Penns Woods Bancorp Earnings 2020-06-30

Balance Sheet	Income Statement	Cash Flow
Assets, Equity	Rev, G Profit, Net Income	Ops, Inv, Fin

Document

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q



☑	Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

for the Quarterly Period Ended June 30, 2020.



☐	Transition report pursuant to Section 13 or 15 (d) of the Exchange Act

For the Transition Period from to .

No. 0-17077

(Commission File Number)

PENNS WOODS BANCORP INC.

(Exact name of Registrant as specified in its charter)



Pennsylvania	300 Market Street, P.O. Box 967	23-2226454
(State or other jurisdiction of	Williamsport	(I.R.S. Employer Identification No.)
incorporation or organization)	Pennsylvania	17703-0967
	(Address of principal executive offices)	(Zip Code)

(570) 322-1111

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Exchange Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $5.55 par value	PWOD	The Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company. or an emerging growth company. See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):



Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On August 1, 2020 there were 7,046,676 shares of the Registrant’s common stock outstanding.

Table of Contents

PENNS WOODS BANCORP, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q



		Page
		Number

Part I	Financial Information

Item 1.	Financial Statements	3

Consolidated Balance Sheet (Unaudited) as of June 30, 2020 and December 31, 2019		3

Consolidated Statement of Income (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019		4

Consolidated Statement of Comprehensive Income (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019		5

Consolidated Statement of Changes in Shareholders’ Equity (Unaudited) for the Three and Six Months Ended June 30, 2020 and 2019		6

Consolidated Statement of Cash Flows (Unaudited) for the Six Months Ended June 30, 2020 and 2019		8

Notes to Consolidated Financial Statements (Unaudited)		9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	50

Item 4.	Controls and Procedures	51

Part II	Other Information

Item 1.	Legal Proceedings	52

Item 1A.	Risk Factors	52

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52

Item 3.	Defaults Upon Senior Securities	52

Item 4.	Mine Safety Disclosures	53

Item 5.	Other Information	53

Item 6.	Exhibits	54

Signatures		55

Exhibit Index and Exhibits		56

Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements

PENNS WOODS BANCORP, INC.

CONSOLIDATED BALANCE SHEET

(UNAUDITED)



	June 30,			December 31,
(In Thousands, Except Share Data)	2020			2019
ASSETS:
Noninterest-bearing balances	$	26,932		$	24,725
Interest-bearing balances in other financial institutions	188,242			23,864
Total cash and cash equivalents	215,174			48,589

Investment debt securities, available for sale, at fair value	164,369			148,619
Investment equity securities, at fair value	1,291			1,261
Investment securities, trading	37			51
Restricted investment in bank stock, at fair value	14,849			13,528
Loans held for sale	5,146			4,232
Loans	1,349,347			1,355,544
Allowance for loan losses	(12,977		)	(11,894		)
Loans, net	1,336,370			1,343,650
Premises and equipment, net	32,873			32,929
Accrued interest receivable	8,068			5,246
Bank-owned life insurance	29,368			29,253
Goodwill	17,104			17,104
Intangibles	777			898
Operating lease right-of-use asset	3,231			4,154
Deferred tax asset	3,284			3,338
Other assets	6,423			12,471
TOTAL ASSETS	$	1,838,364		$	1,665,323

LIABILITIES:
Interest-bearing deposits	$	1,055,981		$	989,259
Noninterest-bearing deposits	418,324			334,746
Total deposits	1,474,305			1,324,005

Short-term borrowings	15,133			4,920
Long-term borrowings	171,885			161,920
Accrued interest payable	1,530			1,671
Operating lease liability	3,263			4,170
Other liabilities	12,640			13,655
TOTAL LIABILITIES	1,678,756			1,510,341

SHAREHOLDERS’ EQUITY:
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued	—			—
Common stock, par value $5.55, 22,500,000 shares authorized; 7,522,573 and 7,520,740 shares issued; 7,042,348 and 7,040,515 outstanding	41,792			41,782
Additional paid-in capital	51,956			51,487
Retained earnings	78,910			76,583
Accumulated other comprehensive loss:
Net unrealized gain on available for sale securities	4,194			2,455
Defined benefit plan	(5,159		)	(5,232		)
Treasury stock at cost, 480,225	(12,115		)	(12,115		)
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY	159,578			154,960
Non-controlling interest	30			22
TOTAL SHAREHOLDERS' EQUITY	159,608			154,982
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,838,364		$	1,665,323

