# EDGAR Filing Document

**Accession Number:** 0000716605
**File Stem:** 0000716605-23-000003
**Filing Date:** 2023-1
**Character Count:** 40832
**Document Hash:** d97f21c0abb546b32eddbb6241930d36
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0000716605-23-000003.hdr.sgml**: 20230130

**ACCESSION NUMBER**: 0000716605-23-000003

**CONFORMED SUBMISSION TYPE**: 8-K

**PUBLIC DOCUMENT COUNT**: 14

**CONFORMED PERIOD OF REPORT**: 20230130

**ITEM INFORMATION**: Results of Operations and Financial Condition

**ITEM INFORMATION**: Financial Statements and Exhibits

**FILED AS OF DATE**: 20230130

**DATE AS OF CHANGE**: 20230130

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** PENNS WOODS BANCORP INC
- **CENTRAL INDEX KEY:** 0000716605
- **STANDARD INDUSTRIAL CLASSIFICATION:** STATE COMMERCIAL BANKS [6022]
- **IRS NUMBER:** 232226454
- **STATE OF INCORPORATION:** PA
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 8-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-17077
- **FILM NUMBER:** 23565885

**BUSINESS ADDRESS:**
- **STREET 1:** 115 S MAIN ST
- **CITY:** JERSEY SHORE
- **STATE:** PA
- **ZIP:** 17740
- **BUSINESS PHONE:** 570-322-1111

**MAIL ADDRESS:**
- **STREET 1:** 115 S MAIN ST
- **CITY:** JERSEY SHORE
- **STATE:** PA
- **ZIP:** 17740

?xml version="1.0" ? pwod-20230130

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**FORM 8-K** 

**CURRENT REPORT**

**Pursuant to Section 13 or 15(d) of**

**The Securities Exchange Act of 1934**

**January 30, 2023** 

Date of Report (Date of earliest event reported)

**PENNS WOODS BANCORP, INC.**

(Exact name of registrant as specified in its charter)

---

| | | |
|:---|:---|:---|
| **Pennsylvania** | **000-17077** | **23-2226454** |
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Ident. No.) |

---

---

| | | |
|:---|:---|:---|
| **300 Market Street** | **P.O. Box 967** | **17703-0967** |
| **Williamsport** | **Pennsylvania** | (Zip Code) |
| (Address of principal executive offices) | (Address of principal executive offices) | (Address of principal executive offices) |

---

 (570) 322-1111 <br> Registrant's telephone number, including area code

---

| |
|:---|
| **N/A** |
| (Former name or former address, if changed since last report.) |

---

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

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 |

---

Indicated by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2) ☐

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 ☐

------

**Item 2.02&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Results of Operation and Financial Condition.**

On January 30, 2023, Penns Woods Bancorp, Inc. (the "Company") distributed a press release announcing its earnings for the period ended December 31, 2022. The press release is attached as Exhibit 99.1 hereto and incorporated herein by reference.

**Item 9.01&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Financial Statements and Exhibits.**

(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits:

99.1 Press release, dated January 30, 2023, of Penns Woods Bancorp, Inc. announcing earnings for the period ended December 31, 2022.

<u>SIGNATURES</u>

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

---

| | | | |
|:---|:---|:---|:---|
| | | PENNS WOODS BANCORP, INC. | PENNS WOODS BANCORP, INC. |
| Dated: | January 30, 2023 |  |  |
|  |  | By: | /s/ Brian L. Knepp |
|  |  |  | &nbsp;&nbsp;&nbsp;Brian L. Knepp |
|  |  |  | &nbsp;&nbsp;&nbsp;President and Chief Financial Officer |

---

EXHIBIT INDEX

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| <u>[99.1](ex991-4q22.htm)</u> | Press release, dated January 30, 2023, of Penns Woods Bancorp, Inc. announcing earnings for the period ended December 31, 2022. |
| 104 | Cover page Interactive Data File (the cover page XBRL tags are embedded within the Inline XBRL document). |

---

## Exhibit 99.1

Exhibit 99.1

![image0a17.jpg](image0a17.jpg)

Press Release — For Immediate Release

January 30, 2023

**Penns Woods Bancorp, Inc. Reports Fourth Quarter and Year Ended 2022 Earnings**

Williamsport, PA — January 30, 2023 - Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc. achieved net income of $17.4 million for the twelve months ended December 31, 2022, resulting in basic and diluted earnings per share of $2.47.

