Attached files
| file | filename |
|---|---|
| 8-K - SECOND QUARTER 2011 8-K - CITIZENS FINANCIAL SERVICES INC | secondquarter2011.htm |
EXHIBIT 99.1
| Contact: | Kathleen Campbell, Marketing Director | First Citizens National Bank |
| 570-662-0422 | 15 S. Main Street | |
| 570-662-8512 (fax) | Mansfield, PA 16933 |
Citizens Financial Services, Inc. Reports Second Quarter 2011 Earnings
MANSFIELD, PENNSYLVANIA— July 26, 2011 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the second quarter ended June 30, 2011.
Net income for the six months ended June 30, 2011 totaled $5,977,000 which compares to $5,673,000 for the same record period last year. This represents an increase of $304,000, or 5.4%. Earnings per share of $2.07 increased 5.6% from $1.96 per share last year. Annualized return on equity for the comparable periods was 17.22% and 18.49%, while return on assets was 1.44% and 1.52%, respectively.
For the three months ended June 30, 2011, net income totaled $3,147,000 which compares to $2,927,000 for the second quarter of 2010. This represents an increase of $220,000, or 7.5%. Earnings per share of $1.09 increased 7.9% from $1.01 per share last year. Annualized return on equity for the comparable periods was 17.85% and 19.09%, while return on assets was 1.50% and 1.57%, respectively.
Net interest income, before the provision for loan loss, increased from $13,556,000 for the six months ended June 30, 2010 to $14,012,000 this year, an increase of $456,000, or 3.4%. On a tax equivalent basis, net interest margin on interest earning assets has declined from 4.26% last year to 3.96% this year. This is mostly due to a decline in asset yields, particularly yields on investment securities. CEO and President Randall E. Black stated, “We have maintained our strategy of purchasing primarily short-term investments in order to position us with available liquidity when market conditions and investment opportunities improve, thus managing for both current and longer term returns. Given the current interest rate environment, we have been able to somewhat offset this by decreasing our deposit costs by continuing to attract more low cost deposits and benefit directly from re-pricing of our certificates of deposit to market”.
As of June 30, 2011, total assets continued to climb to $853.0 million, which was an increase of $40.5 million or 5.0% from December 31, 2010, and an increase of $79.3 million from June 30, 2010, or 10.2%. The investment portfolio totaled $288.6 million as of June 30, 2011. This compares to $251.3 million as of December 31, 2010 and $217.3 million as of June 30, 2010. Net loans have increased a modest $3.1 million during the first six months of 2011 to a total of $470.7 million. Mr. Black further stated, “The continued weak economic environment has resulted in significantly lower loan demand, which has been offset by the lending opportunities related to the Marcellus Shale natural gas exploration efforts. We continuously review and pursue these opportunities, subject to our commitment to maintaining disciplined underwriting standards”. Deposits have increased $32.4 million or 4.8% since December 31, 2010.
Credit quality, which compares favorably to peer, has stabilized and has actually improved from December 31, 2010. Non-performing assets as a percent of loans was 2.25% as of June 30, 2011, which compares to 2.80% as of December. As a result, the provision for loan losses for the first six months of 2011 was $375,000 compared with $540,000 for the comparable period last year.
Stockholders’ equity totaled $75.3 million at June 30, 2011, representing an increase of $6.6 million, or 9.6%, from December 31, 2010. Compared to June 30, 2010, stockholders’ equity has increased $8.7 million, or 13.1%. Book value per share was $24.94 compared with $22.17 as of June 30, 2010, an increase of 12.5%. First Citizens continues to remain well capitalized based upon regulatory guidelines. On July 5, 2011, a cash dividend of $.265 per share as well as a 1% stock dividend were declared and will be paid on July 29, 2011 to shareholders of record as of July 15, 2011. The cash dividend of $.265 per share represents an increase of 3.9% over the July 2010 dividend.
