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Penns Woods Bancorp, Inc. Reports Fourth Quarter 2020 Earnings
Source: Nasdaq GlobeNewswire / 29 Jan 2021 13:34:18 America/Chicago
WILLIAMSPORT, Pa., Jan. 29, 2021 (GLOBE NEWSWIRE) -- Penns Woods Bancorp, Inc. (NASDAQ: PWOD) -
Penns Woods Bancorp, Inc. achieved net income of $15.2 million for the twelve months ended December 31, 2020, resulting in basic and diluted earnings per share of $2.16.
Highlights
- Net income, as reported under GAAP, for the three and twelve months ended December 31, 2020 was $3.9 million and $15.2 million, respectively compared to $2.8 million and $15.7 million for the same periods of 2019. Results for the three and twelve months ended December 31, 2020 compared to 2019 were impacted by a decrease in after-tax securities gains of $91,000 (from a gain of $386,000 to a gain of $295,000) for the three month period and an increase in securities gains of $679,000 (from a gain of $591,000 to a gain of $1,270,000) for the twelve month period. Impacting the three and twelve months ended December 31, 2019 was a write down of assets held for sale and a loss on sale of premises and equipment that totaled $949,000.
- Gain on sale of loans increased $719,000 and $2.4 million, respectfully, for the three and twelve months ended December 31, 2020, to $1.2 million and $4.1 million, respectively, compared to $508,000 and $1.8 million for the 2019 periods. The increase is the result of a significant increase in the number of consumers who are refinancing their mortgage due to the current low interest rate environment.
- The provision for loan losses decreased $1.1 million and $110,000, respectfully, for the three and twelve months ended December 31, 2020, to $585,000 and $2.6 million, respectively, compared to $1.7 million and $2.7 million for the 2019 periods. The higher provision during the 2019 periods was primarily due to a commercial loan relationship that had become non-performing during the fourth quarter of 2019. The provision during 2020 remained elevated due to the economic uncertainty caused by the COVID-19 pandemic.
- Basic and diluted earnings per share for the three and twelve months ended December 31, 2020 were $0.55 and $2.16, respectively. Basic earnings per share for the three and twelve months ended December 31, 2019 were $0.40 and $2.23, respectively, with diluted earnings per share of $0.39 and $2.20, respectively.
- Return on average assets was 0.85% for the three months ended December 31, 2020, compared to 0.68% for the corresponding period of 2019. Return on average assets was 0.85% for the twelve months ended December 31, 2020, compared to 0.94% for the corresponding period of 2019.
- Return on average equity was 9.55% for the three months ended December 31, 2020, compared to 7.22% for the corresponding period of 2019. Return on average equity was 9.66% for the twelve months ended December 31, 2020, compared to 10.54% for the corresponding period of 2019.
COVID-19 Activity
- Approximately one third of employees working remotely.
- As of December 31, 2020, loan modification/deferral program in place to defer payments up to 180 days for principal and/or interest with only $8.7 million in loan principal remaining in deferral.
- All COVID-19 related loan deferrals meet the requirements to not be considered a troubled debt restructuring.
- Participated in the Paycheck Protection Program ("PPP") by primarily utilizing third parties to service and place the loans.
- Significantly reduced deposit rates during the latter half of March 2020 continuing through December 2020.
- Total paycheck protection program loans originated to be held on balance sheet at December 31, 2020 total $11.2 million.
