CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FULL YEAR AND FOURTH QUARTER 2021 FINANCIAL RESULTS
MANSFIELD, Penn., Jan. 28, 2022 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC Pink: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three months and year ended December 31, 2021.
Highlights
- Net income was $29.1 million for 2021, which is 16.0% higher than 2020's net income. The effective tax rate for 2021 was 17.6% compared to 17.3% in 2020.
- Net income was $6.9 million for the three months ended December 31, 2021, which is 3.9% less than the net income for 2020's comparable period. The effective tax rate for the three months ended December 31, 2021 was 18.3% compared to 17.8% in the comparable period in 2020.
- Net interest income before the provision for loan losses was $66.1 million for the year ended December 31, 2021, an increase of $3.9 million, or 6.3%, over 2020.
- Non-performing assets decreased $4.3 million during 2021 and totaled $8,842,000 as of December 31, 2021. As a percent of loans, non-performing assets decreased from 0.93% at December 31, 2020 to 0.61% at December 31, 2021.
- Return on average equity for the three months (annualized) and the year ended December 31, 2021 was 13.11% and 14.26% compared to 15.20% and 14.21% for the three months (annualized) and the year ended December 31, 2020, respectively.
- Return on average tangible equity (non-GAAP) for the three months (annualized) and the year ended December 31, 2021 was 15.53% and 17.01% compared to 18.37% and 17.16% for the three months (annualized) and the year ended December 31, 2020, respectively. (1)
- Return on average assets for the three months (annualized) and the year ended December 31, 2021 was 1.34% and 1.45% compared to 1.55% and 1.46% for the three months (annualized) and the year ended December 31, 2020, respectively.
Covid 19 pandemic response and loan profile
- During 2021, the Company participated in the Paycheck Protection Program (PPP) for loans provided under the auspices of the Small Business Administration (SBA). As of December 31, 2021, 64 loans with a balance of $6.8 million remain outstanding under this program. During 2021, we originated 388 loans with aggregate balances of $24.3 million. As of December 31, 2021, 6 loans that were originated under this program in 2020 remain outstanding and have a balance of $806,000. The loans earn interest at 1% per annum and the processing fee paid by the SBA will be accreted into income over the life of the loans. The SBA has issued guidance for forgiveness with a streamlined approach for loans of $150,000 or less. Of the PPP loans outstanding, 46 loans, or 71.9% of the remaining PPP loans, had an original balance less than $150,000. The outstanding balance for these 46 loans as of December 31, 2021 was approximately $1.5 million.
- Under our COVID loan modification program, during 2021 we provided relief to 19 customers with outstanding balances of $26.7 million, which includes residential, commercial and agricultural customers. As of December 31, 2021, all loans had returned to their original terms that were modified under this program.
- The Company tracks industry concentrations to identify risks that could lead to additional credit risk exposure. As a result of the Covid 19 pandemic, the Company has determined that hotels/motels, restaurants, and amusement/theme parks represent a higher level of credit risk. At December 31, 2021, the Company had limited loan concentrations to these industries as follows:
- Hotels/Motels - $82.4 million or 5.7% of outstanding loans
- Restaurants - $17.7 million or 1.2% of outstanding loans
- Amusement/Theme parks - $8.9 million, or 0.6% of outstanding loans
2021 Compared to 2020
- For 2021, net income totaled $29,118,000 which compares to net income of $25,103,000 for 2020, an increase of $4,015,000 or 16.0%. Basic earnings per share of $7.38 for 2021 compares to $6.53 for last year. Return on equity for 2021 and 2020 was 14.26% and 14.21%, while return on assets was 1.45% and 1.46%, respectively.
- Net interest income before the provision for loan loss for 2021 totaled $66,112,000 compared to $62,191,000 for 2020, resulting in an increase of $3,921,000, or 6.3%. Average interest earning assets increased $287.8 million for 2021 compared to 2020, primarily due to the assets acquired as part of the MidCoast acquisition in the second quarter of 2020 being outstanding for the entire period of 2021 and organic growth primarily in the Delaware region. Average loans increased $133.4 million while average investment securities increased $88.5 million. The yield on interest earning assets decreased 53 basis points to 3.89%, while the cost of interest-bearing liabilities decreased 15 basis points to 0.49%. The yield on interest earning assets in 2020 benefitted approximately $820,000 from the pay-off of two purchase credit impaired loans acquired as part of The First National Bank of Fredericksburg acquisition in 2015. The decrease in the cost of interest-bearing liabilities was due to the Federal Reserve rate cuts made in response to the COVID-19 pandemic in the first quarter of 2020. The tax effected net interest margin for 2021 was 3.52% compared to 3.92% for last year.
