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Penns Woods Bancorp, Inc. Reports Third Quarter 2017 Earnings

/EIN News/ -- WILLIAMSPORT, Pa., Oct. 20, 2017 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Penns Woods Bancorp, Inc. continued its solid earnings, supported by loan and deposit growth, achieving net income of $9,057,000 for the nine months ended September 30, 2017 resulting in basic and dilutive earnings per share of $1.92.

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, was $3,087,000 for the three months ended September 30, 2017 compared to $2,887,000 for the same period of 2016.  Operating earnings increased to $8,737,000 for the nine months ended September 30, 2017 compared to $8,719,000 for the same period of 2016.  Impacting the level of operating earnings were several factors including the continued shift of earning assets from the investment portfolio to the loan portfolio as the balance sheet is actively managed to reduce market risk and interest rate risk in a rising rate environment.  In addition, the effective tax rate has increased due to the conclusion of the ten year tax credit generation period of several low income elderly housing projects in our market footprint in which the company participates.

  • Operating earnings per share for the three months ended September 30, 2017 were $0.66 for both basic and dilutive, an increase from $0.61 for basic and dilutive for the same period of 2016.  Operating earnings per share for the nine months ended September 30, 2017 were $1.85 basic and dilutive compared to $1.84 basic and dilutive for the same period of 2016.

  • Return on average assets was 0.93% for the three months ended September 30, 2017 compared to 0.91% for the corresponding period of 2016.  Return on average assets was 0.87% for the nine months ended September 30, 2017 compared to 0.95% for the corresponding period of 2016.

  • Return on average equity was 9.43% for the three months ended September 30, 2017 compared to 8.69% for the corresponding period of 2016.  Return on average equity was 8.69% for the nine months ended September 30, 2017 compared to 9.14% for the corresponding period of 2016.

“The third quarter of 2017 had several highlights that show our commitment to the future.  Luzerne Bank opened an office in Conyngham and Jersey Shore State Bank continued the construction of a branch in the Muncy/Hughesville area.  In addition the indirect auto lending portfolio is increasing in size with the portfolio approaching $60 million.  While we have focused on the building of branches and the indirect auto portfolio, we have not lost sight of the funding side of balance sheet.  Total deposits have increased six percent year over year as we remain focused on building relationships. The combination of these items has led to an increasing level of core earnings year over year and quarter over quarter,” 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 nine months ended September 30, 2017 was $3,284,000 and $9,057,000 compared to $3,059,000 and $9,529,000 for the same period of 2016. Results for the three and nine months ended September 30, 2017 compared to 2016 were impacted by an increase in after-tax securities gains of $25,000 (from a gain of $172,000 to a gain of $197,000) for the three month periods and a decrease in after-tax securities gains of $490,000 (from a gain of $810,000 to a gain of $320,000) for the nine month periods. Basic and dilutive earnings per share for the three and nine months ended September 30, 2017 were $0.70 and $1.92 compared to $0.65 and $2.01 for the corresponding period of 2016.  Return on average assets and return on average equity were 0.93% and 9.43% for the three months ended September 30, 2017 compared to 0.91% and 8.69% for the corresponding period of 2016.  Return on average assets and return on average equity were 0.87% and 8.69% for the nine months ended September 30, 2017 compared to 0.95% and 9.14% for the corresponding period of 2016.

Net Interest Margin

The net interest margin for the three and nine months ended September 30, 2017 was 3.57% and 3.47% compared to 3.37% and 3.45% for the corresponding period of 2016.  The increase in the net interest margin for the nine month period was limited by a decreasing yield on the investment portfolio due to the continued lower than historical rate environment that limits the yield that we can acquire into the portfolio and our strategic decision to continue repositioning the portfolio through active management in anticipation of a steadily rising rate environment.  The impact of the declining investment portfolio yield and decreasing investment portfolio balance was offset by an 11.24% growth in gross loans from September 30, 2016 to September 30, 2017.  The loan growth was primarily 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 81.94% of total deposits at September 30, 2017 and 79.60% at September 30, 2016. 