Net Income
Net income from core operations (“core earnings”), which is a non-generally accepted accounting principles (GAAP) measure of net income excluding net securities gains or losses, was $3.6 million for the three months ended December 31, 2020 compared to $2.4 million for the same period of 2019. Core earnings were $13.9 million for the twelve months ended December 31, 2020, compared to $15.1 million for the same period of 2019. Core earnings per share for the three months ended December 31, 2020 were $0.51 basic and diluted, compared to $0.35 basic and $0.33 diluted core earnings per share for the same period of 2019. Core earnings per share for the twelve months ended December 31, 2020 were $1.98 basic and diluted, compared to $2.14 basic and $2.12 diluted for the same period of 2019. Core return on average assets and core return on average equity were 0.79% and 8.83% for the three months ended December 31, 2020, compared to 0.59% and 6.23% for the corresponding period of 2019. Core return on average assets and core return on average equity were 0.78% and 8.85% for the twelve months ended December 31, 2020 compared to 0.90% and 10.14% for the corresponding period of 2019. A reconciliation of the non-GAAP financial measures of core earnings, core return on assets, core return on equity, and core earnings per share described in this press release to the comparable GAAP financial measures is included at the end of this press release.
Net Interest Margin
The net interest margin for the three and twelve months ended December 31, 2020 was 2.81% and 2.94%, compared to 3.22% and 3.31% for the corresponding periods of 2019. The decrease in the net interest margin was driven by a decrease in the yield of the loan portfolio of 28 and 16 basis points ("bps"), while the investment portfolio yield declined 80 and 65 bps, respectively, for the three and twelve month periods during the current low interest rate environment. Further compressing the net interest margin was the significant increase of interest-bearing deposits. These deposits carry a current yield of a few basis points as commercial customers have received PPP funding and retail customers have received stimulus funding. Rates paid on interest-bearing liabilities decreased over the three and twelve months ended December 31, 2020 and these rate decreases have partially offset the decline in earning asset yield.
Assets
Total assets increased $169.3 million to $1.8 billion at December 31, 2020 compared to December 31, 2019. Cash and cash equivalents increased significantly due to deposit growth resulting from the various economic recovery programs instituted at the state and federal levels that impacted both commercial and retail customers, coupled with customers becoming more risk adverse and seeking safety in a bank deposit. Net loans decreased $13.1 million to $1.3 billion at December 31, 2020 compared to December 31, 2019, as the COVID-19 business and travel restrictions curtailed various lending activities such as indirect auto, home equity, and commercial. Lending activity began to rebound as business and travel restrictions were lessened during the second half of 2020. The investment portfolio increased $15.5 million from December 31, 2019 to December 31, 2020 as a portion of the excess cash liquidity was invested into short-term municipal bonds.
Non-performing Loans
The ratio of non-performing loans to total loans ratio decreased to 0.77% at December 31, 2020 from 0.92% at December 31, 2019 as non-performing loans have decreased to $10.3 million at December 31, 2020 from $12.4 million at December 31, 2019 primarily due to a commercial loan relationship that was paid-off during the fourth quarter of 2020. 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 $211,000 and $716,000 for the three and twelve months ended December 31, 2020 impacted the allowance for loan losses, which was 1.03% of total loans at December 31, 2020 compared to 0.88% at December 31, 2019.
Deposits
Deposits increased $170.4 million to $1.5 billion at December 31, 2020 compared to December 31, 2019. Noninterest-bearing deposits increased $114.6 million to $449.4 million at December 31, 2020 compared to December 31, 2019. Driving deposit growth was the receipt of PPP funding by commercial customers, stimulus funding by retail customers, and customers becoming more risk adverse and seeking safety in a bank deposit. Emphasis during 2020 has been on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking has increased since the start of 2020 due to these efforts coupled with a change in consumer behavior due to the business and travel restrictions caused by the COVID-19 pandemic.
Shareholders’ Equity
Shareholders’ equity increased $9.2 million to $164.1 million at December 31, 2020 compared to December 31, 2019. The change in accumulated other comprehensive loss from $2.8 million at December 31, 2019 to $882,000 at December 31, 2020 is a result of an increase in unrealized gains on available for sale securities (from an unrealized gain of $2.5 million at December 31, 2019 to an unrealized gain of $4.7 million at December 31, 2020). The amount of accumulated other comprehensive loss at December 31, 2020 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 $364,000. The current level of shareholders’ equity equates to a book value per share of $23.27 at December 31, 2020 compared to $22.01 at December 31, 2019, and an equity to asset ratio of 8.95% at December 31, 2020 compared to 9.31% at December 31, 2019. Dividends declared for the twelve months ended December 31, 2020 and 2019 were $1.28 per share and $1.26 per share, respectively.
