WILLIAMSPORT, Pa., Jan. 29, 2024 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ:PWOD)

Penns Woods Bancorp, Inc. achieved net income of $16.6 million for the twelve months ended December 31, 2023, resulting in basic and diluted earnings per share of $2.34.

Highlights

Net income, as reported under GAAP, for the three and twelve months ended December 31, 2023 was $5.6 million and $16.6 million, compared to $4.5 million and $17.4 million for the same periods of 2022. Results for the three and twelve months ended December 31, 2023 compared to 2022 were impacted by a decrease in net interest income of $1.6 million and $2.8 million, respectively, as interest expense increased significantly due to the velocity and magnitude of the rate increases enacted by the Federal Open Market Committee ("FOMC"). In addition, results were impacted by a decrease in after-tax securities losses of $17,000 (from a loss of $31,000 to a loss of $14,000) for the three month period and a decrease in after-tax securities losses of $147,000 (from a loss of $288,000 to a loss of $141,000) for the twelve month period. Bank-owned life insurance income increased due to a gain on death benefit of $380,000 during the twelve months ended December 31, 2023. The sale of a former branch property resulted in an after-tax gain of $117,000 for the twelve month period ended December 31, 2023, while an after-tax loss of $201,000 related to a branch closure negatively impacted the same period of 2022.
The provision for credit losses decreased $2.3 million for the three months ended December 31, 2023 and decreased $3.4 million for the twelve months ended December 31, 2023 to a recovery of $1.7 million and $1.5 million, respectively, compared to a provision of $575,000 and $1.9 million for the 2022 periods. The decrease for the three and twelve month periods was due primarily to a recovery on a commercial loan which positively affected the historical loss rates, and the payoff of a nonperforming commercial loan.
Basic and diluted earnings per share for the three and twelve months ended December 31, 2023 were $0.77 and $2.34, respectively, compared to basic and diluted earnings per share of $0.64 and $2.47 for the three and twelve month periods ended December 31, 2022.
Annualized return on average assets was 1.02% for three months ended December 31, 2023, compared to 0.92% for the corresponding period of 2022. Annualized return on average assets was 0.79% for the twelve months ended December 31, 2023, compared to 0.90% for the corresponding period of 2022.
Annualized return on average equity was 12.60% for the three months ended December 31, 2023, compared to 10.92% for the corresponding period of 2022. Annualized return on average equity was 9.84% for the twelve months ended December 31, 2023, compared to 10.73% for the corresponding period of 2022.

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 $5.6 million and $16.7 million for the three and twelve months ended December 31, 2023 compared to $5.1 million and $18.2 million for the same periods of 2022. Basic and diluted core earnings per share (non-GAAP) for the three and twelve months ended December 31, 2023 were $0.77 and $2.36, respectively, while basic and diluted core earnings per share for the same periods of 2022 were $0.71 and $2.58. Annualized core return on average assets and core return on average equity (non-GAAP) were 1.02% and 12.63% for the three months ended December 31, 2023, compared to 1.04% and 12.25% for the corresponding periods of 2022. Core return on average assets and core return on average equity (non-GAAP) were 0.79% and 9.93% for the twelve months ended December 31, 2023 compared to 0.94% and 11.22% for the corresponding periods of 2022. 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 twelve months ended December 31, 2023 was 2.73% and 2.80%, compared to 3.42% and 3.24% for the corresponding periods of 2022. The decrease in the net interest margin for the three and twelve month periods was driven by an increase in the rate paid on interest-bearing liabilities of 215 and 197 basis points ("bps"), respectively. The FOMC rate increases during 2022 and 2023 contributed to the increases in rate paid on interest-bearing liabilities as the rate paid on short-term borrowings increased 165 bps and 192 bps for the three and twelve month periods ended December 31, 2023 compared to the same periods of 2022. Short-term borrowings increased in volume and rate paid as this funding source was utilized to provide funding for the growth in the loan portfolio, resulting in an increase of $1.3 million and $7.4 million, respectively, in expense for the three and twelve month periods ended December 31, 2023 compared to the same periods of 2022. The rate paid on interest-bearing deposits increased 207 and 168 bps for the three and twelve month periods ended December 31, 2023 compared to the corresponding periods of 2022 due to the FOMC rate actions and an increase in competition for deposits. The rates paid on time deposits significantly contributed to the increase in funding costs as rates paid for the three and twelve month periods ended December 31, 2023 compared to the same periods of 2022 increased 324 bps and 282 bps, respectively, as deposit gathering campaigns initiated in the latter part of 2022 continued throughout 2023. In addition, brokered deposits have been utilized to assist with the funding of the loan portfolio growth and contributed to the increase in time deposit funding costs. Partially offsetting the increase in funding cost was an increase in the yield on interest-earning assets and growth in the average balance of the earning assets portfolio compared to the same periods in 2022. The average loan portfolio balance increased $220.6 million and $263.7 million for the three and twelve month periods as the average yield on the portfolio increased 96 and 81 bps for the same periods. The three and twelve month periods ended December 31, 2023 were impacted by an increase of 81 and 94 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates.