- The provision for loan losses for 2021 was $1,550,000 compared to $2,400,000 for 2020, a decrease of $850,000. The decrease in the provision is due to less organic loan growth in 2021 compared to 2020 and improved credit metrics for the Bank in 2021.
- Total non-interest income was $12,305,000 for 2021, which is $883,000 more than the non-interest income of $11,422,000 for 2020. The primary drivers were the earnings on bank owned life insurance, which increased $1,133,000 as the result of the passing of two former employees, an increase in equity security gains of $380,000 as a result of market performance and an increase in service charge income of $534,000 as a result of waiving fees in 2020 in response to the pandemic. Other income decreased $576,000 in 2021 compared to 2020 due to a decrease in fee income on derivative transactions for customers. The gain on loans sold decreased $885,000 due to decrease in the number of loans sold in 2021 compared to 2020 due to fewer customers refinancing loans.
- Total non-interest expenses for 2021 totaled $41,550,000 compared to $40,847,000 for the same period last year, which is an increase of $703,000. The primary driver of the increase was salary and benefit costs and occupancy costs, which increased compared to 2020 due to the additional headcount and branches acquired as part of the MidCoast acquisition.
- The provision for income taxes increased $936,000 when comparing 2021 to 2020 as a result of an increase in income before income tax of $4,951,000. The effective tax rate was 17.6% and 17.3% for 2021 and 2020, respectively. It should be noted the earnings on bank owned life insurance are exempt from federal income tax.
Fourth Quarter of 2021 Compared to the Fourth Quarter of 2020
- For the three months ended December 31, 2021, net income totaled $6,944,000 which compares to net income of $7,227,000 for the comparable period of 2020, a decrease of $283,000 or 3.9%. Basic earnings per share of $1.76 for the three months ended December 31, 2021 compares to $1.83 for the 2020 comparable period. Annualized return on equity for the three months ended December 31, 2021 and 2020 was 13.11% and 15.20%, while annualized return on assets was 1.34% and 1.55%, respectively.
- Net interest income before the provision for loan losses for the three months ended December 31, 2021 totaled $16,869,000 compared to $16,545,000 for the three months ended December 31, 2020, resulting in an increase of $324,000. Average interest earning assets increased $214.5 million for the three months ended December 31, 2021 compared to the same period last year as a result of the interest bearing cash, investments and organic loan growth funded by deposit growth. Average loans increased $59.8 million while average investment securities increased $107.3 million and average interest bearing cash holdings increased $49.9 million. The tax effected net interest margin for the three months ended December 31, 2021 was 3.44% compared to 3.82% for the same period last year, which was impacted by the decrease in the average yield on interest earning assets of 47 basis points to 3.77%.
- No provision for loan losses was recorded in the fourth quarter of 2021 due to improved credit metrics in the fourth quarter and limited loan activity in the fourth quarter. The provision for the fourth quarter of 2020 was $900,000 due to $39.4 million of net organic growth during that quarter. The provision for 2020 was also impacted more heavily by the COVID-19 pandemic.
- Total non-interest income was $2,512,000 for the three months ended December 31, 2021, which is $1,452,000 less than the comparable period last year. The primary drivers were a decrease in the gains on loans sold of $712,000 due to a decrease in the amount of loans sold compared to the fourth quarter of 2020 and a decrease in other income of $728,000 due to fee income on derivative transactions for customers.
- Total non-interest expenses for the three months ended December 31, 2021 totaled $10,883,000 compared to $10,821,000 for the same period last year, which is an increase of $62,000, or 0.6%. The primary driver of the increase was other expenses, which increased $432,000, which was driven by a partial settlement of the Company's pension plan in the fourth quarter due to lump sum distributions to former employees of the Company.
- The provision for income taxes decreased $7,000 when comparing the three months ended December 31, 2021 to the same period in 2020 as a result of a decrease in income before income tax of $290,000. The effective tax rate was 18.3% and 17.8% for the three months ended December 31, 2021 and 2020, respectively.
