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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM 10-Q

☑Quarterly Report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

for the Quarterly Period Ended March 31, 2025. 
☐Transition report pursuant to Section 13 or 15 (d) of the Exchange Act

For the Transition Period from                    to                   .

No. 0-17077
(Commission File Number)

PENNS WOODS BANCORP INC.
(Exact name of Registrant as specified in its charter) 
Pennsylvania300 Market Street, P.O. Box 96723-2226454
(State or other jurisdiction ofWilliamsport(I.R.S. Employer Identification No.)
incorporation or organization)Pennsylvania17703-0967
(Address of principal executive offices)(Zip Code)

(570) 322-1111
Registrant’s telephone number, including area code


Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, $5.55 par valuePWODThe Nasdaq Global Select Market

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 the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes ☒ NO ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definition of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one):
 
Large accelerated filer☐Accelerated filer☐
  Non-accelerated filer☒   Smaller reporting company☒
Emerging growth company☐

If an emerging growth company, indicate by check mark if registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐ No ☒
On May 1, 2025 there were 7,614,214 shares of the Registrant’s common stock outstanding.

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PENNS WOODS BANCORP, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

  Page
  Number
 
   
   
  
  
  
 
  
   
   
   
   
 
   
   
   
   
   
   
   
   
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Part I.  FINANCIAL INFORMATION
Item 1.  Financial Statements
PENNS WOODS BANCORP, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)

March 31,December 31,
(In Thousands, Except Share And Per Share Data)20252024
ASSETS: 
Noninterest-bearing balances$26,604 $19,989 
Interest-bearing balances in other financial institutions10,841 8,983 
Total cash and cash equivalents37,445 28,972 
Investment debt securities, available for sale, at fair value175,721 184,542 
Investment equity securities, at fair value1,128 1,111 
Restricted investment in bank stock20,613 20,032 
Loans held for sale2,583 3,266 
Loans1,897,376 1,877,078 
Allowance for credit losses(9,990)(11,848)
Loans, net1,887,386 1,865,230 
Premises and equipment, net27,441 27,789 
Accrued interest receivable10,871 11,114 
Bank-owned life insurance45,982 45,681 
Investment in limited partnerships6,466 6,691 
Goodwill16,450 16,450 
Intangibles82 107 
Operating lease right-of-use asset2,761 2,811 
Deferred tax asset2,067 3,493 
Other assets15,239 15,049 
TOTAL ASSETS$2,252,235 $2,232,338 
LIABILITIES:  
Interest-bearing deposits$1,258,188 $1,249,145 
Noninterest-bearing deposits465,766 456,936 
Total deposits1,723,954 1,706,081 
Short-term borrowings82,910 42,200 
Long-term borrowings214,542 254,588 
Accrued interest payable3,908 4,664 
Operating lease liability2,841 2,889 
Other liabilities12,057 16,685 
TOTAL LIABILITIES2,040,212 2,027,107 
SHAREHOLDERS’ EQUITY:  
Preferred stock, no par value, 3,000,000 shares authorized; no shares issued
— — 
Common stock, par value $5.55, 22,500,000 shares authorized; 8,124,439 and 8,066,968 shares issued; 7,614,214 and 7,556,743 outstanding
45,134 44,815 
Additional paid-in capital62,931 63,193 
Retained earnings120,261 115,331 
Accumulated other comprehensive loss:  
Net unrealized loss on available for sale securities(2,762)(4,567)
Defined benefit plan(726)(726)
Treasury stock at cost, 510,225 shares
(12,815)(12,815)
TOTAL SHAREHOLDERS' EQUITY212,023 205,231 
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY$2,252,235 $2,232,338 

See accompanying notes to the unaudited consolidated financial statements.
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PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended March 31,
(In Thousands, Except Share And Per Share Data)20252024
INTEREST AND DIVIDEND INCOME:  
Loans, including fees$26,014 $23,860 
Investment securities:  
Taxable1,723 1,594 
Tax-exempt60 97 
Dividend and other interest income581 679 
TOTAL INTEREST AND DIVIDEND INCOME28,378 26,230 
INTEREST EXPENSE:  
Deposits8,744 7,963 
Short-term borrowings1,056 2,005 
Long-term borrowings2,438 2,516 
TOTAL INTEREST EXPENSE12,238 12,484 
NET INTEREST INCOME16,140 13,746 
(RECOVERY) PROVISION FOR CREDIT LOSSES(2,969)138 
NET INTEREST INCOME AFTER (RECOVERY) PROVISION FOR CREDIT LOSSES19,109 13,608 
NON-INTEREST INCOME:  
Service charges483 515 
Net debt securities gains (losses), available for sale305 (23)
Net equity securities gains (losses)17 (10)
Bank-owned life insurance301 463 
Gain on sale of loans408 305 
Insurance commissions152 153 
Brokerage commissions167 186 
Loan broker commissions252 222 
Debit card income308 329 
Other175 322 
TOTAL NON-INTEREST INCOME2,568 2,462 
NON-INTEREST EXPENSE:  
Salaries and employee benefits6,483 6,422 
Occupancy874 905 
Furniture and equipment997 939 
Software amortization419 190 
Pennsylvania shares tax413 320 
Professional fees505 552 
Federal Deposit Insurance Corporation deposit insurance397 359 
Marketing47 71 
Intangible amortization25 26 
Loss on sale of premise and equipment— 330 
Merger Expense1,093 — 
Other1,341 1,509 
TOTAL NON-INTEREST EXPENSE12,594 11,623 
INCOME BEFORE INCOME TAX PROVISION9,083 4,447 
INCOME TAX PROVISION1,716 639 
NET INCOME AVAILABLE TO COMMON SHAREHOLDERS'$7,367 $3,808 
EARNINGS PER SHARE - BASIC$0.97 $0.51 
EARNINGS PER SHARE - DILUTED$0.95 $0.51 
WEIGHTED AVERAGE SHARES OUTSTANDING - BASIC 7,589,592 7,512,520 
WEIGHTED AVERAGE SHARES OUTSTANDING - DILUTED7,728,688 7,512,520 
See accompanying notes to the unaudited consolidated financial statements.
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PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(UNAUDITED)
 
 Three Months Ended March 31,
(In Thousands)20252024
Net Income$7,367 $3,808 
Other comprehensive income (loss):  
Net unrealized gain (loss) on available for sale securities2,590 (59)
Tax effect(544)12 
Net realized (gain) loss on available for sale securities included in net income(305)23 
Tax effect64 (5)
   Amortization of unrecognized pension loss— 16 
        Tax effect— (3)
Total other comprehensive income (loss)1,805 (16)
Comprehensive income$9,172 $3,792 
 
See accompanying notes to the unaudited consolidated financial statements.

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PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(UNAUDITED)


 Three months ended:
COMMON STOCKADDITIONAL
PAID-IN CAPITAL		RETAINED EARNINGSACCUMULATED OTHER
COMPREHENSIVE LOSS 		TREASURY STOCKTOTAL
SHAREHOLDERS’ EQUITY
(In Thousands, Except Share And Per Share Data)SHARESAMOUNT
Balance, December 31, 20248,066,968 $44,815 $63,193 $115,331 $(5,293)$(12,815)$205,231 
Net income7,367 7,367 
Other comprehensive income1,805 1,805 
Stock-based compensation (262)(262)
Dividends declared ($0.32 per share)
(2,437)(2,437)
Stock option exercises57,471 319 319 
Balance, March 31, 20258,124,439 $45,134 $62,931 $120,261 $(3,488)$(12,815)$212,023 

COMMON STOCKADDITIONAL
PAID-IN CAPITAL		RETAINED EARNINGSACCUMULATED OTHER
COMPREHENSIVE LOSS 		TREASURY STOCKTOTAL
SHAREHOLDERS’ EQUITY
(In Thousands, Except Share And Per Share Data)SHARESAMOUNT
Balance, December 31, 20238,019,219 $44,550 $61,733 $107,238 $(9,150)$(12,815)$191,556 
Net income3,808 3,808 
Other comprehensive loss(16)(16)
Stock-based compensation273 273 
Dividends declared ($0.32 per share)
(2,404)(2,404)
Common shares issued for employee stock purchase plan2,550 15 35 50 
Common shares issued for director compensation plan2,888 16 46 62 
Dividend reinvestment plan10,940 60128188 
Balance, March 31, 20248,035,597 $44,641 $62,215 $108,642 $(9,166)$(12,815)$193,517 

See accompanying notes to the unaudited consolidated financial statements.



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PENNS WOODS BANCORP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED) 
Three Months Ended March 31,
(In Thousands)20252024
OPERATING ACTIVITIES:  
Net Income$7,367 $3,808 
Adjustments to reconcile net income to net cash provided by operating activities:  
Depreciation and amortization1,069 1,031 
Loss on disposal of premises and equipment— 330 
Amortization of intangible assets25 26 
(Recovery) provision of credit losses(2,969)138 
Stock based compensation(262)273 
Accretion and amortization of investment security discounts and premiums(104)13 
Net debt securities (gains) losses, available for sale(305)23 
Originations of loans held for sale(14,962)(10,413)
Proceeds of loans held for sale16,053 11,351 
Gain on sale of loans(408)(305)
Net equity securities (gains) losses(17)10 
Earnings on bank-owned life insurance(301)(463)
Decrease in deferred tax asset946 117 
Gain on lease abandonment— (127)
Other, net(6,069)(3,544)
Net cash provided by operating activities63 2,268 
INVESTING ACTIVITIES:  
Proceeds from sales of available for sale securities8,018 995 
Proceeds from calls and maturities of available for sale securities3,497 10,740 
Purchases of available for sale securities— (8,108)
Net increase in loans(18,941)(15,149)
Acquisition of premises and equipment(77)(249)
Proceeds from the sale of foreclosed assets75 — 
Purchase of bank-owned life insurance— (6)
Proceeds from bank-owned life insurance death benefit— 1,483 
Proceeds from redemption of regulatory stock11,677 12,867 
Purchases of regulatory stock(12,258)(11,964)
Net cash used for investing activities(8,009)(9,391)
FINANCING ACTIVITIES:  
Net increase in interest-bearing deposits9,043 28,791 
Net increase in noninterest-bearing deposits8,830 278 
Proceeds from long-term borrowings— 20,000 
Repayment of long-term borrowings(40,000)(10,000)
Net increase (decrease) in short-term borrowings40,710 (34,718)
Finance lease principal payments(46)(43)
Dividends paid(2,437)(2,404)
Stock options exercised319 — 
Issuance of common stock— 300 
Net cash provided by financing activities16,419 2,204 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS8,473 (4,919)
CASH AND CASH EQUIVALENTS, BEGINNING28,972 37,462 
CASH AND CASH EQUIVALENTS, ENDING$37,445 $32,543 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:  
Interest paid$12,994 $12,124 
Income taxes paid6 4 
Non-cash investing and financing activities:
Finance right of use asset abandonment— 658 
Finance lease abandonment— 785 
See accompanying notes to the unaudited consolidated financial statements.
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PENNS WOODS BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 

Note 1.  Basis of Presentation
 
The consolidated financial statements include the accounts of Penns Woods Bancorp, Inc. (the “Company”) and its wholly-owned subsidiaries: Woods Investment Company, Inc., Woods Real Estate Development Company, Inc., United Insurance Solutions, LLC., Luzerne Bank, and Jersey Shore State Bank (Jersey Shore State Bank and Luzerne Bank are referred to together as the “Banks”) and Jersey Shore State Bank’s wholly-owned subsidiary, The M Group, Inc. D/B/A The Comprehensive Financial Group (“The M Group”).  All significant inter-company balances and transactions have been eliminated in the consolidation.