Assets

Total assets increased $82,785,000 to $1,430,197,000 at September 30, 2017 compared to September 30, 2016.  Net loans increased $120,019,000 to $1,176,781,000 at September 30, 2017 compared to September 30, 2016 primarily due to campaigns related to increasing home equity product market share during 2016 and 2017 and the introduction of indirect auto lending during the third quarter of 2016.  The investment portfolio decreased $8,534,000 from September 30, 2016 to September 30, 2017 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 shortening 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 ratio of non-performing loans to total loans ratio decreased to 0.69% at September 30, 2017 from September 30, 2016 as non-performing loans have decreased to $8,235,000 at September 30, 2017 from $11,530,000 at September 30, 2016. The level of non-performing loans decreased as a large non-performing loan was paid-off during the three months ended September 30, 2017.  The majority of non-performing loans are centered on 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 $568,000 for the nine months ended September 30, 2017 minimally impacted the allowance for loan losses which was 1.09% of total loans at September 30, 2017.  The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $65,699,000 to $1,153,996,000 at September 30, 2017 compared to September 30, 2016.  Core deposits (total deposits excluding time deposits) increased $79,213,000 due to our commitment to building complete banking relationships with our customers.  Noninterest-bearing deposits increased $15,231,000 to $310,830,000 at September 30, 2017 compared to September 30, 2016.  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 continues to move forward as part of the strategy to build balance sheet protection in a rising rate environment.

Shareholders’ Equity

Shareholders’ equity decreased $266,000 to $139,669,000 at September 30, 2017 compared to September 30, 2016.  The change in accumulated other comprehensive loss from $2,491,000 at September 30, 2016 to $4,130,000 at September 30, 2017 is a result of a decrease in unrealized gains on available for sale securities from an unrealized gain of $1,489,000 at September 30, 2016 to an unrealized gain of $73,000 at September 30, 2017.  The amount of accumulated other comprehensive loss at September 30, 2017 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 an increase in the net loss of $223,000 to $4,203,000 at September 30, 2017.  The current level of shareholders’ equity equates to a book value per share of $29.79 at September 30, 2017 compared to $29.56 at September 30, 2016 and an equity to asset ratio of 9.77% at September 30, 2017 compared to 10.39% at September 30, 2016.  Excluding goodwill and intangibles, book value per share was $25.81 at September 30, 2017 compared to $25.55 at September 30, 2016.  Dividends declared for the nine months ended September 30, 2017 and 2016 were $1.41 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 nine 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. 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; 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, 2016.

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
      110 Reynolds Street
      Williamsport, PA 17702
      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)
 
    September 30,
(In Thousands, Except Share Data)   2017   2016   % Change
ASSETS            
Noninterest-bearing balances   $ 22,042     $ 23,487     (6.15 )%
Interest-bearing balances in other financial institutions   5,705     36,694     (84.45 )%
Total cash and cash equivalents   27,747     60,181     (53.89 )%
             
Investment securities, available for sale, at fair value   132,313     141,057     (6.20 )%
Investment securities, trading   210         100.00 %
Loans held for sale   1,734     2,160     (19.72 )%
Loans   1,189,714     1,069,480     11.24 %
Allowance for loan losses   (12,933 )   (12,718 )   1.69 %
Loans, net   1,176,781     1,056,762     11.36 %
Premises and equipment, net   25,895     22,985     12.66 %
Accrued interest receivable   4,289     3,800     12.87 %
Bank-owned life insurance   27,827     27,176     2.40 %
Goodwill   17,104     17,104     %
Intangibles   1,543     1,889     (18.32 )%
Deferred tax asset   7,984     7,404     7.83 %
Other assets   6,770     6,894     (1.80 )%
TOTAL ASSETS   $ 1,430,197     $ 1,347,412     6.14 %
             
LIABILITIES            
Interest-bearing deposits   $ 843,166     $ 792,698     6.37 %
Noninterest-bearing deposits   310,830     295,599     5.15 %
Total deposits   1,153,996     1,088,297     6.04 %
             
