Penns Woods Bancorp, Inc. (NASDAQ:PWOD) today reported that net income from core operations (?operating earnings?), which is a non-GAAP measure of net income excluding net securities gains and losses, increased to $2,854,000 and $10,815,000 for the three and twelve months ended December 31, 2010 compared to $2,423,000 and $9,291,000 for the same periods of 2009. Operating earnings per share for the three months ended December 31, 2010 were $0.74 basic and dilutive compared to $0.63 basic and dilutive for the same period of 2009 or an increase of 17.5%. Operating earnings per share for the twelve months ended December 31, 2010 increased 16.5% to $2.82 basic and dilutive compared to $2.42 basic and dilutive for the same period of 2009. Operating earnings for the three and twelve months ended December 31, 2010 have been positively impacted by continued emphasis on core deposit growth, an increasing net interest margin, and expense control. 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 this paragraph to the comparable GAAP financial measures is included at the end of this press release.

Net income, as reported under U.S. generally accepted accounting principles, for the three and twelve months ended December 31, 2010 was $2,861,000 and $10,929,000 compared to $2,500,000 and $6,093,000 for the same periods of 2009. Results for the twelve month period ended December 31, 2010 compared to 2009 were significantly impacted by an increase in after-tax securities gains of $3,312,000 (from a loss of $3,198,000 to a gain of $114,000). Included within the change in after-tax securities losses for the twelve months ended December 31, 2009 are pre-tax other than temporary impairment charges relating to certain equity securities held in the investment portfolio of $4,614,000, while there were no such charges during the twelve months ended December 31, 2010. Basic and dilutive earnings per share for the three and twelve months ended December 31, 2010 were $0.75 and $2.85 compared to $0.65 and $1.59 for the corresponding periods of 2009. Return on average assets and return on average equity were 1.63% and 15.56% for the three months ended December 31, 2010 compared to 1.47% and 14.72% for the corresponding period of 2009. Net income for the twelve months ended December 31, 2010 correlates to a return on average assets and return on average equity of 1.56% and 15.30% compared to 0.92% and 9.66% for the twelve month 2009 period.

The net interest margin for the three and twelve months ended December 31, 2010 was 4.66% and 4.57% compared to 4.42% and 4.40% for the corresponding periods of 2009. Contributing to the increased net interest margin is the significant growth in lower cost core deposits, which has led to the average rate paid on interest bearing liabilities decreasing 57 basis points (bp) and 56 bp for the three and twelve months ended December 31, 2010 compared to the same periods of 2009. In addition, the average rate paid on time deposits decreased 71 bp and 77 bp for the three and twelve months ended December 31, 2010 compared to the same periods of 2009. The liability rate decreases are the result of Federal Open Market Committee (FOMC) actions to maintain low interest rates, our strategic decision to shorten the duration of the time deposit portfolio over the past two years, and core deposit growth that provided a lower cost source of funding. The duration of the time deposit portfolio began being lengthened during the second half of 2009 and continues to be lengthened due to the apparent bottoming or near bottoming of deposit rates. In addition, an FHLB long-term borrowing of $10,000,000 at a rate of 3.98% matured, with cash on hand being utilized to pay-off the borrowing during the three months ended December 31, 2010. ?Balance sheet management and growth has led to the increasing net interest margin. During 2010, we accumulated cash in anticipation of the FHLB borrowings that were maturing in the second half of the year. In addition, we have reduced our time deposit portfolio and focused on core deposits which carry a lower cost. Although the focus was on the liability side of the balance sheet, we did not lose sight of the earning asset portfolio. Actions have been taken to reduce the duration of the investment portfolio, while the loan portfolio continues to add quality loans that possess a fair risk/return trade-off and complement the overall earning asset portfolio,? commented Richard A. Grafmyre, President and Chief Executive Officer of Penns Woods Bancorp, Inc.

