Penns Woods Bancorp, Inc. Reports Fourth Quarter 2006 and Full-Year Earnings.JERSEY SHORE, Pa. -- Penns Woods Bancorp, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :PWOD) today reported net income for the three and twelve months ended December 31, 2006 of $2,294,000 and $9,647,000 compared to $2,478,000 and $10,901,000 for the same periods of 2005. Basic and dilutive earnings per share for the three months ended December 31, 2006 were $0.59 as compared to $0.63 basic and $0.62 dilutive for the three months ended December 31, 2005. The twelve months ended December 31, 2006 had basic and diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $2.45 as compared to $2.75 basic and $2.74 dilutive for the twelve months ended December 31, 2005. Return on average assets and return on average equity were 1.56% and 12.18% for the three months ended December 31, 2006 as compared to 1.75% and 13.31% for the corresponding period of 2005. Earnings for the twelve months ended December 31, 2006 correlate to a return on average assets and return on average equity of 1.67% and 12.93% as compared to 1.97% and 14.54% for the twelve months ended December 31, 2005. Net income from core operations ("operating earnings Operating Earnings Profits after subtracting expenses such as marketing, cost of goods sold, administration and general operating costs from revenue. Notes: Tax and interest expenses are not subtracted - operating earnings are synonymous with EBIT (earnings before "), which excludes net security gains, amounted to $2,100,000 and $8,539,000 for the three and twelve months ended December 31, 2006 as compared to operating earnings of $2,256,000 and $9,456,000 for the same periods of 2005. Comparatively, earnings in 2006 have been impacted by a decline in the net interest margin, increased operating costs operating costs npl → gastos mpl operacionales due in part to the opening of our North Atherton Street branch in State College in May 2005 and the opening of our Montoursville branch in August 2006, and by operational growth. In addition, operating earnings for the twelve months ended December 31, 2005 were impacted by nonrecurring additional bank-owned life insurance revenue of $196,000 related to a death benefit. The net interest margin for the three and twelve months ended December 31, 2006 was 3.97% and 4.06%, compared to 4.20% and 4.29% for the corresponding periods of 2005. The decrease in the net interest margin for the three and twelve month periods was due to the cost of interest bearing liabilities increasing at approximately twice the rate of the increase in the yield on earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin . The increase in the cost of interest bearing liabilities was driven primarily by the Federal Open Market Committee rate increases over the past two years, which led to the cost of time deposits and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. borrowings increasing 117 basis points ("bp") and 86 bp, respectively, for the last three months of 2006 and 109 bp and 144 bp, respectively, for the entire year. "2006 was a challenging year due to the continued flat to inverted yield curve Inverted Yield Curve Usually a chart showing long-term debt instruments that have lower yields than short-term debt instruments. It is sometimes referred to as a negative yield curve. , continued margin compression, and increased competition ranging from banks to brokerage houses. We tackled each challenge head on while following the Penns Woods way of doing business, great customer service and continued strong credit quality. Customer service was improved by the addition of a branch in Montoursville and placement of several cash dispenser units within our market area. We made a strategic decision to not compromise our credit standards Credit Standards The guidelines a company follows to determine whether a credit applicant is creditworthy. in order to increase loans outstanding or to increase the yield on loans to combat the rate pressure on interest bearing liabilities. Maintaining our credit quality led to net loans increasing a healthy $21.4 million during 2006 while credit quality remained strong with nonperforming loans to total loans of 0.14% at December 31, 2006 and net loan charge-offs to average loans of 0.04% for the year. We have also utilized short-term certificates of deposit and brokered deposits to provide the funding necessary to reduce the amount of short-term borrowings on the balance sheet," commented Ronald A. Walko, President and Chief Executive Officer of Penns Woods Bancorp, Inc. Total assets increased $23,617,000 to $592,285,000 at December 31, 2006 as compared to December 31, 2005. A continued emphasis on quality loan origination The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. has led to net growth in the loan portfolio of $21,440,000, or 6.4%, since December 31, 2005. The majority of the loan growth has occurred in the commercial real estate portion of the portfolio. The available for sale investment portfolio was strategically reduced $1,818,000 as the cash flow from the portfolio assisted in meeting the funding needs of new higher yielding commercial loans. In addition, a significant investment in the construction of low-income housing units was undertaken in 2006 as part of the company's strategic commitment to the communities where it provides banking services. Total deposits increased 12.1% to $395,191,000 at December 31, 2006 as compared to December 31, 2005, as new relationship based deposit products were launched, short-term certificate of deposits were gathered, and brokered deposits were utilized. The funding generated by the deposit gathering initiatives resulted in short-term borrowings decreasing $19,306,000 from December 31 2005 to December 31, 2006. Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. increased $675,000 to $74,594,000 at December 31, 2006 as net income outpaced dividends paid, accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. comprehensive income increased $710,000, and $2,929,000 in treasury stock was strategically purchased as part of the previously announced stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. plan. The increase in accumulated comprehensive income is the result of an increase in market value, or net unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. , of the investment portfolio at December 31, 2006 as compared to December 31, 2005, offset by the net excess of the projected benefit obligation Projected benefit obligation (PBO) A measure of a pension plan's liability at the calculation date assuming that the plan is ongoing and will not terminate in the foreseeable future. Related: Accumulated benefit obligation. over the market value of the plan assets of the defined benefit pension plan. The current level of shareholders' equity equates to a book value per share of $19.12 at December 31, 2006 as compared to $18.59 at December 31, 2005 and an equity to asset ratio of 12.59% at December 31, 2006. During the twelve months ended December 31, 2006 cash dividends of $1.73 per share were paid to shareholders. The dividends represented an 11% increase or $0.17 per share over the dividends paid during the comparable period of 2005. "We remain committed to building shareholder value by providing a healthy dividend yield in excess of four percent and by conducting stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. on the open market. The dividends paid during 2006 have not only met our continued objective to provide a cash dividend resulting in a return exceeding four percent, but also represent an increase of 11% over 2005. We have also increased the frequency of our stock repurchases on the open market. During 2006 we purchased 76,400 shares on the open market as compared to 14,000 during 2005. The continued strength of our earnings has allowed us to continue and maintain these programs," commented Mr. Walko. The range of closing prices for Penns Woods Bancorp, Inc. stock was between $36.20 and $38.59 during the three months ended December 31, 2006 and between $36.20 and $39.50 during the twelve months ended December 31, 2006. Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates thirteen branch offices providing financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. in Lycoming, Clinton, and Centre Counties. Investment and insurance products are offered through the bank's subsidiary, The M Group, Inc. D/B/A D/B/A Doing Business As The Comprehensive Financial Group. NOTE: This press release contains financial information determined by methods other than in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with U.S. Generally Accepted Accounting Principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See 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. Because certain of these 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. as well as by the Financial Accounting Standards Board Financial Accounting Standards Board (FASB) Board composed of independent members who create and interpret Generally Accepted Accounting Principles (GAAP). , 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. Previous press releases and additional information can be obtained from the Company's website at www.jssb.com. THIS INFORMATION IS SUBJECT TO YEAR-END AUDIT ADJUSTMENT [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] [TABLE OMITTED] |
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