secQ32000
FORM 10-Q QUARTERLY REPORT
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 10
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 2000 Commission file number
0-17077
PENNS WOODS BANCORP, INC.
Incorporated in Pennsylvania
Main Office 115 South Main Street
Jersey Shore, Pennsylvania, 17740
Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that
Registrant was required to file such reports), and (2)
has been subject to such filing requirements for the
past 90 days.
YES [ X ] NO[ ]
On March 31, 2000 were were 3,125,384 shares of the
Registrant's common stock outstanding.
PART I FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
AT DATES INDICATED
March 31, December 31,
2000 1999
--------------------------------
(IN THOUSANDS)
<S> <C> <C>
ASSETS:
Cash and due from banks $12,888 $12,474
Investment securities available for sale 110,181 113,305
Investment securities held to maturity 3,000 3,014
Loans, net of unearned discount 234,537 233,823
Allowance for loan and lease losses (2,865) (2,823)
Loans, net 231,672 231,000
Bank premises and equipment, net 4,853 4,888
Accrued interest receivable 2,106 2,283
Foreclosed assets held for sale 98 67
Other assets 7,595 6,711
--------------------------------
TOTAL ASSETS $372,393 $373,742
================================
LIABILITIES:
Demand deposits $44,541 $43,045
Interest-bearing demand deposits 49,261 44,671
Savings deposits 48,103 46,282
Time deposits 124,279 121,575
--------------------------------
Total deposits $266,184 $255,573
Short-term borrowings 29,360 41,641
Other borrowings 27,278 27,278
Accrued interest payable 1,119 1,123
Other liabilities 2,538 2,042
--------------------------------
Total liabilities $326,479 $327,657
--------------------------------
SHAREHOLDERS' EQUITY:
Common stock, par value $10; 10,000,000 shares
authorized and 3,130,344 and 3,128,332
shares issued $31,303 $31,283
Additional paid-in capital 18,204 18,165
Retained earnings 661 (166)
Accumulated other comprehensive loss (3,984) (2,927)
Less: Treasury stock at cost, 4,960 and 4,960 (270) (270)
--------------------------------
Total shareholders' equity $45,914 $46,085
--------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $372,393 $373,742
================================
</TABLE>
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
FOR THE PERIODS INDICATED
<TABLE>
<CAPTION>
THREE MONTHS THREE MONTHS QUARTER QUARTER
ENDED ENDED ENDED ENDED
March 31, 2000 March 31, 1999 March 31, 2000 March 31, 1999
-----------------------------------------------------------------
(IN THOUSANDS EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $5,139 $4,826 $5,139 $4,826
Interest and dividends on investments: -----------------------------------------------------------------
Taxable interest 998 827 998 827
Nontaxable interest 456 376 456 376
Dividends 226 185 226 185
-----------------------------------------------------------------
Total interest and dividends
on investments 1,680 1,388 1,680 1,388
-----------------------------------------------------------------
Total interest income 6,819 6,214 6,819 6,214
-----------------------------------------------------------------
INTEREST EXPENSE:
Interest on deposits 2,109 2,020 2,109 2,020
Interest on short-term borrowings 477 154 477 154
Interest on other borrowings 345 350 345 350
-----------------------------------------------------------------
Total interest expense 2,931 2,524 2,931 2,524
-----------------------------------------------------------------
Net interest income 3,888 3,690 3,888 3,690
Provision for loan losses 78 78 78 78
-----------------------------------------------------------------
Net interest income after provision for
loan losses 3,810 3,612 3,810 3,612
-----------------------------------------------------------------
OTHER OPERATING INCOME:
Service charges 374 310 374 310
Securities gains 161 185 161 185
Other income 38 67 38 67
----------------------------------------------------------------
Total other operating income 573 562 573 562
-----------------------------------------------------------------
OTHER OPERATING EXPENSES:
Salaries and employee benefits 1,215 1,138 1,215 1,138
Occupancy expense, net 205 158 205 158
Furniture and equipment expense 206 163 206 163
Other expenses 745 809 745 809
-----------------------------------------------------------------
Total other operating expenses 2,371 2,268 2,371 2,268
-----------------------------------------------------------------
INCOME BEFORE TAXES 2,012 1,906 2,012 1,906
INCOME TAX PROVISION 466 431 466 431
-----------------------------------------------------------------
NET INCOME 1,546 1,475 1,546 1,475
=================================================================
EARNINGS PER SHARE - BASIC 0.49 0.47 0.49 0.47
=================================================================
EARNINGS PER SHARE - DILUTED 0.49 0.47 0.49 0.47
=================================================================
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 3,124,697 3,120,884 3,124,697 3,120,884
=================================================================
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 3,124,697 3,132,055 3,124,697 3,132,055
=================================================================
**Weighted average shares used for computation of net income per share reflect
the issuance of a 10% stock dividend on June 8, 1999.
