EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS
(Dollars In Thousands, Except Per Share Data)       (Unaudited)
		AS OF OR FOR THE
		SIX MONTHS ENDED								%
		JUNE 30,								INCREASE
		2018				2017				(DECREASE)
EARNINGS PERFORMANCE
Net Income		$	10,746			$	7,555				42.24	%
Return on Average Assets (Annualized)			1.70	%			1.22	%			39.34	%
Return on Average Equity (Annualized)			11.56	%			8.07	%			43.25	%
BALANCE SHEET HIGHLIGHTS
Total Assets		$	1,284,007			$	1,243,401				3.27	%
Available-for-Sale Debt Securities			348,044				363,776				-4.32	%
Loans (Net)			809,816				771,057				5.03	%
Allowance for Loan Losses			8,831				8,635				2.27	%
Deposits and Repo Sweep Accounts			1,046,068				1,002,137				4.38	%
OFF-BALANCE SHEET
Outstanding Balance of Mortgage Loans Sold
with Servicing Retained			171,543				165,789				3.47	%
Trust Assets Under Management			927,089				894,669				3.62	%
SHAREHOLDERS' VALUE (PER COMMON SHARE)
Net Income - Basic		$	0.88			$	0.62				41.94	%
Net Income - Diluted		$	0.87			$	0.62				40.32	%
Dividends		$	0.54			$	0.52				3.85	%
Common Book Value		$	15.40			$	15.59				-1.22	%
Tangible Common Book Value (a)		$	14.43			$	14.61				-1.23	%
Market Value (Last Trade)		$	25.86			$	23.26				11.18	%
Market Value /  Common Book Value			167.92	%			149.20	%			12.55	%
Market Value /  Tangible Common Book Value			179.21	%			159.21	%			12.56	%
Price Earnings Multiple (Annualized)			14.69				18.76				-21.70	%
Dividend Yield (Annualized)			4.18	%			4.47	%			-6.49	%
Common Shares Outstanding, End of Period			12,280,538				12,176,693				0.85	%

 

 

CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS (Continued)
(Dollars In Thousands, Except Per Share Data)       (Unaudited)
		AS OF OR FOR THE
		SIX MONTHS ENDED								%
		JUNE 30,								INCREASE
		2018				2017				(DECREASE)
SAFETY AND SOUNDNESS
Tangible Common Equity / Tangible Assets (a)			13.93	%			14.45	%			-3.56	%
Nonperforming Assets / Total Assets			1.35	%			1.30	%			3.85	%
Allowance for Loan Losses / Total Loans			1.08	%			1.11	%			-2.70	%
Total Risk Based Capital Ratio (b)			23.76	%			23.57	%			0.81	%
Tier 1 Risk Based Capital Ratio (b)			22.64	%			22.45	%			0.85	%
Common Equity Tier 1 Risk Based Capital Ratio (b)			22.64	%			22.45	%			0.85	%
Leverage Ratio (b)			14.52	%			14.49	%			0.21	%
AVERAGE BALANCES
Average Assets		$	1,263,473			$	1,238,481				2.02	%
Average Equity		$	185,984			$	187,349				-0.73	%
EFFICIENCY RATIO
Net Interest Income on a Fully Taxable-Equivalent
Basis		$	22,812			$	21,903				4.15	%
Noninterest Income			9,095				7,970				14.12	%
Total (1)		$	31,907			$	29,873				6.81	%
Noninterest Expense (2)		$	19,579			$	18,374				6.56	%
Efficiency Ratio = (2)/(1)			61.36	%			61.51	%			-0.24	%

 

(a) Tangible book value per common share and tangible common equity as a percentage of tangible assets are non-U.S. GAAP ratios.  Management believes this non-GAAP information is helpful in evaluating the strength of the Corporation's capital and in providing an alternative, conservative valuation of the Corporation's net worth.  The ratios shown above are based on the following calculations of tangible assets and tangible common equity:

 

Total Assets		$	1,284,007			$	1,243,401
Less: Intangible Assets, Primarily Goodwill			(11,952	)			(11,957	)
Tangible Assets		$	1,272,055			$	1,231,444
Total Shareholders' Equity		$	189,179			$	189,859
Less: Intangible Assets, Primarily Goodwill			(11,952	)			(11,957	)
Tangible Common Equity (3)		$	177,227			$	177,902
Common Shares Outstanding, End of Period (4)			12,280,538				12,176,693
Tangible Common Book Value per Share = (3)/(4)		$	14.43			$	14.61

 

(b) Capital ratios for the most recent period are estimated.                        

