CITIZENS & NORTHERN CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3 - July 12, 2013

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8-K - FORM 8-K - CITIZENS & NORTHERN CORPv349822_8k.htm
EX-99.1 - EXHIBIT 99.1 - CITIZENS & NORTHERN CORPv349822_ex99-1.htm
EX-99.2 - EXHIBIT 99.2 - CITIZENS & NORTHERN CORPv349822_ex99-2.htm

 

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

 

AVAILABLE-FOR-SALE SECURITIES  June 30, 2013   March 31, 2013   December 31, 2012 
(In Thousands)  Amortized   Fair   Amortized   Fair   Amortized   Fair 
   Cost   Value   Cost   Value   Cost   Value 
                         
Obligations of U.S. Government agencies  $49,016   $47,970   $35,802   $36,246   $30,695   $31,217 
Obligations of states and political subdivisions:                              
     Tax-exempt   132,525    134,483    132,917    138,910    130,168    137,020 
     Taxable   29,976    29,689    27,215    27,595    24,426    24,817 
Mortgage-backed securities   63,776    65,625    64,505    67,666    76,368    80,196 
Collateralized mortgage obligations,                              
     Issued by U.S. Government agencies   183,792    182,924    172,222    173,918    179,770    183,510 
Trust preferred securities issued by individual institutions   0    0    5,160    5,163    5,167    5,171 
Collateralized debt obligations:                              
Pooled trust preferred securities - senior tranches   0    0    1,614    1,659    1,615    1,613 
    Other collateralized debt obligations   660    660    660    660    660    660 
Total debt securities   459,745    461,351    440,095    451,817    448,869    464,204 
Marketable equity securities   5,965    8,717    5,570    8,038    5,912    8,373 
Total  $465,710   $470,068   $445,665   $459,855   $454,781   $472,577 

 

 

Summary of Loans by Type                
(Excludes Loans Held for Sale)                
(In Thousands)  June 30,   Mar. 31,   Dec. 31,   June 30, 
   2013   2013   2012   2012 
Residential mortgage:                
  Residential mortgage loans - first liens  $304,806   $306,754   $311,627   $321,163 
  Residential mortgage loans - junior liens   24,797    25,567    26,748    27,404 
  Home equity lines of credit   33,076    32,237    33,017    31,858 
  1-4 Family residential construction   14,895    12,032    12,842    10,699 
Total residential mortgage   377,574    376,590    384,234    391,124 
Commercial:                    
  Commercial loans secured by real estate   155,168    155,474    158,413    164,771 
  Commercial and industrial   45,812    47,031    48,442    52,704 
  Political subdivisions   24,033    27,366    31,789    36,858 
  Commercial construction and land   20,189    28,461    28,200    26,517 
  Loans secured by farmland   11,134    11,214    11,403    10,079 
  Multi-family (5 or more) residential   6,397    6,478    6,745    6,409 
  Agricultural loans   3,061    2,864    3,053    3,263 
  Other commercial loans   543    238    362    563 
Total commercial   266,337    279,126    288,407    301,164 
Consumer   11,059    11,030    11,269    12,146 
Total   654,970    666,746    683,910    704,434 
Less: allowance for loan losses   (7,198)   (7,118)   (6,857)   (7,657)
Loans, net  $647,772   $659,628   $677,053   $696,777 

 

 
 

 

Loans Held for Sale                
(In Thousands)  June 30,   Mar. 31,   Dec 31,   June 30, 
   2013   2013   2012   2012 
Residential mortgage loans originated                
  and serviced - outstanding balance  $127,214   $114,933   $103,176   $74,070 
Less: outstanding balance of loans sold   (126,489)   (114,134)   (100,631)   (70,880)
Loans held for sale, net  $725   $799   $2,545   $3,190 

 

 

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, 
   2013   2013   2013   2012 
Balance, beginning of period  $7,118   $6,857   $6,857   $7,705 
Charge-offs   (52)   (193)   (245)   (291)
Recoveries   66    271    337    58 
Net recoveries (charge-offs)   14    78    92    (233)
Provision for loan losses   66    183    249    185 
Balance, end of period  $7,198   $7,118   $7,198   $7,657 

 

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS            
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)                
(In Thousands)                
   June 30,   Mar. 31,   Dec 31,   June 30, 
   2013   2013   2012   2012 
Impaired loans with a valuation allowance  $1,874   $2,722   $2,710   $3,434 
Impaired loans without a valuation allowance   5,097    4,751    4,719    3,427 
Total impaired loans  $6,971   $7,473   $7,429   $6,861 
                     
Total loans past due 30-89 days and still accruing  $6,114   $6,366   $7,756   $5,191 
                     
Nonperforming assets:                    
  Total nonaccrual loans  $6,697   $7,090   $7,353   $7,447 
  Total loans past due 90 days or more and still accruing   2,202    2,351    2,311    1,144 
  Total nonperforming loans   8,899    9,441    9,664    8,591 
  Foreclosed assets held for sale (real estate)   890    915    879    904 
Total nonperforming assets  $9,789   $10,356   $10,543   $9,495 
                     
