CITIZENS & NORTHERN CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3 - 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-99.2 - EXHIBIT 99.2 - CITIZENS & NORTHERN CORPv318614_ex99-2.htm

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

 

 

 

 

AVAILABLE-FOR-SALE SECURITIES  June 30, 2012   March 31, 2012   December 31, 2011 
(In Thousands)  Amortized   Fair   Amortized   Fair   Amortized   Fair 
   Cost   Value   Cost   Value   Cost   Value 
                         
Obligations of U.S. Government agencies  $23,244   $23,916   $24,810   $25,488   $24,877   $25,587 
Obligations of states and political subdivisions:                              
    Tax-exempt   135,736    141,140    128,628    133,337    129,401    132,962 
    Taxable   19,524    19,924    16,846    17,206    14,004    14,334 
Mortgage-backed securities   103,801    108,426    117,251    121,943    116,602    121,769 
Collateralized mortgage obligations,                              
    Issued by U.S. Government agencies   162,780    165,923    162,846    165,764    161,818    165,131 
Trust preferred securities issued by individual institutions   6,179    6,221    7,783    8,147    7,334    8,146 
Collateralized debt obligations:                              
    Pooled trust preferred securities - senior tranches   2,516    2,386    4,993    4,638    4,996    4,638 
    Pooled trust preferred securities - mezzanine tranches   0    1,146    0    782    0    730 
    Other collateralized debt obligations   660    660    660    660    660    660 
Total debt securities   454,440    469,742    463,817    477,965    459,692    473,957 
Marketable equity securities   6,208    8,626    6,151    8,699    5,643    7,728 
Total  $460,648   $478,368   $469,968   $486,664   $465,335   $481,685 

 

 

 

1
 

  

Summary of Loans by Type                
(Excludes Loans Held for Sale)                
(In Thousands)  June 30,   Mar. 31,   Dec. 31,   June 30, 
   2012   2012   2011   2011 
Residential mortgage:                
 Residential mortgage loans - first liens  $321,163   $326,343   $331,015   $334,300 
 Residential mortgage loans - junior liens   27,404    27,590    28,851    30,214 
 Home equity lines of credit   31,858    30,534    30,037    28,544 
 1-4 Family residential construction   10,699    8,409    9,959    8,574 
Total residential mortgage   391,124    392,876    399,862    401,632 
Commercial:                    
 Commercial loans secured by real estate   164,771    158,323    156,388    157,282 
 Commercial and industrial   52,704    54,370    57,191    59,791 
 Political subdivisions   36,858    36,517    37,620    34,675 
 Commercial construction and land   26,517    23,577    23,518    24,726 
 Loans secured by farmland   10,079    10,334    10,949    10,927 
 Multi-family (5 or more) residential   6,409    6,326    6,583    7,514 
 Agricultural loans   3,263    2,982    2,987    3,182 
 Other commercial loans   563    323    552    576 
Total commercial   301,164    292,752    295,788    298,673 
Consumer   12,146    11,960    12,665    13,631 
Total   704,434    697,588    708,315    713,936 
Less: allowance for loan losses   (7,657)   (7,370)   (7,705)   (8,269)
Loans, net  $696,777   $690,218   $700,610   $705,667 
                     
Loans Held for Sale                    
(In Thousands)   June 30,    Mar. 31,    Dec. 31,    June 30, 
    2012    2012    2011    2011 
                    
Residential mortgage loans originated 
  and serviced - outstanding balance		  $74,070   $64,569   $57,577   $39,416 
Less: outstanding balance of loans sold   (70,880)   (62,346)   (56,638)   (39,249)
Loans held for sale, net  $3,190   $2,223   $939   $167 

 

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ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES                
(In Thousands)                
   3 Months   3 Months   6 Months   6 Months 
   Ended   Ended   Ended   Ended 
   June 30,   Mar. 31,   June 30,   June 30, 
   2012   2012   2012   2011 
Balance, beginning of period  $7,370   $7,705   $7,705   $9,107 
Charge-offs   (115)   (176)   (291)   (897)
Recoveries   35    23    58    220 
Net charge-offs   (80)   (153)   (233)   (677)
Provision (credit) for loan losses   367    (182)   185    (161)
Balance, end of period  $7,657   $7,370   $7,657   $8,269 

 

 

PAST DUE AND NONPERFORMING ASSETS                
(In Thousands)                
   June 30,   Mar. 31,   Dec. 31,   June 30, 
   2012   2012   2011   2011 
Total loans past due 30-89 days and still accruing  $5,191   $5,827   $7,898   $6,611 
                     
