GlobeNewswire Inc | Oct 26, 2020 03:28PM EDT

October 26, 2020

WILLIAMSPORT, Pa., Oct. 26, 2020 (GLOBE NEWSWIRE) -- Penns Woods Bancorp,Inc. (NASDAQ: PWOD)

Penns Woods Bancorp,Inc. achieved net income of $11.3 million for the nine months ended September 30, 2020, resulting in basic and diluted earnings per share of $1.61.

Highlights

-- Net income, as reported under GAAP, for the three and nine months ended September30, 2020 was $4.5 million and $11.3 million, respectively compared to $4.7 million and $12.8 million for the same period of 2019. Results for the three and nine months ended September30, 2020 compared to 2019 were impacted by an increase in after-tax securities gains of $665,000 (from a gain of $134,000 to a gain of $799,000) for the three month period and $770,000 (from a gain of $205,000 to a gain of $975,000) for the nine month period. -- Gain on sale of loans increased $866,000 and $1.7 million, respectfully, for the three and nine months ended September 30, 2020, to $1.4 million and $2.9 million, respectively, compared to $583,000 and $1.2 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 increased $285,000 and $1.0 million, respectfully, for the three and nine months ended September 30, 2020, to $645,000 and $2.0 million, respectively, compared to $360,000 and $1.0 million for the 2019 periods. The increase is the result of the economic uncertainty caused by the COVID-19 pandemic. -- Basic and diluted earnings per share for the three and nine months ended September 30, 2020 were $0.63 and $1.61, respectively, compared to basic and diluted earnings per share of $0.66 and $1.82 for the three and nine months ended September 30, 2019. -- Return on average assets was 0.97% for the three months ended September 30, 2020, compared to 1.10% for the corresponding period of 2019. Return on average assets was 0.85% for the nine months ended September 30, 2020, compared to 1.02% for the corresponding period of 2019. -- Return on average equity was 11.05% for the three months ended September 30, 2020, compared to 12.18% for the corresponding period of 2019. Return on average equity was 9.57% for the nine months ended September 30, 2020, compared to 11.69% for the corresponding period of 2019.

COVID-19 Activity

-- Approximately one third of employees working remotely. -- As of September 30, 2020, loan modification/deferral program in place to defer payments up to 180 days for principal and/or interest with $230.3 million in loan principal affected by this program. -- 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 September 2020. -- Increased the provision for loan losses due to the economic uncertainty caused by the COVID-19 pandemic. -- Net interest margin compression expected to continue as the rate environment remains below historical levels. -- Total paycheck protection program loans originated to be held on balance sheet at September 30, 2020 total $12.3 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 $3.7 million for the three months ended September30, 2020 compared to $4.5 million for the same period of 2019. Core earnings were $10.3 million for the nine months ended September 30, 2020, compared to $12.6 million for the same period of 2019. Core earnings per share for the three months ended September30, 2020 were $0.52 basic and diluted, compared to $0.64 basic and diluted core earnings per share for the same period of 2019. Core earnings per share for the nine months ended September 30, 2020 were $1.47 basic and diluted, compared to $1.80 basic and diluted for the same period of 2019. Core return on average assets and core return on average equity were 0.79% and 9.08% for the three months ended September 30, 2020, compared to 1.07% and 11.82% for the corresponding period of 2019. Core return on average assets and core return on average equity were 0.78% and 8.75% for the nine months ended September 30, 2020 compared to 1.01% and 11.49% 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 nine months ended September 30, 2020 was 2.76% and 2.97%, compared to 3.32% and 3.34% 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 34 and 11 basis points ("bps"), while the the investment portfolio yield declined 56 and 60 bps, respectively, for the three and nine 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 nine months ended September 30, 2020 and these rate decreases will partially offset the decline in earning asset yield.

Assets

Total assets increased $167.7 million to $1.8 billion at September30, 2020 compared to September30, 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 the impacted both commercial and retail customers, coupled with customers becoming more risk adverse and seeking safety in a bank deposit. Net loans decreased $15.0 million to $1.3 billion at September30, 2020 compared to September30, 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 and third quarters of 2020. The investment portfolio remained steady from September30, 2019 to September30, 2020 as cash flow was primarily invested into short-term municipal bonds.