Assets

Total assets increased to $2.2 billion at December 31, 2023, an increase of $204.7 million compared to December 31, 2022. Net loans increased $204.2 million to $1.8 billion at December 31, 2023 compared to December 31, 2022, as continued emphasis was placed on commercial loan growth coupled with growth in indirect auto lending. The investment portfolio increased $2.4 million from December 31, 2022 to December 31, 2023 as restricted investment in bank stock increased $5.2 million resulting from the requirement to hold additional stock in the Federal Home Loan Bank of Pittsburgh ("FHLB") due to an increase in the level of borrowings from the FHLB. The increase in total borrowings of $142.4 million to $398.5 million at December 31, 2023 was utilized to provide funding for the growth in the loan portfolio.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.17% at December 31, 2023 from 0.30% at December 31, 2022, as non-performing loans decreased to $3.1 million at December 31, 2023 from $4.9 million at December 31, 2022. 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 been classified as individually evaluated loans that have a specific allocation recorded within the allowance for credit losses. Net loan recoveries of $525,000 for the twelve months ended December 31, 2023 impacted the allowance for credit losses, which was 0.62% of total loans at December 31, 2023 compared to 0.95% at December 31, 2022 (prior to the adoption of CECL).

Deposits

Deposits increased $33.0 million to $1.6 billion at December 31, 2023 compared to December 31, 2022. Noninterest-bearing deposits decreased $47.9 million to $471.2 million at December 31, 2023 compared to December 31, 2022. Core deposits declined as deposits migrated from core deposit accounts into time deposits as market rates increased due to the FOMC rate increases and increased competition for deposits. Core deposit gathering efforts remained focused on increasing the utilization of electronic (internet and mobile) deposit banking by our customers. Interest-bearing deposits increased $80.9 million from December 31, 2022 to December 31, 2023 primarily due to increased utilization of brokered deposits of $116.4 million as this funding source was utilized to supplement funding loan portfolio growth, while reducing the need to draw upon available borrowing lines. A campaign to attract time deposits with a maturity of five to twenty-four months commenced during the latter part of 2022 and has continued during 2023 with current efforts centered on five to ten months.

Shareholders' Equity

Shareholders' equity increased $23.9 million to $191.6 million at December 31, 2023 compared to December 31, 2022. During the twelve months ended December 31, 2023 the Company sold 420,069 shares of common stock, for net proceeds of $8.3 million, in a registered at-the-market offering. An additional 17,929 shares for net proceeds of $406,000 were issued as part of the Dividend Reinvestment Plan during the twelve months ended December 31, 2023. Accumulated other comprehensive loss of $9.2 million at December 31, 2023 decreased from a loss of $14.0 million at December 31, 2022 as a result of a decrease in net unrealized loss on available for sale securities to $6.4 million at December 31, 2023 from a net unrealized loss of $9.8 million at December 31, 2022 coupled with a decrease in loss of $1.4 million in the defined benefit plan obligation. The current level of shareholders' equity equates to a book value per share of $25.51 at December 31, 2023 compared to $23.76 at December 31, 2022, and an equity to asset ratio of 8.69% at December 31, 2023 and 8.40% at December 31, 2022. Dividends declared for the twelve months ended December 31, 2023 and 2022 were $1.28 per share.

