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2022 Annual Report
TABLE OF CONTENTS | |
Letter to Shareholders | 2 |
Performance Highlights | 3 |
Consolidated Balance Sheet | 6 |
Consolidated Statement of Income | 7 |
Consolidated Statement of Comprehensive Income | 8 |
Consolidated Statement of Changes in Shareholder's Equity | 9 |
Consolidated Statement of Cash Flows | 10 |
Form 10-K | 11 |
Board of Directors | 110 |
1
Dear Shareholders,
2022 was a very successful year for PWOD. Strong high quality loan growth supported by well diversified funding sources produced record earnings. These earnings were further supported through cost control and continued growth in efficiencies from technological investments added over the past several years. Our customers continue to increase utilization of our eBanking products as the number of mobile banking accounts more than doubled and the number of eStatement accounts increased by 16%. We continue to benefit by conservative balance sheet management with an emphasis on acquiring high-quality assets and managing duration. Our success continues to be predicated upon the performance of a great team of employees who continue to perform at the highest level.
Our footprint expansion continues to pay dividends as markets entered over the past several years have produced significant growth and synergies. The overall balance sheet growth was further supported by strong growth in our core markets driven by a robust mortgage business, consumer lending, and commercial lending. We continue to provide economic benefit within our markets through these lending efforts. Further, we are proud of our commitment to our communities as we continue to support and contribute to charities and nonprofit organizations. Our contributions in 2022 to these entities was in excess of $460,000. We ask, that like us, you continue to support our communities to make it a better place to live and prosper. Together we can make a difference.
Financial Highlights
PWOD continued to return strong results during the past year. Highlights from the period ending December 31, 2022 include:
Twelve Months Ended | Twelve Months Ended | % Change | |||||
December 31, 2022 | December 31, 2021 | ||||||
Net Income | $17,422,000 | $16,033,000 | 8.66% | ||||
Basic EPS | $2.47 | $2.27 | 8.81% | ||||
Total Deposits | $1,556,460,000 | $1,621,315,000 | (4.00)% | ||||
Core Deposits | $1,410,178,000 | $1,415,948,000 | (0.41)% | ||||
Net Loans | $1,624,094,000 | $1,377,971,000 | 17.86% | ||||
Total Assets | $2,000,080,000 | $1,940,809,000 | 3.05% | ||||
Final Note
On behalf of the leadership team, all bank employees, and the board of directors we thank you for your support and confidence in our company. Our ability to drive shareholder value over the past 10 years has been unparalleled by our peer banks as illustrated in the Growth in Economic Value graph on the next page. Again, thank you.
Sincerely,
Richard A. Grafmyre, CFP®
Chief Executive Officer
2
PERFORMANCE HIGHLIGHTS
Growth in Economic Value - Since YE 2012
Tangible Book Value "TBV" + Dividends
Annual Growth Rates
TBV + Dividends CAGR - Since YE 2012
160% | 8.2% | ||
PWOD | Peers | ||
140% | 7.5% | ||
120% | 118.9% | PWOD | |
Outperformance | |||
105.6% | of 13% | ||
100% | |||
Peers | |||
80% | |||
60% | 2022 ROATCE(1) + Dividends | ||
40% | 18.4% | ||
17.3% | |||
20% | 6.0% | 3.4% | |
0% |
13.9% 12.5%
Peers
Source: S&P Global Market Intelligence.
Note: Peer group consists of major-exchange traded U.S. banks with total assets between $1 billion and $3 billion, excluding merger targets and mutuals.
(1) ROATCE = Return on Average Tangible Common Equity.
