Exhibit 99.1

Press Release — For Immediate Release
January 23, 2012

Penns Woods Bancorp, Inc. Reports Fourth Quarter 2011 Operating Earnings

Williamsport, PA — January 23, 2012 - 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, increased to $3,079,000 and $11,952,000 for the three and twelve months ended December 31, 2011 compared to $2,854,000 and $10,815,000 for the same periods of 2010.

·                  Operating earnings per share for the three months ended December 31, 2011 were $0.80 basic and dilutive compared to $0.74 basic and dilutive for the same period of 2010 or an increase of 8.1%.  Operating earnings per share for the twelve months ended December 31, 2011 increased 10.6% to $3.12 basic and dilutive compared to $2.82 basic and dilutive for the same period of 2010.

·                  Net interest margin was 4.78% for the three months ended December 31, 2011 compared to 4.66% for the corresponding period of 2010.  For the twelve months ended December 31, 2011 the net interest margin was 4.70% compared to 4.57% for the twelve month 2010 period.

·                  Return on average equity was 17.00% for the three months ended December 31, 2011 compared to 15.56% for the corresponding period of 2010.  Earnings for the twelve months ended December 31, 2011 correlate to a return on average equity of 16.60% compared to 15.30% for the twelve month 2010 period.

“Although earnings remain stable we continue to deal with the challenging economy and credit cycle.  Our focus moving forward will continue to be building core deposits, loan growth, and managing credit risk,” 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 highligts 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 twelve months ended December 31, 2011 was $3,395,000 and $12,362,000 compared to $2,861,000 and $10,929,000 for the same periods of 2010.  Results for the three and twelve month periods ended December 31, 2011 compared to 2010 were impacted by an increase in after-tax securities gains of $309,000 (from a gain of $7,000 to a gain of $316,000) for the three month periods and an increase in after-tax securities gains of $296,000 (from a gain of $114,000 to a gain of $410,000) for the twelve month periods.  Basic and dilutive earnings per share for the three and twelve months ended December 31, 2011 were $0.88 and $3.22 compared to $0.75 and $2.85 for the corresponding periods of 2010.  Return on average assets and return on average equity were 1.80% and 17.00% for the three months ended December 31, 2011 compared to 1.63% and 15.56% for the corresponding period of 2010.  Earnings for the twelve months ended December 31, 2011 correlate to a return on average assets and a return on average equity of 1.69% and 16.60% compared to 1.56% and 15.30% for the twelve month 2010 period.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2011 was 4.78% and 4.70% compared to 4.66% and 4.57% for the corresponding periods of 2010.  In addition, the net interest margin has increased compared to the linked quarter.  The increase in net interest margin resulted primarily from a significant decrease in the cost of interest-bearing liabilities, as we continued to emphasize core deposit growth.  These deposits represent a lower cost funding source than time deposits and comprise 70.3% of total deposits at December 31, 2011 compared to 63.4% at December 31, 2010.  The average rate paid on total interest-bearing deposits decreased 35 and 39 basis points (bp) for the three and twelve months ended December 31, 2011 compared to the same periods of 2010.  The decrease was led by the rate paid on time deposits decreasing 36 and 45 bp for the three and twelve months ended December 31, 2011 compared to the same periods of 2010.  The duration of the time deposit portfolio, which was shortened over the past several years, is now being lengthened due to the apparent bottoming or near bottoming of deposit rates.  FHLB long-term borrowings have been reduced by $10,500,000 since December 31, 2010 with cash on hand and short-term borrowings being utilized to pay off these borrowings carrying an average rate of 4.60% that matured during the three months ended December 31, 2011.

“Today’s interest rate climate provides challenges to support a strong net interest margin.  To maintain our margin we have attacked the challenge from both the earning asset and funding sides of the balance sheet.  We continue to shorten the bond portfolio duration by utilizing shorter term corporate and agency bonds to offset the relatively longer duration of municipal bonds in the portfolio.  While this action may limit current earnings somewhat, it also limits interest rate risk and will provide cash flow over the next few years as we anticipate a period of increasing rates.  The yield on new loans, and investments, are at a lower level than the existing

portfolio which has placed downward pressure on the yield on earning assets.  Our focus on increasing core deposits has resulted in a decrease in the overall cost of interest-bearing liabilities which has offset the negative effects of a declining yield on earning assets,” commented President Grafmyre.

Assets

Total assets increased $72,265,000 to $763,953,000 at December 31, 2011 compared to December 31, 2010.  Net loans increased 4.7% to $428,805,000 at December 31, 2011 compared to December 31, 2010 as the economic environment has in general provided fewer loan opportunities.  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 and/or exceed our credit standards.  During 2011 successful loan campaigns were undertaken to build home equity loans and lines of credit.  The investment portfolio increased $54,503,000 from December 31, 2010 to December 31, 2011 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.

Nonperforming Loans

Our nonperforming loans to total loans ratio has increased to 2.75% at December 31, 2011 from 1.50% at December 31, 2010.  The increase in nonperforming loans is primarily the result of an increase in commercial loan delinquencies.  The increase is centered on several loans that either are 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 to average loans for the twelve months ended December 31, 2011 of 0.37% increased from our historically low levels primarily due to a $1,500,000 partial charge-off related to a real-estate development loan during the second quarter of 2011.  The allowance for loan losses was increased to 1.64% of total loans at December 31, 2011 from 1.45% of total loans at December 31, 2010 due to the general economic uncertainty and an increase in nonperforming loans.

Deposits

Deposits have grown 12.4%, or $64,156,000, to $581,664,000 at December 31, 2011 compared to December 31, 2010, with core deposits (total deposits excluding time deposits) increasing $80,910,000.  Noninterest-bearing deposits have increased 24.6% to $111,354,000 at December 31, 2011 compared to December 31, 2010.  Also playing a significant role in increasing core deposits was money market and NOW accounts with growth rates of 16.1% and 50.8%, respectively.  Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service.  In addition, over the past year we have implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration.

Shareholders’ Equity

Shareholders’ equity increased $13,840,000 to $80,460,000 at December 31, 2011 compared to December 31, 2010.   The accumulated other comprehensive loss of $1,219,000 at December 31, 2011 is a result of an increase in unrealized gains on available for sale securities from an unrealized loss of $7,276,000 at December 31, 2010 to an unrealized gain of $2,914,000 at December 31, 2011.  However, the level of accumulated other comprehensive loss at December 31, 2011 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 $20.97 at December 31, 2011 compared to $17.37 at December 31, 2010 and an equity to asset ratio of 10.53% at December 31, 2011 compared to 9.63% at December 31, 2010.  Excluding accumulated other comprehensive loss, book value per share was $21.29 at December 31, 2011 compared to $19.90 at December 31, 2010.  Dividends paid to shareholders were $0.46 and $1.84 for the three and twelve months ended December 31, 2011 and 2010.

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, 2010.

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)

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES