PWOD Penns Woods Bancorp Inc

Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $14.0 million for the nine months ended September 30, 2024, resulting in basic and diluted earnings per share of $1.86.

Highlights

• Net income, as reported under generally accepted accounting principles (GAAP), for the three and nine months ended September 30, 2024 was $4.8 million and $14.0 million, respectively, compared to $2.2 million and $11.1 million for the same periods of 2023. Results for the three and nine months ended September 30, 2024 compared to 2023 were impacted by an increase in net interest income of $1.7 million and $2.3 million, respectively, as the cost of funds has stabilized. The disposal of assets related to two former branch properties resulted in a one time after-tax loss of $261,000 for the nine month period ended September 30, 2024.
• The allowance for credit losses was impacted for the three and nine months ended September 30, 2024 by a provision for credit losses of $740,000 and a negative provision of $299,000, respectively, compared to provisions for credit losses of $1.4 million and $263,000 for the 2023 periods. The recognition of a negative provision for credit losses for the nine months ended September 30, 2024 is due primarily to recoveries during the second quarter of 2024 on a commercial loan. In addition, a minimal level of loan charge-offs of $312,000 contributed to the recognition of the negative provision for credit losses for the nine months ended September 30, 2024.
• Basic and diluted earnings per share for the three and nine months ended September 30, 2024 were $0.64 and $1.86, respectively, compared to basic and diluted earnings per share of $0.31 and $1.56 basic and $1.53 diluted for the three and nine month periods ended September 30, 2023.
• Annualized return on average assets was 0.86% for the three months ended September 30, 2024, compared to 0.41% for the corresponding period of 2023. Annualized return on average assets was 0.84% for the nine months ended September 30, 2024, compared to 0.70% for the corresponding period of 2023.
• Annualized return on average equity was 9.60% for the three months ended September 30, 2024, compared to 5.06% for the corresponding period of 2023. Annualized return on average equity was 9.74% for the nine months ended September 30, 2024, compared to 8.58% for the corresponding period of 2023.

Net Income

Net income from core operations (“core earnings”), which is a non-GAAP measure of net income excluding net securities gains or losses, was $4.8 million and $14.0 million, respectively, for the three and nine months ended September 30, 2024 compared to $2.3 million and $11.2 million for the same periods of 2023. Basic and diluted core earnings per share (non-GAAP) for the three and nine months ended September 30, 2024 were $0.63 and $1.86, respectively, while basic and diluted core earnings per share for the three month period of 2023 were $0.32 and for the nine month period of 2023 were $1.58 basic and $1.55 diluted. Annualized core return on average assets and core return on average equity (non-GAAP) were 0.85% and 9.54%, respectively, for the three months ended September 30, 2024, compared to 0.42% and 5.20% for the corresponding period of 2023. Annualized core return on average assets and core return on average equity (non-GAAP) were 0.84% and 9.75%, respectively, for the nine months ended September 30, 2024, compared to 0.71% and 8.67% for the corresponding period of 2023. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, core earnings per share and tangible book value per share 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 nine months ended September 30, 2024 was 2.88% and 2.79% respectively, compared to 2.65% and 2.82% for the corresponding periods of 2023. The increase in the net interest margin for the three month period was driven by an increase in the rate paid on interest-earning assets of 64 basis points ("bps"), while the decrease in the net interest margin for the nine month period was driven by a 96 bps increase in the rate paid on interest-bearing liabilities. The overall increase in interest rates over the periods resulted in increases to both the yield on the earnings asset portfolio and the rate paid on interest bearing liabilities. Driving the increase in the yield and interest income on the earning assets portfolio was the repricing of legacy assets coupled with portfolio growth. The average loan portfolio balance increased $76.0 million and $127.0 million, respectively, for the three and nine month periods ended September 30, 2024 compared to the same periods of 2023 as the average yield on the portfolio increased 65 bps and 72 bps, resulting in an increase in taxable equivalent interest income of $3.9 million and $14.5 million, for the periods. The three and nine month periods ended September 30, 2024 were impacted by an increase of 55 bps and 70 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates, which resulted in an increase in taxable equivalent interest income of $343,000 and $1.2 million, respectively. Short-term borrowings decreased in volume, which offset the impact of an increase in rate paid, resulting in a decrease of $1.5 million and $2.1 million in expense for the three and nine month periods ended September 30, 2024 compared to the same periods of 2023. The rate paid on interest-bearing deposits increased 76 bps and 116 bps, respectively, or $3.1 million and $11.8 million in expense, for the three and nine month periods ended September 30, 2024 compared to the corresponding periods of 2023 due to the rate environment, an increase in competition for deposits, and a migration of deposit balances from core deposits to higher rate time deposits. The rates paid on time deposits significantly contributed to the increase in funding costs as rates paid for the three and nine month periods ended September 30, 2024 compared to the same periods of 2023 increased 70 bps and 114 bps, respectively, or $2.2 million and $8.2 million in expense, as deposit gathering campaigns continued to focus on time deposits with a maturity of five months. In addition, brokered deposits have been utilized to assist with funding the loan portfolio growth and contributed to the increase in time deposit funding costs, while lowering the reliance on higher cost short-term borrowings.

Assets

Total assets increased to $2.3 billion at September 30, 2024, an increase of $82.8 million compared to September 30, 2023.  Net loans increased $58.0 million to $1.9 billion at September 30, 2024 compared to September 30, 2023, as continued emphasis was placed on commercial loan growth and indirect auto lending. The investment portfolio increased $8.8 million from September 30, 2023 to September 30, 2024. Investment debt securities increased $12.8 million from September 30, 2023 to September 30, 2024 as fixed rate instruments with maturities of approximately ten years were added to the portfolio to lock in yields.

Non-performing Loans

The ratio of non-performing loans to total loans ratio increased to 0.42% at September 30, 2024 from 0.20% at September 30, 2023, as non-performing loans increased to $7.9 million at September 30, 2024 from $3.7 million at September 30, 2023. 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 charge offs of $328,000 and $312,000 for the three and nine months ended September 30, 2024, respectively, impacted the allowance for credit losses, which was 0.62% of total loans at September 30, 2024 compared to 0.71% at September 30, 2023. Exposure to non-owner occupied office space is minimal at $13.9 million at September 30, 2024 with none of these loans being delinquent.

Deposits

Deposits increased $133.1 million to $1.7 billion at September 30, 2024 compared to September 30, 2023. Noninterest-bearing deposits decreased $18.6 million to $452.9 million at September 30, 2024 compared to September 30, 2023.  Core deposits declined $6.6 million as deposits migrated from core deposit accounts into time deposits as market rates and competition for deposits increased. Core deposit gathering efforts remained focused on increasing the utilization of electronic (internet and mobile) deposit banking by our customers. Core deposits have remained stable at $1.2 billion over the past five quarters. Interest-bearing deposits increased $151.6 million from September 30, 2023 to September 30, 2024 due to growth in the time deposit portfolio of $78.7 million as customers sought a higher rate of interest. Brokered deposit balances increased $61.0 million to $167.7 million at September 30, 2024 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 throughout 2023 and 2024 with current efforts centered on five months.

Shareholders’ Equity

Shareholders’ equity increased $29.2 million to $203.7 million at September 30, 2024 compared to September 30, 2023 due in part to a registered at-the-market offering that generated $7.5 million in capital during the fourth quarter of 2023.  During the three and nine months ended September 30, 2024 there were no shares issued as part of the registered at-the-market offering. A total of 9,074 and 31,050 shares for net proceeds of $205,000 and $632,000 were issued as part of the Dividend Reinvestment Plan during the three and nine months ended September 30 2024. Accumulated other comprehensive loss of $5.3 million at September 30, 2024 decreased from a loss of $14.9 million at September 30, 2023 as a result of a decrease in net unrealized loss on available for sale securities to $2.6 million at September 30, 2024 from a net unrealized loss of $10.9 million at September 30, 2023, coupled with a decrease in loss of $1.3 million in the defined benefit plan obligation. The current level of shareholders’ equity equates to a book value per share of $26.96 at September 30, 2024 compared to $24.55 at September 30, 2023, and an equity to asset ratio of 9.02% at September 30, 2024 and 8.02% at September 30, 2023. Tangible book value per share (a non-GAAP measure) increased to $24.77 at September 30, 2024 compared to $22.20 at September 30, 2023. Dividends declared for the three and nine months ended September 30, 2024 and 2023 were $0.32 and $0.96 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, 2023.

