CITIZENS & NORTHERN CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3 - October 11, 2013

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EX-99.1 - EXHIBIT 99.1 - CITIZENS & NORTHERN CORPv357231_ex99-1.htm
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8-K - FORM 8-K - CITIZENS & NORTHERN CORPv357231_8k.htm

 

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

 

 

AVAILABLE-FOR-SALE SECURITIES

(In Thousands)

  

   September 30, 2013   June 30, 2013   December 31, 2012 
   Amortized   Fair   Amortized   Fair   Amortized   Fair 
   Cost   Value   Cost   Value   Cost   Value 
                         
Obligations of U.S. Government agencies  $47,445   $46,384   $49,016   $47,970   $30,695   $31,217 
Obligations of states and political subdivisions:                              
Tax-exempt   129,884    131,096    132,525    134,483    130,168    137,020 
Taxable   31,582    31,211    29,976    29,689    24,426    24,817 
Mortgage-backed securities   80,190    82,354    63,776    65,625    76,368    80,196 
Collateralized mortgage obligations,                              
Issued by U.S. Government agencies   176,208    175,078    183,792    182,924    179,770    183,510 
Trust preferred securities issued by individual institutions   0    0    0    0    5,167    5,171 
Collateralized debt obligations:                              
Pooled trust preferred securities - senior tranches   0    0    0    0    1,615    1,613 
Other collateralized debt obligations   660    660    660    660    660    660 
Total debt securities   465,969    466,783    459,745    461,351    448,869    464,204 
Marketable equity securities   5,802    8,867    5,965    8,717    5,912    8,373 
Total  $471,771   $475,650   $465,710   $470,068   $454,781   $472,577 

 

Summary of Loans by Type

(Excludes Loans Held for Sale) 

 (In Thousands)

 

   Sept. 30,   June 30,   Dec. 31,   Sept. 30, 
   2013   2013   2012   2012 
                 
Residential mortgage:                    
Residential mortgage loans - first liens  $301,794   $304,806   $311,627   $317,734 
Residential mortgage loans - junior liens   24,079    24,797    26,748    27,084 
Home equity lines of credit   34,360    33,076    33,017    32,550 
1-4 Family residential construction   15,746    14,895    12,842    13,038 
Total residential mortgage   375,979    377,574    384,234    390,406 
Commercial:                    
Commercial loans secured by real estate   151,602    155,168    158,413    163,773 
Commercial and industrial   44,312    45,812    48,442    49,405 
Political subdivisions   13,905    24,033    31,789    35,549 
Commercial construction and land   21,630    20,189    28,200    27,307 
Loans secured by farmland   10,711    11,134    11,403    10,328 
Multi-family (5 or more) residential   5,994    6,397    6,745    6,109 
Agricultural loans   3,085    3,061    3,053    3,181 
Other commercial loans   9,858    543    362    329 
Total commercial   261,097    266,337    288,407    295,981 
Consumer   11,399    11,059    11,269    11,762 
Total   648,475    654,970    683,910    698,149 
Less: allowance for loan losses   (7,130)   (7,198)   (6,857)   (7,792)
Loans, net  $641,345   $647,772   $677,053   $690,357 

 

 
 

 

Loans Held for Sale

(In Thousands)

 

   Sept. 30,   June 30,   Dec. 31,   Sept. 30, 
   2013   2013   2012   2012 
Residential mortgage loans originated and serviced - outstanding balance  $138,875   $127,214   $103,176   $87,051 
Less: outstanding balance of loans sold   (138,074)   (126,489)   (100,631)   (83,205)
Loans held for sale, net  $801   $725   $2,545   $3,846 

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES

(In Thousands)

 

   3 Months   3 Months   9 Months   9 Months 
   Ended   Ended   Ended   Ended 
   Sept. 30,   June 30,   Sept. 30,   Sept. 30, 
   2013   2013   2013   2012 
Balance, beginning of period  $7,198   $7,118   $6,857   $7,705 
Charge-offs   (374)   (52)   (619)   (404)
Recoveries   67    66    404    70 
Net (charge-offs) recoveries   (307)   14    (215)   (334)
Provision for loan losses   239    66    488    421 
Balance, end of period  $7,130   $7,198   $7,130   $7,792 

 

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS

AND TROUBLED DEBT RESTRUCTURINGS (TDRs)

(In Thousands)

 

   Sept. 30,   June 30,   Dec 31,   Sept. 30, 
   2013   2013   2012   2012 
Impaired loans with a valuation allowance  $4,553   $1,874   $2,710   $4,119 
Impaired loans without a valuation allowance   5,703    5,097    4,719    3,718 
Total impaired loans  $10,256   $6,971   $7,429   $7,837 
                     