Non-performing Loans

The ratio of non-performing loans to total loans ratio decreased to 0.77% at September30, 2020 from 1.26% at September30, 2019 as non-performing loans have decreased to $10.4 million at September30, 2020 from $17.2 million at September30, 2019 primarily due to a commercial loan relationship that was partially charged-off during the fourth quarter of 2019. 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 $193,000 for the nine months ended September 30, 2020 impacted the allowance for loan losses, which was 1.00% of total loans at September30, 2020 compared to 1.04% at September 30, 2019.

Deposits

Deposits increased $159.4 million to $1.5 billion at September30, 2020 compared to September30, 2019. Noninterest-bearing deposits increased $106.9 million to $434.2 million at September30, 2020 compared to September30, 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 $7.4 million to $162.4 million at September30, 2020 compared to September30, 2019.The change in accumulated other comprehensive loss from $1.9 million at September30, 2019 to $678,000 at September30, 2020 is a result of an increase in unrealized gains on available for sale securities (from an unrealized gain of $3.3 million at September 30, 2019 to an unrealized gain of $4.4 million at September30, 2020). The amount of accumulated other comprehensive loss at September30, 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 a decrease in the net loss of $47,000. The current level of shareholders equity equates to a book value per share of $23.05 at September30, 2020 compared to $22.03 at September30, 2019, and an equity to asset ratio of 8.82% at September30, 2020 compared to 9.27% at September30, 2019.Dividends declared for the nine months ended September 30, 2020 and 2019 were $0.96 per share and $0.94 per share, respectively.

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 nine branch offices providing financial services in Luzerne County. Investment and insurance products are offered through Jersey Shore State Banks 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 companys 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 Companys 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 Companys 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 Companys organization, compensation and benefit plans; (iii)the effect on the Companys 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 Companys results, see the Companys filings with the Securities and Exchange Commission, including Item1A. Risk Factors, set forth in the Companys Annual Report on Form10-K for the fiscal year ended December31, 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 Companys 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)

September 30,(InThousands,ExceptShareData) 2020 2019 %ChangeASSETS: Noninterest-bearing balances $ 34,987 $ 25,990 34.62 %Interest-bearing balances in 191,285 31,351 510.14 %other financial institutionsTotal cash and cash equivalents 226,272 57,341 294.61 % Investment debt securities, 149,675 149,075 0.40 %available for sale, at fair valueInvestment equity securities, at 1,291 1,820 (29.07 ) %fair valueInvestment securities, trading 35 47 (25.53 ) %Restricted investment in bank 15,006 13,502 11.14 %stock, at fair valueLoans held for sale 6,647 1,868 255.84 %Loans 1,349,140 1,364,984 (1.16 ) %Allowance for loan losses (13,429 ) (14,249 ) (5.75 ) %Loans, net 1,335,711 1,350,735 (1.11 ) %Premises and equipment, net 32,886 33,366 (1.44 ) %Accrued interest receivable 8,540 5,267 62.14 %Bank-owned life insurance 33,474 29,107 15.00 %Goodwill 17,104 17,104 ? %Intangibles 724 960 (24.58 ) %Operating lease right of use 3,184 4,217 (24.50 ) %assetDeferred tax asset 3,409 3,744 (8.95 ) %Other assets 6,821 4,942 38.02 %TOTAL ASSETS $ 1,840,779 $ 1,673,095 10.02 % LIABILITIES: Interest-bearing deposits $ 1,057,562 $ 1,005,078 5.22 %Noninterest-bearing deposits 434,248 327,329 32.66 %Total deposits 1,491,810 1,332,407 11.96 % Short-term borrowings 15,009 5,987 150.69 %Long-term borrowings 153,534 162,290 (5.40 ) %Accrued interest payable 1,491 1,666 (10.50 ) %Operating lease liability 3,219 4,228 (23.86 ) %Other liabilities 13,287 11,456 15.98 %TOTAL LIABILITIES 1,678,350 1,518,034 10.56 % SHAREHOLDERS? EQUITY: Preferred stock, no par value,3,000,000 shares authorized; no ? ? n/ashares issuedCommon stock, par value $5.55,22,500,000 shares authorized;7,527,605 and 7,517,796 shares 41,820 41,758 0.15 %issued; 7,047,380 and 7,037,571shares outstandingAdditional paid-in capital 52,268 51,290 1.91 %Retained earnings 81,127 76,009 6.73 %Accumulated other comprehensive loss:Net unrealized gain on available 4,440 3,266 35.95 %for sale securitiesDefined benefit plan (5,118 ) (5,165 ) 0.91 %Treasury stock at cost, 480,225 (12,115 ) (12,115 ) ? %TOTAL PENNS WOODS BANCORP, INC. 162,422 155,043 4.76 %SHAREHOLDERS' EQUITYNon-controlling interest 7 18 (61.11 ) %TOTAL SHAREHOLDERS' EQUITY 162,429 155,061 4.75 %TOTAL LIABILITIES AND $ 1,840,779 $ 1,673,095 10.02 %SHAREHOLDERS? EQUITY