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)
(In Thousands, Except Share and Per Share Data)		September 30,
			2024				2023			% Change
ASSETS:
Noninterest-bearing balances		$	28,805			$	26,651			8.08	%
Interest-bearing balances in other financial institutions			10,889				8,939			21.81	%
Total cash and cash equivalents			39,694				35,590			11.53	%
Investment debt securities, available for sale, at fair value			197,466				184,667			6.93	%
Investment equity securities, at fair value			1,145				1,072			6.81	%
Restricted investment in bank stock			21,227				25,289			(16.06)%
Loans held for sale			8,967				4,083			119.62	%
Loans			1,875,174				1,818,461			3.12	%
Allowance for credit losses			(11,588	)			(12,890	)		(10.10)%
Loans, net			1,863,586				1,805,571			3.21	%
Premises and equipment, net			27,975				30,746			(9.01)%
Accrued interest receivable			11,433				10,500			8.89	%
Bank-owned life insurance			45,378				33,695			34.67	%
Investment in limited partnerships			6,966				8,275			(15.82)%
Goodwill			16,450				16,450			—	%
Intangibles			133				235			(43.40)%
Operating lease right of use asset			2,861				2,562			11.67	%
Deferred tax asset			3,034				6,961			(56.41)%
Other assets			12,935				10,772			20.08	%
TOTAL ASSETS		$	2,259,250			$	2,176,468			3.80	%
LIABILITIES:
Interest-bearing deposits		$	1,247,399			$	1,095,760			13.84	%
Noninterest-bearing deposits			452,922				471,507			(3.94)%
Total deposits			1,700,321				1,567,267			8.49	%
Short-term borrowings			78,305				193,746			(59.58)%
Long-term borrowings			252,508				217,645			16.02	%
Accrued interest payable			5,509				2,716			102.84	%
Operating lease liability			2,936				2,619			12.10	%
Other liabilities			15,977				17,935			(10.92)%
TOTAL LIABILITIES			2,055,556				2,001,928			2.68	%
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; 8,064,713 and 7,620,250 shares issued; 7,554,488 and 7,110,025 shares outstanding			44,802				42,335			5.83	%
Additional paid-in capital			62,989				55,890			12.70	%
Retained earnings			114,008				104,067			9.55	%
Accumulated other comprehensive loss:
Net unrealized loss on available for sale securities			(2,571	)			(10,886	)		76.38	%
Defined benefit plan			(2,719	)			(4,051	)		32.88	%
Treasury stock at cost, 510,225 shares			(12,815	)			(12,815	)		—	%
TOTAL SHAREHOLDERS' EQUITY			203,694				174,540			16.70	%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	2,259,250			$	2,176,468			3.80	%

    