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates sixteen 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, and United Insurance Solutions, LLC, which offers insurance products. 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. 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, 2022.

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)

	December 31,
(In Thousands, Except Share and Per Share Data)		2023			2022		% Change
ASSETS:
Noninterest-bearing balances	$	28,969		$	27,390		5.76	%
Interest-bearing balances in other financial institutions		8,493			12,943		(34.38	)%
Total cash and cash equivalents		37,462			40,333		(7.12	)%

Investment debt securities, available for sale, at fair value		190,945			193,673		(1.41	)%
Investment equity securities, at fair value		1,122			1,142		(1.75	)%
Restricted investment in bank stock		24,323			19,171		26.87	%
Loans held for sale		3,993			3,298		21.07	%
Loans		1,839,764			1,639,731		12.20	%
Allowance for credit losses		(11,446	)		(15,637	)	(26.80	)%
Loans, net		1,828,318			1,624,094		12.57	%
Premises and equipment, net		30,250			31,844		(5.01	)%
Accrued interest receivable		11,044			9,481		16.49	%
Bank-owned life insurance		33,867			34,452		(1.70	)%
Investment in limited partnerships		7,815			8,656		(9.72	)%
Goodwill		16,450			16,450		—	%
Intangibles		210			327		(35.78	)%
Operating lease right of use asset		2,512			2,651		(5.24	)%
Deferred tax asset		4,655			6,868		(32.22	)%
Other assets		11,843			7,640		55.01	%
TOTAL ASSETS	$	2,204,809		$	2,000,080		10.24	%

LIABILITIES:
Interest-bearing deposits	$	1,118,320		$	1,037,397		7.80	%
Noninterest-bearing deposits		471,173			519,063		(9.23	)%
Total deposits		1,589,493			1,556,460		2.12	%

Short-term borrowings		145,926			153,349		(4.84	)%
Long-term borrowings		252,598			102,783		145.76	%
Accrued interest payable		3,814			603		532.50	%
Operating lease liability		2,570			2,708		(5.10	)%
Other liabilities		18,852			16,512		14.17	%
TOTAL LIABILITIES		2,013,253			1,832,415		9.87	%

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; 8,019,219 and 7,566,810 shares issued; 7,508,994 and 7,056,585 shares outstanding		44,550			42,039		5.97	%
Additional paid-in capital		61,733			54,252		13.79	%
Retained earnings		107,238			98,147		9.26	%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities		(6,396	)		(9,819	)	34.86	%
Defined benefit plan		(2,754	)		(4,139	)	33.46	%
Treasury stock at cost, 510,225 shares		(12,815	)		(12,815	)	—	%
TOTAL SHAREHOLDERS' EQUITY		191,556			167,665		14.25	%
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,204,809		$	2,000,080		10.24	%


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

	Three Months Ended December 31,									Twelve Months Ended December 31,
(In Thousands, Except Share and Per Share Data)		2023			2022		% Change				2023			2022		% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees	$	23,720		$	16,973		39.75	%		$	83,291		$	58,682		41.94	%
Investment securities:
Taxable		1,476			1,084		36.16	%			5,346			3,634		47.11	%
Tax-exempt		107			229		(53.28	)%			517			823		(37.18	)%
Dividend and other interest income		614			319		92.48	%			2,441			1,789		36.44	%
TOTAL INTEREST AND DIVIDEND INCOME		25,917			18,605		39.30	%			91,595			64,928		41.07	%