 

 

QUARTERLY CONDENSED, CONSOLIDATED
INCOME STATEMENT INFORMATION
(Dollars In Thousands, Except Per Share Data) (Unaudited)		For the Three Months Ended:
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2018				2018				2017				2017				2017				2017
Interest income		$	12,334			$	11,890			$	11,785			$	11,626			$	11,340			$	11,112
Interest expense			1,079				993				999				985				978				953
Net interest income			11,255				10,897				10,786				10,641				10,362				10,159
(Credit) provision for loan losses			(20	)			292				23				322				4				452
Net interest income after (credit) provision for loan losses			11,275				10,605				10,763				10,319				10,358				9,707
Noninterest income			4,689				4,406				4,117				4,066				4,106				3,864
Net gains on securities			1,468				0				0				5				107				145
Noninterest expense			9,684				9,895				9,401				9,192				9,076				9,298
Income before income tax provision			7,748				5,116				5,479				5,198				5,495				4,418
Income tax provision			1,377				741				3,536				1,262				1,374				984
Net income		$	6,371			$	4,375			$	1,943			$	3,936			$	4,121			$	3,434
Net income attributable to common shares		$	6,339			$	4,352			$	1,933			$	3,916			$	4,100			$	3,416
Basic earnings per common share		$	0.52			$	0.36			$	0.16			$	0.32			$	0.34			$	0.28
Diluted earnings per common share		$	0.52			$	0.36			$	0.16			$	0.32			$	0.34			$	0.28

 

QUARTERLY CONDENSED, CONSOLIDATED
BALANCE SHEET INFORMATION
(In Thousands) (Unaudited)		As of:
		June 30,				March 31,				Dec. 31,				Sept. 30,				June 30,				March 31,
		2018				2018				2017				2017				2017				2017
ASSETS
Cash & Due from Banks		$	51,475			$	36,860			$	40,244			$	32,850			$	34,643			$	32,543
Available-for-Sale Debt Securities			348,044				341,133				355,937				364,108				363,776				375,948
Loans Held for Sale			177				225				765				437				1,708				163
Loans, Net			809,816				808,300				806,857				792,112				771,057				753,277
Intangible Assets			11,952				11,953				11,954				11,956				11,957				11,958
Other Assets			62,543				59,645				61,202				58,458				60,260				60,035
TOTAL ASSETS		$	1,284,007			$	1,258,116			$	1,276,959			$	1,259,921			$	1,243,401			$	1,233,924
LIABILITIES
Deposits		$	1,040,899			$	1,018,081			$	1,008,449			$	1,021,625			$	997,262			$	980,251
Repo Sweep Accounts			5,169				5,482				3,766				4,739				4,875				6,244
Total Deposits and Repo Sweeps			1,046,068				1,023,563				1,012,215				1,026,364				1,002,137				986,495
Borrowed Funds			39,054				39,122				67,189				34,256				42,321				52,888
Other Liabilities			9,706				9,049				9,112				8,288				9,084				7,191
TOTAL LIABILITIES			1,094,828				1,071,734				1,088,516				1,068,908				1,053,542				1,046,574
SHAREHOLDERS' EQUITY
Common Shareholders' Equity, Excluding
Accumulated Other Comprehensive Income (Loss)			195,518				191,920				189,950				190,639				189,339				187,825
Accumulated Other Comprehensive Income (Loss):
Net Unrealized Gains (Losses) on
Available-for-sale Securities			(6,476	)			(5,679	)			(1,566	)			227				369				(630	)
Defined Benefit Plans Adjustment, Net			137				141				59				147				151				155
TOTAL SHAREHOLDERS' EQUITY			189,179				186,382				188,443				191,013				189,859				187,350
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY		$	1,284,007			$	1,258,116			$	1,276,959			$	1,259,921			$	1,243,401			$	1,233,924

  

 

