Attached files
| file | filename |
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| 8-K - CITIZENS & NORTHERN CORP | v228786_8k.htm |
| EX-99.3 - CITIZENS & NORTHERN CORP | v228786_ex99-3.htm |
| EX-99.1 - CITIZENS & NORTHERN CORP | v228786_ex99-1.htm |
EXHIBIT 99.2
90-92 Main Street, P.O. Box 58
Wellsboro, PA 16901
Phone: (570) 724-3411 Fax: (570) 723-8097
E-Mail: cnemail@cnbankpa.com Web Page: http://www.cnbankpa.com
Stock Symbol: CZNC
Chartered 1864
FEDERAL DEPOSIT INSURANCE CORP
June 30, 2011 QUARTERLY REPORT
Dear Shareholder:
I am pleased to report net income of $5.7 million for the second quarter of 2011 which is a $.8 million increase over the second quarter of 2010, or an increase of 17.36%. 2011 year-to-date earnings of $11.2 million are an increase of $1.9 million over the first half of 2010, or an increase of 20.75%. Return on average assets (ROA) was 1.71% and return on average equity (ROE) was 15.43% for the first half of 2011. Our financial results place Citizens & Northern Corporation in the top echelon of our peer group. Our strong performance has been the result of a substantially improved net interest margin, strong asset quality and firm management of overhead expenses.
As reported in previous quarters, total assets remain relatively unchanged as we continue to de-leverage the balance sheet due to low investment yield opportunities. Non-performing assets to total assets remain relatively modest at .75%, which is very good by industry standards. You will note that the provision for loan losses was a credit for the first half of 2011. The favorable loan loss results in the first half of 2011 reflect our low levels of delinquencies and other loan-related credit problems, as compared to averages for comparable-sized peer banks.
We are proud of our first half results in light of a weak national economy and the uncertainty that surrounds our industry as we await the writing of the final rules that were part of the Dodd-Frank Wall Street Reform and Customer Protection Act.
Over the past eighteen months C&N has experienced a significant financial recovery. This has been the result of a committed employee workforce that is driven to make C&N a premier financial institution. We solicit your continued support and welcome your questions and comments.
Charles H. Updegraff, Jr.
Chairman, President, & CEO
CITIZENS & NORTHERN CORPORATION
BOARD OF DIRECTORS
Charles H. Updegraff, Jr. - Chairman
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Dennis F. Beardslee
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Raymond R. Mattie
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Jan E. Fisher
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Edward H. Owlett, III
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R. Bruce Haner
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Leonard Simpson
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Susan E. Hartley
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James E. Towner
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Leo F. Lambert
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Ann M. Tyler
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Edward L. Learn
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DIRECTORS EMERITI
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R. Robert DeCamp
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CITIZENS & NORTHERN BANK
1-877-838-2517
OFFICES
428 S. Main Street, ATHENS, PA 18810
3 Main Street, CANISTEO, NY 14823
10 N Main Street, COUDERSPORT, PA 16915
111 Main Street, DUSHORE, PA 18614
563 Main Street, EAST SMITHFIELD, PA 18817
104 Main Street, ELKLAND, PA 16920
135 East Fourth Street, EMPORIUM, PA 15834
6250 County Route 64, HORNELL, NY 14843
230-232 Railroad Street, JERSEY SHORE, PA 17740
102 E. Main Street, KNOXVILLE, PA 16928
514 Main Street, LAPORTE, PA 18626
4534 Williamson Trail LIBERTY, PA 16930
1085 S. Main Street, MANSFIELD, PA 16933
612 James Monroe Avenue, MONROETON, PA 18832
3461 Rte.405 Highway, MUNCY, PA 17756
100 Maple Street, PORT ALLEGANY, PA 16743
24 Thompson Street, RALSTON, PA 17763
1827 Elmira Street, SAYRE, PA 18840
2 E. Mountain Ave., SO. WILLIAMSPORT, PA 17702
41 Main Street, TIOGA, PA 16946
428 Main Street, TOWANDA, PA18848
Court House Square, TROY, PA 16947
90-92 Main Street, WELLSBORO, PA 16901
130 Court Street, WILLIAMSPORT, PA 17701
1510 Dewey Ave., WILLIAMSPORT, PA 17702
Route 6, WYSOX, PA 18854
TRUST & FINANCIAL MANAGEMENT GROUP
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3 Main Street, Canisteo, NY 14823
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607-698-4295
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10 N Main Street, Coudersport, PA 16915
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800-921-9150
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1827 Elmira Street, Sayre, PA 18840
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888-760-8192
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428 Main Street, Towanda, PA 18848
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888-987-8784
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90-92 Main Street, Wellsboro, PA 16901
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888-487-8784
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130 Court Street, Williamsport, PA 17701
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866-732-7213
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ACCOUNT SERVICES - 90-92 Main St., Wellsboro, PA 16901
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BANKCARD SERVICES - 90-92 Main St., Wellsboro PA 16901
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800-577-8001
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ELECTRONIC BANKING – 10 Nichols St., Wellsboro, PA 16901
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877-838-2517
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www.cnbankpa.com
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C&N FINANCIAL SERVICES CORPORATION – 90-92 Main Street, Wellsboro, PA
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866-ASK-CNFS
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www.cnfinancialservices.com
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CONDENSED, CONSOLIDATED EARNINGS INFORMATION
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(In Thousands, Except Per Share Data) (Unaudited)
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||||||||||||||||||||
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2ND
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1ST
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2ND
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6 MONTHS ENDED
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|||||||||||||||||
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QUARTER
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QUARTER
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QUARTER
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JUNE 30,
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2011