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

Three Months Ended September 30, Nine Months Ended September 30,(InThousands,ExceptPerShareData) 2020 2019 %Change 2020 2019 %ChangeINTEREST AND DIVIDEND INCOME: Loans including fees $ 14,080 $ 15,426 (8.73 ) % $ 43,403 $ 45,595 (4.81 ) %Investment securities: Taxable 925 998 (7.31 ) % 2,958 2,899 2.04 %Tax-exempt 170 167 1.80 % 484 520 (6.92 ) %Dividend and other interest income 212 493 (57.00 ) % 747 1,345 (44.46 ) %TOTAL INTEREST AND DIVIDEND INCOME 15,387 17,084 (9.93 ) % 47,592 50,359 (5.49 ) % INTEREST EXPENSE: Deposits 2,569 3,165 (18.83 ) % 8,406 8,336 0.84 %Short-term borrowings 8 7 14.29 % 37 790 (95.32 ) %Long-term borrowings 965 1,009 (4.36 ) % 2,893 2,739 5.62 %TOTAL INTEREST EXPENSE 3,542 4,181 (15.28 ) % 11,336 11,865 (4.46 ) % NET INTEREST INCOME 11,845 12,903 (8.20 ) % 36,256 38,494 (5.81 ) % PROVISION FOR LOAN LOSSES 645 360 79.17 % 2,040 1,035 97.10 % NET INTEREST INCOME AFTER PROVISION FOR 11,200 12,543 (10.71 ) % 34,216 37,459 (8.66 ) %LOAN LOSSES NON-INTEREST INCOME: Service charges 388 622 (37.62 ) % 1,249 1,776 (29.67 ) %Debt securities gains, available for sale 1,013 189 435.98 % 1,220 200 510.00 %Equity securities (losses) gains ? (21 ) 100.00 % 30 44 (31.82 ) %Securities (losses) gains, trading (2 ) 2 (200.00 ) % (16 ) 15 (206.67 ) %Bank-owned life insurance 156 143 9.09 % 492 434 13.36 %Gain on sale of loans 1,449 583 148.54 % 2,921 1,246 134.43 %Insurance commissions 101 93 8.60 % 320 346 (7.51 ) %Brokerage commissions 224 353 (36.54 ) % 779 1,032 (24.52 ) %Debit card income 352 333 5.71 % 936 1,032 (9.30 ) %Other 354 525 (32.57 ) % 1,162 1,420 (18.17 ) %TOTAL NON-INTEREST INCOME 4,035 2,822 42.98 % 9,093 7,545 20.52 % NON-INTEREST EXPENSE: Salaries and employee benefits 5,465 5,488 (0.42 ) % 16,362 16,512 (0.91 ) %Occupancy 599 638 (6.11 ) % 1,927 2,085 (7.58 ) %Furniture and equipment 837 885 (5.42 ) % 2,525 2,421 4.30 %Software amortization 257 234 9.83 % 743 629 18.12 %Pennsylvania shares tax 340 285 19.30 % 948 863 9.85 %Professional fees 608 585 3.93 % 1,888 1,834 2.94 %Federal Deposit Insurance Corporation 271 ? n/a 650 504 28.97 %deposit insuranceMarketing 61 98 (37.76 ) % 170 233 (27.04 ) %Intangible amortization 53 62 (14.52 ) % 174 202 (13.86 ) %Other 1,216 1,266 (3.95 ) % 4,041 4,131 (2.18 ) %TOTAL NON-INTEREST EXPENSE 9,707 9,541 1.74 % 29,428 29,414 0.05 %INCOME BEFORE INCOME TAX PROVISION 5,528 5,824 (5.08 ) % 13,881 15,590 (10.96 ) %INCOME TAX PROVISION 1,051 1,170 (10.17 ) % 2,563 2,741 (6.49 ) %NET INCOME $ 4,477 $ 4,654 (3.80 ) % $ 11,318 $ 12,849 (11.92 ) %Earnings attributable to noncontrolling 5 4 25.00 % 13 10 30.00 %interestNET INCOME AVAILABLE TO COMMON $ 4,472 $ 4,650 (3.83 ) % $ 11,305 $ 12,839 (11.95 ) %SHAREHOLDERS'EARNINGS PER SHARE - BASIC $ 0.63 $ 0.66 (4.55 ) % $ 1.61 $ 1.82 (11.54 ) %EARNINGS PER SHARE - DILUTED $ 0.63 $ 0.66 (4.55 ) % $ 1.61 $ 1.82 (11.54 ) %WEIGHTED AVERAGE SHARES OUTSTANDING - 7,045,336 7,037,055 0.12 % 7,042,578 7,036,181 0.09 %BASICWEIGHTED AVERAGE SHARES OUTSTANDING - 7,045,336 7,037,055 0.12 % 7,042,578 7,036,181 0.09 %DILUTEDDIVIDENDS DECLARED PER SHARE $ 0.32 $ 0.31 3.23 % $ 0.96 $ 0.94 2.13 %

