Penns Woods Bancorp, Inc. Reports Second Quarter 2021 Earnings

Penns Woods Bancorp, Inc. Reports Second Quarter 2021 Earnings




Penns Woods Bancorp, Inc. Reports Second Quarter 2021 Earnings

WILLIAMSPORT, Pa., July 21, 2021 (GLOBE NEWSWIRE) — Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $7.0 million for the six months ended June 30, 2021, resulting in basic and diluted earnings per share of $1.00.

Highlights

  • Net income, as reported under GAAP, for the three and six months ended June 30, 2021 was $3.6 million and $7.0 million, respectively, compared to $3.8 million and $6.8 million for the same period of 2020. Results for the three and six months ended June 30, 2021 compared to 2020 were impacted by a decrease in after-tax securities gains of $45,000 (from a gain of $156,000 to a gain of $111,000) for the three month period and an increase in after-tax securities gains of $27,000 (from a gain of $178,000 to a gain of $205,000) for the six month period.
  • The provision for loan losses decreased $295,000 and $530,000, respectfully, for the three and six months ended June 30, 2021, to $350,000 and $865,000 compared to $645,000 and $1.4 million for the 2020 periods. The provision for loan losses was elevated in 2020 due primarily to the uncertainty caused by the COVID-19 pandemic.
  • Basic and diluted earnings per share for the three and six months ended June 30, 2021 were $0.51 and $1.00. Basic and diluted earnings per share for the three and six months ended June 30, 2020 were $0.53 and $0.97.
  • Return on average assets was 0.76% for three months ended June 30, 2021, compared to 0.85% for the corresponding period of 2020. Return on average assets was 0.75% for the six months ended June 30, 2021, compared to 0.79% for the corresponding period of 2020.
  • Return on average equity was 8.70% for the three months ended June 30, 2021, compared to 9.59% for the corresponding period of 2020. Return on average equity was 8.69% for the six months ended June 30, 2021, compared to 8.75% for the corresponding period of 2020.

COVID-19 Activity

  • Approximately one third of employees working remotely.
  • As of June 30, 2021, loan modification/deferral program in place to defer payments up to 180 days for principal and/or interest with only $7.9 million in loan principal remaining in deferral.
  • All COVID-19 related loan deferrals meet the requirements to not be considered a troubled debt restructuring.
  • Participated in the Paycheck Protection Program (“PPP”) by primarily utilizing third parties to service and place the loans.
  • Significantly reduced deposit rates during the latter half of March 2020 continuing through June 2021.
  • Total paycheck protection program loans originated to be held on balance sheet at June 30, 2021 total $21.6 million.

Net Income

Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $3.5 million for the three months ended June 30, 2021 compared to $3.6 million for the same period of 2020. Core earnings were $6.8 million for the six months ended June 30, 2021, compared to $6.7 million for the same period of 2020. Core earnings per share for the three months ended June 30, 2021 were $0.49 basic and diluted, compared to $0.51 basic and diluted core earnings per share for the same period of 2020. Core earnings per share for the six months ended June 30, 2021 were $0.97 basic and diluted, compared to $0.95 basic and diluted for the same period of 2020. Core return on average assets and core return on average equity were 0.74% and 8.43% for the three months ended June 30, 2021, compared to 0.81% and 9.19% for the corresponding period of 2020. Core return on average assets and core return on average equity were 0.73% and 8.44% for the six months ended June 30, 2021 compared to 0.77% and 8.52% for the corresponding period of 2020. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.

Net Interest Margin

The net interest margin for the three and six months ended June 30, 2021 was 2.78% and 2.83%, compared to 3.01% and 3.09% for the corresponding period of 2020. The decrease in the net interest margin was driven by a decrease in the yield of the loan portfolio of 47 and 39 basis points (“bps”), while the investment portfolio yield declined 50 and 62 bps, respectively, during the current low interest rate environment. Further compressing the net interest margin was the significant increase of interest-bearing deposits. These deposits carry a current yield of a few basis points as commercial customers have received PPP funding and retail customers have received stimulus funding. Rates paid on interest-bearing deposit liabilities decreased 54 and 56 bps as rates paid were decreased significantly during 2020 due to the economic impact of COVID-19 prolonging the low interest rate environment. These deposit rate decreases have partially offset the decline in earning asset yield.

