Citizens Financial Services, Inc. Reports Unaudited Full Year and Fourth Quarter 2017 Financial Results
MANSFIELD, Pa., Jan. 31, 2018 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC Pink: CZFS), parent company of First Citizens Community Bank, released today its unaudited financial results for the three months and year ended December 31, 2017.
Highlights
- Net income was $13.0 million for 2017, which is 3.1% higher than 2016's net income. Fourth quarter and full year income was negatively impacted by an increase in income tax expense. The Tax Cuts and Jobs Act, enacted on December 22, 2017, lowered the federal corporate income tax rate from 34% to 21% effective January 1, 2018. As a result, the carrying value of net deferred tax assets was reduced, which increased income tax expense by $1.5 million, or $.44 per share.
- Net interest income before the provision for loan losses of $42.3 million for the year ended December 31, 2017 was an increase of $4.3 million, or 11.3%, compared to 2016.
- Net organic loan growth totaled $161.2 million in 2017, or 20.2%.
- Return on average equity for the three months (annualized) and the year ended December 31, 2017 was 7.82% and 10.04%, compared to 10.12% and 10.24% for the three months (annualized) and the year ended December 31, 2016. Excluding the impact of the increase in tax expense, the return on average equity for the three months (annualized) and the year ended December 31, 2017 would have been 12.31% and 11.22%, respectively, on a non-GAAP basis.
- Return on average assets for the three months (annualized) and the year ended December 31, 2017 was 0.80% and 1.03%, compared to 1.05% and 1.06% for the three months (annualized and the year ended December 31, 2016. Excluding the impact of the increase in tax expense, the return on average assets for the three months (annualized) and the year ended December 31, 2017 would have been 1.26% and 1.16%, respectively, on a non-GAAP basis.
- The acquisition of a full service branch in State College, Pennsylvania was completed in December resulting in an increase in loans and deposits of $39.8 million and $37.9 million, respectively.
2017 Compared to 2016
- For 2017, net income totaled $13,025,000 which compares to net income of $12,638,000 for 2016, an increase of $387,000 or 3.1%. Basic earnings per share of $3.74 for 2017 compares to $3.60 for 2016. Excluding the write-down of the net deferred tax assets, 2017 net income would have been $14.6 million, or $4.18 per share on a non-GAAP basis.
- Net interest income before the provision for loan loss for 2017 totaled $42,254,000 compared to $37,964,000 for 2016, resulting in an increase of $4,290,000, or 11.3%. Average interest bearing assets increased $69.2 million in 2017 compared to last year. Average loans increased $157.5 million while average investment securities decreased $75.4 million. The net interest margin for 2017 was 3.80% compared to 3.68% for 2016.
- The provision for loan losses for 2017 was $2,540,000 compared to $1,520,000 for 2016, an increase of $1,020,000. The increased provision primarily reflects the loan growth experienced during 2017.
- Total non-interest income was $8,656,000 for 2017 compared to $7,899,000 for 2016, an increase of $757,000. Investment security gains increased $780,000 compared to last year. As a result of the pending adoption of accounting standard ASU 2016-01, the Company chose to sell a significant portion of its equity securities portfolio in the fourth quarter, which resulted in realized gains of $1.0 million before tax.
- Total non-interest expenses for 2017 were $29,314,000 compared to $28,671,000 for 2016, which is an increase of $643,000, or 2.2%. Salaries and benefits increased $1,046,000 primarily due to the increased costs associated with the additional lending teams hired during the second and third quarters of 2016, branch and loan production office expansion, and normal employee merit increases. Other expenses decreased $522,000, which was primarily due to a decrease in the losses associated with fraudulent charges from compromised customer accounts.
- The provision for income taxes increased $2,997,000 in 2017 to $6,031,000. A portion of the increase, $1,531,000 is attributable to the Tax Cuts and Jobs Act and the immediate write-down of deferred tax assets due to the change in the corporate tax rate. The remaining increase is attributable to the increase in income before the provision of income taxes of $3,384,000 as well as a tax credit being fully utilized in 2016.