Total loans past due 30-89 days and still accruing  $7,260   $6,114   $7,756   $6,001 
                     
Nonperforming assets:                    
Total nonaccrual loans  $6,760   $6,697   $7,353   $7,269 
Total loans past due 90 days or more and still accruing   2,668    2,202    2,311    2,260 
Total nonperforming loans   9,428    8,899    9,664    9,529 
Foreclosed assets held for sale (real estate)   776    890    879    839 
Total nonperforming assets  $10,204   $9,789   $10,543   $10,368 
                     
Loans subject to troubled debt restructurings (TDRs):                    
Performing  $1,720   $2,187   $906   $916 
Nonperforming   1,366    1,154    1,155    1,753 
Total TDRs  $3,086   $3,341   $2,061   $2,669 
                     
Total nonperforming loans as a % of loans   1.45%   1.36%   1.41%   1.36%
Total nonperforming assets as a % of assets   0.83%   0.80%   0.82%   0.79%
Allowance for loan losses as a % of total loans   1.10%   1.10%   1.00%   1.12%
Allowance for loan losses as a % of nonperforming loans   75.63%   80.89%   70.95%   81.77%

 

 
 

 

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 
   9/30/2013   Return/   6/30/2013   Return/   9/30/2012   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  $335,439    2.04%  $323,248    2.14%  $339,639    2.46%
Tax-exempt   130,831    5.48%   132,198    5.76%   135,362    5.69%
Total available-for-sale securities   466,270    3.00%   455,446    3.19%   475,001    3.38%
Interest-bearing due from banks   24,795    0.40%   23,044    0.40%   33,929    0.36%
Federal funds sold   0    0.00%   3    0.00%   0    0.00%
Loans held for sale   1,032    5.38%   787    6.12%   4,293    3.89%
Loans receivable:                              
Taxable   615,318    5.64%   625,215    5.79%   662,374    6.00%
Tax-exempt   34,712    5.87%   33,690    5.88%   37,696    6.32%
Total loans receivable   650,030    5.65%   658,905    5.80%   700,070    6.02%
Total Earning Assets   1,142,127    4.46%   1,138,185    4.64%   1,213,293    4.82%
Cash   17,698         16,961         17,466      
Unrealized gain/loss on securities   1,688         13,820         19,310      
Allowance for loan losses   (7,258)        (7,229)        (7,727)     
Bank premises and equipment   17,950         18,351         19,106      
Intangible Asset - Core Deposit Intangible   105         120         165      
Intangible Asset - Goodwill   11,942         11,942         11,942      
Other assets   43,690         43,127         46,102      
Total Assets  $1,227,942        $1,235,277        $1,319,657      
                               
INTEREST-BEARING LIABILITIES                              
Interest-bearing deposits:                              
Interest checking  $172,010    0.12%  $167,404    0.12%  $166,961    0.12%
Money market   205,168    0.14%   204,444    0.15%   210,269    0.16%
Savings   116,474    0.10%   117,224    0.10%   110,133    0.10%
Certificates of deposit   144,689    0.99%   150,358    1.00%   199,250    1.47%
Individual Retirement Accounts   127,526    0.40%   130,368    0.44%   141,421    0.73%
Other time deposits   1,556    0.25%   1,161    0.00%   1,768    0.00%
Total interest-bearing deposits   767,423    0.33%   770,959    0.35%   829,802    0.56%
Borrowed funds:                              
Short-term   7,944    0.15%   5,684    0.14%   5,369    0.15%
Long-term   73,436    4.03%   73,615    4.03%   105,811    4.02%
Total borrowed funds   81,380    3.65%   79,299    3.75%   111,180    3.83%
Total Interest-bearing Liabilities   848,803    0.65%   850,258    0.67%   940,982    0.94%
Demand deposits   191,393         193,115         191,301      
Other liabilities   10,030         8,292         8,967      
Total Liabilities   1,050,226         1,051,665         1,141,250      
Stockholders' equity, excluding other comprehensive income/loss   176,772         174,782         166,318      
Other comprehensive income/loss   944         8,830         12,089      
Total Stockholders' Equity   177,716         183,612         178,407      
Total Liabilities and Stockholders' Equity  $1,227,942        $1,235,277        $1,319,657      
Interest Rate Spread        3.81%        3.97%        3.88%
Net Interest Income/Earning Assets        3.97%        4.15%        4.09%
                               
Total Deposits (Interest-bearing and Demand)  $958,816        $964,074        $1,021,103      

 

(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)

 

