Penns Woods Bancorp, Inc. Reports Fourth Quarter 2011 Operating Earnings

WILLIAMSPORT, Pa.--(BUSINESS WIRE)-- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Highlights

• Net income from core operations ("operating earnings"), which is a non-GAAP measure of net income excluding net securities gains and losses, increased to $3,079,000 and $11,952,000 for the three and twelve months ended December 31, 2011 compared to $2,854,000 and $10,815,000 for the same periods of 2010.
• Operating earnings per share for the three months ended December 31, 2011 were $0.80 basic and dilutive compared to $0.74 basic and dilutive for the same period of 2010 or an increase of 8.1%. Operating earnings per share for the twelve months ended December 31, 2011 increased 10.6% to $3.12 basic and dilutive compared to $2.82 basic and dilutive for the same period of 2010.
• Net interest margin was 4.78% for the three months ended December 31, 2011 compared to 4.66% for the corresponding period of 2010. For the twelve months ended December 31, 2011 the net interest margin was 4.70% compared to 4.57% for the twelve month 2010 period.
• Return on average equity was 17.00% for the three months ended December 31, 2011 compared to 15.56% for the corresponding period of 2010. Earnings for the twelve months ended December 31, 2011 correlate to a return on average equity of 16.60% compared to 15.30% for the twelve month 2010 period.

"Although earnings remain stable we continue to deal with the challenging economy and credit cycle. Our focus moving forward will continue to be building core deposits, loan growth, and managing credit risk," 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 twelve months ended December 31, 2011 was $3,395,000 and $12,362,000 compared to $2,861,000 and $10,929,000 for the same periods of 2010. Results for the three and twelve month periods ended December 31, 2011 compared to 2010 were impacted by an increase in after-tax securities gains of $309,000 (from a gain of $7,000 to a gain of $316,000) for the three month periods and an increase in after-tax securities gains of $296,000 (from a gain of $114,000 to a gain of $410,000) for the twelve month periods. Basic and dilutive earnings per share for the three and twelve months ended December 31, 2011 were $0.88 and $3.22 compared to $0.75 and $2.85 for the corresponding periods of 2010. Return on average assets and return on average equity were 1.80% and 17.00% for the three months ended December 31, 2011 compared to 1.63% and 15.56% for the corresponding period of 2010. Earnings for the twelve months ended December 31, 2011 correlate to a return on average assets and a return on average equity of 1.69% and 16.60% compared to 1.56% and 15.30% for the twelve month 2010 period.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2011 was 4.78% and 4.70% compared to 4.66% and 4.57% for the corresponding periods of 2010. In addition, the net interest margin has increased compared to the linked quarter. The increase in net interest margin resulted primarily from a significant decrease in the cost of interest-bearing liabilities, as we continued to emphasize core deposit growth. These deposits represent a lower cost funding source than time deposits and comprise 70.3% of total deposits at December 31, 2011 compared to 63.4% at December 31, 2010. The average rate paid on total interest-bearing deposits decreased 35 and 39 basis points (bp) for the three and twelve months ended December 31, 2011 compared to the same periods of 2010. The decrease was led by the rate paid on time deposits decreasing 36 and 45 bp for the three and twelve months ended December 31, 2011 compared to the same periods of 2010. The duration of the time deposit portfolio, which was shortened over the past several years, is now being lengthened due to the apparent bottoming or near bottoming of deposit rates. FHLB long-term borrowings have been reduced by $10,500,000 since December 31, 2010 with cash on hand and short-term borrowings being utilized to pay off these borrowings carrying an average rate of 4.60% that matured during the three months ended December 31, 2011.

"Today's interest rate climate provides challenges to support a strong net interest margin. To maintain our margin we have attacked the challenge from both the earning asset and funding sides of the balance sheet. We continue to shorten the bond portfolio duration by utilizing shorter term corporate and agency bonds to offset the relatively longer duration of municipal bonds in the portfolio. While this action may limit current earnings somewhat, it also limits interest rate risk and will provide cash flow over the next few years as we anticipate a period of increasing rates. The yield on new loans, and investments, are at a lower level than the existing portfolio which has placed downward pressure on the yield on earning assets. Our focus on increasing core deposits has resulted in a decrease in the overall cost of interest-bearing liabilities which has offset the negative effects of a declining yield on earning assets," commented President Grafmyre.