Short-term borrowings   41,596     11,579     259.24 %
Long-term borrowings   80,998     91,025     (11.02 )%
Accrued interest payable   483     481     0.42 %
Other liabilities   13,455     16,095     (16.40 )%
TOTAL LIABILITIES   1,290,528     1,207,477     6.88 %
             
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; 5,008,720 and 5,006,601 shares issued   41,739     41,721     0.04 %
Additional paid-in capital   50,142     50,050     0.18 %
Retained earnings   64,033     60,889     5.16 %
Accumulated other comprehensive loss:            
Net unrealized gain on available for sale securities   73     1,489     (95.10 )%
Defined benefit plan   (4,203 )   (3,980 )   (5.60 )%
Treasury stock at cost, 320,150 and 272,452 shares   (12,115 )   (10,234 )   18.38 %
TOTAL SHAREHOLDERS’ EQUITY   139,669     139,935     (0.19 )%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 1,430,197     $ 1,347,412     6.14 %
                       


PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
         
    Three Months Ended September 30,   Nine Months Ended September 30,
(In Thousands, Except Per Share Data)   2017   2016   % Change   2017   2016   % Change
INTEREST AND DIVIDEND INCOME:                        
Loans including fees   $ 11,906     $ 10,541     12.95 %   $ 33,642     $ 31,362     7.27 %
Investment securities:                        
Taxable   553     601     (7.99 )%   1,665     1,825     (8.77 )%
Tax-exempt   319     329     (3.04 )%   940     1,203     (21.86 )%
Dividend and other interest income   170     189     (10.05 )%   592     666     (11.11 )%
TOTAL INTEREST AND DIVIDEND INCOME   12,948     11,660     11.05 %   36,839     35,056     5.09 %
                         
INTEREST EXPENSE:                        
Deposits   1,058     909     16.39 %   2,968     2,624     13.11 %
Short-term borrowings   31     7     342.86 %   39     41     (4.88 )%
Long-term borrowings   407     497     (18.11 )%   1,220     1,481     (17.62 )%
TOTAL INTEREST EXPENSE   1,496     1,413     5.87 %   4,227     4,146     1.95 %
                         
NET INTEREST INCOME   11,452     10,247     11.76 %   32,612     30,910     5.51 %
                         
PROVISION FOR LOAN LOSSES   60     258     (76.74 )%   605     866     (30.14 )%
                         
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   11,392     9,989     14.05 %   32,007     30,044     6.53 %
                         
NON-INTEREST INCOME:                        
Service charges   550     585     (5.98 )%   1,637     1,678     (2.44 )%
Securities gains, available for sale   302     253     19.37 %   487     1,174     (58.52 )%
Securities (losses) gains, trading   (4 )   8     (150.00 )%   (2 )   54     (103.70 )%
Bank-owned life insurance   166     172     (3.49 )%   499     516     (3.29 )%
Gain on sale of loans   455     658     (30.85 )%   1,316     1,691     (22.18 )%
Insurance commissions   109     198     (44.95 )%   399     604     (33.94 )%
Brokerage commissions   352     290     21.38 %   1,044     817     27.78 %
Debit card income   514     690     (25.51 )%   1,450     1,413     2.62 %
Other   296     228     29.82 %   1,325     1,310     1.15 %
TOTAL NON-INTEREST INCOME   2,740     3,082     (11.10 )%   8,155     9,257     (11.90 )%
                         
