WILLIAMSPORT, Pa, Jan. 28, 2019 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD)

Penns Woods Bancorp, Inc., supported by loan and deposit growth, achieved net income of $14.7 million for the twelve months ended December 31, 2018, resulting in basic and diluted earnings per share of $3.14.

Highlights

  • Net income, as reported under GAAP, for the three and twelve months ended December 31, 2018 was $4.2 million and $14.7 million, compared to $0.7 million and $9.8 million for the same period of 2017.  Results for the three and twelve months ended December 31, 2018 compared to 2017 were impacted by a decrease in after-tax securities gains of $201,000 (from a gain of $71,000 to a loss of $130,000) for the three month periods and a decrease in after-tax securities gains of $560,000 (from a gain of $391,000 to a loss of $169,000) for the twelve month periods. Impacting the level of operating earnings were several factors, including the continued shift in composition of the earning asset portfolio as the balance sheet is actively managed to reduce market risk and interest rate risk in a rising rate environment. In addition, the effective tax rate has decreased due to the "Tax Cuts and Jobs Act," which reduced the corporate tax rate to 21% effective January 1, 2018.

  • Basic and diluted earnings per share for the three and twelve months ended December 31, 2018 were $0.89 and $3.14, respectively, an increase from basic earnings per share of $0.16 and diluted earnings per share of $0.15 for the three months ended December 31, 2017 and basic and diluted earnings per share of $2.08 for the twelve months ended December 31, 2017.

  • Return on average assets was 1.02% for the three months ended December 31, 2018, compared to 0.20% for the corresponding period of 2017. Return on average assets was 0.94% for the twelve months ended December 31, 2018, compared to 0.69% for the corresponding period of 2017.

  • Return on average equity was 11.77% for the three months ended December 31, 2018, compared to 2.00% for the corresponding period of 2017. Return on average equity was 10.72% for the twelve months ended December 31, 2018, compared to 6.91% for the corresponding period of 2017.

A reconciliation of the non-GAAP financial measures of operating earnings, operating return on assets, operating return on equity, and operating earnings per share described in the highlights to the comparable GAAP financial measures is included at the end of this press release.

Net Income

Net income from core operations (“adjusted earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $4.3 million for the three months ended December 31, 2018 compared to $3.4 million for the same period of 2017. Operating earnings increased to $14.9 million for the twelve months ended December 31, 2018, compared to $12.1 million for the same period of 2017. The impact of the Tax Cuts and Jobs Act was the primary driver for the decrease in the Company's effective tax rate to 13.23% and 16.08% for the three and twelve month periods ended December 31, 2018 compared to 84.71% and 43.29% for the prior year periods (the passage of the "Tax Cuts and Jobs Act" in 2017 caused a revaluation of our net deferred tax assets resulting in a write-down of $2.7 million during the fourth quarter of 2017). Operating earnings per share for the three months ended December 31, 2018 was $0.92 basic and diluted, an increase from $0.72 basic and $0.71 diluted operating earnings per share for the same period of 2017. Operating earnings per share for the twelve months ended December 31, 2018 was $3.17 basic and diluted, compared to $2.57 basic and diluted for the same period of 2017. Operating return on average assets and operating return on average equity were 1.05% and 12.12% for the three months ended December 31, 2018, compared to 0.93% and 9.45% for the corresponding periods of 2017. Operating return on average assets and operating return on average equity were 0.95% and 10.84% for the twelve months ended December 31, 2018 compared to 0.86% and 8.57% for the corresponding periods of 2017.

Net Interest Margin

The net interest margin for the three and twelve months ended December 31, 2018 was 3.33% and 3.31%, compared to 3.48% and 3.47% for the corresponding period of 2017.  The decrease in the net interest margin was driven by an increase in the cost of interest-bearing liabilities of 53 basis points ("bps") for the three month period and 37 bps for the twelve month period primarily from an increase in the rate paid on time deposits as the average maturity of such liabilities lengthened. The impact of the increased cost of funds was limited by an increase in the yield on earning assets of 27 bps and 14 bps for the three and twelve month periods. The increase in the yield on earning assets was driven by an increase in the loan portfolio yield in conjunction with an increase in the average loan portfolio of $170.6 million and $176.0 million, respectively. The loan growth was primarily funded by an increase in average borrowings of $122.5 million and $108.5 million for the three and twelve month periods along with growth in average total deposits of $62.7 million and $48.1 million, respectively for the same periods.