Balance Sheet and Other Information:
- At December 31, 2021, total assets were $2.14 billion compared to $1.89 billion at December 31, 2020. The loan to deposit ratio as of December 31, 2021 was 78.51% compared to 88.45% as of December 31, 2020.
- Available for sale securities of $412.4 million at December 31, 2021 increased $117.2 million from December 31, 2020. The yield on the investment portfolio decreased from 2.55% to 1.96% on a tax equivalent basis due to securities purchased at a discount that were called in the first quarter of 2020 and purchases made in a lower rate environment in the second half of 2020 and all of 2021.
- Net loans as of December 31, 2021 totaled $1.42 billion and increased $34.8 million from December 31, 2020 as a result of organic growth in the Delaware market offset by PPP loan forgiveness.
- The allowance for loan losses totaled $17,304,000 at December 31, 2021 which is an increase of $1,489,000 from December 31, 2020. The increase is due to recording a provision for loan losses of $1,550,000 and recoveries of $153,000, offset by charge-offs of $214,000. The allowance as a percent of total loans was 1.20% as of December 31, 2021 and 1.13% as of December 31, 2020.
- Deposits increased $247.3 million from December 31, 2020, to $1.84 billion at December 31, 2021, primarily due to customers holding more cash due to the pandemic and government stimulus funds provided to customers. Brokered CD's decreased $23.8 million. Non-interest-bearing deposits increased $54.3 million due to additional cash holdings by customers.
- Borrowed funds decreased $14.9 million from December 31, 2020 to $74.0 million at December 31, 2021. The Company paid off $26.8 million of long term borrowings during the year, which were offset by a $2.1 million increase in repurchase agreements and the issuance of $10.0 million of subordinated debt in the second quarter of 2021.
- Stockholders' equity totaled $212.5 million at December 31, 2021, compared to $194.3 million at December 31, 2020, an increase of $18.2 million. The increase was attributable to net income for 2021 totaling $29.1 million, offset by cash dividends totaling $7.4 million and net treasury stock activity of $934,000. As a result of changes in interest rates impacting the fair value of investment securities, derivative instruments and the Company's pension plan, accumulated other comprehensive income, decreased $2.7 million from December 31, 2020.
Dividend Declared
On December 6, 2021, the Board of Directors declared a cash dividend of $0.470 per share, which was paid on December 30, 2021 to shareholders of record at the close of business on December 16, 2021. This quarterly cash dividend is an increase of 3.10% over the regular cash dividend of $0.456 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2021.
Citizens Financial Services, Inc. has nearly 1,900 shareholders, the majority of whom reside in markets where its offices are located.
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, duration and impact of the COVID-19 pandemic; 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.
(1) See reconciliation of GAAP and non-GAAP financial measures at the end of the press release
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED FINANCIAL HIGHLIGHTS | ||||
(UNAUDITED) | ||||
(Dollars in thousands, except share and per share data) | ||||
As of or For The | As of or For The | |||
Three Months Ended | Year Ended | |||
December 31, | December 31, | |||
2021 | 2020 | 2021 | 2020 | |