NON-INTEREST EXPENSE:                        
Salaries and employee benefits   4,738     4,507     5.13 %   14,116     13,433     5.08 %
Occupancy   603     544     10.85 %   1,855     1,630     13.80 %
Furniture and equipment   816     662     23.26 %   2,129     2,042     4.26 %
Software Amortization   235     580     (59.48 )%   750     950     (21.05 )%
Pennsylvania shares tax   228     220     3.64 %   696     698     (0.29 )%
Professional Fees   560     502     11.55 %   1,816     1,512     20.11 %
Federal Deposit Insurance Corporation deposit insurance   194     202     (3.96 )%   514     670     (23.28 )%
Debit Card Expense   168     246     (31.71 )%   478     456     4.82 %
Marketing   315     173     82.08 %   690     568     21.48 %
Intangible amortization   81     90     (10.00 )%   257     276     (6.88 )%
Other   1,628     1,013     60.71 %   4,313     4,230     1.96 %
TOTAL NON-INTEREST EXPENSE   9,566     8,739     9.46 %   27,614     26,465     4.34 %
INCOME BEFORE INCOME TAX PROVISION   4,566     4,332     5.40 %   12,548     12,836     (2.24 )%
INCOME TAX PROVISION   1,282     1,273     0.71 %   3,491     3,307     5.56 %
NET INCOME   $ 3,284     $ 3,059     7.36 %   $ 9,057     $ 9,529     (4.95 )%
                         
EARNINGS PER SHARE - BASIC AND DILUTED   $ 0.70     $ 0.65     7.69 %   $ 1.92     $ 2.01     (4.48 )%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED   4,688,222     4,733,800     (0.96 )%   4,711,282     4,735,844     (0.52 )%
DIVIDENDS DECLARED PER SHARE   $ 0.47     $ 0.47     %   $ 1.41     $ 1.41     %
                                             


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
     
    Three Months Ended
    September 30, 2017   September 30, 2016
(Dollars in Thousands)   Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
ASSETS:                        
Tax-exempt loans   $ 53,850     $ 494     3.64 %   $ 45,715     $ 452     3.93 %
All other loans   1,105,615     11,580     4.16 %   1,011,393     10,243     4.03 %
Total loans   1,159,465     12,074     4.13 %   1,057,108     10,695     4.02 %
                         
Taxable securities   83,106     674     3.24 %   93,893     725     3.09 %
Tax-exempt securities   53,320     483     3.62 %   49,231     498     4.05 %
Total securities   136,426     1,157     3.39 %   143,124     1,223     3.42 %
                         
Interest-bearing deposits   14,085     49     1.38 %   48,125     65     0.54 %
                         
Total interest-earning assets   1,309,976     13,280     4.02 %   1,248,357     11,983     3.82 %
                         
Other assets   101,035             101,312          
                         
TOTAL ASSETS   $ 1,411,011             $ 1,349,669          
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:                        
Savings   $ 157,341     15     0.04 %   $ 151,464     15     0.04 %
Super Now deposits   203,531     140     0.27 %   184,440     107     0.23 %
Money market deposits   284,155     267     0.37 %   245,643     170     0.28 %
Time deposits   206,563     636     1.22 %   223,082     617     1.10 %
Total interest-bearing deposits   851,590     1,058     0.49 %   804,629     909     0.45 %
                         
Short-term borrowings   19,127     31     0.64 %   15,748     7     0.18 %
Long-term borrowings   81,107     407     1.96 %   91,025     497     2.14 %
Total borrowings   100,234     438     1.71 %   106,773     504     1.85 %
                         
Total interest-bearing liabilities   951,824     1,496     0.62 %   911,402     1,413     0.61 %
                         
Demand deposits   304,244             281,586          
Other liabilities   15,708             15,916          
Shareholders’ equity   139,235             140,765          
                         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 1,411,011             $ 1,349,669          
Interest rate spread           3.40 %           3.21 %
Net interest income/margin       $ 11,784     3.57 %       $ 10,570     3.37 %
                                     


    Three Months Ended September 30,
    2017   2016
Total interest income   $ 12,948     $ 11,660  
Total interest expense   1,496     1,413  
Net interest income   11,452     10,247  
Tax equivalent adjustment   332     323  
Net interest income (fully taxable equivalent)   $ 11,784     $ 10,570  
                 