Nonperforming assets:                    
Total loans past due 90 days or more and still accruing  $1,144   $1,252   $1,267   $561 
Total nonaccrual loans   7,447    6,961    7,197    7,586 
Foreclosed assets held for sale (real estate)   904    977    1,235    1,665 
Total nonperforming assets  $9,495   $9,190   $9,699   $9,812 
                     
Total nonperforming assets as a % of assets   0.72%   0.70%   0.73%   0.75%

 

 

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Table III - Analysis of Average Daily Balances and Rates                
(Dollars in Thousands)                        

   3 Months       3 Months       3 Months     
   Ended   Rate of   Ended   Rate of   Ended   Rate of 
   6/30/2012   Return/   3/31/2012   Return/   6/30/2011   Return/ 
   Average   Cost of   Average   Cost of   Average   Cost of 
    Balance    Funds %    Balance    Funds %    Balance    Funds % 
EARNING ASSETS                              
Available-for-sale securities,                              
    at amortized cost:                              
    Taxable  $333,255    3.13%  $331,007    3.32%  $335,289    3.48%
    Tax-exempt   130,111    5.94%   127,729    6.03%   128,049    6.02%
         Total available-for-sale securities   463,366    3.92%   458,736    4.08%   463,338    4.18%
Interest-bearing due from banks   37,300    0.33%   34,334    0.33%   29,385    0.22%
Loans held for sale   1,865    4.96%   1,057    3.42%   342    7.04%
Loans receivable:                              
    Taxable   666,752    6.18%   665,936    6.26%   681,333    6.39%
    Tax-exempt   36,344    6.31%   36,218    6.36%   34,806    6.38%
         Total loans receivable   703,096    6.18%   702,154    6.27%   716,481    6.39%
         Total Earning Assets   1,205,627    5.13%   1,196,281    5.25%   1,209,204    5.39%
Cash   17,791         16,891         17,631      
Unrealized gain/loss on securities   17,545         17,923         5,805      
Allowance for loan losses   (7,435)        (7,739)        (8,938)     
Bank premises and equipment   18,908         18,898         22,114      
Intangible Asset - Core Deposit Intangible   186         204         287      
Intangible Asset - Goodwill   11,942         11,942         11,942      
Other assets   47,046         48,282         56,349      
Total Assets  $1,311,610        $1,302,682        $1,314,394      
                               
INTEREST-BEARING LIABILITIES                              
Interest-bearing deposits:                              
    Interest checking  $156,994    0.13%  $161,524    0.13%  $166,795    0.28%
    Money market   210,646    0.19%   205,866    0.19%   207,266    0.27%
    Savings   107,514    0.10%   104,532    0.10%   95,821    0.20%
    Certificates of deposit   199,320    1.55%   191,924    1.73%   205,346    1.96%
    Individual Retirement Accounts   144,095    0.91%   146,241    0.96%   156,611    2.46%
    Other time deposits   1,314    0.31%   942    0.00%   1,350    0.30%
         Total interest-bearing deposits   819,883    0.62%   811,029    0.67%   833,189    1.09%
Borrowed funds:                              
    Short-term   5,650    0.07%   7,422    0.16%   19,407    0.17%
    Long-term   113,301    4.01%   115,607    4.00%   135,344    4.01%
         Total borrowed funds   118,951    3.82%   123,029    3.77%   154,751    3.53%
         Total Interest-bearing Liabilities   938,834    1.03%   934,058    1.08%   987,940    1.47%
Demand deposits   191,349         189,275         169,677      
Other liabilities   7,774         9,452         6,998      
Total Liabilities   1,137,957         1,132,785         1,164,615      
Stockholders' equity, excluding                              
    other comprehensive income/loss   162,721         158,801         146,267      
Other comprehensive income/loss   10,932         11,096         3,512      
Total Stockholders' Equity   173,653         169,897         149,779      
Total Liabilities and Stockholders' Equity  $1,311,610        $1,302,682        $1,314,394      
Interest Rate Spread        4.10%        4.17%        3.92%
Net Interest Income/Earning Assets        4.33%        4.41%        4.19%
                               
Total Deposits (Interest-bearing                              
    and Demand)  $1,011,232        $1,000,304        $1,002,866      

 

(1) Changes in income on tax-exempt securities and loans are presented on a fully tax-equivalent basis, using the Corporation’s marginal federal income tax rate of 35% in 2012 and 34% in 2011.

