View This Article in BOSS Magazine
A pair of community banks owned by Penns Woods Bancorp are redefining how old ways can combine with new ones for an inspired take on innovation

JSSB Loyalsock office
For the last two decades, most discussions of technological progress in business have been centered on cutting edge technology. Consequently, companies have been generalized as early adopters, fast followers, and laggards when it comes to adopting the latest and greatest systems. However, in the heart of Pennsylvania, Jersey Shore State Bank (JSSB) and Luzerne Bank are defying categorization with an innovative and thoughtful blend of modern and traditional tools to move into a very bright future.
Representing $1.9 billion in assets, JSSB and Luzerne are wholly owned banking subsidiaries of Penns Woods Bancorp, Inc. (NASDAQ: PWOD). JSSB's 17 full-service offices and Luzerne's 8 full-service offices serve customers across North Central, Central, and Northeastern Pennsylvania through their retail and commercial banking, mortgage, and financial services divisions.

Aron Carter
As Penns Woods Chief Risk Officer (CRO), Aron Carter is responsible for the company’s regulatory compliance, credit, collections, information security, and anything in the back office that defies easy categorization. He also collaborates with the CEO and CFO on balance sheet management concepts.
That’s a departure from the typical CRO who focuses on managing risk from a non-operational distance, but then again, most risk specialists don’t spend an entire career interacting with, learning from, and regulating hundreds of financial institutions of varying size like Carter did as a bank regulator for 19 years at the U.S. Treasury Department’s Office of the Comptroller of the Currency (OCC) division.
“I consider myself at times to be a community bank MacGyver given my experiences prior to Penns Woods,” Carter quipped. “If something doesn't fit, it's handed to me, and we find a way to make it work.”
JSSB and Luzerne are on a mission to be the most significant regional community banks with the size and scale to support the communities they serve, many of which are in rural or suburban communities. They are reaching that goal by offering traditional banking products, as well as providing the digital services other customers expect, such as self-service online banking, online bill payment, mobile banking, and P2P payment options.
“Our products aren't complicated, and we don’t complicate them,” he said. The banks treat their customers’ time as if it was their own, and are motivated to make repetitive, laborious processes such as applying for a loan as fast and convenient as possible. That means creating workflows and taking calculated risks that make it easy to take a more direct approach.
“The customer doesn't have all the time in the day; they want to get in and get out. They want to experience a process that's not labor intensive, but (in other banks) they have to talk to a number of people before they can get a loan approved. If it's a basic transaction, we just go ahead and get it done.”
While the populations served by JSSB and Luzerne have the gamut from digital natives to customers who don't have the internet, their service areas have a sizable population of retirement age and higher, who have not had a digital footprint most of their lives and prefer in-person banking. “While technology is great and necessary, it can't replace the success that brought you where you are today,” he said.
Many of our long-time customers who supported the banks before and through the dawn of the digital age are still coming to JSSB and Luzerne. A fierce advocate of inclusion, Carter insists that banks should take their role as trusted advisors to heart and offer customer experiences on par with digital banking experience to everyone.
“We have worked to become solutions oriented, rather than the traditional order-taker approach,” he stressed. “When it comes to customer experience, it's about hearing what people’s challenges are and what they think they need. A solution-centric model enables us to understand our customers and recommend things that they actually need; thus, moving from being order takers.”
Patience is a Virtue
“We try not to be a pioneer with technology because we're realistic,” Carter mused. “When you're a pioneer, if you don't have the bench strength, especially from a technology standpoint, you can really get out too far ahead of your skis.” As fast followers, Penns Woods take a commonsense approach to embrace e-commerce solutions.
Carter is quick to point out that despite his expertise, there may be risk exposures that require a collaborative effort to ameliorate. In such cases, the company’s CIO and Information Security Officer are at the ready to assist him, and he also consults industry peers and vendors.
