Citizens Financial Services, Inc. Reports A 19% Increase in Second Quarter 2012 Earnings

Jul 25, 2012, 12:35 ET from Citizens Financial Services, Inc.

MANSFIELD, Pa., July 25, 2012 /PRNewswire/ -- Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens Community Bank, has released its unaudited financial performance for the quarter ended June 30, 2012.

For the three months ended June 30, 2012, net income totaled $3,753,000 which compares to $3,147,000 for the same period last year. This represents an increase of $606,000, or 19.26%. Earnings per share of $1.30 increased 20.46% from $1.08 per share last year.

For the six months ended June 30, 2012, net income totaled $7,202,000 which compares to $5,977,000 for the same period last year. This represents an increase of $1,225,000, or 20.50%. Earnings per share of $2.49 increased 21.57% from $2.05 per share last year.  Annualized return on equity for the comparable periods was 18.58% and 17.22%, while return on assets was 1.63% and 1.44%, respectively.

Net interest income, before the provision for loan losses, increased from $14,012,000 for the six months ended June 30, 2011 to $15,223,000  this year, an increase of $1,211,000, or 8.6%. On a tax equivalent basis, our net interest margin on interest earning assets has increased from 3.96% last year to 4.04% this year. Yields on interest earning assets decreased 23 basis points, but was offset by a decrease of 35 basis points on interest bearing liabilities.  In particular, yields on investment securities decreased 38 basis points.  CEO and President Randall E. Black stated, "The unprecedented low interest rate environment has continued to make investing difficult.  Primarily, we have invested in short-term investments in order to manage for long-term profitability by having available liquidity when market conditions and investment opportunities improve.  We have been able to off-set declining investment yields by decreasing our deposit costs."

As of June, 30, 2012, total assets were $881.4 million, which was an increase of $2.8 million from December 31, 2011.  The investment portfolio totaled $323.1 million, which is an increase of $4.3 million from the December 31, 2011 balance of $318.8 million.  Net loans have increased $9.5 million to a total of $490.5 million at June 30, 2012 from the end of December.  Since June 30, 2011, net loans have increased $19.7 million, or 4.2%.  Through June $14.2 million of residential mortgages have been originated which have been sold on the secondary market compared with $5.1 million last year.

The provision for loan losses for the first six months of 2012 totaled $210,000 which compares to $375,000 recorded last year.  Credit quality continues to improve and compares favorably to peer.  As of June 30, 2012, non-performing assets as a percent of loans was 1.89%, which compares to 2.11% as of December 31, 2011 and 2.25% as of June 30, 2011.  Through June, annualized net charge-offs as a percent of average loans remains very low at .02%.

Stockholders' equity totaled $86.5 million at June 30, 2012, which is an increase of $5.1 million, or 6.2%, from December 31, 2011 and an increase of $11.2 million from June 30, 2011.  First Citizens continues to remain well capitalized based upon regulatory guidelines.  On July 10, 2012 a cash dividend of $.30 per share along with a 1% stock dividend were declared to shareholders of record as of July 20, 2012.  The cash dividend will be paid on July 27, 2012 and represents an increase of 13.2% over the July 2011 cash dividend of $.265 per share.

"Our financial performance remains strong as we focus on remaining a strong, well-capitalized, local community bank committed to serving our communities and customers, as well as providing outstanding shareholder return and value," commented Mr. Black.

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.

 

CITIZENS FINANCIAL SERVICES, INC.




CONSOLIDATED BALANCE SHEET




(UNAUDITED)









June 30

December 31

June 30

(in thousands except share data)

2012

2011

2011

ASSETS:




Cash and due from banks:




  Noninterest-bearing

$           12,525

$           9,960

$          11,318

  Interest-bearing

5,243

20,472

33,114

Total cash and cash equivalents

17,768

30,432

44,432





Available-for-sale securities

323,131

318,823

288,610





Loans (net of allowance for loan losses: $6,650 at June 30, 2012;




    $6,487 at December 31, 2011 and $6,163 at June 30, 2011)

490,482

481,022

470,749





Premises and equipment

11,515

11,702

11,956

Accrued interest receivable

3,800

3,621

3,717

Goodwill

10,256

10,256

10,256

Bank owned life insurance

13,919

13,669

13,416

Other assets

10,479

9,042

9,846





TOTAL ASSETS

$         881,350

$       878,567

$        852,982





LIABILITIES:




Deposits:




  Noninterest-bearing

$           86,218

$         85,605

$          80,545

  Interest-bearing

652,549

648,388

632,582

Total deposits

738,767

733,993

713,127

Borrowed funds

47,066

53,882

55,408

Accrued interest payable

1,222

1,512

1,556

Other liabilities

7,754

7,712

7,592

TOTAL LIABILITIES

794,809

797,099

777,683

STOCKHOLDERS' EQUITY:




Preferred Stock $1.00 par value; authorized




  3,000,000 shares at June 30, 2012, December 31, 2011 and

  June 30, 2011; 




    none issued in 2012 or 2011

-

-

-

Common stock




  $1.00 par value; authorized 15,000,000 shares at June 30, 2012,

  December 31, 2011 and




  June 30, 2011;   issued 3,132,866 shares at June 30, 2012 and

  December 31, 2011;




  3,104,434 shares at June 30, 2011

3,133

3,133

3,104

Additional paid-in capital

15,364

15,313

14,295

Retained earnings

68,813

63,337

59,393

Accumulated other comprehensive income

4,990

4,949

3,244

Treasury stock, at cost:  243,784 shares at June 30, 2012;

  230,203 shares at




  December 31, 2011 and 214,942 shares at June 30, 2011

(5,759)

(5,264)

(4,737)

TOTAL STOCKHOLDERS' EQUITY

86,541

81,468

75,299

TOTAL LIABILITIES AND




   STOCKHOLDERS' EQUITY

$         881,350

$       878,567

$        852,982





 

CITIZENS FINANCIAL SERVICES, INC.





