02	%
Total loans (2)		1,522,065		15,134	3.94	%		1,342,983		13,446	3.97	%

Federal funds sold		33,641		218	2.57	%		40,000		72	0.71	%

Taxable securities		159,721		1,158	2.94	%		150,308		1,022	2.76	%
Tax-exempt securities (3)		49,177		299	2.47	%		37,069		203	2.22	%
Total securities		208,898		1,457	2.83	%		187,377		1,225	2.65	%

Interest-bearing deposits		34,202		201	2.33	%		205,715		78	0.15	%

Total interest-earning assets		1,798,806		17,010	3.76	%		1,776,075		14,821	3.32	%

Other assets		130,576						132,820

TOTAL ASSETS	$	1,929,382					$	1,908,895

LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings	$	249,083		26	0.04	%	$	228,255		22	0.04	%
Super Now deposits		405,173		287	0.28	%		308,591		219	0.28	%
Money market deposits		287,660		200	0.28	%		306,177		238	0.31	%
Time deposits		148,968		180	0.48	%		248,649		829	1.32	%
Total interest-bearing deposits		1,090,884		693	0.25	%		1,091,672		1,308	0.48	%

Short-term borrowings		8,062		26	1.23	%		8,696		3	0.14	%
Long-term borrowings		109,269		613	2.23	%		133,536		771	2.29	%
Total borrowings		117,331		639	2.16	%		142,232		774	2.16	%

Total interest-bearing liabilities		1,208,215		1,332	0.44	%		1,233,904		2,082	0.67	%

Demand deposits		533,681						490,500
Other liabilities		21,008						17,027
Shareholders' equity		166,478						167,464

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,929,382					$	1,908,895
Interest rate spread (3)					3.32	%					2.65	%
Net interest income/margin (3)			$	15,678	3.47	%			$	12,739	2.85	%

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,
	2022		2021
Total interest income	$	16,864	$	14,714
Total interest expense		1,332		2,082
Net interest income (GAAP)		15,532		12,632
Tax equivalent adjustment		146		107
Net interest income (fully taxable equivalent) (non-GAAP)	$	15,678	$	12,739

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

	Nine Months Ended
	September 30, 2022						September 30, 2021
(Dollars in Thousands)	Average Balance(1)		Interest		Average Rate		Average Balance(1)		Interest		Average Rate
ASSETS:
Tax-exempt loans (3)	$	53,269	$	1,033	2.59	%	$	46,217	$	991	2.87	%
All other loans		1,403,504		40,893	3.90	%		1,292,028		39,043	4.04	%
Total loans (2)		1,456,773		41,926	3.85	%		1,338,245		40,034	4.00	%

Federal funds sold		43,938		465	1.41	%		21,993		117	0.71	%

Taxable securities		152,937		3,126	2.76	%		147,942		3,105	2.84	%
Tax-exempt securities (3)		45,357		752	2.24	%		36,638		627	2.31	%
Total securities		198,294		3,878	2.64	%		184,580		3,732	2.73	%

Interest-bearing deposits		97,520		429	0.59	%		206,895		172	0.11	%

Total interest-earning assets		1,796,525		46,698	3.48	%		1,751,713		44,055	3.37	%

Other assets		129,048						128,567

TOTAL ASSETS	$	1,925,573					$	1,880,280

LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings	$	246,063		72	0.04	%	$	222,889		94	0.06	%
Super Now deposits		388,149		721	0.25	%		294,570		694	0.31	%
Money market deposits		296,998		596	0.27	%		307,309		761	0.33	%
Time deposits		167,876		802	0.64	%		253,130		2,932	1.55	%
Total interest-bearing deposits		1,099,086		2,191	0.27	%		1,077,898		4,481	0.56	%

Short-term borrowings		6,308		29	0.59	%		7,152		7	0.13	%
Long-term borrowings		112,457		1,871	2.22	%		138,669		2,430	2.34	%
Total borrowings		118,765		1,900	2.14	%		145,821		2,437	2.23	%

Total interest-bearing liabilities		1,217,851		4,091	0.45	%		1,223,719		6,918	0.76	%

Demand deposits		519,599						473,088
Other liabilities		23,814						21,327
Shareholders' equity		164,309						162,146

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,925,573					$	1,880,280
Interest rate spread (3)					3.03	%					2.61	%
Net interest income/margin (3)			$	42,607	3.17	%			$	37,137	2.84	%


	Nine Months Ended September 30,
	2022		2021
Total interest income	$	46,323	$	43,715
Total interest expense		4,091		6,918
Net interest income		42,232		36,797
Tax equivalent adjustment		375		340
Net interest income (fully taxable equivalent) (non-GAAP)	$	42,607	$	37,137

(Dollars in Thousands, Except Per Share Data, Unaudited)	Quarter Ended
	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Operating Data
Net income	$	5,250		$	4,231		$	3,432		$	4,879		$	4,125
Net interest income		15,532			13,847			12,853			12,921			12,632
Provision (credit) for loan losses		855			330			150			(300	)		75
Net security (losses) gains		(211	)		(54	)		(61	)		360			40
Non-interest income, excluding net security gains		2,294			2,191			2,473			2,835			2,911
Non-interest expense		10,320			10,420			11,007			10,259			10,447