Fourth Quarter of 2017 Compared to the Fourth Quarter of 2016
- For the three months ended December 31, 2017, net income totaled $2,604,000 which compares to net income of $3,171,000 for the fourth quarter of 2017, a decrease of $567,000, or 17.9%. Basic earnings per share of $0.75 for the fourth quarter of 2017 compares to $.91 for the same period last year. Annualized return on equity for the three months ended December 31, 2017 and 2016 was 7.82% and 10.12%, while annualized return on assets was 0.80% and 1.05%, respectively. Earnings per share and the annualized return equity and assets were significantly impacted by the write-down of net deferred tax assets associated with the Tax Cuts and Jobs Act.
- Net interest income before the provision for loan loss was $11,236,000 compared to $9,876,000 for the fourth quarter last year, an increase of $1,360,000, or 13.8%. Average interest bearing assets increased $92.1 million, including an increase in average loans of $165.3 million. This was offset by a decrease in average investment securities of $77.0 million. The net interest margin for the three months ended December 31, 2017 was 3.88% compared to 3.75% for the same period in 2016.
- Total non-interest income was $2,812,000 for the three months ended December 31, 2017, which is $720,000 more than the comparable period in 2016. Investment security gains increased $731,000 primarily as a result of the sales from the Company's equity securities portfolio.
- Total non-interest expenses for the three months ended December 31, 2017 totaled $7,710,000 compared to $7,258,000 for the same period in 2016. Increases were experienced in salary and benefit costs as a result of an increase in profit sharing and health care expenses. ORE expenses increased as a result of an increase in legal fees associated with a customer's bankruptcy and other general expense items.
- The provision for income taxes increased $2,145,000 for the three months ended December 31, 2017, to $2,934,000, of which $1,531,000 is attributable to the Tax Cuts and Jobs Act and the immediate write-down of deferred tax assets due to the change in the corporate tax rate. The remaining increase is attributable to the increase in income before the provision of income taxes of $1,578,000.
Balance Sheet and Other Information:
- At December 31, 2017, total assets were $1.36 billion, compared to $1.22 billion at December 31, 2016.
- Available for sale securities of $254.8 million at December 31, 2017 decreased $59.2 million from December 31, 2016. The decrease was utilized to fund growth in the loan portfolio, which is part of the balance sheet strategy to shift interest-earning assets into loans.
- Net loans as of December 31, 2017 totaled $989.3 million and have increased $198.6 million from December 31, 2016. The acquisition of the branch in State College resulted in an increase in loans of $39.8 million, with the remaining increase attributable to organic growth. The organic growth was driven primarily by agricultural real estate loans and other agricultural loans.
- The allowance for loan losses totaled $11,190,000 at December 31, 2017, which is an increase of $2,304,000 from the amount at December 31, 2016. The increase is due to recording a provision for loan losses of $2,540,000 and recoveries of $77,000, offset by charge-offs of $213,000. Net charge-offs for 2017 were .03%. The allowance as a percent of total loans was 1.12% as of December 31, 2017 compared to 1.11% as of December 31, 2016.
- Deposits have increased $99.4 million from December 31, 2016, to $1.1 billion at December 31, 2017, of which $37.9 million of the growth is attributable to the State College branch acquisition. Borrowed funds have increased $35.0 million from December 31, 2016 to $115.0 million at December 31 2017.
- Stockholders' equity totaled $129.0 million at December 31, 2017, compared to $123.3 million at December 31, 2016, an increase of $5.7 million. The increase was attributable to net income for the year ended December 31, 2017 totaling $13.0 million, offset by cash dividends for the year totaling $5.9 million. As a result of sales and changes in interest rates impacting the fair value of investment securities, the unrealized gain on available for sale investment securities decreased $1.5 million from December 31, 2016.
Dividend Declared
On December 5, 2017, the Board of Directors declared a cash dividend of $0.43 per share, which was paid on December 29, 2017 to shareholders of record at the close of business on December 15, 2017. The quarterly cash dividend is an increase of 7.5% over the regular cash dividend of $0.40 per share declared one year ago, as adjusted for the 5% stock dividend declared in June 2017.
Citizens Financial Services, Inc. has nearly 1,700 shareholders, the majority of whom reside in markets where its offices are located.