**Highlights**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Net income, as reported under GAAP, for the three and twelve months ended December 31, 2022 was $4.5 million and $17.4 million, respectively, compared to $4.9 million and $16.0 million for the same periods of 2021. Results for the three and twelve months ended December 31, 2022 compared to 2021 were impacted by an increase in after-tax securities losses of $315,000 (from a gain of $284,000 to a loss of $31,000) for the three month period and an increase in after-tax securities losses of $809,000 (from a gain of $521,000 to a loss of $288,000) for the twelve month period. Three and twelve month results for the periods ended December 31, 2022 were impacted by a goodwill impairment charge of $653,000 (after-tax $516,000) related to the wealth management unit (The M Group) as a decline in stock market valuations during 2022 resulted in a decreased level of net income for this entity. Results for the twelve months ended December 31, 2022 were impacted by additional compensation expense of $183,000 (after-tax $145,000) associated with the voluntary cash settlement of 346,725 outstanding stock options. In addition, an after-tax loss of $201,000 related to a branch closure negatively impacted results for the twelve months ended December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The provision for loan losses increased $875,000 for the three months and $1.3 million for the twelve months ended December 31, 2022 to $575,000 and $1.9 million, respectively, compared to ($300,000) and $640,000 for the 2021 periods. The increases in the provision for loan losses were primarily due to the significant growth in the loan portfolio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Basic and diluted earnings per share for the three and twelve months ended December 31, 2022 were $0.64 and $2.47. Basic and diluted earnings per share for the three and twelve months ended December 31, 2021 were $0.69 and $2.27.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Annualized return on average assets was 0.92% for three months ended December 31, 2022, compared to 1.02% for the corresponding period of 2021. Return on average assets was 0.90% for the twelve months ended December 31, 2022, compared to 0.85% for the corresponding period of 2021.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Annualized return on average equity was 10.92% for the three months ended December 31, 2022, compared to 11.59% for the corresponding period of 2021. Return on average equity was 10.73% for the twelve months ended December 31, 2022, compared to 9.93% for the corresponding period of 2021.

**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 and goodwill impairment, was $5.1 million for the three months ended December 31, 2022 compared to $4.6 million for the same period of 2021. Core earnings were $18.2 million for the twelve months ended December 31, 2022, compared to $15.5 million for the same period of 2021. Core earnings per share for the three months ended December 31, 2022 were $0.71 basic and diluted, compared to $0.65 basic and diluted core earnings per share for the same period of 2021. Core earnings per share for the twelve months ended December 31, 2022 were $2.58 basic and diluted, compared to $2.20 basic and diluted for the same period of 2021. Annualized core return on average assets and core return on average equity were 1.04% and 12.25% for the three months ended December 31, 2022, compared to 0.96% and 10.92% for the corresponding period of 2021. Core return on average assets and core return on average equity were 0.94% and 11.22% for the twelve months ended

------

December 31, 2022 compared to 0.82% and 9.61% for the corresponding period of 2021. Core earnings for the twelve months ended December 31, 2022 were impacted negatively by an after-tax compensation expense of $145,000 relating to the voluntary cash settlement of 346,725 stock options along with an after-tax loss of $201,000 relating to a branch closure. 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, 2022 was 3.42% and 3.24%, compared to 2.90% and 2.85% for the corresponding periods of 2021. The increase in the net interest margin for the three and twelve month periods was driven by an increase in earning asset yield of 79 and 28 basis points ("bps") as the yield on earning assets increased during 2022 due to the rate increases enacted by the Federal Open Market Committee ("FOMC"). The three and twelve month periods ended December 31 2022 were impacted by an increase of 58 and 8 bps in the yield earned on the securities portfolio as legacy securities matured with the funds reinvested at higher rates. The FOMC rate increases during 2022 and the utilization of excess on balance sheet liquidity during the first nine months of 2022 caused the rate paid on interest-bearing deposits to increase 19 and decrease 17 bps for the three months and twelve months ended December 31, 2022, respectively, compared to the comparable periods of 2021. The excess on balance sheet liquidity allowed deposit rates to be held at historically low levels for the majority of 2022 with rate increases occurring primarily during the fourth quarter of 2022.

**Assets**

Total assets increased $55.4 million to $2.0 billion at December 31, 2022 compared to December 31, 2021. Cash and cash equivalents decreased $223.5 million as interest-bearing accounts in other financial institutions decreased $181.7 million and fed funds sold decreased $50.0 million as excess liquidity was primarily utilized to fund the growth in the loan portfolio. Net loans increased $246.1 million to $1.6 billion at December 31, 2022 compared to December 31, 2021, as an emphasis was placed on commercial loan growth coupled with a significant increase in indirect auto lending. The investment portfolio increased $31.8 million from December 31, 2021 to December 31, 2022 as a portion of the excess cash liquidity was invested primarily into short and medium-term municipal bonds with a maturity of 10 years or less.