Assets

Total assets increased $72,265,000 to $763,953,000 at December 31, 2011 compared to December 31, 2010. Net loans increased 4.7% to $428,805,000 at December 31, 2011 compared to December 31, 2010 as the economic environment has in general provided fewer loan opportunities. Housing, transportation, and all other facets related to the Marcellus Shale natural gas exploration are creating loan opportunities and we are aggressively attempting to attract those loans that meet and/or exceed our credit standards. During 2011 successful loan campaigns were undertaken to build home equity loans and lines of credit. The investment portfolio increased $54,503,000 from December 31, 2010 to December 31, 2011 due to a combination of market value increases and the purchase of short maturity bonds that have been utilized to reduce the portfolio duration and to provide current cash flow.

Nonperforming Loans

Our nonperforming loans to total loans ratio has increased to 2.75% at December 31, 2011 from 1.50% at December 31, 2010. The increase in nonperforming loans is primarily the result of an increase in commercial loan delinquencies. The increase is centered on several loans that either are 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 to average loans for the twelve months ended December 31, 2011 of 0.37% increased from our historically low levels primarily due to a $1,500,000 partial charge-off related to a real-estate development loan during the second quarter of 2011. The allowance for loan losses was increased to 1.64% of total loans at December 31, 2011 from 1.45% of total loans at December 31, 2010 due to the general economic uncertainty and an increase in nonperforming loans.

Deposits

Deposits have grown 12.4%, or $64,156,000, to $581,664,000 at December 31, 2011 compared to December 31, 2010, with core deposits (total deposits excluding time deposits) increasing $80,910,000. Noninterest-bearing deposits have increased 24.6% to $111,354,000 at December 31, 2011 compared to December 31, 2010. Also playing a significant role in increasing core deposits was money market and NOW accounts with growth rates of 16.1% and 50.8%, respectively. Driving this growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. In addition, over the past year we have implemented a targeted marketing campaign aimed at further strengthening our customer relationships, while also expanding our market penetration.

Shareholders' Equity

Shareholders' equity increased $13,840,000 to $80,460,000 at December 31, 2011 compared to December 31, 2010. The accumulated other comprehensive loss of $1,219,000 at December 31, 2011 is a result of an increase in unrealized gains on available for sale securities from an unrealized loss of $7,276,000 at December 31, 2010 to an unrealized gain of $2,914,000 at December 31, 2011. However, the level of accumulated other comprehensive loss at December 31, 2011 was also impacted by the change in net excess of the projected benefit obligation over the market value of the plan assets of the defined benefit pension plan resulting in an increase in the net loss of $1,720,000. The current level of shareholders' equity equates to a book value per share of $20.97 at December 31, 2011 compared to $17.37 at December 31, 2010 and an equity to asset ratio of 10.53% at December 31, 2011 compared to 9.63% at December 31, 2010. Excluding accumulated other comprehensive loss, book value per share was $21.29 at December 31, 2011 compared to $19.90 at December 31, 2010. Dividends paid to shareholders were $0.46 and $1.84 for the three and twelve months ended December 31, 2011 and 2010.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services in Lycoming, Clinton, Centre, and Montour Counties. Investment and insurance products are offered through the bank's subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.

NOTE: This press release contains financial information determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles ("GAAP"). Management uses the non-GAAP measure of net income from core operations in its analysis of the company's performance. This measure, as used by the Company, adjusts net income determined in accordance with GAAP to exclude the effects of special items, including significant gains or losses that are unusual in nature such as net securities gains and losses. Because certain of these items and their impact on the Company's performance are difficult to predict, management believes presentation of financial measures excluding the impact of such items provides useful supplemental information in evaluating the operating results of the Company's core businesses. These disclosures should not be viewed as a substitute for net income determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

This press release may contain certain "forward-looking statements" including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact. The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company's organization, compensation and benefit plans; (iii) the effect on the Company's competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; and (v) the effect of changes in the business cycle and downturns in the local, regional or national economies. For a list of other factors which could affect the Company's results, see the Company's filings with the Securities and Exchange Commission, including "Item 1A. Risk Factors," set forth in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010.