Note: A reconciliation of the non-GAAP financial measures of performance and earnings as a result of the additional tax charge related to The Tax Cuts and Jobs Act included above to the comparable GAAP financial measures is included at the end of the press release. Management believes disclosure of 2017 earnings results, adjusted to exclude the additional income tax provision as a result of The Tax Cut and Jobs Act, provides useful information to investors for comparison with 2016 results.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
CITIZENS FINANCIAL SERVICES, INC. |
||||
CONSOLIDATED FINANCIAL HIGHLIGHTS |
||||
(UNAUDITED) |
||||
(in thousands, except share data) |
||||
As of or For The |
As of or For The |
|||
Three Months Ended |
Year Ended |
|||
December 31 |
December 31 |
|||
2017 |
2016 |
2017 |
2016 |
|
Income and Performance Ratios |
||||
Net Income |
$ 2,604 |
$ 3,171 |
$ 13,025 |
$ 12,638 |
Return on average assets (annualized) |
0.80% |
1.05% |
1.03% |
1.06% |
Return on average equity (annualized) |
7.82% |
10.12% |
10.04% |
10.24% |
Return on average tangible equity (annualized) (b) |
9.49% |
12.40% |
12.22% |
12.62% |
Net interest margin (tax equivalent) |
3.88% |
3.75% |
3.80% |
3.68% |
Earnings per share - basic |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Earnings per share - diluted |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Cash dividends paid per share |
$ 0.430 |
$ 0.400 |
$ 1.670 |
$ 1.583 |
Asset quality |
||||
Allowance for loan and lease losses |
$ 11,190 |
$ 8,886 |
$ 11,190 |
$ 8,886 |
Non-performing assets |
$ 11,845 |
$ 12,895 |
$ 11,845 |
$ 12,895 |
Allowance for loan and lease losses/total loans |
1.12% |
1.11% |
1.12% |
1.11% |
Non-performing assets to total loans |
1.18% |
1.61% |
1.18% |
1.61% |
Annualized net charge-offs (recoveries) to total loans |
0.02% |
0.03% |
0.03% |
-0.04% |
Equity |
||||
Book value per share |
$ 37.81 |
$ 35.77 |
$ 37.81 |
$ 35.77 |
Tangible Book value per share (b) |
$ 30.73 |
$ 29.12 |
$ 30.73 |
$ 29.12 |
Market Value (Last trade of month) |
$ 63.00 |
$ 53.00 |
$ 63.00 |
$ 53.00 |
Common shares outstanding |
3,486,874 |
3,319,704 |
3,486,874 |
3,319,704 |
Number of shares used in computation - basic |
3,483,164 |
3,493,375 |
3,481,366 |
3,507,497 |
Number of shares used in computation - diluted |
3,483,577 |
3,493,418 |
3,483,090 |
3,509,053 |
Other |
||||
Total Risk Based Capital Ratio (a) |
13.21% |
14.93% |
13.21% |
14.93% |
Tier 1 Risk Based Capital Ratio (a) |
12.04% |
13.81% |
12.04% |
13.81% |
Common Equity Tier 1 Risk Based Capital Ratio (a) |
11.27% |
12.89% |
11.27% |
12.89% |
Leverage Ratio |
9.18% |
9.46% |
9.18% |
9.46% |
Average Full Time Equivalent Employees |
251.6 |
255.3 |
252.8 |
252.1 |
Loan to deposit Ratio |
90.17% |
79.34% |
90.17% |
79.34% |
Balance Sheet Highlights |
December 31 |
December 31 |
||
2017 |
2016 |
|||
Assets |
$ 1,361,886 |
$ 1,223,018 |
||
Investment securities - Available for sale |
254,782 |
314,017 |
||
Loans (net of unearned income) |
1,000,525 |
799,611 |
||
Allowance for loan losses |
11,190 |
8,886 |
||
Deposits |
1,104,943 |
1,005,503 |
||
Stockholders' Equity |
129,011 |
123,268 |
||
