Part I [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for Penns Woods Bancorp, Inc., detailing financial position, performance, and cash flows, with total assets reaching **$1.91 billion** [Consolidated Balance Sheet](index=3&type=section&id=Consolidated%20Balance%20Sheet) Total assets increased to **$1.91 billion** as of September 30, 2021, driven by higher cash and deposits, with total liabilities reaching **$1.74 billion** Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | Sep 30, 2021 (thousands) | Dec 31, 2020 (thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Cash and Cash Equivalents | $281,647 | $213,358 | $68,289 | 32.0% | | Loans, net | $1,332,668 | $1,330,524 | $2,144 | 0.2% | | **Total Assets** | **$1,910,791** | **$1,834,643** | **$76,148** | **4.2%** | | Total Deposits | $1,593,019 | $1,494,443 | $98,576 | 6.6% | | **Total Liabilities** | **$1,742,310** | **$1,670,497** | **$71,813** | **4.3%** | | **Total Shareholders' Equity** | **$168,481** | **$164,146** | **$4,335** | **2.6%** | [Consolidated Statement of Income](index=4&type=section&id=Consolidated%20Statement%20of%20Income) Net income for the nine months ended September 30, 2021, was **$11.17 million**, a slight decrease from the prior year, with diluted EPS at **$1.58** Income Statement Summary (in thousands, except per share data) | Metric | Nine Months Ended Sep 30, 2021 (thousands) | Nine Months Ended Sep 30, 2020 (thousands) | Change ($ thousands) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Interest Income | $36,797 | $36,256 | $541 | 1.5% | | Provision for Loan Losses | $940 | $2,040 | ($1,100) | -53.9% | | Total Non-Interest Income | $8,474 | $9,093 | ($619) | -6.8% | | Total Non-Interest Expense | $30,646 | $29,428 | $1,218 | 4.1% | | **Consolidated Net Income** | **$11,169** | **$11,318** | **($149)** | **-1.3%** | | **Diluted EPS** | **$1.58** | **$1.61** | **($0.03)** | **-1.9%** | - Dividends declared per share remained constant at **$0.96** for the nine-month periods of both 2021 and 2020[12](index=12&type=chunk) [Consolidated Statement of Cash Flows](index=8&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) Cash and cash equivalents increased by **$68.3 million** for the nine months ended September 30, 2021, driven by financing activities Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2021 (thousands) | 2020 (thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $12,387 | $14,901 | | Net cash used for investing activities | ($10,225) | ($109) | | Net cash provided by financing activities | $66,127 | $162,891 | | **Net Increase in Cash and Cash Equivalents** | **$68,289** | **$177,683** | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Detailed notes cover accounting policies, CECL adoption, investment and loan portfolios, off-balance sheet arrangements, fair value measurements, and COVID-19 loan modifications - The company is preparing for the adoption of ASU 2016-13 (CECL), effective for fiscal years beginning after December 15, 2022[31](index=31&type=chunk) Loan Portfolio Composition (in thousands) | Loan Category | Sep 30, 2021 (thousands) | Dec 31, 2020 (thousands) | | :--- | :--- | :--- | | Commercial, financial, and agricultural | $179,648 | $164,743 | | Real estate mortgage: Residential | $587,925 | $589,721 | | Real estate mortgage: Commercial | $377,010 | $373,188 | | Consumer automobile loans | $146,663 | $156,403 | | Other | $55,685 | $59,249 | | **Total Loans** | **$1,346,931** | **$1,343,304** | - As of September 30, 2021, **14 loans** with an aggregate balance of **$1.346 million** remained in deferral under the COVID-19 relief program, not classified as Troubled Debt Restructurings[81](index=81&type=chunk) Off-Balance Sheet Commitments (in thousands) | Instrument | Sep 30, 2021 (thousands) | Dec 31, 2020 (thousands) | | :--- | :--- | :--- | | Commitments to extend credit | $236,397 | $198,512 | | Standby letters of credit | $9,949 | $10,120 | | **Total** | **$246,346** | **$208,632** | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=34&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, highlighting increased core earnings, net interest margin compression, reduced loan loss provisions, and strong capital adequacy and liquidity [Earnings Summary](index=34&type=section&id=Earnings%20Summary) GAAP net income slightly decreased to **$11.15 million**, while non-GAAP core earnings increased to **$10.92 million**, indicating stronger operational performance Reconciliation of GAAP to Non-GAAP Core Earnings (Nine Months Ended Sep 30, in thousands) | Metric | 2021 (thousands) | 2020 (thousands) | | :--- | :--- | :--- | | GAAP net income | $11,154 | $11,305 | | Less: net securities gains, net of tax | $236 | $975 | | **Non-GAAP core earnings** | **$10,918** | **$10,330** | [Net Interest Margin](index=36&type=section&id=Net%20Interest%20Margin) The net interest margin compressed to **2.84%** for the nine months ended September 30, 2021, due to lower asset yields, partially offset by reduced deposit rates Net Interest Margin Analysis (Nine Months Ended Sep 30) | Metric | 2021 | 2020 | | :--- | :--- | :--- | | Average