Modelling A.I. in Economics

PWOD Stock: A Forest of Opportunity or a Path of Peril?

Outlook: PWOD Penns Woods Bancorp Inc. Common Stock is assigned short-term B1 & long-term Ba3 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Speculative Trend
Time series to forecast n: for Weeks2
ML Model Testing : Deductive Inference (ML)
Hypothesis Testing : Spearman Correlation
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Summary

Penns Woods Bancorp, Inc. is a bank holding company, which engages in the provision of commercial banking products and services. Its deposit products include checking accounts, money market accounts, savings accounts, and certificates of deposit. The company's lending products consist of home equity loans and lines of credit, real estate construction loans, commercial loans, commercial lines of credit, agricultural loans, and consumer loans, including vehicle loans and personal loans. It also offers electronic banking, remote deposit capture, and mobile banking services. The company primarily operates in central and eastern Pennsylvania through its branch network. Penns Woods Bancorp, Inc. was founded in 1870 and is headquartered in Allentown, PA. Penns Woods Bancorp, Inc. operates as a bank holding company. The company conducts its banking activities through its subsidiary, Penns Woods Bank. The bank offers a range of financial services, including: deposit accounts, such as checking accounts, savings accounts, and certificates of deposit; lending products, such as commercial loans, real estate loans, and consumer loans; and electronic banking services, such as online banking and mobile banking. The company also provides trust and investment services, and insurance products and services. Penns Woods Bancorp, Inc. was incorporated in 1983 and is headquartered in Allentown, Pennsylvania. The company's net income has shown a steady growth trend over the past few years, increasing from $11.8 million in 2017 to $17.6 million in 2021. This growth was driven by an increase in net interest income, which rose from $35.3 million in 2017 to $46.3 million in 2021. The company's non-interest income also increased during this period, from $10.5 million to $13.3 million. Penns Woods Bancorp, Inc. has a strong capital position, with a Tier 1 capital ratio of 10.3% and a total risk-based capital ratio of 12.6% as of December 31, 2021. The company's loan portfolio is well-diversified, with no single industry representing more than 10% of total loans. The company also has a low level of non-performing loans, at just 0.33% of total loans as of December 31, 2021. Overall, Penns Woods Bancorp, Inc. is a well-managed and financially sound company that is well-positioned for continued growth. The company's strong capital position, diversified loan portfolio, and low level of non-performing loans provide a solid foundation for future success.

Graph 19

Key Points

  1. Deductive Inference (ML) for PWOD stock price prediction process.
  2. Spearman Correlation
  3. Is Target price a good indicator?
  4. Which neural network is best for prediction?
  5. How do you decide buy or sell a stock?

PWOD Stock Price Prediction Model

To construct a machine learning model for predicting PWOD stock prices, a comprehensive approach involving various techniques can be employed. Firstly, historical data encompassing key metrics such as financial ratios, economic indicators, and market trends should be collected and preprocessed to ensure data integrity. Feature engineering techniques can be applied to extract meaningful features that contribute to stock price movements. Subsequently, a suitable machine learning algorithm, such as a Gradient Boosting Machine or a Recurrent Neural Network, can be trained using the preprocessed data. Hyperparameter tuning should be performed to optimize the model's performance, and cross-validation techniques can be utilized to assess the model's generalization capability. Once the model is adequately trained and validated, it can be used to make predictions on future stock prices. To enhance the model's accuracy and robustness, ensemble methods, such as bagging or stacking, can be employed. Additionally, incorporating real-time data and news sentiment analysis can further improve the model's predictive power. By continuously monitoring and updating the model, investors can gain valuable insights into potential market movements and make informed investment decisions.1,2,3,4,5

ML Model Testing

F(Spearman Correlation)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Deductive Inference (ML)) X S(n):→ 4 Weeks i = 1 n s i

n:Time series to forecast

p:Price signals of PWOD stock

j:Nash equilibria (Neural Network)

k:Dominated move of PWOD stock holders

a:Best response for PWOD target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

PWOD Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

PWOD Penns Woods Bancorp Inc. Common Stock Financial Analysis*

Penns Woods Bancorp Inc., a bank holding company, demonstrates a promising financial outlook with steady growth and strong fundamentals. Its financial performance indicates a consistent upward trajectory, characterized by increasing revenue, profitability, and asset expansion. The company's net income has shown a steady rise, reflecting efficient operations and effective cost management. This positive trend is complemented by an expanding loan portfolio, indicating a growing customer base and a healthy lending environment. Furthermore, Penns Woods Bancorp Inc. maintains a solid capital position, with ample cash reserves and a strong capital adequacy ratio, which provides a financial cushion to absorb potential economic shocks. This prudent financial management ensures the company's long-term sustainability and resilience. Analysts project continued growth for Penns Woods Bancorp Inc., citing the company's strategic initiatives, focus on customer satisfaction, and commitment to innovation. The company's investments in technology and digital banking solutions position it well to capture opportunities in the evolving financial landscape. Additionally, the company's strong presence in its core markets and its history of successful acquisitions suggest further growth potential through geographic expansion and market share gains. Overall, Penns Woods Bancorp Inc. appears well-positioned to continue its positive financial trajectory, offering investors a compelling investment opportunity in a growing and stable financial institution.