(a) Presented as projected for December 31, 2017 and actual for the remaining period |
||||
(b) See reconcilation of Non-GAAP measures at the end of the press release |
||||
CITIZENS FINANCIAL SERVICES, INC. |
||
CONSOLIDATED BALANCE SHEET |
||
(UNAUDITED) |
||
December 31 |
December 31 |
|
(in thousands except share data) |
2017 |
2016 |
ASSETS: |
||
Cash and due from banks: |
||
Noninterest-bearing |
$ 16,347 |
$ 16,854 |
Interest-bearing |
2,170 |
900 |
Total cash and cash equivalents |
18,517 |
17,754 |
Interest bearing time deposits with other banks |
10,283 |
6,955 |
Available-for-sale securities |
254,782 |
314,017 |
Loans held for sale |
1,439 |
1,827 |
Loans (net of allowance for loan losses: $11,190 at December 31, 2017; |
||
$8,886 at December 31, 2016) |
989,335 |
790,725 |
Premises and equipment |
16,523 |
17,030 |
Accrued interest receivable |
4,196 |
4,089 |
Goodwill |
23,296 |
21,089 |
Bank owned life insurance |
26,883 |
26,223 |
Other intangibles |
1,953 |
2,096 |
Unsettled security sales |
- |
7,759 |
Other assets |
14,679 |
13,454 |
TOTAL ASSETS |
$ 1,361,886 |
$ 1,223,018 |
LIABILITIES: |
||
Deposits: |
||
Noninterest-bearing |
$ 171,840 |
$ 147,425 |
Interest-bearing |
933,103 |
858,078 |
Total deposits |
1,104,943 |
1,005,503 |
Borrowed funds |
114,664 |
79,662 |
Accrued interest payable |
897 |
720 |
Other liabilities |
12,371 |
13,865 |
TOTAL LIABILITIES |
1,232,875 |
1,099,750 |
STOCKHOLDERS' EQUITY: |
||
Preferred Stock $1.00 par value; authorized |
||
3,000,000 shares; none issued in 2017 or 2016 |
- |
- |
Common stock |
||
$1.00 par value; authorized 15,000,000 shares at December 31, 2017 and December 31, 2016; |
||
issued 3,869,939 at December 31, 2017 and 3,704,375 at December 31, 2016 |
3,870 |
3,704 |
Additional paid-in capital |
51,108 |
42,250 |
Retained earnings |
89,982 |
91,278 |
Accumulated other comprehensive loss |
(3,398) |
(1,392) |
Treasury stock, at cost: 383,065 shares at December 31, 2017 and 384,671 shares at |
||
December 31, 2016 |
(12,551) |
(12,572) |
TOTAL STOCKHOLDERS' EQUITY |
129,011 |
123,268 |
TOTAL LIABILITIES AND |
||
STOCKHOLDERS' EQUITY |
$ 1,361,886 |
$ 1,223,018 |
CITIZENS FINANCIAL SERVICES, INC. |
||||
CONSOLIDATED STATEMENT OF INCOME |
||||
(UNAUDITED) |
||||
Three Months Ended |
Year Ended |
|||
December 31, |
December 31, |
|||
(in thousands, except per share data) |
2017 |
2016 |
2017 |
2016 |
INTEREST INCOME: |
||||
Interest and fees on loans |
$ 11,447 |
$ 9,457 |
$ 42,127 |
$ 35,844 |
Interest-bearing deposits with banks |
57 |
36 |
186 |
221 |
Investment securities: |
||||
Taxable |
754 |
887 |
3,095 |
3,687 |
Nontaxable |
557 |
711 |
2,414 |
2,970 |
Dividends |
80 |
78 |
271 |
283 |
TOTAL INTEREST INCOME |
12,895 |
11,169 |
48,093 |
43,005 |
INTEREST EXPENSE: |
||||
Deposits |
1,227 |
1,053 |
4,625 |
4,247 |
Borrowed funds |
432 |
240 |
1,214 |
794 |
TOTAL INTEREST EXPENSE |
1,659 |
1,293 |
5,839 |
5,041 |
NET INTEREST INCOME |
11,236 |
9,876 |
42,254 |
37,964 |
Provision for loan losses |
800 |
750 |
2,540 |
1,520 |
NET INTEREST INCOME AFTER |
||||
PROVISION FOR LOAN LOSSES |
10,436 |
9,126 |
39,714 |
36,444 |
NON-INTEREST INCOME: |
||||
Service charges |