Rate on Interest-Earning Assets | 3.37% | 3.89% | | Average Rate on Interest-Bearing Liabilities | 0.76% | 1.25% | | **Net Interest Margin (FTE)** | **2.84%** | **2.97%** | [Provision for Loan Losses](index=39&type=section&id=Provision%20for%20Loan%20Losses) The provision for loan losses significantly decreased to **$0.94 million**, reflecting economic improvement and a stable loan portfolio, with nonperforming loans also declining Credit Quality Metrics | Metric | Sep 30, 2021 | Sep 30, 2020 | | :--- | :--- | :--- | | Provision for Loan Losses (YTD) | $940,000 | $2,040,000 | | Nonperforming Loans | $7,763,000 | $10,553,000 | | Allowance for Loan Losses / Total Loans | 1.08% | 1.03% (as of 12/31/20) | | Allowance for Loan Losses / Nonperforming Loans | 187.52% | 127.25% | [Non-interest Income and Expense](index=40&type=section&id=Non-interest%20Income%20and%20Expense) Total non-interest income decreased by **$0.6 million**, while total non-interest expense increased by **$1.2 million**, driven by higher operational costs - Key drivers of non-interest income change (YTD 2021 vs 2020) were a decrease in gain on sale of loans (-**$0.9 million**) and brokerage commissions (-**$0.1 million**), offset by increases in debit card income (+**$0.2 million**) and other income (+**$0.9 million**)[157](index=157&type=chunk)[159](index=159&type=chunk) - The increase in non-interest expense (YTD 2021 vs 2020) was mainly due to higher salaries and benefits (+**$0.7 million**), occupancy (+**$0.5 million**), and marketing (+**$0.3 million**)[160](index=160&type=chunk)[162](index=162&type=chunk) [Financial Condition Analysis](index=42&type=section&id=Financial%20Condition%20Analysis) The company maintained a strong financial condition with increased deposits of **$98.6 million**, reduced borrowings, and capital ratios comfortably exceeding regulatory minimums - Deposit growth of **$98.6 million** since year-end 2020 was a key driver of balance sheet changes, attributed to PPP and stimulus funding and a customer preference for safe bank deposits[174](index=174&type=chunk) Company Capital Ratios | Ratio | Sep 30, 2021 | Well-Capitalized Minimum | | :--- | :--- | :--- | | Common Equity Tier 1 Capital Ratio | 10.88% | 6.50% | | Tier 1 Capital Ratio | 10.88% | 8.00% | | Total Capital Ratio | 11.54% | 10.00% | | Tier 1 Leverage Ratio | 8.29% | 5.00% | - The company has a total borrowing capacity of **$576.2 million** at the FHLB and additional credit lines of **$100 million**, with only **$118 million** in FHLB borrowings outstanding, indicating significant available liquidity[191](index=191&type=chunk) [Interest Rate Sensitivity](index=48&type=section&id=Interest%20Rate%20Sensitivity) The company maintains an asset-sensitive balance sheet, with a **100 basis point** upward rate shock projected to increase net interest income by **9.20%** over twelve months Net Interest Income Rate Shock Forecast (12-Month) | Rate Shock (Basis Points) | Change in Net Interest Income (%) | | :--- | :--- | | +400 | +34.43% | | +200 | +18.20% | | +100 | +9.20% | | **Static** | **—** | | -100 | -7.10% | | -200 | -13.02% | [Quantitative and Qualitative Disclosures About Market Risk](index=49&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risks are interest rate and liquidity risks, with no substantial changes in profile or management strategies since year-end 2020 - The company's primary market risks are identified as interest rate risk and liquidity risk, with no substantial changes in exposure or management approach since the end of 2020[200](index=200&type=chunk) [Controls and Procedures](index=49&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of September 30, 2021[201](index=201&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter ended September 30, 2021[202](index=202&type=chunk) Part II [Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings requiring disclosure for the period - None[204](index=204&type=chunk) [Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) The company refers to risk factors detailed in its 2020 Annual Report on Form 10-K, with no material changes reported during the quarter - The report refers to the risk factors detailed in the company's Annual Report on Form 10-K for the year ended December 31, 2020[205](index=205&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock during Q3 2021, with **353,000** shares remaining available under the repurchase plan Share Repurchase Activity (Q3 2021) | Period | Shares Purchased | | :--- | :--- | | July 2021 | 0 | | August 2021 | 0 | | September 2021 | 0 | - The maximum number of shares remaining for repurchase under the existing program is **353,000**[207](index=207&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☑ Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 for the Quarterly Period Ended June 30, 2021. ☐ Transition report pursuant to Section 13 or 15 (d) of the Exchange Act For the Transition Period from to . No. 0-17077 (Commission File Number) PENNS WOODS BANCORP INC. (Exact name of Registrant as specified in its charter) Pennsylvania 300 Market Street, P.O. Box 967 23-2 ...