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES

Three Months Ended September 30, 2020 September 30, 2019(DollarsinThousands) Average Interest Average Average Interest Average Balance Rate Balance RateASSETS: Tax-exempt loans $ 42,047 $ 386 3.65 % $ 66,617 $ 505 3.04 %All other loans 1,313,474 13,775 4.17 % 1,317,964 15,027 4.57 %Total loans 1,355,521 14,161 4.16 % 1,384,581 15,532 4.50 % Taxable securities 140,695 1,116 3.23 % 137,394 1,284 3.79 %Tax-exempt securities 30,587 216 2.87 % 25,769 211 3.32 %Total securities 171,282 1,332 3.16 % 163,163 1,495 3.72 % Interest-bearing 203,817 21 0.04 % 36,853 207 2.25 %deposits Total interest-earning 1,730,620 15,514 3.57 % 1,584,597 17,234 4.37 %assets Other assets 121,901 101,318 TOTAL ASSETS $ 1,852,521 $ 1,685,915 LIABILITIES AND SHAREHOLDERS? EQUITY:Savings $ 199,420 51 0.10 % $ 169,628 66 0.16 %Super Now deposits 273,190 489 0.71 % 232,918 481 0.83 %Money market deposits 263,926 330 0.50 % 237,362 581 0.98 %Time deposits 329,190 1,699 2.05 % 370,229 2,037 2.21 %Total interest-bearing 1,065,726 2,569 0.96 % 1,010,137 3,165 1.26 %deposits Short-term borrowings 17,517 8 0.18 % 7,990 7 0.35 %Long-term borrowings 165,064 965 2.33 % 169,017 1,009 2.26 %Total borrowings 182,581 973 2.12 % 177,007 1,016 2.18 % Total interest-bearing 1,248,307 3,542 1.13 % 1,187,144 4,181 1.39 %liabilities Demand deposits 424,753 324,940 Other liabilities 17,644 21,151 Shareholders? equity 161,817 152,680 TOTAL LIABILITIES AND $ 1,852,521 $ 1,685,915 SHAREHOLDERS? EQUITYInterest rate spread 2.44 % 2.98 %Net interest income/ $ 11,972 2.76 % $ 13,053 3.32 %margin

Three Months Ended September 30, 2020 2019Total interest income $ 15,387 $ 17,084 Total interest expense 3,542 4,181 Net interest income 11,845 12,903 Tax equivalent adjustment 127 150 Net interest income (fully taxable $ 11,972 $ 13,053 equivalent)

