Attached files
| file | filename |
|---|---|
| 8-K - CITIZENS & NORTHERN CORP | v208317_8k.htm |
| EX-99.2 - CITIZENS & NORTHERN CORP | v208317_ex99-2.htm |
| EX-99.3 - CITIZENS & NORTHERN CORP | v208317_ex99-3.htm |
Exhibit
99.1
|
Contact: Yvonne
Gill
|
|
|
January
18, 2011
|
570-724-0247
|
|
yvonneg@cnbankpa.com
|
C&N
ANNOUNCES FOURTH QUARTER 2010 UNAUDITED FINANCIAL RESULTS
FOR
IMMEDIATE RELEASE:
Wellsboro, PA – Citizens &
Northern Corporation (C&N) announced its unaudited, consolidated financial
results for the fourth quarter 2010 and for the year ended December 31,
2010.
Net
income available to common shareholders was $4,884,000, or $0.40 per share –
basic and diluted in the fourth quarter 2010, up from third quarter 2010
earnings of $4,135,000, or $0.34 per share – basic and diluted. Third
quarter 2010 earnings per share was reduced by $607,000, or $0.05 per share, for
accelerated discount accretion related to C&N’s repayment of TARP preferred
stock. Net income available to common shareholders was $4,242,000, or $0.42
per share - basic and diluted in the fourth quarter 2009.
For the
year ended December 31, 2010, net income available to common shareholders was
$17,581,000, or $1.45 per share – basic and diluted. In
2009, C&N had a net loss of $40,763,000, or $4.40 per share for the year,
included the effects of pre-tax realized losses from securities totaling
$83,840,000.
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)
|
4th
|
3rd
|
4th
|
Year
Ended
|
||
|
Quarter
|
Quarter
|
Quarter
|
Dec.
31,
|
Dec.
31,
|
|
|
2010
|
2010
|
2009
|
2010
|
2009
|
|
|
Net
income (loss) available to common shareholders
|
$4,884
|
$4,135
|
$4,242
|
$17,581
|
($40,763)
|
|
Other-than-temporary
impairment losses on available-for-sale securities
|
0
|
0
|
(956)
|
(433)
|
(85,363)
|
|
Realized
gains on assets previously written down
|
38
|
334
|
947
|
707
|
1,308
|
|
Other-than-temporary
impairment losses on available-for-sale securities, net of related
gains
|
38
|
334
|
(9)
|
274
|
(84,055)
|
|
Income
taxes (1)
|
135
|
(114)
|
516
|
280
|
28,206
|
|
Other-than-temporary
impairment losses, net
|
173
|
220
|
507
|
554
|
(55,849)
|
|
Core
earnings available to common shareholders
|
$4,711
|
$3,915
|
$3,735
|
$17,027
|
$15,086
|
|
Net
income (loss) per share – diluted
|
$0.40
|
$0.34
|
$0.42
|
$1.45
|
($4.40)
|
|
Core
earnings per share – diluted
|
$0.39
|
$0.32
|
$0.37
|
$1.40
|
$1.63
|
|
Weighted
average shares outstanding - diluted
|
12,148,772
|
12,136,516
|
10,141,903
|
12,131,039
|
9,271,869
|
|
Weighted
average shares outstanding - diluted - used in core earnings per
share calculations
|
12,148,772
|
12,136,516
|
10,141,903
|
12,131,039
|
9,272,489
|
(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, further reduced to $148,000 in the second quarter 2010 and
reduced to $0 in the fourth quarter 2010.
Core
earnings per share - diluted was $0.39 in the fourth quarter 2010, up $0.07
from the third quarter 2010 and up $0.02 from the fourth quarter
2009. Third quarter 2010 core earnings per share – diluted included
the effects of the $0.05 charge resulting from the preferred stock repayment
(described above). For the year ended December 31, 2010, core
earnings per share – diluted was $1.40, as compared to $1.63 for
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:
|
|
·
|
Net
interest income was $11,190,000 in the fourth quarter 2010, up $334,000
from the third quarter 2010 and $604,000 over the fourth quarter
2009. For the year ended December 31, 2010, net interest income
totaled $42,869,000, down 1.5% from 2009. The improvement in
the most recent quarter reflected a reduced cost of funds, as well as
$166,000 in income from a security that had been previously written down
with no earnings recognized on it for several
quarters.