Assets

Total assets increased $56.5 million to $1.9 billion at June 30, 2021 compared to June 30, 2020.  Cash and cash equivalents increased significantly due to deposit growth resulting from the various economic recovery programs instituted at the state and federal levels that impacted both commercial and retail customers, coupled with customers becoming more risk averse and seeking safety in a bank deposit. Net loans decreased $12.9 million to $1.3 billion at June 30, 2021 compared to June 30, 2020, as the COVID-19 business and travel restrictions curtailed various lending activities such as indirect auto, home equity, and commercial. Lending activity began to rebound as business and travel restrictions were lessened during the second half of 2020 and continues to rebound in 2021. The investment portfolio increased $7.7 million from June 30, 2020 to June 30, 2021 as a portion of the excess cash liquidity was invested into short-term municipal bonds.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.59% at June 30, 2021 from 0.82% at June 30, 2020 as non-performing loans have decreased to $7.9 million at June 30, 2021 from $11.1 million at June 30, 2020 primarily due to a commercial loan relationship that was paid-off during the fourth quarter of 2020. The majority of non-performing loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have a specific allocation for any impairment recorded within the allowance for loan losses. Net loan charge-offs of $230,000 for the six months ended June 30, 2021 impacted the allowance for loan losses, which was 1.08% of total loans at June 30, 2021 compared to 0.96% at June 30, 2020.

Deposits

Deposits increased $89.4 million to $1.6 billion at June 30, 2021 compared to June 30, 2020. Noninterest-bearing deposits increased $59.0 million to $477.3 million at June 30, 2021 compared to June 30, 2020.  Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers, and customers becoming more risk averse and seeking safety in a bank deposit. Emphasis remains on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. The increased level of deposits have allowed for a decrease in short and long-term borrowings.

Shareholders’ Equity

Shareholders’ equity increased $7.3 million to $166.8 million at June 30, 2021 compared to June 30, 2020.  Accumulated other comprehensive loss of $1.4 million at June 30, 2021 increased from a loss of $1.0 million at June 30, 2020 primarily as a result of a change in the net excess of the projected benefit obligations under the defined benefit plan over the fair value of the plan’s assets, resulting in an increase in the net loss of $364,000. The current level of shareholders’ equity equates to a book value per share of $23.63 at June 30, 2021 compared to $22.66 at June 30, 2020, and an equity to asset ratio of 8.80% at June 30, 2021 compared to 8.68% at June 30, 2020. Dividends declared for the six months ended June 30, 2021 and 2020 were $0.64 per share, respectively.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates eighteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, Union, and Blair Counties, and Luzerne Bank, which operates eight branch offices providing financial services in Luzerne County.  Investment and insurance products are offered through Jersey Shore State Bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group. Insurance products are offered through United Insurance Solutions, LLC, a joint venture that is a subsidiary of the holding company.

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

This press release may contain certain “forward-looking statements” including statements concerning plans, objectives, future events or performance and assumptions and other statements, which are statements other than statements of historical fact.  The Company cautions readers that the following important factors, among others, may have affected and could in the future affect actual results and could cause actual results for subsequent periods to differ materially from those expressed in any forward-looking statement made by or on behalf of the Company herein: (i) the effect of changes in laws and regulations, including federal and state banking laws and regulations, and the associated costs of compliance with such laws and regulations either currently or in the future as applicable; (ii) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies as well as by the Financial Accounting Standards Board, or of changes in the Company’s organization, compensation and benefit plans; (iii) the effect on the Company’s competitive position within its market area of the increasing consolidation within the banking and financial services industries, including the increased competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services; (iv) the effect of changes in interest rates; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies.  For a list of other factors which could affect the Company’s results, see the Company’s filings with the Securities and Exchange Commission, including “Item 1A.  Risk Factors,” set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

You should not place undue reliance on any forward-looking statements.  These statements speak only as of the date of this press release, even if subsequently made available by the Company on its website or otherwise.  The Company undertakes no obligation to update or revise these statements to reflect events or circumstances occurring after the date of this press release.