**Non-performing Loans**

The ratio of non-performing loans to total loans ratio decreased to 0.30% at December 31, 2022 from 0.45% at December 31, 2021, as non-performing loans decreased to $4.9 million at December 31, 2022 from $6.3 million at December 31, 2021. 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 a specific allocation for any impairment recorded within the allowance for loan losses. Net loan charge-offs of $449,000 for the twelve months ended December 31, 2022 impacted the allowance for loan losses, which was 0.95% of total loans at December 31, 2022 compared to 1.02% at December 31, 2021.

**Deposits**

Deposits decreased $64.9 million to $1.6 billion at December 31, 2022 compared to December 31, 2021. Noninterest-bearing deposits increased $24.7 million to $519.1 million at December 31, 2022 compared to December 31, 2021. Driving core deposit gathering efforts was the continued emphasis on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic. Interest-bearing deposits decreased $89.6 million primarily due to a reduction in the Money Market Account portfolio coupled with the maturity of higher cost time deposits. A campaign to attract time deposits with a maturity of ten to twenty-four months was started during the latter part of 2022.

**Shareholders' Equity**

Shareholders' equity decreased $4.6 million to $167.7 million at December 31, 2022 compared to December 31, 2021. Accumulated other comprehensive loss of $14.0 million at December 31, 2022 increased from a loss of $1.1 million at December 31, 2021 as a result of a $9.8 million net unrealized loss on available for sale securities at December 31, 2022 (compared to an unrealized gain of $2.4 million at December 31, 2021) coupled with a increase in loss of $654,000 in the defined benefit plan obligation. The current level of shareholders' equity equates to a book value per share of $23.76 at December 31, 2022 compared to $24.37 at December 31, 2021, and an equity to asset ratio of 8.40% at December 31, 2022 and 8.88% at December 31, 2021. Dividends declared for the twelve months ended December 31, 2022 and 2021 were $1.28 per share.

------

Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates seventeen 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, 2021.

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 | Richard A. Grafmyre, Chief Executive Officer |
| | 110 Reynolds Street | 110 Reynolds Street |
| | Williamsport, PA 17702 | Williamsport, PA 17702 |
| | 570-322-1111 | e-mail: pwod@pwod.com |

---

------

**PENNS WOODS BANCORP, INC.**

**CONSOLIDATED BALANCE SHEET**

**(UNAUDITED)**

---

| | | | |
|:---|:---|:---|:---|
| | **December 31,** | **December 31,** | **December 31,** |
|<br>**(In Thousands, Except Share and Per Share Data)** | **2022** | **2021** | **% Change** |
| ASSETS: |  |  |  |
| Noninterest-bearing balances | $27390 | $19233 | 42.41% |
| Interest-bearing balances in other financial institutions | 12943 | 194629 | (93.35)% |
| Federal funds sold |  | 50000 | (100.00)% |
| &nbsp;&nbsp;&nbsp;Total cash and cash equivalents | 40333 | 263862 | (84.71)% |
| Investment debt securities, available for sale, at fair value | 193673 | 166410 | 16.38% |
| Investment equity securities, at fair value | 1142 | 1288 | (11.34)% |
| Restricted investment in bank stock, at fair value | 19171 | 14531 | 31.93% |
| Loans held for sale | 3298 | 3725 | (11.46)% |
| Loans | 1639731 | 1392147 | 17.78% |
| Allowance for loan losses | (15637) | (14176) | 10.31% |
| &nbsp;&nbsp;&nbsp;Loans, net | 1624094 | 1377971 | 17.86% |
| Premises and equipment, net | 31844 | 34025 | (6.41)% |
| Accrued interest receivable | 9481 | 8048 | 17.81% |
| Bank-owned life insurance | 34452 | 33768 | 2.03% |
| Investment in limited partnerships | 4783 | 4607 | 3.82% |
| Goodwill | 16450 | 17104 | (3.82)% |
| Intangibles | 327 | 480 | (31.88)% |
| Operating lease right of use asset | 2651 | 2851 | (7.02)% |
| Deferred tax asset | 6868 | 2946 | 133.13% |
| Other assets | 7640 | 9193 | (16.89)% |
| TOTAL ASSETS | $1996207 | $1940809 | 2.85% |
| LIABILITIES: |  |  |  |
| Interest-bearing deposits | $1037397 | $1126955 | (7.95)% |
| Noninterest-bearing deposits | 519063 | 494360 | 5.00% |
| &nbsp;&nbsp;&nbsp;Total deposits | 1556460 | 1621315 | (4.00)% |
| Short-term borrowings | 153349 | 5747 | 2568.33% |
| Long-term borrowings | 102783 | 125963 | (18.40)% |
| Accrued interest payable | 603 | 651 | (7.37)% |
| Operating lease liability | 2708 | 2898 | (6.56)% |
| Other liabilities | 12639 | 11961 | 5.67% |
| TOTAL LIABILITIES | 1828542 | 1768535 | 3.39% |
| 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; 7,566,810 and 7,550,272 shares issued; 7,056,585 and 7,070,047 shares outstanding | 42039 | 41945 | 0.22% |
| Additional paid-in capital | 54252 | 53795 | 0.85% |
| Retained earnings | 98147 | 89761 | 9.34% |
| Accumulated other comprehensive (loss) gain: |  |  |  |
| &nbsp;&nbsp;&nbsp;Net unrealized (loss) gain on available for sale securities | (9819) | 2373 | (513.78)% |
| &nbsp;&nbsp;&nbsp;Defined benefit plan | (4139) | (3485) | (18.77)% |
| Treasury stock at cost, 510,225 and 480,225 | (12815) | (12115) | 5.78% |
| TOTAL SHAREHOLDERS' EQUITY | 167665 | 172274 | (2.68)% |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1996207 | $1940809 | 2.85% |