</TABLE>
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31,2000
(IN THOUSANDS EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON ADDITIONAL OTHER TOTAL
STOCK PAID-IN RETAINED COMPREHENSIVE TREASURY SHAREHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS LOSS STOCK EQUITY
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1999 3,128,332 $31,283 $18,165 ($166) ($2,927) ($270) $46,085
Net income for the three months
ended March 31, 2000 1,546 1,546
Dividends declared, $0.23 (719) (719)
Stock options exercised 2,012 20 39 59
Net change in unrealized loss on
investments available for sale (1,057) (1,057)
-------------------------------------------------------------------------------------
Balance, March 31, 2000 3,130,344 $31,303 $18,204 $661 ($3,984) ($270) $45,914
=====================================================================================
</TABLE>
PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT
OF CASH FLOWS
FOR THE QUARTERS ENDED MARCH 31, 2000 AND MARCH 31, 1999
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
---------------------------------
(IN THOUSANDS)
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $1,546 $1,475
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation 158 107
Provision for loan losses 78 78
Accretion and amortization of investment security discounts
and premiums (121) (13)
Securities gains, net (161) (185)
Gain on sale of foreclosed assets - (3)
Increase in all other assets (158) (230)
Increase all other liabilities 495 361
---------------------------------
Net cash provided by operating activities 1,837 1,590
---------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of securities available for sale (21,065) (19,852)
Proceeds from sales of securities available for sale 20,883 10,994
Proceeds from calls and maturities of securities available for 2,000 -
Purchase of securities held to maturity - (25)
Proceeds from calls and maturities of securities held to maturity - 1,025
Net increase in loans (805) (952)
Proceeds from the sale of foreclosed assets 24 43
Acquisition of bank premises and equipment (123) (255)
---------------------------------
Net cash (used in) provided by investing activities 914 (9,022)
---------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in interest-bearing deposits 9,115 1,787
Net increase (decrease) in noninterest-bearing deposits 1,496 (4,339)
Net increase (decrease) in short-term borrowings (12,281) 4,944
Proceeds from long-term borrowings - 5,004
Dividends paid (719) (567)
Stock options exercised 52 -
---------------------------------
Net cash (used in) provided by financing activities (2,337) 6,829
---------------------------------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS 414 (603)
CASH AND CASH EQUIVALENTS, BEGINNING 12,474 12,297
---------------------------------
CASH AND CASH EQUIVALENTS, ENDING $12,888 $11,694
=================================
</TABLE>
[FN]
PENNS WOODS BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. Basis of Presentation
The interim financial statements are unaudited
but, in the opinion of management, reflect all
adjustments necessary for the fair presentation of
results for such periods. All of those adjustments are
of a normal, recurring nature. The results of operations
for any interim period are not necessarily indicative
of results for the full year. These financial
statements should be read in conjunction with
financial statements and notes thereto contained in
the Company's annual report for the year ended
December 31, 1999.