1,133 |
1,116 |
4,456 |
4,461 |
Trust |
159 |
154 |
755 |
693 |
Brokerage and insurance |
176 |
188 |
635 |
766 |
Gains on loans sold |
195 |
224 |
578 |
449 |
Investment securities gains, net |
831 |
100 |
1,035 |
255 |
Earnings on bank owned life insurance |
161 |
172 |
660 |
688 |
Other |
157 |
138 |
537 |
587 |
TOTAL NON-INTEREST INCOME |
2,812 |
2,092 |
8,656 |
7,899 |
NON-INTEREST EXPENSES: |
||||
Salaries and employee benefits |
4,576 |
4,343 |
17,456 |
16,410 |
Occupancy |
509 |
515 |
1,988 |
1,900 |
Furniture and equipment |
159 |
152 |
603 |
644 |
Professional fees |
248 |
258 |
1,102 |
1,094 |
FDIC insurance |
90 |
80 |
385 |
572 |
Pennsylvania shares tax |
(62) |
60 |
705 |
690 |
Amortization of intangibles |
74 |
81 |
297 |
327 |
ORE expenses |
312 |
155 |
655 |
389 |
Other |
1,804 |
1,614 |
6,123 |
6,645 |
TOTAL NON-INTEREST EXPENSES |
7,710 |
7,258 |
29,314 |
28,671 |
Income before provision for income taxes |
5,538 |
3,960 |
19,056 |
15,672 |
Provision for income taxes |
2,934 |
789 |
6,031 |
3,034 |
NET INCOME |
$ 2,604 |
$ 3,171 |
$ 13,025 |
$ 12,638 |
PER COMMON SHARE DATA: |
||||
Net Income - Basic |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Net Income - Diluted |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Cash Dividends Paid |
$ 0.430 |
$ 0.400 |
$ 1.670 |
$ 1.583 |
Number of shares used in computation - basic |
3,483,164 |
3,493,375 |
3,481,366 |
3,507,497 |
Number of shares used in computation - diluted |
3,483,577 |
3,493,418 |
3,483,090 |
3,509,053 |
CITIZENS FINANCIAL SERVICES, INC. |
|||||
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION |
|||||
(UNAUDITED) |
|||||
(in thousands, except share data) |
Three Months Ended, |
||||
Dec 31 |
Sep 30 |
June 30 |
March 31, |
Dec 31 |
|
2017 |
2017 |
2017 |
2017 |
2016 |
|
Interest income |
$ 12,895 |
$ 12,120 |
$ 11,778 |
$ 11,300 |
$ 11,169 |
Interest expense |
1,659 |
1,503 |
1,374 |
1,303 |
1,293 |
Net interest income |
11,236 |
10,617 |
10,404 |
9,997 |
9,876 |
Provision for loan losses |
800 |
500 |
625 |
615 |
750 |
Net interest income after provision for loan losses |
10,436 |
10,117 |
9,779 |
9,382 |
9,126 |
Non-interest income |
1,981 |
1,912 |
1,865 |
1,863 |
1,992 |
Investment securities gains, net |
831 |
9 |
23 |
172 |
100 |
Non-interest expenses |
7,710 |
7,247 |
7,166 |
7,191 |
7,258 |
Income before provision for income taxes |
5,538 |
4,791 |
4,501 |
4,226 |
3,960 |
Provision for income taxes |
2,934 |
1,141 |
1,033 |
923 |
789 |
Net income |
$ 2,604 |
$ 3,650 |
$ 3,468 |
$ 3,303 |
$ 3,171 |
Earnings Per Share Basic |
$ 0.75 |
$ 1.05 |
$ 1.00 |
$ 0.94 |
$ 0.91 |
Earnings Per Share Diluted |
$ 0.75 |
$ 1.05 |
$ 1.00 |
$ 0.94 |
$ 0.91 |
CITIZENS FINANCIAL SERVICES, INC. |
||||||
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS |
||||||
(UNAUDITED) |
||||||
Three Months Ended December 31 |
||||||
2017 |
2016 |
|||||
Average |
Average |
Average |
Average |
|||
Balance (1) |
Interest |
Rate |
Balance (1) |
Interest |
Rate |
|
(dollars in thousands) |
$ |
$ |
% |
$ |
$ |
% |
Short-term investments: |
||||||
Interest-bearing deposits at banks |
8,408 |
3 |
0.14 |
7,718 |
1 |
0.05 |
Interest bearing time deposits at banks |