---

------

**PENNS WOODS BANCORP, INC.**

**CONSOLIDATED STATEMENT OF INCOME**

**(UNAUDITED)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|<br>**(In Thousands, Except Share and Per Share Data)** | **2022** | **2021** | **% Change** | **2022** | **2021** | **% Change** |
| INTEREST AND DIVIDEND INCOME: |  |  |  |  |  |  |
| Loans including fees | $16973 | $13406 | 26.61% | $58682 | $53232 | 10.24% |
| Investment securities: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Taxable | 1084 | 790 | 37.22% | 3634 | 3281 | 10.76% |
| &nbsp;&nbsp;&nbsp;Tax-exempt | 229 | 160 | 43.13% | 823 | 655 | 25.65% |
| &nbsp;&nbsp;&nbsp;Dividend and other interest income | 319 | 343 | (7.00)% | 1789 | 1246 | 43.58% |
| TOTAL INTEREST AND DIVIDEND INCOME | 18605 | 14699 | 26.57% | 64928 | 58414 | 11.15% |
| INTEREST EXPENSE: |  |  |  |  |  |  |
| Deposits | 1499 | 1064 | 40.88% | 3690 | 5545 | (33.45)% |
| Short-term borrowings | 978 | 2 | n/m | 1007 | 9 | n/m |
| Long-term borrowings | 580 | 712 | (18.54)% | 2451 | 3142 | (21.99)% |
| TOTAL INTEREST EXPENSE | 3057 | 1778 | 71.93% | 7148 | 8696 | (17.80)% |
| NET INTEREST INCOME | 15548 | 12921 | 20.33% | 57780 | 49718 | 16.22% |
| PROVISION (RECOVERY) FOR LOAN LOSSES | 575 | (300) | 291.67% | 1910 | 640 | 198.44% |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES | 14973 | 13221 | 13.25% | 55870 | 49078 | 13.84% |
| NON-INTEREST INCOME: |  |  |  |  |  |  |
| Service charges | 540 | 485 | 11.34% | 2103 | 1703 | 23.49% |
| Debt securities (losses) gains, available for sale | (51) | 376 | (113.56)% | (219) | 699 | (131.33)% |
| Net equity securities gains (losses} | 12 | (16) | 175.00% | (146) | (40) | (265.00)% |
| Bank-owned life insurance | 163 | 302 | (46.03)% | 664 | 916 | (27.51)% |
| Gain on sale of loans | 226 | 440 | (48.64)% | 1131 | 2474 | (54.28)% |
| Insurance commissions | 105 | 117 | (10.26)% | 491 | 553 | (11.21)% |
| Brokerage commissions | 120 | 188 | (36.17)% | 620 | 851 | (27.14)% |
| Loan broker income | 324 | 715 | (54.69)% | 1674 | 2164 | (22.64)% |
| Debit card income | 384 | 345 | 11.30% | 1464 | 1511 | (3.11)% |
| Other | 258 | 243 | 6.17% | 931 | 838 | 11.10% |
| TOTAL NON-INTEREST INCOME | 2081 | 3195 | (34.87)% | 8713 | 11669 | (25.33)% |
| NON-INTEREST EXPENSE: |  |  |  |  |  |  |
| Salaries and employee benefits | 5846 | 5907 | (1.03)% | 24267 | 23014 | 5.44% |
| Occupancy | 700 | 771 | (9.21)% | 3080 | 3209 | (4.02)% |
| Furniture and equipment | 834 | 859 | (2.91)% | 3288 | 3522 | (6.64)% |
| Software amortization | 180 | 236 | (23.73)% | 840 | 868 | (3.23)% |
| Pennsylvania shares tax | 333 | 253 | 31.62% | 1452 | 1350 | 7.56% |
| Professional fees | 688 | 550 | 25.09% | 2434 | 2432 | 0.08% |
| Federal Deposit Insurance Corporation deposit insurance | 248 | 258 | (3.88)% | 938 | 963 | (2.60)% |
| Marketing | 255 | 111 | 129.73% | 690 | 545 | 26.61% |
| Intangible amortization | 35 | 44 | (20.45)% | 154 | 191 | (19.37)% |
| Goodwill impairment | 653 |  | n/a | 653 |  | n/a |
| Other | 1479 | 1270 | 16.46% | 5202 | 4811 | 8.13% |
| TOTAL NON-INTEREST EXPENSE | 11251 | 10259 | 9.67% | 42998 | 40905 | 5.12% |
| INCOME BEFORE INCOME TAX PROVISION | 5803 | 6157 | (5.75)% | 21585 | 19842 | 8.78% |
| INCOME TAX PROVISION | 1294 | 1278 | 1.25% | 4163 | 3794 | 9.73% |
| NET INCOME | $4509 | $4879 | (7.58)% | $17422 | $16048 | 8.56% |
| Earnings attributable to noncontrolling interest |  |  | —% |  | 15 | (100.00)% |
| NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' | $4509 | $4879 | (7.58)% | $17422 | $16033 | 8.66% |
| EARNINGS PER SHARE - BASIC | $0.64 | $0.69 | (7.25)% | $2.47 | $2.27 | 8.81% |
| EARNINGS PER SHARE - DILUTED | $0.64 | $0.69 | (7.25)% | $2.47 | $2.27 | 8.81% |
| WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC | 7055181 | 7068327 | (0.19)% | 7059437 | 7061818 | (0.03)% |
| WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED | 7055181 | 7068327 | (0.19)% | 7059437 | 7061818 | (0.03)% |