    Nine Months Ended
    September 30, 2017   September 30, 2016
(Dollars in Thousands)   Average
Balance
  Interest   Average
Rate
  Average
Balance
  Interest   Average
Rate
ASSETS:                        
Tax-exempt loans   $ 46,752     $ 1,315     3.76 %   $ 49,204     $ 1,432     3.89 %
All other loans   1,081,148     32,774     4.05 %   999,685     30,417     4.06 %
Total loans   1,127,900     34,089     4.04 %   1,048,889     31,849     4.06 %
                         
Taxable securities   85,417     2,039     3.18 %   95,652     2,344     3.27 %
Tax-exempt securities   50,972     1,424     3.72 %   56,291     1,823     4.32 %
Total securities   136,389     3,463     3.39 %   151,943     4,167     3.66 %
                         
Interest-bearing deposits   27,901     218     1.04 %   38,411     147     0.51 %
                         
Total interest-earning assets   1,292,190     37,770     3.91 %   1,239,243     36,163     3.90 %
                         
Other assets   102,181             99,295          
                         
TOTAL ASSETS   $ 1,394,371             $ 1,338,538          
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:                        
Savings   $ 157,396     45     0.04 %   $ 151,158     43     0.04 %
Super Now deposits   198,560     377     0.25 %   190,190     356     0.25 %
Money market deposits   278,436     713     0.34 %   234,918     471     0.27 %
Time deposits   207,331     1,833     1.18 %   221,676     1,754     1.06 %
Total interest-bearing deposits   841,723     2,968     0.47 %   797,942     2,624     0.44 %
                         
Short-term borrowings   13,714     39     0.26 %   20,273     41     0.27 %
Long-term borrowings   79,881     1,220     2.01 %   91,025     1,481     2.14 %
Total borrowings   93,595     1,259     1.76 %   111,298     1,522     1.80 %
                         
Total interest-bearing liabilities   935,318     4,227     0.60 %   909,240     4,146     0.61 %
                         
Demand deposits   301,567             274,488          
Other liabilities   18,455             15,775          
Shareholders’ equity   139,031             139,035          
                         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 1,394,371             $ 1,338,538          
Interest rate spread           3.31 %           3.29 %
Net interest income/margin       $ 33,543     3.47 %       $ 32,017     3.45 %
                                     


    Nine Months Ended September 30,
    2017   2016
Total interest income   $ 36,839     $ 35,056  
Total interest expense   4,227     4,146  
Net interest income   32,612     30,910  
Tax equivalent adjustment   931     1,107  
Net interest income (fully taxable equivalent)   $ 33,543     $ 32,017  
                 


(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Operating Data                    
Net income   $ 3,284     $ 3,086     $ 2,686     $ 2,948     $ 3,059  
Net interest income   11,452     10,824     10,336     10,337     10,247  
Provision for loan losses   60     215     330     330     258  
Net security gains (losses)   298     (12 )   199     441     261  
Non-interest income, excluding net security gains   2,442     2,775     2,452     2,415     2,821  
Non-interest expense   9,566     9,063     8,985     8,625     8,739  
                     
Performance Statistics                    
Net interest margin   3.57 %   3.44 %   3.40 %   3.38 %   3.37 %
Annualized return on average assets   0.93 %   0.88 %   0.79 %   0.87 %   0.91 %
Annualized return on average equity   9.43 %   8.79 %   7.69 %   8.43 %   8.69 %
Annualized net loan charge-offs (recoveries) to average loans   0.08 %   %   0.12 %   0.06 %   0.02 %
Net charge-offs   236     11     321     152     57  
Efficiency ratio   68.3 %   65.9 %   69.6 %   66.9 %   66.2 %
                     
Per Share Data                    
Basic earnings per share   $ 0.70     $ 0.65     $ 0.57     $ 0.62     $ 0.65  
Diluted earnings per share   0.70     0.65     0.56     0.62     0.65  
Dividend declared per share   0.47     0.47     0.47     0.47     0.47  
Book value   29.79     29.53     29.38     29.20     29.56  
Common stock price:                    
High   46.47     43.60     49.45     52.03     44.75  
Low   41.08     38.17     43.28     41.00     40.34  
Close   46.47     41.18     43.45     50.50     44.46  
Weighted average common shares:                    
Basic   4,688     4,711     4,735     4,734     4,734  
Fully Diluted   4,688     4,711     4,761     4,734     4,734  
End-of-period common shares:                    
Issued   5,009     5,008     5,008     5,007     5,007  
Treasury   320     320     272     272     272  
                               