Total Assets | Tier 1 Capital ($M) | |
$ in billions |
$1.2 $1.2 $1.3 $1.3
$0.9
$1.7 $1.7
$1.5
$168
$1.8 $1.9 $2.0
$78
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
3
PERFORMANCE HIGHLIGHTS
Loan Composition
2022
Other | Commercial, Financial, | |
1% | ||
and Ag. | ||
Construction | 12% | |
3% | Auto | |
11% |
CRE | Resi |
30% | |
43% | |
Deposit Composition
2022
Time | |
Deposits | |
10% | Non-Interest |
Money | |
Bearing | |
Market | |
33% | |
17% | |
NOW | |
24% | Savings |
16% |
Cost of Interest Bearing Deposits: | 0.34 | % | |
Yield on Total Loans: | 3.95 % | ||
Cost of Total Deposits: | 0.23 | % | |
CRE / TRBC: | 262 % | ||
Cost of Funds: | 0.41 | % | |
Source: Company documents. |
Total Loans | Total Deposits | |
$ in millions | $ in millions |
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
$400
$200
$0
$1,639 | $1,800 | ||||||||||||
$1,600 | |||||||||||||
$186 | $10 | ||||||||||||
$1,392 | |||||||||||||
$1,384 | $1,354 | $1,343 | $43 | $1,400 | |||||||||
$1,246 | $133 | $25 | $151 | $23 | $156 | $139 | $9 | ||||||
$20 | $1,200 | ||||||||||||
$80 | $27 | $37 | |||||||||||
$44 | $38 | $39 | $501 | ||||||||||
$332 | $32 | $372 | $363 | $373 | $447 | $1,000 | |||||||
$800 | |||||||||||||
$708 | $600 | ||||||||||||
$597 | $622 | ||||||||||||
$623 | $590 | $596 | |||||||||||
$400 | |||||||||||||
$200 | |||||||||||||
$179 | $189 | $156 | $165 | $163 | $190 | $0 | |||||||
$1,621 | $1,556 | ||||
$1,494 | |||||
$205 | $146 | ||||
$1,324 | $264 | ||||
$1,146 | $1,220 | $319 | $271 | ||
$378 | |||||
$287 | $284 | ||||
$229 | |||||
$366 | $373 | ||||
$238 | $239 | $216 | $288 | ||
$208 | $219 | $236 | $248 | ||
$215 | $210 | ||||
$161 | $166 | $177 | |||
$449 | $494 | $519 | |||
$321 | $335 | ||||
$303 |
2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | ||
Commercial | R/E Residential | R/E Commercial | Noninterest Bearing | Savings | NOW | ||||||||
Money Market | Time Deposits | ||||||||||||
R/E Construction | Installment | Automobile | |||||||||||
Source: Company documents. | 4 |
PERFORMANCE HIGHLIGHTS
Accounts in thousands | |||||||
Estatement Accounts | Internet Banking Accounts | ||||||
58.0 | |||||||
50.1 | 24.1 | 25.1 | 24.2 | ||||
42.5 | 45.2 | 18.3 | |||||
15.7 | |||||||
37.3 | |||||||
2018 | 2019 | 2020 | 2021 | 2022 | 2018 | 2019 | 2020 | 2021 | 2022 |
Source: Company documents.
Mobile Banking Users
5.7 | ||||
2.0 | 2.4 | |||
1.3 | ||||
0.9 | ||||
2018 | 2019 | 2020 | 2021 | 2022 |
Return on Equity (%) | Return on Average Assets (%) | |
10.7%
9.7% 9.9%
2020 2021 2022
0.86% 0.85% 0.90%
2020 2021 2022
Earnings Per Share
$2.47
$2.16 $2.27
2020 2021 2022
Source: S&P Global Market Intelligence, Company documents.
