EX-99.1 2 pressreleasesecondqtr2006.htm PRESS RELEASE SECOND QUARTER EARNINGS 2006 press release second quarter earnings 2006
Exhibit 99.1
 

 
 Contact:    Kathleen Campbell, Marketing Director  First Citizens National Bank
   570-662-0422         15 S. Main Street
   570-662-8512 (fax)  Mansfield, PA 16933
       
 
      
 
 
Citizens Financial Services, Inc. Reports Second Quarter 2006 Earnings

MANSFIELD, PENNSYLVANIA— July 19, 2006 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the second quarter of 2006.

Net income for the three months ended June 30, 2006 was $1,486,000, which compares to $1,313,000 for the same period last year. This represents an increase of 13.2%. On a year to date basis, net income was $2,762,000 compared with $2,580,000 last year, an increase of 7.1%. Earnings per share for the year are $.98 compared with $.90 for the first six months of 2005, representing an increase of 8.9%.

Return on equity for the six months ended June 30, 2006 and 2005 was 12.75% and 12.52%, respectively. For the three months ended June 30, 2006, return on equity was 13.55% compared with 12.63% for the same period in 2005. Income before taxes has increased from $3,283,000 for the first six months in 2005 to $3,420,000 in 2006, an increase of $137,000. Excluding the provision for loan losses, income before taxes increased $257,000, representing a 7.8% increase. Due to tax planning strategies using tax-exempt investments and loans, the provision for income taxes decreased from $703,000 last year to $658,000 this year, a savings of $45,000.

CEO and President Randall E. Black stated, “The interest rate environment continues to be less than favorable for our bank as well as others that are dealing with the same challenges. The sustained flat yield curve continues to put pressure on our interest rate margin as the Federal Reserve has maintained its policy of monetary tightening by increasing short-term interest rates. However, we have been able to produce positive financial performance through cost control and managing our effective tax rate, while expanding our franchise into Wellsville, New York.”

Since June of last year, total assets have increased $43.8 million, or 8.6%. At the end of June, total assets were $550.9 million compared to $507.1 million last June. Net loans have increased $30.1 million since last June, an increase of 8.2%. Deposits have increased $15.5 million and borrowed funds have increased $27.9 million to fund the overall growth in assets.

Stockholders’ Equity, excluding accumulated other comprehensive income, has increased $2.3 million, or 5.5% since last June. There have been 34,247 shares of treasury stock repurchased during 2006 since the Board of Directors approved a stock repurchase plan on January 17, 2006. Book value per share at June 30, 2006 was $15.60 compared with $14.76 last year, an increase of 5.7%. In June, a cash dividend of $.215 per share was declared and will be paid to shareholders on July 28, 2006 to record holders as of July 14, 2006. This represents an increase of 4.9%. Additionally, a 1% stock dividend will be distributed July 28, 2006 to shareholders of record as of July 14th.

Mr. Black noted that “construction is well under way on our new branch in Wellsville, New York. We expect a completion date during the fourth quarter of this year and continue to be optimistic about our potential to grow our bank in New York.”

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 16 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)
  
2006
  
2005
  
2005
  
ASSETS:
              
Cash and due from banks:
              
Noninterest-bearing
  
$
10,925
  
$
8,498
  
$
8,607
  
Interest-bearing
    
6
   
111
   
101
 
Total cash and cash equivalents
    
10,931
   
8,609
   
8,708
 
                     
Available-for-sale securities
    
101,864
   
102,602
   
91,947
 
 
                    
Loans (net of allowance for loan losses: 2006, $3,623; December 31, 2005
    
397,765
   
379,139
   
367,684
 
$3,664; and June 30, 2005 $3,692)
                    
Premises and equipment
    
12,199
   
12,305
   
12,493
 
Accrued interest receivable
    
2,109
   
2,164
   
1,895
 
Goodwill
    
8,605
   
8,605
   
8,605
 
Core deposit intangible
    
503
   
684
   
973
 
Bank owned life insurance
    
7,889
   
7,743
   
7,598
 
Other assets
    
9,113
   
7,390
   
7,244
 
     
 
    
 
    
 
  
TOTAL ASSETS
  
$
550,978
  
$
529,241
  
$
507,147
  
     
 
    
 
    
 
  
LIABILITIES:
                    
Deposits:
                    
