PENNS WOODS BANCORP INC - FORM 8-K - EX-99.1 - EXHIBIT 99.1

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8-K - 8-K - PENNS WOODS BANCORP INC	q22016-8xk.htm

Exhibit 99.1

Press Release — For Immediate Release

July 21, 2016

Penns Woods Bancorp, Inc. Reports Second Quarter 2016 Earnings

Williamsport, PA — July 21, 2016 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. continued its solid earnings, supported by loan and deposit growth, achieving net income of $6,468,000 for the six months ended June 30, 2016 resulting in basic and dilutive earnings per share of $1.37.

Highlights

•

Net income from core operations (“operating earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains, remained flat at $3,065,000 for the three months ended June 30, 2016 compared to $3,088,000 for the same period of 2015. Operating earnings decreased to $5,830,000 for the six months ended June 30, 2016 compared to $6,007,000 for the same period of 2015. The 2015 six month period included non-recurring gains on the sale of other real estate owned of $222,000 above the 2016 level. In addition, the investment portfolio has declined $67,802,000 from June 30, 2015 to June 30, 2016 as part of our strategy to position the balance sheet for a rising rate environment.


•	Operating earnings per share for the three months ended June 30, 2016 and 2015 were $0.65 for both basic and dilutive. Operating earnings per share for the six months ended June 30, 2016 were $1.23 basic and dilutive compared to $1.25 basic and dilutive for the same period of 2015.


•	Return on average assets was 1.00% for the three months ended June 30, 2016 compared to 1.07% for the corresponding period of 2015. Return on average assets was 0.97% for the six months ended June 30, 2016 compared to 1.07% for the corresponding period of 2015.


•	Return on average equity was 9.77% for the three months ended June 30, 2016 compared to 10.05% for the corresponding period of 2015. Return on average equity was 9.36% for the six months ended June 30, 2016 compared to 9.90% for the corresponding period of 2015.

“The first six months of 2016 have seen the continuation of our strategy to more conservatively manage the balance sheet by reducing interest rate and market risk. Our employees have been successful in building the loan portfolio primarily through growth in variable rate home equity products. In addition the commercial loan portfolio continues to perform well. Funding the growth was achieved through a reduction in the investment portfolio combined with deposit gathering efforts. The loan and deposit growth is the result of relationship building,” 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, 2016 was $3,390,000 and $6,468,000 compared to $3,433,000 and $6,788,000 for the same period of 2015. Results for the three and six months ended June 30, 2016 compared to 2015 were impacted by a decrease in after-tax securities gains of $20,000 (from a gain of $345,000 to a gain of $325,000) for the three month periods and a decrease in after-tax securities gains of $143,000 (from a gain of $781,000 to a gain of $638,000) for the six month periods. Basic and dilutive earnings per share for the three and six months ended June 30, 2016 were $0.72 and $1.37 compared to $0.72 and $1.42 for the corresponding periods of 2015. Return on average assets and return on average equity were 1.00% and 9.77% for the three months ended June 30, 2016 compared to 1.07% and 10.05% for the corresponding period of 2015. Return on average assets and return on average equity were 0.97% and 9.36% for the six months ended June 30, 2016 compared to 1.07% and 9.90% for the corresponding period of 2015.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2016 was 3.42% and 3.49% compared to 3.64% and 3.66% for the corresponding periods of 2015. The decline in the net interest margin was driven by a decreasing yield on the loan and investment portfolios due to the continued low rate environment and our strategic decision to continue repositioning the earning asset portfolio in anticipation of a rising rate environment. The impact of the declining earning asset yield and decreasing investment portfolio balance was partially offset by a 7.80% growth in gross loans from June 30, 2015 to June 30, 2016 resulting in net interest income increasing slightly compared to the comparable six month period of 2015. The loan growth was funded by an increase in core deposits and a decrease in the investment portfolio. Core deposits represent a lower cost funding source than time deposits and comprise 79.65% of total deposits at June 30, 2016 and 78.16% at June 30, 2015.