PENNS WOODS BANCORP, INC.CONSOLIDATED STATEMENT OF INCOME(UNAUDITED)
(In Thousands, Except Share and Per Share Data)		Three Months Ended September 30,											Nine Months Ended September 30,
			2024				2023			% Change				2024				2023			% Change
INTEREST AND DIVIDEND INCOME:
Loans including fees		$	25,632			$	21,720			18.01	%		$	74,021			$	59,571			24.26	%
Investment securities:
Taxable			1,874				1,365			37.29	%			5,213				3,870			34.70	%
Tax-exempt			61				114			(46.49)%				233				410			(43.17)%
Dividend and other interest income			621				722			(13.99)%				1,980				1,827			8.37	%
TOTAL INTEREST AND DIVIDEND INCOME			28,188				23,921			17.84	%			81,447				65,678			24.01	%
INTEREST EXPENSE:
Deposits			9,599				6,463			48.52	%			26,439				14,686			80.03	%
Short-term borrowings			932				2,412			(61.36)%				4,024				6,084			(33.86)%
Long-term borrowings			2,601				1,714			51.75	%			7,667				3,892			96.99	%
TOTAL INTEREST EXPENSE			13,132				10,589			24.02	%			38,130				24,662			54.61	%
NET INTEREST INCOME			15,056				13,332			12.93	%			43,317				41,016			5.61	%
PROVISION (RECOVERY) FOR CREDIT LOSSES			740				1,372			(46.06)%				(299	)			263			(213.69)%
NET INTEREST INCOME AFTER PROVISION (RECOVERY) OF CREDIT LOSSES			14,316				11,960			19.70	%			43,616				40,753			7.03	%
NON-INTEREST INCOME:
Service charges			537				545			(1.47)%				1,551				1,557			(0.39)%
Net debt securities losses, available for sale			(5	)			(45	)		88.89	%			(40	)			(125	)		68.00	%
Net equity securities gains (losses)			41				(36	)		213.89	%			24				(35	)		168.57	%
Bank-owned life insurance			206				170			21.18	%			856				892			(4.04)%
Gain on sale of loans			416				257			61.87	%	.		1,021				732			39.48	%
Insurance commissions			145				136			6.62	%			425				416			2.16	%
Brokerage commissions			164				142			15.49	%			521				448			16.29	%
Loan broker income			351				241			45.64	%			841				728			15.52	%
Debit card income			355				320			10.94	%			1,052				995			5.73	%
Other			211				145			45.52	%			657				546			20.33	%
TOTAL NON-INTEREST INCOME			2,421				1,875			29.12	%			6,908				6,154			12.25	%
NON-INTEREST EXPENSE:
Salaries and employee benefits			6,402				6,290			1.78	%			19,224				18,778			2.38	%
Occupancy			731				784			(6.76)%				2,394				2,422			(1.16)%
Furniture and equipment			731				867			(15.69)%				2,436				2,503			(2.68)%
Software amortization			245				237			3.38	%			657				593			10.79	%
Pennsylvania shares tax			351				280			25.36	%			1,022				807			26.64	%
Professional fees			530				719			(26.29)%				1,654				2,313			(28.49)%
Federal Deposit Insurance Corporation deposit insurance			399				425			(6.12)%				1,179				1,122			5.08	%
Marketing			60				167			(64.07)%				209				594			(64.81)%
Intangible amortization			26				25			4.00	%			77				92			(16.30)%
Other			1,409				1,378			2.25	%			4,652				4,275			8.82	%
TOTAL NON-INTEREST EXPENSE			10,884				11,172			(2.58)%				33,504				33,499			0.01	%
INCOME BEFORE INCOME TAX PROVISION			5,853				2,663			119.79	%			17,020				13,408			26.94	%
INCOME TAX PROVISION			1,052				439			139.64	%			3,022				2,355			28.32	%
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'		$	4,801			$	2,224			115.87	%		$	13,998			$	11,053			26.64	%
EARNINGS PER SHARE - BASIC		$	0.64			$	0.31			106.45	%		$	1.86			$	1.56			19.23	%
EARNINGS PER SHARE - DILUTED		$	0.64			$	0.31			106.45	%		$	1.86			$	1.53			21.57	%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC			7,544,344				7,072,440			6.67	%			7,528,758				7,064,336			6.57	%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED			7,544,344				7,228,940			4.36	%			7,528,758				7,220,836			4.26	%

