Penns Woods Bancorp, Inc. Reports Third Quarter 2012 Operating Earnings

WILLIAMSPORT, Pa., Oct. 18, 2012 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (Nasdaq:PWOD)

Highlights
  • Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and losses and bank owned life insurance gains on death benefit, increased to $3,372,000 for the three months ended September 30, 2012 compared to $3,145,000 for the same period of 2011. Net income from core operations increased to $9,849,000 for the nine months ended September 30, 2012 compared to $8,873,000 for the same period of 2011.  
  • Operating earnings per share for the three months ended September 30, 2012 were $0.88 basic and dilutive compared to $0.82 basic and dilutive for the same period of 2011, an increase of 7.3%. Operating earnings per share for the nine months ended September 30, 2012 were $2.57 basic and dilutive compared to $2.31 basic and dilutive for the same period of 2011, an increase of 11.3%.  
  • Return on average assets was 1.77% for the three months ended September 30, 2012 compared to 1.67% for the three month period of 2011. Return on average assets was 1.78% for the nine months ended September 30, 2012 compared to 1.65% for the nine month period of 2011.  
  • Return on average equity was 15.94% for the three months ended September 30, 2012 compared to 16.49% for the corresponding period of 2011. Return on average equity was 16.25% for the nine months ended September 30, 2012 compared to 16.46% for the corresponding period of 2011.

"The continued growth in loans and deposits is the result of the effort of our employees who remain focused on building relationships. Core deposits and home equity loans and lines have been utilized as the building blocks of the relationship. These building blocks play a significant role in generating the strong financial metrics being reported of net income, earnings per share, return on equity, and return on assets," said Richard A. Grafmyre, CFP®, President and CEO.

A reconciliation of the non-GAAP financial measures of operating earnings, operating return on assets, operating return on equity, and operating earnings per share, described in the highlights, to the comparable GAAP financial measures is included at the end of this press release.

Net Income

Net income, as reported under GAAP, for the three and nine months ended September 30, 2012 was $3,667,000 and $10,754,000 compared to $3,150,000 and $8,967,000 for the same periods of 2011. Results for the three and nine months ended September 30, 2012 compared to 2011 were impacted by an increase in after-tax securities gains of $290,000 (from a gain of $5,000 to a gain of $295,000) for the three month periods and an increase in after-tax securities gains of $702,000 (from a gain of $94,000 to a gain of $796,000) for the nine month periods.  In addition, a gain of $109,000 on death benefit related to bank owned life insurance was recorded during the first quarter of 2012. Basic and dilutive earnings per share for the three and nine months ended September 30, 2012 were $0.96 and $2.80 compared to $0.82 and $2.34 for the corresponding periods of 2011. Return on average assets and return on average equity were 1.77% and 15.94% for the three months ended September 30, 2012 compared to 1.67% and 16.49% for the corresponding period of 2011. Earnings for the nine months ended September 30, 2012 correlate to a return on average assets and a return on average equity of 1.78% and 16.25% compared to 1.65% and 16.46% for the corresponding period of 2011.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2012 was 4.34% and 4.51% compared to 4.55% and 4.67% for the corresponding periods of 2011. While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $2,058,000 to $25,493,000 for the nine months ended September 30, 2012 compared to the corresponding period of 2011. Driving this increase is the continued emphasis on core deposit growth. These deposits represent a lower cost funding source than time deposits and comprise 73.53% of total deposits at September 30, 2012 compared to 70.28% at September 30, 2011. The average rate paid on total interest-bearing deposits decreased 29 and 31 basis points (bp) for the three and nine months ended September 30, 2012 compared to the same periods of 2011. The decrease in the rate paid on total interest-bearing deposits was led by a decrease in the rate paid on time deposits and money markets. The rate paid on time deposits decreased 32 and 35 bp for the three and nine months ended September 30, 2012 compared to the same periods of 2011 and the rate paid on money markets decreased 42 and 39 bp for the three and nine months ended September 30, 2012 compared to the same periods of 2011. The duration of the time deposit portfolio, which was shortened over the past several years, continues to be slowly lengthened due to the apparent bottoming or near bottoming of deposit rates. FHLB long-term borrowings have been increased by $4,500,000 since September 30, 2011.  Long-term borrowings of $10,500,000 matured during the three months ended December 31, 2011 carrying an average rate of 4.60%, while $15,000,000 was obtained during the three months ended September 30, 2012 carrying an average rate of 0.90% to fund a combination of loan growth and FHLB debt that will be maturing during the fourth quarter.

