Executive Summary

Q1 2025 EPS rose sharply to $0.97 basic / $0.95 diluted on net income of $7.4M, driven by net interest margin expansion to 3.13% and a $3.0M negative provision (release) aided by a $1.3M commercial loan recovery; core diluted EPS was $1.04 after backing out $0.12 of after-tax merger expense with Northwest Bancshares (NWBI) .
Asset sensitivity and repricing of legacy assets, plus lower short-term borrowing costs and modest loan growth, lifted NII to $16.1M (+17% y/y) and pushed ROA/ROE to 1.31%/14.76% (core ROA/ROE 1.43%/16.15%) .
Credit quality mixed: nonperforming loans increased to 0.53% of loans ($10.0M), but recoveries drove net loan recoveries of $0.96M and allowed allowance coverage to decline to 0.54% of loans; office CRE exposure remains low ($13.7M, none delinquent) .
No formal guidance was issued; the Board maintained the quarterly dividend at $0.32 (Q1 declared Feb 25; Q2 declared May 27). S&P Global Wall Street consensus estimates were unavailable for PWOD, so no beat/miss framing is provided .

What Went Well and What Went Wrong

What Went Well

Net interest margin expanded to 3.13% (from 2.69% a year ago), driven by asset repricing, portfolio growth, and lower borrowing costs; management noted recognition of $223k of interest from a commercial loan recovery contributed to yield on earning assets .
Strong earnings power with credit recoveries: negative provision of $2.97M (vs +$0.14M y/y) on a $1.3M commercial loan recovery, lifting ROA to 1.31% and ROE to 14.76% .
Funding mix stabilizing: deposits up $105.4M y/y to $1.72B; brokered deposits supplemented loan growth while reducing reliance on higher-cost short-term borrowings .

What Went Wrong

Nonperforming loans rose to 0.53% of loans ($10.0M) from 0.43% y/y; allowance coverage to loans dipped to 0.54% (from 0.62% y/y) as recoveries reduced modeled loss rates .
Non-interest expense increased 8% y/y to $12.6M, including $1.09M of merger expense tied to the pending NWBI acquisition; efficiency ratio remained elevated at 68.4% despite NIM tailwinds .
Deposit mix still pressured by higher-rate competition: time deposits and brokered balances increased, while noninterest-bearing declined $5.7M y/y, modestly raising funding costs despite q/q improvement .

Financial Results

Quarterly comparison (oldest → newest):

Metric	Q3 2024	Q4 2024	Q1 2025
Total Interest & Dividend Income ($M)	$28.188	$28.251	$28.378
Total Interest Expense ($M)	$13.132	$12.688	$12.238
Net Interest Income ($M)	$15.056	$15.563	$16.140
Total Non-Interest Income ($M)	$2.421	$2.710	$2.568
Non-Interest Expense ($M)	$10.884	$12.980	$12.594
(Recovery) Provision for Credit Losses ($M)	$0.740	$0.420	$(2.969)
Net Income ($M)	$4.801	$3.741	$7.367
EPS – Basic ($)	$0.64	$0.50	$0.97
EPS – Diluted ($)	$0.64	$0.49	$0.95
Net Interest Margin (%)	2.88%	2.98%	3.13%
ROA (Annualized, %)	0.86%	0.67%	1.31%
ROE (Annualized, %)	9.60%	7.28%	14.76%
Efficiency Ratio (%)	62.26%	70.73%	68.36%

YoY comparison:

Metric	Q1 2024	Q1 2025
Total Interest & Dividend Income ($M)	$26.230	$28.378
Net Interest Income ($M)	$13.746	$16.140
Total Non-Interest Income ($M)	$2.462	$2.568
Net Income ($M)	$3.808	$7.367
EPS – Basic ($)	$0.51	$0.97
Net Interest Margin (%)	2.69%	3.13%

KPIs and asset quality (oldest → newest):

KPI	Q3 2024	Q4 2024	Q1 2025
Loans, Net ($B)	$1.864	$1.865	$1.887
Deposits ($B)	$1.700	$1.706	$1.724
Brokered Deposits ($M)	$167.7	$178.3	$177.0
Nonperforming Loans ($M)	$7.94	$8.90	$9.99
NPLs / Loans (%)	0.42%	0.47%	0.53%
ACL / Loans (%)	0.62%	0.63%	0.54%
Net (Recoveries) Charge-offs ($000)	328	228	(957)
Cost of Total Deposits (Ann., %)	2.27%	2.22%	2.07%

