Citizens Financial Services, Inc. Reports Third Quarter 2009 Earnings
Tue Oct 27, 5:00 PM
MANSFIELD, Pa., Oct. 27 /PRNewswire-FirstCall/ -- Citizens Financial Services, Incorporated (OTC Bulletin Board: CZFS.OB), parent company of First Citizens National Bank, has released its unaudited financial performance for the 3rd quarter of 2009.
Year to date net income through September 30, 2009 was $7,206,000 compared with $3,415,000 last year, an increase of $3,791,000 or 111.0%. Earnings per share of $2.51 increased 110.9% from $1.19 per share for the same period last year. The comparison to last year's results is impacted significantly by the $4.1 million other than temporary impairment charge recorded in the third quarter last year related to investments in Freddie Mac preferred stock and a Lehman Brothers corporate bond. Return on equity for the comparable periods was 17.46% and 8.93%, while return on assets was 1.39% and .76%, respectively.
Net income for the three months ended September 30, 2009 totaled $2,388,000 which compares to a net loss of $1,052,000 for the third quarter last year, representing an increase of $3,440,000. As mentioned above, the comparison to last year is impacted by the $4.1 million impairment charge recorded last year. Earnings (loss) per share for the three months ended September 30, 2009 and 2008 were $.83 and $(.37) per share, respectively. Return on equity for the comparable periods was 16.84% and -8.01%, while return on assets was 1.35% and -.69%, for the respective time periods.
Core earnings, which excludes investment securities gains and losses on an after tax basis, has increased $220,000 from last year, or 3.2%. CEO and President Randall E. Black stated, "Our continued outstanding financial performance in 2009 has been achieved despite an increase of approximately $1.4 million, or 12.0%, in operating expenses. Over $925,000 of this increase relates to higher FDIC deposit insurance premiums. The increase in premiums was necessary in order to replenish the FDIC insurance fund, which has declined due to the significant increase in bank failures throughout the country. On an after tax basis, this increase has reduced earnings per share in 2009 by $.21 per share."
As of September 30, 2009, total assets were $707.2 million, which was an increase of $38.6 million from December 31, 2008 and an increase of $86.5 million, or 13.9%, from September 30, 2008. The investment portfolio has increased $69.3 million since September 30, 2008 to a total of $197.5 million. Net loans have increased $19.0 million, or 4.5%, since last year. Total deposits of $579.8 million have increased $33.2 million from December 31, 2008, and $64.9 million from one year ago.
As of September 30, 2009 credit quality remains strong compared to peer. However, the poor economy and higher unemployment rates have had an impact on our credit quality as non-performing assets as a percent of loans were 1.45% which compares to 0.73% at December 31, 2008 and 0.92% as of the end of last September. The increase is attributable to the local economy, including the struggles of the agricultural community. As such, the provision for loan losses for the nine months ended September 30, 2009 was $700,000 compared to $225,000 for the same period last year, an increase of $475,000.
First Citizens remains well capitalized with capital levels well exceeding regulatory levels. Excluding accumulated other comprehensive income, stockholders' equity totaled $57.7 million at September 30, 2009, representing an increase of $7.6 million, or 15.2%, from September 30, 2008. Book value per share at September 30, 2009 was $20.09 compared with $17.59 last September, an increase of 14.2%. In October, a cash dividend of $.25 per share was declared and will be paid on October 30, 2009 to shareholders of record, as of October 16, 2009, an increase of 4.2% over the October 2008 dividend. "During these difficult economic times, it is comforting to know that our financial strength and continued profitability gives us the affordability to continue to provide a very attractive dividend yield to our shareholders," stated 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 17 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)
(in thousands, except share September 30 December 31 September 30
and per share data) 2009 2008 2008
--------------------------- ---- ---- ----
ASSETS:
Cash and due from banks:
Noninterest-bearing $10,844 $9,692 $26,070
Interest-bearing 9,318 10,164 22
------------------ ----- ------ --
Total cash and cash equivalents 20,162 19,856 26,092
Available-for-sale securities 197,544 174,139 128,227
Loans (net of allowance for loan
losses: $4,683 at September 30,
2009, $4,378 at December 31, 2008,
and $4,288 at September 30, 2008) 443,808 428,436 424,857
Premises and equipment 11,896 12,762 12,024
Accrued interest receivable 3,544 2,912 2,776
Goodwill 10,256 10,256 8,605
Bank owned life insurance 12,539 12,176 8,639