PENNS WOODS BANCORP, INC.AVERAGE BALANCES AND INTEREST RATES

Nine Months Ended September 30, 2020 September 30, 2019(DollarsinThousands) Average Interest Average Average Interest Average Balance Rate Balance RateASSETS: Tax-exempt loans $ 46,476 $ 1,138 3.27 % $ 69,973 $ 1,592 3.04 %All other loans 1,304,207 42,504 4.35 % 1,315,022 44,337 4.51 %Total loans 1,350,683 43,642 4.32 % 1,384,995 45,929 4.43 % Taxable securities 143,601 3,582 3.38 % 131,451 3,934 4.05 %Tax-exempt securities 27,558 613 3.02 % 26,813 658 3.32 %Total securities 171,159 4,195 3.32 % 158,264 4,592 3.92 % Interest-bearing 125,447 123 0.13 % 18,050 310 2.30 %deposits Total interest-earning 1,647,289 47,960 3.89 % 1,561,309 50,831 4.36 %assets Other assets 116,868 109,278 TOTAL ASSETS $ 1,764,157 $ 1,670,587 LIABILITIES AND SHAREHOLDERS? EQUITY:Savings $ 189,205 209 0.15 % $ 168,909 147 0.12 %Super Now deposits 248,327 1,322 0.71 % 236,965 1,313 0.74 %Money market deposits 234,772 1,225 0.70 % 242,630 1,649 0.91 %Time deposits 356,897 5,650 2.11 % 335,456 5,227 2.08 %Total interest-bearing 1,029,201 8,406 1.09 % 983,960 8,336 1.13 %deposits Short-term borrowings 13,195 37 0.37 % 45,046 790 2.34 %Long-term borrowings 165,702 2,893 2.33 % 153,684 2,739 2.24 %Total borrowings 178,897 2,930 2.19 % 198,730 3,529 2.26 % Total interest-bearing 1,208,098 11,336 1.25 % 1,182,690 11,865 1.32 %liabilities Demand deposits 378,889 318,602 Other liabilities 19,682 22,705 Shareholders? equity 157,488 146,590 TOTAL LIABILITIES AND $ 1,764,157 $ 1,670,587 SHAREHOLDERS? EQUITYInterest rate spread 2.64 % 3.04 %Net interest income/ $ 36,624 2.97 % $ 38,966 3.34 %margin

Nine Months Ended September 30, 2020 2019Total interest income $ 47,592 $ 50,359 Total interest expense 11,336 11,865 Net interest income 36,256 38,494 Tax equivalent adjustment 368 472 Net interest income (fully taxable $ 36,624 $ 38,966 equivalent)

(DollarsinThousands,ExceptPerShareData) QuarterEnded 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019Operating Data Net income $ 4,472 $ 3,760 $ 3,073 $ 2,833 $ 4,650 Net interest income 11,845 12,250 12,161 12,321 12,903 Provision for loan losses 645 645 750 1,700 360 Net security gains 1,011 198 28 489 170 Non-interest income, excluding net security gains 3,024 2,423 2,409 2,418 2,652 Non-interest expense 9,707 9,611 10,110 10,294 9,541 Performance Statistics Net interest margin 2.76 % 3.01 % 3.19 % 3.22 % 3.32 %Annualized return on average assets 0.97 % 0.85 % 0.74 % 0.68 % 1.10 %Annualized return on average equity 11.05 % 9.60 % 7.83 % 7.22 % 12.18 %Annualized net loan charge-offs to average loans 0.06 % 0.05 % 0.04 % 1.19 % 0.03 %Net charge-offs 193 168 144 4,055 112 Efficiency ratio 64.89 % 65.10 % 68.96 % 69.42 % 60.98 % Per Share Data Basic earnings per share $ 0.63 $ 0.53 $ 0.44 $ 0.40 $ 0.66 Diluted earnings per share 0.63 0.53 0.43 0.39 0.66 Dividend declared per share 0.32 0.32 0.32 0.32 0.31 Book value 23.05 22.66 22.23 22.01 22.03 Common stock price: High 22.83 27.75 35.36 35.58 30.93 Low 19.61 20.01 19.05 29.68 26.87 Close 19.85 22.71 24.30 35.58 30.83 Weighted average common shares: Basic 7,045 7,042 7,041 7,040 7,037 Fully Diluted 7,045 7,042 7,103 7,338 7,037 End-of-period common shares: Issued 7,528 7,523 7,521 7,521 7,518 Treasury 480 480 480 480 480