|
|
|
·
|
The
provision for loan losses was $719,000 in the fourth quarter 2010, which
was $530,000 higher than the third quarter 2010 and $593,000 higher than
the fourth quarter 2009 amounts. In the fourth quarter 2010,
management increased the total estimated allowance for losses from
individually impaired loans (primarily larger commercial loans) by
$494,000 from the September 30, 2010 amount. For the year ended
December 31, 2010, the provision for loan losses totaled $1,191,000, up
from $680,000 in 2009, mainly as a result of the increased estimate in
allowance for losses on impaired loans in the most recent
quarter.
|
|
|
·
|
Noninterest
revenue was $3,480,000 in the fourth quarter 2010, down $95,000 from the
immediate prior quarter and $183,000 from the fourth quarter
2009. The reduction in noninterest revenue in the fourth
quarter 2010 in comparison to the prior quarter was mainly due to a lower
amount of gains realized on sales of other real estate
properties. Similarly, the reduced level of noninterest revenue
in the fourth quarter 2010 as compared to the fourth quarter 2009 resulted
from lower amounts of gains from sales of other real estate, as well as
inclusion in 2009 of revenue from temporary operation of a property that
was subsequently sold. For the year ended December 31, 2010,
noninterest revenue was $896,000, or 6.9%, higher than in 2009, reflecting
substantial increases in 2010 in revenue from sales of mortgages and from
debit card-related interchange
fees.
|
|
|
·
|
Noninterest
expense totaled $7,720,000 in the fourth quarter 2010, down $375,000 from
the third quarter, mainly as a result of lower costs related to loan
collection activities and a decrease in FDIC assessments
expense. Noninterest expense was $38,000 higher in the fourth
quarter 2010 as compared to the fourth quarter 2009, reflecting increases
in total compensation-related costs, offset by reductions in expenses
associated with other real estate properties, as well as reductions in
FDIC assessments and furniture and equipment expense. For the
year ended December 31, 2010, total noninterest expense was $2,442,000, or
7.2%, lower than in 2009, reflecting the impact of lower FDIC assessments,
lower furniture and equipment expense as a result of much of the core
banking system software and equipment becoming fully depreciated and
reductions in several other categories of operating
costs.
|
|
|
·
|
The
provision for income taxes totaled $1,411,000, or 22.4% of pre-tax income
in the fourth quarter 2010, down from $1,671,000, or 25.6% of pre-tax
income in the third quarter. The provision for income tax in
the fourth quarter 2010 included a benefit (reduction in expense) of
$148,000 resulting from a reduction in a valuation reserve. For
the year ended December 31, 2010, the tax provision was $5,800,000, or
23.3% of pre-tax income.
|
Other
Information:
Changes
in other unaudited financial information are as follows:
|
|
·
|
Total
assets amounted to $1,316,588,000 at December 31, 2010, as compared to
$1,308,108,000 at September 30, 2010 and $1,321,795,000 at December 31,
2009.
|
|
|
·
|
Net
loans outstanding (excluding mortgage loans held for sale) were
$721,304,000 at December 31, 2010, up from $717,526,000 at September 30,
2010 and up 1.2% from December 31, 2009. Total nonperforming
assets as a percentage of assets was 0.92% as of December 31, 2010, up
from 0.82% at September 30, 2010 and 0.76% at December 31,
2009.
|
|
|
·
|
Total
deposits and repo sweep accounts of $1,022,761,000 at December 31, 2010
were up 2.1% from September 30, 2010 and 6.4% from December 31,
2009.
|
|
|
·
|
Total
shareholders’ equity was $138,944,000 at December 31, 2010, down from
$141,082,000 at September 30, 2010, and $152,410,000 at December 31,
2009. The decrease in equity in the most recent quarter
resulted from fluctuation in the fair value of securities, with the change
in fair value recorded as a charge to equity, net of tax, with no impact
to earnings. Management assessed the declines in fair value of securities
as of December 31, 2010, and determined that none of the affected
securities was other-than-temporarily impaired. The reduction
in total equity at December 31, 2010 as compared to 2009 resulted from the
preferred stock repayment. Tangible common equity as a
percentage of tangible assets was 9.71% at December 31, 2010, up from
8.72% a year earlier.
|
|
|
·
|
Assets
under management by C&N’s Trust and Financial Management Group
amounted to $608,843,000 at December 31, 2010, up from $591,267,000 at
September 30, 2010 and up 0.6% 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.
|
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.