Penns Woods Bancorp, Inc. is the parent company of Jersey Shore State Bank, which operates eighteen branch offices providing financial services in Lycoming, Clinton, Centre, Montour, and Union Counties, and Luzerne Bank, which operates nine 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; (v) the effects of health emergencies, including the spread of infectious diseases or pandemics; or (vi) 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, 2019.
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 570-322-1111 e-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) 2020 2019 % Change ASSETS: Noninterest-bearing balances $ 31,821 $ 24,725 28.70 % Interest-bearing balances in other financial institutions 181,537 23,864 660.71 % Total cash and cash equivalents 213,358 48,589 339.11 % Investment debt securities, available for sale, at fair value 162,261 148,619 9.18 % Investment equity securities, at fair value 1,288 1,261 2.14 % Investment securities, trading 40 51 (21.57 ) % Restricted investment in bank stock, at fair value 15,377 13,528 13.67 % Loans held for sale 5,239 4,232 23.79 % Loans 1,344,327 1,355,544 (0.83 ) % Allowance for loan losses (13,803 ) (11,894 ) 16.05 % Loans, net 1,330,524 1,343,650 (0.98 ) % Premises and equipment, net 32,702 32,929 (0.69 ) % Accrued interest receivable 8,394 5,246 60.01 % Bank-owned life insurance 33,638 29,253 14.99 % Goodwill 17,104 17,104 — % Intangibles 671 898 (25.28 ) % Operating lease right of use asset 3,136 4,154 (24.51 ) % Deferred tax asset 2,526 3,338 (24.33 ) % Other assets 8,385 12,471 (32.76 ) % TOTAL ASSETS $ 1,834,643 $ 1,665,323 10.17 % LIABILITIES: Interest-bearing deposits $ 1,045,086 $ 989,259 5.64 % Noninterest-bearing deposits 449,357 334,746 34.24 % Total deposits 1,494,443 1,324,005 12.87 % Short-term borrowings 5,244 4,920 6.59 % Long-term borrowings 153,475 161,920 (5.22 ) % Accrued interest payable 1,112 1,671 (33.45 ) % Operating lease liability 3,175 4,170 (23.86 ) % Other liabilities 13,048 13,655 (4.45 ) % TOTAL LIABILITIES 1,670,497 1,510,341 10.60 % SHAREHOLDERS’ EQUITY: Preferred stock, no par value, 3,000,000 shares authorized; no shares issued — — n/a Common stock, par value $5.55, 22,500,000 shares authorized; 7,532,576 and 7,520,740 shares issued; 7,052,351 and 7,040,515 shares outstanding 41,847 41,782 0.16 % Additional paid-in capital 52,523 51,487 2.01 % Retained earnings 82,769 76,583 8.08 % Accumulated other comprehensive (loss) gain: Net unrealized gain on available for sale securities 4,714 2,455 92.02 % Defined benefit plan (5,596 ) (5,232 ) (6.96 ) % Treasury stock at cost, 480,225 (12,115 ) (12,115 ) — % TOTAL PENNS WOODS BANCORP, INC. SHAREHOLDERS' EQUITY 164,142 