Assets

Total assets increased $210.3 million to $1.7 billion at December 31, 2018 compared to December 31, 2017.  Net loans increased $137.2 million to $1.4 billion at December 31, 2018 compared to December 31, 2017, primarily due to campaigns related to increasing home equity product market share and indirect auto lending. The investment portfolio increased $30.3 million from December 31, 2017 to December 31, 2018 due to an increase in the taxable municipal and restricted bank stock portfolios.

Non-performing Loans

The ratio of non-performing loans to total loans ratio increased to 1.20% at December 31, 2018 from 0.58% at December 31, 2017 as non-performing loans have increased to $16.6 million at December 31, 2018 from $7.3 million at December 31, 2017 primarily due to a commercial loan relationship that became non-performing during the last three months of 2018. 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 $756,000 for the twelve months ended December 31, 2018 minimally impacted the allowance for loan losses, which was 1.00% of total loans at December 31, 2018. The majority of the loans charged-off had a specific allowance within the allowance for loan losses.

Deposits

Deposits increased $73.6 million to $1.2 billion at December 31, 2018 compared to December 31, 2017.  Noninterest-bearing deposits increased $17.5 million to $320.8 million at December 31, 2018 compared to December 31, 2017.  Driving deposit growth is our commitment to easy-to-use products, community involvement, and emphasis on customer service. While deposit gathering efforts have centered on core deposits, the lengthening of the average maturity of the time deposit portfolio continues to move forward as part of the strategy to build balance sheet protection in a rising interest rate environment.

Shareholders’ Equity

Shareholders’ equity increased $5.3 million to $143.5 million at December 31, 2018 compared to December 31, 2017. The change in accumulated other comprehensive loss from $5.0 million at December 31, 2017 to $6.6 million at December 31, 2018 is a result of an increase in unrealized losses on available for sale securities (from an unrealized gain of $54,000 at December 31, 2017 to an unrealized loss of $1.4 million at December 31, 2018). The amount of accumulated other comprehensive loss at December 31, 2018 was also impacted by the change in net excess of the projected benefit obligation over the fair value of the plan assets of the defined benefit pension plan, resulting in an increase in the net loss of $356,000, mainly due to the change in the corporate tax rate from 2017 to 2018. The current level of shareholders’ equity equates to a book value per share of $30.59 at December 31, 2018 compared to $29.47 at December 31, 2017 and an equity to asset ratio of 8.52% at December 31, 2018, compared to 9.37% at December 31, 2017.  Excluding goodwill and intangibles, book value per share was $26.70 at December 31, 2018, compared to $25.51 at December 31, 2017.  Dividends declared for the twelve months ended December 31, 2018 and 2017 were $1.88 per share.

During the first quarter of 2019, the Company expects to offer approximately $10.0 million of a new series of non-cumulative, non-convertible preferred stock to a limited number of accredited investors in a private placement transaction.  The preferred stock would be structured to qualify as Tier 1 capital for bank regulatory purposes.  The proceeds of the offering would be used for general corporate purposes, including funding organic growth.  There can be no assurance that the offering will be completed during the first quarter of 2019 or otherwise.  Any shares of preferred stock offered and sold will not be registered under the Securities Act of 1933 and may not be offered or sold absent registration or an applicable exemption from registration requirements.

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, and Union Counties, and Luzerne Bank, which operates ten branch offices providing financial services in Luzerne County.  Investment and insurance products are offered through Jersey Shore State Bank’s subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group.  Insurance products are offered through United Insurance Solutions, LLC, a joint venture that is a subsidiary of the holding company.

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; and (v) 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, 2017.