Total assets increased $15,484,000 to $691,688,000 at December 31, 2010 compared to December 31, 2009. Net loans increased $8,650,000 or 2.2% despite a soft economy that 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. The economic issues of the continuing soft economy are impacting our loan credit quality ratios, although we continue to compare favorably to other members of the financial industry. Our nonperforming loans to total loans ratio has increased to 1.50% at December 31, 2010 from 1.10% at December 31, 2009. The increase in nonperforming loans is primarily the result of an increase in commercial loan delinquencies. The increase is centered on several loans that are in a secured position and have sureties with a strong underlying financial position. Annualized net loan charge-offs to average loans of 0.19% for the twelve month period ended December 31, 2010 remain at a minimal level. The allowance for loan losses was increased to 1.45% of total loans at December 31, 2010 due to the general economic uncertainty and an increase in nonperforming loans. The investment portfolio increased $6,773,000 from December 31, 2009 to December 31, 2010 due to the purchase of short maturity bonds that have been utilized to reduce the portfolio duration.

Deposits have grown 4.1% or $20,221,000 to $517,508,000 at December 31, 2010 compared to December 31, 2009, with core deposits (total deposits excluding time deposits) increasing 17.3% or $48,512,000. Core deposits at December 31, 2010 comprise 63.4% of total deposits compared to 56.2% at December 31, 2009. ?Leading the increase was growth of $32,489,000 or 43.5% in money market accounts resulting from strategic actions undertaken to build customer relationships that utilize multiple staple products. These actions have resulted in not only deposit growth across core deposit categories, but have also led to increased revenues related to card usage. Maintaining the deposit momentum will be a key focus as we move forward. We are committed to utilizing targeted marketing efforts through various delivery channels, developing products and services to meet the needs of our market area, and most importantly providing the tools and training to our employees that will allow them to grow our franchise,? commented Mr. Grafmyre.

Shareholders' equity decreased $296,000 to $66,620,000 at December 31, 2010 compared to December 31, 2009 as accumulated other comprehensive loss increased by $4,200,000. The increase in accumulated other comprehensive loss is a result of an increase in unrealized losses on available for sale securities from an unrealized loss of $3,569,000 at December 31, 2009 to an unrealized loss of $7,276,000 at December 31, 2010. Accumulated other comprehensive loss 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 $493,000. The current level of shareholders' equity equates to a book value per share of $17.37 at December 31, 2010 compared to $17.45 at December 31, 2009 and an equity to asset ratio of 9.63% at December 31, 2010 compared to 9.90% at December 31, 2009. Excluding accumulated other comprehensive gain/loss, book value per share was $19.90 at December 31, 2010 compared to $18.88 at December 31, 2009. Dividends paid to shareholders were $0.46 and $1.84 for the three and twelve months ended December 31, 2010 and 2009.

?Investors and regulators have placed a premium on capital levels during this prolonged period of a sluggish economy. We continue to augment our ?well capitalized? regulatory capital position through solid earnings and a dividend policy that results in sufficient capital growth that will allow for balance sheet growth. Moving forward we intend to continue building capital levels to provide for organic growth, while also maintaining sufficient capital to facilitate growth through other opportunities that may arise,? commented Mr. Grafmyre.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates twelve branch offices providing financial services in Lycoming, Clinton, and Centre 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, 2009.

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.jssb.com.

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT

 
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
     
(In Thousands, Except Share Data) December 31,
2010 2009 % Change  
 
ASSETS
Noninterest-bearing balances $ 9,467 $ 13,760 -31.2 %
Interest-bearing deposits in other financial institutions   26     28   -7.1 %
Total cash and cash equivalents 9,493 13,788 -31.2 %
 
Investment securities, available for sale, at fair value 215,565 208,768 3.3 %
Investment securities held to maturity (fair value of $83 and $108) 83 107 -22.4 %
Loans held for sale 6,658 4,063 63.9 %
Loans 415,557 405,529 2.5 %
Less: Allowance for loan losses   6,035     4,657   29.6 %
Loans, net 409,522 400,872 2.2 %
Premises and equipment, net 7,658 7,988 -4.1 %
Accrued interest receivable 3,765 3,523 6.9 %
Bank-owned life insurance 15,436 14,942 3.3 %
Investment in limited partnerships 4,205 4,898 -14.1 %
Goodwill 3,032 3,032 0.0 %
Deferred tax asset 11,897 9,491 25.4 %
Other assets   4,374     4,732   -7.6 %
TOTAL ASSETS $ 691,688   $ 676,204   2.3 %
 