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES (UNAUDITED)
		Three Months Ended
(Dollars in Thousands)		September 30, 2024									September 30, 2023
		Average Balance (1)			Interest			Average Rate			Average Balance (1)			Interest			Average Rate
ASSETS:
Tax-exempt loans (3)		$	69,831		$	534		3.04	%		$	68,243		$	462		2.69	%
All other loans			1,805,097			25,210		5.56	%			1,730,669			21,355		4.90	%
Total loans (2)			1,874,928			25,744		5.46	%			1,798,912			21,817		4.81	%
Taxable securities			207,888			2,355		4.61	%			193,019			1,945		4.09	%
Tax-exempt securities (3)			11,475			77		2.73	%			20,777			144		2.81	%
Total securities			219,363			2,432		4.51	%			213,796			2,089		3.96	%
Interest-bearing balances in other financial institutions			10,167			140		5.48	%			11,868			142		4.75	%
Total interest-earning assets			2,104,458			28,316		5.36	%			2,024,576			24,048		4.72	%
Other assets			132,244									131,451
TOTAL ASSETS		$	2,236,702								$	2,156,027
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	214,050			282		0.52	%		$	225,357			181		0.32	%
Super Now deposits			220,825			1,133		2.04	%			244,387			1,174		1.91	%
Money market deposits			320,908			2,781		3.45	%			294,006			1,862		2.51	%
Time deposits			482,335			5,403		4.46	%			342,450			3,246		3.76	%
Total interest-bearing deposits			1,238,118			9,599		3.08	%			1,106,200			6,463		2.32	%
Short-term borrowings			66,795			932		5.54	%			173,364			2,412		5.52	%
Long-term borrowings			250,938			2,601		4.12	%			204,901			1,714		3.32	%
Total borrowings			317,733			3,533		4.42	%			378,265			4,126		4.33	%
Total interest-bearing liabilities			1,555,851			13,132		3.35	%			1,484,465			10,589		2.83	%
Demand deposits			453,169									471,494
Other liabilities			27,558									24,193
Shareholders’ equity			200,124									175,875
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	2,236,702								$	2,156,027
Interest rate spread (3)								2.01	%								1.89	%
Net interest income/margin (3)					$	15,184		2.88	%					$	13,459		2.65	%

1.  Information on this table has been calculated using average daily balance sheets to obtain average balances.2.  Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.3.  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 September 30,
			2024			2023
Total interest income		$	28,188		$	23,921
Total interest expense			13,132			10,589
Net interest income (GAAP)			15,056			13,332
Tax equivalent adjustment			128			127
Net interest income (fully taxable equivalent) (non-GAAP)		$	15,184		$	13,459

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES (UNAUDITED)
		Nine Months Ended
		September 30, 2024									September 30, 2023
(Dollars in Thousands)		Average Balance (1)			Interest			Average Rate			Average Balance (1)			Interest			Average Rate
ASSETS:
Tax-exempt loans (3)		$	69,455		$	1,490		2.87	%		$	66,372		$	1,371		2.76	%
All other loans			1,792,518			72,844		5.43	%			1,668,596			58,488		4.69	%
Total loans (2)			1,861,973			74,334		5.33	%			1,734,968			59,859		4.61	%
Taxable securities			203,964			6,795		4.45	%			188,477			5,331		3.78	%
Tax-exempt securities (3)			13,625			295		2.89	%			25,837			519		2.69	%
Total securities			217,589			7,090		4.35	%			214,314			5,850		3.65	%
Interest-bearing balances in other financial institutions			10,382			398		5.12	%			10,619			366		4.61	%
Total interest-earning assets			2,089,944			81,822		5.24	%			1,959,901			66,075		4.41	%
Other assets			131,000									132,133
TOTAL ASSETS		$	2,220,944								$	2,092,034
LIABILITIES AND SHAREHOLDERS’ EQUITY:
Savings		$	217,056			811		0.50	%		$	233,784			456		0.26	%
Super Now deposits			218,307			3,303		2.02	%			293,636			3,026		1.38	%
Money market deposits			308,027			7,734		3.35	%			292,490			4,807		2.20	%
Time deposits			446,158			14,591		4.37	%			264,855			6,397		3.23	%
Total interest-bearing deposits			1,189,548			26,439		2.97	%			1,084,765			14,686		1.81	%
Short-term borrowings			96,669			4,024		5.60	%			155,136			6,084		5.26	%
Long-term borrowings			256,960			7,667		3.99	%			169,276			3,892		3.07	%
Total borrowings			353,629			11,691		4.43	%			324,412			9,976		4.12	%
Total interest-bearing liabilities			1,543,177			38,130		3.30	%			1,409,177			24,662		2.34	%
Demand deposits			454,967									484,662
Other liabilities			31,133									26,334
Shareholders’ equity			191,667									171,861
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		$	2,220,944								$	2,092,034
Interest rate spread (3)								1.94	%								2.07	%
Net interest income/margin (3)					$	43,692		2.79	%					$	41,413		2.82	%

