0000716605False00007166052022-07-212022-07-21

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
 
FORM 8-K
 
CURRENT REPORT
 
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
January 30, 2023 
Date of Report (Date of earliest event reported)
 
PENNS WOODS BANCORP, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 000-17077 23-2226454
(State or other jurisdiction
of incorporation)		 (Commission
File Number)		 (IRS Employer
Ident. No.)
 
300 Market StreetP.O. Box 96717703-0967
WilliamsportPennsylvania(Zip Code)
(Address of principal executive offices)
 
(570) 322-1111
Registrant's telephone number, including area code
 
N/A
(Former name or former address, if changed since last report.)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $5.55 par valuePWODThe Nasdaq Global Select Market
Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2) ☐
If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐


Item 2.02                                           Results of Operation and Financial Condition.
 
On January 30, 2023, Penns Woods Bancorp, Inc. (the “Company”) distributed a press release announcing its earnings for the period ended December 31, 2022.  The press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

Item 9.01                                           Financial Statements and Exhibits.

(d)                                 Exhibits:

99.1        Press release, dated January 30, 2023, of Penns Woods Bancorp, Inc. announcing earnings for the period ended December 31, 2022.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 PENNS WOODS BANCORP, INC.
   
Dated:January 30, 2023  
   
 By:/s/  Brian L. Knepp
  Brian L. Knepp
  President and Chief Financial Officer
 

EXHIBIT INDEX
 
Exhibit Number Description
 Press release, dated January 30, 2023, of Penns Woods Bancorp, Inc. announcing earnings for the period ended December 31, 2022.
104Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document).

Exhibit 99.1
image0a17.jpg

Press Release — For Immediate Release
January 30, 2023

Penns Woods Bancorp, Inc. Reports Fourth Quarter and Year Ended 2022 Earnings

Williamsport, PA — January 30, 2023 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $17.4 million for the twelve months ended December 31, 2022, resulting in basic and diluted earnings per share of $2.47.

Highlights

•Net income, as reported under GAAP, for the three and twelve months ended December 31, 2022 was $4.5 million and $17.4 million, respectively, compared to $4.9 million and $16.0 million for the same periods of 2021. Results for the three and twelve months ended December 31, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $315,000 (from a gain of $284,000 to a loss of $31,000) for the three month period and an increase in after-tax securities losses of $809,000 (from a gain of $521,000 to a loss of $288,000) for the twelve month period. Three and twelve month results for the periods ended December 31, 2022 were impacted by a goodwill impairment charge of $653,000 (after-tax $516,000) related to the wealth management unit (The M Group) as a decline in stock market valuations during 2022 resulted in a decreased level of net income for this entity. Results for the twelve months ended December 31, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the twelve months ended December 31, 2022.

•The provision for loan losses increased $875,000 for the three months and $1.3 million for the twelve months ended December 31, 2022 to $575,000 and $1.9 million, respectively, compared to ($300,000) and $640,000 for the 2021 periods. The increases in the provision for loan losses were primarily due to the significant growth in the loan portfolio.

•Basic and diluted earnings per share for the three and twelve months ended December 31, 2022 were $0.64 and $2.47. Basic and diluted earnings per share for the three and twelve months ended December 31, 2021 were $0.69 and $2.27.

•Annualized return on average assets was 0.92% for three months ended December 31, 2022, compared to 1.02% for the corresponding period of 2021. Return on average assets was 0.90% for the twelve months ended December 31, 2022, compared to 0.85% for the corresponding period of 2021.

•Annualized return on average equity was 10.92% for the three months ended December 31, 2022, compared to 11.59% for the corresponding period of 2021. Return on average equity was 10.73% for the twelve months ended December 31, 2022, compared to 9.93% for the corresponding period of 2021.