LIABILITIES
Interest-bearing deposits $ 428,161 $ 417,388 2.6 %
Noninterest-bearing deposits   89,347     79,899   11.8 %
Total deposits 517,508 497,287 4.1 %
 
Short-term borrowings 27,299 18,354 48.7 %
Long-term borrowings, Federal Home Loan Bank (FHLB) 71,778 86,778 -17.3 %
Accrued interest payable 750 1,073 -30.1 %
Other liabilities   7,733     5,796   33.4 %
TOTAL LIABILITIES   625,068     609,288   2.6 %
 
SHAREHOLDERS' EQUITY
Common stock, par value $8.33, 10,000,000 shares authorized;
4,015,753 and 4,013,142 shares issued 33,464 33,443 0.1 %
Additional paid-in capital 18,064 18,008 0.3 %
Retained earnings 31,091 27,218 14.2 %
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities (7,276 ) (3,569 ) 103.9 %
Defined benefit plan (2,413 ) (1,920 ) 25.7 %
Less: Treasury stock at cost, 180,596 and 179,028 shares   (6,310 )   (6,264 ) 0.7 %
TOTAL SHAREHOLDERS' EQUITY   66,620     66,916   -0.4 %
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 691,688   $ 676,204   2.3 %
 
 
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,
2010 2009 % Change 2010 2009 % Change
 
INTEREST AND DIVIDEND INCOME:
Loans including fees $ 6,351 $ 6,543 -2.9 % $ 25,513 $ 25,568 -0.2 %
Investment securities:
Taxable 1,402 1,319 6.3 % 5,584 5,424 2.9 %
Tax-exempt 1,265 1,257 0.6 % 5,059 5,005 1.1 %
Dividend and other interest income   49   29 69.0 %   206   194   6.2 %
TOTAL INTEREST AND DIVIDEND INCOME   9,067   9,148 -0.9 %   36,362   36,191   0.5 %
 
INTEREST EXPENSE:
Deposits 1,336 1,927 -30.7 % 6,055 8,284 -26.9 %
Short-term borrowings 68 78 -12.8 % 265 396 -33.1 %
Long-term borrowings, FHLB   815   937 -13.0 %   3,548   3,718   -4.6 %
TOTAL INTEREST EXPENSE   2,219   2,942 -24.6 %   9,868   12,398   -20.4 %
 
NET INTEREST INCOME 6,848 6,206 10.3 % 26,494 23,793 11.4 %
 
PROVISION FOR LOAN LOSSES   750   335 123.9 %   2,150   917   134.5 %
 
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES   6,098   5,871 3.9 %   24,344   22,876   6.4 %
 
NON-INTEREST INCOME:
Deposit service charges 568 581 -2.2 % 2,177 2,200 -1.0 %
Securities gains (losses), net 11 116 -90.5 % 173 (4,846 ) 103.6 %
Bank-owned life insurance 194 295 -34.2 % 636 713 -10.8 %
Gain on sale of loans 235 300 -21.7 % 949 826 14.9 %
Insurance commissions 203 201 1.0 % 970 1,189 -18.4 %
Other   674   581 16.0 %   2,554   2,205   15.8 %
TOTAL NON-INTEREST INCOME   1,885   2,074 -9.1 %   7,459   2,287   226.1 %
 