"The net interest margin has and will continue to encounter challenges. Legacy earning assets are maturing or are repricing lower at their rate reset dates at the same time that new earning assets are being added at substantially lower rates due to the current interest rate environment. In addition, our strategy is to shorten both the loan and investment portfolios so that we will have an increased level of cash flow when interest rates begin to increase. This strategy does limit current earnings, but serves a key role in our long-term asset liability management strategy. On the funding side of the balance sheet there is limited ability to reduce costs as deposit rates have previously been reduced with limited room for reductions remaining, although there is $15 million in FHLB debt that is maturing during October 2012 with a substantial interest expense reduction anticipated after the funds are replaced," commented President Grafmyre. 

Assets

Total assets increased $87,956,000 to $840,606,000 at September 30, 2012 compared to September 30, 2011. Net loans increased 12.9% to $477,530,000 at September 30, 2012 compared to September 30, 2011 as the economic environment has in general provided fewer loan opportunities over the past year. Housing, transportation, and all other facets related to the Marcellus Shale natural gas exploration are creating loan opportunities and we are aggressively attempting to attract those loans that meet or exceed our credit standards. During 2012 several successful loan campaigns were undertaken to build home equity loans and lines of credit. The investment portfolio increased $29,564,000 from September 30, 2011 to September 30, 2012 due to a combination of market value increases and the purchase of short maturity bonds that have been utilized to reduce the portfolio duration and to provide current cash flow.

Non-performing Loans

Our non-performing loans to total loans ratio has decreased to 2.48% at September 30, 2012 from 3.34% at September 30, 2011. The decrease in non-performing loans is primarily the result of a decrease in commercial loan delinquencies due to several partial charge-offs and the receipt of collateral in lieu of payment with the collateral now carried as other real estate owned. The majority of non-performing loans are centered on several 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 $1,433,000 for the nine months ended September 30, 2012 represented 0.31% of average loans for the nine months ended September 30, 2012. The allowance for loan losses was increased to 1.55% of total loans at September 30, 2012 from 1.48% at September 30, 2011 due to the general economic uncertainty that persists.  

Deposits

Deposits have grown 11.4%, or $65,810,000, to $641,110,000 at September 30, 2012 compared to September 30, 2011, with core deposits (total deposits excluding time deposits) increasing $67,071,000, while higher cost time deposits decreased $1,261,000. Noninterest-bearing deposits have increased 10.0% to $115,285,000 at September 30, 2012 compared to September 30, 2011. Also playing a significant role in increasing core deposits were money market and NOW accounts with growth rates of 21.3% and 21.6%, respectively. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. We have also successfully implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration. In addition our newest branch, Danville, opened in January 2012 and has gathered approximately $25 million in deposits during the first nine months of its operation.

Shareholders' Equity

Shareholders' equity increased $15,207,000 to $93,779,000 at September 30, 2012 compared to September 30, 2011.  The accumulated other comprehensive gain of $6,715,000 at September 30, 2012 is a result of an increase in unrealized gains on available for sale securities from an unrealized gain of $950,000 at September 30, 2011 to an unrealized gain of $10,848,000 at September 30, 2012. However, the amount of accumulated other comprehensive gain at September 30, 2012 was also impacted by the change in net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan resulting in an increase in the net loss of $1,720,000. The current level of shareholders' equity equates to a book value per share of $24.43 at September 30, 2012 compared to $20.48 at September 30, 2011 and an equity to asset ratio of 11.16% at September 30, 2012 compared to 10.44% at September 30, 2011. Excluding accumulated other comprehensive gain/loss, book value per share was $22.68 at September 30, 2012 compared to $20.86 at September 30, 2011. Dividends per share paid to shareholders were $0.47 and $1.41 for the three and nine months ended September 30, 2012 compared to $0.46 and $1.38 for the three and nine months ended September 30, 2011. 

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour 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 such as net securities gains and losses. 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. 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, 2011.

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.jssb.com.