“The net interest margin continues to come under downward pressure from both external and internal factors. The continued low interest rate environment is limiting the yield on earning assets that we can acquire into our loan and investment portfolios. At the same time, our strategic decision to reduce our interest rate and market risk in a rising rate environment by reducing the duration and size of the investment portfolio through active management has resulted in a declining investment portfolio yield. The combination of these factors has resulted in new earning assets being added to the balance sheet at rates lower than the legacy assets they replace. While the yield on earning assets is declining, the rate paid on interest bearing liabilities has become stagnant as liability rates are at or near their apparent bottom,” commented President Grafmyre.

Assets

Total assets increased $54,670,000 to $1,346,482,000 at June 30, 2016 compared to June 30, 2015. Net loans increased $74,989,000 to $1,041,602,000 at June 30, 2016 compared to June 30, 2015 primarily due to campaigns related to increasing home equity product market share during 2015 and 2016, and growth in the commercial loan portfolio. The investment portfolio decreased $67,802,000 from June 30, 2015 to June 30, 2016 due to our strategy to reduce the investment portfolio duration through the selective selling of bonds as opportunities develop. The combination of loan portfolio growth and a decrease in the size of the investment portfolio has resulted in a shortening of the overall earning asset portfolio duration consistent with a strategy to reduce the interest rate and market risk exposure to a rising rate environment.

Non-performing Loans

The non-performing loans to total loans ratio increased to 1.10% at June 30, 2016 from 0.99% at June 30, 2015. This change was primarily the result of a large commercial real estate loan that was placed on non-accrual status causing non-performing loans to increase to $11,626,000 at June 30, 2016 from $9,689,000 at June 30, 2015. 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 $135,000 for the six months ended June 30, 2016 minimally impacted the allowance for loan losses which was 1.19% of total loans at June 30, 2016. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $77,399,000 to $1,084,867,000 at June 30, 2016 compared to June 30, 2015. Core deposits (total deposits excluding time deposits) increased $76,724,000 due to our commitment to building complete banking relationships with our customers. Noninterest-bearing deposits increased $29,500,000 to $274,002,000 at June 30, 2016 compared to June 30, 2015. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. While deposit gathering efforts have centered on core deposits, the lengthening of the time deposit portfolio is in process as part of the strategy to build balance sheet protection in a rising rate environment.

Shareholders’ Equity

Shareholders’ equity increased $4,396,000 to $139,394,000 at June 30, 2016 compared to June 30, 2015. Since June 30, 2015 treasury stock purchases of $1,374,000 for 33,974 shares were completed as part of the stock repurchase plan. The change in accumulated other comprehensive loss from $3,170,000 at June 30, 2015 to $2,168,000 at June 30, 2016 is a result of an increase in unrealized gains on available for sale securities from an unrealized gain of $1,374,000 at June 30, 2015 to an unrealized gain of $1,838,000 at June 30, 2016. The amount of accumulated other comprehensive loss at June 30, 2016 was also impacted by the change in net excess of the projected benefit obligation over the fair value of the plan assets of the defined benefit pension plan resulting in a decrease in the net loss of $538,000 to $4,006,000 at June 30, 2016. The current level of shareholders’ equity equates to a book value per share of $29.45 at June 30, 2016 compared to $28.33 at June 30, 2015 and an equity to asset ratio of 10.35% at June 30, 2016 compared to 10.45% at June 30, 2015. Excluding goodwill and intangibles, book value per share was $25.42 at June 30, 2016 compared to $24.47 at June 30, 2015. Dividends declared for each of the three and six months ended June 30, 2016 and 2015 were $0.47 and $0.94 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates fifteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, and Union Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County. 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 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, 2015.

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, President and Chief Executive Officer
	300 Market Street
	Williamsport, PA 17701
	570-322-1111	e-mail: pwod@pwod.com

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.