Notes: Office CRE exposure $13.7M, none delinquent (Q1 2025) . Core diluted EPS $1.04 after excluding after-tax net securities gains and merger expense (Q1 2025) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Financial guidance	FY/Q2 2025	None provided	None provided	Maintained (no formal guidance)
Dividend per share	Q1 2025	$0.32 (historical run-rate)	$0.32 declared Feb 25, payable Mar 25	Maintained
Dividend per share	Q2 2025	$0.32 (historical run-rate)	$0.32 declared May 27, payable Jun 24	Maintained

No other quantitative guidance (revenue/margins/OpEx/tax) was issued in Q1 materials .

Earnings Call Themes & Trends

No Q1 2025 earnings call transcript was available in the document set searched; themes below synthesize press releases.

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Net interest margin	2.88%; NIM aided by asset repricing; deposit costs elevated	2.98%; asset yields up; borrowing costs down	3.13%; 38 bps asset yield increase; $223k interest on recovery	Improving sequentially
Deposit mix/competition	Shift to time/brokered; core stable; competition high	Time/brokered higher; core stable; lower reliance on short-term borrowings	Brokered $177M; core stable; decreased borrowing	Stable core, higher term/brokered
Credit quality	NPLs to 0.42%; low office exposure; modest charge-offs	NPLs to 0.47%; office CRE $14.1M none delinquent	NPLs to 0.53%; office CRE $13.7M none delinquent; recoveries drove negative provision	NPLs rising; recoveries supportive
Operating efficiency	Efficiency 62.3%	Efficiency 70.7% (merger/expense)	Efficiency 68.4% (merger expense present)	Mixed; elevated on merger costs
Regulatory/strategic	—	Announced merger with NWBI (Dec 16, 2024) referenced	Merger progress referenced; merger expenses incurred	Integration planning underway

Management Commentary

“The net interest margin for the three months ended March 31, 2025 was 3.13%... driven by an increase in the rate collected on interest-earning assets of 38 bps... repricing of legacy assets, portfolio growth, and the recognition of $223,000 in interest from a recovery on a commercial loan.”
“Deposits increased $105.4 million to $1.7 billion... Brokered deposit balances increased $51.2 million to $177.0 million... utilized to supplement funding loan portfolio growth, while reducing the need to draw upon available borrowing lines.”
“The ratio of non-performing loans to total loans increased to 0.53%... Net loan recoveries of $957,000... Exposure to non-owner occupied office space is minimal at $13.7 million... none delinquent.”
“Results... were impacted by after-tax merger related expenses of $948,000 resulting from the announced acquisition... by Northwest Bancshares, Inc.”

Q&A Highlights

No earnings call transcript or Q&A was available for Q1 2025; no management Q&A highlights can be provided based on available documents [ListDocuments: earnings-call-transcript returned none].

Estimates Context

S&P Global consensus estimates (EPS and revenue) for PWOD Q1 2025 were unavailable; as a result, we cannot frame results as beats/misses versus Wall Street. Values from S&P Global could not be retrieved due to missing mapping; consensus unavailable.

Key Takeaways for Investors

Earnings quality mixed: strong NIM expansion and lower funding costs are positive, but EPS was boosted by a sizable negative provision tied to recoveries; core diluted EPS was lower at $1.04 after excluding merger expense and securities gains .
Asset sensitivity remains a tailwind with legacy asset repricing and loan growth (avg loans +$41.8M y/y), while borrowing costs declined; monitor durability if rates fall and asset yields compress .
Credit metrics bear watching: NPL ratio climbed to 0.53% and ACL/loans declined to 0.54% due to recoveries; office exposure is small and performing, but trend in NPLs is upward .
Funding shows stability in core deposits with ongoing customer digitization, but mix remains skewed to time and brokered deposits amid competitive rates; deposit costs improved sequentially (2.07%) .
Merger with Northwest Bancshares introduces integration/cost synergy optionality but adds near-term expense (Q1 merger expense $1.09M pre-tax); watch for closing timeline and updated cost saves .
Dividend maintained at $0.32 per quarter; income investors get continuity pending merger completion .
Near-term trading setup: narrative favors continued NIM/ROA improvement, but sustainability depends on underlying credit formation (beyond recoveries) and funding-cost discipline; lack of Street estimates may reduce event-driven volatility in the near term .

PENNS WOODS BANCORP INC (PWOD)·Q1 2025 Earnings Summary