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.  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 the financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

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.


Note 2.  Accumulated Other Comprehensive Loss

The changes in accumulated other comprehensive loss by component shown net of tax and parenthesis indicating debits, as of March 31, 2025 and 2024 were as follows:
Three Months Ended March 31, 2025Three Months Ended March 31, 2024
(In Thousands)Net Unrealized (Loss) Gain on Available
for Sale Securities		Defined
Benefit 
Plan		TotalNet Unrealized (Loss) Gain on Available
for Sale Securities		Defined
Benefit 
Plan		Total
Beginning balance$(4,567)$(726)$(5,293)$(6,396)$(2,754)$(9,150)
Other comprehensive income (loss) before reclassifications2,046 — 2,046 (47)— (47)
Amounts reclassified from accumulated other comprehensive loss(241)— (241)18 13 31 
Net current-period other comprehensive income (loss)1,805 — 1,805 (29)13 (16)
Ending balance$(2,762)$(726)$(3,488)$(6,425)$(2,741)$(9,166)
The reclassifications out of accumulated other comprehensive loss shown, net of tax and parenthesis indicating debits to net income, as of March 31, 2025 and 2024 were as follows:
Details about Accumulated Other Comprehensive Loss ComponentsAmount Reclassified from Accumulated Other Comprehensive LossAffected Line Item
 in the Consolidated 
Statement of Income
Three Months Ended March 31, 2025Three Months Ended March 31, 2024
Net unrealized gain (loss) on available for sale securities$305 $(23)Net debt securities gains (losses), available for sale
Income tax effect(64)5 Income tax provision
Total reclassifications for the period$241 $(18)
Net unrecognized pension costs$— $(16)Other non-interest expense
Income tax effect— 3 Income tax provision
Total reclassifications for the period$— $(13)


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Note 3.  Recent Accounting Pronouncements

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which provides for improvements to income tax disclosures primarily related to the rate reconciliation and income taxes paid information. This guidance is effective for public business entities for annual periods beginning after December 15, 2024, and for annual periods beginning after December 15, 2025, for all other entities. This Update is not expected to have a significant impact on the Company’s financial statements.


Note 4. Per Share Data

There are no convertible securities which would affect the denominator in calculating basic and dilutive earnings per share. There were a total of 758,250 stock options, with an average exercise price of $25.05, outstanding on March 31, 2025. A portion of these options were included, on a weighted average basis, in the computation of diluted earnings per share for the period due to the average market price of common shares of $29.82 for the period being greater than the strike price. There were a total of 1,097,000 stock options, with an average exercise price of $25.13, outstanding on March 31, 2024. These options were excluded, on a weighted average basis, in the computation of diluted earnings per share for the period due to the average market price of common shares of $20.20 for the period being less than the strike price.

 Three Months Ended March 31,
 20252024
Weighted average common shares issued8,099,817 8,022,745 
Weighted average treasury stock shares(510,225)(510,225)
Weighted average common shares outstanding - basic7,589,592 7,512,520 
Dilutive effect of outstanding stock options139,096 — 
Weighted average common shares outstanding - diluted7,728,688 7,512,520 
 

Note 5. Investment Securities
 
The amortized cost, gross unrealized gains and losses, and fair values of our investment securities portfolio at March 31, 2025 and December 31, 2024 are as follows, no allowance for credit losses required on any category on investments for either period presented:
 March 31, 2025
  GrossGross 
 AmortizedUnrealizedUnrealizedFair
(In Thousands)CostGainsLossesValue
Available for sale (AFS):    
U.S. Government and agency securities$2,000 $— $(19)$1,981 
Mortgage-backed securities37,645 360 (271)37,734 
State and political securities101,036 148 (3,141)98,043 
Other debt securities38,536 487 (1,060)37,963 
Total debt securities$179,217 $995 $(4,491)$175,721 
Investment equity securities:
Equity securities$1,300 $— $(172)$1,128 
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 December 31, 2024
  GrossGross 
 AmortizedUnrealizedUnrealizedFair
(In Thousands)CostGainsLossesValue
Available for sale (AFS):    
U.S. Government and agency securities$2,000 $— $(40)$1,960 
Mortgage-backed securities38,795 127 (565)38,357 
State and political securities104,992 48 (4,416)100,624 
Other debt securities44,536 684 (1,619)43,601 
Total debt securities$190,323 $859 $(6,640)$184,542 
Investment equity securities:
Equity securities$1,300 $— $(189)$1,111 

The following tables show the Company’s gross unrealized losses and fair value, aggregated by investment category and length of time, that the individual debt securities have been in a continuous unrealized loss position, at March 31, 2025 and December 31, 2024.
 March 31, 2025
 Less than Twelve MonthsTwelve Months or GreaterTotal
  Gross Gross Gross
 FairUnrealizedFairUnrealizedFairUnrealized
(In Thousands)ValueLossesValueLossesValueLosses
Available for sale (AFS):
U.S. Government and agency securities$998 $(2)$983 $(17)$1,981 $(19)
Mortgage-backed securities13,266 (109)3,334 (162)16,600 (271)
State and political securities14,858 (290)70,060 (2,851)84,918 (3,141)
Other debt securities3,997 (18)17,309 (1,042)21,306 (1,060)
Total debt securities$33,119 $(419)$91,686 $(4,072)$124,805 $(4,491)
 December 31, 2024
 Less than Twelve MonthsTwelve Months or GreaterTotal
  Gross Gross Gross
 FairUnrealizedFairUnrealizedFairUnrealized
(In Thousands)ValueLossesValueLossesValueLosses
Available for sale (AFS):
U.S. Government and agency securities$988 $(12)$972 $(28)$1,960 $(40)
Mortgage-backed securities21,988 (391)1,640 (174)23,628 (565)
State and political securities22,249 (598)74,096 (3,818)96,345 (4,416)
Other debt securities2,716 (65)23,014 (1,554)25,730 (1,619)
Total debt securities$47,941 $(1,066)$99,722 $(5,574)$147,663 $(6,640)
 
At March 31, 2025, there were a total of 33 securities in a continuous unrealized loss position for less than twelve months and 124 individual securities that were in a continuous unrealized loss position for twelve months or greater. No credit losses occurred for the period ended March 31, 2025.

The Company reviews its position quarterly and has determined that, at March 31, 2025, the declines outlined in the above table represent temporary non-credit declines and the Company does not intend to sell, and does not believe it will be required to sell, these securities before recovery of their cost basis, which may be at maturity.  The Company has concluded that the unrealized losses disclosed above are not credit-related but are the result of interest rate changes, sector credit ratings changes, or company-specific ratings changes that are not expected to result in the non-collection of principal and interest during the period.

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The amortized cost and fair value of debt securities at March 31, 2025, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities since borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
(In Thousands)Amortized CostFair Value
Due in one year or less$19,809 $19,648 
Due after one year to five years69,036 67,440 
Due after five years to ten years68,230 66,751 
Due after ten years22,142 21,882 
Total$179,217 $175,721 

Total gross proceeds from sales of debt securities available for sale for the three months ended March 31, 2025 was $8,018,000, compared to $995,000 for the corresponding 2024 period.

The following table represents gross realized gains and losses from the sales of debt securities available for sale:
 Three Months Ended March 31,
(In Thousands)20252024
Available for sale (AFS):
Gross realized gains:  
State and political securities$— $— 
Other debt securities416 — 
Total gross realized gains$416 $— 
Gross realized losses:  
State and political securities$(111)$(23)
Other debt securities— — 
Total gross realized losses$(111)$(23)

Investment securities with a carrying value of approximately $111,479,000 and $110,153,000 at March 31, 2025 and December 31, 2024, respectively, were pledged to secure certain deposits, repurchase agreements, and for other purposes as required by law.

At March 31, 2025 and December 31, 2024, we had $1,128,000 and $1,111,000, respectively, in equity securities recorded at fair value. The following is a summary of unrealized and realized gains and losses recognized in net income on equity securities during the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(In Thousands)20252024
Net gains (losses) recognized in equity securities during the period$17 $(10)
Less: Net losses realized on the sale of equity securities during the period— — 
Unrealized gains (losses) recognized in equity securities held at reporting date$17 $(10)


Note 6. Loans

Management segments the Banks' loan portfolio to a level that enables risk and performance monitoring according to similar risk characteristics.  Loans are segmented based on the underlying collateral characteristics.  Categories include commercial, financial, and agricultural, real estate, and installment loans.  Real estate loans are further segmented into three categories: residential, commercial, and construction, while installment loans are classified as either consumer automobile loans or other installment loans.




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The following table presents the related aging categories of loans, by class, as of March 31, 2025 and December 31, 2024:
 March 31, 2025
 Past Due
 30 To 89Past Due 90
(In Thousands)DaysDays Or MoreCurrentTotal
Commercial, financial, and agricultural$972 $174 $214,268 $215,414 
Real estate mortgage: 
Residential10,037 3,820 818,662 832,519 
Commercial2,002 4,669 531,436 538,107 
Construction200 — 40,281 40,481 
Consumer automobile loans4,242 517 255,184 259,943 
Other consumer installment loans146 38 9,373 9,557 
 $17,599 $9,218 $1,869,204 1,896,021 
Net deferred loan fees and discounts 1,355 
Allowance for credit losses (9,990)
Loans, net $1,887,386 
 December 31, 2024
 Past Due  
 30 To 89Past Due 90 
(In Thousands)DaysDays Or MoreCurrentTotal
Commercial, financial, and agricultural$1,742 $64 $210,313 $212,119 
Real estate mortgage:    
Residential13,222 2,622 814,563 830,407 
Commercial1,522 2,964 531,533 536,019 
Construction1,056 — 42,075 43,131 
Consumer automobile loans5,071 373 239,150 244,594 
Other consumer installment loans160 41 9,644 9,845 
 $22,773 $6,064 $1,847,278 1,876,115 
Net deferred loan fees and discounts  963 
Allowance for loan losses  (11,848)
Loans, net  $1,865,230 

As of March 31, 2025, loans that were ninety days past due or greater and still accruing totaled $4,105,000, compared to a total of $4,516,000 at December 31, 2024.

The Allowance for Credit Losses ("ACL") related to loans consists of loans evaluated collectively and individually for expected credit losses. The ACL related to loans represents an estimate of expected credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The ACL for off balance sheet credit exposure includes estimated losses on unfunded loan commitments, letters of credit and other off balance sheet credit exposures and is recorded in other liabilities. The total ACL is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The following table presents the components of the ACL as of March 31, 2025 and December 31, 2024:
(In Thousands)March 31, 2025December 31, 2024
ACL - loans$9,990 $11,848 
ACL - off balance sheet credit exposure397 551 
Total ACL$10,387 $12,399 



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Non-Accrual Loans
 March 31, 2025December 31, 2024
(In Thousands)With a Related ACLWithout a Related ACLTotalWith a Related ACLWithout a Related ACLTotal
Commercial, financial, and agricultural$41 $84 $125 $— $564 $564 
Real estate mortgage:
Residential307 530 837 — 212 212 
Commercial2,336 2,576 4,912 2,036 1,576 3,612 
Construction— — — — — — 
Consumer automobile— 8 8 — — — 
Other consumer installment loans— — — — — — 
$2,684 $3,198 $5,882 $2,036 $2,352 $4,388 

Total interest income recorded on non-accrual loans at March 31, 2025 totaled $55,000 for the three month period ended.