INTEREST EXPENSE:
Deposits		7,445			1,499		396.66	%			22,131			3,690		499.76	%
Short-term borrowings		2,317			978		136.91	%			8,401			1,007		734.26	%
Long-term borrowings		2,207			580		280.52	%			6,099			2,451		148.84	%
TOTAL INTEREST EXPENSE		11,969			3,057		291.53	%			36,631			7,148		412.47	%

NET INTEREST INCOME		13,948			15,548		(10.29	)%			54,964			57,780		(4.87	)%

(Recovery) provision for loan credit losses		(1,653	)		575		(387.48	)%			(927	)		1,910		(148.53	)%
Recovery for off balance sheet credit exposures		(89	)		—		n/a				(552	)		—		n/a
TOTAL (RECOVERY) PROVISION FOR CREDIT LOSSES		(1,742	)		575		(402.96	)%			(1,479	)		1,910		(177.43	)%

NET INTEREST INCOME AFTER (RECOVERY) PROVISION FOR CREDIT LOSSES		15,690			14,973		4.79	%			56,443			55,870		1.03	%

NON-INTEREST INCOME:
Service charges		533			540		(1.30	)%			2,090			2,103		(0.62	)%
Net debt securities losses, available for sale		(68	)		(51	)	(33.33	)%			(193	)		(219	)	11.87	%
Net equity securities gains (losses)		50			12		316.67	%			15			(146	)	110.27	%
Bank-owned life insurance		171			163		4.91	%			1,063			664		60.09	%
Gain on sale of loans		314			226		38.94	%	.		1,046			1,131		(7.52	)%
Insurance commissions		113			105		7.62	%			529			491		7.74	%
Brokerage commissions		127			120		5.83	%			575			620		(7.26	)%
Loan broker income		264			324		(18.52	)%			992			1,674		(40.74	)%
Debit card income		333			384		(13.28	)%			1,328			1,464		(9.29	)%
Other		384			258		48.84	%			930			931		(0.11	)%
TOTAL NON-INTEREST INCOME		2,221			2,081		6.73	%			8,375			8,713		(3.88	)%

NON-INTEREST EXPENSE:
Salaries and employee benefits		6,284			5,846		7.49	%			25,062			24,267		3.28	%
Occupancy		746			700		6.57	%			3,168			3,080		2.86	%
Furniture and equipment		889			834		6.59	%			3,392			3,288		3.16	%
Software amortization		250			180		38.89	%			843			840		0.36	%
Pennsylvania shares tax		275			333		(17.42	)%			1,082			1,452		(25.48	)%
Professional fees		640			688		(6.98	)%			2,953			2,434		21.32	%
Federal Deposit Insurance Corporation deposit insurance		456			248		83.87	%			1,578			938		68.23	%
Marketing		90			255		(64.71	)%			684			690		(0.87	)%
Intangible amortization		25			35		(28.57	)%			117			154		(24.03	)%
Goodwill impairment		—			653		n/a				—			653		n/a
Other		1,342			1,479		(9.26	)%			5,617			5,202		7.98	%
TOTAL NON-INTEREST EXPENSE		10,997			11,251		(2.26	)%			44,496			42,998		3.48	%
INCOME BEFORE INCOME TAX PROVISION		6,914			5,803		19.15	%			20,322			21,585		(5.85	)%
INCOME TAX PROVISION		1,359			1,294		5.02	%			3,714			4,163		(10.79	)%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'	$	5,555		$	4,509		23.20	%		$	16,608		$	17,422		(4.67	)%
EARNINGS PER SHARE - BASIC	$	0.77		$	0.64		20.31	%		$	2.34		$	2.47		(5.26	)%
EARNINGS PER SHARE - DILUTED	$	0.77		$	0.64		20.31	%		$	2.34		$	2.47		(5.26	)%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC		7,255,222			7,055,181		2.84	%			7,112,450			7,059,437		0.75	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED		7,255,222			7,055,181		2.84	%			7,112,450			7,059,437		0.75	%


