Attached files
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| 8-K - FOURTH QUARTER 2013 8-K - CITIZENS FINANCIAL SERVICES INC | fourthquarter2013.htm |
| Contact: Kathleen Campbell, Marketing Director | First Citizens Community Bank | |
| 570-662-0422 | 15 S. Main Street | |
| 570-662-8512 (fax) | Mansfield, PA 16933 |
Citizens Financial Services, Inc. Reports Fourth quarter 2013 Earnings
MANSFIELD, PENNSYLVANIA— January 24, 2014 – Citizens Financial Services, Inc. (OTC BB: CZFS), parent company of First Citizens Community Bank, has released its unaudited financial performance for the year ended December 31, 2013.
For the twelve months ended December 31, 2013, net income totaled $13,375,000 which compares to $14,215,000 last year. This represents a decrease of $840,000, or 5.9%. Earnings per share of $4.42 decreased 4.9% from $4.65 per share last year. Annualized return on equity for the comparable periods was 14.89% and 17.48%, while return on assets was 1.51% and 1.62%, respectively. CEO and President Randall E. Black stated, “While not at last year’s record level, results for 2013 represent very strong financial performance, are the second highest level of earnings in the history of our organization, and will continue to place us near the top of our peers. Margin compression and increasing regulatory burdens are the primary factors in lower earnings. Despite this, the results support our ongoing efforts to remain a strong, well-capitalized, local community bank committed to serving our communities and customers, as well as providing exceptional shareholder return and value. In the forthcoming year, we will continue to focus on investments in technology and human resources, and new products that will provide greater benefits and service for our customers”.
For the three months ended December 31, 2013, net income totaled $3,296,000 which compares to net income of $3,549,000 for the fourth quarter of 2012. This represents a decrease of $253,000, or 7.1%. Earnings per share of $1.09 for the fourth quarter compares to $1.17 last year. Annualized return on equity for the comparable periods was 14.21% and 16.74%, while return on assets was 1.47% and 1.62%, respectively.
Net interest income, before the provision for loan losses, decreased from $30,426,000 for the twelve months ended December 31, 2012 to $29,919,000 for 2013. The decrease of $507,000, or 1.7%, is reflective of declining margins. “As the prolonged low interest rate cycle persists, our cash flows continue to be re-invested at lower yields. We anticipate our strong loan demand towards the end of 2013 will help offset additional margin compression as we utilize future cash flows from our investment portfolio to fund our lending needs. On a tax equivalent basis, our net interest margin has declined 12 basis points from 3.99% last year to 3.87% this year. The tax equivalent yields on interest earning assets decreased from 4.91% for 2012 to 4.62% this year. This has been offset somewhat by reducing our cost of funds, including non-interest bearing deposits, from .97% last year to .80% this year”, added Mr. Black.
At December 31, 2013, total assets were $914.9 million, which was an increase of $32.5 million from total assets of $882.4 million at December 31, 2012. The investment portfolio and time deposits with other banks increased $9.5 million from year-end 2012. Net loans of $533.5 million as of the end of December have increased $37.8 million, or 7.6%, compared to December 31, 2012. Much of the success in loan growth is attributed to expansion into Luzerne and Lackawanna counties via loan production offices. Even with our growth, asset quality remains strong. As of December 31, 2013, non-performing assets totaled $10.2 million and represented 1.88% of loans. This compares to 1.83% as of December 31, 2012. For 2013, the provision for loan loss was $405,000 which is slightly less than the $420,000 provision recorded last year. The annualized net charge-offs as a percent of average loans remains very low at .02%.