---

------

**PENNS WOODS BANCORP, INC.**

**AVERAGE BALANCES AND INTEREST RATES** 

**(UNAUDITED)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** | **Three Months Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|<br>**(Dollars in Thousands)** | **Average** <br>**Balance (1)** | **Interest** | **Average <br>Rate** | **Average** <br>**Balance (1)** | **Interest** | **Average <br>Rate** |
| ASSETS: |  |  |  |  |  |  |
| Tax-exempt loans (3) | $61756 | $408 | 2.62% | $46583 | $317 | 2.70% |
| All other loans | 1546338 | 16651 | 4.27% | 1320972 | 13156 | 3.95% |
| Total loans (2) | 1608094 | 17059 | 4.21% | 1367555 | 13473 | 3.91% |
| Federal funds sold |  |  | —% | 47391 | 85 | 0.71% |
| Taxable securities | 167405 | 1329 | 3.22% | 148434 | 978 | 2.67% |
| Tax-exempt securities (3) | 41167 | 290 | 2.86% | 38043 | 202 | 2.15% |
| Total securities | 208572 | 1619 | 3.15% | 186477 | 1180 | 2.57% |
| Interest-bearing deposits | 5797 | 74 | 5.06% | 184591 | 70 | 0.15% |
| Total interest-earning assets | 1822463 | 18752 | 4.09% | 1786014 | 14808 | 3.30% |
| Other assets | 128084 |  |  | 130859 |  |  |
| TOTAL ASSETS | $1950547 |  |  | $1916873 |  |  |
| LIABILITIES AND SHAREHOLDERS' EQUITY: |  |  |  |  |  |  |
| Savings | $249793 | 66 | 0.10% | $233791 | 22 | 0.04% |
| Super Now deposits | 385060 | 623 | 0.64% | 345653 | 206 | 0.24% |
| Money market deposits | 268519 | 509 | 0.75% | 301651 | 211 | 0.28% |
| Time deposits | 144491 | 301 | 0.83% | 218260 | 625 | 1.14% |
| Total interest-bearing deposits | 1047863 | 1499 | 0.57% | 1099355 | 1064 | 0.38% |
| Short-term borrowings | 97585 | 978 | 3.98% | 7255 | 2 | 0.11% |
| Long-term borrowings | 102814 | 580 | 2.24% | 125991 | 712 | 2.25% |
| Total borrowings | 200399 | 1558 | 3.09% | 133246 | 714 | 2.13% |
| Total interest-bearing liabilities | 1248262 | 3057 | 0.97% | 1232601 | 1778 | 0.57% |
| Demand deposits | 517977 |  |  | 496478 |  |  |
| Other liabilities | 19151 |  |  | 19463 |  |  |
| Shareholders' equity | 165157 |  |  | 168331 |  |  |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1950547 |  |  | $1916873 |  |  |
| Interest rate spread (3) |  |  | 3.12% |  |  | 2.73% |
| Net interest income/margin (3) |  | $15695 | 3.42% |  | $13030 | 2.90% |