Citizens Financial Services, Inc. has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 18 offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
1
|
CITIZENS FINANCIAL SERVICES, INC.
|
|||
|
CONSOLIDATED BALANCE SHEET
|
|||
|
(UNAUDITED)
|
|||
|
June 30
|
December 31
|
June 30
|
|
|
(in thousands except share data)
|
2011
|
2010
|
2010
|
|
ASSETS:
|
|||
|
Cash and due from banks:
|
|||
|
Noninterest-bearing
|
$ 11,318
|
$ 9,541
|
$ 9,656
|
|
Interest-bearing
|
33,114
|
34,454
|
30,728
|
|
Total cash and cash equivalents
|
44,432
|
43,995
|
40,384
|
|
Available-for-sale securities
|
288,610
|
251,303
|
217,261
|
|
|
|||
|
Loans (net of allowance for loan losses: June 30, 2011, $6,163;
|
|||
|
December 31, 2010, $5,915; June 30, 2010, $5,302)
|
470,749
|
467,602
|
467,037
|
|
|
|||
|
Premises and equipment
|
11,956
|
12,503
|
12,694
|
|
Accrued interest receivable
|
3,717
|
3,455
|
3,228
|
|
Goodwill
|
10,256
|
10,256
|
10,256
|
|
Bank owned life insurance
|
13,416
|
13,171
|
12,917
|
|
Other assets
|
9,846
|
10,241
|
9,900
|
|
|
|
|
|
|
TOTAL ASSETS
|
$ 852,982
|
$ 812,526
|
$ 773,677
|
|
|
|
|
|
|
LIABILITIES:
|
|||
|
Deposits:
|
|||
|
Noninterest-bearing
|
$ 80,545
|
$ 75,589
|
$ 63,954
|
|
Interest-bearing
|
632,582
|
605,122
|
582,709
|
|
Total deposits
|
713,127
|
680,711
|
646,663
|
|
Borrowed funds
|
55,408
|
55,996
|
52,763
|
|
Accrued interest payable
|
1,556
|
1,779
|
1,787
|
|
Other liabilities
|
7,592
|
5,350
|
5,861
|
|
TOTAL LIABILITIES
|
777,683
|
743,836
|
707,074
|
|
STOCKHOLDERS' EQUITY:
|
|||
|
Preferred Stock $1.00 par value; authorized
|
|||
|
3,000,000 shares at June 30, 2011, December 31, 2010 and June 30, 2010;
|
|||
|
none issued in 2011 or 2010
|
-
|
-
|
-
|
|
Common stock
|
|||
|
$1.00 par value; authorized 15,000,000 shares at June 30, 2011, December 31, 2010 and
|
|||
|
June 30, 2010; issued 3,104,434 shares at June 30, 2011 and December 31, 2010;
|
|||
|
3,076,253 shares at June 30, 2010
|
3,104
|
3,104
|
3,076
|
|
Additional paid-in capital
|
14,295
|
14,235
|
13,486
|
|
Retained earnings
|
59,393
|
54,932
|
51,575
|
|
Accumulated other comprehensive income
|
3,244
|
1,054
|
3,112
|
|
Treasury stock, at cost: 214,942 shares at June 30, 2011; 212,067 shares at
|
|||
|
December 31, 2010 and 212,486 shares at June 30, 2010
|
(4,737)
|
(4,635)
|
(4,646)
|
|
TOTAL STOCKHOLDERS' EQUITY
|
75,299
|
68,690
|
66,603
|
|
TOTAL LIABILITIES AND
|
|||
|
STOCKHOLDERS' EQUITY
|
$ 852,982
|
$ 812,526
|
$ 773,677
|
2
|
CITIZENS FINANCIAL SERVICES, INC.
