EX-99 2 release.htm EARNINGS RELEASE AND FINANCIALS earnings release and financials

PRESS RELEASE
First Citizens National Bank - 15 South Main Street - Mansfield, PA 16933 - 570-662-0422 - Fax: 570-662-8512

For Immediate Release

October 22, 2004
Contact: Kathleen Campbell, Senior Vice President, Marketing Director
570-662-0422
Fax: 570-662-8512

CITIZENS FINANCIAL SERVICES, INC. REPORTS THIRD QUARTER EARNINGS

Mansfield, PA - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance through September 30, 2004. Total assets increased $51.7 million to $497.5 million since September 30, 2003. Total liabilities increased $49.3 million to $457.1 million during the same period, an increase of 12.1%. Total loans increased $39.4 million, or 12.54% to $353.5 million, while total deposits increased $22.7 million, or 5.87%, to $409.0 million during the same period. Earnings for the three-month and nine-month periods ending September 30, 2004 were $1.4 million and $4.4 million, respectively, as compared to $.8 million and $3.6 million for the same periods ending September 30, 2003. Earnings per share for the quarter ending September 30, 2004 are $.50 per share as compared to $.28 per share for the same quarter of 2003. Likewise, year-to-date earnings per share through September 30, 2004 are $1.54 as compared to $1.23 for the same period last year.

Stockholders’ equity (excluding accumulated other comprehensive income) has increased $2.7 million, or 7.28% during the first nine months of 2004. The cash dividend to be paid on October 29th to record holders of October 15th will be $.20 per share, as compared to $.19 per share for the same period in 2003.

The significant improvement for both the three months and nine months ended September 30, 2004 over last year’s comparable periods is primarily due to the supplemental retirement package granted to the former President upon his retirement in September 2003. This had the effect of an after-tax charge of approximately $554,000 during the third quarter. The 2004 results are reflective of our successful purchase of two branches from The Legacy Bank in Bradford County during the second quarter.

Inquiries regarding the purchase of the company’s stock may be made through the following brokers: Ferris Baker Watts, Inc. 410-659-4600; Ryan, Beck & Co., 973-549-4200; Schwab Capital Markets LP, 201-963-9100; Monroe Securities, Inc.; 800-766-5560; Boenning & Scattergood Inc., 610-828-0400; Keefe, Beuyette & Woods, Inc., 212-554-2600; Knight Equity Markets, LP, 212-336-8790; Crown Financial Group Inc., 201-459-9500; GVR Co, 800-638-8602; Hill Thompson Magid & Co, 800-631-3083; BrokerageAmerica, Inc., 212-880-7408; and Pershing Trading Company, 201-413-3531.

Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties. First Citizens National Bank has offices in Genesee, Ulysses, Wellsboro, Weis Market (Wellsboro), Mansfield, Wal-Mart (Mansfield), Blossburg, Canton, Troy, Towanda, LeRaysville, Sayre, Gillett and Millerton.

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.

 
     

Financial Highlights
          
     
2004
    
2003
  
Nine Months Ended September 30
              
Net Income
  
$
4,383
 
$
3,552
 
Comprehensive Income
    
3,550
   
2,262
 
Per common share data:
              
Earnings per share
    
1.54
   
1.23
 
Cash Dividends declared
    
0.58
   
0.55
 
Performance Ratios:
              
Return on average assets
    
1.22
%
  
1.09
%
Return on average equity
    
15.04
%
  
12.86
%
               
               
Three Months Ended September 30
              
Net Income
  
$
1,423
 
$
806
 
Per common share data:
              
Earnings per share
    
0.50
   
0.28
 
Cash Dividends declared
    
0.195
   
0.185
 
Performance Ratios:
              
Return on average assets
    
1.15
%
  
0.73
%
Return on average equity
    
14.31
%
  
8.60
%
               
               
At September 30
              
Assets
  
$
497,489
 
$
445,783
 
Investment securities:
              
Available for sale
    
100,996
   
91,822
 
Loans (net of unearned income)
    
353,490
   
314,098
 
Allowance for loan losses
    
4,109
   
3,587
 
Deposits
    
409,012
   
386,325
 
Stockholders' Equity
    
40,432
   
38,044
 
Non-performing assets
    
2,588
   
2,302
 
Average Leverage Ratio
    
7.74
%
  
6.59
%
Per common share data:
              
Book value
  
$
14.19
 
$
13.53
 
Market value (average of bid/ask price)
    
21.83
   
25.13
 
Market price to book value ratio
    
153.84
%
  
185.70
%

 
     
 

Consolidated Balance Sheet
                    
(Unaudited - In thousands, except share data)
                    
 
                    
   
September 30 
    
December 31
    
September 30
  
(in thousands)
    
2004
    
2003
    
2003
  
ASSETS:
                    
Cash and due from banks:
                    
Noninterest-bearing
  
$
8,145
 
$
9,624
 
$
10,242
 
Interest-bearing
    
123
   
327
   
317
 
Total cash and cash equivalents
    
8,268
   
9,951
   
10,559
 
                     
Available-for-sale securities
    
100,996
   
106,587
   
91,822
 
 
                    
Loans (net of allowance for loan losses 2004, $4,109,000;
                    
December 31, 2003, $3,620,000 and, September 30, 2003, $3,587,000)
    
349,381
   
314,037
   
310,511
 
 
                    