Performance Statistics
Net interest margin		3.47	%		3.12	%		2.93	%		2.90	%		2.85	%
Annualized return on average assets		1.09	%		0.88	%		0.72	%		1.02	%		0.86	%
Annualized return on average equity		12.61	%		10.15	%		8.17	%		11.59	%		9.85	%
Annualized net loan charge-offs (recoveries) to average loans		0.01	%		(0.01	)%		0.09	%		0.02	%		(0.01	)%
Net charge-offs (recoveries)		37			(40	)		303			81			(44	)
Efficiency ratio		57.70	%		64.72	%		71.53	%		64.83	%		66.93	%

Per Share Data
Basic earnings per share	$	0.74		$	0.60		$	0.49		$	0.69		$	0.58
Diluted earnings per share		0.74			0.60			0.49			0.69			0.58
Dividend declared per share		0.32			0.32			0.32			0.32			0.32
Book value		23.32			23.56			23.81			24.37			23.84
Common stock price:
High		24.29			24.35			24.67			24.65			24.42
Low		22.02			22.34			23.64			23.50			22.78
Close		22.91			23.09			24.43			23.65			23.92
Weighted average common shares:
Basic		7,051			7,059			7,073			7,068			7,064
Fully Diluted		7,051			7,059			7,073			7,068			7,064
End-of-period common shares:
Issued		7,563			7,559			7,555			7,550			7,546
Treasury		(510	)		(510	)		(480	)		(480	)		(480	)

(Dollars in Thousands, Except Per Share Data, Unaudited)	Quarter Ended
	9/30/2022			6/30/2022			3/31/2022			12/31/2021			9/30/2021
Financial Condition Data:
General
Total assets	$	1,905,116		$	1,891,806		$	1,916,809		$	1,940,809		$	1,910,791
Loans, net		1,545,489			1,474,739			1,391,943			1,377,971			1,332,668
Goodwill		17,104			17,104			17,104			17,104			17,104
Intangibles		361			396			437			480			524
Total deposits		1,590,415			1,589,579			1,612,395			1,621,315			1,593,019
Noninterest-bearing		537,403			524,288			514,130			494,360			481,875
Savings		249,532			249,057			245,661			236,312			231,189
NOW		392,140			353,102			379,838			366,399			340,441
Money Market		268,532			309,453			299,166			318,877			305,156
Time Deposits		142,808			153,679			173,600			205,367			234,358
Total interest-bearing deposits		1,053,012			1,065,291			1,098,265			1,126,955			1,111,144

Core deposits*		1,447,607			1,435,900			1,438,795			1,415,948			1,358,661
Shareholders' equity		164,489			166,054			168,427			172,274			168,478

Asset Quality
Non-performing loans	$	5,743		$	5,100		$	5,281		$	6,250		$	7,763
Non-performing loans to total assets		0.30	%		0.27	%		0.28	%		0.32	%		0.41	%
Allowance for loan losses		15,211			14,393			14,023			14,176			14,557
Allowance for loan losses to total loans		0.97	%		0.97	%		1.00	%		1.02	%		1.08	%
Allowance for loan losses to non-performing loans		264.86	%		282.22	%		265.54	%		226.82	%		187.52	%
Non-performing loans to total loans		0.37	%		0.34	%		0.38	%		0.45	%		0.58	%

Capitalization
Shareholders' equity to total assets		8.63	%		8.78	%		8.79	%		8.88	%		8.82	%

* Core deposits are defined as total deposits less time 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)		2022			2021			2022			2021
GAAP net income	$	5,250		$	4,125		$	12,913		$	11,154
Less: net securities (losses) gains, net of tax		(167	)		32			(258	)		236
Non-GAAP core earnings	$	5,417		$	4,093		$	13,171		$	10,918

	Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Return on average assets (ROA)		1.09	%		0.86	%		0.89	%		0.79	%
Less: net securities (losses) gains, net of tax		(0.03	)%		—	%		(0.02	)%		0.02	%
Non-GAAP core ROA		1.12	%		0.86	%		0.91	%		0.77	%

	Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Return on average equity (ROE)		12.61	%		9.85	%		10.48	%		9.17	%
Less: net securities (losses) gains, net of tax		(0.41	)%		0.07	%		(0.21	)%		0.19	%
Non-GAAP core ROE		13.02	%		9.78	%		10.69	%		8.98	%

	Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Basic earnings per share (EPS)	$	0.74		$	0.58		$	1.83		$	1.58
Less: net securities (losses) gains, net of tax		(0.03	)		—			(0.04	)		0.03
Non-GAAP basic core EPS	$	0.77		$	0.58		$	1.87		$	1.55

	Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021
Diluted EPS	$	0.74		$	0.58		$	1.83		$	1.58
Less: net securities (losses) gains, net of tax		(0.03	)		—			(0.04	)		0.03
Non-GAAP diluted core EPS	$	0.77		$	0.58		$	1.87		$	1.55

Penns Woods Bancorp, Inc. Reports Third Quarter 2022 Earnings