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23.07.2013 20:59:00
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Citizens Financial Services, Inc. Reports Second Quarter 2013 Earnings
MANSFIELD, Pa., July 23, 2013 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC BB: CZFS), parent company of First Citizens Community Bank, has released its unaudited financial performance for the six months ended June 30, 2013.
For the three months ended June 30, 2013, net income totaled $3,280,000 which compares to net income of $3,753,000 for the second quarter of 2012. This represents a decrease of $473,000, or 12.6%. Earnings per share of $1.08 for the second quarter compares to $1.23 last year. Annualized return on equity for the comparable periods was 14.77% and 18.72%, while return on assets was 1.49% and 1.69%, respectively.
For the six months ended June 30, 2013, net income totaled $6,567,000 which compares to $7,202,000 for the same period last year. This represents a decrease of $635,000, or 8.8%. Earnings per share of $2.17 decreased 7.7% from $2.35 per share last year. Annualized return on equity for the comparable periods was 14.99% and 18.25%, while return on assets was 1.50% and 1.63%, respectively. CEO and President Randall E. Black stated, "Our financial performance continues to remain strong and better than peer. As expected, results for 2013 are negatively impacted by the current low interest rate environment, which has resulted in margin compression as cash flows are being invested at lower yields."
Net interest income, before the provision for loan losses, decreased from $15,223,000 for the six months ended June 30, 2012 to $14,664,000 in 2013. The decrease of $559,000, or 3.7%, is reflective of declining margins. On a tax equivalent basis, the net interest margin has decreased from 4.04% last year to 3.87% this year. The tax equivalent yields on interest earning assets decreased from 5.02% for the first six months of 2012 to 4.67% this year. "As expected, the sluggish economy and persistent interest rate environment has continued to impact our margins. Despite the moderate growth in interest earning assets from a year ago, particularly loans, the additional assets are added at lower rates than those assets that are maturing or re-pricing. This has been offset somewhat by reducing our cost of funds, which has decreased from 1.14% last year to .95% this year", added Mr. Black.
At June 30, 2013, total assets were $879.1 million, which was a decrease of $3.3 million from total assets of $882.4 million at December 31, 2012. From year-end 2012, the investment portfolio has decreased $2.3 million to $307.9 million at June 30, 2013. Net loans of $508.7 million as of the end of June have increased $13.1 million, or 2.6%, compared to December 31, 2012 and have increased $18.3 million from June 30, 2012. Part of this growth has been the success in Luzerne and Lackawanna counties since opening a loan production office in the latter part of 2012. Asset quality remains strong. As of June 30, 2013, non-performing assets totaled $9.1 million and represented 1.77% of loans. This compares to 1.83% as of December 31, 2012. Through June 2013, the provision for loan loss was $225,000 compared to $210,000 recorded last year. The annualized net charge-offs as a percent of average loans remains very low at .01%.
Stockholders' equity totaled $88.9 million at June 30, 2013, which compares to $89.5 million at December 31, 2012. The decrease is attributable to a decrease in the unrealized gain on available for sale investment securities. The recent increase in long-term interest rates has resulted in a decrease in the fair value of investment securities. On June 28, 2013 a 5% stock dividend was paid to shareholders of record on June 21, 2013. Additionally, a cash dividend of $.285 per share was also paid on June 28th, which equates to $.271 per share after giving retroactive consideration to the 5% stock dividend. The cash and stock dividend reflects the Board of Directors' desire to provide total shareholder return to the shareholder base.