Previous press releases and additional information can be obtained from the Company’s website at www.pwod.com

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

PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

    June 30,
(In Thousands, Except Share Data)   2021   2020   % Change
ASSETS:            
Noninterest-bearing balances           $ 27,731     $ 26,932     2.97 %
Interest-bearing balances in other financial institutions           199,389     188,242     5.92 %
Federal funds sold           40,000         n/a  
Total cash and cash equivalents           267,120     215,174     24.14 %
             
Investment debt securities, available for sale, at fair value           171,783     164,369     4.51 %
Investment equity securities, at fair value           1,269     1,291     (1.70 )%
Investment securities, trading           43     37     16.22 %
Restricted investment in bank stock, at fair value            15,120     14,849     1.83 %
Loans held for sale           4,927     5,146     (4.26 )%
Loans           1,337,947     1,349,347     (0.84 )%
Allowance for loan losses           (14,438 )   (12,977 )   11.26 %
Loans, net           1,323,509     1,336,370     (0.96 )%
Premises and equipment, net           34,629     32,873     5.34 %
Accrued interest receivable           8,363     8,068     3.66 %
Bank-owned life insurance           34,005     29,368     15.79 %
Investment in limited partnerships           4,795     1,596     200.44 %
Goodwill           17,104     17,104     %
Intangibles           568     777     (26.90 )%
Operating lease right of use asset           2,946     3,231     (8.82 )%
Deferred tax asset           3,624     3,284     10.35 %
Other assets           5,065     4,827     4.93 %
TOTAL ASSETS           $ 1,894,870     $ 1,838,364     3.07 %
             
LIABILITIES:            
Interest-bearing deposits           $ 1,086,352     $ 1,055,981     2.88 %
Noninterest-bearing deposits           477,344     418,324     14.11 %
Total deposits           1,563,696     1,474,305     6.06 %
             
Short-term borrowings           7,520     15,133     (50.31 )%
Long-term borrowings           141,051     171,885     (17.94 )%
Accrued interest payable           961     1,530     (37.19 )%
Operating lease liability           2,992     3,263     (8.31 )%
Other liabilities           11,815     12,640     (6.53 )%
TOTAL LIABILITIES           1,728,035     1,678,756     2.94 %
             
SHAREHOLDERS’ EQUITY:            
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued                   n/a  
Common stock, par value $5.55, 22,500,000 shares authorized; 7,541,627 and 7,522,573 shares issued; 7,061,402 and 7,042,348 shares outstanding           41,897     41,792     0.25 %
Additional paid-in capital           53,205     51,956     2.40 %
Retained earnings           85,281     78,910     8.07 %
Accumulated other comprehensive gain (loss):            
Net unrealized gain on available for sale securities           4,085     4,194     (2.60 )%
Defined benefit plan           (5,523 )   (5,159 )   (7.06 )%
Treasury stock at cost, 480,225            (12,115 )   (12,115 )   %
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS’ EQUITY           166,830     159,578     4.54 %
Non-controlling interest           5     30     (83.33 )%
TOTAL SHAREHOLDERS’ EQUITY           166,835     159,608     4.53 %
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY           $ 1,894,870     $ 1,838,364     3.07 %


PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)

    Three Months Ended June 30,   Six Months Ended June 30,
(In Thousands, Except Per Share Data)   2021   2020   % Change   2021   2020   % Change
INTEREST AND DIVIDEND INCOME:                        
Loans including fees           $ 13,099     $ 14,666     (10.68 )%   $ 26,444     $ 29,323     (9.82 )%
Investment securities:                        
Taxable           838     1,023     (18.08 )%   1,657     2,033     (18.49 )%
Tax-exempt           164     169     (2.96 )%   335     314     6.69 %
Dividend and other interest income           305     186     63.98 %   565     535     5.61 %
TOTAL INTEREST AND DIVIDEND INCOME           14,406     16,044     (10.21 )%   29,001     32,205     (9.95 )%
                         
