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
   570-322-1111e-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