NOTE 2. Comprehensive Income
The components of other comprehensive income
and related tax effects are as follows:
<TABLE>
<CAPTION>
MARCH 31, MARCH 31,
2000 1999
---------------------------------
(IN THOUSANDS)
<S> <C>
Change in net unrealized (loss) on securities available for sale,
net of tax benefit of $490 for 2000 and $537 for 1999 (951) (1,043)
---------------------------------
Less: Reclassification adjustment for realized gains included
in net income, net of taxes of $55 for 2000 an 106 122
---------------------------------
Net unrealized losses net of tax ($1,057) ($1,165)
=================================
</FN>
</TABLE>
EARNINGS SUMMARY
Interest Income
For the three months ended March 31, 2000,
total interest income increased by $605,000 or
9.74% compared to the same period in 1999.
This increase is due to an increase of $313,000 in
interest and fees on loans and an increase in
total interest and dividends on investments of
$292,000.
The increase in interest and fees on loans of
$313,000 was primarily due to the effect of the 50
basis point increase in prime rate during the first
quarter . Interest and dividends on investments
increased due to the net effect of a $171,000 increase
in taxable interest, an $80,000 increase in nontaxable
interest and an increase in dividend income of
$41,000.
Interest Expense
For the three months ended March 31, 2000
total interest expense increased $407,000 or
16.13% over the same period in 1999. The overall
increase in interest expense is the result of an
$89,000 increase in interest paid on deposits, mainly
due to volume; a $323,000 increase in interest
expense paid on short-term borrowings, significantly
due to the increase of overnight FHLB borrowings
during the first quarter of 2000 compared to the first
quarter of 1999; and a slight decrease of $5,000 in
interest paid on other borrowings, due to a $500,000
FHLB loan that was paid off during the fourth quarter
of 1999.
Provision for Loan Losses
The provision for loan losses totaled $78,000
for the three months ended March 31, 2000. The
provision for the same period in 1999 also totaled
$78,000.
As of the first quarter of 2000, charge offs
exceeded recoveries by $36,000 compared to
the first quarter of 1999 when charge offs
exceeded recoveries by $28,000.
Senior Management utilizes several
different methods to determine the adequacy
of the loan loss allowance and to establish
quarterly provisions. Among these methods
is the analysis of the most recent five
year average loss history, the coverage of
non-performing loans provided by the
allowance, an estimate of potential loss in
homogeneous pools of loans and the internal
credit rating assigned to watch and problem
loans.
In addition to the preceding, senior
management also reviews macro portfolio
risks such as the absence of
concentrations, absence of foreign credit
exposure and growth objectives in fine
tuning the allowance and provisions.
The ratio of non-accruing loans and those
accruing but delinquent more than 90 days
(collectively called "non-performing"
loans) to the allowance for loan losses
stood at .30 times at March 31, 2000 a
decrease in coverage from the .19 times at
December 31, 1999. The overall increase in
non-performing loans totaled $341,000. Non-
performing loans secured by real estate accounted
for $373,000 of the overall increase whereas
non-performing commercial and agricultural loans
and installment loans declined $24,000 and $8,000,
respectively. Based upon this analysis as well as
as well as the others noted above, senior
management has concluded that the allowance
for loan losses is adequate.
Other Operating Income
Other operating income for the three months
ended March 31, 2000 increased $11,000.
This decrease is due to the net effect of an
increase in service charges collected of
$64,000, a decrease in securities gains
realized of $24,000 and a decrease in
other income of $29,000.
The increase in service charges was mainly
a result of an increase in service charges
collected on deposit accounts. Volume as well as
fee increases for overdraft and stop payment
services, effective December 1, 1999, effected the
amount of service charges on deposit accounts.
In addition, there was an increase in charges
collected during the first quarter of 2000 when
compared to the first quarter of 1999 due to a
service charge relating to ATM usage that was put
into effect in late March, 1999.
Realized gains were on sales
of bonds that were sold in effort to better
match the Bank's rate-sensitive assets and
rate-sensitive liabilities given the current
economic conditions. In addition, gains
were realized on partial sales of equity securities
that have been in the portfolio long-term
that had reached what management had
determined to be their maximum potential.
Other Operating Expense
For the three months ended March 31, 2000
total other operating expenses increased $103,000
over the same period in 1999.