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT
       
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
 (UNAUDITED)
       
(In Thousands, Except Share Data) September 30,
  2012 2011 % Change
       
ASSETS      
Noninterest-bearing balances  $ 13,243  $ 11,658 13.6%
Interest-bearing deposits in other financial institutions  7,901  17 46376.5%
 Total cash and cash equivalents  21,144  11,675 81.1%
       
Investment securities, available for sale, at fair value 296,255 266,637 11.1%
Investment securities held to maturity (fair value of $0 and $54)  --  54 -100.0%
Loans held for sale 2,285 3,623 -36.9%
Loans 485,051 429,344 13.0%
Allowance for loan losses (7,521) (6,355) 18.3%
 Loans, net 477,530 422,989 12.9%
Premises and equipment, net 8,247 7,533 9.5%
Accrued interest receivable 4,255 3,802 11.9%
Bank-owned life insurance 16,238 15,929 1.9%
Investment in limited partnerships 3,048 3,709 -17.8%
Goodwill 3,032 3,032 0.0%
Deferred tax asset 3,878 8,087 -52.0%
Other assets 4,694 5,580 -15.9%
TOTAL ASSETS  $ 840,606  $752,650 11.7%
       
LIABILITIES      
Interest-bearing deposits  $ 525,825  $ 470,517 11.8%
Noninterest-bearing deposits 115,285 104,783 10.0%
 Total deposits 641,110 575,300 11.4%
       
Short-term borrowings 17,932 17,584 2.0%
Long-term borrowings, Federal Home Loan Bank (FHLB) 76,278 71,778 6.3%
Accrued interest payable 501 616 -18.7%
Other liabilities 11,006 8,800 25.1%
 TOTAL LIABILITIES 746,827 674,078 10.8%
       
SHAREHOLDERS' EQUITY      
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued  --   --  0.0%
Common stock, par value $8.33, 15,000,000 shares authorized;      
 4,018,777 and 4,017,251 shares issued 33,489 33,477 0.0%
Additional paid-in capital 18,148 18,103 0.2%
Retained earnings 41,737 34,765 20.1%
Accumulated other comprehensive gain (loss):      
 Net unrealized gain on available for sale securities 10,848 950 1041.9%
 Defined benefit plan (4,133) (2,413) -71.3%
Treasury stock at cost, 180,596 shares (6,310) (6,310) 0.0%
 TOTAL SHAREHOLDERS' EQUITY 93,779 78,572 19.4%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 840,606  $752,650 11.7%
       
             
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME 
(UNAUDITED)
             
             
(In Thousands, Except Per Share Data)            
  Three Months Ended September 30, Nine Months Ended September 30,
  2012 2011 % Change 2012 2011 % Change
INTEREST AND DIVIDEND INCOME:            
Loans including fees  $ 6,346  $ 6,327 0.3%  $ 18,954  $ 18,759 1.0%
Investment securities:            
 Taxable  1,486  1,445 2.8%  4,477  4,231 5.8%
 Tax-exempt   1,339  1,336 0.2%  4,127  3,875 6.5%
 Dividend and other interest income  96  65 47.7%  274  174 57.5%
TOTAL INTEREST AND DIVIDEND INCOME   9,267  9,173 1.0%  27,832  27,039 2.9%
             
INTEREST EXPENSE:            
Deposits   902  1,154 -21.8%  2,797  3,530 -20.8%
Short-term borrowings  38  58 -34.5%  100  157 -36.3%
Long-term borrowings, FHLB  637  751 -15.2%  1,877  2,227 -15.7%
TOTAL INTEREST EXPENSE  1,577  1,963 -19.7%  4,774  5,914 -19.3%
             
NET INTEREST INCOME  7,690  7,210 6.7%  23,058  21,125 9.2%
             
PROVISION FOR LOAN LOSSES  600  600 0.0%  1,800  1,800 0.0%
             
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   7,090  6,610 7.3%  21,258  19,325 10.0%
             
NON-INTEREST INCOME:            
Service charges  489  508 -3.7%  1,394  1,538 -9.4%
Securities gains, net  447  8 5487.5%  1,206  142 749.3%
Bank-owned life insurance  138  148 -6.8%  539  461 16.9%
Gain on sale of loans  527  359 46.8%  1,053  850 23.9%
Insurance commissions  295  241 22.4%  1,053  630 67.1%
Brokerage commissions  239  241 -0.8%  698  797 -12.4%
Other  636  485 31.1%  1,872  1,390 34.7%
TOTAL NON-INTEREST INCOME  2,771  1,990 39.2%  7,815  5,808 34.6%
             