The following table presents outstanding loan balances of collateral-dependent loans by class as of March 31, 2025 and December 31, 2024:
March 31, 2025
(In Thousands)Real estateOtherTotal
Real estate mortgage:
Residential$2,018 $— $2,018 
Commercial3,056 — 3,056 
Total$5,074 $— $5,074 
December 31, 2024
(In Thousands)Real estateOtherTotal
Real estate mortgage:
Residential$1,420 $— $1,420 
Commercial3,505 — 3,505 
Total$4,925 $— $4,925 

Loan Modifications

The ACL incorporates an estimate of lifetime expected credit losses and is recorded upon asset origination or acquisition. The starting point for the estimate of the ACL is historical loss information, which includes losses from modifications of receivables to borrowers experiencing financial difficulty. The Company uses a probability of default/loss given default model to determine the allowance for credit losses. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification.

Loans considered modifications to borrowers experiencing financial difficulty amounted to $3,794,000 and $4,319,000 as of March 31, 2025 and December 31, 2024, respectively.

The amount of foreclosed residential real estate held at March 31, 2025 and December 31, 2024, totaled $897,000 and $1,496,000, respectively. Consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at March 31, 2025 and December 31, 2024, totaled $897,000 and $1,693,000, respectively.


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Internal Credit Ratings

Management uses a ten point internal credit rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized, and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The special mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt, and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are evaluated for substandard classification.  Loans in the doubtful category exhibit the same weaknesses found in the substandard loans; however, the weaknesses are more pronounced.  Such loans are static and collection in full is improbable.  However, these loans are not yet rated as loss because certain events may occur which would salvage the debt.  Loans classified as loss are considered uncollectible and charge-off is imminent.

To help ensure that credit ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Banks have a structured loan rating process with several layers of internal and external oversight.  Generally, consumer and residential mortgage loans are included in the pass category unless a specific action, such as bankruptcy, repossession, or death occurs to raise awareness of a possible credit event.  An external semi-annual loan review of large commercial relationships is performed, as well as a sample of smaller transactions. The 2025 loan review will evaluate the Banks' outstanding commercial portfolio which can consist of outstanding loans, commercial real estate mortgages and outstanding commitments. Detailed reviews, including plans for resolution, are performed on loans classified as substandard, doubtful, or loss on a quarterly basis.






































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The following table presents the credit quality categories identified above as of March 31, 2025 and December 31, 2024:
March 31, 2025
(In Thousands)20252024202320222021PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial, financial, and agricultural
Pass$5,273 $28,000 $22,243 $40,836 $28,339 $52,482 $33,485 $141 $210,799 
Special Mention— — — 90 336 1,773 1,753 — 3,952 
Substandard or Lower— — 55 — — 316 10 282 663 
$5,273 $28,000 $22,298 $40,926 $28,675 $54,571 $35,248 $423 $215,414 
 
Current period gross write offs$— $— $1 $— $— $— $— $— $1 
Real estate mortgage:
Residential
Pass$25,699 $104,840 $111,236 $122,408 $75,254 $184,390 $60,266 $144,730 $828,823 
Special Mention— — 329 506 — 88 — — 923 
Substandard or Lower— — — 307 264 2,060 92 50 2,773 
$25,699 $104,840 $111,565 $123,221 $75,518 $186,538 $60,358 $144,780 $832,519 
Current period gross write offs$— $— $— $— $— $— $— $3 $3 
Commercial
Pass$10,120 $39,196 $65,976 $99,543 $115,731 $180,809 $13,005 $829 $525,209 
Special Mention— — 173 146 2,307 887 — — 3,513 
Substandard or Lower— — 135 — 864 8,067 319 — 9,385 
$10,120 $39,196 $66,284 $99,689 $118,902 $189,763 $13,324 $829 $538,107 
Current period gross write offs$— $— $— $— $— $— $— $— $— 
Construction
Pass$1,746 $16,654 $8,429 $6,818 $1,201 $5,203 $354 $— $40,405 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — 76 — — 76
$1,746 $16,654 $8,429 $6,818 $1,201 $5,279 $354 $— $40,481 
Current period gross write offs$— $— $— $— $— $— $— $— $— 
Consumer Automobile
Pass$32,949 $81,345 $79,853 $47,261 $9,847 $8,688 $— $— $259,943 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — — — — — 
$32,949 $81,345 $79,853 $47,261 $9,847 $8,688 $— $— $259,943 
Current period gross write offs$— $46 $110 $83 $14 $43 $— $— $296 
Installment loans to individuals
Pass$1,049 $2,092 $1,548 $1,093 $729 $3,019 $— $27 $9,557 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — — — — — 
$1,049 $2,092 $1,548 $1,093 $729 $3,019 $— $27 $9,557 
Current period gross write offs$16 $23 $16 $11 $10 $21 $— $— $97 


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December 31, 2024
(In Thousands)20232022202120202019PriorRevolving LoansRevolving Loans Converted to TermTotal
Commercial, financial, and agricultural
Pass$29,156 $24,335 $41,488 $30,040 $29,742 $23,601 $31,511 $144 $210,017 
Special Mention— — 127 24 15 — — — 166 
Substandard or Lower— — — — — 690 476 770 1,936 
$29,156 $24,335 $41,615 $30,064 $29,757 $24,291 $31,987 $914 $212,119 
Current period gross write offs$— $40 $71 $— $— $65 $— $— $176 
Real estate mortgage:
Residential
Pass$107,763 $114,177 $125,199 $78,214 $44,408 $147,432 $61,341 $148,538 $827,072 
Special Mention— 334 516 — — 90 — — 940 
Substandard or Lower— — 309 266 — 1,766 — 54 2,395 
$107,763 $114,511 $126,024 $78,480 $44,408 $149,288 $61,341 $148,592 $830,407 
Current period gross write offs$— $— $— $— $— $13 $27 $— $40 
Commercial
Pass$37,787 $63,099 $102,339 $117,802 $45,307 $143,949 $12,456 $873 $523,612 
Special Mention— 181 149 2,366 — 906 — — 3,602 
Substandard or Lower— — — 872 — 7,933 — — 8,805 
$37,787 $63,280 $102,488 $121,040 $45,307 $152,788 $12,456 $873 $536,019 
Current period gross write offs$— $— $— $— $— $3 $— $— $3 
Construction
Pass$15,094 $14,053 $6,888 $1,225 $1,117 $4,325 $350 $— $43,052 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — 79 — — 79
$15,094 $14,053 $6,888 $1,225 $1,117 $4,404 $350 $— $43,131 
Current period gross write offs$— $— $— $— $— $— $— $— $— 
Consumer Automobile
Pass$78,688 $89,462 $53,488 $11,776 $7,691 $3,489 $— $— $244,594 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — — — — — 
$78,688 $89,462 $53,488 $11,776 $7,691 $3,489 $— $— $244,594 
Current period gross write offs$115 $525 $246 $97 $61 $37 $— $— $1,081 
Installment loans to individuals
Pass$2,837 $1,739 $1,245 $800 $386 $2,808 $— $30 $9,845 
Special Mention— — — — — — — — — 
Substandard or Lower— — — — — — — — — 
$2,837 $1,739 $1,245 $800 $386 $2,808 $— $30 $9,845 
Current period gross write offs$122 $86 $30 $2 $4 $52 $— $— $296 

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Allowance for Credit Losses

Maintaining an appropriate Allowance for Credit Losses ("ACL") is dependent on various factors, including the ability to identify potential problem loans in a timely manner. For commercial construction, residential construction, commercial and industrial, and commercial real estate, an internal credit rating process is used. Management believes that internal credit ratings are the most relevant credit quality indicator for these types of loans. The migration of loans through the various internal credit rating categories is a significant component of the ACL methodology for these loans, which bases the probability of default on this migration. Assigning credit ratings involves judgment. The Company's loan review process provide a separate assessment of credit rating accuracy. Credit ratings may be changed based on the ongoing monitoring procedures performed by loan officers or credit administration staff or if specific loan review assessments identify a deterioration or an improvement in the loans.

Management considers the performance of the loan portfolio and its impact on the ACL. The Company does not assign internal Credit ratings to smaller balance, homogeneous loans, such as home equity, residential mortgage, and consumer automobile loans. For these loans, the most relevant credit quality indicator is delinquency status and management evaluates credit quality based on the aging status of the loan.

Historical loss trends are used in the estimation of losses in the current portfolio.  These historical loss amounts are modified by other qualitative factors.  A historical charge-off factor is calculated utilizing the charge-off and recovery data over the past ten years.  Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience.  The additional factors that are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources are: national and local economic trends and conditions; trends in volumes and terms of loans; effects of changes in lending policies; experience, ability, and depth of lending staff; value of underlying collateral; and concentrations of credit from a loan type, industry and/or geographic standpoint.

Management reviews the loan portfolio on a quarterly basis in order to make appropriate and timely adjustments to the ACL.  When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ACL.

Activity in the allowance is presented for the three months ended March 31, 2025 and 2024:

 Three Months Ended March 31, 2025
 Commercial, Financial, and AgriculturalReal Estate MortgagesConsumer automobileOther consumer installment 
(In Thousands)ResidentialCommercialConstructionTotals
Beginning Balance$2,323 $726 $5,299 $7 $2,909 $584 $11,848 
Charge-offs(1)(3)— — (296)(97)(397)
Recoveries378 1 — — 22 953 1,354 
Provision(1,132)333 (2,224)4 1,055 (851)(2,815)
Ending Balance$1,568 $1,057 $3,075 $11 $3,690 $589 $9,990 
 Three Months Ended March 31, 2024
 Commercial, Financial, and AgriculturalReal Estate MortgagesConsumer automobileOther consumer installment 
(In Thousands)ResidentialCommercialConstructionTotals
Beginning Balance$3,379 $1,200 $3,352 $145 $2,668 $702 $11,446 
Charge-offs(90)(4)— — (336)(95)(525)
Recoveries70 2 2 — 44 27 145 
Provision(308)(479)1,292 (136)111 (4)476 
Ending Balance$3,051 $719 $4,646 $9 $2,487 $630 $11,542 
 
The shift in allocation and the changes in the provision for credit losses are primarily due to changes in the credit metrics within the loan portfolio, a recovery on a commercial loan, and a decline in the historical loss rates over the look back period which reduced the probability of default and loss given default applied to the loan portfolio when determining the level of the allowance for credit losses. The fluctuation in provision for consumer automobile loans was driven by the level of net charge-
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offs, an uncertain economic outlook, and portfolio growth. The provision for residential real estate increased due to the uncertain economic outlook. The level of provision for commercial, financial, and agricultural was primarily the result of net recoveries for the three month period which influenced the default assumptions in the model along with a decline in the historical loss rates over the look back period. The provision for commercial real estate decreased for the three month period due to strong credit metrics of the portfolio and a reduction in the loss probability based on the ten year look back period. The ACL for real estate construction remained stable as the portfolio balance decreased slightly.

The Company makes commercial, industrial, residential, and installment loans to customers primarily throughout north-east and central Pennsylvania. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within this region.

The Company has a concentration of the following to gross loans at March 31, 2025 and 2024: 
 March 31,
 20252024
Owners of residential rental properties19.72 %18.68 %
Owners of commercial rental properties14.72 %14.56 %
Exposure to non-owner occupied office space at March 31, 2025 and December 31, 2024 was $13,658,000 and $14,076,000, respectively, with none of these loans being delinquent.



Note 7. Net Periodic Benefit Cost-Defined Benefit Plans

For a detailed disclosure on the Company’s pension and employee benefits plans, please refer to Note 13 of the Company’s Consolidated Financial Statements included in the Annual Report on Form 10-K for the year ended December 31, 2024.

