Yahoo Finance Penns Woods Bancorp Inc Reports Decrease in Q1 2024 Earnings Amid Rising Interest Expenses
Net Income: $3.8M for Q1 2024, a decrease from $4.7M in Q1 2023.
Earnings Per Share: Basic and diluted EPS at $0.51 for Q1 2024, down from $0.66 and $0.64 respectively in Q1 2023.
Net Interest Margin: Decreased to 2.69% in Q1 2024 from 3.10% in Q1 2023.
Total Assets: Increased to $2.2 billion as of March 31, 2024, up 7.02% year-over-year.
Provision for Credit Losses: Rose to $138,000 in Q1 2024, up from $71,000 in Q1 2023.
Annualized Return on Average Assets: Decreased to 0.69% in Q1 2024 from 0.92% in Q1 2023.
Annualized Return on Average Equity: Lowered to 8.03% in Q1 2024 from 11.12% in Q1 2023.
On April 25, 2024, Penns Woods Bancorp Inc (NASDAQ:PWOD) disclosed its financial results for the first quarter of 2024 through an 8-K filing. The company, a prominent bank holding entity for Jersey Shore State Bank and Luzerne Bank, reported a net income of $3.8 million, a decrease from $4.7 million in the same period last year. This decline was primarily due to a significant rise in interest expenses following rate increases by the Federal Open Market Committee (FOMC).
Financial Performance Overview
Penns Woods Bancorp's earnings per share (EPS) also saw a reduction, with basic and diluted EPS at $0.51 compared to $0.66 and $0.64 respectively in Q1 2023. The bank's net interest income fell by $552,000 to $13.746 million, driven by a 156 basis points increase in the rate paid on interest-bearing liabilities. This was partially offset by higher yields on interest-earning assets and growth in the average balance of the earning assets portfolio.
Challenges and Operational Highlights
The bank faced challenges from higher funding costs due to aggressive FOMC rate hikes and increased competition for deposits. This led to a shift in deposit balances from core deposits to higher rate time deposits, impacting the banks funding strategy. Despite these challenges, Penns Woods Bancorp managed to grow its total assets by $145 million to $2.2 billion, with net loans increasing by $155.5 million.
Asset Quality and Capital Adequacy
The ratio of non-performing loans to total loans increased slightly to 0.43% from 0.28% year-over-year. However, the bank maintains a robust capital position, with shareholders equity rising by $19.5 million to $193.5 million. The bank's capital adequacy is reflected in an equity to asset ratio of 8.76%.
Strategic Movements and Future Outlook
Penns Woods Bancorp continues to focus on commercial loan growth and enhancing its digital banking platforms to adapt to changing customer preferences. The bank's strategy to attract time deposits and utilize brokered deposits for funding loan portfolio growth is pivotal as it navigates the current high-interest rate environment.
In conclusion, while Penns Woods Bancorp faces headwinds from increased funding costs and interest rate volatility, its strategic initiatives and strong asset growth highlight its resilience. Investors and stakeholders will be watching closely how the bank manages its interest expense and capitalizes on growth opportunities in the upcoming quarters.
For detailed financial figures and further information, please refer to the official 8-K filing by Penns Woods Bancorp Inc.
Explore the complete 8-K earnings release (here) from Penns Woods Bancorp Inc for further details.
This article first appeared on GuruFocus.