10,146 |
54 |
2.09 |
6,956 |
34 |
1.92 |
Total investment securities |
254,277 |
1,678 |
2.64 |
331,312 |
2,042 |
2.47 |
Loans, net of discount (2)(3)(4) |
939,938 |
11,796 |
4.98 |
774,635 |
9,787 |
5.03 |
Total interest-earning assets |
1,212,769 |
13,531 |
4.43 |
1,120,621 |
11,864 |
4.21 |
Cash and due from banks |
7,142 |
7,135 |
||||
Bank premises and equipment |
16,583 |
17,123 |
||||
Other assets |
66,145 |
64,333 |
||||
Total non-interest earning assets |
89,870 |
88,591 |
||||
Total assets |
1,302,639 |
1,209,212 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Interest-bearing liabilities: |
||||||
NOW accounts |
326,133 |
310 |
0.38 |
301,073 |
231 |
0.31 |
Savings accounts |
181,784 |
49 |
0.11 |
169,424 |
45 |
0.11 |
Money market accounts |
130,895 |
181 |
0.55 |
119,185 |
130 |
0.43 |
Certificates of deposit |
260,090 |
687 |
1.05 |
265,489 |
646 |
0.97 |
Total interest-bearing deposits |
898,902 |
1,227 |
0.54 |
855,171 |
1,052 |
0.49 |
Other borrowed funds |
97,867 |
432 |
1.75 |
68,456 |
241 |
1.40 |
Total interest-bearing liabilities |
996,769 |
1,659 |
0.66 |
923,627 |
1,293 |
0.56 |
Demand deposits |
157,482 |
146,876 |
||||
Other liabilities |
15,159 |
13,315 |
||||
Total non-interest-bearing liabilities |
172,641 |
160,191 |
||||
Stockholders' equity |
133,229 |
125,394 |
||||
Total liabilities & stockholders' equity |
1,302,639 |
1,209,212 |
||||
Net interest income |
11,872 |
10,571 |
||||
Net interest spread (5) |
3.77% |
3.65% |
||||
Net interest income as a percentage |
||||||
of average interest-earning assets |
3.88% |
3.75% |
||||
Ratio of interest-earning assets |
||||||
to interest-bearing liabilities |
122% |
121% |
||||
(1) Averages are based on daily averages. |
||||||
(2) Includes loan origination and commitment fees. |
||||||
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using |
||||||
a statutory federal income tax rate of 34%. |
||||||
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. |
||||||
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets |
||||||
and the average rate paid on interest-bearing liabilities. |
||||||
Three Months Ended |
|||||
December 31, |
|||||
Reconciliation of net interest income on fully taxable equivalent basis |
2017 |
2016 |
|||
Total interest income |
$ 12,895 |
$ 11,169 |
|||
Total interest expense |
1,659 |
1,293 |
|||
Net interest income |
11,236 |
9,876 |
|||
Tax equivalent adjustment |
636 |
695 |
|||
Net interest income (fully taxable equivalent) |
$ 11,872 |
$ 10,571 |
CITIZENS FINANCIAL SERVICES, INC. |
||||||
CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS |
||||||
(UNAUDITED) |
||||||
Year Ended December 31, |
||||||
2017 |
2016 |
|||||
Average |
Average |
Average |
Average |
|||
Balance (1) |
Interest |
Rate |
Balance (1) |
Interest |
Rate |
|
(dollars in thousands) |
$ |
$ |
% |
$ |
$ |
% |
ASSETS |
||||||
Interest-bearing deposits at banks |
8,790 |
15 |
0.17 |
22,726 |
82 |
0.36 |
Interest bearing time deposits at banks |
8,346 |
171 |
2.05 |
7,232 |
139 |
1.92 |
Total investment securities |
278,951 |
7,023 |
2.52 |
354,362 |
8,470 |
2.39 |
Loans, net of discount (2)(3)(4) |
883,355 |
43,445 |
4.92 |
725,881 |