Income and Performance Ratios | ||||
Net Income | $ 6,944 | $ 7,227 | $ 29,118 | $ 25,103 |
Return on average assets (annualized) | 1.34% | 1.55% | 1.45% | 1.46% |
Return on average equity (annualized) | 13.11% | 15.20% | 14.26% | 14.21% |
Return on average tangible equity (annualized) (a) | 15.53% | 18.37% | 17.01% | 17.16% |
Net interest margin (tax equivalent)(a) | 3.44% | 3.82% | 3.52% | 3.92% |
Earnings per share - basic (b) | $ 1.76 | $ 1.83 | $ 7.38 | $ 6.53 |
Earnings per share - diluted (b) | $ 1.76 | $ 1.83 | $ 7.38 | $ 6.53 |
Cash dividends paid per share (b) | $ 0.470 | $ 0.456 | $ 1.861 | $ 1.900 |
Number of shares used in computation - basic (b) | 3,943,334 | 3,951,217 | 3,945,299 | 3,844,241 |
Number of shares used in computation - diluted (b) | 3,943,387 | 3,951,225 | 3,945,299 | 3,846,082 |
Asset quality | ||||
Allowance for loan and lease losses | $ 17,304 | $ 15,815 | ||
Non-performing assets | $ 8,842 | $ 13,093 | ||
Allowance for loan and lease losses/total loans | 1.20% | 1.13% | ||
Non-performing assets to total loans | 0.61% | 0.93% | ||
Annualized net charge-offs to total loans | 0.01% | 0.07% | 0.00% | 0.03% |
Equity | ||||
Book value per share (b) | $ 53.91 | $ 48.40 | ||
Tangible Book value per share (a) (b) | $ 45.54 | $ 40.05 | ||
Market Value (Last reported trade of month) | $ 60.70 | $ 60.00 | ||
Common shares outstanding | 3,944,420 | 3,921,408 | ||
Other | ||||
Average Full Time Equivalent Employees | 295.2 | 294.8 | 290.8 | 280.7 |
Loan to Deposit Ratio | 78.51% | 88.45% | ||
Trust assets under management | $ 154,840 | $ 150,348 | ||
Brokerage assets under management | $ 282,058 | $ 241,003 | ||
Balance Sheet Highlights | December 31, | December 31, | ||
2021 | 2020 | |||
Assets | $ 2,143,863 | $ 1,891,674 | ||
Investment securities | 414,672 | 297,120 | ||
Loans (net of unearned income) | 1,441,533 | 1,405,281 | ||
Allowance for loan losses | 17,304 | 15,815 | ||
Deposits | 1,836,151 | 1,588,858 | ||
Stockholders' Equity | 212,492 | 194,259 | ||
(a) See reconcilation of GAAP and Non-GAAP measures at the end of the press release | ||||
(b) Prior period amounts were adjusted to reflect stock dividends. | ||||
CITIZENS FINANCIAL SERVICES, INC. | ||
CONSOLIDATED BALANCE SHEET | ||
(UNAUDITED) | ||
December 31, | December 31, | |
(in thousands except share data) | 2021 | 2020 |
ASSETS: | ||
Cash and due from banks: | ||
Noninterest-bearing | $ 14,051 | $ 16,374 |
Interest-bearing | 158,782 | 52,333 |
Total cash and cash equivalents | 172,833 | 68,707 |
Interest bearing time deposits with other banks | 11,026 | 13,758 |
Equity securities | 2,270 | 1,931 |
Available-for-sale securities | 412,402 | 295,189 |
Loans held for sale | 4,554 | 14,640 |
Loans (net of allowance for loan losses: $17,304 at December 31, 2021 and | ||
$15,815 at December 31, 2020) | 1,424,229 | 1,389,466 |
Premises and equipment | 17,016 | 16,948 |
Accrued interest receivable | 5,235 | 5,998 |
Goodwill | 31,376 | 31,376 |
Bank owned life insurance | 38,503 | 32,589 |
Other intangibles | 1,627 | 1,668 |
Other assets | 22,792 | 19,404 |
TOTAL ASSETS | $ 2,143,863 | $ 1,891,674 |
LIABILITIES: | ||
Deposits: | ||
Noninterest-bearing | $ 358,073 | $ 303,762 |
Interest-bearing | 1,478,078 | 1,285,096 |
Total deposits | 1,836,151 | 1,588,858 |
Borrowed funds | 73,977 | 88,838 |
Accrued interest payable | 711 | 1,017 |
Other liabilities | 20,532 | 18,702 |
TOTAL LIABILITIES | 1,931,371 | 1,697,415 |
STOCKHOLDERS' EQUITY: | ||