The following sets forth the components of the net periodic expense/(gain) of the domestic non-contributory defined benefit plan for the three months ended March 31, 2025 and 2024, respectively:
Three Months Ended March 31,
(In Thousands)20252024
Interest cost$201 $193 
Expected return on plan assets(397)(365)
Amortization of net loss— 16 
Net periodic benefit$(196)$(156)

Employer Contributions

The Company previously disclosed in its consolidated financial statements, included in the Annual Report on Form 10-K for the year ended December 31, 2024, that it does not expect to contribute to its defined benefit plan in 2025.  As of March 31, 2025, there were no contributions made to the pension plan.


Note 8. Stock Purchase Plans

The Company maintains an Employee Stock Purchase Plan (“Plan”).  The Plan is intended to encourage employee participation in the ownership and economic progress of the Company.  The Plan allows for up to 1,500,000 shares to be purchased by employees.  The purchase price of the shares is 95% of market value with an employee eligible to purchase up to the lesser of 15% of base compensation or $25,000 in market value annually.  During the three months ended March 31, 2025 and 2024, there were 0 and 2,550 shares issued under the Plan, respectively, for total proceeds of $0 and $50,000.

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The Company maintains the 2020 Non-Employee Director Compensation Plan ("Director Plan"). Under this Director Plan, non-employee directors who have not attained specified stock ownership levels are required to receive a portion of their annual compensation in the form of common stock (currently 50% of total annual compensation), with the ability to elect to receive up to 100% of annual compensation in the form of common stock by making a written election prior to the calendar year to which the compensation relates. The Director Plan allows for up to 100,000 shares to be issued. As of March 31, 2025, the Company had issued 54,120 shares under the Director Plan.

The Plan and Director Plan have been suspended for 2025 due to the pending acquisition of the Company by Northwest Bancshares, Inc. which is expected to close in the third quarter of 2025.

Note 9. Off-Balance Sheet Risk

The Company is a party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers.  These financial instruments are primarily comprised of commitments to extend credit, standby letters of credit, and credit exposure from the sale of assets with recourse.  These instruments involve, to varying degrees, elements of credit, interest rate, or liquidity risk in excess of the amount recognized in the Consolidated Balance Sheet.  The contract amounts of these instruments express the extent of involvement the Company has in particular classes of financial instruments.

The Company’s exposure to credit loss from nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters of credit is represented by the contractual amount of these instruments.  The Company uses the same credit policies in making commitments and conditional obligations as it does for on-balance sheet instruments.  The Company may require collateral or other security to support financial instruments with off-balance sheet credit risk.

Financial instruments whose contract amounts represent credit risk are as follows at March 31, 2025 and December 31, 2024:
(In Thousands)March 31, 2025December 31, 2024
Commitments to extend credit$880,514 $887,788 
Funded commitments to extend credit481,665 487,074 
Remaining unfunded commitments to extend credit398,849 400,714 
Standby letters of credit5,865 9,977 
Credit exposure from the sale of assets with recourse7,463 7,305 
Total unfunded credit exposure$412,177 $417,996 
Allowance for credit losses$397 $551 
Commitment to extend credit funded rate54.7 %54.9 %
Historic commitment to extend credit funded rate56.2 %56.3 %

Commitments to extend credit are legally binding agreements to lend to customers.  Commitments generally have fixed expiration dates or other termination clauses and may require payment of fees.  Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future liquidity requirements.  The Company evaluates each customer’s credit worthiness on a case-by-case basis.  The amount of collateral obtained, if deemed necessary by the Company, on an extension of credit is based on management’s credit assessment of the counterparty.

Standby letters of credit represent conditional commitments issued by the Company to guarantee the performance of a customer to a third party.  These instruments are issued primarily to support bid or performance related contracts.  The coverage period for these instruments is typically a one year period with an annual renewal option subject to prior approval by management.  Fees earned from the issuance of these letters are recognized upon expiration of the coverage period.  For secured letters of credit, the collateral is typically Bank deposit instruments or customer business assets.

Note 10. Fair Value Measurements

The following disclosures show the hierarchical disclosure framework associated with the level of pricing observations utilized in measuring assets and liabilities at fair value.
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Level I: Quoted prices are available in active markets for identical assets or liabilities as of the reported date.
   
Level II: Pricing inputs are other than quoted prices in active markets, which are either directly or indirectly observable as of the reported date. The nature of these assets and liabilities include items for which quoted prices are available but traded less frequently, and items that are fair valued using other financial instruments, the parameters of which can be directly observed.
   
Level III: Assets and liabilities that have little to no pricing observability as of the reported date. These items do not have two-way markets and are measured using management’s best estimate of fair value, where the inputs into the determination of fair value require significant management judgment or estimation.

This hierarchy requires the use of observable market data when available.

The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a recurring basis as of March 31, 2025 and December 31, 2024, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.
 March 31, 2025
(In Thousands)Level ILevel IILevel IIITotal
Assets measured on a recurring basis:    
Investment securities, available for sale:    
U.S. Government and agency securities$— $1,981 $— $1,981 
Mortgage-backed securities— 37,734 — 37,734 
State and political securities— 98,043 — 98,043 
Other debt securities— 37,963 — 37,963 
Investment equity securities:
  Equity securities1,128 — — 1,128 

 December 31, 2024
(In Thousands)Level ILevel IILevel IIITotal
Assets measured on a recurring basis:    
Investment securities, available for sale:    
U.S. Government and agency securities$— $1,960 $— $1,960 
Mortgage-backed securities— 38,357 — 38,357 
State and political securities— 100,624 — 100,624 
Other debt securities— 43,601 — 43,601 
Investment equity securities:
  Equity securities1,111 — — 1,111 

The following table presents the assets reported on the Consolidated Balance Sheet at their fair value on a non-recurring basis as of March 31, 2025 and December 31, 2024, by level within the fair value hierarchy. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. 
 March 31, 2025
(In Thousands)Level ILevel IILevel IIITotal
Assets measured on a non-recurring basis:    
Collateral dependent loans$— $— $5,074 $5,074 
Other real estate owned— — 83 83 
 December 31, 2024
(In Thousands)Level ILevel IILevel IIITotal
Assets measured on a non-recurring basis:    
Collateral dependent loans$— $— $4,925 $4,925 
Other real estate owned— — 178 178 
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The following tables present a listing of significant unobservable inputs used in the fair value measurement process for items valued utilizing level III techniques as of March 31, 2025 and December 31, 2024: 
 March 31, 2025
 Quantitative Information About Level III Fair Value Measurements
(In Thousands)Fair ValueValuation Technique(s)Unobservable InputsRangeWeighted Average
Collateral dependent loans$5,074 
Appraisal of collateral (1)
Appraisal of collateral (1)
(5)% to (24)%
(15)%
Other real estate owned$83 
Appraisal of collateral (1)
Appraisal of collateral (1)
(20)%(20)%
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.
 December 31, 2024
 Quantitative Information About Level III Fair Value Measurements
(In Thousands)Fair ValueValuation Technique(s)Unobservable InputsRangeWeighted Average
Collateral dependent loans$4,925 
Appraisal of collateral (1)
Appraisal of collateral (1)
(5)% to (24)%
(11)%
Other real estate owned$178 
Appraisal of collateral (1)
Appraisal of collateral (1)
(20)%(20)%
(1) Appraisals may be adjusted by management for qualitative factors such as economic conditions and estimated liquidation expenses.

The significant unobservable input used in the fair value measurement of the Company’s impaired loans using the appraisal of collateral valuation technique include appraisal adjustments, which are adjustments to appraisals by management for qualitative factors such as economic conditions and estimated liquidation expenses.  The significant unobservable input used in the fair value measurement of the Company’s other real estate owned are the same inputs used to value impaired loans using the appraisal of collateral valuation technique. 

Note 11. Fair Value of Financial Instruments

The Company is required to disclose fair values for its financial instruments.  Fair values are made at a specific point in time, based on relevant market information and information about the financial instrument.  These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument.  Also, it is the Company’s general practice and intention to hold most of its financial instruments to maturity and not to engage in trading or sales activities.  Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors.  These fair values are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision.  Changes in assumptions can significantly affect the fair values.

Fair values have been determined by the Company using historical data and an estimation methodology suitable for each category of financial instruments. The Company’s fair values are set forth below for the Company’s other financial instruments.

As certain assets and liabilities, such as deferred tax assets, premises and equipment, and many other operational elements of the Company, are not considered financial instruments but have value, this fair value of financial instruments would not represent the full market value of the Company.











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The fair values of the Company’s financial instruments not recorded at fair value on a recurring or nonrecurring basis are as follows at March 31, 2025 and December 31, 2024:
 CarryingFairFair Value Measurements at March 31, 2025
(In Thousands)ValueValueLevel ILevel IILevel III
Financial assets:     
Loans held for sale (1)$2,583 $2,583 $2,583 $— $— 
Loans, net1,887,386 1,909,203 — — 1,909,203 
Financial liabilities:     
Time deposits & brokered deposits519,992 519,012 — — 519,012 
Short-term borrowings 82,910 82,910 82,910 — — 
Long-term borrowings214,542 215,060 — — 215,060 
(1) The financial instrument is carried at cost the lower of cost or fair value at, March 31, 2025 which is not significantly different than the fair value of the instruments
 CarryingFairFair Value Measurements at December 31, 2024
(In Thousands)ValueValueLevel ILevel IILevel III
Financial assets:     
Loans held for sale (1)$3,266 $3,266 $3,266 $— $— 
Loans, net1,865,230 1,869,035 — — 1,869,035 
Financial liabilities:     
Time deposits & brokered deposits519,141 518,232 — — 518,232 
Short-term borrowings42,200 42,200 42,200 — — 
Long-term borrowings254,588 254,113 — — 254,113 
(1) The financial instrument is carried at cost the lower of cost or fair value at, December 31, 2024 which is not significantly different than the fair value of the instruments
The methods and assumptions used by the Company in estimating fair values of financial instruments is in accordance with ASC Topic 825, Financial Instruments, as amended by ASU 2016-01 which requires public entities to use exit pricing in the calculation of the above tables.

Note 12. Stock Options

In 2020, the Company adopted the 2020 Equity Incentive Plan which replaced the 2014 Equity Incentive Plan that did not have any remaining shares available for issuance. The plans are designed to help the Company attract, retain, and motivate employees and non-employee directors. Incentive stock options, non-qualified stock options, restricted stock, restricted stock units, and other equity-based awards may be granted as part of the plan.

As of January 1, 2024, the Company had a total of 1,087,300 stock options outstanding.
