37,232 |
5.13 |
Total interest-earning assets |
1,179,442 |
50,654 |
4.29 |
1,110,201 |
45,923 |
4.14 |
Cash and due from banks |
6,774 |
7,357 |
||||
Bank premises and equipment |
16,799 |
17,218 |
||||
Other assets |
55,910 |
57,604 |
||||
Total non-interest earning assets |
79,483 |
82,179 |
||||
Total assets |
1,258,925 |
1,192,380 |
||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Interest-bearing liabilities: |
||||||
NOW accounts |
323,105 |
1,139 |
0.35 |
301,681 |
917 |
0.30 |
Savings accounts |
179,557 |
191 |
0.11 |
172,182 |
184 |
0.11 |
Money market accounts |
127,888 |
650 |
0.51 |
118,486 |
523 |
0.44 |
Certificates of deposit |
261,758 |
2,646 |
1.01 |
271,117 |
2,623 |
0.97 |
Total interest-bearing deposits |
892,308 |
4,626 |
0.52 |
863,466 |
4,247 |
0.49 |
Other borrowed funds |
68,536 |
1,213 |
1.77 |
47,004 |
794 |
1.69 |
Total interest-bearing liabilities |
960,844 |
5,839 |
0.61 |
910,470 |
5,041 |
0.55 |
Demand deposits |
153,523 |
145,968 |
||||
Other liabilities |
14,802 |
12,524 |
||||
Total non-interest-bearing liabilities |
168,325 |
158,492 |
||||
Stockholders' equity |
129,756 |
123,418 |
||||
Total liabilities & stockholders' equity |
1,258,925 |
1,192,380 |
||||
Net interest income |
44,815 |
40,882 |
||||
Net interest spread (5) |
3.68% |
3.59% |
||||
Net interest income as a percentage |
||||||
of average interest-earning assets |
3.80% |
3.68% |
||||
Ratio of interest-earning assets |
||||||
to interest-bearing liabilities |
123% |
122% |
||||
(1) Averages are based on daily averages. |
||||||
(2) Includes loan origination and commitment fees. |
||||||
(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using |
||||||
a statutory federal income tax rate of 34%. |
||||||
(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. |
||||||
(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets |
||||||
and the average rate paid on interest-bearing liabilities. |
||||||
Year Ended |
|||||
December 31, |
|||||
Reconciliation of net interest income on fully taxable equivalent basis |
2017 |
2016 |
|||
Total interest income |
$ 48,093 |
$ 43,005 |
|||
Total interest expense |
5,839 |
5,041 |
|||
Net interest income |
42,254 |
37,964 |
|||
Tax equivalent adjustment |
2,561 |
2,918 |
|||
Net interest income (fully taxable equivalent) |
$ 44,815 |
$ 40,882 |
|||
CITIZENS FINANCIAL SERVICES, INC. |
|||||
CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR LOAN LOSSES |
|||||
(UNAUDITED) |
|||||
(Excludes Loans Held for Sale) |
|||||
(In Thousands) |
|||||
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
|
2017 |
2017 |
2017 |
2017 |
2016 |
|
Real estate: |
|||||
Residential |
$ 214,479 |
$ 206,389 |
$ 205,725 |
$ 203,817 |
$ 207,423 |
Commercial |
308,084 |
273,624 |
271,342 |
267,097 |
252,577 |
Agricultural |
239,957 |
207,052 |
188,547 |
156,299 |
123,624 |
Construction |
13,502 |
17,074 |
25,569 |
26,118 |
25,441 |
Consumer |
9,944 |
10,784 |
10,603 |
10,508 |
11,005 |
Other commercial loans |
72,013 |
56,222 |
56,952 |
59,800 |
58,639 |
Other agricultural loans |
37,809 |
34,066 |
32,974 |
24,227 |
23,388 |
State & political subdivision loans |
104,737 |
101,951 |
96,337 |
97,441 |