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
 570-322-1111e-mail: pwod@pwod.com

THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT


PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

  December 31,
(In Thousands, Except Share Data) 2018 2017 % Change
ASSETS:      
Noninterest-bearing balances $24,325  $25,692  (5.32)%
Interest-bearing balances in other financial institutions 42,417  1,551  2,634.82%
Total cash and cash equivalents 66,742  27,243  144.99%
Investment debt securities, available for sale, at fair value 134,285  108,627  23.62%
Investment equity securities, at fair value 1,776  2,516  (29.41)%
Investment securities, trading 36  190  (81.05)%
Restricted investment in bank stock, at fair value 18,862  13,332  41.48%
Loans held for sale 2,929  1,196  144.90%
Loans 1,384,757  1,246,614  11.08%
Allowance for loan losses (13,837) (12,858) 7.61%
Loans, net 1,370,920  1,233,756  11.12%
Premises and equipment, net 27,580  27,386  0.71%
Accrued interest receivable 5,334  4,321  23.44%
Bank-owned life insurance 28,627  27,982  2.31%
Goodwill 17,104  17,104  %
Intangibles 1,162  1,462  (20.52)%
Deferred tax asset 5,154  4,388  17.46%
Other assets 4,260  4,989  (14.61)%
TOTAL ASSETS $1,684,771  $1,474,492  14.26%
LIABILITIES:      
Interest-bearing deposits $899,089  $843,004  6.65%
Noninterest-bearing deposits 320,814  303,316  5.77%
Total deposits 1,219,903  1,146,320  6.42%
Short-term borrowings 167,865  100,748  66.62%
Long-term borrowings 138,942  70,970  95.78%
Accrued interest payable 1,150  502  129.08%
Other liabilities 13,367  17,758  (24.73)%
TOTAL LIABILITIES 1,541,227  1,336,298  15.34%
SHAREHOLDERS’ EQUITY:      
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued     n/a 
Common stock, par value $8.33, 15,000,000 shares authorized; 5,011,698 and 5,009,339 shares issued; 4,691,548 and 4,689,189 outstanding 41,763  41,744  0.05%
Additional paid-in capital 50,737  50,173  1.12%
Retained earnings 69,787  63,364  10.14%
Accumulated other comprehensive loss:      
Net unrealized loss on available for sale securities (1,360) (54) (2,418.52)%
Defined benefit plan (5,276) (4,920) (7.24)%
Treasury stock at cost, 320,150 (12,115) (12,115) %
TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY 143,536  138,192  3.87%
Non-controlling interest  8  2  300.00%
TOTAL SHAREHOLDERS' EQUITY 143,544  138,194  3.87%
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,684,771  $1,474,492  14.26%
            
            

PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)