154,960 5.93 % Non-controlling interest 4 22 (81.82 ) % TOTAL SHAREHOLDERS' EQUITY 164,146 154,982 5.91 % TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,834,643 $ 1,665,323 10.17 % 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) 2020 2019 % Change 2020 2019 % Change INTEREST AND DIVIDEND INCOME: Loans including fees $ 13,814 $ 14,789 (6.59 ) % $ 57,217 $ 60,384 (5.24 ) % Investment securities: Taxable 820 1,098 (25.32 ) % 3,778 3,997 (5.48 ) % Tax-exempt 166 140 18.57 % 650 660 (1.52 ) % Dividend and other interest income 246 388 (36.60 ) % 993 1,733 (42.70 ) % TOTAL INTEREST AND DIVIDEND INCOME 15,046 16,415 (8.34 ) % 62,638 66,774 (6.19 ) % INTEREST EXPENSE: Deposits 2,159 3,107 (30.51 ) % 10,565 11,443 (7.67 ) % Short-term borrowings 6 3 100.00 % 43 793 (94.58 ) % Long-term borrowings 914 984 (7.11 ) % 3,807 3,723 2.26 % TOTAL INTEREST EXPENSE 3,079 4,094 (24.79 ) % 14,415 15,959 (9.67 ) % NET INTEREST INCOME 11,967 12,321 (2.87 ) % 48,223 50,815 (5.10 ) % PROVISION FOR LOAN LOSSES 585 1,700 (65.59 ) % 2,625 2,735 (4.02 ) % NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 11,382 10,621 7.17 % 45,598 48,080 (5.16 ) % NON-INTEREST INCOME: Service charges 441 635 (30.55 ) % 1,690 2,411 (29.90 ) % Debt securities gains, available for sale 372 440 (15.45 ) % 1,592 640 148.75 % Equity securities (losses) gains (3 ) 74 (104.05 ) % 27 89 (69.66 ) % Securities gains (losses), trading 5 (25 ) 120.00 % (11 ) 19 (157.89 ) % Bank-owned life insurance 161 140 15.00 % 653 574 13.76 % Gain on sale of loans 1,227 508 141.54 % 4,148 1,754 136.49 % Insurance commissions 96 87 10.34 % 416 433 (3.93 ) % Brokerage commissions 191 326 (41.41 ) % 970 1,358 (28.57 ) % Debit card income 344 346 (0.58 ) % 1,280 1,378 (7.11 ) % Other 241 376 (35.90 ) % 1,403 1,796 (21.88 ) % TOTAL NON-INTEREST INCOME 3,075 2,907 5.78 % 12,168 10,452 16.42 % NON-INTEREST EXPENSE: Salaries and employee benefits 5,270 5,317 (0.88 ) % 21,632 21,829 (0.90 ) % Occupancy 723 627 15.31 % 2,650 2,712 (2.29 ) % Furniture and equipment 886 827 7.13 % 3,411 3,248 5.02 % Software amortization 235 242 (2.89 ) % 978 871 12.28 % Pennsylvania shares tax 341 285 19.65 % 1,289 1,148 12.28 % Professional fees 474 640 (25.94 ) % 2,362 2,474 (4.53 ) % Federal Deposit Insurance Corporation deposit insurance 289 97 197.94 % 939 578 62.46 % Write down of assets held for sale — 475 (100.00 ) % — 475 (100.00 ) % Loss on sale of premises and equipment — 474 (100.00 ) % — 474 (100.00 ) % Marketing 91 192 (52.60 ) % 261 425 (38.59 ) % Intangible amortization 53 62 (14.52 ) % 227 264 (14.02 ) % Other 1,278 1,056 21.02 % 5,319 5,210 2.09 % TOTAL NON-INTEREST EXPENSE 9,640 10,294 (6.35 ) % 39,068 39,708 (1.61 ) % INCOME BEFORE