NON-INTEREST EXPENSE:            
Salaries and employee benefits  2,939  2,621 12.1%  8,806  7,728 13.9%
Occupancy, net  317  313 1.3%  963  962 0.1%
Furniture and equipment  355  354 0.3%  1,058  1,011 4.6%
Pennsylvania shares tax  169  172 -1.7%  505  516 -2.1%
Amortization of investments in limited partnerships  165  165 0.0%  496  496 0.0%
FDIC deposit insurance  111  43 158.1%  349  416 -16.1%
Other  1,402  1,300 7.8%  4,088  3,683 11.0%
TOTAL NON-INTEREST EXPENSE  5,458  4,968 9.9%  16,265  14,812 9.8%
             
INCOME BEFORE INCOME TAX PROVISION   4,403  3,632 21.2%  12,808  10,321 24.1%
INCOME TAX PROVISION   736  482 52.7%  2,054  1,354 51.7%
NET INCOME  $ 3,667  $ 3,150 16.4%  $ 10,754  $ 8,967 19.9%
             
EARNINGS PER SHARE - BASIC  $ 0.96  $ 0.82 16.5%  $ 2.80  $ 2.34 19.8%
             
EARNINGS PER SHARE - DILUTED  $ 0.96  $ 0.82 16.5%  $ 2.80  $ 2.34 19.8%
             
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC  3,837,925  3,836,244 0.0%  3,837,570  3,835,778 0.0%
             
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED  3,837,925  3,836,244 0.0%  3,837,570  3,835,778 0.0%
             
DIVIDENDS PER SHARE  $ 0.47  $ 0.46 2.2%  $ 1.41  $ 1.38 2.2%
             
             
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
             
  For the Three Months Ended
(Dollars in Thousands) September 30, 2012 September 30, 2011
  Average Balance  Interest Average Rate Average Balance  Interest Average Rate
ASSETS:            
Tax-exempt loans  $ 22,916  $ 302 5.24%  $ 20,211  $ 311 6.10%
All other loans  452,370  6,147 5.41%  407,346  6,122 5.96%
Total loans  475,286  6,449 5.40%  427,557  6,433 5.97%
             
Taxable securities  162,822  1,580 3.88%  139,510  1,509 4.33%
Tax-exempt securities  132,996  2,029 6.10%  117,917  2,024 6.87%
Total securities  295,818  3,609 4.88%  257,427  3,533 5.49%
             
Interest-bearing deposits  8,966  2 0.09%  15,734  1 0.03%
             
Total interest-earning assets  780,070  10,060 5.14%  700,718  9,967 5.66%
             
Other assets  48,096      53,323    
             
TOTAL ASSETS  $ 828,166      $ 754,041    
             
LIABILITIES AND SHAREHOLDERS' EQUITY:            
Savings  $ 81,413  16 0.08%  $ 72,704  28 0.15%
Super Now deposits  120,135  158 0.52%  98,094  141 0.57%
Money market deposits  151,307  173 0.45%  128,012  280 0.87%
Time deposits  171,245  555 1.29%  173,825  705 1.61%
Total interest-bearing deposits  524,100  902 0.68%  472,635  1,154 0.97%
             
Short-term borrowings  18,607  38 0.81%  17,357  58 1.33%
Long-term borrowings, FHLB  65,517  637 3.80%  71,778  751 4.09%
Total borrowings  84,124  675 3.14%  89,135  809 3.56%
             
Total interest-bearing liabilities  608,224  1,577 1.02%  561,770  1,963 1.38%
             
Demand deposits  116,582      104,017    
Other liabilities  11,355      11,821    
Shareholders' equity  92,005      76,433    
             
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 828,166      $ 754,041    
Interest rate spread     4.12%     4.28%
Net interest income/margin    $ 8,483 4.34%    $ 8,004 4.55%
             
             
    For the Three Months Ended      
    September 30,      
    2012 2011      
Total interest income    $ 9,267  $ 9,173      
Total interest expense    1,577  1,963      
             