---

1.&nbsp;&nbsp;&nbsp;&nbsp;Information on this table has been calculated using average daily balance sheets to obtain average balances.

2.&nbsp;&nbsp;&nbsp;&nbsp;Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.

3.&nbsp;&nbsp;&nbsp;&nbsp;Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income &nbsp;&nbsp;&nbsp;&nbsp;

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

---

| | | |
|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** |
| | **2022** | **2021** |
| Total interest income | $18605 | $14699 |
| Total interest expense | 3057 | 1778 |
| Net interest income (GAAP) | 15548 | 12921 |
| Tax equivalent adjustment | 147 | 109 |
| Net interest income (fully taxable equivalent) (non-GAAP) | $15695 | $13030 |

---

------

**PENNS WOODS BANCORP, INC.**

**AVERAGE BALANCES AND INTEREST RATES** 

**(UNAUDITED)**

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Twelve Months Ended** | **Twelve Months Ended** | **Twelve Months Ended** | **Twelve Months Ended** | **Twelve Months Ended** | **Twelve Months Ended** |
| | **December 31, 2022** | **December 31, 2022** | **December 31, 2022** | **December 31, 2021** | **December 31, 2021** | **December 31, 2021** |
|<br>**(Dollars in Thousands)** | **Average** <br>**Balance (1)** | **Interest** | **Average <br>Rate** | **Average** <br>**Balance (1)** | **Interest** | **Average <br>Rate** |
| ASSETS: |  |  |  |  |  |  |
| Tax-exempt loans (3) | $55364 | $1441 | 2.60% | $46312 | $1308 | 2.82% |
| All other loans | 1439550 | 57544 | 4.00% | 1299321 | 52199 | 4.02% |
| Total loans (2) | 1494914 | 58985 | 3.95% | 1345633 | 53507 | 3.98% |
| Federal funds sold | 32863 | 465 | 1.41% | 28395 | 202 | 0.71% |
| Taxable securities | 156584 | 4455 | 2.88% | 148066 | 4083 | 2.80% |
| Tax-exempt securities (3) | 44301 | 1042 | 2.38% | 36993 | 829 | 2.27% |
| Total securities | 200885 | 5497 | 2.77% | 185059 | 4912 | 2.69% |
| Interest-bearing deposits | 74401 | 503 | 0.68% | 201273 | 242 | 0.12% |
| Total interest-earning assets | 1803063 | 65450 | 3.63% | 1760360 | 58863 | 3.35% |
| Other assets | 128213 |  |  | 129582 |  |  |
| TOTAL ASSETS | $1931276 |  |  | $1889942 |  |  |
| LIABILITIES AND SHAREHOLDERS' EQUITY: |  |  |  |  |  |  |
| Savings | $247003 | 138 | 0.06% | $225637 | 116 | 0.05% |
| Super Now deposits | 387370 | 1344 | 0.35% | 307446 | 900 | 0.29% |
| Money market deposits | 289820 | 1105 | 0.38% | 305883 | 972 | 0.32% |
| Time deposits | 161982 | 1103 | 0.68% | 244341 | 3557 | 1.46% |
| Total interest-bearing deposits | 1086175 | 3690 | 0.34% | 1083307 | 5545 | 0.51% |
| Short-term borrowings | 29315 | 1007 | 3.44% | 7178 | 9 | 0.13% |
| Long-term borrowings | 110027 | 2451 | 2.23% | 135474 | 3142 | 2.32% |
| Total borrowings | 139342 | 3458 | 2.48% | 142652 | 3151 | 2.21% |
| Total interest-bearing liabilities | 1225517 | 7148 | 0.58% | 1225959 | 8696 | 0.71% |
| Demand deposits | 519189 |  |  | 478984 |  |  |
| Other liabilities | 24182 |  |  | 23568 |  |  |
| Shareholders' equity | 162388 |  |  | 161431 |  |  |
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $1931276 |  |  | $1889942 |  |  |
| Interest rate spread (3) |  |  | 3.05% |  |  | 2.64% |
| Net interest income/margin (3) |  | $58302 | 3.24% |  | $50167 | 2.85% |

---

1.&nbsp;&nbsp;&nbsp;&nbsp;Information on this table has been calculated using average daily balance sheets to obtain average balances.