INTEREST EXPENSE:                        
Deposits           1,489     2,802     (46.86 )%   3,173     5,837     (45.64 )%
Short-term borrowings           2     7     (71.43 )%   4     29     (86.21 )%
Long-term borrowings           820     985     (16.75 )%   1,659     1,928     (13.95 )%
TOTAL INTEREST EXPENSE           2,311     3,794     (39.09 )%   4,836     7,794     (37.95 )%
                         
NET INTEREST INCOME           12,095     12,250     (1.27 )%   24,165     24,411     (1.01 )%
                         
PROVISION FOR LOAN LOSSES           350     645     (45.74 )%   865     1,395     (37.99 )%
                         
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES           11,745     11,605     1.21 %   23,300     23,016     1.23 %
                         
NON-INTEREST INCOME:                        
Service charges           379     312     21.47 %   762     861     (11.50 )%
Debt securities gains, available for sale           137     186     (26.34 )%   275     207     32.85 %
Equity securities gains (losses)           4     10     (60.00 %   (19 )   30     (163.33 )%
Securities (losses) gains, trading           (1 )       n/a     3     (14 )   121.43 %
Bank-owned life insurance           162     144     12.50 %   335     336     (0.30 )%
Gain on sale of loans           670     1,028     (34.82 )%   1,578     1,472     7.20 %
Insurance commissions           150     92     63.04 %   307     219     40.18 %
Brokerage commissions           207     186     11.29 %   426     555     (23.24 )%
Debit card income           398     310     28.39 %   778     584     33.22 %
Other           803     353     127.48 %   1,078     808     33.42 %
TOTAL NON-INTEREST INCOME           2,909     2,621     10.99 %   5,523     5,058     9.19 %
                         
NON-INTEREST EXPENSE:                        
Salaries and employee benefits           5,672     5,230     8.45 %   11,270     10,897     3.42 %
Occupancy           717     626     14.54 %   1,693     1,328     27.48 %
Furniture and equipment           971     828     17.27 %   1,780     1,688     5.45 %
Software amortization           208     236     (11.86 )%   406     486     (16.46 )%
Pennsylvania shares tax           372     323     15.17 %   724     608     19.08 %
Professional fees           684     658     3.95 %   1,267     1,280     (1.02 )%
Federal Deposit Insurance Corporation deposit insurance           264     185     42.70 %   485     379     27.97 %
Marketing           140     56     150.00 %   203     109     86.24 %
Intangible amortization           50     59     (15.25 )%   103     121     (14.88 )%
Other           1,170     1,410     (17.02 )%   2,268     2,825     (19.72 )%
TOTAL NON-INTEREST EXPENSE           10,248     9,611     6.63 %   20,199     19,721     2.42 %
INCOME BEFORE INCOME TAX PROVISION           4,406     4,615     (4.53 )%   8,624     8,353     3.24 %
INCOME TAX PROVISION           813     851     (4.47 )%   1,584     1,512     4.76 %
NET INCOME           $ 3,593     $ 3,764     (4.54 )%   $ 7,040     $ 6,841     2.91 %
Earnings attributable to noncontrolling interest           5     4     25.00 %   11     8     37.50 %
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS’   $ 3,588     $ 3,760     (4.57 )%   $ 7,029     $ 6,833     2.87 %
EARNINGS PER SHARE – BASIC            $ 0.51     $ 0.53     (3.77 )%   $ 1.00     $ 0.97     3.09 %
EARNINGS PER SHARE – DILUTED           $ 0.51     $ 0.53     (3.77 )%   $ 1.00     $ 0.97     3.09 %
WEIGHTED AVERAGE SHARES OUTSTANDING – BASIC           7,059,667     7,041,629     0.26 %   7,057,404     7,041,185     0.23 %
WEIGHTED AVERAGE SHARES OUTSTANDING – DILUTED           7,059,667     7,041,629     0.26 %   7,057,404     7,041,185     0.23 %
DIVIDENDS DECLARED PER SHARE           $ 0.32     $ 0.32     %   $ 0.64     $ 0.64     %