Preferred Stock $1.00 par value; authorized | ||
3,000,000 shares; none issued in 2021 or 2020 | - | - |
Common stock | ||
$1.00 par value; authorized 25,000,000 shares at December 31, 2021 and December 31, 2020: | ||
issued 4,388,901 shares at December 31, 2021 and 4,350,342 shares at December 31, 2020 | 4,389 | 4,350 |
Additional paid-in capital | 78,395 | 75,908 |
Retained earnings | 146,010 | 126,627 |
Accumulated other comprehensive (loss) income | (155) | 2,587 |
Treasury stock, at cost: 444,481 shares at December 31, 2021 and 428,492 shares | ||
at December 31, 2020 | (16,147) | (15,213) |
TOTAL STOCKHOLDERS' EQUITY | 212,492 | 194,259 |
TOTAL LIABILITIES AND | ||
STOCKHOLDERS' EQUITY | $ 2,143,863 | $ 1,891,674 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED STATEMENT OF INCOME | ||||
(UNAUDITED) | ||||
Three Months Ended | Year Ended | |||
December 31, | December 31, | |||
(in thousands, except share and per share data) | 2021 | 2020 | 2021 | 2020 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 16,802 | $ 16,775 | $ 66,371 | $ 63,538 |
Interest-bearing deposits with banks | 112 | 103 | 447 | 401 |
Investment securities: | ||||
Taxable | 955 | 878 | 3,820 | 4,090 |
Nontaxable | 549 | 532 | 2,201 | 1,869 |
Dividends | 87 | 123 | 378 | 398 |
TOTAL INTEREST INCOME | 18,505 | 18,411 | 73,217 | 70,296 |
INTEREST EXPENSE: | ||||
Deposits | 1,292 | 1,572 | 5,837 | 6,851 |
Borrowed funds | 344 | 294 | 1,268 | 1,254 |
TOTAL INTEREST EXPENSE | 1,636 | 1,866 | 7,105 | 8,105 |
NET INTEREST INCOME | 16,869 | 16,545 | 66,112 | 62,191 |
Provision for loan losses | - | 900 | 1,550 | 2,400 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR LOAN LOSSES | 16,869 | 15,645 | 64,562 | 59,791 |
NON-INTEREST INCOME: | ||||
Service charges | 1,276 | 1,114 | 4,755 | 4,221 |
Trust | 191 | 261 | 865 | 803 |
Brokerage and insurance | 435 | 356 | 1,625 | 1,297 |
Gains on loans sold | 174 | 886 | 1,283 | 2,168 |
Equity security gains (losses), net | 51 | 235 | 339 | (41) |
Available for sale security gains, net | - | 3 | 212 | 305 |
Earnings on bank owned life insurance | 185 | 181 | 1,828 | 695 |
Other | 200 | 928 | 1,398 | 1,974 |
TOTAL NON-INTEREST INCOME | 2,512 | 3,964 | 12,305 | 11,422 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 6,590 | 6,779 | 25,902 | 24,190 |
Occupancy | 744 | 666 | 2,966 | 2,557 |
Furniture and equipment | 112 | 170 | 519 | 757 |
Professional fees | 373 | 337 | 1,526 | 1,517 |
FDIC insurance expense | 135 | 135 | 522 | 476 |
Pennsylvania shares tax | 24 | 59 | 880 | 868 |
Amortization of intangibles | 46 | 54 | 192 | 216 |
Merger and acquisition | - | - | - | 2,179 |
Software expenses | 318 | 338 | 1,321 | 1,155 |
ORE expenses | 56 | 230 | 439 | 451 |
Other | 2,485 | 2,053 | 7,283 | 6,481 |
TOTAL NON-INTEREST EXPENSES | 10,883 | 10,821 | 41,550 | 40,847 |
Income before provision for income taxes | 8,498 | 8,788 | 35,317 | 30,366 |
Provision for income taxes | 1,554 | 1,561 | 6,199 | 5,263 |
NET INCOME | $ 6,944 | $ 7,227 | $ 29,118 | $ 25,103 |
PER COMMON SHARE DATA: | ||||
Net Income - Basic | $ 1.76 | $ 1.83 | $ 7.38 | $ 6.53 |
Net Income - Diluted | $ 1.76 | $ 1.83 | $ 7.38 | $ 6.53 |
Cash Dividends Paid | $ 0.470 | $ 0.456 | $ 1.861 | $ 1.900 |
Number of shares used in computation - basic | 3,943,334 | 3,951,217 | 3,945,299 | 3,844,241 |
Number of shares used in computation - diluted | 3,943,387 | 3,951,225 | 3,945,299 | 3,846,082 |
CITIZENS FINANCIAL SERVICES, INC. | |||||
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION | |||||