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Stockholders’ equity totaled $92.1 million at December 31, 2013, which compares to $89.5 million at December 31, 2012. Excluding accumulated other comprehensive income; stockholders’ equity increased $8.4 million since the end of 2012. Net income of $13.4 million was offset by net treasury stock activity of $1.3 million and cash dividends of $3.7 million. Additionally, the unrealized gain on available for sale investment securities has decreased $6.9 million from last year due to the increase in long-term interest rates which has resulted in a decrease in the fair value of investment securities. A cash dividend of $.385 per share was paid on December 27, 2013 to shareholders of record on December 19, 2013. The dividends for the year will total $1.22 per share adjusted for the stock dividend paid earlier this year, which continues to represent an attractive dividend yield. In addition to the cash and stock dividend issued in 2013, the Board of Directors of Citizens Financial Services accelerated the 2013 first quarter dividend of $.38 per share into the fourth quarter of 2012 due to the significant issues in Washington regarding the very complex fiscal cliff tax issues at that time.
Citizens Financial Services, Inc. has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 18 offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED BALANCE SHEET
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(UNAUDITED)
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December 31
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December 31
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(in thousands except share data)
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2013
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2012
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ASSETS:
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Cash and due from banks:
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Noninterest-bearing
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$ 8,899
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$ 12,307
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Interest-bearing
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1,184
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14,026
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Total cash and cash equivalents
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10,083
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26,333
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Interest bearing time deposits with other banks
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2,480
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-
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Available-for-sale securities
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317,301
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310,252
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Loans held for sale
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278
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1,458
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Loans (net of allowance for loan losses: $7,098 at December 31, 2013 and
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$6,784 at December 31, 2012)
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533,514
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495,679
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Premises and equipment
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11,105
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11,521
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Accrued interest receivable
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3,728
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3,816
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Goodwill
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10,256
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10,256
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Bank owned life insurance
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14,679
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14,177
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Other assets
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11,510
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8,935
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TOTAL ASSETS
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$ 914,934
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$ 882,427
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 85,585
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$ 89,494
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Interest-bearing
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662,731
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647,602
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Total deposits
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748,316
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737,096
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Borrowed funds
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66,932
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46,126
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Accrued interest payable
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895
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1,143
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Other liabilities
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6,735
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8,587
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TOTAL LIABILITIES
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822,878
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792,952
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STOCKHOLDERS' EQUITY:
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Preferred Stock $1.00 par value; authorized
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3,000,000 shares at December 31, 2013 and December 31, 2012;
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none issued in 2013 or 2012
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-
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-
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Common stock
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$1.00 par value; authorized 15,000,000 shares at December 31, 2013 and
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and December 30, 2012; issued 3,305,517 shares at December 31, 2013 and 3,161,324
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at December 31, 2012
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3,306
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3,161
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Additional paid-in capital
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23,562
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16,468
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Retained earnings
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74,325
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71,813
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Accumulated other comprehensive income (loss)
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(1,225)
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4,631
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Treasury stock, at cost: 290,468 shares at December 31, 2013 and 262,921 shares at
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December 31, 2012
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(7,912)
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(6,598)
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TOTAL STOCKHOLDERS' EQUITY
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92,056
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89,475
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TOTAL LIABILITIES AND
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STOCKHOLDERS' EQUITY
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$ 914,934
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$ 882,427
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3
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED STATEMENT OF INCOME
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(UNAUDITED)
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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(in thousands, except per share data)
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2013
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2012
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2013
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2012
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INTEREST INCOME:
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Interest and fees on loans
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$ 7,183
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$ 7,418
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$ 28,982
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$ 29,770
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Interest-bearing deposits with banks
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13
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10
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40
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21
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Investment securities:
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Taxable
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917
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1,002
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3,721
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4,521
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Nontaxable
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842
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909
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3,405
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3,702
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Dividends
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25
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22
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86
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71
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TOTAL INTEREST INCOME
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8,980
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9,361
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36,234
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38,085
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INTEREST EXPENSE:
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Deposits
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1,213
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1,406
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5,107
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6,113
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Borrowed funds
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257
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367
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1,208
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1,546
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TOTAL INTEREST EXPENSE
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1,470
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1,773
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6,315
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7,659
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NET INTEREST INCOME
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7,510
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7,588
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29,919
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30,426
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Provision for loan losses
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90
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105
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405
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420
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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7,420
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7,483
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29,514
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30,006
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NON-INTEREST INCOME:
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Service charges
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1,096
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1,129
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4,299
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4,475
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Trust
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155