AVAILABLE-FOR-SALE DEBT SECURITIES		June 30, 2018								March 31, 2018								December 31, 2017
(In Thousands)		Amortized				Fair				Amortized				Fair				Amortized				Fair
		Cost				Value				Cost				Value				Cost				Value
Obligations of U.S. Government agencies		$	7,779			$	7,779			$	8,023			$	7,803			$	8,026			$	7,873
Obligations of states and political subdivisions:
Tax-exempt			101,956				101,700				103,598				103,403				103,673				105,111
Taxable			26,248				26,066				24,140				24,038				25,431				25,573
Mortgage-backed securities issued or guaranteed
by U.S. Government agencies or sponsored
agencies:
Residential pass-through securities			60,130				58,330				50,880				49,335				52,992				52,347
Residential collateralized mortgage obligations			126,457				121,933				127,886				124,008				134,314				131,814
Commercial mortgage-backed securities			33,671				32,236				33,793				32,546				33,881				33,219
Total Available-for-Sale Debt Securities		$	356,241			$	348,044			$	348,320			$	341,133			$	358,317			$	355,937

 

 

Summary of Loans by Type
(Excludes Loans Held for Sale)
(In Thousands)		June 30,				March 31,				Dec. 31,				June 30,
		2018				2018				2017				2017
Residential mortgage:
Residential mortgage loans - first liens		$	361,592			$	358,786			$	359,987			$	342,603
Residential mortgage loans - junior liens			26,594				25,870				25,325				24,150
Home equity lines of credit			34,852				34,595				35,758				37,159
1-4 Family residential construction			26,722				25,790				26,216				26,067
Total residential mortgage			449,760				445,041				447,286				429,979
Commercial:
Commercial loans secured by real estate			159,392				161,571				159,266				155,158
Commercial and industrial			88,499				89,346				88,276				82,815
Political subdivisions			56,690				56,224				59,287				51,495
Commercial construction and land			13,066				13,232				14,527				15,201
Loans secured by farmland			7,397				7,015				7,255				7,432
Multi-family (5 or more) residential			7,860				7,621				7,713				7,497
Agricultural loans			5,622				5,803				6,178				4,454
Other commercial loans			14,455				16,079				10,986				11,038
Total commercial			352,981				356,891				353,488				335,090
Consumer			15,906				15,417				14,939				14,623
Total			818,647				817,349				815,713				779,692
Less: allowance for loan losses			(8,831	)			(9,049	)			(8,856	)			(8,635	)
Loans, net		$	809,816			$	808,300			$	806,857			$	771,057

 

Loans Held for Sale
(In Thousands)		June 30,				March 31,				Dec. 31,				June 30,
		2018				2018				2017				2017
Residential mortgage loans originated
and serviced - outstanding balance		$	171,720			$	171,462			$	170,490			$	167,497
Less: outstanding balance of loans sold			(171,543	)			(171,237	)			(169,725	)			(165,789	)
Loans held for sale, net		$	177			$	225			$	765			$	1,708

 

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
(In Thousands)
		3 Months				3 Months				6 Months				6 Months
		Ended				Ended				Ended				Ended
		June 30,				March 31,				June 30,				June 30,
		2018				2018				2018				2017
Balance, beginning of period		$	9,049			$	8,856			$	8,856			$	8,473
Charge-offs			(211	)			(115	)			(326	)			(335	)
Recoveries			13				16				29				41
Net charge-offs			(198	)			(99	)			(297	)			(294	)
(Credit) provision for loan losses			(20	)			292				272				456
Balance, end of period		$	8,831			$	9,049			$	8,831			$	8,635

 

 

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)
(Dollars In Thousands)
		June 30,				March 31,				Dec 31,				June 30,
		2018				2018				2017				2017
Impaired loans with a valuation allowance		$	3,652			$	4,699			$	4,100			$	3,293
Impaired loans without a valuation allowance			4,346				5,507				5,411				5,418
Total impaired loans		$	7,998			$	10,206			$	9,511			$	8,711
Total loans past due 30-89 days and still accruing		$	3,921			$	5,927			$	9,449			$	3,749
Nonperforming assets:
Total nonaccrual loans		$	11,230			$	13,587			$	13,404			$	11,504
Total loans past due 90 days or more and still accruing			3,195				2,795				3,724				2,680
Total nonperforming loans			14,425				16,382				17,128				14,184
Foreclosed assets held for sale (real estate)			2,897				1,100				1,598				2,023
Total nonperforming assets		$	17,322			$	17,482			$	18,726			$	16,207
Loans subject to troubled debt restructurings (TDRs):
Performing		$	753			$	774			$	636			$	729
Nonperforming			2,951				2,987				3,027				3,059
Total TDRs		$	3,704			$	3,761			$	3,663			$	3,788
Total nonperforming loans as a % of loans			1.76	%			2.00	%			2.10	%			1.82	%
Total nonperforming assets as a % of assets			1.35	%			1.39	%			1.47	%			1.30	%
Allowance for loan losses as a % of total loans			1.08	%			1.11	%			1.09	%			1.11	%
Allowance for loan losses as a % of nonperforming loans			61.22	%			55.24	%			51.70	%			60.88	%

