CITIZENS & NORTHERN CORP - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - July 16, 2012

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8-K - FORM 8-K - CITIZENS & NORTHERN CORPv318614_8k.htm
EX-99.1 - EXHIBIT 99.1 - CITIZENS & NORTHERN CORPv318614_ex99-1.htm
EX-99.3 - EXHIBIT 99.3 - CITIZENS & NORTHERN CORPv318614_ex99-3.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, 2012                                     QUARTERLY REPORT

 

Dear Shareholder:

 

I am proud to report another quarter of outstanding financial results. Net income for the second quarter was $5.7 million and $11.3 million year-to-date. Return on Average Assets (ROAA) is 1.72% for 2012, slightly higher than the 1.71% for the first six months of 2011. Return on Average Equity (ROAE) of 13.12% for 2012 is modestly lower than the 15.43% for the first half of 2011. Both metrics place Citizens & Northern in the top tier of our peer group.

 

The past quarter saw the balance sheet grow marginally with increases to loans and deposits while borrowed funds declined. Nonperforming Assets to Total Assets is very low at .72%. Capital remains strong and is well in excess of the regulatory defined “Well Capitalized” metrics.

 

Dividends paid in the first six months of 2012 of 38 cents per share represent a 40.7% increase over dividends paid the first six months of 2011. The market value of our stock (CZNC) closed the quarter at $19.05 per share, an increase of 26.4% over the past year.

 

The Federal Reserve Bank’s desire to keep interest rates low will continue to apply pressure to our net interest margin. Coupled with revenue reductions and expense increases associated with Dodd-Frank it will require management to maintain its excellent efficiency ratio and to grow interest income and non-interest income.

 

I am confident the Board of Directors, management and employees are up to the challenge of continuing to enhance shareholder value. 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

  Dennis F. Beardslee   Raymond R. Mattie
  Jan E. Fisher   Edward H. Owlett, III
  R. Bruce Haner   Leonard Simpson
  Susan E. Hartley   James E. Towner
  Leo F. Lambert   Ann M. Tyler

 

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

3 Main Street, Canisteo, NY 14823   607-698-4295
10 N Main Street, Coudersport, PA 16915   800-921-9150
1827 Elmira Street, Sayre, PA 18840   888-760-8192
428 Main Street, Towanda, PA 18848   888-987-8784
90-92 Main Street, Wellsboro, PA 16901   888-487-8784
130 Court Street, Williamsport, PA 17701   866-732-7213
     
 ACCOUNT SERVICES - 90-92 Main St., Wellsboro, PA 16901    
 BANKCARD SERVICES - 90-92 Main St., Wellsboro PA 16901    800-577-8001
 ELECTRONIC BANKING – 10 Nichols St., Wellsboro, PA 16901    877-838-2517
www.cnbankpa.com     
     
 C&N FINANCIAL SERVICES CORPORATION – 90-92 Main Street, Wellsboro, PA    866-ASK-CNFS
 www.cnfinancialservices.com    

 

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CONDENSED, CONSOLIDATED EARNINGS INFORMATION             
(In Thousands, Except Per Share Data)   (Unaudited)             
   2ND   1ST   2ND   6 MONTHS ENDED 
   QUARTER   QUARTER   QUARTER   JUNE 
   2012   2012   2011   2012   2011 
    (Current)    (Prior Qtr)    (Prior Yr)    (Current)    (Prior Yr) 
Interest and Dividend Income  $14,529   $14,776   $15,443   $29,305   $30,741 
Interest Expense   2,401    2,502    3,628    4,903    7,644 
Net Interest Income   12,128    12,274    11,815    24,402    23,097 
Provision (Credit) for Loan Losses   367    (182)   31    185    (161)
Net Interest Income After Provision (Credit) for Loan Losses   11,761    12,456    11,784    24,217    23,258 
Other Income   4,095    3,759    3,673    7,854    6,228 
Net Gains (Losses) on Available-for-sale Securities   203    (2)   163    201    2,002 
Noninterest Expenses   8,280    8,517    7,794    16,797    16,057 
Income Before Income Tax Provision   7,779    7,696    7,826    15,475    15,431 
Income Tax Provision   2,094    2,109    2,129    4,203    4,193 
Net Income  $5,685   $5,587   $5,697   $11,272   $11,238 
                          