CONSOLIDATED STATEMENT OF INCOME





(UNAUDITED)






Three Months Ended

Six Months Ended


June 30,

June 30,

(in thousands, except per share data)

2012

2011

2012

2011

INTEREST INCOME:





Interest and fees on loans

$       7,439

$      7,463

$     14,904

$    14,858

Interest-bearing deposits with banks

1

20

6

42

Investment securities:





    Taxable

1,237

1,176

2,434

2,348

    Nontaxable

920

892

1,874

1,757

    Dividends

16

14

32

29

TOTAL INTEREST INCOME

9,613

9,565

19,250

19,034

INTEREST EXPENSE:





Deposits

1,555

2,046

3,221

4,134

Borrowed funds

393

443

806

888

TOTAL INTEREST EXPENSE

1,948

2,489

4,027

5,022

NET INTEREST INCOME

7,665

7,076

15,223

14,012

Provision for loan losses

105

150

210

375

NET INTEREST INCOME AFTER





    PROVISION FOR LOAN LOSSES

7,560

6,926

15,013

13,637

NON-INTEREST INCOME:





Service charges

1,129

1,128

2,207

2,073

Trust

151

146

324

303

Brokerage and insurance

75

123

225

218

Gains on loans sold

131

34

185

75

Investment securities gains, net

213

114

321

234

Earnings on bank owned life insurance

126

124

250

245

Other

208

129

364

269

TOTAL NON-INTEREST INCOME

2,033

1,798

3,876

3,417

NON-INTEREST EXPENSES:





Salaries and employee benefits

2,668

2,518

5,421

5,033

Occupancy 

314

329

624

719

Furniture and equipment

96

106

202

223

Professional fees

224

172

492

329

FDIC insurance

115

250

238

500

Pennsylvania shares tax

160

146

326

293

Other

1,092

1,189

2,221

2,393

TOTAL NON-INTEREST EXPENSES

4,669

4,710

9,524

9,490

Income before provision for income taxes

4,924

4,014

9,365

7,564

Provision for income taxes

1,171

867

2,163

1,587

NET INCOME

$        3,753

$       3,147

$        7,202

$      5,977






PER COMMON SHARE DATA:





Net Income - Basic

$          1.30

$        1.08

$          2.49

$        2.05

Net Income - Diluted

$          1.30

$        1.08

$          2.49

$        2.05

Cash Dividends Paid 

$        0.300

$      0.265

$        0.595

$      0.525






Number of shares used in computation - basic

2,886,012

2,915,708

2,890,849

2,916,526

Number of shares used in computation - diluted

2,887,421

2,915,708

2,891,473

2,916,526






 

Financial Highlights











Three Months Ended

Six Months Ended


June 30

June 30


2012

2011

2012

2011

Performance Ratios and Share Data:





    Return on average assets (annualized)

1.69%

1.50%

1.63%

1.44%

    Return on average equity (annualized)

18.72%

17.85%

18.58%

17.22%

    Net interest margin (tax equivalent)

4.03%

3.93%

4.04%

3.96%

    Cash dividends paid per share 

$                       0.300

$                      0.265

$                 0.595

$            0.525

    Earnings per share - basic

$                         1.30

$                        1.08

$                   2.49

$              2.05

    Earnings per share - diluted

$                         1.30

$                        1.08

$                   2.49

$              2.05

Number of shares used in computation - basic

2,886,012

2,915,708

2,890,849

2,916,526

Number of shares used in computation - diluted

2,887,421

2,915,708

2,891,473

2,916,526


























Balance Sheet Highlights (dollars in thousands):

June 30, 2012

December 31, 2011

June 30, 2011







Assets

$                    881,350

$                   878,567

$852,982


Investment securities:





    Available for sale

323,131

318,823

288,610


Loans (net of unearned income)

497,132

487,509

476,912


Allowance for loan losses

6,650

6,487

6,163


Deposits

738,767

733,933

713,127


Stockholders' Equity

86,541

81,468

75,299


Non-performing assets

9,403

10,300

10,725


Non-performing assets to total loans

1.89%

2.11%

2.25%


Annualized net charge-offs to total loans

0.02%

0.02%

0.05%


Average Leverage Ratio

9.20%

8.83%

8.53%


Common shares outstanding

2,881,266

2,902,663

2,889,492


Book value per share

$                       28.23

$                       26.36

$24.94







 

SOURCE Citizens Financial Services, Inc.



RELATED LINKS

http://www.firstcitizensbank.com