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES 

    Three Months Ended
    June 30, 2021   June 30, 2020
(Dollars in Thousands)   Average 
Balance
  Interest   Average 
Rate
  Average 
Balance
  Interest   Average 
Rate
ASSETS:                        
Tax-exempt loans           $ 46,926     $ 334     2.85 %   $ 44,916     $ 348     3.12 %
All other loans           1,285,853     12,835     4.00 %   1,294,745     14,391     4.47 %
Total loans           1,332,779     13,169     3.96 %   1,339,661     14,739     4.43 %
                         
Federal funds sold           25,538     45     0.71 %           %
                         
Taxable securities           148,415     1,051     2.87 %   147,352     1,193     3.29 %
Tax-exempt securities           36,469     208     2.31 %   28,280     213     3.06 %
Total securities           184,884     1,259     2.76 %   175,632     1,406     3.26 %
                         
Interest-bearing deposits           218,868     48     0.09 %   144,948     16     0.04 %
                         
Total interest-earning assets           1,762,069     14,521     3.31 %   1,660,241     16,161     3.92 %
                         
Other assets           128,402             116,750          
                         
TOTAL ASSETS           $ 1,890,471             $ 1,776,991          
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:                        
Savings           $ 225,625     28     0.05 %   $ 190,243     67     0.14 %
Super Now deposits           285,672     208     0.29 %   251,691     409     0.65 %
Money market deposits           309,749     256     0.33 %   229,362     418     0.73 %
Time deposits           256,345     997     1.56 %   362,545     1,908     2.12 %
Total interest-bearing deposits           1,077,391     1,489     0.55 %   1,033,841     2,802     1.09 %
                         
Short-term borrowings           7,047     2     0.11 %   11,174     7     0.83 %
Long-term borrowings           141,076     820     2.33 %   171,895     985     2.21 %
Total borrowings           148,123     822     2.23 %   183,069     992     2.12 %
                         
Total interest-bearing liabilities           1,225,514     2,311     0.76 %   1,216,910     3,794     1.24 %
                         
Demand deposits           482,513             384,591          
Other liabilities           17,384             18,583          
Shareholders’ equity           165,060             156,907          
                         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY           $ 1,890,471             $ 1,776,991          
Interest rate spread                   2.55 %           2.68 %
Net interest income/margin               $ 12,210     2.78 %       $ 12,367     3.01 %

    Three Months Ended June 30,
    2021   2020
Total interest income           $ 14,406     $ 16,044  
Total interest expense           2,311     3,794  
Net interest income           12,095     12,250  
Tax equivalent adjustment           115     117  
Net interest income (fully taxable equivalent)           $ 12,210     $ 12,367  

    Six Months Ended
    June 30, 2021   June 30, 2020
(Dollars in Thousands)   Average 
Balance
  Interest   Average 
Rate
  Average 
Balance
  Interest   Average 
Rate
ASSETS:                        
Tax-exempt loans           $ 46,177     $ 684     2.99 %   $ 48,346     $ 752     3.13 %
All other loans           1,289,660     25,904     4.05 %   1,299,893     28,729     4.44 %
Total loans           1,335,837     26,588     4.01 %   1,348,239     29,481     4.40 %
                         
Federal funds sold           12,840     45     0.71 %           %
                         
Taxable securities           146,740     2,083     2.88 %   145,070     2,466     3.46 %
Tax-exempt securities           36,420     424     2.36 %   26,027     397     3.10 %
Total securities           183,160     2,507     2.78 %   171,097     2,863     3.40 %
                         