1.  Information on this table has been calculated using average daily balance sheets to obtain average balances.2.  Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.3.  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%

		Nine months ended September 30,
			2024			2023
Total interest income		$	81,447		$	65,678
Total interest expense			38,130			24,662
Net interest income (GAAP)			43,317			41,016
Tax equivalent adjustment			375			397
Net interest income (fully taxable equivalent) (non-GAAP)		$	43,692		$	41,413

(Dollars in Thousands, Except Per Share Data, Unaudited)		Quarter Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Operating Data
Net income		$	4,801			$	5,390			$	3,808			$	5,555			$	2,224
Net interest income			15,056				14,515				13,746				13,948				13,332
Provision (recovery) for credit losses			740				(1,177	)			138				(1,742	)			1,372
Net security gains (losses)			36				(19	)			(33	)			(18	)			(81	)
Non-interest income, excluding net security gains (losses)			2,385				2,044				2,495				2,239				1,956
Non-interest expense			10,884				10,996				11,623				10,997				11,172
Performance Statistics
Net interest margin			2.88	%			2.83	%			2.69	%			2.73	%			2.65	%
Annualized cost of total deposits			2.27	%			2.14	%			2.01	%			1.89	%			1.64	%
Annualized non-interest income to average assets			0.43	%			0.37	%			0.45	%			0.41	%			0.35	%
Annualized non-interest expense to average assets			1.95	%			1.98	%			2.10	%			2.02	%			2.07	%
Annualized return on average assets			0.86	%			0.97	%			0.69	%			1.02	%			0.41	%
Annualized return on average equity			9.60	%			11.12	%			8.03	%			12.60	%			5.06	%
Annualized net loan charge-offs (recoveries) to average loans			0.07	%		(0.09)%					0.08	%		(0.05)%					0.01	%
Net charge-offs (recoveries)			328				(396	)			380				(209	)			33
Efficiency ratio			62.26	%			66.25	%			71.41	%			67.78	%			72.76	%
Per Share Data
Basic earnings per share		$	0.64			$	0.72			$	0.51			$	0.77			$	0.31
Diluted earnings per share			0.64				0.72				0.51				0.77				0.31
Dividend declared per share			0.32				0.32				0.32				0.32				0.32
Book value			26.96				26.13				25.72				25.51				24.55
Tangible book value (Non-GAAP)			24.77				23.93				23.50				23.29				22.20
Common stock price:
High			23.98				21.08				22.64				23.64				27.17
Low			19.29				17.17				18.44				20.05				20.70
Close			23.79				20.55				19.41				22.51				21.08
Weighted average common shares:
Basic			7,544				7,529				7,513				7,255				7,072
Fully Diluted			7,544				7,529				7,513				7,255				7,229
End-of-period common shares:
Issued			8,065				8,052				8,036				8,019				7,620
Treasury			(510	)			(510	)			(510	)			(510	)			(510	)