5
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
December 31, | ||||||
(In Thousands, Except Share Data) | 2022 | 2021 | ||||
ASSETS: | ||||||
Noninterest-bearingbalances | $ | 27,390 | $ | 19,233 | ||
Interest-bearingdeposits in other financial institutions | 12,943 | 194,629 | ||||
Federal funds sold | - | 50,000 | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total cash and cash equivalents | 40,333 | 263,862 | ||||
Investment debt securities, available for sale, at fair value | 193,673 | 166,410 | ||||
Investment equity securities, at fair value | 1,142 | 1,288 | ||||
Restricted investment in bank stock, at cost | 19,171 | 14,531 | ||||
Loans held for sale | 3,298 | 3,725 | ||||
Loans | 1,639,731 | 1,392,147 | ||||
Allowance for loan losses | (15,637) | (14,176) | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Loans, net | 1,624,094 | 1,377,971 | ||||
Premises and equipment, net | 31,844 | 34,025 | ||||
Accrued interest receivable | 9,481 | 8,048 | ||||
Bank-ownedlife insurance | 34,452 | 33,768 | ||||
Investment in limited partnerships | 8,656 | 4,607 | ||||
Goodwill | 16,450 | 17,104 | ||||
Intangibles | 327 | 480 | ||||
Operating lease right of use asset | 2,651 | 2,851 | ||||
Deferred tax assets | 6,868 | 2,946 | ||||
Other assets | 7,640 | 9,193 | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL ASSETS | $ | 2,000,080 | $ | 1,940,809 | ||
LIABILITIES: | ||||||
Interest-bearingdeposits | $ | 1,037,397 | $ | 1,126,955 | ||
Noninterest-bearingdeposits | 519,063 | 494,360 | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total deposits | 1,556,460 | 1,621,315 | ||||
Short-termborrowings | 153,349 | 5,747 | ||||
Long-termborrowings | 102,783 | 125,963 | ||||
Accrued interest payable | 603 | 651 | ||||
Operating lease liability | 2,708 | 2,898 | ||||
Other liabilities | 16,512 | 11,961 | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL LIABILITIES | 1,832,415 | 1,768,535 | ||||
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; 7,566,810 and 7,550,272 shares issued; | ||||||
7,056,585 and 7,070,047 shares outstanding | 42,039 | 41,945 | ||||
Additional paid-incapital | 54,252 | 53,795 | ||||
Retained earnings | 98,147 | 89,761 | ||||
Accumulated other comprehensive (loss) gain: | ||||||
Net unrealized (loss) gain on available for sale securities | (9,819) | 2,373 | ||||
Defined benefit plan | (4,139) | (3,485) | ||||
Treasury stock at cost, 510,225 and 480,225 shares | (12,815) | (12,115) | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL SHAREHOLDERS' EQUITY | 167,665 | 172,274 | ||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 2,000,080 | $ | 1,940,809 | ||
See accompanying notes to the consolidated financial statements.
6
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(In Thousands, Except Per Share Data) | Year Ended December 31, | ||||||||
2022 | 2021 | 2020 | |||||||
INTEREST AND DIVIDEND INCOME: | |||||||||
Loans, including fees | . . . . . . . . . . . . . $ | 58,682 | $ | 53,232 | $ | 57,217 | |||
Investment securities: | |||||||||
Taxable | . . . . . . . . . . . . . | 3,634 | 3,281 | 3,778 | |||||
Tax-exempt | . . . . . . . . . . . . . | 823 | 655 | 650 | |||||
Dividend and other interest income | . . . . . . . . . . . . . | 1,789 | 1,246 | 993 | |||||
. . . . . . . . . . . . . . . . . . . . . . . .TOTAL INTEREST AND DIVIDEND INCOME | . . . . . . . . . . . . . | 64,928 | 58,414 | 62,638 | |||||
INTEREST EXPENSE: | |||||||||
Deposits | . . . . . . . . . . . . . | 3,690 | 5,545 | 10,565 | |||||
Short-termborrowings | . . . . . . . . . . . . . | 1,007 | 9 | 43 | |||||
Long-termborrowings | . . . . . . . . . . . . . | 2,451 | 3,142 | 3,807 | |||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL INTEREST EXPENSE | . . . . . . . . . . . . . | 7,148 | 8,696 | 14,415 | |||||
.NET INTEREST INCOME | . . . . . . . . . . . . . | 57,780 | 49,718 | 48,223 | |||||
PROVISION FOR LOAN LOSSES | . . . . . . . . . . . . . | 1,910 | 640 | 2,625 | |||||
.NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES . | . . . . . . . . . . . . . | 55,870 | 49,078 | 45,598 | |||||
NON-INTEREST INCOME: | |||||||||