(UNAUDITED) | |||||
(in thousands, except per share data) | Three Months Ended, | ||||
Dec 31, | Sept 30, | June 30, | March 31, | Dec 31, | |
2021 | 2021 | 2021 | 2021 | 2020 | |
Interest income | $ 18,505 | $ 18,342 | $ 18,075 | $ 18,295 | $ 18,411 |
Interest expense | 1,636 | 1,752 | 1,863 | 1,854 | 1,866 |
Net interest income | 16,869 | 16,590 | 16,212 | 16,441 | 16,545 |
Provision for loan losses | - | 400 | 500 | 650 | 900 |
Net interest income after provision for loan losses | 16,869 | 16,190 | 15,712 | 15,791 | 15,645 |
Non-interest income | 2,461 | 2,618 | 2,677 | 3,998 | 3,726 |
Investment securities gains, net | 51 | 234 | 29 | 237 | 238 |
Non-interest expenses | 10,883 | 10,400 | 10,320 | 9,947 | 10,821 |
Income before provision for income taxes | 8,498 | 8,642 | 8,098 | 10,079 | 8,788 |
Provision for income taxes | 1,554 | 1,578 | 1,451 | 1,616 | 1,561 |
Net income | $ 6,944 | $ 7,064 | $ 6,647 | $ 8,463 | $ 7,227 |
Earnings Per Share Basic | $ 1.76 | $ 1.79 | $ 1.69 | $ 2.14 | $ 1.83 |
Earnings Per Share Diluted | $ 1.76 | $ 1.79 | $ 1.69 | $ 2.14 | $ 1.83 |
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, | ||||||
2021 | 2020 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Interest-bearing deposits at banks | 107,948 | 38 | 0.14 | 58,054 | 14 | 0.09 |
Interest bearing time deposits at banks | 11,266 | 74 | 2.57 | 13,758 | 89 | 2.57 |
Investment securities | 400,922 | 1,737 | 1.73 | 293,649 | 1,673 | 2.28 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 202,357 | 2,402 | 4.71 | 204,095 | 2,711 | 5.28 |
Construction loans | 67,907 | 690 | 4.03 | 28,214 | 336 | 4.74 |
Commercial Loans | 758,133 | 9,301 | 4.87 | 692,745 | 8,805 | 5.06 |
Agricultural Loans | 345,420 | 3,757 | 4.32 | 356,317 | 3,927 | 4.38 |
Loans to state & political subdivisions | 46,307 | 367 | 3.14 | 76,421 | 749 | 3.90 |
Other loans | 27,720 | 357 | 5.11 | 30,246 | 390 | 5.13 |
Loans, net of discount (2)(3)(4) | 1,447,844 | 16,874 | 4.62 | 1,388,038 | 16,918 | 4.85 |
Total interest-earning assets | 1,967,980 | 18,723 | 3.77 | 1,753,499 | 18,694 | 4.24 |
Cash and due from banks | 6,421 | 7,021 | ||||
Bank premises and equipment | 17,142 | 17,686 | ||||
Other assets | 73,929 | 91,806 | ||||
Total non-interest earning assets | 97,492 | 116,513 | ||||
Total assets | 2,065,472 | 1,870,012 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
NOW accounts | 476,634 | 301 | 0.25 | 412,472 | 198 | 0.19 |
Savings accounts | 305,962 | 74 | 0.10 | 252,019 | 90 | 0.14 |
Money market accounts | 285,952 | 182 | 0.25 | 229,433 | 202 | 0.35 |
Certificates of deposit | 332,880 | 735 | 0.87 | 382,188 | 1,082 | 1.13 |
Total interest-bearing deposits | 1,401,428 | 1,292 | 0.37 | 1,276,112 | 1,572 | 0.49 |
Other borrowed funds | 76,970 | 344 | 1.78 | 96,565 | 294 | 1.21 |
Total interest-bearing liabilities | 1,478,398 | 1,636 | 0.44 | 1,372,677 | 1,866 | 0.54 |
Demand deposits | 360,645 | 289,632 | ||||
Other liabilities | 14,519 | 17,472 | ||||
Total non-interest-bearing liabilities | 375,164 | 307,104 | ||||
Stockholders' equity | 211,910 | 190,231 | ||||
Total liabilities & stockholders' equity | 2,065,472 | 1,870,012 | ||||
Net interest income | 17,087 | 16,828 | ||||
Net interest spread (5) | 3.34% | 3.70% | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.44% | 3.82% | ||||
Ratio of interest-earning assets | ||||||
to interest-bearing liabilities | 133% | 128% | ||||