PER COMMON SHARE DATA:                         
Net Income – Basic  $0.46   $0.46   $0.47   $0.92   $0.92 
Net Income – Diluted  $0.46   $0.46   $0.47   $0.92   $0.92 
Dividend Per Share  $0.20   $0.18   $0.14   $0.38   $0.27 
Number Shares Used in Computation - Basic   12,225,808    12,206,870    12,177,110    12,216,339    12,176,027 
Number Shares Used in Computation - Diluted   12,242,833    12,245,752    12,180,199    12,243,303    12,179,153 

 

 

CONDENSED, CONSOLIDATED BALANCE SHEET DATA            
(In Thousands, Except Per Share Data)    (Unaudited)            
   JUNE 30,   MAR. 31,   JUNE 30, 
   2012   2012   2011 
ASSETS            
Cash & Due from Banks  $69,158   $56,498   $49,392 
Available-for-sale Securities   478,368    486,664    464,214 
Loans Held for Sale   3,190    2,223    167 
Loans, Net   696,777    690,218    705,667 
Intangible Assets   12,117    12,135    12,211 
Other Assets   67,917    69,026    77,999 
TOTAL ASSETS  $1,327,527   $1,316,764   $1,309,650 
                
LIABILITIES               
Deposits  $1,029,456   $1,016,801   $995,361 
Repo Sweep Accounts   4,242    4,030    20,343 
    Total Deposits and Repo Sweeps   1,033,698    1,020,831    1,015,704 
Borrowed Funds   110,038    115,202    133,182 
Other Liabilities   7,729    9,117    7,071 
TOTAL LIABILITIES   1,151,465    1,145,150    1,155,957 
                
SHAREHOLDERS' EQUITY               
Common Shareholders' Equity, Excluding Accumulated               
 Other Comprehensive Income (Loss)   165,008    161,240    148,707 
Accumulated Other Comprehensive Income (Loss):               
 Net Unrealized Gains/Losses on               
   Available-for-sale Securities   11,519    10,852    5,299 
 Defined Benefit Plans   (465)   (478)   (313)
TOTAL SHAREHOLDERS' EQUITY   176,062    171,614    153,693 
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY  $1,327,527   $1,316,764   $1,309,650 

 

 

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CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS        
(In Thousands, Except Per Share Data)       (Unaudited)        
   6 MONTHS ENDED   % 
   JUNE 30,   INCREASE 
   2012   2011   (DECREASE) 
EARNINGS PERFORMANCE               
Net Income  $11,272   $11,238    0.30%
Return on Average Assets   1.72%   1.71%   0.58%
Return on Average Equity   13.12%   15.43%   -14.97%
                
BALANCE SHEET HIGHLIGHTS               
Total Assets  $1,327,527   $1,309,650    1.37%
Available-for-Sale Securities   478,368    464,214    3.05%
Loans (Net)   696,777    705,667    -1.26%
Allowance for Loan Losses   7,657    8,269    -7.40%
Deposits and Repo Sweep Accounts   1,033,698    1,015,704    1.77%
                
Trust Assets Under Management   669,538    634,821    5.47%
                
SHAREHOLDERS' VALUE               
   (PER COMMON SHARE)               
Net Income - Basic  $0.92   $0.92    0.00%
Net Income - Diluted  $0.92   $0.92    0.00%
Dividends  $0.38   $0.27    40.74%
Common Book Value  $14.39   $12.65    13.75%
Tangible Common Book Value  $13.40   $11.64    15.12%
Market Value (Last Trade)  $19.05   $15.07    26.41%
Market Value /  Common Book Value   132.38%   119.13%   11.12%
Market Value /  Tangible Common Book Value   142.16%   129.47%   9.81%
Price Earnings Multiple   10.35    8.19    26.37%
Dividend Yield   3.99%   3.58%   11.45%
                
SAFETY AND SOUNDNESS               
Tangible Common Equity / Tangible Assets   12.46%   10.90%   14.31%
Nonperforming Assets / Total Assets   0.72%   0.75%   -4.00%
Allowance for Loan Losses / Total Loans   1.09%   1.16%   -6.03%
Total Risk Based Capital Ratio (a)   22.56%   19.40%   16.29%
Tier 1 Risk Based Capital Ratio (a)   21.33%   18.15%   17.52%
Leverage Ratio (a)   11.76%   10.14%   15.98%
                
                
AVERAGE BALANCES               
Average Assets  $1,307,146   $1,313,482    -0.48%
Average Equity   171,775    145,620    17.96%
                
(a) Capital ratios for the most recent period are estimated.          

 

 

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