Net interest income    7,690  7,210      
Tax equivalent adjustment    793  794      
             
Net interest income (fully taxable equivalent)    $ 8,483  $ 8,004      
               
               
PENNS WOODS BANCORP, INC.  
AVERAGE BALANCES AND INTEREST RATES  
               
  For the Nine Months Ended  
(Dollars in Thousands) September 30, 2012 September 30, 2011  
  Average Balance  Interest Average Rate Average Balance  Interest Average Rate  
ASSETS:              
Tax-exempt loans  $ 21,977  $ 909 5.52%  $ 20,302  $ 924 6.09%  
All other loans  436,921  18,354 5.61%  402,384  18,149 6.03%  
Total loans  458,898  19,263 5.61%  422,686  19,073 6.03%  
               
Taxable securities  157,791  4,747 4.01%  126,887  4,402 4.63%  
Tax-exempt securities  131,306  6,253 6.35%  109,552  5,871 7.15%  
Total securities  289,097  11,000 5.07%  236,439  10,273 5.79%  
               
Interest-bearing deposits  8,098  4 0.07%  11,916  3 0.03%  
               
Total interest-earning assets  756,093  30,267 5.34%  671,041  29,349 5.84%  
               
Other assets  49,702      53,405      
               
TOTAL ASSETS  $ 805,795      $ 724,446      
               
LIABILITIES AND SHAREHOLDERS' EQUITY:              
Savings  $ 78,180  44 0.08%  $ 69,994  98 0.19%  
Super Now deposits  116,205  452 0.52%  83,357  331 0.53%  
Money market deposits  143,878  580 0.54%  120,177  835 0.93%  
Time deposits  173,578  1,721 1.32%  181,158  2,266 1.67%  
Total interest-bearing deposits  511,841  2,797 0.73%  454,686  3,530 1.04%  
               
Short-term borrowings  19,293  100 0.69%  17,055  157 1.23%  
Long-term borrowings, FHLB  62,701  1,877 3.93%  71,778  2,227 4.09%  
Total borrowings  81,994  1,977 3.17%  88,833  2,384 3.54%  
               
Total interest-bearing liabilities  593,835  4,774 1.07%  543,519  5,914 1.45%  
               
Demand deposits  112,464      98,000      
Other liabilities  11,258      10,272      
Shareholders' equity  88,238      72,655      
               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY  $ 805,795      $ 724,446      
Interest rate spread     4.27%     4.39%  
Net interest income/margin    $ 25,493 4.51%    $23,435 4.67%  
               
               
    For the Nine Months Ended        
    September 30,        
    2012 2011        
Total interest income    $ 27,832  $ 27,039        
Total interest expense    4,774  5,914        
Net interest income    23,058  21,125        
Tax equivalent adjustment    2,435  2,310        
Net interest income (fully taxable equivalent)    $ 25,493  $ 23,435        
           
           
  Quarter Ended
           
(Dollars in Thousands, Except Per Share Data) 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
           
Operating Data          
           
Net income  $ 3,667  $ 3,398  $ 3,689  $ 3,395  $ 3,150
Net interest income  7,690  7,698  7,670  7,595  7,210
Provision for loan losses  600  600  600  900  600
Net security gains  447  170  589  479  8
Non-interest income, ex. net security gains  2,324  2,111  2,174  1,932  1,982
Non-interest expense  5,458  5,343  5,464  5,152  4,968
           
Performance Statistics          
           
Net interest margin 4.34% 4.47% 4.72% 4.78% 4.55%
Annualized return on average assets 1.77% 1.67% 1.91% 1.80% 1.67%
Annualized return on average equity 15.94% 15.48% 17.39% 17.00% 16.49%
Annualized net loan charge-offs to avg loans 0.44% 0.79% 0.01% 0.09% 0.01%
Net charge-offs  517  907  9  101  8
Efficiency ratio 54.5% 54.5% 55.5% 54.1% 54.1%
           