  Three Months Ended December 31, Twelve Months Ended December 31,
(In Thousands, Except Per Share Data) 2018 2017 % Change 2018 2017 % Change
INTEREST AND DIVIDEND INCOME:            
Loans including fees $14,828  $12,191  21.63% $54,000  $45,833  17.82%
Investment securities:            
Taxable 886  517  71.37% 2,784  2,182  27.59%
Tax-exempt 182  278  (34.53)% 860  1,218  (29.39)%
Dividend and other interest income 340  152  123.68% 1,102  744  48.12%
TOTAL INTEREST AND DIVIDEND INCOME 16,236  13,138  23.58% 58,746  49,977  17.55%
INTEREST EXPENSE:            
Deposits  1,999  1,115  79.28% 6,370  4,083  56.01%
Short-term borrowings  753  195  286.15% 1,757  234  650.85%
Long-term borrowings  785  360  118.06% 2,809  1,580  77.78%
TOTAL INTEREST EXPENSE  3,537  1,670  111.80% 10,936  5,897  85.45%
NET INTEREST INCOME . 12,699  11,468  10.73% 47,810  44,080  8.46%
PROVISION FOR LOAN LOSSES 760  125  508.00% 1,735  730  137.67%
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 11,939  11,343  5.25% 46,075  43,350  6.29%
NON-INTEREST INCOME:            
Service charges  672  585  14.87% 2,460  2,222  10.71%
Debt securities (losses) gains, available for sale (30) 113  (126.55)% (47) 600  (107.83)%
Equity securities losses  (126)   n/a  (170)   n/a 
Securities (losses) gains, trading (9) (6) (50.00)% 3  (8) (137.50)%
Bank-owned life insurance 166  167  (0.60)% 662  666  (0.60)%
Gain on sale of loans 465  358  29.89% 1,518  1,674  (9.32)%
Insurance commissions 99  97  2.06% 365  496  (26.41)%
Brokerage commissions 323  334  (3.29)% 1,336  1,378  (3.05)%
Debit card income 469  510  (8.04)% 1,534  1,960  (21.73)%
Other 400  431  (7.19)% 1,800  1,756  2.51%
TOTAL NON-INTEREST INCOME 2,429  2,589  (6.18)% 9,461  10,744  (11.94)%
NON-INTEREST EXPENSE:            
Salaries and employee benefits 5,696  4,883  16.65% 21,083  18,999  10.97%
Occupancy 622  592  5.07% 2,702  2,447  10.42%
Furniture and equipment  764  786  (2.80)% 3,092  2,915  6.07%
Software Amortization 208  224  (7.14)% 712  974  (26.90)%
Pennsylvania shares tax 275  229  20.09% 1,108  925  19.78%
Professional Fees 432  537  (19.55)% 2,106  2,353  (10.50)%
Federal Deposit Insurance Corporation deposit insurance 251  155  61.94% 890  669  33.03%
Marketing 3  268  (98.88)% 767  958  (19.94)%
Intangible amortization 71  81  (12.35)% 300  337  (10.98)%
Other 1,210  1,493  (18.96)% 5,247  6,285  (16.52)%
TOTAL NON-INTEREST EXPENSE 9,532  9,248  3.07% 38,007  36,862  3.11%
INCOME BEFORE INCOME TAX PROVISION 4,836  4,684  3.25% 17,529  17,232  1.72%
INCOME TAX PROVISION  640  3,968  (83.87)% 2,819  7,459  (62.21)%
NET INCOME $4,196  $716  486.03% $14,710  $9,773  50.52%
Earnings attributable to noncontrolling interest 7    % 6    %
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' $4,189  $716  485.06% $14,704  $9,773  50.46%
EARNINGS PER SHARE - BASIC $0.89  $0.16  456.25% $3.14  $2.08  50.96%
EARNINGS PER SHARE - DILUTED $0.89  $0.15  493.33% $3.14  $2.08  50.96%
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 4,691,125  4,688,744  0.05% 4,690,254  4,705,602  (0.33)%
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED  4,691,125  4,782,244  (1.91)% 4,690,254  4,705,602  (0.33)%
DIVIDENDS DECLARED PER SHARE $0.47  $0.47  % $1.88  $1.88  %
                       
                       

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES

  Three Months Ended
  December 31, 2018 December 31, 2017
(Dollars in Thousands) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
ASSETS:            
Tax-exempt loans  $73,726  $553  2.98% $62,012  $609  3.90%
All other loans 1,310,303  14,391  4.36% 1,151,374  11,789  4.06%
Total loans  1,384,029  14,944  4.28% 1,213,386  12,398  4.05%
Taxable securities 121,598  1,207  3.97% 80,109  650  3.25%
Tax-exempt securities 28,382  231  3.26% 47,788  421  3.52%
Total securities 149,980  1,438  3.84% 127,897  1,071  3.35%
Interest-bearing deposits  3,399  19  2.22% 6,318  19  1.19%
Total interest-earning assets  1,537,408  16,401  4.24% 1,347,601  13,488  3.97%
Other assets  97,798      101,907     
TOTAL ASSETS $1,635,206      $1,449,508     
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:            
Savings  $164,891  26  0.06% $159,204  17  0.04%
Super Now deposits 216,170  320  0.59% 206,005  151  0.29%
Money market deposits 239,919  400  0.66% 263,003  236  0.36%
Time deposits 283,663  1,253  1.75% 220,331  711  1.28%
Total interest-bearing deposits 904,643  1,999  0.88% 848,543  1,115  0.52%
Short-term borrowings 121,327  753  2.43% 62,394  195  1.23%
Long-term borrowings 138,942  785  2.21% 75,373  360  1.87%
Total borrowings 260,269  1,538  2.31% 137,767  555  1.58%
Total interest-bearing liabilities 1,164,912  3,537  1.20% 986,310  1,670  0.67%
Demand deposits 312,511      305,867     
Other liabilities 15,448      14,258     
Shareholders’ equity 142,335      143,073     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY . $1,635,206      $1,449,508     
Interest rate spread     3.04%     3.30%
Net interest income/margin   $12,864  3.33%   $11,818  3.48%
                   