NON-INTEREST EXPENSE:
Salaries and employee benefits 2,435 2,524 -3.5 % 10,214 10,189 0.2 %
Occupancy, net 293 310 -5.5 % 1,240 1,266 -2.1 %
Furniture and equipment 342 306 11.8 % 1,264 1,212 4.3 %
Pennsylvania shares tax 169 171 -1.2 % 677 685 -1.2 %
Amortization of investments in limited partnerships 210 142 47.9 % 693 567 22.2 %
Other   1,363   1,732 -21.3 %   5,404   5,893   -8.3 %
TOTAL NON-INTEREST EXPENSE   4,812   5,185 -7.2 %   19,492   19,812   -1.6 %
 
INCOME BEFORE INCOME TAX PROVISION (BENEFIT) 3,171 2,760 14.9 % 12,311 5,351 130.1 %
INCOME TAX PROVISION (BENEFIT)   310   260 19.2 %   1,382   (742 ) 286.3 %
NET INCOME $ 2,861 $ 2,500 14.4 % $ 10,929 $ 6,093   79.4 %
 
EARNINGS PER SHARE - BASIC $ 0.75 $ 0.65 15.4 % $ 2.85 $ 1.59   79.2 %
 
EARNINGS PER SHARE - DILUTED $ 0.75 $ 0.65 15.4 % $ 2.85 $ 1.59   79.2 %
 
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC   3,834,710   3,833,732 0.0 %   3,834,255   3,832,789   0.0 %
 
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED   3,834,847   3,833,869 0.0 %   3,834,394   3,832,886   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, 2010 December 31, 2009
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 18,540 $ 299 6.40 % $ 16,829 $ 284 6.70 %
All other loans   399,300   6,154   6.11 %   395,335   6,356 6.38 %
Total loans   417,840   6,453   6.13 %   412,164   6,640 6.39 %
 
Taxable securities 117,162 1,450 4.95 % 104,527 1,348 5.16 %
Tax-exempt securities   108,909   1,917   7.04 %   108,901   1,905 7.00 %
Total securities   226,071   3,367   5.96 %   213,428   3,253 6.10 %
 
Interest bearing deposits   6,640   1   0.06 %   2,094   - 0.00 %
 
Total interest-earning assets 650,551   9,821   6.01 % 627,686   9,893 6.27 %
 
Other assets   52,497   53,435
 
TOTAL ASSETS $ 703,048 $ 681,121
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 63,643 39 0.24 % $ 59,952 69 0.46 %
Super Now deposits 66,109 89 0.53 % 63,227 120 0.75 %
Money market deposits 105,524 289 1.09 % 74,315 303 1.62 %
Time deposits   199,004   919   1.83 %   223,966   1,435 2.54 %
Total interest-bearing deposits   434,280   1,336   1.22 %   421,460   1,927 1.81 %
 
Short-term borrowings 18,030 68 1.50 % 16,217 78 1.88 %
Long-term borrowings, FHLB   78,191   815   4.08 %   86,778   937 4.23 %
Total borrowings   96,221   883   3.59 %   102,995   1,015 3.86 %
 
Total interest-bearing liabilities 530,501   2,219   1.65 % 524,455   2,942 2.22 %
 
Demand deposits 90,980 78,027
Other liabilities 8,032 10,714
Shareholders' equity   73,535   67,925
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 703,048 $ 681,121
Interest rate spread   4.36 % 4.05 %
Net interest income/margin $ 7,602   4.66 % $ 6,951 4.42 %
 
 
For the Three Months Ended

December 31,

 
2010 2009
 
Total interest income $ 9,067 $ 9,148
Total interest expense   2,219   2,942  
 
Net interest income 6,848 6,206
Tax equivalent adjustment   754   745  
 
Net interest income (fully taxable equivalent) $ 7,602 $ 6,951  
 
 
PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
           
For the Twelve Months Ended
(Dollars in Thousands) December 31, 2010 December 31, 2009
Average Balance Interest Average Rate Average Balance Interest Average Rate
ASSETS:
Tax-exempt loans $ 33,962 $ 1,212 3.57 % $ 16,688 $ 1,100 6.59 %
All other loans   382,091   24,713   6.47 %   382,433   24,842 6.50 %
Total loans   416,053   25,925   6.23 %   399,121   25,942 6.50 %
 