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Stock options outstanding as of March 31, 2025 are presented below:

Stock Options Granted
DateSharesForfeitedSettlementOutstandingStrike PriceVesting PeriodExpiration
January 17, 202464,700 (4,700)— 60,000 $20.85 3 years10 years
January 17, 202432,300 (2,300)— 30,000 20.85 5 years10 years
January 20, 202359,500 (6,700)— 52,800 27.77 3 years10 years
January 20, 202329,500 (3,300)— 26,200 27.77 5 years10 years
January 18, 2022156,000 (6,700)(73,300)76,000 24.10 3 years10 years
January 18, 202278,000 (3,300)— 74,700 24.10 5 years10 years
April 9, 2021156,500 (6,700)(82,400)67,400 24.23 3 years10 years
April 9, 202178,000 (3,300)— 74,700 24.23 5 years10 years
March 11, 2020119,300 (2,500)(63,800)53,000 25.34 3 years10 years
March 11, 2020119,200 (2,500)— 116,700 25.34 5 years10 years
March 15, 2019120,900 (24,300)(34,125)62,475 28.01 3 years10 years
March 15, 2019119,100 (23,700)(34,125)61,275 28.01 5 years10 years
August 27, 201558,125 (26,250)(28,875)3,000 28.02 5 years10 years
1,191,125 (116,250)(316,625)758,250 $25.05 
A summary of stock option activity for the three months ended March 31, 2025 is presented below:
March 31, 2025
SharesWeighted Average Exercise Price
Outstanding, beginning of year1,087,300 $25.12 
Granted— — 
Settlement(281,050)25.34 
Forfeited(48,000)25.04 
Outstanding, end of period758,250 $25.05 
Exercisable, end of period439,850 $25.73 

The estimated fair value of options, including the effect of estimated forfeitures, is recognized as expense on a straight line basis over the options’ vesting periods while ensuring that the cumulative amount of compensation cost recognized at least equals the value of the vested portion of the award at that date.

Compensation expense for stock options is recognized using the fair value when the stock options are granted and is amortized over the options' vesting period. Compensation expense related to stock options was $(262,000), the negative amount was due to forfeitures during the period, for the three months ended March 31, 2025, compared to $273,000 for the same period of 2024. As of March 31, 2025, a total of 439,850 stock options were exercisable and the weighted average years to expiration of these options was 5.12 years.

Note 13.  Reclassification of Comparative Amounts

Certain comparative amounts for the prior period have been reclassified to conform to current period presentations. Such reclassifications had no effect on net income or shareholders’ equity.
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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 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; (vi) the effect of changes in the business cycle and downturns in the local, regional or national economies; or (vii) any potential adverse events or developments resulting from the merger agreement, dated December 16, 2024, between Penns Woods Bancorp, Inc. and Northwest Bancshares, Inc., including, without limitation, any event, change, or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement or the possibility that the parties may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or to successfully integrate the business and operations of Jersey Shore State Bank and Luzerne Bank with those of Northwest Savings Bank after closing; and (viii) the Risk Factors identified in Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and in other filings made by the Company under the Securities Exchange Act of 1934.

You should not put undue reliance on any forward-looking statements.  These statements speak only as of the date of this Quarterly Report on Form 10-Q, 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 Quarterly Report on Form 10-Q.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

EARNINGS SUMMARY

Comparison of the Three Months Ended March 31, 2025 and 2024

Summary Results

Net income for the three months ended March 31, 2025 was $7,367,000, compared $3,808,000 for the same period of 2024. Results for the three months ended March 31, 2025 compared to 2024 were impacted by an increase in net interest income of $2,394,000, as the net interest margin expanded. The three month period ended March 31, 2025 has been impacted by after-tax merger related expenses of $948,000 resulting from the announced acquisition of the Company by Northwest Bancshares, Inc. The disposal of assets related to two former branch properties resulted in a one time after-tax loss of $261,000 for the three month period ended March 31, 2024. The allowance for credit losses was impacted for the three months ended March 31, 2025 by a negative provision for credit losses of $2,969,000, compared to a provision for credit losses of $138,000 for the 2024 period. The recognition of a negative provision for credit losses for the 2025 period was due primarily to a recovery on a commercial loan of $1,312,000. The recovery, coupled with a decline in the historical loss rates over the look back period, reduced the probability of default and loss given default applied to the loan portfolio when determining the level of the allowance for credit losses. Basic and diluted earnings per share for the three months ended March 31, 2025 were $0.97 and $0.95, respectively. This compares to basic and diluted earnings per share of $0.51 for the three month period ended March 31, 2024. Annualized return on average assets was 1.31% for the three months ended March 31, 2025, compared to 0.69% for the corresponding period of 2024. Annualized return on average equity was 14.76% for the three months ended March 31, 2025, compared to 8.03% for the corresponding period of 2024.

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 by excluding significant gains or losses that are unusual in nature.  Because certain of these items and their impact on the Company’s performance are difficult to predict, management believes the 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.  For purposes of this Quarterly Report on Form 10-Q, net income from core operations means net income adjusted to exclude after-tax net securities gains or losses and merger related expenses. 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.

Reconciliation of GAAP and Non-GAAP Financial Measures
(Dollars in Thousands, Except Per Share Data)Three Months Ended March 31,
20252024
GAAP net income$7,367$3,808
Net securities (gains) losses, net of tax(254)26
Merger expenses, net of tax948—
Non-GAAP core earnings$8,061$3,834
Three Months Ended March 31,
 20252024
Return on average assets (ROA)1.31 %0.69 %
Net securities (gains) losses, net of tax(0.04)%— %
Merger expenses, net of tax0.16 %— %
Non-GAAP core ROA1.43 %0.69 %
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Three Months Ended March 31,
 20252024
Return on average equity (ROE)14.76 %8.03 %
Net securities (gains) losses, net of tax(0.51)%0.06 %
Merger expenses, net of tax1.90 %— %
Non-GAAP core ROE16.15 %8.09 %
Three Months Ended March 31,
 20252024
Basic earnings per share (EPS)$0.97$0.51
Net securities (gains) losses, net of tax(0.03)—
Merger expenses, net of tax0.12—
Non-GAAP basic core EPS$1.06$0.51
Three Months Ended March 31,
 20252024
Diluted EPS$0.95$0.51
Net securities (gains) losses, net of tax(0.03)—
Merger expenses, net of tax0.12—
Non-GAAP diluted core EPS$1.04$0.51
 
Interest and Dividend Income

Interest and dividend income for the three months ended March 31, 2025 increased $2,148,000 compared to the same period of 2024. The increase in loan portfolio income was due to an increase in the average loan portfolio balance coupled with an increase in average rate earned on the portfolio as legacy loans matured and were replaced with loans at current higher rates and variable rate loans reset to higher rates.  Investment securities income has been impacted primarily by an increase in the average rate earned on the portfolio as lower yielding legacy investments matured. The fluctuation in dividend and other interest income is due primarily to dividends received on FHLB restricted stock.

Interest and dividend income composition for the three months ended March 31, 2025 and 2024 was as follows:
 Three Months Ended
 March 31, 2025March 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Loans including fees$26,014 91.67 %$23,860 90.96 %$2,154 9.03 %
Investment securities:      
Taxable1,723 6.07 1,594 6.08 129 8.09 
Tax-exempt60 0.21 97 0.37 (37)(38.14)
Dividend and other interest income581 2.05 679 2.59 (98)(14.43)
Total interest and dividend income$28,378 100.00 %$26,230 100.00 %$2,148 8.19 %
Interest Expense

Interest expense for the three months ended March 31, 2025 decreased $246,000 compared to the same period of 2024. Interest-bearing deposit interest expense increased due a time deposit gathering campaign that generated funding for the increase in the loan portfolio. In addition, competition for deposits along with the impact of the rate environment contributed to the increase in deposit interest expense. Brokered deposit utilization increased deposit interest expense as this funding source was a supplement to in-market deposit gathering efforts and was used to reduce the utilization of short-term borrowings. Long-term borrowing interest expense decreased as matured long-term borrowings were not replaced.


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Interest expense composition for the three months ended March 31, 2025 and 2024 was as follows:
 Three Months Ended
 March 31, 2025March 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Deposits$8,744 71.45 %$7,963 63.79 %$781 9.81 %
Short-term borrowings1,056 8.63 2,005 16.06 (949)(47.33)
Long-term borrowings2,438 19.92 2,516 20.15 (78)(3.10)
Total interest expense$12,238 100.00 %$12,484 100.00 %$(246)(1.97)%
Net Interest Margin

The net interest margin for the three months ended March 31, 2025 was 3.13% compared to 2.69% for the corresponding period of 2024. The increase in the net interest margin for the three month period was driven by an increase in the rate collected on interest-earning assets of 38 basis points ("bps"). The overall market conditions over the periods resulted in increases to the yield on the earnings asset portfolio and a decrease in the rate paid on interest-bearing deposits. Driving the increase in the yield and interest income on the earning assets portfolio was the repricing of legacy assets, portfolio growth, and the recognition of $223,000 in interest from a recovery on a commercial loan. The average loan portfolio balance increased $41.8 million for the three month period ended March 31, 2025 compared to the same period of 2024 as the average yield on the portfolio increased 40 bps, resulting in an increase in taxable equivalent interest income of $2.2 million for the period. The three month period ended March 31, 2025 was impacted by an increase of 30 bps in the yield earned on the securities portfolio as legacy securities matured, which offset the impact of a decrease in average securities balance of $15.0 million. Short-term borrowings decreased leading to a decrease of $949,000 in expense for the three month period ended March 31, 2025 compared to the same period of 2024. The rate paid on interest-bearing deposits increased 4 bps, or $781,000, in expense for the three month period ended March 31, 2025 compared to the corresponding period of 2024 due to the rate environment, an increase in competition for deposits, increased utilization of brokered deposits, and a migration of deposit balances from core deposits to higher rate time deposits. The average balance of time deposits increased $99.9 million from the three month period ended March 31, 2024 to 2025 as the rate paid on the funds decreased 9 bps. In addition, brokered deposits have been utilized to assist with funding the loan portfolio growth and contributed to the increase in time deposit balances, while lowering the reliance on higher cost short-term borrowings.



























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The following is a schedule of average balances and associated yields for the three months ended March 31, 2025 and 2024:
 AVERAGE BALANCES AND INTEREST RATES
 Three Months Ended March 31, 2025Three Months Ended March 31, 2024
(In Thousands)Average Balance (1)InterestAverage RateAverage Balance (1)InterestAverage Rate
Assets:      
Tax-exempt loans (3)
$68,615 $556 3.28 %$69,349 $463 2.69 %
All other loans1,824,502 25,575 5.68 %1,781,962 23,494 5.30 %
Total loans (2)
1,893,117 26,131 5.60 %1,851,311 23,957 5.20 %
Taxable securities191,040 2,188 4.64 %200,275 2,144 4.35 %
Tax-exempt securities (3)
10,751 76 2.87 %16,529 123 3.03 %
Total securities201,791 2,264 4.55 %216,804 2,267 4.25 %
Interest-bearing balances in other financial institutions14,699 116 3.20 %10,199 129 5.09 %
Total interest-earning assets2,109,607 28,511 5.48 %2,078,314 26,353 5.10 %
Other assets138,990   130,958   
Total assets$2,248,597   $2,209,272   
Liabilities and shareholders’ equity:      
Savings$209,025 234 0.45 %$218,722 268 0.49 %
Super Now deposits208,537 904 1.76 %215,870 1,084 2.02 %
Money market deposits317,306 2,468 3.15 %292,707 2,359 3.24 %
Time deposits507,085 5,138 4.11 %407,169 4,252 4.20 %
Total interest-bearing deposits1,241,953 8,744 2.86 %1,134,468 7,963 2.82 %
Short-term borrowings95,339 1,056 4.49 %144,350 2,005 5.59 %
Long-term borrowings230,682 2,438 4.29 %259,697 2,516 3.90 %
Total borrowings326,021 3,494 4.35 %404,047 4,521 4.50 %
Total interest-bearing liabilities1,567,974 12,238 3.17 %1,538,515 12,484 3.26 %
Demand deposits449,384   451,877   
Other liabilities31,524   29,260   
Shareholders’ equity199,715   189,620   
Total liabilities and shareholders’ equity$2,248,597   $2,209,272   
Interest rate spread (3)
  2.31 %  1.84 %
Net interest income/margin (3)
 $16,273 3.13 % $13,869 2.69 %
1.    Information on this table has been calculated using average daily balance sheets to obtain average balances.
2.    Non-accrual loans have been included with loans for the purpose of analyzing net interest earnings.
3.    Income and rates on fully taxable equivalent basis include an adjustment for the difference between annual income from tax-exempt obligations and             
the taxable equivalent of such income at the standard tax rate of 21% and are reconciled to the equivalent GAAP measure below the tables.