 

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

 

4
 

 

Table III - Analysis of Average Daily Balances and Rates
(Dollars in Thousands)
   6 Months       6 Months     
   Ended   Rate of   Ended   Rate of 
   6/30/2012   Return/   6/30/2011   Return/ 
   Average   Cost of   Average   Cost of 
   Balance   Funds %   Balance   Funds % 
EARNING ASSETS                
Available-for-sale securities,                
at amortized cost:                
    Taxable  $332,131    3.22%  $331,219    3.45%
    Tax-exempt   128,920    5.99%   127,514    6.05%
         Total available-for-sale securities   461,051    4.00%   458,733    4.17%
Interest-bearing due from banks   35,817    0.33%   30,561    0.21%
Loans held for sale   1,461    4.40%   1,028    5.30%
Loans receivable:                    
    Taxable   666,344    6.22%   684,277    6.39%
    Tax-exempt   36,281    6.34%   34,939    6.41%
         Total loans receivable   702,625    6.23%   720,244    6.39%
         Total Earning Assets   1,200,954    5.19%   1,209,538    5.39%
Cash   17,341         17,310      
Unrealized gain/loss on securities   17,734         2,626      
Allowance for loan losses   (7,587)        (9,069)     
Bank premises and equipment   18,903         22,293      
Intangible Asset - Core Deposit Intangible   195         301      
Intangible Asset - Goodwill   11,942         11,942      
Other assets   47,664         58,541      
Total Assets  $1,307,146        $1,313,482      
                     
INTEREST-BEARING LIABILITIES                    
Interest-bearing deposits:                    
    Interest checking  $159,259    0.13%  $165,146    0.30%
    Money market   208,256    0.19%   205,363    0.29%
    Savings   106,023    0.10%   94,232    0.22%
    Certificates of deposit   195,622    1.64%   208,721    1.97%
    Individual Retirement Accounts   145,168    0.94%   158,880    2.73%
    Other time deposits   1,128    0.18%   1,154    0.35%
         Total interest-bearing deposits   815,456    0.65%   833,496    1.17%
Borrowed funds:                    
    Short-term   6,536    0.12%   18,143    0.16%
    Long-term   114,454    4.00%   140,544    4.01%
         Total borrowed funds   120,990    3.79%   158,687    3.57%
         Total Interest-bearing Liabilities   936,446    1.05%   992,183    1.55%
Demand deposits   190,312         168,948      
Other liabilities   8,613         6,731      
Total Liabilities   1,135,371         1,167,862      
Stockholders' equity, excluding                    
    other comprehensive income/loss   160,761         144,172      
Other comprehensive income/loss   11,014         1,448      
Total Stockholders' Equity   171,775         145,620      
Total Liabilities and Stockholders' Equity  $1,307,146        $1,313,482      
Interest Rate Spread        4.14%        3.84%
Net Interest Income/Earning Assets        4.37%        4.12%
                     
Total Deposits (Interest-bearing                    
    and Demand)  $1,005,768        $1,002,444      
                     

 

(1) Changes in income on tax-exempt securities and loans are presented on a fully tax-equivalent basis, using the Corporation’s marginal federal income tax rate of 35% in 2012 and 34% in 2011.
(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

 

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COMPARISON OF NONINTEREST INCOME
(In Thousands)  Three Months Ended   Six Months Ended 
   June 30,   Mar. 31,   June 30,   June 30,   June 30, 
   2012   2012   2011   2012   2011 
Service charges on deposit accounts  $1,256   $1,161   $1,225   $2,417   $2,356 
Service charges and fees   235    220    207    455    425 
Trust and financial management revenue   960    929    946    1,889    1,823 
Brokerage revenue   288    168    229    456    352 
Insurance commissions, fees and premiums   73    34    58    107    126 
Interchange revenue from debit card transactions   488    495    485    983    937 
Net gains from sales of loans   373    265    155    638    414 
Increase in cash surrender value of life insurance   117    119    132    236    254 
Net (loss) gain from other real estate   (184)   104    (24)   (80)   (43)
Net gain from premises and equipment   270    0    0    270    0 
Impairment loss on limited partnership investment   0    0    0    0    (948)
Other operating income   219    264    260    483    532 
Total other operating income, before realized                         
  gains on available-for-sale securities, net  $4,095   $3,759   $3,673   $7,854   $6,228 
                          

 

COMPARISON OF NONINTEREST EXPENSE
(In Thousands)  Three Months Ended   Six Months Ended 
   June 30,   Mar. 31,   June 30,   June 30,   June 30, 
   2012   2012   2011   2012   2011 
 Salaries and wages  $3,586   $3,575   $3,469   $7,161   $6,870 
 Pensions and other employee benefits   1,090    1,366    1,018    2,456    2,324 
 Occupancy expense, net   628    636    665    1,264    1,397 
 Furniture and equipment expense   461    482    453    943    937 
 FDIC Assessments   157    146    189    303    514 
 Pennsylvania shares tax   340    332    320    672    639 
 Other operating expense   2,018    1,980    1,680    3,998    3,376 
 Total Noninterest Expense  $8,280   $8,517   $7,794   $16,797   $16,057 

 

 

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