2.&nbsp;&nbsp;&nbsp;&nbsp;Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.

3.&nbsp;&nbsp;&nbsp;&nbsp;Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income &nbsp;&nbsp;&nbsp;&nbsp;

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

---

| | | |
|:---|:---|:---|
| | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
| | **2022** | **2021** |
| Total interest income | $64928 | $58414 |
| Total interest expense | 7148 | 8696 |
| Net interest income | 57780 | 49718 |
| Tax equivalent adjustment | 522 | 449 |
| Net interest income (fully taxable equivalent) (non-GAAP) | $58302 | $50167 |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(Dollars in Thousands, Except Share and Per Share Data, Unaudited)** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** |
| | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Operating Data** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income | $4509 | $5250 | $4231 | $3432 | $4879 |
| &nbsp;&nbsp;&nbsp;Net interest income | 15548 | 15532 | 13847 | 12853 | 12921 |
| &nbsp;&nbsp;&nbsp;Provision (credit) for loan losses | 575 | 855 | 330 | 150 | (300) |
| &nbsp;&nbsp;&nbsp;Net security (losses) gains | (39) | (211) | (54) | (61) | 360 |
| &nbsp;&nbsp;&nbsp;Non-interest income, excluding net security (losses) gains | 2120 | 2294 | 2191 | 2473 | 2835 |
| &nbsp;&nbsp;&nbsp;Non-interest expense | 11251 | 10320 | 10420 | 11007 | 10259 |
| **Performance Statistics** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net interest margin | 3.42% | 3.47% | 3.12% | 2.93% | 2.90% |
| &nbsp;&nbsp;&nbsp;Annualized return on average assets | 0.92% | 1.09% | 0.88% | 0.72% | 1.02% |
| &nbsp;&nbsp;&nbsp;Annualized return on average equity | 10.92% | 12.61% | 10.15% | 8.17% | 11.59% |
| &nbsp;&nbsp;&nbsp;Annualized net loan charge-offs (recoveries) to average loans | 0.04% | 0.01% | (0.01)% | 0.09% | 0.02% |
| &nbsp;&nbsp;&nbsp;Net charge-offs (recoveries) | 149 | 37 | (40) | 303 | 81 |
| &nbsp;&nbsp;&nbsp;Efficiency ratio | 59.79% | 57.70% | 64.72% | 71.53% | 64.83% |
| **Per Share Data** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic earnings per share | $0.64 | $0.74 | $0.60 | $0.49 | $0.69 |
| &nbsp;&nbsp;&nbsp;Diluted earnings per share | 0.64 | 0.74 | 0.60 | 0.49 | 0.69 |
| &nbsp;&nbsp;&nbsp;Dividend declared per share | 0.32 | 0.32 | 0.32 | 0.32 | 0.32 |
| &nbsp;&nbsp;&nbsp;Book value | 23.76 | 23.32 | 23.56 | 23.81 | 24.37 |
| &nbsp;&nbsp;&nbsp;Common stock price: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;High | 26.89 | 24.29 | 24.35 | 24.67 | 24.65 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Low | 23.15 | 22.02 | 22.34 | 23.64 | 23.50 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Close | 26.62 | 22.91 | 23.09 | 24.43 | 23.65 |
| &nbsp;&nbsp;&nbsp;Weighted average common shares: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Basic | 7055 | 7051 | 7059 | 7073 | 7068 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Fully Diluted | 7055 | 7051 | 7059 | 7073 | 7068 |
| &nbsp;&nbsp;&nbsp;End-of-period common shares: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Issued | 7567 | 7563 | 7559 | 7555 | 7550 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Treasury | (510) | (510) | (510) | (480) | (480) |