Employee salaries and benefits
increased $77,000 as a result of normal increases in
salary levels.
Occupancy expense increased $47,000 and
furniture and equipment expense increased
$43,000. The increase in occupancy
expense can be attributed to an increases
in rental and depreciation expenses related to
the opening of the full-service branch office in
Zion, Pennsylvania, on May 8, 1999 in addition to
an overall increase in maintenance and repairs
expense.
The $43,000 increase in furniture and
equipment expense can be attributed mainly
to the impelmentation of Internet and Telephone
Banking. General maintenance and depreciation
expenses also contributed to the increase.
Expenses included under the other expenses
heading are such items as: advertising, postage,
maintenance, FDIC, other insurance,
Pennsylvania State shares tax,
legal and professional fees, telephone,
printing and supplies and other general and
administrative expenses. An overall decrease
in other expenses totaled $64,000. This
decrease can be largely attributed to approximately
$116,000 of non-recurring expenses related to the
acquisition of the First National Bank of Spring Mills
that were incurred during the first quarter of 1999,
coupled with increases in other operating expenses
during the first quarter of 2000.
Provision for Income Taxes
Provision for income taxes for the three
months ended March 31, 2000 resulted in an
effective income tax rate of 23.16%
compared to 22.61% for the corresponding
period in 1999. The increase noted is
due to the overall increase in taxable income for the
period.
ASSET/LIABILITY MANAGEMENT
Assets
At March 31, 2000, cash and investment securities
totaled $126,069,000 or a net decrease of $2,724,000
over the corresponding balance at December 31, 1999.
Investment securities decreased $3,138,000 while
cash increased $414,000. During this period, net
loans increased by $672,000 to $231,672,000.
The decrease in investment securities is primarily
due to the change in the net unrealized loss from
$4,435,000 at December 31, 1999 to $6,037,000 at
March 31, 2000. This decrease, $1,602,000, combined
with purchases of equity securities during the
first quarter account for the overall decrease
in investment securities.
Management evaluates credit risk,
anticipated economic conditions and other
relevant factors impacting the quality of
the loan portfolio in order to establish an
adequate loan-loss allowance. An internal
credit review committee monitors loans in
accordance with Federal supervisory standards
In addition, management frequently reviews and
utilizes the results of examinations and reports
provided by the committee, regulators, and
independent loan review consultants, on the
adequacy of the loan loss allowance.
Accordingly, on a quarterly basis,
management determines an appropriate
provision for possible loan losses from
earnings in order to maintain allowance
coverage relative to potential losses.
Management has reviewed the loan portfolio
for credit risk related to the Year 2000 compliance
and found no material effect to the allowance.
The allowance for loan losses totaled
$2,865,000 at March 31, 2000, an increase of
$42,000 over the balance at December 31,
1999. For the three months ended
March 31, 2000, the provision for loan
losses totaled $78,000. As a percent of loans,
the allowance for loan losses totaled 1.22% at
March 31, 2000 and 1.21% at December 31, 1999.
Loans accounted for on a non-accrual basis
totaled $536,000 and $284,000 at March 31, 2000 and
December 31, 1999 respectively.
Accruing loans, contractually delinquent 90
days or more were $330,000 at March 31, 2000
and $241,000 at December 31, 1999.
These loans are predominately secured by
first lien mortgages on residential real
estate where appraisal values mitigate any
potential loss of interest and principal.
The ratio of non-accruing loans and those
accruing but delinquent more than 90 days to
the allowance for loan losses stood at .30
times at March 31, 2000 and .19 times at
December 31, 1999. Presently the portfolio
has no loans that meet the definition of
"trouble debt restructurings" under FAS 15.
A watch list of potential problem loans is
maintained and updated quarterly by an
internal credit review committee. At this
time there are no credits of substance that
have the potential to become more than 90
days delinquent.
The Bank has not had nor presently has any
foreign outstandings. In addition, no known
concentrations of credit presently exist.
At March 31, 200 the balance of other real
estate was $98,000 compared to $67,000 at
December 31, 1999. During the first quarter two
properties that were placed into other real estate
and one property that was previously in other real
estate was sold.