“AI Oasis is one of those vendors,” he said. AI Oasis is an AI technology center of United AI Network, the largest independent global supplier of Anti-Money Laundering, counter terrorist financing, regulatory compliance, fraud elimination, financial crimes prevention, consumer protection, and law enforcement solutions.
“We use their Patriot Officer® platform to facilitate our Bank Secrecy Act (BSA) transaction monitoring efforts,” he said. “We’ve been with them since 2014 and they have helped us to be very efficient in our BSA Department.
“Our daily and monthly transaction accounts between our two banks, makes it virtually impossible to do transaction monitoring manually in an effective manner,” he continued. “AI OASIS provides the platform that helps us focus our time on what’s most important. They have been a good partner with us, and I think we've been good partners with them as well. “
Going Their Own Way

Wilkes-Barre business district
When banks merge or undertake partnerships with other financial institutions, executives often focus mostly on issues with technology and systems, integration, and data management. While those issues are critical to a successful merger, Carter adds human nature to the equation.
“The biggest issues are social and cultural. Each organization has its own culture, and bringing two separate cultures together and merging them into one is the biggest challenge for any acquisition or merger. Organizations have to get used to each other, and there are people challenges and things of that nature.”
When Luzerne and JSSB united, both banks were similar in culture, which made the move easier. “I think organizations struggle when there are two dissimilar organizations trying to combine. That makes it very difficult to become one. I'm not saying it can’t be done, but it makes it very difficult.
“For example, if there’s a strong characteristic in the CEO of one institution and a CEO with a more collaborative characteristic heading up the other institution, then those are tough things to mesh together,” he added. “As an organization as a whole, I think we've done a pretty good job in making ourselves one.”
Carter stressed that he wasn't brought into JSSB and Luzerne to be a traditional CRO. “I was brought to the institution to be nimble and adjust as necessary,” he said. “I go back to MacGyver, where you have the gum, the paper clip, and the clothespin, and you can fix an engine. It might not be pretty, but you get it to work. You get it to match.”
Examination and adaptation are the Penns Woods strategy. “We look at things and adapt,” he said. As a regulator, he knows all too well of the stress it can put on an organization. Especially in finance, regulations are often seen as a burden to adjust to and comply with, but that’s not how it’s done at JSSB and Luzerne.
“We look at regulatory change as an opportunity because we realize that sometimes banks may say, ‘Well, I'm not going to offer that product or service anymore because of the change in regulatory requirements.’”
In fact, the banks have expanded their business despite shouldering regulatory burdens on occasion. “We have the people and are willing to bet on ourselves that everything will work out OK. We run the banks and accommodate regulation.”
When Carter was a regulator, most of his work took place in community banks in the Northeast and Mid-Atlantic. Most regulations are treated as a one size fits all proposition. When taking that tack, community banks must try to make them as less intrusive as possible. “Sometimes your hands are tied. Other times you have the flexibility.”
Throughout his career, Carter has had an affinity for community banks because regulatory compliance and other processes are harder for them to comply given their smaller sizes. “They don't have the deep pockets like a Wells Fargo or Citibank to do a lot of things. They can't just say, ‘Here's $5 million, we're going to set aside for that.’ They don't just hire a specific person for each specific thing.”
Carter recalled when he was a regulator, he worked with a very small bank with a workforce of about 10 people. As such, even minor responsibilities fell on its CEO’s shoulders. “He was also the guy who shoveled snow and was also the janitor. He did everything. That is the true spirit of community banking right there where banks can be MacGuyvers in their own fashions depending on situation.”
At JSSB and Luzerne, that community bank spirit emerged boldly during the pandemic. Many residents in Pennsylvania’s countryside often tend to be more traditional and wary of disruptions. That includes the banks’ customers and employees. Because leadership intimately knows their workforce, their worries, and their hopes, they allowed remote work to continue as the pandemic’s threat diminished.
Slightly less than a third of the bank’s workforce, those who are not in customer-facing roles, continue to work from home. Microsoft Teams has been a great help from both an efficiency and effectiveness standpoint.