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
(UNAUDITED)

	Three Months Ended
	December 31, 2023						December 31, 2022
(Dollars in Thousands)	Average Balance (1)		Interest		Average Rate		Average Balance (1)		Interest		Average Rate
ASSETS:
Tax-exempt loans (3)	$	68,234	$	478	2.78	%	$	61,756	$	408	2.62	%
All other loans		1,760,509		23,342	5.26	%		1,546,338		16,651	4.27	%
Total loans (2)		1,828,743		23,820	5.17	%		1,608,094		17,059	4.21	%

Federal funds sold		—		—	—	%		—		—	—	%

Taxable securities		193,744		1,932	4.04	%		167,405		1,329	3.22	%
Tax-exempt securities (3)		18,041		135	3.03	%		41,167		290	2.86	%
Total securities		211,785		2,067	3.96	%		208,572		1,619	3.15	%

Interest-bearing balances in other financial institutions		11,795		158	5.31	%		5,797		74	5.06	%

Total interest-earning assets		2,052,323		26,045	5.04	%		1,822,463		18,752	4.09	%

Other assets		130,421						128,084

TOTAL ASSETS	$	2,182,744					$	1,950,547

LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings	$	222,740		229	0.41	%	$	249,793		66	0.10	%
Super Now deposits		227,113		1,129	1.97	%		385,060		623	0.64	%
Money market deposits		293,542		2,217	3.00	%		268,519		509	0.75	%
Time deposits		377,516		3,870	4.07	%		144,491		301	0.83	%
Total interest-bearing deposits		1,120,911		7,445	2.64	%		1,047,863		1,499	0.57	%

Short-term borrowings		163,088		2,317	5.63	%		97,585		978	3.98	%
Long-term borrowings		235,998		2,207	3.71	%		102,814		580	2.24	%
Total borrowings		399,086		4,524	4.50	%		200,399		1,558	3.09	%

Total interest-bearing liabilities		1,519,997		11,969	3.12	%		1,248,262		3,057	0.97	%

Demand deposits		457,546						517,977
Other liabilities		28,786						19,151
Shareholders' equity		176,415						165,157

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,182,744					$	1,950,547
Interest rate spread (3)					1.92	%					3.12	%
Net interest income/margin (3)			$	14,076	2.73	%			$	15,695	3.42	%

Information on this table has been calculated using average daily balance sheets to obtain average balances.
Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income

from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%


	Three Months Ended December 31,
		2023		2022
Total interest income	$	25,917	$	18,605
Total interest expense		11,969		3,057
Net interest income (GAAP)		13,948		15,548
Tax equivalent adjustment		128		147
Net interest income (fully taxable equivalent) (non-GAAP)	$	14,076	$	15,695


PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES
(UNAUDITED)

	Twelve Months Ended
	December 31, 2023						December 31, 2022
(Dollars in Thousands)	Average Balance (1)		Interest		Average Rate		Average Balance (1)		Interest		Average Rate
ASSETS:
Tax-exempt loans (3)	$	66,863	$	1,849	2.77	%	$	55,364	$	1,441	2.60	%
All other loans		1,691,742		81,830	4.84	%		1,439,550		57,544	4.00	%
Total loans (2)		1,758,605		83,679	4.76	%		1,494,914		58,985	3.95	%

Federal funds sold		—		—	—	%		32,863		465	1.41	%

Taxable securities		189,804		7,263	3.83	%		156,584		4,455	2.88	%
Tax-exempt securities (3)		23,872		654	2.74	%		44,301		1,042	2.38	%
Total securities		213,676		7,917	3.71	%		200,885		5,497	2.77	%

Interest-bearing balances in other financial institutions		10,916		524	4.80	%		74,401		503	0.68	%