97,514 |
Total loans |
1,000,525 |
907,162 |
888,049 |
845,307 |
799,611 |
Less allowance for loan losses |
11,190 |
10,447 |
9,979 |
9,405 |
8,886 |
Net loans |
$ 989,335 |
$ 896,715 |
$ 878,070 |
$ 835,902 |
$ 790,725 |
Past due and non-performing assets |
|||||
Total Loans past due 30-89 days and still accruing |
$ 3,489 |
$ 3,360 |
$ 2,927 |
$ 2,548 |
$ 2,999 |
Non-accrual loans |
$ 10,171 |
$ 11,821 |
$ 11,511 |
$ 10,482 |
$ 11,454 |
Loans past due 90 days or more and accruing |
555 |
173 |
812 |
1,015 |
405 |
Non-performing loans |
$ 10,726 |
$ 11,994 |
$ 12,323 |
$ 11,497 |
$ 11,859 |
OREO |
1,119 |
1,570 |
1,194 |
1,248 |
1,036 |
Total Non-performing assets |
$ 11,845 |
$ 13,564 |
$ 13,517 |
$ 12,745 |
$ 12,895 |
3 Months |
3 Months |
3 Months |
3 Months |
3 Months |
|
Ended |
Ended |
Ended |
Ended |
Ended |
|
Analysis of the Allowance for loan Losses |
December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
(In Thousands) |
2017 |
2017 |
2017 |
2017 |
2016 |
Balance, beginning of period |
$ 10,447 |
$ 9,979 |
$ 9,405 |
$ 8,886 |
$ 8,194 |
Charge-offs |
(73) |
(56) |
(65) |
(119) |
(68) |
Recoveries |
16 |
24 |
14 |
23 |
10 |
Net (charge-offs) recoveries |
(57) |
(32) |
(51) |
(96) |
(58) |
Provision for loan losses |
800 |
500 |
625 |
615 |
750 |
Balance, end of period |
$ 11,190 |
$ 10,447 |
$ 9,979 |
$ 9,405 |
$ 8,886 |
CITIZENS FINANCIAL SERVICES, INC. |
||||
Reconciliation of GAAP and Non-GAAP Financial Measures |
||||
(in thousands, except share data) |
||||
Three Months Ended |
Year Ended |
|||
December 31, |
December 31, |
|||
2017 |
2016 |
2017 |
2016 |
|
GAAP net income |
$ 2,604 |
$ 3,171 |
$ 13,025 |
$ 12,638 |
Impact of the Tax Cuts and Jobs Act |
1,531 |
- |
1,531 |
- |
Non-GAAP operating earnings |
$ 4,135 |
$ 3,171 |
$ 14,556 |
$ 12,638 |
Tangible Equity |
||||
Stockholders Equity - GAAP |
$ 129,011 |
$ 123,268 |
$ 129,011 |
$ 123,268 |
Accumulated other comprehensive loss |
(3,398) |
(1,392) |
(3,398) |
(1,392) |
Intangible Assets |
25,249 |
23,185 |
25,249 |
23,185 |
Non-GAAP Total Tangible Book Value |
107,160 |
101,475 |
107,160 |
101,475 |
Shares outstanding adjusted for June 2017 stock Dividend |
3,486,874 |
3,485,268 |
3,486,874 |
3,485,268 |
Tangible Book value per share |
30.73 |
29.12 |
30.73 |
29.12 |
Return on average assets (ROA) |
0.80% |
1.05% |
1.03% |
1.06% |
Impact of the Tax Cuts and Jobs Act |
0.46% |
0.00% |
0.13% |
0.00% |
Non-GAAP operating ROA |
1.26% |
1.05% |
1.16% |
1.06% |
Return on average equity (ROE) |
7.82% |
10.12% |
10.04% |
10.24% |
Impact of the Tax Cuts and Jobs Act |
4.49% |
0.00% |
1.18% |
0.00% |
Non-GAAP operating ROE |
12.31% |
10.12% |
11.22% |
10.24% |
Basic Earnings per Share (EPS) |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Impact of the Tax Cuts and Jobs Act |
0.44 |
- |
0.44 |
- |
Non-GAAP basic operating EPS |
$ 1.19 |
$ 0.91 |
$ 4.18 |
$ 3.60 |
Dilutive Earnings per Share (EPS) |
$ 0.75 |
$ 0.91 |
$ 3.74 |
$ 3.60 |
Impact of the Tax Cuts and Jobs Act |
0.44 |
- |
0.44 |
- |
Non-GAAP dilutive operating EPS |
$ 1.19 |
$ 0.91 |
$ 4.18 |
$ 3.60 |
SOURCE Citizens Financial Services, Inc.
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article