The following table presents the adjustment to convert net interest income to net interest income on a fully taxable equivalent basis for the three months ended March 31, 2025 and 2024:
Three Months Ended March 31,
(In Thousands)20252024
Total interest income$28,378 $26,230 
Total interest expense12,238 12,484 
Net interest income (GAAP)16,140 13,746 
Tax equivalent adjustment133 123 
Net interest income (fully taxable equivalent) (NON-GAAP)$16,273 $13,869 
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The following table sets forth the respective impact that both volume and rate changes have had on net interest income on a fully taxable equivalent basis for the three months ended March 31, 2025 and 2024:
 Three Months Ended March 31,
 2025 vs. 2024
 Increase (Decrease) Due to
(In Thousands)VolumeRateNet
Interest income:   
Tax-exempt loans$(5)$98 $93 
All other loans520 1,561 2,081 
Taxable investment securities(100)144 44 
Tax-exempt investment securities(41)(6)(47)
Interest bearing deposits45 (58)(13)
Total interest-earning assets419 1,739 2,158 
Interest expense:   
Savings deposits(12)(22)(34)
Super Now deposits(38)(142)(180)
Money market deposits181 (72)109 
Time deposits984 (98)886 
Short-term borrowings(601)(348)(949)
Long-term borrowings(308)230 (78)
Total interest-bearing liabilities206 (452)(246)
Change in net interest income$213 $2,191 $2,404 

Provision for Credit Losses

The provision for credit losses is based upon management’s quarterly review of the loan portfolio.  The purpose of the review is to assess loan quality, identify impaired loans, analyze delinquencies, ascertain loan growth, evaluate potential charge-offs and recoveries, and assess general economic conditions in the markets served.  An external independent loan review is also performed annually for the Banks.  Management remains committed to an aggressive program of problem loan identification and resolution.

The allowance for credit losses is determined by applying loss factors to outstanding loans by type.  A historical charge-off factor is calculated utilizing the charge-off and recovery data over the past ten years. Management has identified a number of additional qualitative factors which it uses to supplement the historical charge-off factor because these factors are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience.

Although management believes it uses the best information available to make such determinations and that the allowance for credit losses is adequate at March 31, 2025, future adjustments could be necessary if circumstances or economic conditions differ substantially from the assumptions used in making the initial determinations.  A downturn in the local economy, increased unemployment, and delays in receiving financial information from borrowers could result in increased levels of nonperforming assets, charge-offs, loan loss provisions, and reductions in income.  Additionally, as an integral part of the examination process, bank regulatory agencies periodically review the Banks' loan loss allowance.  The banking agencies could require the recognition of additions to the loan loss allowance based on their judgment of information available to them at the time of their examination.

When determining the appropriate allowance level, management has attributed the allowance for credit losses to various portfolio segments; however, the allowance is available for the entire portfolio as needed.

The allowance for credit losses decreased from $11,848,000 at December 31, 2024 to $9,990,000 at March 31, 2025. The decrease in allowance was the result of the recognition of a negative provision for credit losses of $2,969,000 for the 2025 period due primarily to a recovery on a commercial loan compared to a provision for credit losses of $138,000 for the three months ended March 31, 2024. The recovery, coupled with a decline in the historical loss rates over the look back period, reduced the probability of default and loss given default applied to the loan portfolio when determining the level of the
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allowance for credit losses as of March 31, 2025. At March 31, 2025 and December 31, 2024, the allowance for credit losses to total loans was 0.53% and 0.63%, respectively.

Nonperforming loans increased to $9,987,000 at March 31, 2025 from $8,904,000 at December 31, 2024. The majority of nonperforming loans involve loans that are either in a secured position and have sureties with a strong underlying financial position or have been individually evaluated for impairment and have a specific allocation recorded within the allowance for credit losses. The ratio of nonperforming loans to total loans ratio increased to 0.53% at March 31, 2025 from 0.47% at December 31, 2024 and 0.43% at March 31, 2024. Net loan recoveries of $957,000 for the three months ended March 31, 2025 impacted the allowance for credit losses, which was 0.53% of total loans at March 31, 2025 and 0.63% at December 31, 2024 compared to 0.62% at March 31, 2024.

The following is a table showing total nonperforming loans as of:
 Total Nonperforming Loans
(In Thousands)90 Days Past DueNon-accrualTotal
March 31, 2025$4,105 $5,882 $9,987 
December 31, 20244,516 4,388 8,904 
September 30, 20243,530 4,410 7,940 
June 30, 20242,257 4,527 6,784 
March 31, 20243,449 4,509 7,958 

Additional allowance for credit losses and net (charge-offs) recoveries information is presented by loan portfolio segment in the tables below.
March 31, 2025
Amount of Allowance for Credit Losses AllocatedTotal loansAllowance for Credit Losses to Total Loans RatioNet (Charge-Offs) RecoveriesAverage LoansRatio of Net (Charge-Offs) Recoveries to Average Loans
(In Thousands)
Commercial, financial, and agricultural$1,568$215,414 0.73 %$377 $215,860 0.70 %
Real estate mortgage:
Residential1,057832,519 0.13 %(2)833,182 — %
Commercial3,075538,107 0.57 %— 535,930 — %
Construction1140,481 0.03 %— 41,536 — %
Consumer automobiles3,690259,943 1.42 %(274)257,314 (0.43)%
Other consumer installment loans5899,557 6.16 %856 9,295 36.84 %
$9,990$1,896,021 0.53 %$957 $1,893,117 0.20 %
Total non-accrual loans outstanding$5,882
Non-accrual loans to total loans outstanding0.31 %
Allowance for credit losses to non-accrual loans169.84 %
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December 31, 2024
Amount of Allowance for Loan Losses AllocatedTotal loansAllowance for Loan Losses to Total Loans RatioNet (Charge-Offs) RecoveriesAverage LoansRatio of Net (Charge-Offs) Recoveries to Average Loans
(In Thousands)
Commercial, financial, and agricultural$2,323$212,119 1.10 %$582 $215,958 0.27 %
Real estate mortgage:
Residential726830,407 0.09 %(8)816,306 — %
Commercial5,299536,019 0.99 %(1)537,220 — %
Construction743,131 0.02 %— 41,110 — %
Consumer automobiles2,909244,594 1.19 %(903)244,996 (0.37)%
Other consumer installment loans5849,845 5.93 %(210)9,954 (2.11)%
$11,848$1,876,115 0.63 %$(540)$1,865,544 (0.03)%
Total non-accrual loans outstanding$4,388
Non-accrual loans to total loans outstanding0.23 %
Allowance for loan losses to non-accrual loans270.01 %

Non-interest Income

Total non-interest income for the three months ended March 31, 2025 compared to the same period in 2024 increased $106,000. Excluding net securities losses, non-interest income for the three months ended March 31, 2025 decreased $249,000 compared to the same period in 2024. Gain on sale of loans and loan broker commissions both increased for the three month period as the volume of loan sales has increased due to an uptick in mortgage activity. The changes in bank-owned life insurance revenue for the three month period was primarily due to a decrease in gain on death benefits. Other income primarily decreased for the three month period due to the recognition of a gain on extinguishment of debt during the 2024 period.

Non-interest income composition for the three months ended March 31, 2025 and 2024 was as follows:
 Three Months Ended
 March 31, 2025March 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Service charges$483 18.81 %$515 20.92 %$(32)(6.21)%
Net debt securities gains (losses), available for sale305 11.88 (23)(0.93)328 1,426.09 
Net equity securities gains (losses)17 0.67 (10)(0.41)27 270.00 
Bank-owned life insurance301 11.72 463 18.81 (162)(34.99)
Gain on sale of loans408 15.89 305 12.39 103 33.77 
Insurance commissions152 5.92 153 6.21 (1)(0.65)
Brokerage commissions167 6.50 186 7.55 (19)(10.22)
Loan broker commissions252 9.81 222 9.02 30 13.51 
Debit card income308 11.99 329 13.36 (21)(6.38)
Other175 6.81 322 13.08 (147)(45.65)
Total non-interest income$2,568 100.00 %$2,462 100.00 %$106 4.31 %
Non-interest Expense

Total non-interest expense increased $971,000 for the three months ended March 31, 2025 compared to the same period of 2024. The increase in salaries and employee benefits is attributable to routine annual wage increases and an increase in health insurance costs. Occupancy expenses have been impacted by expected changes in maintenance, utilities, and depreciation with the three month period ended March 31, 2025 decreasing due to the disposal of a former branch location and a relocation of a second location during the first quarter of 2024. Software amortization increased due to increased software licensing costs and investment in additional automated systems. Marketing costs decreased as print advertising has been limited while emphasis has been placed on social media marketing efforts. Pennsylvania shares tax increased as the taxable base increased. Professional
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fees decreased primarily due to a decrease in internal audit fees. FDIC insurance expense increased due to an increase in the assessment base. The three months ended March 31, 2024 had a loss on sale of premise and equipment related to the exit of two branch location leases. There were a total of $1,093,000 recognized in merger related expenses incurred during the three month period ended March 31, 2025.

Non-interest expense composition for the three months ended March 31, 2025 and 2024 was as follows:
 Three Months Ended
 March 31, 2025March 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Salaries and employee benefits$6,483 51.48 %$6,422 55.25 %$61 0.95 %
Occupancy874 6.94 905 7.79 (31)(3.43)
Furniture and equipment997 7.92 939 8.08 58 6.18 
Software amortization419 3.33 190 1.63 229 120.53 
Pennsylvania shares tax413 3.28 320 2.75 93 29.06 
Professional fees505 4.01 552 4.75 (47)(8.51)
Federal Deposit Insurance Corporation deposit insurance397 3.15 359 3.09 38 10.58 
Marketing47 0.37 71 0.61 (24)(33.80)
Intangible amortization25 0.20 26 0.22 (1)(3.85)
Loss on sale of premise and equipment— — 330 2.84 (330)n/a
Merger Expense1,093 8.68 — n/a1,093 n/a
Other1,341 10.64 1,509 12.99 (168)(11.13)
Total non-interest expense$12,594 100.00 %$11,623 100.00 %$971 8.35 %
Provision for Income Taxes

Income taxes increased $1,077,000 for the three months ended March 31, 2025 compared to the same period of 2024. The effective tax rate for the three months ended March 31, 2025 was 18.89% compared to 14.37% for the same period of 2024. The increase in rate is driven by an increase in taxable income led by an increase in net interest income. A valuation allowance was established on the $1,810,000 of capital loss carryforwards as of December 31, 2022, which remained unchanged during the first quarter of 2025.

ASSET/LIABILITY MANAGEMENT

Cash and Cash Equivalents

Cash and cash equivalents increased $8,473,000 from $28,972,000 at December 31, 2024 to $37,445,000 at March 31, 2025, primarily as a result of the following activity during the three months ended March 31, 2025.

Loans Held for Sale

Activity regarding loans held for sale resulted in sales proceeds, less $408,000 in realized gains, being greater than loan originations by $683,000 for the three months ended March 31, 2025.

Loans

Gross loans increased $20,298,000 since December 31, 2024 due primarily to an increase in consumer automobile loans.