CONSOLIDATED BALANCE SHEET

(UNAUDITED)



	June 30,
(In Thousands, Except Share Data)	2016			2015			% Change
ASSETS
Noninterest-bearing balances	$	24,088		$	20,428		17.92	%
Interest-bearing balances in other financial institutions	45,387			1,441			3,049.69	%
Total cash and cash equivalents	69,475			21,869			217.69	%

Investment securities, available for sale, at fair value	146,667			214,312			(31.56	)%
Investment securities, trading	—			157			(100.00	)%
Loans held for sale	1,349			2,107			(35.98	)%
Loans	1,054,119			977,878			7.80	%
Allowance for loan losses	(12,517		)	(11,265		)	11.11	%
Loans, net	1,041,602			966,613			7.76	%
Premises and equipment, net	22,304			20,816			7.15	%
Accrued interest receivable	3,490			3,706			(5.83	)%
Bank-owned life insurance	27,016			26,327			2.62	%
Investment in limited partnerships	704			1,229			(42.72	)%
Goodwill	17,104			17,104			—	%
Intangibles	1,979			1,294			52.94	%
Deferred tax asset	7,400			8,772			(15.64	)%
Other assets	7,392			7,506			(1.52	)%
TOTAL ASSETS	$	1,346,482		$	1,291,812		4.23	%

LIABILITIES
Interest-bearing deposits	$	810,865		$	762,966		6.28	%
Noninterest-bearing deposits	274,002			244,502			12.07	%
Total deposits	1,084,867			1,007,468			7.68	%

Short-term borrowings	17,440			59,026			(70.45	)%
Long-term borrowings	91,025			75,426			20.68	%
Accrued interest payable	456			410			11.22	%
Other liabilities	13,300			14,484			(8.17	)%
TOTAL LIABILITIES	1,207,088			1,156,814			4.35	%

SHAREHOLDERS’ EQUITY
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued	—			—			n/a
Common stock, par value $8.33, 15,000,000 shares authorized; 5,006,036 and 5,003,169 shares issued	41,717			41,698			0.05	%
Additional paid-in capital	50,025			49,933			0.18	%
Retained earnings	60,054			55,397			8.41	%
Accumulated other comprehensive loss:
Net unrealized gain on available for sale securities	1,838			1,374			33.77	%
Defined benefit plan	(4,006		)	(4,544		)	11.84	%
Treasury stock at cost, 272,452 and 238,478 shares	(10,234		)	(8,860		)	15.51	%
TOTAL SHAREHOLDERS’ EQUITY	139,394			134,998			3.26	%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,346,482		$	1,291,812		4.23	%

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)



	Three Months Ended June 30,							Six Months Ended June 30,
(In Thousands, Except Per Share Data)	2016		2015			% Change		2016		2015			% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees	$	10,466	$	9,752		7.32	%	$	20,821	$	19,075		9.15	%
Investment securities:
Taxable	601		885			(32.09	)%	1,223		1,899			(35.60	)%
Tax-exempt	398		744			(46.51	)%	874		1,511			(42.16	)%
Dividend and other interest income	204		148			37.84	%	477		441			8.16	%
TOTAL INTEREST AND DIVIDEND INCOME	11,669		11,529			1.21	%	23,395		22,926			2.05	%

INTEREST EXPENSE:
Deposits	881		785			12.23	%	1,716		1,528			12.30	%
Short-term borrowings	8		28			(71.43	)%	34		47			(27.66	)%
Long-term borrowings	492		494			(0.40	)%	983		1,018			(3.44	)%
TOTAL INTEREST EXPENSE	1,381		1,307			5.66	%	2,733		2,593			5.40	%

NET INTEREST INCOME	10,288		10,222			0.65	%	20,662		20,333			1.62	%

PROVISION FOR LOAN LOSSES	258		600			(57.00	)%	608		1,300			(53.23	)%

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	10,030		9,622			4.24	%	20,054		19,033			5.36	%

NON-INTEREST INCOME:
Service charges	561		598			(6.19	)%	1,093		1,151			(5.04	)%
Securities gains, available for sale	486		526			(7.60	)%	921		1,187			(22.41	)%
Securities gains (losses), trading	6		(4		)	250.00	%	46		(4		)	1,250	%
Bank-owned life insurance	161		171			(5.85	)%	345		359			(3.90	)%
Gain on sale of loans	566		482			17.43	%	1,033		781			32.27	%
Insurance commissions	200		204			(1.96	)%	405		438			(7.53	)%
Brokerage commissions	272		294			(7.48	)%	527		539			(2.23	)%
Other	926		786			17.81	%	1,805		1,866			(3.27	)%
TOTAL NON-INTEREST INCOME	3,178		3,057			3.96	%	6,175		6,317			(2.25	)%