Net Income

Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses and goodwill impairment, was $5.1 million for the three months ended December 31, 2022 compared to $4.6 million for the same period of 2021. Core earnings were $18.2 million for the twelve months ended December 31, 2022, compared to $15.5 million for the same period of 2021. Core earnings per share for the three months ended December 31, 2022 were $0.71 basic and diluted, compared to $0.65 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the twelve months ended December 31, 2022 were $2.58 basic and diluted, compared to $2.20 basic and diluted for the same period of 2021. Annualized core return on average assets and core return on average equity were 1.04% and 12.25% for the three months ended December 31, 2022, compared to 0.96% and 10.92% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.94% and 11.22% for the twelve months ended
1

December 31, 2022 compared to 0.82% and 9.61% for the corresponding period of 2021. Core earnings for the twelve months ended December 31, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options along with an after-tax loss of $201,000 relating to a branch closure. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2022 was 3.42% and 3.24%, compared to 2.90% and 2.85% for the corresponding periods of 2021. The increase in the net interest margin for the three and twelve month periods was driven by an increase in earning asset yield of 79 and 28 basis points ("bps") as the yield on earning assets increased during 2022 due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). The three and twelve month periods ended December 31 2022 were impacted by an increase of 58 and 8 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates. The FOMC rate increases during 2022 and the utilization of excess on balance sheet liquidity during the first nine months of 2022 caused the rate paid on interest-bearing deposits to increase 19 and decrease 17 bps for the three months and twelve months ended December 31, 2022, respectively, compared to the comparable periods of 2021. The excess on balance sheet liquidity allowed deposit rates to be held at historically low levels for the majority of 2022 with rate increases occurring primarily during the fourth quarter of 2022.

Assets

Total assets increased $55.4 million to $2.0 billion at December 31, 2022 compared to December 31, 2021.  Cash and cash equivalents decreased $223.5 million as interest-bearing accounts in other financial institutions decreased $181.7 million and fed funds sold decreased $50.0 million as excess liquidity was primarily utilized to fund the growth in the loan portfolio. Net loans increased $246.1 million to $1.6 billion at December 31, 2022 compared to December 31, 2021, as an emphasis was placed on commercial loan growth coupled with a significant increase in indirect auto lending. The investment portfolio increased $31.8 million from December 31, 2021 to December 31, 2022 as a portion of the excess cash liquidity was invested primarily into short and medium-term municipal bonds with a maturity of 10 years or less.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.30% at December 31, 2022 from 0.45% at December 31, 2021, as non-performing loans decreased to $4.9 million at December 31, 2022 from $6.3 million at December 31, 2021. The majority of non-performing loans involve 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 $449,000 for the twelve months ended December 31, 2022 impacted the allowance for loan losses, which was 0.95% of total loans at December 31, 2022 compared to 1.02% at December 31, 2021.

Deposits

Deposits decreased $64.9 million to $1.6 billion at December 31, 2022 compared to December 31, 2021. Noninterest-bearing deposits increased $24.7 million to $519.1 million at December 31, 2022 compared to December 31, 2021.  Driving core deposit gathering efforts was the continued emphasis on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. Interest-bearing deposits decreased $89.6 million primarily due to a reduction in the Money Market Account portfolio coupled with the maturity of higher cost time deposits. A campaign to attract time deposits with a maturity of ten to twenty-four months was started during the latter part of 2022.

Shareholders’ Equity

Shareholders’ equity decreased $4.6 million to $167.7 million at December 31, 2022 compared to December 31, 2021.  Accumulated other comprehensive loss of $14.0 million at December 31, 2022 increased from a loss of $1.1 million at December 31, 2021 as a result of a $9.8 million net unrealized loss on available for sale securities at December 31, 2022 (compared to an unrealized gain of $2.4 million at December 31, 2021) coupled with a increase in loss of $654,000 in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $23.76 at December 31, 2022 compared to $24.37 at December 31, 2021, and an equity to asset ratio of 8.40% at December 31, 2022 and 8.88% at December 31, 2021. Dividends declared for the twelve months ended December 31, 2022 and 2021 were $1.28 per share.

2

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates seventeen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County, and United Insurance Solutions, LLC, which offers insurance products.  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 these certain 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; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) 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, 2021.