Service charges | . . . . . . . . . . . . . | 2,103 | 1,703 | 1,690 | |||||
Net debt securities (losses) gains, available for sale | . . . . . . . . . . . . . | (219) | 699 | 1,592 | |||||
Net equity securities (losses) gains | . . . . . . . . . . . . . | (146) | (40) | 16 | |||||
Bank-ownedlife insurance | . . . . . . . . . . . . . | 664 | 916 | 653 | |||||
Gain on sale of loans | . . . . . . . . . . . . . | 1,131 | 2,474 | 4,148 | |||||
Insurance commissions | . . . . . . . . . . . . . | 491 | 553 | 416 | |||||
Brokerage commissions | . . . . . . . . . . . . . | 620 | 851 | 970 | |||||
Loan broker income | . . . . . . . . . . . . . | 1,674 | 2,164 | 673 | |||||
Debit card income | . . . . . . . . . . . . . | 1,464 | 1,511 | 1,280 | |||||
Other | . . . . . . . . . . . . . | 931 | 838 | 730 | |||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL NON-INTERESTINCOME | . . . . . . . . . . . . . | 8,713 | 11,669 | 12,168 | |||||
NON-INTEREST EXPENSE: | |||||||||
Salaries and employee benefits | . . . . . . . . . . . . . | 24,267 | 23,014 | 21,632 | |||||
Occupancy | . . . . . . . . . . . . . | 3,080 | 3,209 | 2,650 | |||||
Furniture and equipment | . . . . . . . . . . . . . | 3,288 | 3,522 | 3,411 | |||||
Software amortization | . . . . . . . . . . . . . | 840 | 868 | 978 | |||||
Pennsylvania shares tax | . . . . . . . . . . . . . | 1,452 | 1,350 | 1,289 | |||||
Professional fees | . . . . . . . . . . . . . | 2,434 | 2,432 | 2,362 | |||||
Federal Deposit Insurance Corporation deposit insurance | . . . . . . . . . . . . . | 938 | 963 | 939 | |||||
Marketing | . . . . . . . . . . . . . | 690 | 545 | 261 | |||||
Intangible amortization | . . . . . . . . . . . . . | 154 | 191 | 227 | |||||
Goodwill impairment | . . . . . . . . . . . . . | 653 | - | - | |||||
Other | . . . . . . . . . . . . . | 5,202 | 4,811 | 5,319 | |||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .TOTAL NON-INTERESTEXPENSE | . . . . . . . . . . . . . | 42,998 | 40,905 | 39,068 | |||||
.INCOME BEFORE INCOME TAX PROVISION | . . . . . . . . . . . . . | 21,585 | 19,842 | 18,698 | |||||
INCOME TAX PROVISION | . . . . . . . . . . . . . | 4,163 | 3,794 | 3,474 | |||||
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .CONSOLIDATED NET INCOME | . . . . . . . . . . . . . | $ | 17,422 | $ | 16,048 | $ | 15,224 | ||
Earnings attributable to noncontrolling interest | . . . . . . . . . . . . . | - | 15 | 18 | |||||
NET INCOME ATTRIBUTABLE TO PENNS WOODS BANCORP, INC. | . . . . . . . . . . . . . | $ | 17,422 | $ | 16,033 | $ | 15,206 | ||
.EARNINGS PER SHARE - BASIC | . . . . . . . . . . . . . $ | 2.47 | $ | 2.27 | $ | 2.16 | |||
EARNINGS PER SHARE - DILUTED | |||||||||
$ | 2.47 | $ | 2.27 | $ | 2.16 | ||||
. . . . . . . . . .WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | . . . . . . . . . . . . . | 7,059,437 | 7,061,818 | 7,044,542 | |||||
. . . . . . . .WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | . . . . . . . . . . . . . | 7,059,437 | 7,061,818 | 7,044,542 | |||||
See accompanying notes to the consolidated financial statements.
7
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Year Ended December 31, | |||||||||
(In Thousands) | 2022 | 2021 | 2020 | ||||||
Net Income | $ | 17,422 | $ | 16,048 | $ | 15,224 | |||
Other comprehensive (loss) income: | |||||||||
Change in unrealized (loss) gain on available for sale securities | (15,652) | (2,264) | 4,452 | ||||||
Tax effect | 3,287 | 475 | (935) | ||||||
Net realized loss (gain) included in net income | 219 | (699) | (1,592) | ||||||
Tax effect | (46) | 147 | 334 | ||||||
(Accretion) amortization of unrecognized pension and post-retirement items | (827) | 2,674 | (461) | ||||||
Tax effect | 173 | (563) | 97 | ||||||
Total other comprehensive (loss) income | (12,846) | (230) | 1,895 | ||||||
Comprehensive income | $ | 4,576 | $ | 15,818 | $ | 17,119 | |||
See accompanying notes to the consolidated financial statements.
8
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Penns Woods Bancorp Inc. published this content on 15 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 07:55:05 UTC.