Deposits
At March 31, 2000 total deposits amounted to
$266,184,000 representing an increase of
$10,611,000, or 4.15%, from total deposits
at December 31, 1999.
Other Liabilities
At March 31, 2000, other liabilities
totaled $2,538,000 or a $496,000 increase
over the balance at December 31, 1999. This
increase is primarily due to an increase in
accrued taxes and accrued expenses.
Capital
The adequacy of the Company's capital is
reviewed on an ongoing basis with reference
to the size, composition and quality of the
Company's resources and regulatory
guidelines. Management seeks to maintain a
level of capital sufficient to support
existing assets and anticipated asset
growth, maintain favorable access to capital
markets and preserve high quality credit
ratings. The capital requirements of the
Pennsylvania Department of Banking are 6%.
The capital requirements of the Federal
Deposit Insurance Corporation are:
1. Regulatory capital to total assets 6%.
2. Primary capital to total assets 5 1/2%.
Regulatory capital to total assets was 12.33% for
March 31, 2000 and December 31, 1999.
Primary capital to total assets at March 31, 2000
was 13.10% compared to 13.09% at
December 31, 1999.
The Federal Reserve Board, the FDIC and the
OCC have issued certain risk-based capital
guidelines, which supplement existing
capital requirements. The guidelines
require all United States banks and bank
holding companies to maintain a minimum
risk-based capital ratio of 8.00% (of which
at least 4.00% must be in the form of common
stockholders' equity). Assets are assigned
to five risk categories, with higher levels
of capital being required for the categories
perceived as representing greater risk. The
required capital will represent equity and
(to the extent permitted) nonequity capital
as a percentage of total risk-weighted
assets. The risk-based capital rules are
designed to make regulatory capital
requirements more sensitive to differences
in risk profiles among banks and bank
holding companies and to minimize
disincentives for holding liquid assets.
Capital is being maintained in compliance
with risk-based capital guidelines.
The Company's Tier 1 Capital to total risk
weighted assets ratio is 20.28% and the
total capital ratio to total risk weighted
assets ratio is 21.47%.
Liquidity and Interest Rate Sensitivity
The asset/liability committee addresses the
liquidity needs of the Bank to see that
sufficient funds are available to meet
credit demands and deposit withdrawals as
well as to the placement of available funds
in the investment portfolio. In assessing
liquidity requirements, equal consideration
is given to the current position as well as
the future outlook.
The following liquidity measures are
monitored and kept within the limits cited.
1. Net Loans to Total Assets, 70% maximum
2. Net Loans to Total Deposits, 92.5% maximum
3. Net Loans to Core Deposits, 100% maximum
4. Investments to Total Assets, 40% maximum
5. Investments to Total Deposits, 50% maximum
6. Total Liquid Assets to Total Assets, 25% minimum
7. Total Liquid Assets to Total Liabilities, 25% minimum
8. Net Core Funding Dependence, 15% maximum
The Bank has maintained a liquidity level at or above the
guidelines of the FDIC and the Pennsylvania Department
of Banking. The Bank has available to it Federal Funds
lines of credit totalling $8,000,000 from correspondent banks.
In addition, the Bank has an agreement with the Federal
Home Loan Bank of Pittsburgh that enables the Bank
to receive advances up to $86,457,000 through
the Federal Home Loan Bank's "Open Repo Plus", revolving
line of credit program, with commitment up to one year.
All of the funding mentioned is available to the Bank,
should the need for short-term funds arise.