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 .

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(In Thousands, Except Share Data)		December 31,
			2011				2010			% Change
ASSETS
Noninterest-bearing balances		$	13,829			$	9,467			46.1	%
Interest-bearing deposits in other financial institutions			56				26			115.4	%
Total cash and cash equivalents			13,885				9,493			46.3	%
Investment securities, available for sale, at fair value			270,097				215,565			25.3	%
Investment securities held to maturity (fair value of $55 and $83)			54				83			-34.9	%
Loans held for sale			3,787				6,658			-43.1	%
Loans			435,959				415,557			4.9	%
Less: Allowance for loan losses			7,154				6,035			18.5	%
Loans, net			428,805				409,522			4.7	%
Premises and equipment, net			7,707				7,658			0.6	%
Accrued interest receivable			3,905				3,765			3.7	%
Bank-owned life insurance			16,065				15,436			4.1	%
Investment in limited partnerships			3,544				4,205			-15.7	%
Goodwill			3,032				3,032			0.0	%
Deferred tax asset			7,991				11,897			-32.8	%
Other assets			5,081				4,374			16.2	%
TOTAL ASSETS		$	763,953			$	691,688			10.4	%
LIABILITIES
Interest-bearing deposits		$	470,310			$	428,161			9.8	%
Noninterest-bearing deposits			111,354				89,347			24.6	%
Total deposits			581,664				517,508			12.4	%
Short-term borrowings			29,598				27,299			8.4	%
Long-term borrowings, Federal Home Loan Bank (FHLB)			61,278				71,778			-14.6	%
Accrued interest payable			536				750			-28.5	%
Other liabilities			10,417				7,733			34.7	%
TOTAL LIABILITIES			683,493				625,068			9.3	%
SHAREHOLDERS' EQUITY
Common stock, par value $8.33, 10,000,000 shares authorized;
4,017,677 and 4,015,753 shares issued			33,480				33,464			0.0	%
Additional paid-in capital			18,115				18,064			0.3	%
Retained earnings			36,394				31,091			17.1	%
Accumulated other comprehensive loss:
Net unrealized gain (loss) on available for sale securities			2,914				(7,276	)		140.0	%
Defined benefit plan			(4,133	)			(2,413	)		-71.3	%
Less: Treasury stock at cost, 180,596 shares			(6,310	)			(6,310	)		0.0	%
TOTAL SHAREHOLDERS' EQUITY			80,460				66,620			20.8	%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	763,953			$	691,688			10.4	%

PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In Thousands, Except Per Share Data)		Three Months Ended									Twelve Months Ended
		December 31,									December 31,
		2011			2010			% Change			2011			2010			% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	6,428		$	6,351		1.2	%		$	25,187		$	25,513		-1.3	%
Investment securities:
Taxable			1,446			1,402		3.1	%			5,677			5,584		1.7	%
Tax-exempt			1,385			1,265		9.5	%			5,260			5,059		4.0	%
Dividend and other interest income			78			49		59.2	%			252			206		22.3	%
TOTAL INTEREST AND DIVIDEND INCOME			9,337			9,067		3.0	%			36,376			36,362		0.0	%
INTEREST EXPENSE:
Deposits			1,036			1,336		-22.5	%			4,566			6,055		-24.6	%
Short-term borrowings			45			68		-33.8	%			202			265		-23.8	%
Long-term borrowings, FHLB			661			815		-18.9	%			2,888			3,548		-18.6	%
TOTAL INTEREST EXPENSE			1,742			2,219		-21.5	%			7,656			9,868		-22.4	%
NET INTEREST INCOME			7,595			6,848		10.9	%			28,720			26,494		8.4	%
PROVISION FOR LOAN LOSSES			900			750		20.0	%			2,700			2,150		25.6	%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES			6,695			6,098		9.8	%			26,020			24,344		6.9	%
NON-INTEREST INCOME:
Service charges			483			568		-15.0	%			2,021			2,177		-7.2	%
Securities gains, net			479			11		4254.5	%			621			173		259.0	%
Bank-owned life insurance			138			194		-28.9	%			599			636		-5.8	%
Gain on sale of loans			280			235		19.1	%			1,130			949		19.1	%
Insurance commissions			303			203		49.3	%			933			970		-3.8	%
Brokerage commissions			200			249		-19.7	%			997			965		3.3	%
Other			528			425		24.2	%			1,918			1,589		20.7	%
TOTAL NON-INTEREST INCOME			2,411			1,885		27.9	%			8,219			7,459		10.2	%
NON-INTEREST EXPENSE:
Salaries and employee benefits			2,751			2,435		13.0	%			10,479			10,214		2.6	%
Occupancy, net			300			293		2.4	%			1,262			1,240		1.8	%
Furniture and equipment			368			342		7.6	%			1,379			1,264		9.1	%
Pennsylvania shares tax			173			169		2.4	%			689			677		1.8	%
Amortization of investments in limited partnerships			165			210		-21.4	%			661			693		-4.6	%
FDIC deposit insurance			109			180		-39.4	%			525			737		-28.8	%
Other			1,286			1,183		8.7	%			4,969			4,667		6.5	%
TOTAL NON-INTEREST EXPENSE			5,152			4,812		7.1	%			19,964			19,492		2.4	%
INCOME BEFORE INCOME TAX PROVISION			3,954			3,171		24.7	%			14,275			12,311		16.0	%
INCOME TAX PROVISION			559			310		80.3	%			1,913			1,382		38.4	%
NET INCOME		$	3,395		$	2,861		18.7	%		$	12,362		$	10,929		13.1	%
EARNINGS PER SHARE - BASIC		$	0.88		$	0.75		17.3	%		$	3.22		$	2.85		13.0	%
EARNINGS PER SHARE - DILUTED		$	0.88		$	0.75		17.3	%		$	3.22		$	2.85		13.0	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			3,836,802			3,834,710		0.1	%			3,836,036			3,834,255		0.0	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			3,836,802			3,834,847		0.1	%			3,836,036			3,834,394		0.0	%
DIVIDENDS PER SHARE		$	0.46		$	0.46		0.0	%		$	1.84		$	1.84		0.0	%

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
		For the Three Months Ended
(Dollars in Thousands)		December 31, 2011										December 31, 2010
		Average Balance			Interest			Average Rate				Average Balance			Interest			Average Rate
ASSETS:
Tax-exempt loans		$	20,119		$	289			5.70	%		$	18,540		$	299		6.40	%
All other loans			414,356			6,237			5.97	%			399,300			6,154		6.11	%
Total loans			434,475			6,526			5.96	%			417,840			6,453		6.13	%
Taxable securities			141,805			1,524			4.30	%			117,162			1,450		4.95	%
Tax-exempt securities			123,960			2,098			6.77	%			108,909			1,917		7.04	%
Total securities			265,765			3,622			5.45	%			226,071			3,367		5.96	%
Interest-bearing deposits			645			-			0.00	%			6,640			1		0.06	%
Total interest-earning assets			700,885			10,148			5.76	%			650,551			9,821		6.01	%
Other assets			52,578										52,497
TOTAL ASSETS		$	753,463									$	703,048
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings		$	70,725			23			0.13	%		$	63,643			39		0.24	%
Super Now deposits			103,982			141			0.54	%			66,109			89		0.53	%
Money market deposits			125,259			229			0.73	%			105,524			289		1.09	%
Time deposits			173,931			643			1.47	%			199,004			919		1.83	%
Total interest-bearing deposits			473,897			1,036			0.87	%			434,280			1,336		1.22	%
Short-term borrowings			21,268			45			0.84	%			18,030			68		1.50	%
Long-term borrowings, FHLB			64,245			661			4.03	%			78,191			815		4.08	%
Total borrowings			85,513			706			3.23	%			96,221			883		3.59	%
Total interest-bearing liabilities			559,410			1,742			1.23	%			530,501			2,219		1.65	%
Demand deposits			105,607										90,980
Other liabilities			8,562										8,032
Shareholders' equity			79,884										73,535
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	753,463									$	703,048
Interest rate spread									4.53	%								4.36	%
Net interest income/margin					$	8,406			4.78	%					$	7,602		4.66	%
					For the Three Months Ended
					December 31,
					2011			2010
Total interest income					$	9,337		$	9,067
Total interest expense						1,742			2,219
Net interest income						7,595			6,848
Tax equivalent adjustment						811			754
Net interest income (fully taxable equivalent)					$	8,406		$	7,602