Total interest-earning assets		1,983,197		92,120	4.65	%		1,803,063		65,450	3.63	%

Other assets		131,704						128,213

TOTAL ASSETS	$	2,114,901					$	1,931,276

LIABILITIES AND SHAREHOLDERS' EQUITY:
Savings	$	231,000		685	0.30	%	$	247,003		138	0.06	%
Super Now deposits		276,868		4,155	1.50	%		387,370		1,344	0.35	%
Money market deposits		292,755		7,024	2.40	%		289,820		1,105	0.38	%
Time deposits		293,252		10,267	3.50	%		161,982		1,103	0.68	%
Total interest-bearing deposits		1,093,875		22,131	2.02	%		1,086,175		3,690	0.34	%

Short-term borrowings		157,140		8,401	5.36	%		29,315		1,007	3.44	%
Long-term borrowings		186,094		6,099	3.28	%		110,027		2,451	2.23	%
Total borrowings		343,234		14,500	4.23	%		139,342		3,458	2.48	%

Total interest-bearing liabilities		1,437,109		36,631	2.55	%		1,225,517		7,148	0.58	%

Demand deposits		477,828						519,189
Other liabilities		31,243						24,182
Shareholders' equity		168,721						162,388

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,114,901					$	1,931,276
Interest rate spread (3)					2.10	%					3.05	%
Net interest income/margin (3)			$	55,489	2.80	%			$	58,302	3.24	%

Information on this table has been calculated using average daily balance sheets to obtain average balances.
Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income

from tax-exempt obligations and the taxable equivalent of such income at the standard tax rate of 21%


	Twelve Months Ended December 31,
		2023		2022
Total interest income	$	91,595	$	64,928
Total interest expense		36,631		7,148
Net interest income		54,964		57,780
Tax equivalent adjustment		525		522
Net interest income (fully taxable equivalent) (non-GAAP)	$	55,489	$	58,302


(Dollars in Thousands, Except Per Share Data, Unaudited)	Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Operating Data
Net income	$	5,555		$	2,224		$	4,171		$	4,658		$	4,509
Net interest income		13,948			13,332			13,386			14,298			15,548
(Recovery) provision for credit losses		(1,742	)		1,372			(1,180	)		71			575
Net security losses		(18	)		(81	)		(39	)		(40	)		(39	)
Non-interest income, excluding net security losses		2,239			1,956			2,061			2,297			2,120
Non-interest expense		10,997			11,172			11,429			10,898			11,251

Performance Statistics
Net interest margin		2.73	%		2.65	%		2.77	%		3.10	%		3.42	%
Annualized return on average assets		1.02	%		0.41	%		0.80	%		0.92	%		0.92	%
Annualized return on average equity		12.60	%		5.06	%		9.53	%		11.12	%		10.92	%
Annualized net loan (recoveries) charge-offs to average loans	(0.05		)%		0.01	%	(0.11		)%		0.03	%		0.04	%
Net (recoveries) charge-offs		(209	)		33			(472	)		123			149
Efficiency ratio		67.78	%		72.76	%		73.78	%		65.46	%		59.79	%

Per Share Data
Basic earnings per share	$	0.77		$	0.31		$	0.59		$	0.66		$	0.64
Diluted earnings per share		0.77			0.31			0.59			0.64			0.64
Dividend declared per share		0.32			0.32			0.32			0.32			0.32
Book value		25.51			24.55			24.70			24.64			23.76
Common stock price:
High		23.64			27.17			27.34			27.77			26.89
Low		20.05			20.70			21.95			21.90			23.15
Close		22.51			21.08			25.03			23.10			26.62
Weighted average common shares:
Basic		7,255			7,072			7,062			7,058			7,055
Fully Diluted		7,255			7,229			7,062			7,334			7,055
End-of-period common shares:
Issued		8,019			7,620			7,574			7,570			7,567
Treasury		(510	)		(510	)		(510	)		(510	)		(510	)