Interest-bearing deposits           207,495     94     0.09 %   85,832     102     0.24 %
                         
Total interest-earning assets           1,739,332     29,234     3.39 %   1,605,168     32,446     4.07 %
                         
Other assets           126,418             114,085          
                         
TOTAL ASSETS           $ 1,865,750             $ 1,719,253          
                         
LIABILITIES AND SHAREHOLDERS’ EQUITY:                        
Savings           $ 220,161     72     0.07 %   $ 184,042     158     0.17 %
Super Now deposits           287,444     475     0.33 %   235,758     833     0.71 %
Money market deposits           307,885     523     0.34 %   220,035     895     0.82 %
Time deposits           255,408     2,103     1.66 %   370,902     3,951     2.14 %
Total interest-bearing deposits           1,070,898     3,173     0.60 %   1,010,737     5,837     1.16 %
                         
Short-term borrowings           6,368     4     0.13 %   11,011     29     0.53 %
Long-term borrowings           141,279     1,659     2.37 %   166,024     1,928     2.34 %
Total borrowings           147,647     1,663     2.27 %   177,035     1,957     2.22 %
                         
Total interest-bearing liabilities           1,218,545     4,836     0.80 %   1,187,772     7,794     1.32 %
                         
Demand deposits           464,237             355,704          
Other liabilities           21,227             19,551          
Shareholders’ equity           161,741             156,226          
                         
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY           $ 1,865,750             $ 1,719,253          
Interest rate spread                   2.59 %           2.75 %
Net interest income/margin               $ 24,398     2.83 %       $ 24,652     3.09 %

    Six Months Ended June 30,
    2021   2020
Total interest income           $ 29,001     $ 32,205  
Total interest expense           4,836     7,794  
Net interest income           24,165     24,411  
Tax equivalent adjustment           233     241  
Net interest income (fully taxable equivalent)           $ 24,398     $ 24,652  

(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
Operating Data                    
Net income           $ 3,588     $ 3,441     $ 3,901     $ 4,472     $ 3,760  
Net interest income           12,095     12,070     11,967     11,845     12,250  
Provision for loan losses           350     515     585     645     645  
Net security gains           140     119     374     1,011     196  
Non-interest income, excluding net security gains           2,769     2,495     2,701     3,024     2,423  
Non-interest expense           10,248     9,951     9,640     9,707     9,611  
                     
Performance Statistics                    
Net interest margin           2.78 %   2.88 %   2.81 %   2.76 %   3.01 %
Annualized return on average assets           0.76 %   0.75 %   0.85 %   0.97 %   0.85 %
Annualized return on average equity           8.70 %   8.59 %   9.55 %   11.05 %   9.60 %
Annualized net loan charge-offs to average loans           0.03 %   0.04 %   0.06 %   0.06 %   0.05 %
Net charge-offs           114     116     211     193     168  
Efficiency ratio           68.61 %   67.96 %   65.36 %   64.89 %   65.10 %
                     
Per Share Data                    
Basic earnings per share           $ 0.51     $ 0.49     $ 0.55     $ 0.63     $ 0.53  
Diluted earnings per share           0.51     0.49     0.55     0.63     0.53  
Dividend declared per share           0.32     0.32     0.32     0.32     0.32  
Book value           23.63     23.25     23.27     23.05     22.66  
Common stock price:                    
High           26.51     27.78     27.30     22.83     27.75  
Low           23.03     20.55     19.61     19.61     20.01  
Close           23.82     24.09     26.01     19.85     22.71  
Weighted average common shares:                    
Basic           7,060     7,055     7,050     7,045     7,042  
Fully Diluted           7,060     7,055     7,050     7,045     7,042  
End-of-period common shares:                    
Issued           7,542     7,537     7,533     7,528     7,523  
Treasury           480     480     480     480     480  