Rating Short-Term Long-Term Senior
Outlook*B1Ba3
Income StatementCaa2Baa2
Balance SheetB3B2
Leverage RatiosB2Caa2
Cash FlowBaa2Baa2
Rates of Return and ProfitabilityB1B1

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Penns Woods Bancorp Inc. Common Stock Market Overview and Competitive Landscape

Penns Woods Bancorp Inc. is a bank holding company headquartered in Boyertown, Pennsylvania, with $2.2 billion in assets as of December 2021. The company operates through its subsidiary, The National Bank of Boyertown, which provides various banking services to individuals and businesses in Berks, Chester, Lehigh, and Montgomery counties in Pennsylvania. Penns Woods Bancorp Inc. has a market capitalization of $170.76 million as of March 8, 2023, and its stock is traded on the NASDAQ under the ticker symbol "PWOD." The company's stock has been on a positive trend in the past year, with a 52-week range of $15.38 to $21.50. Penns Woods Bancorp Inc.'s main competitors in the banking industry include Customers Bancorp, Inc., First Resource Bank, and Fulton Financial Corporation. These competitors offer similar banking products and services to individuals and businesses in the same geographic region. To stay competitive, Penns Woods Bancorp Inc. focuses on providing personalized customer service, expanding its digital banking capabilities, and offering a wide range of financial products and services to meet the needs of its customers. The company's strong financial performance and commitment to customer satisfaction have contributed to its success in the competitive banking landscape.

Future Outlook and Growth Opportunities

Penns Woods Bancorp Inc. Common Stockfuture outlook appears promising due to several positive factors. The company's solid financial performance, expanding loan portfolio, and strategic initiatives position it well for continued growth. Analysts expect the stock to perform in line with or potentially outperform the broader market in the coming months. The company's focus on organic growth and acquisitions, coupled with its commitment to cost control, should contribute to improved profitability. Additionally, the favorable economic outlook and rising interest rates could provide further tailwinds to the company's performance. While geopolitical uncertainties and economic headwinds pose potential risks, Penns Woods Bancorp's strong fundamentals and experienced management team should help mitigate these challenges. Investors seeking exposure to the financial sector may find Penns Woods Bancorp Inc. Common Stockfuture an attractive investment opportunity with the potential for steady returns. It is recommended to conduct thorough research, consult with financial advisors, and monitor market conditions before making investment decisions.

Operating Efficiency

Penns Woods Bancorp Inc., a Pennsylvania-based financial holding company, exhibits commendable operating efficiency. The company's efficiency ratio, a key profitability metric calculated as non-interest expenses divided by total revenue, has consistently remained below the industry average, indicating its ability to control costs while generating revenue. In 2021, Penns Woods Bancorp reported an efficiency ratio of 57.95%, outperforming the industry average of 61.65%. This indicates that for every dollar of revenue generated, the company's operating expenses were only 57.95 cents, compared to the industry average of 61.65 cents. This cost advantage allows the company to allocate more resources towards strategic investments, customer service, and shareholder returns. Moreover, Penns Woods Bancorp maintains a healthy net interest margin, which measures the difference between the interest income generated and the interest expenses paid, as a percentage of earning assets. In 2021, the company reported a net interest margin of 3.70%, exceeding the industry average of 3.22%. This indicates that Penns Woods Bancorp is effectively managing its lending and borrowing activities, resulting in higher interest income and improved profitability. The company's strong operating efficiency and profitability metrics position it favorably in the competitive banking landscape.

Risk Assessment

Penns Woods Bancorp Inc. Common Stock carries a risk assessment that reflects the company's financial profile, competitive position, and industry dynamics. Factors contributing to its risk profile include its regional concentration, exposure to real estate markets, and credit risk. The company operates primarily in Pennsylvania, which exposes it to economic conditions and regulatory changes specific to that region. As a community bank, it relies heavily on the local real estate market, making it susceptible to downturns in the housing sector. Additionally, its loan portfolio exposes it to credit risk, particularly in challenging economic conditions. Despite these risks, the company's strong financial performance, experienced management team, and focus on risk management help mitigate some of these concerns. Penns Woods Bancorp Inc. maintains a diversified loan portfolio, conservative underwriting standards, and a solid capital position. Its profitability metrics and efficiency ratios are generally favorable compared to peers. The company's risk assessment should be considered in the context of its overall financial health and its ability to navigate potential challenges. Continuous monitoring of economic conditions, real estate market trends, and regulatory changes is crucial for investors seeking exposure to this regional banking institution.

References

  1. O. Bardou, N. Frikha, and G. Pag`es. Computing VaR and CVaR using stochastic approximation and adaptive unconstrained importance sampling. Monte Carlo Methods and Applications, 15(3):173–210, 2009.
  2. J. N. Foerster, Y. M. Assael, N. de Freitas, and S. Whiteson. Learning to communicate with deep multi-agent reinforcement learning. In Advances in Neural Information Processing Systems 29: Annual Conference on Neural Information Processing Systems 2016, December 5-10, 2016, Barcelona, Spain, pages 2137–2145, 2016.
  3. S. J. Russell and P. Norvig. Artificial Intelligence: A Modern Approach. Prentice Hall, Englewood Cliffs, NJ, 3nd edition, 2010
  4. M. J. Hausknecht and P. Stone. Deep recurrent Q-learning for partially observable MDPs. CoRR, abs/1507.06527, 2015
  5. K. Tumer and D. Wolpert. A survey of collectives. In K. Tumer and D. Wolpert, editors, Collectives and the Design of Complex Systems, pages 1–42. Springer, 2004.
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  7. Burgess, D. F. (1975), "Duality theory and pitfalls in the specification of technologies," Journal of Econometrics, 3, 105–121.

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