(Dollars in Thousands, Unaudited)		Quarter Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Financial Condition Data:
General
Total assets		$	2,259,250			$	2,234,617			$	2,210,116			$	2,204,809			$	2,176,468
Loans, net			1,863,586				1,855,054				1,843,805				1,828,318				1,805,571
Goodwill			16,450				16,450				16,450				16,450				16,450
Intangibles			133				158				184				210				235
Total deposits			1,700,321				1,648,093				1,618,562				1,589,493				1,567,267
Noninterest-bearing			452,922				461,092				471,451				471,173				471,507
Savings			211,560				218,354				220,932				219,287				226,897
NOW			218,279				209,906				208,073				214,888				220,730
Money Market			321,614				320,101				299,916				299,353				291,889
Time Deposits			328,294				310,187				292,372				260,067				249,550
Brokered Deposits			167,652				128,453				125,818				124,725				106,694
Total interest-bearing deposits			1,247,399				1,187,001				1,147,111				1,118,320				1,095,760
Core deposits*			1,204,375				1,209,453				1,200,372				1,204,701				1,211,023
Shareholders’ equity			203,694				197,087				193,517				191,556				174,540
Asset Quality
Non-performing loans		$	7,940			$	6,784			$	7,958			$	3,148			$	3,683
Non-performing loans to total assets			0.35	%			0.30	%			0.36	%			0.14	%			0.17	%
Allowance for credit losses on loans			11,588				11,234				11,542				11,446				12,890
Allowance for credit losses on loans to total loans			0.62	%			0.60	%			0.62	%			0.62	%			0.71	%
Allowance for credit losses on loans to non-performing loans			145.94	%			165.60	%			145.04	%			363.60	%			349.99	%
Non-performing loans to total loans			0.42	%			0.36	%			0.43	%			0.17	%			0.20	%
Capitalization
Shareholders’ equity to total assets			9.02	%			8.82	%			8.76	%			8.69	%			8.02	%

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

Reconciliation of GAAP and Non-GAAP Financial Measures(UNAUDITED)
(Dollars in Thousands, Except Per Share Data, Unaudited)		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
GAAP net income		$	4,801			$	2,224			$	13,998			$	11,053
Net securities (gains) losses, net of tax			(28	)			64				13				126
Non-GAAP core earnings		$	4,773			$	2,288			$	14,011			$	11,179
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Return on average assets (ROA)			0.86	%			0.41	%			0.84	%			0.70	%
Net securities (gains) losses, net of tax		(0.01)%					0.01	%			—	%			0.01	%
Non-GAAP core ROA			0.85	%			0.42	%			0.84	%			0.71	%
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Return on average equity (ROE)			9.60	%			5.06	%			9.74	%			8.58	%
Net securities (gains) losses, net of tax		(0.06)%					0.14	%			0.01	%			0.09	%
Non-GAAP core ROE			9.54	%			5.20	%			9.75	%			8.67	%
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Basic earnings per share (EPS)		$	0.64			$	0.31			$	1.86			$	1.56
Net securities (gains) losses, net of tax			(0.01	)			0.01				—				0.02
Non-GAAP basic core EPS		$	0.63			$	0.32			$	1.86			$	1.58
		Three Months Ended September 30,								Nine Months Ended September 30,
			2024				2023				2024				2023
Diluted EPS		$	0.64			$	0.31			$	1.86			$	1.53
Net securities (gains) losses, net of tax			(0.01	)			0.01				—				0.02
Non-GAAP diluted core EPS		$	0.63			$	0.32			$	1.86			$	1.55

(Dollars in Thousands, Except Share and Per Share Data, Unaudited)		Quarter Ended
		9/30/2024				6/30/2024				3/31/2024				12/31/2023				9/30/2023
Total shareholders' equity		$	203,694			$	197,087			$	193,517			$	191,556			$	174,540
Goodwill			(16,450	)			(16,450	)			(16,450	)			(16,450	)			(16,450	)
Intangibles			(133	)			(158	)			(184	)			(210	)			(235	)
Tangible shareholders' equity		$	187,111			$	180,479			$	176,883			$	174,896			$	157,855
Shares outstanding			7,554,488				7,541,474				7,525,372				7,508,994				7,110,025
Book value per share		$	26.96			$	26.13			$	25.72			$	25.51			$	24.55
Tangible book value per share (Non-GAAP)		$	24.77			$	23.93			$	23.50			$	23.29			$	22.20