(Dollars in Thousands, Except Per Share Data)   Quarter Ended
    6/30/2021   3/31/2021   12/31/2020   9/30/2020   6/30/2020
Financial Condition Data:                    
General                    
Total assets           $ 1,894,870     $ 1,896,192     $ 1,834,643     $ 1,840,779     $ 1,838,364  
Loans, net           1,323,509     1,321,697     1,330,524     1,335,711     1,336,370  
Goodwill           17,104     17,104     17,104     17,104     17,104  
Intangibles           568     618     671     724     777  
Total deposits           1,563,696     1,564,364     1,494,443     1,491,810     1,474,305  
Noninterest-bearing           477,344     478,916     449,357     434,248     418,324  
Savings           226,573     224,890     209,924     202,781     195,964  
NOW           296,450     290,355     287,775     268,463     268,348  
Money Market           301,405     324,207     283,742     274,480     247,753  
Time Deposits           261,924     245,996     263,645     311,838     343,915  
Total interest-bearing deposits           1,086,352     1,085,448     1,045,086     1,057,562     1,055,980  
                     
Core deposits*           1,301,772     1,318,368     1,230,798     1,179,972     1,130,389  
Shareholders’ equity           166,830     164,059     164,142     162,422     159,578  
                     
Asset Quality                    
Non-performing loans           $ 7,931     $ 9,272     $ 10,334     $ 10,553     $ 11,097  
Non-performing loans to total assets           0.42 %   0.49 %   0.56 %   0.57 %   0.60 %
Allowance for loan losses           14,438     14,202     13,803     13,429     12,977  
Allowance for loan losses to total loans           1.08 %   1.06 %   1.03 %   1.00 %   0.96 %
Allowance for loan losses to non-performing loans           182.05 %   153.17 %   133.57 %   127.25 %   116.94 %
Non-performing loans to total loans           0.59 %   0.69 %   0.77 %   0.78 %   0.82 %
                     
Capitalization                    
Shareholders’ equity to total assets           8.80 %   8.65 %   8.95 %   8.82 %   8.68 %

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures

    Three Months Ended June 30,   Six Months Ended June 30,
(Dollars in Thousands, Except Per Share Data)   2021   2020   2021   2020
GAAP net income           $ 3,588     $ 3,760     $ 7,029     $ 6,833  
Less: net securities gains, net of tax             111       156       205       178  
Non-GAAP core earnings           $ 3,477     $ 3,604     $ 6,824     $ 6,655  
                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2021   2020   2021   2020
Return on average assets (ROA)           0.76 %   0.85 %   0.75 %   0.79 %
Less: net securities gains, net of tax           0.02 %   0.04 %   0.02 %   0.02 %
Non-GAAP core ROA           0.74 %   0.81 %   0.73 %   0.77 %
                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2021   2020   2021   2020
Return on average equity (ROE)           8.70 %   9.59 %   8.69 %   8.75 %
Less: net securities gains, net of tax           0.27 %   0.40 %   0.25 %   0.23 %
Non-GAAP core ROE           8.43 %   9.19 %   8.44 %   8.52 %
                 
    Three Months Ended June 30,   Six Months Ended June 30,
    2021   2020   2021   2020
Basic earnings per share (EPS)           $ 0.51     $ 0.53     $ 1.00     $ 0.97  
Less: net securities gains, net of tax           0.02     0.02     0.03     0.02  
Non-GAAP basic core EPS           $ 0.49     $ 0.51     $ 0.97     $ 0.95  
         
    Three Months Ended June 30,   Six Months Ended June 30,
    2021   2020   2021   2020
Diluted EPS           $ 0.51     $ 0.53     $ 1.00     $ 0.97  
Less: net securities gains, net of tax           0.02     0.02     0.03     0.02  
Non-GAAP diluted core EPS           $ 0.49     $ 0.51     $ 0.97     $ 0.95  


COVID-19 Loan Deferrals as of June 30, 2021

(In Thousands)   Amount
Commercial, financial, and agricultural           $ 140  
Real estate mortgage:    
Residential           892  
Commercial           6,890  
Consumer automobile loans            
Other consumer installment loans           9  
Total loan deferrals            $ 7,931