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

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)	2020		2019			2020			2019
INTEREST AND DIVIDEND INCOME:
Loans, including fees	$	14,666	$	15,300		$	29,323		$	30,169
Investment securities:
Taxable	1,023		967			2,033			1,901
Tax-exempt	169		179			314			353
Dividend and other interest income	186		395			535			852
TOTAL INTEREST AND DIVIDEND INCOME	16,044		16,841			32,205			33,275
INTEREST EXPENSE:
Deposits	2,802		2,871			5,837			5,171
Short-term borrowings	7		178			29			783
Long-term borrowings	985		879			1,928			1,730
TOTAL INTEREST EXPENSE	3,794		3,928			7,794			7,684
NET INTEREST INCOME	12,250		12,913			24,411			25,591
PROVISION FOR LOAN LOSSES	645		315			1,395			675
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES	11,605		12,598			23,016			24,916
NON-INTEREST INCOME:
Service charges	312		592			861			1,154
Net debt securities gains (losses), available for sale	186		(2		)	207			11
Net equity securities gains	10		22			30			65
Net securities gains (losses), trading	—		3			(14		)	13
Bank-owned life insurance	144		123			336			291
Gain on sale of loans	1,028		347			1,472			663
Insurance commissions	92		119			219			253
Brokerage commissions	186		356			555			679
Debit card fees	310		389			584			699
Other	353		520			808			895
TOTAL NON-INTEREST INCOME	2,621		2,469			5,058			4,723
NON-INTEREST EXPENSE:
Salaries and employee benefits	5,230		5,523			10,897			11,024
Occupancy	626		668			1,328			1,447
Furniture and equipment	828		784			1,688			1,536
Software amortization	236		188			486			395
Pennsylvania shares tax	323		285			608			578
Professional fees	658		727			1,280			1,249
Federal Deposit Insurance Corporation deposit insurance	185		236			379			504
Marketing	56		33			109			135
Intangible amortization	59		69			121			140
Other	1,410		1,546			2,825			2,865
TOTAL NON-INTEREST EXPENSE	9,611		10,059			19,721			19,873
INCOME BEFORE INCOME TAX PROVISION	4,615		5,008			8,353			9,766
INCOME TAX PROVISION	851		759			1,512			1,571
CONSOLIDATED NET INCOME	$	3,764	$	4,249		$	6,841		$	8,195
Less: Net income attributable to noncontrolling interest	4		4			8			6
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC.	$	3,760	$	4,245		$	6,833		$	8,189
EARNINGS PER SHARE - BASIC	$	0.53	$	0.60		$	0.97		$	1.16
EARNINGS PER SHARE - DILUTED	$	0.53	$	0.60		$	0.97		$	1.16
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC	7,041,629		7,038,503			7,041,185			7,038,068
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED	7,041,629		7,038,503			7,041,185			7,038,068
DIVIDENDS DECLARED PER SHARE	$	0.32	$	0.31		$	0.64		$	0.63

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(UNAUDITED)



	Three Months Ended June 30,						Six Months Ended June 30,
(In Thousands)	2020			2019			2020			2019
Net Income	$	3,760		$	4,245		$	6,833		$	8,189
Other comprehensive income:
Change in unrealized gain on available for sale securities	1,715			2,811			2,409			4,795
Tax effect	(360		)	(590		)	(506		)	(1,007		)
Net realized (gain) loss on available for sale securities included in net income	(186		)	2			(207		)	(11		)
Tax effect	39			(1		)	43			2
Amortization of unrecognized pension gain	51			47			92			94
Tax effect	(11		)	(10		)	(19		)	(20		)
Total other comprehensive income	1,248			2,259			1,812			3,853
Comprehensive income	$	5,008		$	6,504		$	8,645		$	12,042

See accompanying notes to the unaudited consolidated financial statements.

Table of Contents

PENNS WOODS BANCORP, INC.

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

(UNAUDITED)

Three months ended:



	COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
(In Thousands, Except Per Share Data)	SHARES	AMOUNT		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
Balance, March 31, 2020	7,521,491	$	41,786	$	51,701	$	77,403		$	(2,213	)	$	(12,115	)	$	26	$	156,588
Net income						3,760									4		3,764
Other comprehensive income									1,248								1,248
Stock-based compensation				238													238
Dividends declared ($0.32 per share)						(2,253		)									(2,253		)
Common shares issued for employee stock purchase plan	1,082	6		17													23
Balance, June 30, 2020	7,522,573	$	41,792	$	51,956	$	78,910		$	(965	)	$	(12,115	)	$	30	$	159,608



	COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
(In Thousands, Except Per Share Data)	SHARES	AMOUNT		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
Balance, March 31, 2019	7,518,410	$	41,767	$	50,890	$	71,526		$	(5,042	)	$	(12,115	)	$	10	$	147,036
Net income						4,245									4		4,249
Other comprehensive income									2,259								2,259
Stock-based compensation				177													177
Dividends declared ($0.31 per share)						(2,206		)									(2,206		)
Common shares issued for employee stock purchase plan	937	6		20													26
Balance, June 30, 2019	7,519,347	$	41,773	$	51,087	$	73,565		$	(2,783	)	$	(12,115	)	$	14	$	151,541

Table of Contents

Six months ended:



	COMMON STOCK			ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
(In Thousands, Except Per Share Data)	SHARES	AMOUNT		ADDITIONAL PAID-IN CAPITAL		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TREASURY STOCK			NON-CONTROLLING INTEREST		TOTAL SHAREHOLDERS’ EQUITY
Balance, December 31, 2019	7,520,740	$	41,782	$	51,487	$	76,583		$	(2,777	)	$	(12,115	)	$	22	$	154,982
Net income						6,833									8		6,841
Other comprehensive income									1,812								1,812
Stock-based compensation				436													436
Dividends declared ($0.64 per share)						(4,506		)									(4,506		)
Common shares issued for employee stock purchase plan	1,833	10		33													43
Balance, June 30, 2020	7,522,573	$	41,792	$	51,956	$	78,910		$	(965	)	$	(12,115	)	$	30	$	159,608

COMMON STOCK

ADDITIONAL

PAID-IN CAPITAL

RETAINED EARNINGS

ACCUMULATED OTHER

COMPREHENSIVE LOSS

TREASURY STOCK

NON-CONTROLLING INTEREST

TOTAL

SHAREHOLDERS’ EQUITY

(In Thousands, Except Per Share Data)

AMOUNT

Balance, December 31, 2018

7,517,547

41,763

50,737

69,787

Price	46.40	EPS	2
Shares	7	P/E	25
MCap	327	P/FCF	21
Net Debt	-57	EBIT	32
TEV	269	TEV/EBIT	8
TTM 2019-09-30, in MM, except price, ratios

10-Q	2020-06-30	Filed 2020-08-10
10-Q	2020-03-31	Filed 2020-05-08
10-K	2019-12-31	Filed 2020-03-11
10-Q	2019-09-30	Filed 2019-11-08
10-Q	2019-06-30	Filed 2019-08-09
10-Q	2019-03-31	Filed 2019-05-10
10-K	2018-12-31	Filed 2019-03-12
10-Q	2018-09-30	Filed 2018-11-08
10-Q	2018-08-08	Filed 2018-08-08
10-Q	2018-03-31	Filed 2018-05-10
10-K	2017-12-31	Filed 2018-03-13
10-Q	2017-09-30	Filed 2017-11-08
10-Q	2017-06-30	Filed 2017-08-08
10-Q	2017-03-31	Filed 2017-05-09
10-K	2016-12-31	Filed 2017-03-10
10-Q	2016-09-30	Filed 2016-11-09
10-Q	2016-06-30	Filed 2016-08-09
10-Q	2016-03-31	Filed 2016-05-10
10-K	2015-12-31	Filed 2016-03-10
10-Q	2015-09-30	Filed 2015-11-09
10-Q	2015-06-30	Filed 2015-08-10
10-Q	2015-03-31	Filed 2015-05-11
10-K	2014-12-31	Filed 2015-03-12
10-Q	2014-09-30	Filed 2014-11-10
10-Q	2014-06-30	Filed 2014-08-11
10-Q	2014-03-31	Filed 2014-05-12
10-K	2013-12-31	Filed 2014-03-14
10-Q	2013-09-30	Filed 2013-11-12
10-Q	2013-06-30	Filed 2013-08-09
10-Q	2013-03-31	Filed 2013-05-10
10-K	2012-12-31	Filed 2013-03-13
10-Q	2012-09-30	Filed 2012-11-09
10-Q	2012-06-30	Filed 2012-08-09
10-Q	2012-03-31	Filed 2012-05-09
10-K	2011-12-31	Filed 2012-03-14
10-Q	2011-09-30	Filed 2011-11-09
10-Q	2011-06-30	Filed 2011-08-09
10-Q	2011-03-31	Filed 2011-05-10
10-K	2010-12-31	Filed 2011-03-10
10-Q	2010-09-30	Filed 2010-11-09
10-Q	2010-06-30	Filed 2010-08-09
10-Q	2010-03-31	Filed 2010-05-10
10-K	2009-12-31	Filed 2010-03-12

8-K	2020-07-22	Earnings, Exhibits
8-K	2020-04-28
8-K	2020-04-22
8-K	2020-04-06
8-K	2020-01-28
8-K	2019-10-23
8-K	2019-09-30
8-K	2019-09-03
8-K	2019-08-13
8-K	2019-07-23
8-K	2019-05-31
8-K	2019-04-23
8-K	2019-04-22
8-K	2019-01-28
8-K	2018-12-31
8-K	2018-10-19
8-K	2018-09-27
8-K	2018-07-20
8-K	2018-04-24
8-K	2018-04-19
8-K	2018-01-30
8-K	2018-01-11

EX-31.1	ex311-2q20.htm
EX-31.2	ex312-2q20.htm
EX-32.1	ex321-2q20.htm
EX-32.2	ex322-2q20.htm

PWOD 10Q Quarterly Report

Penns Woods Bancorp Earnings 2020-06-30