(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 21% for 2021 and 2020. See reconciliation of GAAP and non-GAAP measures at the end of the press release. | ||||||
(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. |
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, | ||||||
2021 | 2020 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Short-term investments: | ||||||
Interest-bearing deposits at banks | 108,872 | 124 | 0.11 | 41,330 | 37 | 0.09 |
Total short-term investments | 108,872 | 124 | 0.11 | 41,330 | 37 | 0.09 |
Interest bearing time deposits at banks | 12,527 | 323 | 2.57 | 14,139 | 364 | 2.57 |
Investment securities: | ||||||
Taxable | 252,470 | 4,198 | 1.66 | 188,241 | 4,488 | 2.38 |
Tax-exempt (3) | 104,379 | 2,786 | 2.67 | 80,131 | 2,366 | 2.95 |
Investment securities | 356,849 | 6,984 | 1.96 | 268,372 | 6,854 | 2.55 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 203,062 | 9,867 | 4.86 | 210,696 | 11,161 | 5.30 |
Construction loans | 56,315 | 2,292 | 4.07 | 26,343 | 1,288 | 4.89 |
Commercial Loans | 739,000 | 36,215 | 4.90 | 590,469 | 31,087 | 5.26 |
Agricultural Loans | 349,951 | 15,079 | 4.31 | 357,201 | 16,022 | 4.49 |
Loans to state & political subdivisions | 52,804 | 1,871 | 3.54 | 86,143 | 3,458 | 4.01 |
Other loans | 24,125 | 1,385 | 5.74 | 20,986 | 1,185 | 5.65 |
Loans, net of discount (2)(3)(4) | 1,425,257 | 66,709 | 4.68 | 1,291,838 | 64,201 | 4.97 |
Total interest-earning assets | 1,903,505 | 74,140 | 3.89 | 1,615,679 | 71,456 | 4.42 |
Cash and due from banks | 6,525 | 7,487 | ||||
Bank premises and equipment | 17,194 | 17,286 | ||||
Other assets | 75,410 | 79,305 | ||||
Total non-interest earning assets | 99,129 | 104,078 | ||||
Total assets | 2,002,634 | 1,719,757 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
NOW accounts | 457,189 | 1,387 | 0.30 | 383,931 | 1,102 | 0.29 |
Savings accounts | 290,376 | 322 | 0.11 | 241,429 | 476 | 0.20 |
Money market accounts | 257,937 | 684 | 0.27 | 205,142 | 1,012 | 0.49 |
Certificates of deposit | 351,265 | 3,444 | 0.98 | 345,397 | 4,261 | 1.23 |
Total interest-bearing deposits | 1,356,767 | 5,837 | 0.43 | 1,175,899 | 6,851 | 0.58 |
Other borrowed funds | 84,621 | 1,268 | 1.50 | 93,237 | 1,254 | 1.34 |
Total interest-bearing liabilities | 1,441,388 | 7,105 | 0.49 | 1,269,136 | 8,105 | 0.64 |
Demand deposits | 341,604 | 257,285 | ||||
Other liabilities | 15,420 | 16,662 | ||||
Total non-interest-bearing liabilities | 357,024 | 273,947 | ||||
Stockholders' equity | 204,222 | 176,674 | ||||
Total liabilities & stockholders' equity | 2,002,634 | 1,719,757 | ||||
Net interest income | 67,035 | 63,351 | ||||
Net interest spread (5) | 3.40% | 3.78% | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.52% | 3.92% | ||||
Ratio of interest-earning assets | ||||||
to interest-bearing liabilities | 132% | 127% | ||||
(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 21% for 2021 and 2020. See reconciliation of GAAP and non-GAAP measures at the end of the press release. |
(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. |
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, | |
2021 | 2021 | 2021 | 2021 | 2020 | |
Real estate: | |||||
Residential | $ 201,097 | $ 204,853 | $ 202,171 | $ 203,273 | $ 201,911 |
Commercial | 687,338 | 657,485 | 641,633 | 605,547 | 596,255 |
Agricultural | 312,011 | 312,442 | 310,274 | 315,313 | 315,158 |
Construction | 55,036 | 68,408 | 63,065 | 42,651 | 35,404 |
Consumer | 25,858 | 31,042 | 8,684 | 26,181 | 30,277 |
Other commercial loans | 74,585 | 92,188 | 104,349 | 109,168 | 114,169 |