Premises and equipment
    
11,863
   
10,645
   
10,775
 
Accrued interest receivable
    
1,875
   
1,703
   
1,741
 
Goodwill
    
8,605
   
6,905
   
6,905
 
Core deposit intangible
    
1,406
   
978
   
1,087
 
Bank owned life insurance
    
7,374
   
7,142
   
7,064
 
Other assets
    
7,721
   
5,930
   
5,319
 
     
   
   
 
TOTAL ASSETS
  
$
497,489
 
$
463,878
 
$
445,783
 
     
   
   
 
LIABILITIES:
                    
Deposits:
                    
Noninterest-bearing
  
$
42,420
 
$
46,820
 
$
44,401
 
Interest-bearing
    
366,592
   
338,871
   
341,924
 
Total deposits
    
409,012
   
385,691
   
386,325
 
Borrowed funds
    
36,253
   
27,796
   
17,351
 
Notes payable
    
7,500
   
7,500
   
-
 
Accrued interest payable
    
1,685
   
1,888
   
1,683
 
Other liabilities
    
2,607
   
2,474
   
2,380
 
TOTAL LIABILITIES
    
457,057
   
425,349
   
407,739
 
 
    
   
       
                     
STOCKHOLDERS' EQUITY:
                    
Common Stock
                    
$1.00 par value; authorized 10,000,000 shares;
                    
issued 2,937,519 shares in 2004 and 2,909,849 shares in 2003,
                    
respectively
    
2,938
   
2,910
   
2,910
 
Additional paid-in capital
    
10,804
   
10,213
   
10,213
 
Retained earnings
    
28,578
   
26,455
   
25,663
 
TOTAL
    
42,320
   
39,578
   
38,786
 
Accumulated other comprehensive income
    
123
   
956
   
1,263
 
Less: Treasury Stock, at cost
                    
97,262 shares for 2004 and 96,962 shares for 2003, respectively
   
(2,011
)
  
(2,005
)
  
(2,005
)
                     
TOTAL STOCKHOLDERS' EQUITY
    
40,432
   
38,529
   
38,044
 
TOTAL LIABILITIES AND
                    
STOCKHOLDERS' EQUITY
  
$
497,489
 
$
463,878
 
$
445,783
 

 
     
 

Consolidated Statement of Income
                          
(Unaudited - In thousands, except per share data)
                          
 
                          
 
    
Three Months Ended 
    
Nine Months Ended
  
 
    
September 30 
    
September 30
  
     
2004
    
2003
    
2004
    
2003
  
INTEREST INCOME:
                          
Interest and fees on loans
  
$
5,851
 
$
5,439
 
$
16,647
 
$
16,158
 
Interest-bearing deposits with banks
    
1
   
6
   
9
   
27
 
Investment securities:
                          
Taxable
    
846
   
703
   
2,590
   
2,468
 
Nontaxable
    
76
   
105
   
223
   
363
 
Dividends
    
81
   
76
   
210
   
235
 
     
   
   
   
 
TOTAL INTEREST INCOME
    
6,855
   
6,329
   
19,679
   
19,251
 
     
   
   
   
 
INTEREST EXPENSE:
                          
Deposits
    
2,126
   
2,075
   
6,081
   
6,504
 
Borrowed funds
    
253
   
74
   
684
   
223
 
     
   
   
   
 
TOTAL INTEREST EXPENSE
    
2,379
   
2,149
   
6,765
   
6,727
 
     
   
   
   
 
NET INTEREST INCOME
    
4,476
   
4,180
   
12,914
   
12,524
 
Provision for loan losses
    
-
   
120
   
-
   
375
 
     
   
   
   
 
NET INTEREST INCOME AFTER
                          
PROVISION FOR LOAN LOSSES
    
4,476
   
4,060
   
12,914
   
12,149
 
     
   
   
   
 
NON-INTEREST INCOME:
                          
Service charges
    
783
   
779
   
2,265
   
2,261
 
Trust
    
126
   
142
   
484
   
437
 
Gains on loans sold
   
17
   
100
   
37
   
326
 
Realized securities gains, net
    
-
   
114
   
491
   
514
 
Earnings on bank owned life insurance
    
75
   
61
   
233
   
64
 
Other
    
152
   
130
   
412
   
488
 
                 
   
 
TOTAL NON-INTEREST INCOME
    
1,153
   
1,326
   
3,922
   
4,090
 
           
   
   
 
NON-INTEREST EXPENSES:
                          
Salaries and employee benefits
    
1,905
   
2,680
   
5,677
   
6,516
 
Occupancy
   
259
   
252
   
812
   
770
 
Furniture and equipment
    
181
   
179
   
517
   
533
 
Professional fees
    
131
   
183
   
443
   
487
 
Amortization
    
145
   
109
   
362
   
326
 
Other
    
1,159
   
1,088
   
3,314
   
3,120
 
     
   
   
   
 
TOTAL NON-INTEREST EXPENSES
    
3,780
   
4,491
   
11,125
   
11,752
 
     
   
   
   
 
Income before provision for income taxes
    
1,849
   
895
   
5,711
   
4,487
 
Provision for income taxes
    
426
   
89
   
1,328
   
935
 
     
   
   
   
 
NET INCOME
  
$
1,423
 
$
806
 
$
4,383
 
$
3,552
 
 
                          
     
   
   
   
 
EARNINGS PER SHARE
  
$
0.50
 
$
0.28
 
$
1.54
 
$
1.23
 
                           
CASH DIVIDENDS DECLARED
  
$
0.195
 
$
0.185
 
$
0.580
 
$
0.550