   9 Months       9 Months     
   Ended   Rate of   Ended   Rate of 
   9/30/2013   Return/   9/30/2012   Return/ 
   Average   Cost of   Average   Cost of 
   Balance   Funds %   Balance   Funds % 
EARNING ASSETS                    
Available-for-sale securities, at amortized cost:                    
Taxable  $324,839    2.16%  $334,652    2.96%
Tax-exempt   131,053    5.66%   131,083    5.88%
Total available-for-sale securities   455,892    3.17%   465,735    3.79%
Interest-bearing due from banks   25,808    0.39%   35,183    0.34%
Federal funds sold   6    0.00%   0    0.00%
Loans held for sale   1,333    4.71%   2,412    4.10%
Loans receivable:                    
Taxable   625,527    5.77%   665,011    6.15%
Tax-exempt   35,617    5.85%   36,756    6.33%
Total loans receivable   661,144    5.77%   701,767    6.16%
Total Earning Assets   1,144,183    4.61%   1,205,097    5.07%
Cash   16,919         17,383      
Unrealized gain/loss on securities   10,539         18,263      
Allowance for loan losses   (7,205)        (7,634)     
Bank premises and equipment   18,316         18,971      
Intangible Asset - Core Deposit Intangible   119         185      
Intangible Asset - Goodwill   11,942         11,942      
Other assets   43,400         47,140      
Total Assets  $1,238,213        $1,311,347      
                     
INTEREST-BEARING LIABILITIES                    
Interest-bearing deposits:                    
Interest checking  $171,180    0.12%  $161,845    0.13%
Money market   203,925    0.14%   208,932    0.18%
Savings   116,745    0.10%   107,403    0.10%
Certificates of deposit   151,630    1.06%   196,840    1.58%
Individual Retirement Accounts   130,633    0.45%   143,910    0.87%
Other time deposits   1,190    0.11%   1,343    0.10%
Total interest-bearing deposits   775,303    0.36%   820,273    0.62%
Borrowed funds:                    
Short-term   5,963    0.13%   6,144    0.13%
Long-term   76,761    4.02%   111,552    4.01%
Total borrowed funds   82,724    3.74%   117,696    3.80%
Total Interest-bearing Liabilities   858,027    0.69%   937,969    1.02%
Demand deposits   189,823         190,644      
Other liabilities   9,070         8,732      
Total Liabilities   1,056,920         1,137,345      
Stockholders' equity, excluding other comprehensive income/loss   174,726         162,627      
Other comprehensive income/loss   6,567         11,375      
Total Stockholders' Equity   181,293         174,002      
Total Liabilities and Stockholders' Equity  $1,238,213        $1,311,347      
Interest Rate Spread        3.92%        4.05%
Net Interest Income/Earning Assets        4.10%        4.28%
                     
Total Deposits (Interest-bearing and Demand)  $965,126        $1,010,917      

 

(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   Nine Months Ended 
   Sept. 30,   June 30,   Sept. 30,   Sept. 30,   Sept. 30, 
   2013   2013   2012   2013   2012 
Service charges on deposit accounts  $1,281   $1,171   $1,290   $3,611   $3,707 
Service charges and fees   241    216    239    658    694 
Trust and financial management revenue   1,033    1,045    873    3,022    2,762 
Brokerage revenue   205    237    197    586    653 
Insurance commissions, fees and premiums   32    59    62    136    169 
Interchange revenue from debit card transactions   484    505    477    1,453    1,460 
Net gains from sales of loans   624    587    625    1,756    1,263 
Increase in cash surrender value of life insurance   109    99    111    301    347 
Net gain from premises and equipment   14    0    1    14    271 
Other operating income   270    272    247    790    730 
Total other operating income, before realized gains on available-for-sale securities, net  $4,293   $4,191   $4,122   $12,327   $12,056 

 

COMPARISON OF NONINTEREST EXPENSE

(In Thousands)

 

   Three Months Ended   Nine Months Ended 
   Sept. 30,   June 30,   Sept. 30,   Sept. 30,   Sept. 30, 
   2013   2013   2012   2013   2012 
Salaries and wages  $3,536   $3,635   $3,594   $10,771   $10,755 
Pensions and other employee benefits   876    1,034    982    3,165    3,438 
Occupancy expense, net   626    599    610    1,859    1,874 
Furniture and equipment expense   487    483    475    1,464    1,418 
FDIC Assessments   151    147    165    450    468 
Pennsylvania shares tax   350    351    339    1,051    1,011 
Other operating expense   2,584    2,271    2,061    6,923    5,996 
Total noninterest expense, before loss on prepayment of borrowings   8,610    8,520    8,226    25,683    24,960 
Loss on prepayment of borrowings   0    0    2,190    1,023    2,333 
Total Noninterest Expense  $8,610   $8,520   $10,416   $26,706   $27,293 

 

 

 

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