                     
Loans subject to troubled debt restructurings (TDRs):                    
  Performing  $2,187   $829   $906   $925 
  Nonperforming   1,154    1,338    1,155    1,754 
Total TDRs  $3,341   $2,167   $2,061   $2,679 
                     
Total nonperforming loans as a % of loans   1.36%   1.42%   1.41%   1.22%
Total nonperforming assets as a % of assets   0.80%   0.83%   0.82%   0.72%
Allowance for loan losses as a % of total loans   1.10%   1.07%   1.00%   1.09%
Allowance for loan losses as a % of nonperforming loans   80.89%   75.39%   70.95%   89.13%

 

 
 

 

Analysis of Average Daily Balances and Rates                    
(Dollars in Thousands)                        
   3 Months   Rate of   3 Months   Rate of   3 Months   Rate of 
   Ended   Return/   Ended   Return/   Ended   Return/ 
   6/30/2013   Cost of   3/31/2013   Cost of   6/30/2012   Cost of 
   Average   Funds   Average   Funds   Average   Funds 
   Balance   %   Balance   %   Balance   % 
EARNING ASSETS                        
Available-for-sale securities,                        
at amortized cost:                        
     Taxable  $323,248    2.14%  $315,612    2.31%  $333,255    3.13%
     Tax-exempt   132,198    5.76%   130,123    5.75%   130,111    5.94%
          Total available-for-sale securities   455,446    3.19%   445,735    3.32%   463,366    3.92%
Interest-bearing due from banks   23,044    0.40%   29,638    0.38%   37,300    0.33%
Federal funds sold   3    0.00%   15    0.00%   0    0.00%
Loans held for sale   787    6.12%   2,193    3.88%   1,865    4.96%
Loans receivable:                              
     Taxable   625,215    5.79%   636,278    5.88%   666,752    6.18%
     Tax-exempt   33,690    5.88%   38,491    5.81%   36,344    6.31%
          Total loans receivable   658,905    5.80%   674,769    5.88%   703,096    6.18%
          Total Earning Assets   1,138,185    4.64%   1,152,350    4.74%   1,205,627    5.13%
Cash   16,961         16,080         17,791      
Unrealized gain/loss on securities   13,820         16,270         17,545      
Allowance for loan losses   (7,229)        (7,126)        (7,435)     
Bank premises and equipment   18,351         18,655         18,908      
Intangible Asset - Core Deposit Intangible   120         132         186      
Intangible Asset - Goodwill   11,942         11,942         11,942      
Other assets   43,127         43,376         47,046      
Total Assets  $1,235,277        $1,251,679        $1,311,610      
                               
INTEREST-BEARING LIABILITIES                              
Interest-bearing deposits:                              
     Interest checking  $167,404    0.12%  $174,149    0.12%  $156,994    0.13%
     Money market   204,444    0.15%   202,129    0.14%   210,646    0.19%
     Savings   117,224    0.10%   116,538    0.10%   107,514    0.10%
     Certificates of deposit   150,358    1.00%   160,011    1.17%   199,320    1.55%
     Individual Retirement Accounts   130,368    0.44%   134,076    0.50%   144,095    0.91%
     Other time deposits   1,161    0.00%   845    0.00%   1,314    0.31%
          Total interest-bearing deposits   770,959    0.35%   787,748    0.40%   819,883    0.62%
Borrowed funds:                              
     Short-term   5,684    0.14%   4,220    0.10%   5,650    0.07%
     Long-term   73,615    4.03%   83,341    4.00%   113,301    4.01%
          Total borrowed funds   79,299    3.75%   87,561    3.81%   118,951    3.82%
          Total Interest-bearing Liabilities   850,258    0.67%   875,309    0.74%   938,834    1.03%
Demand deposits   193,115         184,890         191,349      
Other liabilities   8,292         8,875         7,774      
Total Liabilities   1,051,665         1,069,074         1,137,957      
Stockholders' equity, excluding                              
     other comprehensive income/loss   174,782         172,578         162,721      
Other comprehensive income/loss   8,830         10,027         10,932      
Total Stockholders' Equity   183,612         182,605         173,653      
Total Liabilities and Stockholders' Equity  $1,235,277        $1,251,679        $1,311,610      
Interest Rate Spread        3.97%        4.00%        4.10%
Net Interest Income/Earning Assets        4.15%        4.18%        4.33%
                               
Total Deposits (Interest-bearing                              
     and Demand)  $964,074        $972,638        $1,011,232      

 

(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%.