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The allocation of the loan portfolio, by category, as of March 31, 2025 and December 31, 2024 is presented below:
 March 31, 2025December 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Commercial, financial, and agricultural$215,414 11.35 %$212,119 11.30 %$3,295 1.55 %
Real estate mortgage:      
Residential832,519 43.88 830,407 44.24 2,112 0.25 %
Commercial538,107 28.36 536,019 28.56 2,088 0.39 %
Construction40,481 2.13 43,131 2.30 (2,650)(6.14)%
Consumer automobile loans259,943 13.70 244,594 13.03 15,349 6.28 %
Other consumer installment loans9,557 0.50 9,845 0.52 (288)(2.93)%
Net deferred loan fees and discounts1,355 0.08 963 0.05 392 40.71 %
Gross loans$1,897,376 100.00 %$1,877,078 100.00 %$20,298 1.08 %
 
Investments

The fair value of the investment debt securities portfolio at March 31, 2025 decreased $8,821,000 since December 31, 2024, while the amortized cost of the portfolio decreased $11,106,000.  The decrease in the investment portfolio amortized value occurred primarily within the other debt securities segment of the portfolio. Principal cash flow from all portfolio segments is being utilized to fund loan growth versus reinvestment into the investment portfolio. The portfolio continues to be actively managed in order to reduce interest rate and market risk. The unrealized losses within the debt securities portfolio are the result of market activity, not credit issues/ratings, as approximately 83.14% of the debt securities portfolio on an amortized cost basis is currently rated A or higher by either S&P or Moody’s.

The Company considers various factors, which include examples from applicable accounting guidance, when analyzing the available for sale portfolio for possible other than temporary impairment.  The Company primarily considers the following factors in its analysis: severity of the fair value being less than carrying value; reduction of dividend paid (equities); continued payment of dividend/interest, credit rating, and financial condition of an issuer; intent and ability to hold until anticipated recovery (which may be maturity); and general outlook for the economy, specific industry, and entity in question.

The bond portion of the portfolio review is conducted with emphases on several factors.  Continued payment of principal and interest is given primary importance with credit rating and financial condition of the issuer following as the next most important.  Credit ratings were reviewed with the ratings of the bonds being satisfactory.  Bonds that were not currently rated were discussed with a third party and/or underwent an internal financial review. Each bond is reviewed to determine whether it is a general obligation bond, which is backed by the credit and taxing power of the issuing jurisdiction, or a revenue bond, which is only payable from specified revenues.  Based on the review undertaken by the Company, the Company determined that the decline in value of the various bond holdings were temporary and were the result of the general market downturns and interest rate/yield curve changes, not credit issues.  The fact that almost all of such bonds are general obligation bonds further solidified the Company’s determination that the decline in the value of these bond holdings is temporary.

The fair value of the equity portfolio continues to fluctuate as the economic and political environment continues to impact stock pricing. The amortized cost of the available for sale equity securities portfolio has remained flat at $1,300,000 for March 31, 2025 and December 31, 2024 while the fair value increased $17,000 over the same time period.

The distribution of credit ratings by amortized cost and fair values for the debt security portfolio at March 31, 2025 follows:
 A- to AAAB- to BBB+C- to CCC+Not RatedTotal
(In Thousands)Amortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair ValueAmortized CostFair Value
Available for sale (AFS):        
U.S. Government and agency securities$2,000$1,981$—$—$—$—$—$—$2,000$1,981
Mortgage-backed securities 6237,64537,734——————37,64537,734
State and political securities98,57695,602998996——1,4621,445101,03698,043
Other debt securities10,78510,3003,6833,571——24,06824,09238,53637,963
Total debt securities AFS$149,006$145,617$4,681$4,567$—$—$25,530$25,537$179,217$175,721
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Financing Activities

Deposits

Total deposits increased $17,873,000 from December 31, 2024 to March 31, 2025. Core deposits (deposits less time deposits) remained stable as growth in money market deposits offset the flow of deposit balances from lower rate products, such as NOW accounts, into higher rate time deposit accounts. Money market deposits increased primarily as customers moved deposit balances into this deposit product from lower rate products in addition to increased balances from commercial customers. Emphasis has been on increasing the utilization of electronic (internet and mobile) deposit banking among our customers. Utilization of internet and mobile banking products has increased due to these efforts coupled with a change in consumer behavior over the past several years. Brokered deposits decreased slightly as the product continues to provide an alternative to FHLB borrowings and supplemented funding for loan portfolio growth.

Deposit balances and their changes for the periods being discussed follow:
 March 31, 2025December 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Demand deposits$465,766 27.02 %$456,936 26.78 %$8,830 1.93 %
NOW accounts203,191 11.79 212,687 12.47 (9,496)(4.46)
Money market deposits323,869 18.79 308,977 18.11 14,892 4.82 
Savings deposits211,136 12.25 208,340 12.21 2,796 1.34 
Time deposits342,983 19.89 340,844 19.98 2,139 0.63 
Brokered deposits177,009 10.26 178,297 10.45 (1,288)(0.72)
 Total deposits$1,723,954 100.00 %$1,706,081 100.00 %$17,873 1.05 %

As of March 31, 2025 and December 31, 2024 the Company had $434,356,000 and $429,964,000, respectively, in uninsured deposits. Included in the total uninsured deposits is a concentration of public funds which were collateralized by the Banks in the amount of $80,934,000 and $77,429,000 at March 31, 2025 and December 31, 2024, respectively. Total uninsured deposits less collateralized public funds was $353,422,000 at March 31, 2025 and $352,535,000 at December 31, 2024.

Borrowed Funds

Total borrowed funds increased 0.22%, or $664,000, to $297,452,000 at March 31, 2025 compared to $296,788,000 at December 31, 2024. Long term borrowings declined as matured borrowings were replaced with short term FHLB borrowings that were utilized to provide funding for the loan portfolio growth. Securities sold under agreements to repurchase have increased as customers balances have increased.

 March 31, 2025December 31, 2024Change
(In Thousands)Amount% TotalAmount% TotalAmount%
Short-term borrowings:  11   
FHLB repurchase agreements$8,563 2.88 %$31,811 10.72 %$(23,248)(73.08)
Short-term FHLB borrowings72,030 24.22 8,455 2.85 63,575 751.92 
Securities sold under agreement to repurchase2,317 0.77 1,934 0.65 383 19.80 
Total short-term borrowings82,910 27.87 42,200 14.22 40,710 96.47 
Long-term borrowings:
Long-term FHLB borrowings207,953 69.91 247,953 83.55 (40,000)(16.13)
Long-term finance lease6,589 2.22 6,635 2.24 (46)(0.69)
Total long-term borrowings214,542 72.13 254,588 85.79 (40,046)(15.73)
Total borrowed funds$297,452 100.00 %$296,788 100.00 %$664 0.22 %





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Short-Term Borrowings

The following table provides further information in regards to secured borrowings that have been accounted for as repurchase agreements.
Remaining Contractual Maturity Overnight and Continuous
(In Thousands)March 31, 2025December 31, 2024
Investment debt securities pledged, fair value$5,788 $5,717 
Repurchase agreements2,317 1,934 

Capital

Federal regulations require the Company and the Banks to maintain minimum amounts of capital.  Specifically, each is required to maintain certain minimum dollar amounts and ratios of Common Equity Tier 1, Total, and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average total assets.

In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (“FDICIA”) established five capital categories ranging from “well capitalized” to “critically undercapitalized.”  Should any institution fail to meet the requirements to be considered “adequately capitalized,” it would become subject to a series of increasingly restrictive regulatory actions.

As of March 31, 2025 and December 31, 2024 the FDIC categorized the Banks as well capitalized under the regulatory framework for prompt corrective action.  To be classified as a well capitalized financial institution, common equity tier I risk-based, tier I risked-based, total risk-based, and tier I leverage capital ratios must be at least 6.5%, 8%, 10%, and 5%, respectively.

We expect to continue to emphasize growth in our commercial and consumer loan portfolios, and additional regulatory capital generated through retained earnings and other sources will be necessary to support any such continued growth. At March 31, 2025, each of the Banks was “well capitalized” as defined by applicable bank regulatory standards. Applicable regulatory capital requirements also require each Bank to maintain a “capital conservation buffer,” consisting solely of tier 1 common equity, of 2.5% above the regulatory minimum capital requirements for each of the tier 1 common equity (“CET1”), tier 1 (“Tier 1”), and total capital (“Total Capital”) ratios. As a result of the capital conservation buffer requirements, if a bank does not maintain CET1, Tier 1 and Total Capital ratios of at least 7%, 8.5%, and 10.5%, respectively, determined as of the end of each calendar quarter, the bank’s ability to make certain discretionary payments, including discretionary dividend payments, are subject to a maximum payout ratio limitation unless the FDIC approves the distribution or payment. At March 31, 2025, each of Banks exceeded the capital conservation buffer requirements for applicable capital ratios.

Capital ratios for the Company and each Bank (using the definitions from the prompt corrective action rules) are presented in the following tables, which shows that the Company and both Banks met all regulatory capital requirements.


















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The Company's capital ratios as of March 31, 2025 and December 31, 2024 were as follows:
 March 31, 2025December 31, 2024
(In Thousands)AmountRatioAmountRatio
Common Equity Tier I Capital (to Risk-weighted Assets)    
Actual$199,479 10.588 %$194,466 10.429 %
For Capital Adequacy Purposes84,780 4.500 83,910 4.500 
Minimum To Maintain Capital Conservation Buffer At Reporting Date131,881 7.000 130,527 7.000 
To Be Well Capitalized122,461 6.500 121,203 6.500 
Total Capital (to Risk-weighted Assets)   
Actual$209,866 11.139 %$206,865 11.094 %
For Capital Adequacy Purposes150,725 8.000 149,173 8.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date197,827 10.500 195,789 10.500 
To Be Well Capitalized188,406 10.000 186,466 10.000 
Tier I Capital (to Risk-weighted Assets)   
Actual$199,479 10.588 %$194,466 10.429 %
For Capital Adequacy Purposes113,041 6.000 111,880 6.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date160,141 8.500 158,497 8.500 
To Be Well Capitalized150,721 8.000 149,173 8.000 
Tier I Capital (to Average Assets)   
Actual$199,479 8.993 %$194,466 8.775 %
For Capital Adequacy Purposes88,726 4.000 88,645 4.000 
To Be Well Capitalized110,908 5.000 110,807 5.000 
 
Jersey Shore State Bank's capital ratios as of March 31, 2025 and December 31, 2024 were as follows:
 March 31, 2025December 31, 2024
(In Thousands)AmountRatioAmountRatio
Common Equity Tier I Capital (to Risk-weighted Assets)    
Actual$140,820 10.328 %$137,102 10.100 %
For Capital Adequacy Purposes61,357 4.500 61,085 4.500 
Minimum To Maintain Capital Conservation Buffer At Reporting Date95,443 7.000 95,021 7.000 
To Be Well Capitalized88,626 6.500 88,234 6.500 
Total Capital (to Risk-weighted Assets)   
Actual$148,617 10.899 %$147,327 10.853 %
For Capital Adequacy Purposes109,087 8.000 108,598 8.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date143,176 10.500 142,535 10.500 
To Be Well Capitalized136,358 10.000 135,748 10.000 
Tier I Capital (to Risk-weighted Assets)- - 
Actual$140,820 10.328 %$137,102 10.100 %
For Capital Adequacy Purposes81,809 6.000 81,447 6.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date115,896 8.500 115,383 8.500 
To Be Well Capitalized109,078 8.000 108,596 8.000 
Tier I Capital (to Average Assets)   
Actual$140,820 8.752 %$137,102 8.571 %
For Capital Adequacy Purposes64,360 4.000 63,984 4.000 
To Be Well Capitalized80,450 5.000 79,980 5.000 