Financial Performance - Net income for Q1 2021 was $3,441,000, an increase from $3,073,000 in Q1 2020, reflecting a 12% year-over-year growth[116] - Basic and diluted earnings per share for Q1 2021 were $0.49, compared to $0.44 and $0.43 for the same period in 2020, representing a 11.36% increase[116] - Core earnings for Q1 2021 were $3,347,000, up from $3,051,000 in Q1 2020, indicating a 9.7% increase[116] - Total non-interest income increased by $177,000 to $2,614,000 in Q1 2021 compared to Q1 2020, marking a 7.26% increase[138] - Non-interest expenses for the three months ended March 31, 2021, totaled $9,951,000, a decrease of 1.57% from $10,110,000 in the same period of 2020[142] Interest Income and Expenses - Interest and dividend income decreased to $14,595,000 in Q1 2021 from $16,161,000 in Q1 2020, a decline of 9.69%[122] - Total interest expense for Q1 2021 was $2,525,000, down from $4,000,000 in Q1 2020, a reduction of 36.88%[124] - The net interest margin for Q1 2021 was 2.88%, down from 3.19% in Q1 2020, reflecting a decrease of 31 basis points[126] - Net interest income on a fully taxable equivalent basis decreased from $12,285,000 in Q1 2020 to $12,188,000 in Q1 2021, a reduction of 0.79%[128] Loan Portfolio - The company experienced a decrease in loan portfolio income due to lower average rates and balances[122] - Total loans decreased from $1,356,817,000 in Q1 2020 to $1,338,929,000 in Q1 2021, a decline of 1.3%[128] - Gross loans decreased by $8,428,000 to $1,335,899,000, primarily due to declines in residential and commercial real estate mortgages and consumer automobile loans[146] - The provision for loan losses decreased from $750,000 in Q1 2020 to $515,000 in Q1 2021, reflecting limited economic improvement[135] - Nonperforming loans decreased to $9,272,000 at March 31, 2021, down from $11,300,000 at March 31, 2020, a decline of 17.9%[136] - The ratio of nonperforming loans to total loans improved from 0.84% in Q1 2020 to 0.69% in Q1 2021[136] Capital and Liquidity - The company maintains a focus on capital adequacy to support asset growth and preserve high-quality credit ratings[159] - As of March 31, 2021, the company's Common Equity Tier I Capital ratio was 11.447%, up from 11.267% on December 31, 2020[163] - The Total Capital ratio as of March 31, 2021, was 12.102%, slightly down from 12.151% at the end of 2020[163] - The company maintained a Tier I Capital ratio of 11.447% as of March 31, 2021, compared to 11.267% at the end of the previous year[163] - The company has a total current maximum borrowing capacity at the FHLB of $571,174,000, with FHLB borrowings totaling $133,000,000 as of March 31, 2021[170] - The company aims to maintain adequate liquidity while minimizing interest rate risk, ensuring sufficient funds for financial obligations[166] Market Conditions and Risks - The impact of COVID-19 on the company's financial results remains uncertain, affecting economic activity and market volatility[111] - The company is positioned to respond to interest rate changes, with a projected net interest income increase of 28.10% under a +400 basis point rate shock scenario[176] - A market value at risk calculation is utilized to monitor the effects of interest rate changes on the company's balance sheet, with results within established guidelines[173] - Management believes the Company is well positioned to respond to changes in market interest rate outlook[180] Deposits and Cash Management - Total deposits rose by $69,921,000 to $1,564,364,000, driven by PPP funding and increased consumer savings behavior during the COVID-19 pandemic[153] - Cash and cash equivalents increased by $64,330,000, reaching $277,688,000 as of March 31, 2021, compared to $213,358,000 at December 31, 2020[144] - Demand deposits increased by 6.58% to $478,916,000, while time deposits decreased by 6.69% to $245,996,000[154] - Total borrowed funds decreased by 6.91%, or $10,975,000, to $147,744,000 as of March 31, 2021, compared to $158,719,000 at December 31, 2020[155] Employee Compensation - Salaries and employee benefits accounted for 56.26% of total non-interest expenses, slightly decreasing from 56.05% year-over-year[142]

Table of Contents PENNS WOODS BANCORP, INC. UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2020 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED) For the transition period from to Commission file number 0-17077 Indicate by check mark whether the registrant has submitted electronically ever ...