INCOME TAX PROVISION 4,817 3,234 48.95 % 18,698 18,824 (0.67 ) % INCOME TAX PROVISION 911 397 129.47 % 3,474 3,138 10.71 % NET INCOME $ 3,906 $ 2,837 37.68 % $ 15,224 $ 15,686 (2.95 ) % Earnings attributable to noncontrolling interest 5 4 25.00 % 18 14 28.57 % NET INCOME AVAILABLE TO COMMON SHAREHOLDERS' $ 3,901 $ 2,833 37.70 % $ 15,206 $ 15,672 (2.97 ) % EARNINGS PER SHARE - BASIC $ 0.55 $ 0.40 37.50 % $ 2.16 $ 2.23 (3.14 ) % EARNINGS PER SHARE - DILUTED $ 0.55 $ 0.39 41.03 % $ 2.16 $ 2.20 (1.82 ) % WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 7,050,389 7,039,968 0.15 % 7,044,542 7,038,714 0.08 % WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED 7,050,389 7,338,468 (3.93 ) % 7,044,542 7,113,339 (0.97 ) % DIVIDENDS DECLARED PER SHARE $ 0.32 $ 0.32 — % $ 1.28 $ 1.26 1.59 % PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATESThree Months Ended December 31, 2020 December 31, 2019 (Dollars in Thousands) Average
BalanceInterest Average
RateAverage
BalanceInterest Average
RateASSETS: Tax-exempt loans $ 42,882 $ 303 2.81 % $ 55,727 $ 446 3.21 % All other loans 1,304,521 13,575 4.14 % 1,306,203 14,437 4.43 % Total loans 1,347,403 13,878 4.10 % 1,361,930 14,883 4.38 % Taxable securities 140,074 1,048 3.04 % 145,273 1,372 3.83 % Tax-exempt securities 33,187 210 2.57 % 22,406 177 3.20 % Total securities 173,261 1,258 2.95 % 167,679 1,549 3.75 % Interest-bearing deposits 183,428 18 0.04 % 30,393 207 1.50 % Total interest-earning assets 1,704,092 15,154 3.54 % 1,560,002 16,639 4.26 % Other assets 123,352 108,235 TOTAL ASSETS $ 1,827,444 $ 1,668,237 LIABILITIES AND SHAREHOLDERS’ EQUITY: Savings $ 206,563 47 0.09 % $ 172,573 69 0.16 % Super Now deposits 271,600 433 0.63 % 216,535 445 0.82 % Money market deposits 277,980 304 0.44 % 229,486 535 0.94 % Time deposits 285,281 1,375 1.92 % 375,838 2,058 2.20 % Total interest-bearing deposits 1,041,424 2,159 0.82 % 994,432 3,107 1.25 % Short-term borrowings 11,068 6 0.29 % 4,781 3 0.25 % Long-term borrowings 153,506 914 2.50 % 162,241 984 2.30 % Total borrowings 164,574 920 2.35 % 167,022 987 2.24 % Total interest-bearing liabilities 1,205,998 3,079 1.03 % 1,161,454 4,094 1.39 % Demand deposits 439,841 329,873 Other liabilities 18,218 19,693 Shareholders’ equity 163,387 157,217 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,827,444 $ 1,668,237 Interest rate spread 2.51 % 2.87 % Net interest income/margin $ 12,075 2.81 % $ 12,545 3.22 % Three Months Ended December 31, 2020 2019 Total interest income $ 15,046 $ 16,415 Total interest expense 3,079 4,094 Net interest income 11,967 12,321 Tax equivalent adjustment 108 224 Net interest income (fully taxable equivalent) $ 12,075 $ 12,545 PENNS WOODS BANCORP, INC.