  Three Months Ended December 31,
  2018 2017
Total interest income $16,236  $13,138 
Total interest expense 3,537  1,670 
Net interest income 12,699  11,468 
Tax equivalent adjustment 165  350 
Net interest income (fully taxable equivalent) $12,864  $11,818 
         

PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATES

  Twelve Months Ended
  December 31, 2018 December 31, 2017
(Dollars in Thousands) Average
Balance
 Interest Average
Rate
 Average
Balance
 Interest Average
Rate
ASSETS:            
Tax-exempt loans $74,923  $2,242  2.99% $49,982  $1,924  3.85%
All other loans 1,250,521  52,229  4.18% 1,099,465  44,563  4.05%
Total loans 1,325,444  54,471  4.11% 1,149,447  46,487  4.04%
Taxable securities 100,915  3,828  3.79% 84,079  2,689  3.20%
Tax-exempt securities 36,279  1,089  3.00% 50,169  1,845  3.68%
Total securities 137,194  4,917  3.58% 134,248  4,534  3.38%
Interest-bearing deposits 3,005  58  1.93% 22,461  237  1.06%
Total interest-earning assets 1,465,643  59,446  4.06% 1,306,156  51,258  3.92%
Other assets 97,577      100,481     
TOTAL ASSETS $1,563,220      $1,406,637     
             
LIABILITIES AND SHAREHOLDERS’ EQUITY:            
Savings $164,844  75  0.05% $157,851  62  0.04%
Super Now deposits 225,885  1,033  0.46% 200,436  528  0.26%
Money market deposits 240,541  1,214  0.50% 274,546  949  0.35%
Time deposits 259,286  4,048  1.56% 210,608  2,544  1.21%
Total interest-bearing deposits 890,556  6,370  0.72% 843,441  4,083  0.48%
Short-term borrowings 85,086  1,757  2.04% 25,984  234  0.89%
Long-term borrowings 128,127  2,809  2.16% 78,745  1,580  1.98%
Total borrowings 213,213  4,566  2.11% 104,729  1,814  1.71%
Total interest-bearing liabilities 1,103,769  10,936  0.99% 948,170  5,897  0.62%
Demand deposits 303,606      302,651     
Other liabilities 18,742      14,398     
Shareholders’ equity 137,103      141,418     
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $1,563,220      $1,406,637     
Interest rate spread     3.07%     3.30%
Net interest income/margin   $48,510  3.31%   $45,361  3.47%
                   


  Twelve Months Ended December 31,
  2018 2017
Total interest income  $58,746  $49,977 
Total interest expense  10,936  5,897 
Net interest income  47,810  44,080 
Tax equivalent adjustment 700  1,281 
Net interest income (fully taxable equivalent)  $48,510  $45,361 
         


(Dollars in Thousands, Except Per Share Data) Quarter Ended
  12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017
Operating Data          
Net income $4,189  $3,826  $3,480  $3,208  $716 
Net interest income 12,699  12,255  11,703  11,153  11,468 
Provision for loan losses 760  480  335  160  125 
Net security (losses) gains (165) (24) 15  (40) 107 
Non-interest income, ex. net security (losses) gains 2,594  2,613  2,347  2,368  2,482 
Non-interest expense 9,532  9,681  9,517  9,524  9,248 
           
Performance Statistics          
Net interest margin 3.33% 3.30% 3.32% 3.31% 3.48%
Annualized return on average assets 1.02% 0.96% 0.91% 0.86% 0.20%
Annualized return on average equity 11.77% 10.94% 10.07% 9.18% 2.00%
Annualized net loan charge-offs to average loans 0.08% 0.05% 0.04% 0.06% 0.07%
Net charge-offs 266  171  137  182  200 
Efficiency ratio 61.9% 64.6% 67.2% 69.8% 65.7%
           
Per Share Data          
Basic earnings per share  $0.89  $0.82  $0.74  $0.68  $0.16 
Diluted earnings per share  0.89  0.82  0.74  0.68  0.15 
Dividend declared per share  0.47  0.47  0.47  0.47  0.47 
Book value 30.59  29.96  29.66  29.45  29.47 
Common stock price:          
High 44.18  46.27  46.92  45.56  49.79 
Low 38.66  43.22  41.29  39.61  45.65 
Close 40.24  43.45  44.78  42.31  46.58 
Weighted average common shares:          
Basic 4,691  4,691  4,690  4,689  4,689 
Fully Diluted 4,691  4,691  4,703  4,689  4,782 
End-of-period common shares:          
Issued  5,012  5,011  5,011  5,010  5,009 
Treasury  320  320  320  320  320 
                