The following table sets forth the Bank's interest rate
sensitivity as of March 31, 2000:
<TABLE>
<CAPTION>
AFTER ONE AFTER TWO AFTER
WITHIN BUT WITHIN BUT WITHIN FIVE
ONE YEAR TWO YEARS FIVE YEARS YEARS
<S> <C> <C> <C> <C>
Earning assets: (1) (2)
Investment securities (1) $10,068 $10,224 $22,919 $76,036
Loans (2) 80,927 30,078 99,269 24,264
------------------------------------------------------------------
Total earning assets 90,995 40,302 122,188 100 ,300
Deposits (3) 101,025 42,982 62,093 15,542
Borrowings 29,591 797 25,000 1,250
------------------------------------------------------------------
Total interest bearing liabili 130,616 43,779 87,093 16,792
Net non-interest bearing
funding (4) 13,255 10,085 24,552 27,613
------------------------------------------------------------------
Total net funding sources 143,871 53,864 111,645 44,405
Excess assets (liabilities) (52,876) (13,562) 10,543 55,895
Cumulative excess
assets (liabilities) (52,876) (66,438) (55,895) 0
<FN>
(1) Investment balances reflect estimated prepayments
on mortgage-backed securities.
(2) Loan balances include annual repayment assumptions
based on projected cash flow from the loan portfolio.
The cash flow projections are based on the terms of
the credit facilities and estimated prepayments on
fixed rate mortgage loans. Loans include loans held
for resale.
(3) Adjustments to the interest sensitivity of Savings,
NOW and MMDA account balances reflect managerial
assumptions based on historical experience,
expected behavior in future rate environments and
the Bank's positioning for these products.
(4) Net non-interest bearing funds is the sum of non-interest
bearing liabilities and shareholders' equity minus
non-interest earning assets and reflect managerial
assumptions as to the appropriate investment
maturities for these sources.
In this analysis the company examines the
result of a 100 and 200 basis point change in
market interest rates and the effect on net
interest income. It is assumed that the change is
instantaneous and that all rates move in a
parallel manner. In addition, it is assumed
that rates on core deposit products such as NOW's,
savings accounts, and the MMDA accounts
will be adjusted by 50% of the assumed rate
change. Assumptions are also made concerning
prepayment speeds on mortgage loans and
mortgage securities. The results of this rate
shock are a useful tool to assist the Company in
assessing interest rate risk inherent in its
balance sheet. Below are the results of this
rate shock analysis as of March 31, 2000:
Net Interest Income
Change in Rates Change (After tax)
-200 716
-100 405
+100 (425)
+200 (796)
The model utilized to create the report
presented above makes various estimates
at each level of interest rate change regarding
cash flow from principal repayment on loans and
mortgage-backed securities and or call activity
on investment securities. Actual results could
differ significantly from these estimates which
would result in significant differences in the
calculated projected change. In addition, the limits
stated above do not necessarily represent
the level of change under which management
would undertake specific measure to realign its
portfolio in order to reduce the projected
level of change.
Generally, management believes the
Company is well positioned to respond
expeditiously when the market interest rate outlook
changes.
</FN>
</TABLE>
Inflation
The asset and liability structure of a financial
insitution is primarily monetary in nature,
therefore, interest rates rather than inflation
have a more significant impact on the Corporation's
performance. Interest rates are not always
affected in the same direction or magnitude as
prices of other goods and services, but are
reflective of fiscal policy initiatives or economic
factors which are not measured by a price
index.
CAUTIONARY STATEMENT FOR PURPOSES OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995
This Report contains certain "forward-looking
statements" including statements concerning
plans, objectives, future events or performance
and assumptions and other statements which are
other than statements of historical fact. Penns
Woods Bancorp, Inc. and its subsidiaries (the
"Company") wishes to caution readers that the
following important factors, among others, may
have affected and could in the future affect
the Company's actual results and could
cause the Company's actual results for subsequent
periods to differ materially from those
expressed in any forward-looking statement
made by or on behalf of the Company herin: (i) the
effect of changes in laws and regulations,
including federal and state banking laws and
regulations, which the Company must comply,
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 nonbank 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.
In reference to the attached financial statements, all
adjustments are of a normal recurring nature pursuant
to Rule 10-01 (b) (8) of Regulation S-X.
Part II. OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-K.
Number Description
- ------------------------------
(11) Statement Regarding Computation of Per Share Earnings
(27) Financial Data Schedule
(99) Independent Accountants' Report
SIGNATURES
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 thereunto duly authorized.