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
		For the Twelve Months Ended
(Dollars in Thousands)		December 31, 2011										December 31, 2010
		Average Balance			Interest			Average Rate				Average Balance			Interest			Average Rate
ASSETS:
Tax-exempt loans		$	20,267		$	1,213			5.99	%		$	18,287		$	1,212		6.63	%
All other loans			405,391			24,386			6.02	%			397,766			24,713		6.21	%
Total loans			425,658			25,599			6.01	%			416,053			25,925		6.23	%
Taxable securities			130,647			5,926			4.54	%			113,714			5,784		5.09	%
Tax-exempt securities			113,184			7,970			7.04	%			108,658			7,665		7.05	%
Total securities			243,831			13,896			5.70	%			222,372			13,449		6.05	%
Interest-bearing deposits			9,074			3			0.03	%			8,782			6		0.07	%
Total interest-earning assets			678,563			39,498			5.82	%			647,207			39,380		6.08	%
Other assets			53,207										53,734
TOTAL ASSETS		$	731,770									$	700,941
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings		$	70,178			121			0.17	%		$	64,477			183		0.28	%
Super Now deposits			88,556			473			0.53	%			65,080			385		0.59	%
Money market deposits			121,458			1,063			0.88	%			100,112			1,167		1.17	%
Time deposits			179,336			2,909			1.62	%			208,274			4,320		2.07	%
Total interest-bearing deposits			459,528			4,566			0.99	%			437,943			6,055		1.38	%
Short-term borrowings			18,117			202			1.11	%			15,371			265		1.72	%
Long-term borrowings, FHLB			69,879			2,888			4.08	%			83,901			3,548		4.17	%
Total borrowings			87,996			3,090			3.47	%			99,272			3,813		3.79	%
Total interest-bearing liabilities			547,524			7,656			1.39	%			537,215			9,868		1.83	%
Demand deposits			99,917										84,158
Other liabilities			9,852										8,118
Shareholders' equity			74,477										71,450
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	731,770									$	700,941
Interest rate spread									4.43	%								4.25	%
Net interest income/margin					$	31,842			4.70	%					$	29,512		4.57	%
					For the Twelve Months Ended
					December 31,
					2011			2010
Total interest income					$	36,376		$	36,362
Total interest expense						7,656			9,868
Net interest income						28,720			26,494
Tax equivalent adjustment						3,122			3,018
Net interest income (fully taxable equivalent)					$	31,842		$	29,512

		Quarter Ended
(Dollars in Thousands, Except Per Share Data)			12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
Operating Data
Net income		$	3,395		$	3,150		$	2,964		$	2,853		$	2,861
Net interest income			7,595			7,210			6,918			6,997			6,848
Provision for loan losses			900			600			600			600			750
Net security gains			479			8			9			125			11
Non-interest income, ex. net security gains			1,932			1,982			1,864			1,820			1,874
Non-interest expense			5,152			4,968			4,856			4,988			4,812
Performance Statistics
Net interest margin			4.78%			4.55%			4.58%			4.86%			4.66%
Annualized return on average assets			1.80%			1.67%			1.64%			1.65%			1.63%
Annualized return on average equity			17.00%			16.49%			16.29%			16.62%			15.56%
Annualized net loan charge-offs to avg loans			0.09%			0.01%			1.41%			0.00%			0.18%
Net charge-offs (recoveries)			101			8			1,477			(5)			193
Efficiency ratio			54.1%			54.1%			55.3%			56.6%			55.2%
Per Share Data
Basic earnings per share		$	0.88		$	0.82		$	0.78		$	0.74		$	0.75
Diluted earnings per share			0.88			0.82			0.78			0.74			0.75
Dividend declared per share			0.46			0.46			0.46			0.46			0.46
Book value			20.97			20.48			19.27			17.99			17.37
Common stock price:
High			39.30			36.56			39.30			40.08			41.26
Low			32.01			31.07			33.33			35.46			31.97
Close			38.78			32.75			34.36			38.93			39.80
Weighted average common shares:
Basic			3,837			3,836			3,836			3,835			3,835
Fully Diluted			3,837			3,836			3,836			3,835			3,835
End-of-period common shares:
Issued			4,018			4,017			4,017			4,016			4,016
Treasury			181			181			181			181			181

