Attached files
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8-K - CITIZENS & NORTHERN CORP | v199098_8k.htm |
EX-99.3 - CITIZENS & NORTHERN CORP | v199098_ex99-3.htm |
EX-99.2 - CITIZENS & NORTHERN CORP | v199098_ex99-2.htm |
Exhibit
99.1
Contact: Yvonne
Gill
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October
15, 2010
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570-724-0247
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yvonneg@cnbankpa.com
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C&N
ANNOUNCES THIRD QUARTER 2010 UNAUDITED FINANCIAL RESULTS
FOR
IMMEDIATE RELEASE:
Wellsboro, PA – Citizens &
Northern Corporation (C&N) announced its unaudited, consolidated financial
results for the third quarter 2010 and for the nine months ended September 30,
2010.
In the
third quarter 2010, net income available to common shareholders was $4,135,000,
or $0.34 per share – basic and diluted. Third quarter earnings per
share was reduced by $607,000, or $0.05 per share, for accelerated discount
accretion related to C&N’s repayment of the preferred stock that had been
sold to the U.S. Treasury Department under the TARP Capital Purchase
Program. Net income available to common shareholders was $4,497,000,
or $0.37 per share - basic and diluted in the second quarter 2010 and the net
loss was $28,194,000, or $3.17 per share in the third quarter
2009. Pre-tax realized gains from available-for-sale securities
totaled $388,000 in the third quarter 2010 and $319,000 in the second quarter
2010, while third quarter 2009 results were significantly impacted by pre-tax
realized losses from securities totaling $47,848,000.
For the
nine months ended September 30, 2010, net income available to common
shareholders was $12,697,000, or $1.05 per share – basic and
diluted. For the first nine months of 2009, C&N’s net loss of
$45,005,000, or $5.01 per share, included the effects of pre-tax realized losses
from securities totaling $83,522,000.
Core
Earnings is an earnings performance measurement which C&N’s management has
defined to exclude the effects of other-than-temporary impairment (OTTI) losses
on available-for-sale securities and realized gains on securities for which OTTI
has previously been recognized. Core Earnings is a performance
measurement that is not based on U.S. generally accepted accounting principles
(GAAP), meaning that it is a non-GAAP measure. Management believes
Core Earnings information is meaningful for evaluating C&N’s operating
performance, because it excludes some of the impact of market volatility as it
relates to investments in securities. This disclosure should not be
viewed as a substitute for results determined in accordance with GAAP, nor is it
necessarily comparable to non-GAAP performance measures that may be presented by
other companies.
The table
below provides a reconciliation of Core Earnings to net income (loss), the most
directly comparable GAAP financial measure:
RECONCILIATION
OF NON-GAAP MEASURE (UNAUDITED)
(In
thousands, except per-share data)
3rd
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2nd
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3rd
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9 Months Ended
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|||||||
Quarter
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Quarter
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Quarter
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Sept. 30,
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Sept. 30,
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||||||
2010
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2010
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2009
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2010
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2009
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||||||
Net
income (loss) available to common shareholders
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$4,135
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$4,497
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($28,567)
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$12,697
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($45,005)
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|||||
Other-than-temporary
impairment losses
on
available-for-sale securities
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0
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(2)
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(47,947)
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(433)
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(84,407)
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Realized
gains on assets previously written down
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334
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51
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70
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669
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361
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Other-than-temporary
impairment losses on
available-for-sale
securities, net of related gains
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334
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49
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(47,877)
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236
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(84,046)
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Income
taxes (1)
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(114)
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208
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15,392
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144
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27,690
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Other-than-temporary
impairment losses, net
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220
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257
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(32,485)
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380
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(56,356)
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Core
earnings available to common shareholders
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$3,915
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$4,240
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$3,918
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$12,317
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$11,351
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Net
income (loss) per share – diluted
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$0.34
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$0.37
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($3.17)
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$1.05
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($5.01)
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Core
earnings per share – diluted
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$0.32
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$0.35
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$0.43
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$1.02
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$1.26
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Weighted
average shares outstanding – diluted
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12,136,516
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12,125,072
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9,005,850
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12,125,142
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8,978,665
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Weighted
average shares outstanding - diluted -
used
in core earnings per share calculations
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12,136,516
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12,125,072
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9,023,370
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12,125,142
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8,993,014
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(1)
Income tax has been allocated to the non-core gains and losses at 34%, adjusted
for a valuation allowance on deferred tax assets associated with losses
from securities classified as capital assets for federal income tax
reporting purposes. A valuation allowance of $886,000 was
recorded in the third quarter 2009, was reduced to $373,000 in the fourth
quarter 2009 and was further reduced to $148,000 in the second quarter
2010. There was no change to the valuation allowance in the third quarter
2010.