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, Chief Executive Officer
 110 Reynolds Street
 Williamsport, PA 17702
 570-322-1111e-mail: pwod@pwod.com

3

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
 
 December 31,
(In Thousands, Except Share and Per Share Data)20222021% Change
ASSETS:   
Noninterest-bearing balances$27,390 $19,233 42.41 %
Interest-bearing balances in other financial institutions12,943 194,629 (93.35)%
Federal funds sold— 50,000 (100.00)%
Total cash and cash equivalents40,333 263,862 (84.71)%
Investment debt securities, available for sale, at fair value193,673 166,410 16.38 %
Investment equity securities, at fair value1,142 1,288 (11.34)%
Restricted investment in bank stock, at fair value 19,171 14,531 31.93 %
Loans held for sale3,298 3,725 (11.46)%
Loans1,639,731 1,392,147 17.78 %
Allowance for loan losses(15,637)(14,176)10.31 %
Loans, net1,624,094 1,377,971 17.86 %
Premises and equipment, net31,844 34,025 (6.41)%
Accrued interest receivable9,481 8,048 17.81 %
Bank-owned life insurance34,452 33,768 2.03 %
Investment in limited partnerships4,783 4,607 3.82 %
Goodwill16,450 17,104 (3.82)%
Intangibles327 480 (31.88)%
Operating lease right of use asset2,651 2,851 (7.02)%
Deferred tax asset6,868 2,946 133.13 %
Other assets7,640 9,193 (16.89)%
TOTAL ASSETS$1,996,207 $1,940,809 2.85 %
LIABILITIES:   
Interest-bearing deposits$1,037,397 $1,126,955 (7.95)%
Noninterest-bearing deposits519,063 494,360 5.00 %
Total deposits1,556,460 1,621,315 (4.00)%
Short-term borrowings153,349 5,747 2,568.33 %
Long-term borrowings102,783 125,963 (18.40)%
Accrued interest payable603 651 (7.37)%
Operating lease liability2,708 2,898 (6.56)%
Other liabilities12,639 11,961 5.67 %
TOTAL LIABILITIES1,828,542 1,768,535 3.39 %
SHAREHOLDERS’ EQUITY:   
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued— — n/a
Common stock, par value $5.55, 22,500,000 shares authorized; 7,566,810 and 7,550,272 shares issued; 7,056,585 and 7,070,047 shares outstanding42,039 41,945 0.22 %
Additional paid-in capital54,252 53,795 0.85 %
Retained earnings98,147 89,761 9.34 %
Accumulated other comprehensive (loss) gain:  
Net unrealized (loss) gain on available for sale securities(9,819)2,373 (513.78)%
Defined benefit plan(4,139)(3,485)(18.77)%
Treasury stock at cost, 510,225 and 480,225(12,815)(12,115)5.78 %
TOTAL SHAREHOLDERS' EQUITY167,665 172,274 (2.68)%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,996,207 $1,940,809 2.85 %
4

PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended December 31,Twelve Months Ended December 31,
(In Thousands, Except Share and Per Share Data)20222021% Change20222021% Change
INTEREST AND DIVIDEND INCOME:      
Loans including fees$16,973 $13,406 26.61 %$58,682 $53,232 10.24 %
Investment securities:     
Taxable1,084 790 37.22 %3,634 3,281 10.76 %
Tax-exempt229 160 43.13 %823 655 25.65 %
Dividend and other interest income319 343 (7.00)%1,789 1,246 43.58 %
TOTAL INTEREST AND DIVIDEND INCOME18,605 14,699 26.57 %64,928 58,414 11.15 %
INTEREST EXPENSE:      
Deposits1,499 1,064 40.88 %3,690 5,545 (33.45)%
Short-term borrowings978 2 n/m1,007 9 n/m
Long-term borrowings580 712 (18.54)%2,451 3,142 (21.99)%
TOTAL INTEREST EXPENSE3,057 1,778 71.93 %7,148 8,696 (17.80)%
NET INTEREST INCOME15,548 12,921 20.33 %57,780 49,718 16.22 %
PROVISION (RECOVERY) FOR LOAN LOSSES575 (300)291.67 %1,910 640 198.44 %
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES14,973 13,221 13.25 %55,870 49,078 13.84 %
NON-INTEREST INCOME:     
Service charges540 485 11.34 %2,103 1,703 23.49 %
Debt securities (losses) gains, available for sale(51)376 (113.56)%(219)699 (131.33)%
Net equity securities gains (losses}12 (16)175.00 %(146)(40)(265.00)%
Bank-owned life insurance163 302 (46.03)%664 916 (27.51)%
Gain on sale of loans226 440 (48.64)%.1,131 2,474 (54.28)%
Insurance commissions105 117 (10.26)%491 553 (11.21)%
Brokerage commissions120 188 (36.17)%620 851 (27.14)%
Loan broker income324 715 (54.69)%1,674 2,164 (22.64)%
Debit card income384 345 11.30 %1,464 1,511 (3.11)%
Other258 243 6.17 %931 838 11.10 %
TOTAL NON-INTEREST INCOME2,081 3,195 (34.87)%8,713 11,669 (25.33)%
NON-INTEREST EXPENSE:      
Salaries and employee benefits5,846 5,907 (1.03)%24,267 23,014 5.44 %
Occupancy700 771 (9.21)%3,080 3,209 (4.02)%
Furniture and equipment834 859 (2.91)%3,288 3,522 (6.64)%
Software amortization180 236 (23.73)%840 868 (3.23)%
Pennsylvania shares tax333 253 31.62 %1,452 1,350 7.56 %
Professional fees688 550 25.09 %2,434 2,432 0.08 %
Federal Deposit Insurance Corporation deposit insurance248 258 (3.88)%938 963 (2.60)%
Marketing255 111 129.73 %690 545 26.61 %
Intangible amortization35 44 (20.45)%154 191 (19.37)%
Goodwill impairment653 — n/a653 — n/a
Other1,479 1,270 16.46 %5,202 4,811 8.13 %
TOTAL NON-INTEREST EXPENSE11,251 10,259 9.67 %42,998 40,905 5.12 %
INCOME BEFORE INCOME TAX PROVISION5,803 6,157 (5.75)%21,585 19,842 8.78 %
INCOME TAX PROVISION1,294 1,278 1.25 %4,163 3,794 9.73 %
NET INCOME$4,509 $4,879 (7.58)%$17,422 $16,048 8.56 %
Earnings attributable to noncontrolling interest— — — %— 15 (100.00)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'$4,509 $4,879 (7.58)%$17,422 $16,033 8.66 %
EARNINGS PER SHARE - BASIC $0.64 $0.69 (7.25)%$2.47 $2.27 8.81 %
EARNINGS PER SHARE - DILUTED$0.64 $0.69 (7.25)%$2.47 $2.27 8.81 %
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC7,055,181 7,068,327 (0.19)%7,059,437 7,061,818 (0.03)%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED7,055,181 7,068,327 (0.19)%7,059,437 7,061,818 (0.03)%

5

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 
(UNAUDITED)
 Three Months Ended
 December 31, 2022December 31, 2021
(Dollars in Thousands)
Average 
Balance (1)
InterestAverage 
Rate
Average 
Balance (1)
InterestAverage 
Rate
ASSETS:      
Tax-exempt loans (3)
$61,756 $408 2.62 %$46,583 $317 2.70 %
All other loans1,546,338 16,651 4.27 %1,320,972 13,156 3.95 %
Total loans (2)
1,608,094 17,059 4.21 %1,367,555 13,473 3.91 %
Federal funds sold— — — %47,391 85 0.71 %
Taxable securities167,405 1,329 3.22 %148,434 978 2.67 %
Tax-exempt securities (3)
41,167 290 2.86 %38,043 202 2.15 %
Total securities208,572 1,619 3.15 %186,477 1,180 2.57 %
Interest-bearing deposits5,797 74 5.06 %184,591 70 0.15 %
Total interest-earning assets1,822,463 18,752 4.09 %1,786,014 14,808 3.30 %
Other assets128,084 130,859   
TOTAL ASSETS$1,950,547   $1,916,873   
LIABILITIES AND SHAREHOLDERS’ EQUITY:      
Savings$249,793 66 0.10 %$233,791 22 0.04 %
Super Now deposits385,060 623 0.64 %345,653 206 0.24 %
Money market deposits268,519 509 0.75 %301,651 211 0.28 %
Time deposits144,491 301 0.83 %218,260 625 1.14 %
Total interest-bearing deposits1,047,863 1,499 0.57 %1,099,355 1,064 0.38 %
Short-term borrowings97,585 978 3.98 %7,255 2 0.11 %
Long-term borrowings102,814 580 2.24 %125,991 712 2.25 %
Total borrowings200,399 1,558 3.09 %133,246 714 2.13 %
Total interest-bearing liabilities1,248,262 3,057 0.97 %1,232,601 1,778 0.57 %
Demand deposits517,977 496,478  
Other liabilities19,151 19,463  
Shareholders’ equity165,157 168,331  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,950,547  $1,916,873  
Interest rate spread (3)
  3.12 %  2.73 %
Net interest income/margin (3)
 $15,695 3.42 % $13,030 2.90 %
1.    Information on this table has been calculated using average daily balance sheets to obtain average balances.
2.    Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3.    Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income     
from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%
Three Months Ended December 31,
 20222021
Total interest income$18,605 $14,699 
Total interest expense3,057 1,778 
Net interest income (GAAP)15,548 12,921 
Tax equivalent adjustment147 109 
Net interest income (fully taxable equivalent) (non-GAAP)$15,695 $13,030 
6