AVERAGE BALANCES AND INTEREST RATESTwelve Months Ended December 31, 2020 December 31, 2019 (Dollars in Thousands) Average
BalanceInterest Average
RateAverage
BalanceInterest Average
RateASSETS: Tax-exempt loans $ 45,650 $ 1,441 3.16 % $ 66,435 $ 2,038 3.07 % All other loans 1,304,209 56,079 4.30 % 1,309,806 58,774 4.49 % Total loans 1,349,859 57,520 4.26 % 1,376,241 60,812 4.42 % Taxable securities 142,714 4,630 3.30 % 134,935 5,306 3.99 % Tax-exempt securities 28,973 823 2.89 % 25,702 835 3.29 % Total securities 171,687 5,453 3.23 % 160,637 6,141 3.88 % Interest-bearing deposits 140,022 141 0.10 % 21,161 310 2.00 % Total interest-earning assets 1,661,568 63,114 3.80 % 1,558,039 67,263 4.33 % Other assets 118,536 111,839 TOTAL ASSETS $ 1,780,104 $ 1,669,878 LIABILITIES AND SHAREHOLDERS’ EQUITY: Savings $ 193,568 256 0.13 % $ 169,832 216 0.13 % Super Now deposits 254,177 1,755 0.69 % 231,816 1,758 0.76 % Money market deposits 245,633 1,529 0.62 % 239,317 2,184 0.91 % Time deposits 338,895 7,025 2.07 % 345,635 7,285 2.11 % Total interest-bearing deposits 1,032,273 10,565 1.02 % 986,600 11,443 1.16 % Short-term borrowings 12,660 43 0.34 % 34,897 793 2.27 % Long-term borrowings 162,636 3,807 2.34 % 155,841 3,723 2.25 % Total borrowings 175,296 3,850 2.20 % 190,738 4,516 2.25 % Total interest-bearing liabilities 1,207,569 14,415 1.19 % 1,177,338 15,959 1.34 % Demand deposits 394,210 321,443 Other liabilities 20,858 22,379 Shareholders’ equity 157,467 148,718 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 1,780,104 $ 1,669,878 Interest rate spread 2.61 % 2.99 % Net interest income/margin $ 48,699 2.94 % $ 51,304 3.31 % Twelve Months Ended December 31, 2020 2019 Total interest income $ 62,638 $ 66,774 Total interest expense 14,415 15,959 Net interest income 48,223 50,815 Tax equivalent adjustment 476 489 Net interest income (fully taxable equivalent) $ 48,699 $ 51,304 (Dollars in Thousands, Except Per Share Data) Quarter Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Operating Data Net income $ 3,901 $ 4,472 $ 3,760 $ 3,073 $ 2,833 Net interest income 11,967 11,845 12,250 12,161 12,321 Provision for loan losses 585 645 645 750 1,700 Net security gains 374 1,011 196 27 489 Non-interest income, excluding net security gains 2,701 3,024 2,423 2,409 2,418 Non-interest expense 9,640 9,707 9,611 10,110 10,294 Performance Statistics Net interest margin 2.81 % 2.76 % 3.01 % 3.19 % 3.22 % Annualized return on average assets 0.85 % 0.97 % 0.85 % 0.74 % 0.68 % Annualized return on average equity 9.55 % 11.05 % 9.60 % 7.83 % 7.22 % Annualized net loan charge-offs to average loans 0.06 % 0.06 % 0.05 % 0.04 % 1.19 % Net charge-offs 211 193 168 144 4,055 Efficiency ratio 65.36 % 64.89 % 65.10 % 68.96 % 69.42 % Per Share Data Basic earnings per share $ 0.55 $ 0.63 $ 0.53 $ 0.44 $ 0.40 Diluted earnings per share 0.55 0.63 0.53 0.43 0.39 Dividend declared per share 0.32 0.32 0.32 0.32 0.32 Book value 23.27 23.05 22.66 22.23 22.01 Common stock price: High 27.30 22.83 27.75 35.36 35.58 Low 19.61 19.61 20.01 19.05 29.68 Close 26.01 19.85 22.71 24.30 35.58 Weighted average common shares: Basic 7,050 7,045 7,042 7,041 7,040 Fully Diluted 7,050 7,045 7,042 7,103 7,338 End-of-period common shares: Issued 7,533 7,528 7,523 7,521 7,521 Treasury 480 480 480 480 480 (Dollars in Thousands, Except Per Share Data) Quarter Ended 12/31/2020 9/30/2020 6/30/2020 3/31/2020 12/31/2019 Financial Condition Data: General Total assets $ 1,834,643 $ 1,840,779 $ 1,838,364 $ 1,688,508 $ 1,665,323 Loans, net 1,330,524 1,335,711 1,336,370 1,336,900 1,343,650 Goodwill 17,104 17,104 17,104 17,104 17,104 Intangibles 671 724 777 836 898 Total deposits 1,494,443 1,491,810 1,474,305 1,326,734 1,324,005 Noninterest-bearing 449,357 434,248 418,324 332,759 334,746 Savings 209,924 202,781 195,964 183,929 176,732 NOW 287,775 268,463 268,348 229,919 218,605 Money Market 283,742 274,480 247,753 204,832 216,038 Time Deposits 263,645 311,838 343,915 375,295 377,884 Total interest-bearing deposits 1,045,086 1,057,562 1,055,980 993,975 989,259 Core deposits* 1,230,798 1,179,972 1,130,389 951,439 946,121 Shareholders’ equity 164,142 162,422 159,578 156,562 154,960 Asset Quality Non-performing loans $ 10,334 $ 10,553 $ 11,097 $ 11,300 $ 12,421 Non-performing loans to total assets 0.56 % 0.57 % 0.60 % 0.67 % 0.75 % Allowance for loan losses 13,803 13,429 12,977 12,500 11,894 Allowance for loan losses to total loans 1.03 % 1.00 % 0.96 % 0.93 % 0.88 % Allowance for loan losses to non-performing loans 133.57 % 127.25 % 116.94 % 110.62 % 95.76 % Non-performing loans to total loans 0.77 % 0.78 % 0.82 % 0.84 % 0.92 % Capitalization Shareholders’ equity to total assets 8.95 % 8.82 % 8.68 % 9.27 % 9.31 % * 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) 2020 2019 2020 2019 GAAP net income $ 3,901 $ 2,833 $ 15,206 $ 15,672 Less: net securities gains, net of tax 295 386 1,270 591 Non-GAAP core earnings $ 3,606 $ 2,447 $ 13,936 $ 15,081 Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Return on average assets (ROA) 0.85 % 0.68 % 0.85 % 0.94 % Less: net securities gains, net of tax 0.06 % 0.09 % 0.07 % 0.04 % Non-GAAP core ROA 0.79 % 0.59 % 0.78 % 0.90 % Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Return on average equity (ROE) 9.55 % 7.22 % 9.66 % 10.54 % Less: net securities gains, net of tax 0.72 % 0.99 % 0.81 % 0.40 % Non-GAAP core ROE 8.83 % 6.23 % 8.85 % 10.14 % Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Basic earnings per share (EPS) $ 0.55 $ 0.40 $ 2.16 $ 2.23 Less: net securities gains, net of tax 0.04 0.05 0.18 0.09 Non-GAAP basic core EPS $ 0.51 $ 0.35 $ 1.98 $ 2.14 Three Months Ended December 31, Twelve Months Ended December 31, 2020 2019 2020 2019 Diluted EPS $ 0.55 $ 0.39 $ 2.16 $ 2.20 Less: net securities gains, net of tax 0.04 0.06 0.18 0.08 Non-GAAP diluted core EPS $ 0.51 $ 0.33 $ 1.98 $ 2.12 COVID-19 Loan Deferrals as of December 31, 2020
(In Thousands) Amount Commercial, financial, and agricultural $ 2,497 Real estate mortgage: Residential 1,626 Commercial 4,172 Consumer automobile loans 384 Other consumer installment loans 36 Total loan deferrals $ 8,715 
- Net income, as reported under GAAP, for the three and twelve months ended December 31, 2020 was $3.9 million and $15.2 million, respectively compared to $2.8 million and $15.7 million for the same periods of 2019. Results for the three and twelve months ended December 31, 2020 compared to 2019 were impacted by a decrease in after-tax securities gains of $91,000 (from a gain of $386,000 to a gain of $295,000) for the three month period and an increase in securities gains of $679,000 (from a gain of $591,000 to a gain of $1,270,000) for the twelve month period. Impacting the three and twelve months ended December 31, 2019 was a write down of assets held for sale and a loss on sale of premises and equipment that totaled $949,000.