(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    9/30/2017   6/30/2017   3/31/2017   12/31/2016   9/30/2016
Financial Condition Data:                    
General                    
Total assets   $ 1,430,197     $ 1,395,364     $ 1,400,708     $ 1,348,590     $ 1,347,412  
Loans, net   1,176,781     1,125,976     1,098,195     1,080,785     1,056,762  
Goodwill   17,104     17,104     17,104     17,104     17,104  
Intangibles   1,543     1,623     1,709     1,799     1,889  
Total deposits   1,153,996     1,151,110     1,160,664     1,095,214     1,088,297  
Noninterest-bearing   310,830     300,054     312,392     303,277     295,599  
Savings   156,437     158,101     159,652     153,788     150,822  
NOW   203,744     199,917     205,011     174,653     175,767  
Money Market   274,528     287,140     278,443     245,121     244,138  
Time Deposits   208,457     205,898     205,166     218,375     221,971  
Total interest-bearing deposits   843,166     851,056     848,272     791,937     792,698  
                     
Core deposits*   945,539     945,212     955,498     876,839     866,326  
Shareholders’ equity   139,669     138,440     139,113     138,249     139,935  
                     
Asset Quality                    
Non-performing loans   $ 8,235     $ 12,537     $ 10,870     $ 11,626     $ 11,530  
Non-performing loans to total assets   0.58 %   0.90 %   0.78 %   0.86 %   0.86 %
Allowance for loan losses   12,933     13,109     12,905     12,896     12,718  
Allowance for loan losses to total loans   1.09 %   1.15 %   1.16 %   1.18 %   1.19 %
Allowance for loan losses to non-performing loans   157.05 %   104.56 %   118.72 %   110.92 %   110.30 %
Non-performing loans to total loans   0.69 %   1.10 %   0.98 %   1.06 %   1.08 %
                     
Capitalization                    
Shareholders’ equity to total assets   9.77 %   9.92 %   9.93 %   10.25 %   10.39 %
                               
* Core deposits are defined as total deposits less time deposits                        
                         


Reconciliation of GAAP and Non-GAAP Financial Measures
         
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
(Dollars in Thousands, Except Per Share Data)   2017   2016   2017   2016
GAAP net income   $ 3,284     $ 3,059     $ 9,057     $ 9,529  
Less: net securities gains, net of tax   197     172     320     810  
Non-GAAP operating earnings   $ 3,087     $ 2,887     $ 8,737     $ 8,719  
                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
Return on average assets (ROA)   0.93 %   0.91 %   0.87 %   0.95 %
Less: net securities gains, net of tax   0.05 %   0.05 %   0.03 %   0.08 %
Non-GAAP operating ROA   0.88 %   0.86 %   0.84 %   0.87 %
                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
Return on average equity (ROE)   9.43 %   8.69 %   8.69 %   9.14 %
Less: net securities gains, net of tax   0.56 %   0.49 %   0.31 %   0.78 %
Non-GAAP operating ROE   8.87 %   8.20 %   8.38 %   8.36 %
                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
Basic earnings per share (EPS)   $ 0.70     $ 0.65     $ 1.92     $ 2.01  
Less: net securities gains, net of tax   0.04     0.04     0.07     0.17  
Non-GAAP basic operating EPS   $ 0.66     $ 0.61     $ 1.85     $ 1.84  
                                 
    Three Months Ended
September 30,
  Nine Months Ended
September 30,
    2017   2016   2017   2016
Dilutive EPS   $ 0.70     $ 0.65     $ 1.92     $ 2.01  
Less: net securities gains, net of tax   0.04     0.04     0.07     0.17  
Non-GAAP dilutive operating EPS   $ 0.66     $ 0.61     $ 1.85     $ 1.84  
                                 

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