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 
(UNAUDITED)
Twelve Months Ended
 December 31, 2022December 31, 2021
(Dollars in Thousands)
Average 
Balance (1)
InterestAverage 
Rate
Average 
Balance (1)
InterestAverage 
Rate
ASSETS:      
Tax-exempt loans (3)
$55,364 $1,441 2.60 %$46,312 $1,308 2.82 %
All other loans1,439,550 57,544 4.00 %1,299,321 52,199 4.02 %
Total loans (2)
1,494,914 58,985 3.95 %1,345,633 53,507 3.98 %
Federal funds sold32,863 465 1.41 %28,395 202 0.71 %
Taxable securities156,584 4,455 2.88 %148,066 4,083 2.80 %
Tax-exempt securities (3)
44,301 1,042 2.38 %36,993 829 2.27 %
Total securities200,885 5,497 2.77 %185,059 4,912 2.69 %
Interest-bearing deposits74,401 503 0.68 %201,273 242 0.12 %
Total interest-earning assets1,803,063 65,450 3.63 %1,760,360 58,863 3.35 %
Other assets128,213  129,582  
TOTAL ASSETS$1,931,276  $1,889,942  
LIABILITIES AND SHAREHOLDERS’ EQUITY:    
Savings$247,003 138 0.06 %$225,637 116 0.05 %
Super Now deposits387,370 1,344 0.35 %307,446 900 0.29 %
Money market deposits289,820 1,105 0.38 %305,883 972 0.32 %
Time deposits161,982 1,103 0.68 %244,341 3,557 1.46 %
Total interest-bearing deposits1,086,175 3,690 0.34 %1,083,307 5,545 0.51 %
Short-term borrowings29,315 1,007 3.44 %7,178 9 0.13 %
Long-term borrowings110,027 2,451 2.23 %135,474 3,142 2.32 %
Total borrowings139,342 3,458 2.48 %142,652 3,151 2.21 %
Total interest-bearing liabilities1,225,517 7,148 0.58 %1,225,959 8,696 0.71 %
Demand deposits519,189  478,984  
Other liabilities24,182  23,568  
Shareholders’ equity162,388  161,431  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$1,931,276  $1,889,942  
Interest rate spread (3)
  3.05 %  2.64 %
Net interest income/margin (3)
 $58,302 3.24 % $50,167 2.85 %
1.    Information on this table has been calculated using average daily balance sheets to obtain average balances.
2.    Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3.    Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income     
from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%
Twelve Months Ended December 31,
 20222021
Total interest income$64,928 $58,414 
Total interest expense7,148 8,696 
Net interest income57,780 49,718 
Tax equivalent adjustment522 449 
Net interest income (fully taxable equivalent) (non-GAAP)$58,302 $50,167 