Per Share Data          
           
Basic earnings per share  $ 0.96  $ 0.89  $ 0.96  $ 0.88  $ 0.82
Diluted earnings per share  0.96  0.89  0.96  0.88  0.82
Dividend declared per share  0.47  0.47  0.47  0.46  0.46
Book value  24.43  22.96  22.22  20.97  20.48
Common stock price:          
High  44.60  39.90  41.67  39.30  36.56
Low  37.78  36.72  36.20  32.01  31.07
Close  44.33  39.81  40.88  38.78  32.75
Weighted average common shares:          
Basic  3,838  3,838  3,837  3,837  3,836
Fully Diluted  3,838  3,838  3,837  3,837  3,836
End-of-period common shares:          
Issued  4,019  4,018  4,018  4,018  4,017
Treasury  181  181  181  181  181
           
           
  Quarter Ended
           
(Dollars in Thousands, Except Per Share Data) 9/30/2012 6/30/2012 3/31/2012 12/31/2011 9/30/2011
           
Financial Condition Data:          
General          
Total assets  $ 840,606  $ 818,433  $ 793,114  $ 763,953  $ 752,650
Loans, net  477,530  457,904  435,832  428,805  422,989
Intangibles  3,032  3,032  3,032  3,032  3,032
Total deposits  641,110  641,167  621,542  581,664  575,300
 Noninterest-bearing  115,285  117,762  116,271  111,354  104,783
           
 Savings  81,479  81,479  77,253  71,646  73,376
 NOW  125,572  115,972  108,904  101,808  103,264
 Money Market  149,054  152,114  141,830  124,335  122,896
 Time Deposits  169,720  173,840  177,284  172,521  170,981
 Total interest-bearing deposits  525,825  523,405  505,271  470,310  470,517
           
Core deposits*  471,390  467,327  444,258  409,143  404,319
Shareholders' equity  93,779  88,111  85,279  80,460  78,572
           
Asset Quality          
           
Non-performing assets  $ 12,041  $ 8,725  $ 11,308  $ 12,009  $ 14,344
Non-performing assets to total assets 1.43% 1.07% 1.43% 1.57% 1.91%
Allowance for loan losses  7,521  7,438  7,745  7,154  6,355
Allowance for loan losses to total loans 1.55% 1.60% 1.75% 1.64% 1.48%
Allowance for loan losses to non-performing loans 62.46% 85.25% 68.49% 59.57% 44.30%
Non-performing loans to total loans 2.48% 1.87% 2.55% 2.75% 3.34%
           
Capitalization          
           
Shareholders' equity to total assets 11.16% 10.77% 10.75% 10.53% 10.44%
           
* Core deposits are defined as total deposits less time deposits      
       
Reconciliation of GAAP and Non-GAAP Financial Measures
               
(Dollars in Thousands, Except Per Share Data) Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2012   2011   2012   2011
GAAP net income  $ 3,667    $ 3,150    $ 10,754    $ 8,967
Less: net securities and bank-owned life insurance gains, net of tax  295    5    905    94
Non-GAAP operating earnings  $ 3,372    $ 3,145    $ 9,849    $ 8,873
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2012   2011   2012   2011
Return on average assets (ROA) 1.77%   1.67%   1.78%   1.65%
Less: net securities and bank-owned life insurance gains, net of tax 0.14%   0.00%   0.15%   0.02%
Non-GAAP operating ROA 1.63%   1.67%   1.63%   1.63%
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2012   2011   2012   2011
Return on average equity (ROE) 15.94%   16.49%   16.25%   16.46%
Less: net securities and bank-owned life insurance gains, net of tax 1.28%   0.03%   1.37%   0.18%
Non-GAAP operating ROE 14.66%   16.46%   14.88%   16.28%
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2012   2011   2012   2011
Basic earnings per share (EPS)  $ 0.96    $ 0.82    $ 2.80    $ 2.34
Less: net securities and bank-owned life insurance gains, net of tax  0.08   0.00    0.23    0.03
Non-GAAP basic operating EPS  $ 0.88    $ 0.82    $ 2.57    $ 2.31
               
  Three Months Ended   Nine Months Ended
  September 30,   September 30,
  2012   2011   2012   2011
Dilutive EPS  $ 0.96    $ 0.82    $ 2.80    $ 2.34
Less: net securities and bank-owned life insurance gains, net of tax  0.08   0.00    0.23    0.03
Non-GAAP dilutive operating EPS  $ 0.88    $ 0.82    $ 2.57    $ 2.31
               
CONTACT: Richard A. Grafmyre, President and Chief Executive Officer         300 Market Street         Williamsport, PA  17701         570-322-1111         e-mail: jssb@jssb.com