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

 

 
 

 

Analysis of Average Daily Balances and Rates            
(Dollars in Thousands)                
   6 Months       6 Months     
   Ended   Rate of   Ended   Rate of 
   6/30/2013   Return/   6/30/2012   Return/ 
   Average   Cost of   Average   Cost of 
   Balance   Funds %   Balance   Funds % 
EARNING ASSETS                
Available-for-sale securities,                
 at amortized cost:                
     Taxable  $319,451    2.23%  $332,131    3.22%
     Tax-exempt   131,166    5.75%   128,920    5.99%
          Total available-for-sale securities   450,617    3.25%   461,051    4.00%
Interest-bearing due from banks   26,323    0.39%   35,817    0.33%
Federal funds sold   9    0.00%   0    0.00%
Loans held for sale   1,486    4.48%   1,461    4.40%
Loans receivable:                    
     Taxable   630,716    5.84%   666,344    6.22%
     Tax-exempt   36,077    5.84%   36,281    6.34%
          Total loans receivable   666,793    5.84%   702,625    6.23%
          Total Earning Assets   1,145,228    4.69%   1,200,954    5.19%
Cash   16,523         17,341      
Unrealized gain/loss on securities   15,038         17,734      
Allowance for loan losses   (7,178)        (7,587)     
Bank premises and equipment   18,502         18,903      
Intangible Asset - Core Deposit Intangible   126         195      
Intangible Asset - Goodwill   11,942         11,942      
Other assets   43,252         47,664      
Total Assets  $1,243,433        $1,307,146      
                     
INTEREST-BEARING LIABILITIES                    
Interest-bearing deposits:                    
     Interest checking  $170,758    0.12%  $159,259    0.13%
     Money market   203,293    0.14%   208,256    0.19%
     Savings   116,883    0.10%   106,023    0.10%
     Certificates of deposit   155,158    1.09%   195,622    1.64%
     Individual Retirement Accounts   132,212    0.47%   145,168    0.94%
     Other time deposits   1,004    0.00%   1,128    0.18%
          Total interest-bearing deposits   779,308    0.38%   815,456    0.65%
Borrowed funds:                    
     Short-term   4,956    0.12%   6,536    0.12%
     Long-term   78,451    4.01%   114,454    4.00%
          Total borrowed funds   83,407    3.78%   120,990    3.79%
          Total Interest-bearing Liabilities   862,715    0.70%   936,446    1.05%
Demand deposits   189,025         190,312      
Other liabilities   8,582         8,613      
Total Liabilities   1,060,322         1,135,371      
Stockholders' equity, excluding                    
     other comprehensive income/loss   173,686         160,761      
Other comprehensive income/loss   9,425         11,014      
Total Stockholders' Equity   183,111         171,775      
Total Liabilities and Stockholders' Equity  $1,243,433        $1,307,146      
Interest Rate Spread        3.99%        4.14%
Net Interest Income/Earning Assets        4.16%        4.37%
                     
Total Deposits (Interest-bearing                    
     and Demand)  $968,333        $1,005,768      

 

(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%.

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

 

 
 

 

COMPARISON OF NONINTEREST INCOME                    
(In Thousands)  Three Months Ended   Six Months Ended 
   June 30,   Mar. 31,   June 30,   June 30,   June 30, 
   2013   2013   2012   2013   2012 
Service charges on deposit accounts  $1,171   $1,159   $1,256   $2,330   $2,417 
Service charges and fees   216    201    235    417    455 
Trust and financial management revenue   1,045    944    960    1,989    1,889 
Brokerage revenue   237    144    288    381    456 
Insurance commissions, fees and premiums   59    45    73    104    107 
Interchange revenue from debit card transactions   505    464    488    969    983 
Net gains from sales of loans   587    545    373    1,132    638 
Increase in cash surrender value of life insurance   99    93    117    192    236 
Net gain from premises and equipment   0    0    270    0    270 
Other operating income   272    248    219    520    483 
Total other operating income, before realized                         
   gains on available-for-sale securities, net  $4,191   $3,843   $4,279   $8,034   $7,934 

 

                     
COMPARISON OF NONINTEREST EXPENSE                    
(In Thousands)  Three Months Ended   Six Months Ended 
   June 30,   Mar. 31,   June 30,   June 30,   June 30, 
   2013   2013   2012   2013   2012 
Salaries and wages  $3,635   $3,600   $3,586   $7,235   $7,161 
Pensions and other employee benefits   1,034    1,255    1,090    2,289    2,456 
Occupancy expense, net   599    634    628    1,233    1,264 
Furniture and equipment expense   483    494    461    977    943 
FDIC Assessments   147    152    157    299    303 
Pennsylvania shares tax   351    350    340    701    672 
Other operating expense   2,271    2,068    2,059    4,339    3,935 
Total noninterest expense, before loss on                         
prepayment of borrowings   8,520    8,553    8,321    17,073    16,734 
Loss on prepayment of borrowings   0    1,023    143    1,023    143 
 Total Noninterest expense  $8,520   $9,576   $8,464   $18,096   $16,877 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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