(Dollars in Thousands)	Quarter Ended
	12/31/2023			9/30/2023			6/30/2023			3/31/2023			12/31/2022
Financial Condition Data:
General
Total assets	$	2,204,809		$	2,176,468		$	2,135,319		$	2,065,143		$	2,000,080
Loans, net		1,828,318			1,805,571			1,757,811			1,688,289			1,624,094
Goodwill		16,450			16,450			16,450			16,450			16,450
Intangibles		210			235			260			292			327
Total deposits		1,589,493			1,567,267			1,553,757			1,638,835			1,556,460
Noninterest-bearing		471,173			471,507			475,937			502,352			519,063
Savings		219,287			226,897			229,108			239,526			247,952
NOW		214,888			220,730			238,353			363,548			372,574
Money Market		299,353			291,889			296,957			300,273			270,589
Time Deposits		260,067			249,550			226,224			191,203			137,949
Brokered Deposits		124,725			106,694			87,178			41,933			8,333
Total interest-bearing deposits		1,118,320			1,095,760			1,077,820			1,136,483			1,037,397

Core deposits*		1,204,701			1,211,023			1,240,355			1,405,699			1,410,178
Shareholders' equity		191,556			174,540			174,402			173,970			167,665

Asset Quality
Non-performing loans	$	3,148		$	3,683		$	4,276		$	4,766		$	4,890
Non-performing loans to total assets		0.14	%		0.17	%		0.20	%		0.23	%		0.24	%
Allowance for loan losses		11,446			12,890			11,592			11,734			15,637
Allowance for loan losses to total loans		0.62	%		0.71	%		0.66	%		0.69	%		0.95	%
Allowance for loan losses to non-performing loans		363.60	%		349.99	%		271.09	%		246.20	%		319.78	%
Non-performing loans to total loans		0.17	%		0.20	%		0.24	%		0.28	%		0.30	%

Capitalization
Shareholders' equity to total assets		8.69	%		8.02	%		8.17	%		8.42	%		8.40	%

* Core deposits are defined as total deposits less time deposits and brokered deposits.


Reconciliation of GAAP and Non-GAAP Financial Measures
(UNAUDITED)

	Three Months Ended December 31,						Twelve Months Ended December 31,
(Dollars in Thousands, Except Per Share Data)		2023			2022			2023			2022
GAAP net income	$	5,555		$	4,509		$	16,608		$	17,422
Net securities losses, net of tax		14			31			141			288
Goodwill impairment		—			516			—			516
Non-GAAP core earnings	$	5,569		$	5,056		$	16,749		$	18,226

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Return on average assets (ROA)		1.02	%		0.92	%		0.79	%		0.90	%
Net securities losses, net of tax		—	%		0.01	%		—	%		0.01	%
Goodwill impairment		—	%		0.11	%		—	%		0.03	%
Non-GAAP core ROA		1.02	%		1.04	%		0.79	%		0.94	%

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Return on average equity (ROE)		12.60	%		10.92	%		9.84	%		10.73	%
Net securities losses, net of tax		0.03	%		0.08	%		0.09	%		0.17	%
Goodwill impairment		—	%		1.25	%		—	%		0.32	%
Non-GAAP core ROE		12.63	%		12.25	%		9.93	%		11.22	%

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Basic earnings per share (EPS)	$	0.77		$	0.64		$	2.34		$	2.47
Net securities losses, net of tax		—			—			0.02			0.04
Goodwill impairment		—			0.07			—			0.07
Non-GAAP basic core EPS	$	0.77		$	0.71		$	2.36		$	2.58

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2023			2022			2023			2022
Diluted EPS	$	0.77		$	0.64		$	2.34		$	2.47
Net securities losses, net of tax		—			—			0.02			0.04
Goodwill impairment		—			0.07			—			0.07
Non-GAAP diluted core EPS	$	0.77		$	0.71		$	2.36		$	2.58