Taxable securities 113,714 5,784 5.09 % 103,338 5,617 5.44 %
Tax-exempt securities   108,658   7,665   7.05 %   104,800   7,583 7.24 %
Total securities   222,372   13,449   6.05 %   208,138   13,200 6.34 %
 
Interest bearing deposits   8,782   6   0.07 %   1,938   1 0.05 %
 
Total interest-earning assets 647,207   39,380   6.08 % 609,197   39,143 6.43 %
 
Other assets   53,734   54,642
 
TOTAL ASSETS $ 700,941 $ 663,839
 
LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings $ 64,477 183 0.28 % $ 60,815 313 0.51 %
Super Now deposits 65,080 385 0.59 % 58,591 507 0.87 %
Money market deposits 100,112 1,167 1.17 % 62,906 1,227 1.95 %
Time deposits   208,274   4,320   2.07 %   219,264   6,237 2.84 %
Total interest-bearing deposits   437,943   6,055   1.38 %   401,576   8,284 2.06 %
 
Short-term borrowings 15,371 265 1.72 % 27,641 396 1.42 %
Long-term borrowings, FHLB   83,901   3,548   4.17 %   86,778   3,718 4.23 %
Total borrowings   99,272   3,813   3.79 %   114,419   4,114 3.55 %
 
Total interest-bearing liabilities 537,215   9,868   1.83 % 515,995   12,398 2.39 %
 
Demand deposits 84,158 74,618
Other liabilities 8,118 10,169
Shareholders' equity   71,450   63,057
 
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 700,941 $ 663,839
Interest rate spread   4.25 % 4.04 %
Net interest income/margin $ 29,512   4.57 % $ 26,745 4.40 %
 
 
For the Twelve Months Ended
December 31,
 

2010

2009
 
Total interest income $ 36,362 $ 36,191
Total interest expense   9,868   12,398  
 
Net interest income 26,494 23,793
Tax equivalent adjustment   3,018   2,952  
 
Net interest income (fully taxable equivalent) $ 29,512 $ 26,745  
 
   
Quarter Ended
               
(Dollars in Thousands, Except Per Share Data)

12/31/2010

    

9/30/2010

    

6/30/2010

    

3/31/2010

    

12/31/2009

                                             
Operating Data                                              
                                             
Net income $ 2,861       $ 2,848       $ 2,772       $ 2,448       $ 2,500  
Net interest income   6,848         6,758         6,590         6,298         6,206  
Provision for loan losses   750         700         400         300         335  
Net security gains (losses)   11         109         56         (3 )       116  
Non-interest income, ex. net security gains (losses)   1,874         1,761         1,952         1,699         1,958  
Non-interest expense   4,812         4,704         4,990         4,986         5,185  
                                             
Performance Statistics                                              
                                             
Net interest margin   4.66 %       4.56 %       4.56 %       4.49 %       4.42 %
Annualized return on average assets   1.63 %       1.60 %       1.58 %       1.42 %       1.47 %
Annualized return on average equity   15.56 %       15.51 %       15.76 %       14.31 %       14.72 %
Annualized net loan charge-offs to avg loans   0.18 %       0.26 %       0.21 %       0.09 %       0.15 %
Net charge-offs   193         268         217         93         157  
Efficiency ratio   55.2 %       55.2 %       58.4 %       62.4 %       63.5 %
                                             
Per Share Data                                              
                                             
Basic earnings per share $ 0.75       $ 0.74       $ 0.72       $ 0.64       $ 0.65  
Diluted earnings per share   0.75         0.74         0.72         0.64         0.65  
Dividend declared per share   0.46         0.46         0.46         0.46         0.46  
Book value   17.37         19.64         18.42         17.73         17.45  
Common stock price:                                              
High   41.26         33.15         34.50         34.03         33.24  
Low   31.97         29.41         26.76         30.04         30.37  
Close   39.80         33.05         30.42         33.55         32.44  
Weighted average common shares:                                              
Basic   3,835         3,834         3,834         3,834         3,834  
Fully Diluted   3,835         3,834         3,834         3,834         3,834  
End-of-period common shares:                                              
Issued   4,016         4,015         4,014         4,014         4,013  
Treasury   181         181         181         179         179  
 