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Luzerne Bank's capital ratios as of March 31, 2025 and December 31, 2024 were as follows:
 March 31, 2025December 31, 2024
(In Thousands)AmountRatioAmountRatio
Common Equity Tier I Capital (to Risk-weighted Assets)    
Actual$55,385 10.639 %$55,651 10.735 %
For Capital Adequacy Purposes23,426 4.500 23,328 4.500 
Minimum To Maintain Capital Conservation Buffer At Reporting Date36,441 7.000 36,288 7.000 
To Be Well Capitalized33,838 6.500 33,696 6.500 
Total Capital (to Risk-weighted Assets)   
Actual$57,975 11.137 %$57,825 11.155 %
For Capital Adequacy Purposes41,645 8.000 41,470 8.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date54,659 10.500 54,430 10.500 
To Be Well Capitalized52,056 10.000 51,838 10.000 
Tier I Capital (to Risk-weighted Assets)   
Actual$55,385 10.639 %$55,651 10.735 %
For Capital Adequacy Purposes31,235 6.000 31,104 6.000 
Minimum To Maintain Capital Conservation Buffer At Reporting Date44,250 8.500 44,065 8.500 
To Be Well Capitalized41,647 8.000 41,473 8.000 
Tier I Capital (to Average Assets)   
Actual$55,385 8.008 %$55,651 8.020 %
For Capital Adequacy Purposes27,665 4.000 27,756 4.000 
To Be Well Capitalized34,581 5.000 34,695 5.000 

During the twelve months ended December 31, 2024, the Company sold 420,069 shares in a registered at-the-market offering pursuant to the terms of an equity distribution agreement, dated September 13, 2023 (the “Distribution Agreement”), between D.A. Davidson & Co. (the “Distribution Agent”) and the Company. Under the terms of the Distribution Agreement, the Company will pay the Distribution Agent a fee in the amount of 2.75% of the gross proceeds from the sale of such shares. No shares were offered or sold under the at-the-market offering during the three months ended March 31, 2025.

Liquidity; Interest Rate Sensitivity and Market Risk

The asset/liability committee addresses the liquidity needs of the Company to ensure 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 for compliance and were within the limits cited, with the exception of net loans to total deposits that was 109%, at March 31, 2025:

1.            Net Loans to Total Assets, 85% maximum
2.              Net Loans to Total Deposits, 100% maximum
3.              Cumulative 90 day Maturity GAP %, +/- 15% maximum
4.              Cumulative 1 Year Maturity GAP %, +/- 20% maximum

Fundamental objectives of the Company’s asset/liability management process are to maintain adequate liquidity while minimizing interest rate risk. The maintenance of adequate liquidity provides the Company with the ability to meet its financial obligations to depositors, loan customers, and shareholders. Additionally, it provides funds for normal operating expenditures and business opportunities as they arise.  The objective of interest rate sensitivity management is to increase net interest income by managing interest sensitive assets and liabilities in such a way that they can be repriced in response to changes in market interest rates.

The Banks, like other financial institutions, must have sufficient funds available to meet liquidity needs for deposit withdrawals, loan commitments and originations, and expenses. In order to control cash flow, the Banks estimate future cash flows from deposits, loan payments, and investment security payments. The primary sources of funds are deposits, principal and interest
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payments on loans and investment securities, FHLB borrowings, and brokered deposits. Management believes the Banks have adequate resources to meet their normal funding requirements.

Management monitors the Company’s liquidity on both a long and short-term basis, thereby providing management necessary information to react to current balance sheet trends. Cash flow needs are assessed and sources of funds are determined. Funding strategies consider both customer needs and economical cost. Both short and long-term funding needs are addressed by maturities and sales of available for sale and trading investment securities, loan repayments and maturities, and liquidating money market investments such as federal funds sold. The use of these resources, in conjunction with access to credit, provides core funding to satisfy depositor, borrower, and creditor needs.

Management monitors and determines the desirable level of liquidity. Consideration is given to loan demand, investment opportunities, deposit pricing and growth potential, as well as the current cost of borrowing funds. The Company has a total current maximum borrowing capacity at the FHLB of $847,542,000. In addition to this credit arrangement, the Company has additional lines of credit with correspondent banks of $90,000,000. Management believes it has sufficient liquidity to satisfy estimated short-term and long-term funding needs. FHLB borrowings totaled $288,546,000 as of March 31, 2025.

Interest rate sensitivity, which is closely related to liquidity management, is a function of the repricing characteristics of the Company’s portfolio of assets and liabilities. Asset/liability management strives to match maturities and rates between loan and investment security assets with the deposit liabilities and borrowings that fund them. Successful asset/liability management results in a balance sheet structure which can cope effectively with market rate fluctuations. The matching process segments both assets and liabilities into future time periods (usually 12 months, or less) based upon when repricing can be effected. Repriceable assets are subtracted from repriceable liabilities for a specific time period to determine the “gap”, or difference. Once known, the gap is managed based on predictions about future market interest rates. Intentional mismatching, or gapping, can enhance net interest income if market rates move as predicted.  However, if market rates behave in a manner contrary to predictions, net interest income will suffer. Gaps, therefore, contain an element of risk and must be prudently managed. In addition to gap management, the Company has an asset/liability management policy which incorporates a market value at risk calculation which is used to determine the effects of interest rate movements on shareholders’ equity and a simulation analysis to monitor the effects of interest rate changes on the Company’s consolidated balance sheet.

The Company currently maintains a gap position of being asset sensitive.  The Company has strategically taken this position as it has previously decreased the duration of the earning asset portfolio by adding quality short and intermediate term loans such as home equity loans.  The Company has added certain longer-term earning assets due to the significant increase in interest rates. Lengthening of the liability portfolio, primarily time deposits, previously was undertaken to build protection during the current rate environment and has now shifted to a time deposit gathering campaign with an emphasis on five month maturities.

A market value at risk calculation is utilized to monitor the effects of interest rate changes on the Company’s balance sheet and more specifically shareholders’ equity.  The Company does not manage the balance sheet structure in order to maintain compliance with this calculation.  The calculation serves as a guideline with greater emphasis placed on interest rate sensitivity.  Changes to calculation results from period to period are reviewed as changes in results could be a signal of future events.  As of the most recent analysis, the results of the market value at risk calculation were within established guidelines due to the strategic direction being taken.

Interest Rate Sensitivity

In this analysis the Company examines the result of a 100, 200, 300, and 400 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.  Assumptions are also made concerning prepayment speeds on mortgage loans and mortgage securities.

The following is a rate shock forecast for the twelve month period ending March 31, 2026 assuming a static balance sheet as of March 31, 2025.
 Parallel Rate Shock in Basis Points
(In Thousands)-300-200-100Static+100+200+300+400
Net interest income$70,069 $71,474 $72,840 $73,900 $74,681 $75,097 $75,287 $74,854 
Change from static(3,831)(2,426)(1,060)— 781 1,197 1,387 954 
Percent change from static-5.18 %-3.28 %-1.43 %— 1.06 %1.62 %1.88 %1.29 %

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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 measures 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.

Inflation

Substantially all of the Company's assets and liabilities relate to banking activities and are monetary. The consolidated financial statements and related financial data are presented following GAAP. GAAP currently requires the Company to measure the financial position and results of operations in terms of historical dollars, except for securities available for sale, individually evaluated loans, and other real estate loans that are measured at fair value. Changes in the value of money due to rising inflation can cause purchasing power loss.

Management's opinion is that movements in interest rates affect the financial condition and results of operations to a greater degree than changes in the rate of inflation. It should be noted that interest rates and inflation do affect each other but do not always move in correlation with each other. The Company's ability to match the interest sensitivity of its financial assets to the interest sensitivity of its liabilities in its asset/liability management may tend to minimize the effect of changes in interest rates on the Company's performance.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Market risk for the Company is comprised primarily of interest rate risk exposure and liquidity risk.  Interest rate risk and liquidity risk management is performed at both the level of the Company and the Banks.  The Company’s interest rate sensitivity is monitored by management through selected interest rate risk measures produced by an independent third party.  There have been no substantial changes in the Company’s gap analysis or simulation analysis compared to the information provided in the Annual Report on Form 10-K for the period ended December 31, 2024.  Additional information and details are provided in the “Liquidity, Interest Rate Sensitivity, and Market Risk” section of “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of that document.

Generally, management believes the Company is well positioned to respond in a timely manner when the market interest rate outlook changes.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An analysis was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of March 31, 2025.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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Part II.  OTHER INFORMATION
Item 1.                           Legal Proceedings

None.

Item 1A.  Risk Factors

Certain risk factors are set forth in Part I, Item 1A, “Risk Factors,” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.


Item 2.                           Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides certain information with respect to the Company's repurchase of common stock during the quarter ended March 31, 2025.
PeriodTotal
Number of
Shares (or
Units) Purchased		Average
Price Paid
per Share
(or Units) Purchased		Total Number of
Shares (or Units)
Purchased as Part of
Publicly Announced Plans or Programs		Maximum Number (or
Approximate Dollar Value)
of Shares (or Units) that
May Yet Be Purchased Under the Plans or Programs
Month #1 (January 1 - January 31, 2025)— $— — 376,000 
Month #2 (February 1 - February 28, 2025— — — 376,000 
Month #3 (March 1 - March 31, 2025)— — — 376,000 

Item 3.                           Defaults Upon Senior Securities
None
Item 4.                           Mine Safety Disclosures
Not applicable.
Item 5.                           Other Information
(c) Securities Trading Plans of Directors and Executive Officers

During the three months ended March 31, 2025, none of our directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmation defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement" as defined in Item 408 of SEC Regulation S-K.
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Item 6.                           Exhibits
 
 Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3(i) of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2022).
 Bylaws of the Registrant (incorporated by reference to Exhibit 3(ii) of the Registrant's Annual Report on Form 10-K for the year ended December 31, 2020).
 Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Executive Officer.
 Rule 13a-14(a)/Rule 15d-14(a) Certification of Chief Financial Officer.
 Section 1350 Certification of Chief Executive Officer.
 Section 1350 Certification of Chief Financial Officer.
101 Interactive data file containing the following financial statements formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheet at March 31, 2025 and December 31, 2024; (ii) the Consolidated Statement of Income for the three months ended March 31, 2025 and 2024; (iii) Consolidated Statement of Comprehensive Income for the three months ended March 31, 2025 and 2024; (iv) the Consolidated Statement of Shareholders’ Equity for the three months ended March 31, 2025 and 2024; (v) the Consolidated Statement of Cash Flows for the three months ended March 31, 2025 and 2024 and (vi) the Notes to Consolidated Financial Statements. As provided in Rule 406T of Regulation S-T, this interactive data file shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, and shall not be deemed “filed” or part of any registration statement or prospectus for purposes of Section 11 or 12 under the Securities Act of 1933, or otherwise subject to liability under those sections.
104Cover page interactive data file (formatted as inline XBRL and contained in Exhibit 101).
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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 13, 2025/s/ Richard A. Grafmyre
 Richard A. Grafmyre, Chief Executive Officer
 (Principal Executive Officer)
  
  
Date:May 13, 2025/s/ Brian L. Knepp
 Brian L. Knepp, President and Chief Financial Officer
 (Principal Financial Officer and Principal Accounting
 Officer)
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