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(Dollars in Thousands, Except Share and Per Share Data, Unaudited)Quarter Ended
12/31/20229/30/20226/30/20223/31/202212/31/2021
Operating Data 
Net income$4,509$5,250$4,231$3,432$4,879
Net interest income15,54815,53213,84712,85312,921
Provision (credit) for loan losses575855330150(300)
Net security (losses) gains(39)(211)(54)(61)360
Non-interest income, excluding net security (losses) gains2,1202,2942,1912,4732,835
Non-interest expense11,25110,32010,42011,00710,259
Performance Statistics
Net interest margin3.42 %3.47 %3.12 %2.93 %2.90 %
Annualized return on average assets0.92 %1.09 %0.88 %0.72 %1.02 %
Annualized return on average equity10.92 %12.61 %10.15 %8.17 %11.59 %
Annualized net loan charge-offs (recoveries) to average loans0.04 %0.01 %(0.01)%0.09 %0.02 %
Net charge-offs (recoveries)14937(40)30381
Efficiency ratio59.79 %57.70 %64.72 %71.53 %64.83 %
Per Share Data
Basic earnings per share$0.64$0.74$0.60$0.49$0.69
Diluted earnings per share0.640.740.600.490.69
Dividend declared per share0.320.320.320.320.32
Book value23.7623.3223.5623.8124.37
Common stock price:
High26.8924.2924.3524.6724.65
Low23.1522.0222.3423.6423.50
Close26.6222.9123.0924.4323.65
Weighted average common shares: 
Basic7,0557,0517,0597,0737,068
Fully Diluted7,0557,0517,0597,0737,068
End-of-period common shares:
Issued7,5677,5637,5597,5557,550
Treasury(510)(510)(510)(480)(480)
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(Dollars in Thousands, Except Share and Per Share Data, Unaudited)Quarter Ended
12/31/20229/30/20226/30/20223/31/202212/31/2021
Financial Condition Data:     
General     
Total assets$1,996,207$1,905,116$1,891,806$1,916,809$1,940,809
Loans, net1,624,0941,545,4891,474,7391,391,9431,377,971
Goodwill16,45017,10417,10417,10417,104
Intangibles327361396437480
Total deposits1,556,4601,590,4151,589,5791,612,3951,621,315
Noninterest-bearing519,063537,403524,288514,130494,360
Savings247,952249,532249,057245,661236,312
NOW372,574392,140353,102379,838366,399
Money Market270,589268,532309,453299,166318,877
Time Deposits146,282142,808153,679173,600205,367
Total interest-bearing deposits1,037,3971,053,0121,065,2911,098,2651,126,955
Core deposits*1,410,1781,447,6071,435,9001,438,7951,415,948
Shareholders’ equity167,665164,489166,054168,427172,274
Asset Quality
Non-performing loans$4,890$5,743$5,100$5,281$6,250
Non-performing loans to total assets0.24 %0.30 %0.27 %0.28 %0.32 %
Allowance for loan losses15,63715,21114,39314,02314,176
Allowance for loan losses to total loans0.95 %0.97 %0.97 %1.00 %1.02 %
Allowance for loan losses to non-performing loans
319.78 %264.86 %282.22 %265.54 %226.82 %
Non-performing loans to total loans0.30 %0.37 %0.34 %0.38 %0.45 %
Capitalization
Shareholders’ equity to total assets8.40 %8.63 %8.78 %8.79 %8.88 %

* Core deposits are defined as total deposits less time deposits
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Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)
Three Months Ended December 31,Twelve Months Ended December 31,
(Dollars in Thousands, Except Per Share Data)2022202120222021
GAAP net income$4,509$4,879$17,422$16,033
Net securities losses (gains), net of tax31(284)288(521)
Goodwill impairment516—516—
Non-GAAP core earnings$5,056$4,595$18,226$15,512
 Three Months Ended December 31,Twelve Months Ended December 31,
 2022202120222021
Return on average assets (ROA)0.92 %1.02 %0.90 %0.85 %
Net securities losses (gains), net of tax0.01 %(0.06)%0.01 %(0.03)%
Goodwill impairment0.11 %— %0.03 %— %
Non-GAAP core ROA1.04 %0.96 %0.94 %0.82 %
 Three Months Ended December 31,Twelve Months Ended December 31,
 2022202120222021
Return on average equity (ROE)10.92 %11.59 %10.73 %9.93 %
Net securities losses (gains), net of tax0.08 %(0.67)%0.17 %(0.32)%
Goodwill impairment1.25 %— %0.32 %— %
Non-GAAP core ROE12.25 %10.92 %11.22 %9.61 %
 Three Months Ended December 31,Twelve Months Ended December 31,
 2022202120222021
Basic earnings per share (EPS)$0.64$0.69$2.47$2.27
Net securities losses (gains), net of tax—(0.04)0.04(0.07)
Goodwill impairment0.07—0.07—
Non-GAAP basic core EPS$0.71$0.65$2.58$2.20
 Three Months Ended December 31,Twelve Months Ended December 31,
 2022202120222021
Diluted EPS$0.64$0.69$2.47$2.27
Net securities losses (gains), net of tax—(0.04)0.04(0.07)
Goodwill impairment0.07—0.07—
Non-GAAP diluted core EPS$0.71$0.65$2.58$2.20




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