Other assets 7,465 8,075 9,504
------------ ----- ----- -----
TOTAL ASSETS $707,214 $668,612 $620,724
============ ======== ======== ========
LIABILITIES:
Deposits:
Noninterest-bearing $56,070 $55,545 $59,300
Interest-bearing 523,777 491,135 455,652
------------------ ------- ------- -------
Total deposits 579,847 546,680 514,952
Borrowed funds 57,790 61,204 52,625
Accrued interest payable 2,075 2,233 2,048
Other liabilities 6,395 5,725 3,625
----------------- ----- ----- -----
TOTAL LIABILITIES 646,107 615,842 573,250
----------------- ------- ------- -------
STOCKHOLDERS' EQUITY:
Common stock
$1.00 par value; authorized
10,000,000 shares; issued
3,076,253 shares at September
30, 2009 and 3,048,289 shares
at December 31, 2008 and September
30, 2008, respectively 3,076 3,048 3,048
Additional paid-in capital 13,455 12,981 12,979
Retained earnings 45,557 41,034 38,370
Accumulated other comprehensive
income 3,365 26 (2,631)
Treasury stock, at cost: 202,287
shares at September 30, 2009,
200,918 shares at December 31,
2008 and 199,575 shares at
September 30, 2008 (4,346) (4,319) (4,292)
--------------------------------- ------ ------ ------
TOTAL STOCKHOLDERS' EQUITY 61,107 52,770 47,474
-------------------------- ------ ------ ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $707,214 $668,612 $620,724
===================== ======== ======== ========
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------ ------------- -------------
(in thousands, except share
and per share data) 2009 2008 2009 2008
--------------------------- ---- ---- ---- ----
INTEREST INCOME:
Interest and fees on loans $7,581 $7,793 $22,616 $23,102
Interest-bearing deposits
with banks 15 28 27 34
Investment securities:
Taxable 1,466 1,142 4,647 3,391
Nontaxable 598 359 1,583 1,048
Dividends 7 23 20 164
------------- --- -- -- ---
TOTAL INTEREST INCOME 9,667 9,345 28,893 27,739
--------------------- ----- ----- ------ ------
INTEREST EXPENSE:
Deposits 2,777 2,837 8,555 8,508
Borrowed funds 500 545 1,519 2,030
-------------- --- --- ----- -----
TOTAL INTEREST EXPENSE 3,277 3,382 10,074 10,538
---------------------- ----- ----- ------ ------
NET INTEREST INCOME 6,390 5,963 18,819 17,201
Provision for loan losses 400 105 700 225
------------------------- --- --- --- ---
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 5,990 5,858 18,119 16,976
-------------------------- ----- ----- ------ ------
NON-INTEREST INCOME:
Service charges 958 944 2,664 2,591
Trust 121 148 397 451
Brokerage and insurance 75 58 228 176
Gains on loans sold 83 4 292 45
Investment securities gains
(losses), net - (4,089) 118 (4,089)
Earnings on bank owned life
insurance 128 90 364 261
Other 87 121 278 368
----- -- --- --- ---
TOTAL NON-INTEREST INCOME
(LOSS) 1,452 (2,724) 4,341 (197)
-------------------------- ----- ------ ----- ----
NON-INTEREST EXPENSES:
Salaries and employee benefits 2,393 2,196 7,018 6,510
Occupancy 272 271 889 866
Furniture and equipment 102 107 336 368
Professional fees 164 156 459 485
FDIC insurance 277 52 1,030 104
Other 1,242 1,250 3,581 3,552
----- ----- ----- ----- -----
TOTAL NON-INTEREST EXPENSES 4,450 4,032 13,313 11,885
--------------------------- ----- ----- ------ ------
Income (loss) before
provision for income taxes 2,992 (898) 9,147 4,894
Provision for income taxes 604 154 1,941 1,479
-------------------------- --- --- ----- -----
NET INCOME (LOSS) $2,388 $(1,052) $7,206 $3,415
================= ====== ======= ====== ======
Earnings Per Share $0.83 $(0.37) $2.51 $1.19
================== ===== ====== ===== =====
Cash Dividends Paid Per Share $0.245 $0.235 $0.730 $0.700
============================= ====== ====== ====== ======
Weighted average number of
shares outstanding 2,873,966 2,877,510 2,873,520 2,879,853
Financial Highlights
--------------------
Three Months Ended Nine Months Ended
September 30 September 30
2009 2008 2009 2008
Performance Ratios and
Share Data:
Return on average assets
(annualized) 1.35% -0.69% 1.39% 0.76%
Return on average equity
(annualized) 16.84% -8.01% 17.46% 8.93%
Net interest margin (tax
equivalent) 4.16% 4.48% 4.24% 4.41%
Cash dividends paid per
share $0.245 $0.235 $0.730 $0.700
Earnings per share $0.83 $(0.37) $2.51 $1.19
Weighted average
shares
outstanding 2,873,966 2,877,510 2,873,520 2,879,853
Balance Sheet Highlights September 30, December 31, September 30,
(dollars in thousands): 2009 2008 2008
---- ---- ----
Assets $707,214 $668,612 $620,724
Investment securities:
Available for sale 197,544 174,139 128,227
Loans (net of unearned
income) 448,491 432,814 429,145
Allowance for loan losses 4,683 4,378 4,288
Deposits 579,847 546,680 514,952
Stockholders' Equity 61,107 52,770 47,474
Non-performing assets 6,517 3,176 3,937
Non-performing assets to
total loans 1.45% 0.73% 0.92%
Average Leverage Ratio 8.04% 7.91% 8.10%
Common shares outstanding 2,873,966 2,847,371 2,848,715
Book value per share $20.09 $18.52 $17.59
SOURCE Citizens Financial Services, Inc.
158.94 (1.43%)
