Exhibit 99.1

Press Release — For Immediate Release

July 18, 2012

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

Williamsport, PA — July 18, 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 and bank owned life insurance gains on death benefit, increased to $3,286,000 and $6,477,000 for the three and six months ended June 30, 2012 compared to $2,958,000 and $5,729,000 for the same period of 2011.

·                  Operating earnings per share for the three and six months ended June 30, 2012 were $0.86 and $1.69 basic and dilutive compared to $0.77 and $1.49 basic and dilutive for the same period of 2011, an increase of 11.7% and 13.4%.

·                  Return on average assets was 1.67% and 1.78% for the three and six months ended June 30, 2012 compared to 1.64% for the three and six month periods of 2011.

·                  Return on average equity was 15.48% and 16.42% for the three and six months ended June 30, 2012 compared to 16.29% and 16.45% for the corresponding period of 2011.

“The effort of all employees to focus on relationships has resulted in continued growth of loans and deposits.  These efforts have resulted in significant growth in home equity loans, while core deposits have increased substantially and have been utilized to fund the loan growth.  The growth in loans and deposits is the cornerstone of the strong financial metrics of net income, earnings per share, return on equity, and return on assets that are being reported,” 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 six months ended June 30, 2012 was $3,398,000 and $7,087,000 compared to $2,964,000 and $5,817,000 for the same period of 2011.  Results for the three and six months ended June 30, 2012 compared to 2011 were impacted by an increase in after-tax securities gains of $106,000 (from a gain of $6,000 to a gain of $112,000) for the three month periods and an increase in after-tax securities gains of $413,000 (from a gain of $88,000 to a gain of $501,000) for the six month periods.  In addition, a gain of $109,000 on death benefit related to bank owned life insurance was recorded during the six months ended June 30, 2012.  Basic and dilutive earnings per share for the three and six months ended June 30, 2012 were $0.89 and $1.85 compared to $0.78 and $1.52 for the corresponding periods of 2011.  Return on average assets and return on average equity were 1.67% and 15.48% for the three months ended June 30, 2012 compared to 1.64% and 16.29% for the corresponding period of 2011.  Earnings for the six months ended June 30, 2012 correlate to a return on average assets and a return on average equity of 1.78% and 16.42% compared to 1.64% and 16.45% for the six month 2011 period.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2012 was 4.47% and 4.59% compared to 4.58% and 4.73% for the corresponding period of 2011.  While the net interest margin has decreased year over year, net interest income on a fully taxable equivalent basis has increased $1,578,000 to $17,010,000 for the six months ended June 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 72.9% of total deposits at June 30, 2012 compared to 68.8% at June 30, 2011.  The average rate paid on total interest-bearing deposits decreased 32 and 33 basis points (bp) for the three and six months ended June 30, 2012 compared to the same period of 2011.  The decrease was led by the rate paid on time deposits decreasing 35 and 36 bp for the three and six months ended June 30, 2012 compared to the same period of 2011.  The duration of the time deposit portfolio, which was shortened over the past several years, is now being slowly lengthened due to the apparent bottoming or near bottoming of deposit rates.  FHLB long-term borrowings have been reduced by $10,500,000 since June 30, 2011 as borrowings in that amount carrying an average rate of 4.60% matured during the three months ended December 31, 2011.

“Maintaining the net interest margin in the current interest rate environment will be challenging.  We have been able to reduce the rates paid on interest-bearing liabilities; however, earning asset yields have also been decreasing.  Earning asset yields are expected to decrease over the near term as loan yields have been decreasing due to the interest rate environment, while at the same time the duration of the bond portfolio has been shortened by utilizing shorter term corporate and agency bonds to offset the relatively longer duration of municipal bonds in the portfolio.  The shortening of the earning asset portfolio may limit current earnings due to the low rates on the short end of the interest rate curve, but 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 negative effect of the declining yield on earning assets is being limited due to the increase in core deposits.  We expect the overall cost of interest-bearing liabilities to decline through the second half of the year as time deposits reprice and FHLB borrowings mature during the fourth quarter of 2012,” commented President Grafmyre.

Assets

Total assets increased $73,447,000 to $818,433,000 at June 30, 2012 compared to June 30, 2011.  Net loans increased 10.8% to $457,904,000 at June 30, 2012 compared to June 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 a successful loan campaign was undertaken to build home equity loans and lines of credit.  The campaign resulted in loan growth of approximately $15,000,000.  The investment portfolio increased $49,204,000 from June 30, 2011 to June 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 1.87% at June 30, 2012 from 2.60% at June 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 $907,000 for the three months ended June 30, 2012 represented 0.79% of average loans for the three months ended June 30, 2012.  The allowance for loan losses was increased to 1.60% of total loans at June 30, 2012 from 1.38% at June 30, 2011 due to the general economic uncertainty that persists.

Deposits

Deposits have grown 12.5%, or $71,334,000, to $641,167,000 at June 30, 2012 compared to June 30, 2011, with core deposits (total deposits excluding time deposits) increasing $75,011,000, while higher cost time deposits decreased $3,677,000.  Noninterest-bearing deposits have increased 17.6% to $117,762,000 at June 30, 2012 compared to June 30, 2011.  Also playing a significant role in increasing core deposits were money market and NOW accounts with growth rates of 17.9% and 27.0%, 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 $20 million in deposits during the first six months of its operation.

Shareholders’ Equity

Shareholders’ equity increased $14,205,000 to $88,111,000 at June 30, 2012 compared to June 30, 2011.   The accumulated other comprehensive gain of $2,925,000 at June 30, 2012 is a result of an increase in unrealized gains on available for sale securities from an unrealized loss of $2,312,000 at June 30, 2011 to an unrealized gain of $7,058,000 at June 30, 2012.  However, the amount of accumulated other comprehensive gain at June 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 $22.96 at June 30, 2012 compared to $19.27 at June 30, 2011 and an equity to asset ratio of 10.77% at June 30, 2012 compared to 9.92% at June 30, 2011.  Excluding accumulated other comprehensive gain/loss, book value per share was $22.20 at June 30, 2012 compared to $20.50 at June 30, 2011.  Dividends per share paid to shareholders were $0.47 and $0.94 for the three and six months ended June 30, 2012 compared to $0.46 and $0.92 for the three and six months ended June 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)

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