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) | 2013 | 2012 | 2012 |
ASSETS: | |||
Cash and due from banks: | |||
Noninterest-bearing | $ 7,928 | $ 12,307 | $ 12,525 |
Interest-bearing | 3,642 | 14,026 | 5,243 |
Total cash and cash equivalents | 11,570 | 26,333 | 17,768 |
Available-for-sale securities | 307,935 | 310,252 | 323,131 |
Loans held for sale | 796 | 1,458 | - |
Loans (net of allowance for loan losses: $6,989 at June 30, 2013; | |||
$6,784 at December 31, 2012 and $6,650 at June 30, 2012) | 508,747 | 495,679 | 490,482 |
Premises and equipment | 11,396 | 11,521 | 11,515 |
Accrued interest receivable | 3,821 | 3,816 | 3,800 |
Goodwill | 10,256 | 10,256 | 10,256 |
Bank owned life insurance | 14,427 | 14,177 | 13,919 |
Other assets | 10,128 | 8,935 | 10,479 |
TOTAL ASSETS | $ 879,076 | $ 882,427 | $ 881,350 |
LIABILITIES: | |||
Deposits: | |||
Noninterest-bearing | $ 86,852 | $ 89,494 | $ 86,218 |
Interest-bearing | 661,162 | 647,602 | 652,549 |
Total deposits | 748,014 | 737,096 | 738,767 |
Borrowed funds | 33,993 | 46,126 | 47,066 |
Accrued interest payable | 964 | 1,143 | 1,222 |
Other liabilities | 7,223 | 8,587 | 7,754 |
TOTAL LIABILITIES | 790,194 | 792,952 | 794,809 |
STOCKHOLDERS' EQUITY: | |||
Preferred Stock $1.00 par value; authorized | |||
3,000,000 shares at June 30, 2013, December 31, 2012 and June 30, 2012; | |||
none issued in 2013 or 2012 | - | - | - |
Common stock | |||
$1.00 par value; authorized 15,000,000 shares at June 30, 2013, December 31, 2012 and | |||
June 30, 2012; issued 3,305,517 shares at June 30, 2013; 3,161,324 at | |||
December 31, 2012 and 3,132,866 shares at June 30, 2012 | 3,306 | 3,161 | 3,133 |
Additional paid-in capital | 23,545 | 16,468 | 15,364 |
Retained earnings | 69,538 | 71,813 | 68,813 |
Accumulated other comprehensive income | (713) | 4,631 | 4,990 |
Treasury stock, at cost: 267,006 shares at June 30, 2013; 262,921 shares at | |||
December 31, 2012 and 243,784 shares at June 30, 2012 | (6,794) | (6,598) | (5,759) |
TOTAL STOCKHOLDERS' EQUITY | 88,882 | 89,475 | 86,541 |
TOTAL LIABILITIES AND | |||
STOCKHOLDERS' EQUITY | $ 879,076 | $ 882,427 | $ 881,350 |
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) | 2013 | 2012 | 2013 | 2012 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 7,141 | $ 7,439 | $ 14,278 | $ 14,904 |
Interest-bearing deposits with banks | 9 | 1 | 19 | 6 |
Investment securities: | ||||
Taxable | 936 | 1,237 | 1,899 | 2,434 |
Nontaxable | 844 | 920 | 1,713 | 1,874 |
Dividends | 18 | 16 | 38 | 32 |
TOTAL INTEREST INCOME | 8,948 | 9,613 | 17,947 | 19,250 |
INTEREST EXPENSE: | ||||
Deposits | 1,287 | 1,555 | 2,615 | 3,221 |
Borrowed funds | 310 | 393 | 668 | 806 |
TOTAL INTEREST EXPENSE | 1,597 | 1,948 | 3,283 | 4,027 |
NET INTEREST INCOME | 7,351 | 7,665 | 14,664 | 15,223 |
Provision for loan losses | 75 | 105 | 225 | 210 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR LOAN LOSSES | 7,276 | 7,560 | 14,439 | 15,013 |
NON-INTEREST INCOME: | ||||
Service charges | 1,079 | 1,129 | 2,103 | 2,207 |