---

------

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **(Dollars in Thousands, Except Share and Per Share Data, Unaudited)** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** | **Quarter Ended** |
| | **12/31/2022** | **9/30/2022** | **6/30/2022** | **3/31/2022** | **12/31/2021** |
| **Financial Condition Data:** |  |  |  |  |  |
| **General** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total assets | $1996207 | $1905116 | $1891806 | $1916809 | $1940809 |
| &nbsp;&nbsp;&nbsp;Loans, net | 1624094 | 1545489 | 1474739 | 1391943 | 1377971 |
| &nbsp;&nbsp;&nbsp;Goodwill | 16450 | 17104 | 17104 | 17104 | 17104 |
| &nbsp;&nbsp;&nbsp;Intangibles | 327 | 361 | 396 | 437 | 480 |
| &nbsp;&nbsp;&nbsp;Total deposits | 1556460 | 1590415 | 1589579 | 1612395 | 1621315 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noninterest-bearing | 519063 | 537403 | 524288 | 514130 | 494360 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Savings | 247952 | 249532 | 249057 | 245661 | 236312 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW | 372574 | 392140 | 353102 | 379838 | 366399 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Money Market | 270589 | 268532 | 309453 | 299166 | 318877 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Time Deposits | 146282 | 142808 | 153679 | 173600 | 205367 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total interest-bearing deposits | 1037397 | 1053012 | 1065291 | 1098265 | 1126955 |
| &nbsp;&nbsp;&nbsp;Core deposits\* | 1410178 | 1447607 | 1435900 | 1438795 | 1415948 |
| &nbsp;&nbsp;&nbsp;Shareholders' equity | 167665 | 164489 | 166054 | 168427 | 172274 |
| **Asset Quality** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Non-performing loans | $4890 | $5743 | $5100 | $5281 | $6250 |
| &nbsp;&nbsp;&nbsp;Non-performing loans to total assets | 0.24% | 0.30% | 0.27% | 0.28% | 0.32% |
| &nbsp;&nbsp;&nbsp;Allowance for loan losses | 15637 | 15211 | 14393 | 14023 | 14176 |
| &nbsp;&nbsp;&nbsp;Allowance for loan losses to total loans | 0.95% | 0.97% | 0.97% | 1.00% | 1.02% |
| &nbsp;&nbsp;Allowance for loan losses to non-performing loans | 319.78% | 264.86% | 282.22% | 265.54% | 226.82% |
| &nbsp;&nbsp;&nbsp;Non-performing loans to total loans | 0.30% | 0.37% | 0.34% | 0.38% | 0.45% |
| **Capitalization** |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Shareholders' equity to total assets | 8.40% | 8.63% | 8.78% | 8.79% | 8.88% |

---

\* Core deposits are defined as total deposits less time deposits

------

**Reconciliation of GAAP and Non-GAAP Financial Measures**

**(UNAUDITED)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|<br>**(Dollars in Thousands, Except Per Share Data)** | **2022** | **2021** | **2022** | **2021** |
| GAAP net income | $4509 | $4879 | $17422 | $16033 |
| Net securities losses (gains), net of tax | 31 | (284) | 288 | (521) |
| Goodwill impairment | 516 |  | 516 |  |
| Non-GAAP core earnings | $5056 | $4595 | $18226 | $15512 |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Return on average assets (ROA) | 0.92% | 1.02% | 0.90% | 0.85% |
| Net securities losses (gains), net of tax | 0.01% | (0.06)% | 0.01% | (0.03)% |
| Goodwill impairment | 0.11% | —% | 0.03% | —% |
| Non-GAAP core ROA | 1.04% | 0.96% | 0.94% | 0.82% |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Return on average equity (ROE) | 10.92% | 11.59% | 10.73% | 9.93% |
| Net securities losses (gains), net of tax | 0.08% | (0.67)% | 0.17% | (0.32)% |
| Goodwill impairment | 1.25% | —% | 0.32% | —% |
| Non-GAAP core ROE | 12.25% | 10.92% | 11.22% | 9.61% |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Basic earnings per share (EPS) | $0.64 | $0.69 | $2.47 | $2.27 |
| Net securities losses (gains), net of tax |  | (0.04) | 0.04 | (0.07) |
| Goodwill impairment | 0.07 |  | 0.07 |  |
| Non-GAAP basic core EPS | $0.71 | $0.65 | $2.58 | $2.20 |
|  | **Three Months Ended December 31,** | **Three Months Ended December 31,** | **Twelve Months Ended December 31,** | **Twelve Months Ended December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Diluted EPS | $0.64 | $0.69 | $2.47 | $2.27 |
| Net securities losses (gains), net of tax |  | (0.04) | 0.04 | (0.07) |
| Goodwill impairment | 0.07 |  | 0.07 |  |
| Non-GAAP diluted core EPS | $0.71 | $0.65 | $2.58 | $2.20 |

---

<br>