(Dollars in Thousands, Except Per Share Data) Quarter Ended
  12/31/2018 9/30/2018 6/30/2018 3/31/2018 12/31/2017
Financial Condition Data:          
General          
Total assets $1,684,771  $1,670,348  $1,603,273  $1,526,745  $1,474,492 
Loans, net 1,370,920  1,355,762  1,318,039  1,267,912  1,233,756 
Goodwill 17,104  17,104  17,104  17,104  17,104 
Intangibles 1,162  1,233  1,304  1,382  1,462 
Total deposits 1,219,903  1,210,477  1,191,019  1,192,454  1,146,320 
Noninterest-bearing  320,814  313,111  311,194  304,261  303,316 
Savings 166,063  164,449  166,183  166,243  160,698 
NOW  207,819  223,963  216,109  240,259  215,021 
Money Market  238,596  238,131  245,081  235,381  237,818 
Time Deposits  286,611  270,823  252,452  246,310  229,467 
Total interest-bearing deposits  899,089  897,366  879,825  888,193  843,004 
Core deposits* 933,292  939,654  938,567  946,144  916,853 
Shareholders’ equity 143,536  140,538  139,134  138,192  138,192 
           
Asset Quality          
Non-performing loans $16,572  $8,739  $7,132  $7,641  $7,268 
Non-performing loans to total assets 0.98% 0.52% 0.44% 0.50% 0.49%
Allowance for loan losses 13,837  13,343  13,034  12,836  12,858 
Allowance for loan losses to total loans 1.00% 0.97% 0.98% 1.00% 1.03%
Allowance for loan losses to non-performing loans 83.50% 152.68% 182.75% 167.99% 176.91%
Non-performing loans to total loans 1.20% 0.64% 0.54% 0.60% 0.58%
           
Capitalization          
Shareholders’ equity to total assets  8.52% 8.41% 8.68% 9.05% 9.37%
 
* Core deposits are defined as total deposits less time deposits
 
 

Reconciliation of GAAP and Non-GAAP Financial Measures

  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
(Dollars in Thousands, Except Per Share Data) 2018 2017 2018 2017
GAAP net income $4,189  $716  $14,704  $9,773 
Less: net securities (losses) gains, net of tax (130) 71  (169) 391 
Add: Effect of deferred tax asset revaluation   2,734    2,734 
Non-GAAP operating earnings $4,319  $3,379  $14,873  $12,116 
         
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2018 2017 2018 2017
Return on average assets (ROA)  1.02% 0.20% 0.94% 0.69%
Less: net securities (losses) gains, net of tax (0.03)% 0.02% (0.01)% 0.02%
Add: Effect of deferred tax asset revaluation % 0.75% % 0.19%
Non-GAAP operating ROA 1.05% 0.93% 0.95% 0.86%
         
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2018 2017 2018 2017
Return on average equity (ROE) 11.77% 2.00% 10.72% 6.91%
Less: net securities (losses) gains, net of tax (0.35)% 0.20% (0.12)% 0.27%
Add: Effect of deferred tax asset revaluation % 7.65% % 1.93%
Non-GAAP operating ROE 12.12% 9.45% 10.84% 8.57%
         
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2018 2017 2018 2017
Basic earnings per share (EPS) $0.89  $0.16  $3.14  $2.08 
Less: net securities (losses) gains, net of tax (0.03) 0.02  (0.03) 0.09 
Add: Effect of deferred tax asset revaluation   0.58    0.58 
Non-GAAP basic operating EPS $0.92  $0.72  $3.17  $2.57 
     
  Three Months Ended
December 31,
 Twelve Months Ended
December 31,
  2018 2017 2018 2017
Diluted EPS $0.89  $0.15  $3.14  $2.08 
Less: net securities (losses) gains, net of tax (0.03) 0.02  (0.03) 0.09 
Add: Effect of deferred tax asset revaluation   0.58    0.58 
Non-GAAP diluted operating EPS $0.92  $0.71  $3.17  $2.57