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Penns Woods Bancorp. Inc. continued its solid earnings and growth achieving net income of $14,608,000 for the 12 months ended Dec. 31 resulting in basic and dilutive earnings per share of $3.03, according to a news release.
Year-over-year comparisons are impacted by the acquisition of Luzerne National Bank Corp. that was effective June 1, 2013 and resulted in increases in net loans of $254,057,000; investments of $21,140,000; deposits of $279,867,000; and assets of $329,209,000 at the time of acquisition.
Net income from core operations, which is a measure of net income excluding net securities gains and bank owned life insurance gains on death benefits, decreased to $2,560,000 for the 3 months ended Dec. 31 compared to $3,389,000 for the same period of 2013. Net income from core operations decreased to $12,114,000 for the 12 months ended Dec. 31 compared to $12,489,000 for the same period of 2013. Impacting the 3- and 12-month periods was an increase in the provision for loan losses of $1,005,000 and $575,000, respectively due to the level of charge-offs and the downgrading of several commercial loans.
Operating earnings per share for the 3 months ended Dec. 31 were $0.53 basic and dilutive compared to $0.70 basic and dilutive for the same period of 2013. Operating earnings per share for the 12 months ended Dec. 31 were $2.52 basic and dilutive compared to $2.83 basic and dilutive for the same period 2013.
Return on average assets, the news release said, was 0.93 percent for the 3 months ended Dec. 31 compared to 1.16 percent for the corresponding period of 2013. Return on average assets was 1.19 percent for the 3 months ended Dec. 31 compared to 1.32 percent for the corresponding period of 2013.
Return on average equity was 8.33 percent for the 3 months ended Dec. 31 compared to 10.99 percent for the corresponding period of 2013. Return on average equity was 10.79 percent for the 12 months ended Dec. 31 compared to 12.36 percent for the corresponding period of 2013.
“The 12 months ended Dec. 31, 2014 have been an exciting and challenging time for the Penns Woods family,” said Richard A. Grafmyre, president and CEO, according to the news release. “We have experienced a record level of net income, while undertaking several projects that will prepare us for the future – upgrading software systems, opening a branch in Loyalsock and beginning the process of building a branch in Lewisburg. While these projects were progressing, we were also in the midst of shifting the earning asset portfolio from investments to loans. This strategic action was taken as we focused on shortening the earning asset portfolio per our strategy to reduce interest rate and market price risk, but this action did negatively impact net interest income and the net interest margin. We also have been working through several impaired credits in the loan portfolio which resulted in $2,415,000 in charge-offs and an increase in the provision for loan losses during 2014.”
Return on average assets and return on average equity were 0.93 percent and 8.33 percent for the 3 months ended Dec. 31 compared to 1.16 percent and 10.99 percent for the corresponding period of 2013. Return on average assets and return on average equity were 1.19 percent and 10.79 percent for the 12 months ended Dec. 31 compared to 1.32 percent and 12.36 percent for the corresponding period of 2013.
The net interest margin for the 3- and 12-month periods ended Dec. 31 was 3.73 percent and 3.81 percent compared to 3.98 percent and 4.13 percent for the corresponding periods of 2013. The net interest margin has decreased for the comparable three and twelve months ended, while net interest income on a fully taxable equivalent basis has decreased $347,000 for the 3 months ended Dec. 31 and increased $2,098,000 for the 12 months ended Dec. 31 compared to the corresponding periods of 2013. Driving the increase is the growth in the loan and deposit portfolios for the twelve months ended Dec. 31 compared to the corresponding period for 2013, primarily due to growth in home equity products and the continued emphasis on core deposit growth.