|
||||
|
CONSOLIDATED STATEMENT OF INCOME
|
||||
|
(UNAUDITED)
|
||||
|
Three Months Ended
|
Six Months Ended
|
|||
|
|
June 30,
|
June 30,
|
||
|
(in thousands, except per share data)
|
2011
|
2010
|
2011
|
2010
|
|
INTEREST INCOME:
|
||||
|
Interest and fees on loans
|
$ 7,463
|
$ 7,752
|
$ 14,858
|
$ 15,486
|
|
Interest-bearing deposits with banks
|
20
|
17
|
42
|
31
|
|
Investment securities:
|
|
|
|
|
|
Taxable
|
1,176
|
1,264
|
2,348
|
2,599
|
|
Nontaxable
|
892
|
727
|
1,757
|
1,368
|
|
Dividends
|
14
|
7
|
29
|
13
|
|
TOTAL INTEREST INCOME
|
9,565
|
9,767
|
19,034
|
19,497
|
|
INTEREST EXPENSE:
|
||||
|
Deposits
|
2,046
|
2,519
|
4,134
|
5,061
|
|
Borrowed funds
|
443
|
439
|
888
|
880
|
|
TOTAL INTEREST EXPENSE
|
2,489
|
2,958
|
5,022
|
5,941
|
|
NET INTEREST INCOME
|
7,076
|
6,809
|
14,012
|
13,556
|
|
Provision for loan losses
|
150
|
235
|
375
|
540
|
|
NET INTEREST INCOME AFTER
|
||||
|
PROVISION FOR LOAN LOSSES
|
6,926
|
6,574
|
13,637
|
13,016
|
|
NON-INTEREST INCOME:
|
||||
|
Service charges
|
1,002
|
937
|
1,843
|
1,790
|
|
Trust
|
146
|
135
|
303
|
281
|
|
Brokerage and insurance
|
123
|
141
|
218
|
223
|
|
Gains on loans sold
|
34
|
35
|
75
|
48
|
|
Investment securities gains, net
|
114
|
35
|
234
|
99
|
|
Earnings on bank owned life insurance
|
124
|
125
|
245
|
249
|
|
Other
|
129
|
116
|
269
|
224
|
|
TOTAL NON-INTEREST INCOME
|
1,672
|
1,524
|
3,187
|
2,914
|
|
NON-INTEREST EXPENSES:
|
||||
|
Salaries and employee benefits
|
2,518
|
2,416
|
5,033
|
4,857
|
|
Occupancy
|
329
|
297
|
719
|
603
|
|
Furniture and equipment
|
106
|
111
|
223
|
217
|
|
Professional fees
|
172
|
153
|
329
|
333
|
|
Federal deposit insurance
|
250
|
217
|
500
|
454
|
|
Other
|
1,209
|
1,162
|
2,456
|
2,220
|
|
TOTAL NON-INTEREST EXPENSES
|
4,584
|
4,356
|
9,260
|
8,684
|
|
Income before provision for income taxes
|
4,014
|
3,742
|
7,564
|
7,246
|
|
Provision for income taxes
|
867
|
815
|
1,587
|
1,573
|
|
NET INCOME
|
$ 3,147
|
$ 2,927
|
$ 5,977
|
$ 5,673
|
|
|
||||
|
Earnings Per Share
|
$ 1.09
|
$ 1.01
|
$ 2.07
|
$ 1.96
|
|
Cash Dividends Paid Per Share
|
$ 0.265
|
$ 0.255
|
$ 0.525
|
$ 0.505
|
|
Weighted average number of shares outstanding
|
2,887,276
|
2,898,480
|
2,888,094
|
2,898,571
|
3
|
Financial Highlights
|
||||
|
Three Months Ended
|
Six Months Ended
|
|||
|
June 30
|
June 30
|
|||
|
2011
|
2010
|
2011
|
2010
|
|
|
Performance Ratios and Share Data:
|
||||
|
Return on average assets (annualized)
|
1.50%
|
1.57%
|
1.44%
|
1.52%
|
|
Return on average equity (annualized)
|
17.85%
|
19.09%
|
17.22%
|
18.49%
|
|
Net interest margin (tax equivalent)
|
3.94%
|
4.17%
|
3.96%
|
4.26%
|
|
Cash dividends paid per share
|
$0.265
|
$0.255
|
$0.525
|
$0.505
|
|
Earnings per share
|
$1.09
|
$1.02
|
$2.07
|
$1.98
|
|
Weighted average shares outstanding
|
2,887,276
|
2,898,480
|
2,888,094
|
2,898,571
|
|
Balance Sheet Highlights (dollars in thousands):
|
June 30, 2011
|
December 31, 2010
|
June 30, 2010
|
|
Assets
|
$852,982
|
$812,526
|
$773,677
|
|
Investment securities:
|
|||
|
Available for sale
|
288,610
|
251,303
|
217,261
|
|
Loans (net of unearned income)
|
476,912
|
473,517
|
472,339
|
|
Allowance for loan losses
|
6,163
|
5,915
|
5,302
|
|
Deposits
|
713,127
|
680,711
|
646,663
|
|
Stockholders' Equity
|
75,299
|
68,690
|
66,603
|
|
Non-performing assets
|
10,725
|
13,238
|
6,833
|
|
Non-performing assets to total loans
|
2.25%
|
2.80%
|
1.45%
|
|
Annualized net charge-offs to total loans
|
0.05%
|
0.04%
|
0.05%
|
|
Average Leverage Ratio
|
8.53%
|
8.32%
|
8.36%
|
|
Common shares outstanding
|
2,889,492
|
2,892,367
|
2,863,767
|
|
Book value per share
|
$24.94
|
$23.38
|
$22.17
|
4