NON-INTEREST EXPENSE:
Salaries and employee benefits	4,346		4,301			1.05	%	8,926		8,771			1.77	%
Occupancy	545		564			(3.37	)%	1,086		1,192			(8.89	)%
Furniture and equipment	679		643			5.60	%	1,380		1,238			11.47	%
Pennsylvania shares tax	220		243			(9.47	)%	478		467			2.36	%
Amortization of investments in limited partnerships	68		166			(59.04	)%	220		331			(33.53	)%
Federal Deposit Insurance Corporation deposit insurance	236		230			2.61	%	468		445			5.17	%
Marketing	185		145			27.59	%	395		274			44.16	%
Intangible amortization	100		80			25.00	%	187		162			15.43	%
Other	2,287		2,049			11.62	%	4,587		4,009			14.42	%
TOTAL NON-INTEREST EXPENSE	8,666		8,421			2.91	%	17,727		16,889			4.96	%
INCOME BEFORE INCOME TAX PROVISION	4,542		4,258			6.67	%	8,502		8,461			0.48	%
INCOME TAX PROVISION	1,152		825			39.64	%	2,034		1,673			21.58	%
NET INCOME	$	3,390	$	3,433		(1.25	)%	$	6,468	$	6,788		(4.71	)%

EARNINGS PER SHARE - BASIC AND DILUTED	$	0.72	$	0.72		—	%	$	1.37	$	1.42		(3.52	)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED	4,733,251		4,779,687			(0.97	)%	4,736,878		4,790,536			(1.12	)%
DIVIDENDS DECLARED PER SHARE	$	0.47	$	0.47		—	%	$	0.94	$	0.94		—	%

PENNS WOODS BANCORP, INC.

AVERAGE BALANCES AND INTEREST RATES



	Three Months Ended
	June 30, 2016						June 30, 2015
(Dollars in Thousands)	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
ASSETS:
Tax-exempt loans	$	46,281	$	445	3.87	%	$	39,977	$	388	3.89	%
All other loans	1,000,541		10,172		4.09	%	921,769		9,496		4.13	%
Total loans	1,046,822		10,617		4.08	%	961,746		9,884		4.12	%

Federal funds sold	—		—		—	%	—		—		—	%

Taxable securities	94,049		734		3.12	%	130,730		1,030		3.15	%
Tax-exempt securities	56,348		603		4.28	%	87,509		1,127		5.15	%
Total securities	150,397		1,337		3.56	%	218,239		2,157		3.95	%

Interest-bearing deposits	54,309		71		0.53	%	3,781		3		0.32	%

Total interest-earning assets	1,251,528		12,025		3.86	%	1,183,766		12,044		4.08	%

Other assets	100,241						98,039

TOTAL ASSETS	$	1,351,769					$	1,281,805

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings	$	153,151	14		0.04	%	$	143,305	14		0.04	%
Super Now deposits	198,048		125		0.25	%	187,828		124		0.26	%
Money market deposits	239,754		161		0.27	%	209,624		143		0.27	%
Time deposits	221,376		581		1.06	%	220,851		504		0.92	%
Total interest-bearing deposits	812,329		881		0.44	%	761,608		785		0.41	%

Short-term borrowings	16,710		8		0.19	%	39,166		28		0.28	%
Long-term borrowings	91,025		492		2.14	%	81,924		494		2.39	%
Total borrowings	107,735		500		1.84	%	121,090		522		1.71	%

Total interest-bearing liabilities	920,064		1,381		0.60	%	882,698		1,307		0.59	%

Demand deposits	276,748						244,205
Other liabilities	16,151						18,231
Shareholders’ equity	138,806						136,671

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,351,769					$	1,281,805
Interest rate spread					3.26	%					3.49	%
Net interest income/margin			$	10,644	3.42	%			$	10,737	3.64	%