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2011
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2010
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2011
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2010
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(Current)
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(Prior Qtr)
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(Prior Yr)
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(Current)
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(Prior Yr)
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Interest and Dividend Income
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$ | 15,443 | $ | 15,298 | $ | 15,386 | $ | 30,741 | $ | 31,119 | ||||||||||
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Interest Expense
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3,628 | 4,016 | 5,036 | 7,644 | 10,296 | |||||||||||||||
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Net Interest Income
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11,815 | 11,282 | 10,350 | 23,097 | 20,823 | |||||||||||||||
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Provision (Credit) for Loan Losses
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31 | (192 | ) | 76 | (161 | ) | 283 | |||||||||||||
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Net Interest Income After Provision (Credit) for Loan Losses
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11,784 | 11,474 | 10,274 | 23,258 | 20,540 | |||||||||||||||
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Other Income
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3,673 | 2,555 | 3,260 | 6,228 | 6,808 | |||||||||||||||
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Net Gains on Available-for-sale Securities
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163 | 1,839 | 319 | 2,002 | 377 | |||||||||||||||
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Noninterest Expenses
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7,794 | 8,263 | 7,703 | 16,057 | 15,700 | |||||||||||||||
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Income Before Income Tax Provision
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7,826 | 7,605 | 6,150 | 15,431 | 12,025 | |||||||||||||||
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Income Tax Provision
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2,129 | 2,064 | 1,281 | 4,193 | 2,718 | |||||||||||||||
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Net Income
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5,697 | 5,541 | 4,869 | 11,238 | 9,307 | |||||||||||||||
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U.S. Treasury Preferred Dividends
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- | - | 372 | - | 745 | |||||||||||||||
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Net Income Available to Common Shareholders
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$ | 5,697 | $ | 5,541 | $ | 4,497 | $ | 11,238 | $ | 8,562 | ||||||||||
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PER COMMON SHARE DATA:
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Net Income – Basic
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$0.47 | $0.46 | $0.37 | $0.92 | $0.71 | |||||||||||||||
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Net Income – Diluted
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$0.47 | $0.45 | $0.37 | $0.92 | $0.71 | |||||||||||||||
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Dividend Per Share
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$0.14 | $0.13 | $0.09 | $0.27 | $0.17 | |||||||||||||||
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Number Shares Used in Computation - Basic
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12,177,110 | 12,174,935 | 12,125,072 | 12,176,027 | 12,119,358 | |||||||||||||||
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Number Shares Used in Computation - Diluted
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12,180,199 | 12,178,099 | 12,125,072 | 12,179,153 | 12,119,358 | |||||||||||||||
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CONDENSED, CONSOLIDATED BALANCE SHEET DATA
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(In Thousands, Except Per Share Data) (Unaudited)
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JUNE 30,
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MARCH 31,
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JUNE 30,
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2011
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2011
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2010
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ASSETS
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Cash & Due from Banks
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$ | 49,392 | $ | 59,278 | $ | 83,652 | ||||||
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Available-for-sale Securities
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464,214 | 452,974 | 426,246 | |||||||||
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Loans Held for Sale
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167 | 135 | 111 | |||||||||
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Loans, Net
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705,667 | 710,113 | 715,252 | |||||||||
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Intangible Assets
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12,211 | 12,239 | 12,356 | |||||||||
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Other Assets
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77,999 | 81,470 | 101,040 | |||||||||
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TOTAL ASSETS
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$ | 1,309,650 | $ | 1,316,209 | $ | 1,338,657 | ||||||
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LIABILITIES
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Deposits
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$ | 995,361 | $ | 1,010,001 | $ | 968,540 | ||||||
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Repo Sweep Accounts
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20,343 | 16,068 | 28,132 | |||||||||
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Total Deposits and Repo Sweeps
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1,015,704 | 1,026,069 | 996,672 | |||||||||
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Borrowed Funds
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133,182 | 138,340 | 173,831 | |||||||||
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Other Liabilities
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7,071 | 5,747 | 6,659 | |||||||||
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TOTAL LIABILITIES
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1,155,957 | 1,170,156 | 1,177,162 | |||||||||
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SHAREHOLDERS' EQUITY
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Preferred Stock
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- | - | 25,833 | |||||||||
