Penns Woods Bancorp(PWOD) - 2024 Q2 - Quarterly Report

Financial Performance - Net income for the three months ended June 30, 2024, was $5,390,000, an increase of 29.2% compared to $4,171,000 for the same period in 2023[110] - Basic earnings per share for the three months ended June 30, 2024, were $0.72, up from $0.59 in the same period of 2023, representing a 22% increase[115] - Total interest income for the six months ended June 30, 2024, was $53,259,000, compared to $41,757,000 for the same period in 2023, representing a 27.5% increase[126] - Net interest income (GAAP) for the three months ended June 30, 2024, was $14,515,000, up from $13,386,000 in 2023, reflecting an 8.4% increase[126] - Net interest income (fully taxable equivalent) for the six months ended June 30, 2024, was $28,508,000, compared to $27,954,000 in 2023, showing a 2% increase[126] Interest and Expense Management - Interest and dividend income for the three months ended June 30, 2024, increased by $5,136,000, or 23.46%, compared to the same period in 2023[116] - Total interest expense for the three months ended June 30, 2024, was $12,514,000, an increase of 47.10% compared to $8,507,000 for the same period in 2023[120] - Total interest expense rose to $24,998,000, a 77.63% increase from $14,073,000 in the previous year[121] - The rate paid on interest-bearing deposits increased by 115 basis points, resulting in an expense increase of $4,026,000 for the three months ended June 30, 2024[122] - Total interest-bearing liabilities increased to $1,535,026,000, with an average rate of 3.28%[124] Asset and Loan Growth - Loans including fees for the three months ended June 30, 2024, amounted to $24,529,000, representing 90.75% of total interest and dividend income[117] - Average loan portfolio balance increased by $120,814,000 for the three months ended June 30, 2024, compared to the same period in 2023[122] - Total loans for the six months ended June 30, 2024, amounted to $1,855,425,000, compared to $1,702,467,000 for the same period in 2023, marking a 9% increase[125] - Gross loans increased by $26,524,000 since December 31, 2023, reaching a total of $1,866,288,000, driven primarily by growth in residential and commercial real estate mortgage categories[151] Credit Quality and Loss Provisions - The allowance for credit losses for the three months ended June 30, 2024, included negative provisions of $1,177,000, compared to negative provisions of $1,180,000 for the same period in 2023[110] - The provision for credit losses decreased from $11,446,000 at December 31, 2023, to $11,234,000 at June 30, 2024, indicating improved loan quality[133] - The allowance for credit losses to total loans was 0.60% at June 30, 2024, down from 0.62% at December 31, 2023[133] - Nonperforming loans increased to $6,784,000 at June 30, 2024, from $3,148,000 at December 31, 2023, representing a significant rise[136] - The ratio of nonperforming loans to total loans increased to 0.36% at June 30, 2024, compared to 0.17% at December 31, 2023[136] Deposits and Funding - Total deposits increased to $16,840,000, representing a 104.79% change from $8,223,000 in the previous year[121] - Total interest-bearing deposits increased to $1,164,996,000 for the six months ended June 30, 2024, from $1,073,869,000 in 2023, a rise of 8.5%[125] - Money market deposits surged by $105,213,000, representing a 48.96% increase, from $214,888,000 to $320,101,000 during the same period[160] - Time deposits rose by $50,120,000, or 19.27%, from $260,067,000 to $310,187,000[160] - Total borrowed funds decreased by $35,006,000, or 8.78%, from $398,524,000 to $363,518,000[161] Capital and Regulatory Ratios - Common Equity Tier I Capital ratio increased to 10.170% as of June 30, 2024, up from 10.098% on December 31, 2023[172] - Total Capital ratio improved to 10.801% as of June 30, 2024, compared to 10.798% at the end of 2023[172] - The Company maintained a net loans to total deposits ratio of 113% as of June 30, 2024, exceeding the maximum limit of 100%[176] - The Total Capital to Risk-weighted Assets ratio was 10.624% as of June 30, 2024, compared to 10.701% on December 31, 2023, with an actual amount of $143,787 thousand[173] Operational Efficiency - Total non-interest expense decreased by $433,000 for the three months ended June 30, 2024, compared to the same period in 2023[144] - Non-interest expenses for the three months ended June 30, 2024, totaled $10,996,000, a decrease of $433,000 or 3.79% compared to $11,429,000 for the same period in 2023[145] - Marketing expenses decreased significantly by $194,000 or 71.32% in Q2 2024, totaling $78,000 compared to $272,000 in Q2 2023[145] Risk Management - The Company is primarily exposed to interest rate risk and liquidity risk[190] - Interest rate sensitivity is monitored through measures produced by an independent third party[190] - Management believes the Company is well positioned to respond to changes in market interest rate outlook[191]