	Three Months Ended June 30,
	2016		2015
Total interest income	$	11,669	$	11,529
Total interest expense	1,381		1,307
Net interest income	10,288		10,222
Tax equivalent adjustment	356		515
Net interest income (fully taxable equivalent)	$	10,644	$	10,737



	Six Months Ended
	June 30, 2016						June 30, 2015
(Dollars in Thousands)	Average Balance		Interest		Average Rate		Average Balance		Interest		Average Rate
ASSETS:
Tax-exempt loans	$	50,700	$	980	3.89	%	$	38,303	$	771	4.06	%
All other loans	994,034		20,174		4.08	%	906,693		18,566		4.13	%
Total loans	1,044,734		21,154		4.07	%	944,996		19,337		4.13	%

Taxable securities	96,541		1,618		3.35	%	137,041		2,333		3.40	%
Tax-exempt securities	59,860		1,324		4.42	%	87,667		2,289		5.22	%
Total securities	156,401		2,942		3.76	%	224,708		4,622		4.11	%

Interest-bearing deposits	33,501		82		0.49	%	5,152		7		0.27	%

Total interest-earning assets	1,234,636		24,178		3.94	%	1,174,856		23,966		4.11	%

Other assets	98,276						97,043

TOTAL ASSETS	$	1,332,912					$	1,271,899

LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings	$	151,004	29		0.04	%	$	142,537	29		0.04	%
Super Now deposits	193,098		249		0.26	%	189,125		253		0.27	%
Money market deposits	229,497		301		0.26	%	207,446		279		0.27	%
Time deposits	220,965		1,137		1.03	%	218,824		967		0.89	%
Total interest-bearing deposits	794,564		1,716		0.43	%	757,932		1,528		0.41	%

Short-term borrowings	22,560		34		0.30	%	33,728		47		0.28	%
Long-term borrowings	91,025		983		2.14	%	82,961		1,018		2.44	%
Total borrowings	113,585		1,017		1.77	%	116,689		1,065		1.82	%

Total interest-bearing liabilities	908,149		2,733		0.60	%	874,621		2,593		0.59	%

Demand deposits	270,900						242,488
Other liabilities	15,703						17,687
Shareholders’ equity	138,160						137,103

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,332,912					$	1,271,899
Interest rate spread					3.34	%					3.52	%
Net interest income/margin			$	21,445	3.49	%			$	21,373	3.66	%



	Six Months Ended June 30,
	2016		2015
Total interest income	$	23,395	$	22,926
Total interest expense	2,733		2,593
Net interest income	20,662		20,333
Tax equivalent adjustment	783		1,040
Net interest income (fully taxable equivalent)	$	21,445	$	21,373



(Dollars in Thousands, Except Per Share Data)	Quarter Ended
	6/30/2016			3/31/2016			12/31/2015			9/302015			6/30/2015
Operating Data
Net income	$	3,390		$	3,078		$	3,746		$	3,364		$	3,433
Net interest income	10,288			10,374			10,338			10,234			10,222
Provision for loan losses	258			350			480			520			600
Net security gains	492			475			894			493			522
Non-interest income, excluding net security gains	2,686			2,522			2,417			2,644			2,535
Non-interest expense	8,666			9,061			8,317			8,530			8,421

Performance Statistics
Net interest margin	3.42		%	3.57		%	3.55		%	3.55		%	3.64		%
Annualized return on average assets	1.00		%	0.94		%	1.15		%	1.04		%	1.07		%
Annualized return on average equity	9.77		%	8.95		%	10.73		%	9.89		%	10.05		%
Annualized net loan charge-offs (recoveries) to average loans	0.05		%	—		%	(0.03		)%	0.12		%	0.07		%
Net charge-offs (recoveries)	123			12			(75		)	296			161
Efficiency ratio	66.0		%	69.6		%	64.6		%	65.7		%	65.3		%