Core
earnings per share -diluted was $0.32 in the third quarter 2010, down $0.03 from
the immediately previous quarter and $0.11 from the third quarter 2009, and
reflecting the effects of the $0.05 charge resulting from the preferred stock
repayment (described above). For the first nine months of 2010, core
earnings per share – diluted was $1.02, as compared to $1.26 for the first nine
months of 2009. Core earnings per share in 2010 have been impacted by
a higher number of weighted average common shares outstanding than in 2009,
resulting from the issuance of shares of common stock in a public offering in
December 2009 that raised capital of $21.4 million, net of offering
costs. Some of the more significant fluctuations in the components of core
earnings are as follows:
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·
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Net
interest income was $10,856,000 in the third quarter 2010, up $506,000
from the second quarter 2010 and $64,000 over the third quarter
2009. Year-to-date, net interest income totaled $31,679,000 in
2010, down 3.8% from the first nine months of 2009. The
improvement in the most recent quarter reflected a reduced cost of funds,
an increase in average loans, with a reduced average amount of funds held
in overnight investments.
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·
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Noninterest
revenue was $3,449,000 in the third quarter 2010, up $439,000 from the
immediate prior quarter and $167,000 over the third quarter
2009. Third quarter 2010 revenue included an increase in
revenue from mortgages originated and sold in the secondary market
totaling $131,000 (as compared to the second quarter), as well as gains
from sales of other real estate. For the nine months ended
September 30, 2010, noninterest revenue was $978,000, or 10.7%, higher
than the first nine months of 2009. In the first quarter 2010,
C&N realized a pre-tax gain of $448,000 from the exchange of property
at one of the banking locations. Also in 2010, revenue from
sales of mortgages and from debit card-related interchange fees have
increased substantially.
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·
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The
provision for loan losses was $189,000 in the third quarter 2010, for a
total of $472,000 for the first nine months of 2010. In 2009,
the provision for loan losses was $634,000 in the third quarter and
$554,000 for the first nine months.
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·
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Noninterest
expense totaled $7,969,000 in the third quarter 2010, up $340,000 from the
second quarter, mainly as a result of higher costs related to loan
collection activities and an increase of $155,000 in total salaries and
wages. Noninterest expense was $308,000 lower in the third
quarter 2010 as compared to the third quarter 2009, and noninterest
expense for the nine months ended September 30, 2010 was $2,581,000 or
9.9% lower than the total for the first nine months of
2009. Year-to-date, total salaries and benefit expenses are
$697,000, or 5.3%, lower in 2010 than in the first nine months of
2009. In 2010, furniture and equipment expenses have been
reduced because much of the computer hardware and software for the core
banking system became fully depreciated in late 2009, and FDIC assessments
have been lower in 2010 than in
2009.
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·
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The
provision for income taxes totaled $1,671,000, or 25.6% of pre-tax income
in the third quarter 2010, up from $1,281,000 or 20.8% of pre-tax income
in the second quarter. The provision for income tax in the
second quarter included a benefit (reduction in expense) of $225,000
resulting from a reduction in a valuation reserve. For the nine
months ended September 30, 2010, the tax provision was $4,389,000, or
23.6% of pre-tax income.
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Other
Information:
Changes
in other unaudited financial information are as follows:
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·
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Total
assets amounted to $1,308,000 at September 30, 2010, down from
$1,338,657,000 at June 30, 2010 and up 1.9% from $1,283,378,000 at
September 30, 2009.
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·
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Net
loans outstanding were $718,087,000 at September 30, 2010, up from
$715,363,000 at June 30, 2010 and down 0.3% from September 30,
2009.
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·
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Total
deposits and repo sweep accounts of $1,001,918,000 at September 30, 2010
were up 0.5% from June 30, 2010 and 7.6% from September 30,
2009.
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·
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Total
shareholders’ equity was $141,082,000 at September 30, 2010, down from
$161,495,000 at June 30, 2010 as a result of the preferred stock
repayment. Tangible common equity as a percentage of tangible
assets was 9.94% at September 30,
2010.
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·
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Assets
under management by C&N’s Trust and Financial Management Group
amounted to $591,267,000 at September 30, 2010, up from $558,344,000 at
June 30, 2010 and down 0.3% from one year earlier. Fluctuations
in the value of assets under management have resulted mainly from
volatility in U.S. and international stock market
values.
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Citizens & Northern Corporation is
the parent company of Citizens & Northern Bank, a local, independent community bank
providing complete financial, investment and insurance services through
26 full service offices throughout Tioga,
Bradford, Sullivan, Lycoming, Potter, Cameron and McKean counties in
Pennsylvania and in
Canisteo and South
Hornell, NY. C&N can be found on the worldwide web at
www.cnbankpa.com. The
Company’s stock is listed on NASDAQ Capital Market Securities under the
symbol CZNC.
Safe Harbor Statement: Except
for historical information contained herein, the matters discussed in this
release are forward-looking statements. Investors are cautioned that
all forward-looking statements involve risks and uncertainty, including without
limitation, the following: changes in monetary and fiscal policies of the
Federal Reserve Board and the U.S. Government, particularly related to changes
in interest rates; changes in general economic conditions; legislative or
regulatory changes; downturn in demand for loan, deposit and other financial
services in the Corporation’s market area; increased competition from other
banks and non-bank providers of financial services; technological changes and
increased technology-related costs; changes in management’s assessment of
realization of securities and other assets; and changes in accounting
principles, or the application of generally accepted accounting
principles. Citizens & Northern disclaims any intention or
obligation to publicly update or revise any forward-looking statements, whether
as a result of events or circumstances after the date hereof or to reflect the
occurrence of unanticipated events.