		Quarter Ended
(Dollars in Thousands, Except Per Share Data)			12/31/2011			9/30/2011			6/30/2011			3/31/2011			12/31/2010
Financial Condition Data:
General
Total assets		$	763,953		$	752,650		$	744,986		$	693,337		$	691,688
Loans, net			428,805			422,989			413,397			405,453			409,522
Intangibles			3,032			3,032			3,032			3,032			3,032
Total deposits			581,664			575,300			569,833			528,717			517,508
Noninterest-bearing			111,354			104,783			100,104			95,278			89,347
Savings			71,646			73,376			71,923			69,095			64,258
NOW			101,808			103,264			91,285			70,763			67,505
Money Market			124,335			122,896			129,004			108,104			107,123
Time Deposits			172,521			170,981			177,517			185,477			189,275
Total interest-bearing deposits			470,310			470,517			469,729			433,439			428,161
Core deposits*			409,143			404,319			392,316			343,240			328,233
Shareholders' equity			80,460			78,572			73,906			68,998			66,620
Asset Quality
Non-performing assets		$	12,009		$	14,344		$	10,911		$	12,900		$	6,215
Non-performing assets to total assets			1.57%			1.91%			1.46%			1.86%			0.90%
Allowance for loan losses			7,154			6,355			5,764			6,640			6,035
Allowance for loan losses to total loans			1.64%			1.48%			1.38%			1.61%			1.45%
Allowance for loan losses to non-performing loans			59.57%			44.30%			52.83%			51.47%			97.10%
Non-performing loans to total loans			2.75%			3.34%			2.60%			3.13%			1.50%
Capitalization
Shareholders' equity to total assets			10.53%			10.44%			9.92%			9.95%			9.63%
* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and non-GAAP Financial Measures
(Dollars in Thousands, Except Per Share Data)			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
				2011				2010				2011				2010
GAAP net income			$	3,395			$	2,861			$	12,362			$	10,929
Less: net securities gains, net of tax				316				7				410				114
Non-GAAP operating earnings			$	3,079			$	2,854			$	11,952			$	10,815
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
				2011				2010				2011				2010
Return on average assets (ROA)				1.80	%			1.63	%			1.69	%			1.56	%
Less: net securities gains, net of tax				0.17	%			0.01	%			0.06	%			0.02	%
Non-GAAP operating ROA				1.63	%			1.62	%			1.63	%			1.54	%
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
				2011				2010				2011				2010
Return on average equity (ROE)				17.00	%			15.56	%			16.60	%			15.30	%
Less: net securities gains, net of tax				1.58	%			0.04	%			0.55	%			0.16	%
Non-GAAP operating ROE				15.42	%			15.52	%			16.05	%			15.14	%
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
				2011				2010				2011				2010
Basic earnings per share (EPS)			$	0.88			$	0.75			$	3.22			$	2.85
Less: net securities gains, net of tax				0.08				0.01				0.10				0.03
Non-GAAP basic operating EPS			$	0.80			$	0.74			$	3.12			$	2.82
			Three Months Ended								Twelve Months Ended
			December 31,								December 31,
				2011				2010				2011				2010
Dilutive EPS			$	0.88			$	0.75			$	3.22			$	2.85
Less: net securities gains, net of tax				0.08				0.01				0.10				0.03
Non-GAAP dilutive operating EPS			$	0.80			$	0.74			$	3.12			$	2.82

Penns Woods Bancorp, Inc.
Richard A.
570-322-1111
[e-mail]

Source: Penns Woods Bancorp, Inc.