Per Share Data
Basic earnings per share	$	0.72		$	0.65		$	0.79		$	0.71		$	0.72
Diluted earnings per share	0.72			0.65			0.79			0.71			0.72
Dividend declared per share	0.47			0.47			0.47			0.47			0.47
Book value	29.45			29.09			28.71			28.54			28.33
Common stock price:
High	44.70			41.32			45.28			44.56			48.28
Low	37.82			36.73			40.47			40.41			41.84
Close	41.99			38.54			42.46			40.92			44.09
Weighted average common shares:
Basic	4,733			4,741			4,747			4,762			4,780
Fully Diluted	4,733			4,741			4,747			4,762			4,780
End-of-period common shares:
Issued	5,006			5,006			5,005			5,004			5,004
Treasury	272			272			258			254			238



(Dollars in Thousands, Except Per Share Data)	Quarter Ended
	6/30/2016			3/31/2016			12/31/2015			9/30/2015			6/30/2015
Financial Condition Data:
General
Total assets	$	1,346,482		$	1,318,137		$	1,320,057		$	1,299,292		$	1,291,812
Loans, net	1,041,602			1,028,870			1,033,163			990,164			966,613
Goodwill	17,104			17,104			17,104			17,104			17,104
Intangibles	1,979			2,078			1,240			1,316			1,294
Total deposits	1,084,867			1,059,581			1,031,880			1,004,801			1,007,468
Noninterest-bearing	274,002			269,362			280,083			247,848			244,502

Savings	152,540			153,217			144,561			143,224			143,415
NOW	190,890			190,168			176,078			188,444			188,092
Money Market	246,712			226,659			209,782			204,475			211,412
Time Deposits	220,723			220,175			221,376			220,810			220,047
Total interest-bearing deposits	810,865			790,219			751,797			756,953			762,966

Core deposits*	864,145			839,406			810,504			783,991			787,421
Shareholders’ equity	139,394			137,663			136,279			135,577			134,998

Asset Quality
Non-performing loans	$	11,626		$	11,648		$	9,446		$	8,608		$	9,689
Non-performing loans to total assets	0.86		%	0.88		%	0.72		%	0.66		%	0.75		%
Allowance for loan losses	12,517			12,382			12,044			11,489			11,265
Allowance for loan losses to total loans	1.19		%	1.19		%	1.15		%	1.15		%	1.15		%
Allowance for loan losses to non-performing loans	107.66		%	106.30		%	127.50		%	133.47		%	116.27		%
Non-performing loans to total loans	1.10		%	1.12		%	0.90		%	0.86		%	0.99		%

Capitalization
Shareholders’ equity to total assets	10.35		%	10.44		%	10.32		%	10.43		%	10.45		%

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures



	Three Months Ended June 30,						Six Months Ended June 30,
(Dollars in Thousands, Except Per Share Data)	2016			2015			2016			2015
GAAP net income	$	3,390		$	3,433		$	6,468		$	6,788
Less: net securities gains, net of tax	325			345			638			781
Non-GAAP operating earnings	$	3,065		$	3,088		$	5,830		$	6,007

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Return on average assets (ROA)	1.00		%	1.07		%	0.97		%	1.07		%
Less: net securities gains, net of tax	0.09		%	0.11		%	0.10		%	0.13		%
Non-GAAP operating ROA	0.91		%	0.96		%	0.87		%	0.94		%

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Return on average equity (ROE)	9.77		%	10.05		%	9.36		%	9.90		%
Less: net securities gains, net of tax	0.94		%	1.01		%	0.92		%	1.14		%
Non-GAAP operating ROE	8.83		%	9.04		%	8.44		%	8.76		%

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Basic earnings per share (EPS)	$	0.72		$	0.72		$	1.37		$	1.42
Less: net securities gains, net of tax	0.07			0.07			0.14			0.17
Non-GAAP basic operating EPS	$	0.65		$	0.65		$	1.23		$	1.25

	Three Months Ended June 30,						Six Months Ended June 30,
	2016			2015			2016			2015
Dilutive EPS	$	0.72		$	0.72		$	1.37		$	1.42
Less: net securities gains, net of tax	0.07			0.07			0.14			0.17
Non-GAAP dilutive operating EPS	$	0.65		$	0.65		$	1.23		$	1.25

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PENNS WOODS BANCORP INC Reports