 

 

Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
		3 Months								3 Months								3 Months
		Ended				Rate of				Ended				Rate of				Ended				Rate of
		6/30/2018				Return/				3/31/2018				Return/				6/30/2017				Return/
		Average				Cost of				Average				Cost of				Average				Cost of
		Balance				Funds %				Balance				Funds %				Balance				Funds %
EARNING ASSETS
Available-for-sale debt securities,
at amortized cost:
Taxable		$	247,809				2.24	%		$	249,840				2.21	%		$	254,806				2.13	%
Tax-exempt			102,801				3.50	%			103,177				3.53	%			114,993				4.41	%
Total available-for-sale debt securities			350,610				2.61	%			353,017				2.60	%			369,799				2.84	%
Marketable equity security			952				2.53	%			962				2.11	%			1,000				2.01	%
Interest-bearing due from banks			22,286				1.73	%			14,131				1.43	%			14,873				1.11	%
Loans held for sale			267				6.01	%			168				4.83	%			499				4.82	%
Loans receivable:
Taxable			747,889				5.14	%			740,655				5.04	%			702,933				4.91	%
Tax-exempt			77,616				3.65	%			76,242				3.72	%			68,439				4.48	%
Total loans receivable			825,505				5.00	%			816,897				4.92	%			771,372				4.87	%
Total Earning Assets			1,199,620				4.23	%			1,185,175				4.18	%			1,157,543				4.17	%
Cash			18,010								16,874								17,276
Unrealized gain/loss on securities			(8,242	)							(5,529	)							689
Allowance for loan losses			(9,161	)							(9,002	)							(8,901	)
Bank premises and equipment			15,425								15,451								15,714
Intangible assets			11,952								11,954								11,957
Other assets			41,575								42,781								41,322
Total Assets		$	1,269,179							$	1,257,704							$	1,235,600
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	217,607				0.39	%		$	212,981				0.34	%		$	203,256				0.21	%
Money market			180,667				0.27	%			179,923				0.21	%			190,703				0.19	%
Savings			152,663				0.10	%			149,618				0.10	%			142,978				0.10	%
Certificates of deposit			135,429				1.15	%			123,974				1.00	%			116,450				0.82	%
Individual Retirement Accounts			92,899				0.51	%			94,311				0.49	%			98,004				0.43	%
Other time deposits			1,092				0.00	%			772				0.00	%			1,107				0.00	%
Total interest-bearing deposits			780,357				0.45	%			761,579				0.39	%			752,498				0.31	%
Borrowed funds:
Short-term			23,610				1.39	%			52,305				1.54	%			21,205				0.85	%
Long-term			22,174				2.13	%			13,054				2.02	%			38,353				3.74	%
Total borrowed funds			45,784				1.75	%			65,359				1.64	%			59,558				2.71	%
Total Interest-bearing Liabilities			826,141				0.52	%			826,938				0.49	%			812,056				0.48	%
Demand deposits			248,182								235,936								227,488
Other liabilities			8,848								8,870								7,573
Total Liabilities			1,083,171								1,071,744								1,047,117
Stockholders' equity, excluding accumulated
other comprehensive income/loss			192,375								190,129								187,882
Accumulated other comprehensive income/loss			(6,367	)							(4,169	)							601
Total Shareholders' Equity			186,008								185,960								188,483
Total Liabilities and Shareholders' Equity		$	1,269,179							$	1,257,704							$	1,235,600
Interest Rate Spread							3.71	%							3.69	%							3.69	%
Net Interest Income/Earning Assets							3.87	%							3.84	%							3.83	%
Total Deposits (Interest-bearing
and Demand)		$	1,028,539							$	997,515							$	979,986

 

(1) Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% in 2018 and 35% in 2017.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

(3) Rates of return on earning assets and costs of funds have been presented on an annualized basis.