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172
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694
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644
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Brokerage and insurance
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111
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87
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444
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392
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Gains on loans sold
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207
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472
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443
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759
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Investment securities gains, net
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56
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43
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441
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604
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Earnings on bank owned life insurance
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125
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129
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502
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507
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Other
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118
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114
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446
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456
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TOTAL NON-INTEREST INCOME
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1,868
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2,146
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7,269
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7,837
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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2,936
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2,892
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11,392
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11,018
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Occupancy
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315
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337
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1,271
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1,265
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Furniture and equipment
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120
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96
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492
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411
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Professional fees
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177
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190
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781
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891
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FDIC insurance
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113
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115
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450
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468
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Pennsylvania shares tax
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92
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161
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640
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602
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Other
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1,329
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1,154
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4,630
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4,642
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TOTAL NON-INTEREST EXPENSES
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5,082
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4,945
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19,656
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19,297
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Income before provision for income taxes
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4,206
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4,684
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17,127
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18,546
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Provision for income taxes
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910
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1,135
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3,752
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4,331
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NET INCOME
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$ 3,296
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$ 3,549
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$ 13,375
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$ 14,215
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PER COMMON SHARE DATA:
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Net Income - Basic
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$ 1.09
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$ 1.17
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$ 4.42
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$ 4.65
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Net Income - Diluted
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$ 1.09
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$ 1.17
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$ 4.42
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$ 4.65
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Cash Dividends Paid
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$ 0.385
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$ 0.654
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$ 1.222
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$ 1.505
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Number of shares used in computation - basic
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3,012,003
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3,044,991
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3,025,315
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3,056,078
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Number of shares used in computation - diluted
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3,012,228
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3,045,435
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3,026,485
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3,057,720
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4
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Financial Highlights
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Three Months Ended
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Twelve Months Ended
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December 31,
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December 31,
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2013
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2012
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2013
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2012
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Performance Ratios and Share Data:
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Return on average assets (annualized)
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1.47%
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1.62%
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1.51%
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1.62%
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Return on average equity (annualized)
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14.21%
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16.74%
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14.89%
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17.48%
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Net interest margin (tax equivalent)
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3.78%
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3.96%
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3.87%
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3.99%
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Cash dividends paid per share
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$ 0.385
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$ 0.654
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$ 1.222
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$ 1.505
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Earnings per share - basic
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$ 1.09
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$ 1.17
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$ 4.42
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$ 4.65
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Earnings per share - diluted
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$ 1.09
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$ 1.17
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$ 4.42
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$ 4.65
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Number of shares used in computation - basic
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3,012,003
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3,044,991
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3,025,315
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3,056,078
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Number of shares used in computation - diluted
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3,012,228
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3,045,435
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3,026,485
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3,057,720
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Balance Sheet Highlights (dollars in thousands):
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December 31, 2013
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December 31, 2012
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Assets
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$ 914,934
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$ 882,427
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Investment securities:
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Available for sale
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317,301
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310,352
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Loans (net of unearned income)
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540,612
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502,463
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Allowance for loan losses
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7,098
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6,784
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Deposits
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748,316
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737,096
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Stockholders' Equity
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92,056
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89,475
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Non-performing assets
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10,154
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9,189
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Non-performing assets to total loans
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1.88%
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1.83%
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Annualized net charge-offs to total loans
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0.02%
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0.02%
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Average Leverage Ratio
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10.52%
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9.70%
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Common shares outstanding
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3,015,049
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2,898,403
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Book value per share
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$ 30.94
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$ 27.89
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5