Trust | 169 | 151 | 370 | 324 |
Brokerage and insurance | 121 | 75 | 213 | 225 |
Gains on loans sold | 50 | 131 | 161 | 185 |
Investment securities gains, net | 98 | 213 | 294 | 321 |
Earnings on bank owned life insurance | 126 | 126 | 250 | 250 |
Other | 100 | 104 | 204 | 233 |
TOTAL NON-INTEREST INCOME | 1,743 | 1,929 | 3,595 | 3,745 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 2,795 | 2,668 | 5,600 | 5,421 |
Occupancy | 312 | 314 | 654 | 624 |
Furniture and equipment | 113 | 96 | 215 | 202 |
Professional fees | 188 | 224 | 417 | 492 |
FDIC insurance | 113 | 115 | 225 | 238 |
Pennsylvania shares tax | 182 | 160 | 365 | 326 |
Other | 1,129 | 988 | 2,178 | 2,090 |
TOTAL NON-INTEREST EXPENSES | 4,832 | 4,565 | 9,654 | 9,393 |
Income before provision for income taxes | 4,187 | 4,924 | 8,380 | 9,365 |
Provision for income taxes | 907 | 1,171 | 1,813 | 2,163 |
NET INCOME | $ 3,280 | $ 3,753 | $ 6,567 | $ 7,202 |
PER COMMON SHARE DATA: | ||||
Net Income - Basic | $ 1.08 | $ 1.23 | $ 2.17 | $ 2.35 |
Net Income - Diluted | $ 1.08 | $ 1.23 | $ 2.16 | $ 2.35 |
Cash Dividends Paid | $ 0.271 | $ 0.283 | $ 0.543 | $ 0.562 |
Number of shares used in computation - basic | 3,031,279 | 3,058,663 | 3,032,491 | 3,063,500 |
Number of shares used in computation - diluted | 3,032,857 | 3,060,072 | 3,033,272 | 3,064,124 |
Financial Highlights | ||||
Three Months Ended | Six Months Ended | |||
June 30 | June 30 | |||
2013 | 2012 | 2013 | 2012 | |
Performance Ratios and Share Data: | ||||
Return on average assets (annualized) | 1.49% | 1.69% | 1.50% | 1.63% |
Return on average equity (annualized) | 14.77% | 18.72% | 14.99% | 18.25% |
Net interest margin (tax equivalent) | 3.85% | 4.03% | 3.87% | 4.04% |
Cash dividends paid per share | $ 0.271 | $ 0.283 | $ 0.543 | $ 0.562 |
Earnings per share - basic | $ 1.08 | $ 1.23 | $ 2.17 | $ 2.35 |
Earnings per share - diluted | $ 1.08 | $ 1.23 | $ 2.16 | $ 2.35 |
Number of shares used in computation - basic | 3,031,279 | 3,058,663 | 3,032,491 | 3,063,500 |
Number of shares used in computation - diluted | 3,032,857 | 3,060,072 | 3,033,272 | 3,064,124 |
Balance Sheet Highlights (dollars in thousands): | June 30, 2013 | December 31, 2012 | June 30, 2012 | |
Assets | $ 879,076 | $ 882,427 | $ 881,350 | |
Investment securities: | ||||
Available for sale | 307,935 | 310,252 | 323,131 | |
Loans (net of unearned income) | 515,736 | 502,463 | 497,132 | |
Allowance for loan losses | 6,989 | 6,784 | 6,650 | |
Deposits | 748,014 | 737,096 | 738,767 | |
Stockholders' Equity | 88,882 | 89,475 | 86,541 | |
Non-performing assets | 9,129 | 9,189 | 9,403 | |
Non-performing assets to total loans | 1.77% | 1.83% | 1.89% | |
Annualized net charge-offs to total loans | 0.01% | 0.02% | 0.02% | |
Average Leverage Ratio | 10.18% | 9.70% | 9.20% | |
Common shares outstanding | 3,038,511 | 2,898,402 | 2,881,266 | |
Book value per share | $ 29.49 | $ 27.89 | $ 26.64 | |
SOURCE Citizens Financial Services, Inc.
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