 

 

Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
		6 Months								6 Months
		Ended				Rate of				Ended				Rate of
		6/30/2018				Return/				6/30/2017				Return/
		Average				Cost of				Average				Cost of
		Balance				Funds %				Balance				Funds %
EARNING ASSETS
Available-for-sale debt securities,
at amortized cost:
Taxable		$	248,819				2.22	%		$	262,486				2.12	%
Tax-exempt			102,988				3.51	%			116,303				4.42	%
Total available-for-sale debt securities			351,807				2.60	%			378,789				2.82	%
Marketable equity security			957				2.32	%			1,000				2.02	%
Interest-bearing due from banks			18,231				1.61	%			14,898				0.99	%
Loans held for sale			218				5.55	%			351				5.75	%
Loans receivable:
Taxable			744,292				5.09	%			700,501				4.89	%
Tax-exempt			76,933				3.69	%			64,907				4.51	%
Total loans receivable			821,225				4.96	%			765,408				4.86	%
Total Earning Assets			1,192,438				4.21	%			1,160,446				4.14	%
Cash			17,445								16,648
Unrealized gain/loss on securities			(6,893	)							(130	)
Allowance for loan losses			(9,082	)							(8,748	)
Bank premises and equipment			15,438								15,713
Intangible assets			11,953								11,958
Other assets			42,174								42,594
Total Assets		$	1,263,473							$	1,238,481
INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Interest checking		$	215,307				0.37	%		$	202,194				0.18	%
Money market			180,297				0.24	%			190,902				0.18	%
Savings			151,149				0.10	%			140,903				0.10	%
Certificates of deposit			129,733				1.08	%			115,051				0.81	%
Individual Retirement Accounts			93,601				0.50	%			98,513				0.43	%
Other time deposits			933				0.00	%			950				0.00	%
Total interest-bearing deposits			771,020				0.42	%			748,513				0.30	%
Borrowed funds:
Short-term			37,878				1.50	%			31,240				0.79	%
Long-term			17,639				2.09	%			38,386				3.75	%
Total borrowed funds			55,517				1.69	%			69,626				2.42	%
Total Interest-bearing Liabilities			826,537				0.51	%			818,139				0.48	%
Demand deposits			242,093								225,127
Other liabilities			8,859								7,866
Total Liabilities			1,077,489								1,051,132
Stockholders' equity, excluding accumulated
other comprehensive income/loss			191,258								187,289
Accumulated other comprehensive income/loss			(5,274	)							60
Total Shareholders' Equity			185,984								187,349
Total Liabilities and Shareholders' Equity		$	1,263,473							$	1,238,481
Interest Rate Spread							3.70	%							3.66	%
Net Interest Income/Earning Assets							3.86	%							3.81	%
Total Deposits (Interest-bearing
and Demand)		$	1,013,113							$	973,640

 

(1) Annualized rates of return on tax-exempt securities and loans are presented on a fully taxable-equivalent basis, using the Corporation’s marginal federal income tax rate of 21% in 2018 and 35% in 2017.

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

(3) Rates of return on earning assets and costs of funds have been presented on an annualized basis.

 

 

COMPARISON OF NONINTEREST INCOME
(In Thousands)		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2018				2018				2017				2018				2017
Trust and financial management revenue		$	1,526			$	1,422			$	1,497			$	2,948			$	2,677
Brokerage revenue			271				212				208				483				364
Insurance commissions, fees and premiums			13				44				31				57				72
Service charges on deposit accounts			1,302				1,204				1,112				2,506				2,213
Service charges and fees			82				86				86				168				166
Interchange revenue from debit card transactions			641				579				568				1,220				1,088
Net gains from sales of loans			166				184				188				350				354
Loan servicing fees, net			61				128				55				189				127
Increase in cash surrender value of life insurance			98				97				94				195				184
Other noninterest income			529				450				267				979				725
Total noninterest income, excluding realized gains
(losses) on securities, net		$	4,689			$	4,406			$	4,106			$	9,095			$	7,970

 

COMPARISON OF NONINTEREST EXPENSE
(In Thousands)		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,				June 30,
		2018				2018				2017				2018				2017
Salaries and wages		$	4,193			$	4,124			$	3,972			$	8,317			$	7,840
Pensions and other employee benefits			1,200				1,610				1,137				2,810				2,661
Occupancy expense, net			613				637				600				1,250				1,178
Furniture and equipment expense			313				271				315				584				628
Data processing expenses			694				641				615				1,335				1,190
Automated teller machine and interchange expense			319				322				305				641				599
Pennsylvania shares tax			336				336				336				672				672
Professional fees			279				276				188				555				375
Telecommunications			157				233				132				390				266
Directors' fees			168				184				186				352				371
Other noninterest expense			1,412				1,261				1,290				2,673				2,594
Total noninterest expense		$	9,684			$	9,895			$	9,076			$	19,579			$	18,374