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Common Shareholders' Equity, Excluding Accumulated
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Other Comprehensive Income (Loss)
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148,707 | 144,895 | 134,229 | |||||||||
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Accumulated Other Comprehensive Income (Loss):
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Net Unrealized Gains/Losses on
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Available-for-sale Securities
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5,299 | 1,478 | 1,684 | |||||||||
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Defined Benefit Plans
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(313 | ) | (320 | ) | (251 | ) | ||||||
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TOTAL SHAREHOLDERS' EQUITY
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153,693 | 146,053 | 161,495 | |||||||||
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TOTAL LIABILITIES & SHAREHOLDERS' EQUITY
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$ | 1,309,650 | $ | 1,316,209 | $ | 1,338,657 | ||||||
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CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS
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(In Thousands, Except Per Share Data) (Unaudited)
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6 MONTHS ENDED
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%
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JUNE 30,
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INCREASE
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2011
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2010
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(DECREASE)
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EARNINGS PERFORMANCE
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Net Income
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$ | 11,238 | $ | 9,307 | 20.75 | % | ||||||
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Return on Average Assets
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1.71 | % | 1.39 | % | 23.02 | % | ||||||
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Return on Average Equity
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15.43 | % | 11.91 | % | 29.55 | % | ||||||
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BALANCE SHEET HIGHLIGHTS
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Total Assets
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$ | 1,309,650 | $ | 1,338,657 | -2.17 | % | ||||||
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Available-for-Sale Securities
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464,214 | 426,246 | 8.91 | % | ||||||||
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Loans (Net)
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705,667 | 715,252 | -1.34 | % | ||||||||
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Allowance for Loan Losses
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8,269 | 8,461 | -2.27 | % | ||||||||
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Deposits and Repo Sweep Accounts
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1,015,704 | 996,672 | 1.91 | % | ||||||||
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Trust Assets Under Management
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634,821 | 558,344 | 13.70 | % | ||||||||
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SHAREHOLDERS' VALUE
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(PER COMMON SHARE)
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Net Income - Basic
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$0.92 | $0.71 | 29.58 | % | ||||||||
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Net Income - Diluted
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$0.92 | $0.71 | 29.58 | % | ||||||||
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Dividends
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$0.27 | $0.17 | 58.82 | % | ||||||||
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Common Book Value
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$12.65 | $11.18 | 13.15 | % | ||||||||
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Tangible Common Book Value
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$11.64
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$10.17 | 14.45 | % | ||||||||
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Market Value (Last Trade)
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$15.07 | $10.70 | 40.84 | % | ||||||||
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Market Value / Common Book Value
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119.13 | % | 95.71 | % | 24.47 | % | ||||||
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Market Value / Tangible Common Book Value
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129.47 | % | 105.21 | % | 23.05 | % | ||||||
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Price Earnings Multiple
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8.19 | 7.54 | 8.62 | % | ||||||||
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Dividend Yield
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3.58 | % | 3.18 | % | 12.58 | % | ||||||
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SAFETY AND SOUNDNESS
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Tangible Common Equity / Tangible Assets
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10.90 | % | 9.30 | % | 17.20 | % | ||||||
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Nonperforming Assets / Total Assets
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0.75 | % | 0.81 | % | -7.41 | % | ||||||
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Allowance for Loan Losses / Total Loans
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1.16 | % | 1.17 | % | -0.85 | % | ||||||
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Total Risk Based Capital Ratio (a)
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19.09 | % | 19.12 | % | -0.16 | % | ||||||
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Tier 1 Risk Based Capital Ratio (a)
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17.84 | % | 17.91 | % | -0.39 | % | ||||||
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Leverage Ratio (a)
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10.04 | % | 10.09 | % | -0.50 | % | ||||||
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AVERAGE BALANCES
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Average Assets
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$ | 1,313,482 | $ | 1,335,267 | -1.63 | % | ||||||
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Average Equity
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145,620 | 156,331 | -6.85 | % | ||||||||
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(a) Capital ratios are estimated.
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