(DollarsinThousands,ExceptPerShareData) QuarterEnded 9/30/2020 6/30/2020 3/31/2020 12/31/2019 9/30/2019Financial Condition Data: General Total assets $ 1,840,779 $ 1,838,364 $ 1,688,508 $ 1,665,323 $ 1,673,095 Loans, net 1,335,711 1,336,370 1,336,900 1,343,650 1,350,735 Goodwill 17,104 17,104 17,104 17,104 17,104 Intangibles 724 777 836 898 960 Total deposits 1,491,810 1,474,305 1,326,734 1,324,005 1,332,407 Noninterest-bearing 434,248 418,324 332,759 334,746 327,329 Savings 202,781 195,964 183,929 176,732 171,370 NOW 268,463 268,348 229,919 218,605 219,466 Money Market 274,480 247,753 204,832 216,038 239,926 Time Deposits 311,838 343,915 375,295 377,884 374,316 Total interest-bearing deposits 1,057,562 1,055,980 993,975 989,259 1,005,078 Core deposits* 1,179,972 1,130,389 951,439 946,121 958,091 Shareholders? equity 162,422 159,578 156,562 154,960 155,061 Asset Quality Non-performing loans $ 10,396 $ 11,097 $ 11,300 $ 12,421 $ 17,208 Non-performing loans to total assets 0.56 % 0.60 % 0.67 % 0.75 % 1.03 %Allowance for loan losses 13,429 12,977 12,500 11,894 14,249 Allowance for loan losses to total loans 1.00 % 0.96 % 0.93 % 0.88 % 1.04 %Allowance for loan losses to non-performing 129.17 % 116.94 % 110.62 % 95.76 % 82.80 %loansNon-performing loans to total loans 0.77 % 0.82 % 0.84 % 0.92 % 1.26 % Capitalization Shareholders? equity to total assets 8.82 % 8.68 % 9.27 % 9.31 % 9.27 %

* Core deposits are defined as total deposits less time deposits

Reconciliation of GAAP and Non-GAAP Financial Measures

Three Months Ended Nine Months Ended September 30, September 30,(DollarsinThousands,ExceptPerShareData) 2020 2019 2020 2019GAAP net income $ 4,472 $ 4,650 $ 11,305 $ 12,839 Less: net securities gains, net of tax 799 134 975 205 Non-GAAP core earnings $ 3,673 $ 4,516 $ 10,330 $ 12,634 Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Return on average assets (ROA) 0.97 % 1.10 % 0.85 % 1.02 %Less: net securities gains, net of tax 0.18 % 0.03 % 0.07 % 0.01 %Non-GAAP core ROA 0.79 % 1.07 % 0.78 % 1.01 % Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Return on average equity (ROE) 11.05 % 12.18 % 9.57 % 11.69 %Less: net securities gains, net of tax 1.97 % 0.36 % 0.82 % 0.20 %Non-GAAP core ROE 9.08 % 11.82 % 8.75 % 11.49 % Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Basic earnings per share (EPS) $ 0.63 $ 0.66 $ 1.61 $ 1.82 Less: net securities gains, net of tax 0.11 0.02 0.14 0.02 Non-GAAP basic core EPS $ 0.52 $ 0.64 $ 1.47 $ 1.80 Three Months Ended Nine Months Ended September 30, September 30, 2020 2019 2020 2019Diluted EPS $ 0.63 $ 0.66 $ 1.61 $ 1.82 Less: net securities gains, net of tax 0.11 0.02 0.14 0.02 Non-GAAP diluted core EPS $ 0.52 $ 0.64 $ 1.47 $ 1.80

Loan Deferrals

(InThousands) AmountCommercial, financial, and agricultural $ 25,933 Real estate mortgage: Residential 61,712 Commercial 128,820 Construction 6,698 Consumer automobile loans 6,264 Other consumer installment loans 899 Total loan deferrals $ 230,326