Other agricultural loans | 39,852 | 28,562 | 33,720 | 41,378 | 48,779 |
State & political subdivision loans | 45,756 | 47,928 | 51,213 | 60,890 | 63,328 |
Total loans | 1,441,533 | 1,442,908 | 1,415,109 | 1,404,401 | 1,405,281 |
Less: allowance for loan losses | 17,304 | 17,334 | 16,931 | 16,560 | 15,815 |
Net loans | $ 1,424,229 | $ 1,425,574 | $ 1,398,178 | $ 1,387,841 | $ 1,389,466 |
Past due and non-performing assets | |||||
Total Loans past due 30-89 days and still accruing | $ 967 | $ 1,482 | $ 1,495 | $ 2,383 | $ 4,120 |
Non-accrual loans | $ 7,616 | $ 8,858 | $ 9,082 | $ 10,680 | $ 10,732 |
Loans past due 90 days or more and accruing | 46 | 83 | 49 | 478 | 525 |
Non-performing loans | $ 7,662 | $ 8,941 | $ 9,131 | $ 11,158 | $ 11,257 |
OREO | 1,180 | 1,277 | 1,811 | 1,720 | 1,836 |
Total Non-performing assets | $ 8,842 | $ 10,218 | $ 10,942 | $ 12,878 | $ 13,093 |
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) | 2021 | 2021 | 2021 | 2021 | 2020 |
Balance, beginning of period | $ 17,334 | $ 16,931 | $ 16,560 | $ 15,815 | $ 15,169 |
Charge-offs | (65) | (7) | (138) | (4) | (276) |
Recoveries | 35 | 10 | 9 | 99 | 22 |
Net (charge-offs) recoveries | (30) | 3 | (129) | 95 | (254) |
Provision for loan losses | - | 400 | 500 | 650 | 900 |
Balance, end of period | $ 17,304 | $ 17,334 | $ 16,931 | $ 16,560 | $ 15,815 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||
(UNAUDITED) | ||||
(Dollars in thousands, except share and per share data) | ||||
As of | ||||
December 31, | ||||
2021 | 2020 | |||
Tangible Equity | ||||
Stockholders Equity - GAAP | $ 212,492 | $ 194,259 | ||
Accumulated other comprehensive loss (income) | 155 | (2,587) | ||
Intangible Assets | (33,003) | (33,044) | ||
Tangible Equity - Non-GAAP | 179,644 | 158,628 | ||
Shares outstanding adjusted for June 2021 stock Dividend | 3,944,420 | 3,960,409 | ||
Tangible Book value per share - non-GAAP | $ 45.54 | $ 40.05 | ||
As of | ||||
December 31, | ||||
2021 | 2020 | |||
Tangible Equity per share | ||||
Stockholders Equity per share - GAAP | $ 53.87 | $ 49.05 | ||
Adjustments for accumulated other comprehensive loss ( income) | 0.04 | (0.65) | ||
Book value per share - GAAP | 53.91 | 48.40 | ||
Adjustments for intangible assets | (8.37) | (8.35) | ||
Tangible Book value per share - Non-GAAP | $ 45.54 | $ 40.05 | ||
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2021 | 2020 | 2021 | 2020 | |
Return on Average Tangible Equity | ||||
Average Stockholders Equity - GAAP | $ 210,801 | $ 193,117 | $ 205,449 | $ 178,789 |
Average Accumulated Other Comprehensive loss ( income) | 1,109 | (2,886) | (1,227) | (2,115) |
Average Intangible Assets | (33,009) | (32,843) | (33,018) | (30,376) |
Average Tangible Equity - Non-GAAP | 178,901 | 157,388 | 171,204 | 146,298 |
Net Income | $ 6,944 | 7,227 | $ 29,118 | $ 25,103 |
Annualized Return on Average Tangible Equity - Non-GAAP | 15.53% | 18.37% | 17.01% | 17.16% |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
Reconciliation of net interest income on fully taxable equivalent basis | 2021 | 2020 | 2021 | 2020 |
Total interest income | $ 18,505 | $ 18,411 | $ 73,217 | $ 70,296 |
Total interest expense | 1,636 | 1,866 | 7,105 | 8,105 |
Net interest income | 16,869 | 16,545 | 66,112 | 62,191 |
Tax equivalent adjustment | 218 | 283 | 923 | 1,160 |
Net interest income (fully taxable equivalent) | $ 17,087 | $ 16,828 | $ 67,035 | $ 63,351 |
SOURCE Citizens Financial Services, Inc.
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