PENNS WOODS BANCORP, INC.
(Registrant)
Date: May 12, 2000 /s/ Ronald A. Walko
----------------
Ronald A. Walko, Executive
Vice President
and Chief Executive Officer
Date: May 12, 2000 /s/ Sonya E. Scott
----------------
Sonya E. Scott, Secretary
Description
- ------------------------------
(11) Statement Regarding Computation of Per Share Earnings
(27) Financial Data Schedule
(99) Independent Accountants' Report
EXHIBIT 11
<TABLE>
STATEMENT OF COMPUTATION OF EARNING PER SHARE
FOR THE PERIOD ENDED 3/31/00
LESS FRACTION
SHARES FRACTIONAL OF WEIGHTED
DATE OUTSTANDING RESTATEMENT SHARES YEAR SHARES
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
1/01/00 - 1/3 3,123,372 - - 31/91 1,064,005.9
2/01/00 - 2/1 3,125,372 - - 13/91 446,481.7
2/14/00 - 3/3 3,125,384 - - 47/91 1,614,209.3
WEIGHTED SHARES OUTSTANDING 3/31/00 3,124,697
=================
<S> <C> <C>
NET INCOME 3/31/00 $1,546,039
WEIGHTED SHARES OUTSTANDING 3/31/00 3,124,697
EARNINGS PER SHARE 3/31/00 - BASIC $0.49
=================
NET INCOME 3/31/00 $1,546,039
WEIGHTED SHARES OUTSTANDING 3/31/00 3,124,697
DILUTIVE EFFECT OF STOCK OPTIONS 3/31/00 -
3,124,697
EARNINGS PER SHARE 3/31/00 - DILUTED $0.49
=================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 12888
<INT-BEARING-DEPOSITS> 221643
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 110181
<INVESTMENTS-CARRYING> 3000
<INVESTMENTS-MARKET> 0
<LOANS> 234537
<ALLOWANCE> 2865
<TOTAL-ASSETS> 372393
<DEPOSITS> 266184
<SHORT-TERM> 29360
<LIABILITIES-OTHER> 3657
<LONG-TERM> 27278
0
0
<COMMON> 31303
<OTHER-SE> 14611
<TOTAL-LIABILITIES-AND-EQUITY> 372393
<INTEREST-LOAN> 5139
<INTEREST-INVEST> 1680
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 6819
<INTEREST-DEPOSIT> 2109
<INTEREST-EXPENSE> 822
<INTEREST-INCOME-NET> 3888
<LOAN-LOSSES> 78
<SECURITIES-GAINS> 161
<EXPENSE-OTHER> 2371
<INCOME-PRETAX> 2012
<INCOME-PRE-EXTRAORDINARY> 2012
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1546
<EPS-BASIC> .49
<EPS-DILUTED> .49
<YIELD-ACTUAL> 0
<LOANS-NON> 536
<LOANS-PAST> 330
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2823
<CHARGE-OFFS> 45
<RECOVERIES> 9
<ALLOWANCE-CLOSE> 2865
<ALLOWANCE-DOMESTIC> 2865
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
INDEPENDENT ACCOUNTANTS' REPORT
Board of Directors and Shareholders
Penns Woods Bancorp, Inc.
We have reviewed the accompanying consolidated balance sheet of
Penns Woods Bancorp, Inc. and subsidiary as of March 31, 2000, and
the related consolidated statements of income and cash
flows for the three-month periods ended March 31, 2000 and 1999,
and the consolidated statement of changes in shareholders' equity
for the three-month period ended March 31, 2000.
These financial statements are the responsibility of the Company's
management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review
of interim financial information consists principally of
applying analytical procedures to financial data and making inquiries
of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the accompanying financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of December 31, 1999,
and the related consolidated statements of income, changes in stockholders'
equity, and cash flows for the year then ended (not presented
herein); and in our report dated January 21, 2000, we expressed an unqualified
opinion on those consolidated financial statements.
`/s/ S.R. Snodgrass, A.C.
Wexford, PA
May 11, 2000