   
Quarter Ended
               
(Dollars in Thousands, Except Per Share Data)

12/31/2010

    

9/30/2010

    

6/30/2010

    

3/31/2010

    

12/31/2009

                                             
Financial Condition Data:                                              
General                                              
Total assets $ 691,688       $ 713,496       $ 710,291       $ 695,755       $ 676,204  
Loans, net   409,522         407,394         406,913         405,055         400,872  
Intangibles   3,032         3,032         3,032         3,032         3,032  
Total deposits   517,508         534,170         529,981         521,040         497,287  
Noninterest-bearing   89,347         92,128         87,979         80,913         79,899  
                                             
Savings   64,258         66,763         66,789         64,255         60,827  
NOW   67,505         66,957         65,802         64,362         64,361  
Money Market   107,123         105,147         101,301         94,725         74,634  
Time Deposits   189,275         203,175         208,110         216,785         217,566  
Total interest-bearing deposits   428,161         442,042         442,002         440,127         417,388  
                                             
Core deposits*   328,233         330,995         321,871         304,255         279,721  
Shareholders' equity   66,620         75,323         70,603         67,972         66,916  
                                             
Asset Quality                                              
                                             
Non-performing assets $ 6,215       $ 6,918       $ 6,646       $ 3,863       $ 4,456  
Non-performing assets to total assets   0.90 %       0.97 %       0.94 %       0.56 %       0.66 %
Allowance for loan losses   6,035         5,479         5,047         4,864         4,657  
Allowance for loan losses to total loans   1.45 %       1.33 %       1.23 %       1.19 %       1.15 %

Allowance for loan losses to non-performing loans

  97.10 %       79.20 %       75.94 %       125.91 %       104.51 %
Non-performing loans to total loans   1.50 %       1.68 %       1.61 %       0.94 %       1.10 %
                                             
Capitalization                                              
                                             
Shareholders' equity to total assets   9.63 %       10.56 %       9.94 %       9.77 %       9.90 %
 
* 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,
2010     2009 2010     2009
GAAP net income $ 2,861 $ 2,500 $ 10,929 $ 6,093
Less: securities gains (losses), net of tax   7     77     114     (3,198 )
Non-GAAP operating earnings $ 2,854   $ 2,423   $ 10,815   $ 9,291  
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
Return on average assets (ROA) 1.63 % 1.47 % 1.56 % 0.92 %
Less: securities gains (losses), net of tax   0.01 %   0.05 %   0.02 %   -0.48 %
Non-GAAP operating ROA   1.62 %   1.42 %   1.54 %   1.40 %
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
Return on average equity (ROE) 15.56 % 14.72 % 15.30 % 9.66 %
Less: securities gains (losses), net of tax   0.04 %   0.45 %   0.16 %   -5.07 %
Non-GAAP operating ROE   15.52 %   14.27 %   15.14 %   14.73 %
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
Basic earnings per share (EPS) $ 0.75 $ 0.65 $ 2.85 $ 1.59
Less: securities gains (losses), net of tax   0.01     0.02     0.03     (0.83 )
Non-GAAP basic operating EPS $ 0.74   $ 0.63   $ 2.82   $ 2.42  
 
 
Three Months Ended Twelve Months Ended
December 31, December 31,
2010 2009 2010 2009
Dilutive EPS $ 0.75 $ 0.65 $ 2.85 $ 1.59
Less: securities gains (losses), net of tax   0.01     0.02     0.03     (0.83 )
Non-GAAP dilutive operating EPS $ 0.74   $ 0.63   $ 2.82   $ 2.42  
 

Penns Woods Bancorp, Inc.
Richard A. Grafmyre, President and Chief Executive Officer
570-322-1111
jssb@jssb.com