“We are unique because at many banks like us that may be in a rural location, all of their people have returned to work – even the people in the back office that aren't customer-facing,” he said. “We've decided to go with our blended solution because it works.”
Additionally, the workforce benefits from flexible work schedules. Carter recalled a situation that illustrates their workers’ appreciation for these kinds of options. He cited a bank employee, a mother whose son worked the third shift in a factory and didn’t get home until 2 or 3 in the morning. Her son had a developmental disability, so she would get up in the middle of the night to drive him home. The bank allowed her to manage her schedule, and she set her work hours to coincide with her son’s schedule.
“She was a good employee and very appreciative that we allowed her that flexibility,” he said. “We're very strong proponents for flexible work schedules such as 4/10, early starts, and late starts.” That may not always be possible, depending on the demands of the specific job a worker has, but the company endeavors to give everyone flexible options.
He pointed out two other positives of keeping the remote work option: employee satisfaction and talent acquisition. “Since COVID, competition for labor has increased exponentially,” he said. “We found that allowing people in certain positions – that may not be customer facing – to work remotely has been a plus for us for helping retain and even attract potential employees.”
Of course, the community bank ethos that defines JSSB and Luzerne extends to their customer neighbors. The organization recognizes the tremendous impact that personal circumstances have on a client’s ability to make progress in their financial lives.
“Let’s say we have a single mother that may have a couple of children and is in a bad situation,” Carter posited. “Her financial situation might not be the greatest, but instead of immediately saying no, what if you were willing to have her come in and put in a loan application and then walk her through the steps she needs to qualify? What are you doing to get her to the next step? The next step could be, ‘If you do this, maybe this can help improve your credit score.’ And then checking in with that person in a couple of months to make sure that they’re on that path.”
For Carter and the banks of Penns Woods, a “no” from the bank is not the ultimate answer for people with challenging financial circumstances. “A ‘no’ isn’t permanent, but it requires work by both the potential customer and the banker to change the answer to a ‘maybe’ or a ‘yes,’” he concluded.
“The individual should have goals and be able to seek direction with a banker if needed to achieve those goals. This is their life. But it's our job to work with that individual because they are seeking help not just a transaction (though it may be masked as a transaction) in many cases to achieve their goals. We’re doing what we can do to get that person to that next step.” If that’s not community bank spirit, we don’t know what is.
Penns Woods Bancorp, Inc., is the bank holding company for Jersey Shore State Bank (JSSB) and Luzerne Bank (LUZ). It was incorporated in Pennsylvania on January 7, 1983, with JSSB as a wholly owned subsidiary and later acquired Luzerne Bank on June 1, 2013. In October 2000, JSSB acquired the M Group, Inc. D/B/A The Comprehensive Financial Group. The M. Group operates as a subsidiary of JSSB, offering insurance and securities brokerage services.
At Penn's Woods Bancorp, Inc., we value leadership, the kind of insightful, strategic leadership necessary to ensure the ongoing success and integrity of the regional financial institutions we oversee. We take pride in the expertise, dedication to excellence, and commitment to community of our leadership team as well as the leadership serving at each of our member banks.
As the bank holding company for Jersey Shore State Bank (JSSB) and Luzerne Bank (LUZ), Penns Woods Bancorp, Inc., manages and supervises these regional banking institutions that serve customers throughout north-central and northeastern Pennsylvania. Our principal source of income results from dividends paid by JSSB and LUZ through their account services as well as through the insurance and investment products available from JSSB’s subsidiary, M-Group D/B/A The Comprehensive Financial Group.
Corporate Office
300 Market Street
Williamsport, PA 17701
Phone Number: 888.412.5772
Email: contactus@jssb.com
Homepage Link: https://www.jssb.com/
Facebook: https://www.facebook.com/JerseyShoreStateBank/
LinkedIn: https://www.linkedin.com/company/jersey-shore-state-bank