Noninterest-bearing
  
$
50,289
  
$
50,600
  
$
46,764
  
Interest-bearing
    
387,620
   
379,199
   
375,668
 
Total deposits
    
437,909
   
429,799
   
422,432
 
Borrowed funds
    
67,116
   
52,674
   
39,199
 
Accrued interest payable
    
1,739
   
1,862
   
1,599
 
Commitment to purchase investments
    
-
   
752
   
-
 
Other liabilities
    
2,690
   
2,593
   
2,716
 
TOTAL LIABILITIES
    
509,454
   
487,680
   
465,946
 
STOCKHOLDERS' EQUITY:
                    
Common Stock
                    
$1.00 par value; authorized 10,000,000 shares; issued 2,965,257 shares in
                    
2006 and at December 31, 2005 and 2,937,519 shares at June 30. 2005
    
2,965
   
2,965
   
2,938
 
Additional paid-in capital
    
11,359
   
11,359
   
10,804
 
Retained earnings
    
32,809
   
31,251
   
30,324
 
TOTAL
    
47,133
   
45,575
   
44,066
 
Accumulated other comprehensive loss
    
(2,357
)
  
(1,540
)
  
(391
)
Less: Treasury Stock, at cost 152,962 shares for 2006, 118,715 shares at
                   
December 31, 2005 and 97,262 shares at June 30, 2005
    
(3,252
)
  
(2,474
)
  
(2,474
)
TOTAL STOCKHOLDERS' EQUITY
    
41,524
   
41,561
   
41,201
 
TOTAL LIABILITIES AND
                    
STOCKHOLDERS' EQUITY
  
$
550,978
  
$
529,241
  
$
507,147
  
                     
 
 

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)
  
2006
  
2005
  
2006
  
2005
  
INTEREST INCOME:
                  
Interest and fees on loans
  
$
6,894
  
$
6,105
  
$
13,413
  
$
12,024
  
Investment securities:
                  
Taxable
    
879
   
749
   
1,698
   
1,541
 
Nontaxable
    
221
   
124
   
447
   
242
 
Dividends
    
82
   
55
   
149
   
106
 
TOTAL INTEREST INCOME
    
8,076
   
7,033
   
15,707
   
13,913
 
INTEREST EXPENSE:
                          
Deposits
    
2,722
   
2,256
   
5,323
   
4,425
 
Borrowed funds
    
876
   
379
   
1,539
   
757
 
TOTAL INTEREST EXPENSE
    
3,598
   
2,635
   
6,862
   
5,182
 
NET INTEREST INCOME
    
4,478
   
4,398
   
8,845
   
8,731
 
Provision for loan losses
    
60
   
-
   
120
   
-
 
NET INTEREST INCOME AFTER
                          
PROVISION FOR LOAN LOSSES
    
4,418
   
4,398
   
8,725
   
8,731
 
NON-INTEREST INCOME:
                          
Service charges
    
809
   
746
   
1,515
   
1,419
 
Trust
    
108
   
86
   
237
   
208
 
Brokerage
    
39
   
55
   
97
   
93
 
Insurance
    
20
   
61
   
56
   
144
 
Investment securities gains (losses), net
    
5
   
-
   
(1
)
  
-
 
Earnings on bank owned life insurance
    
74
   
75
   
146
   
149
 
Other
    
136
   
112
   
273
   
224
 
TOTAL NON-INTEREST INCOME
    
1,191
   
1,135
   
2,323
   
2,237
 
NON-INTEREST EXPENSES:
                          
Salaries and employee benefits
    
1,987
   
1,974
   
4,023
   
3,895
 
Occupancy
   
276
   
282
   
584
   
585
 
Furniture and equipment
    
144
   
160
   
296
   
335
 
Professional fees
    
106
   
131
   
246
   
275
 
Amortization
    
36
   
144
   
180
   
289
 
Other
    
1,188
   
1,171
   
2,299
   
2,306
 
TOTAL NON-INTEREST EXPENSES
    
3,737
   
3,862
   
7,628
   
7,685
 
Income before provision for income taxes
    
1,872
   
1,671
   
3,420
   
3,283
 
Provision for income taxes
    
386
   
358
   
658
   
703
 
NET INCOME
  
$
1,486
  
$
1,313
  
$
2,762
  
$
2,580
  
 
                          
Earnings Per Share
  
$
0.53
  
$
0.46
  
$
0.98
  
$
0.90
  
Cash Dividends Per Share
  
$
0.215
  
$
0.205
  
$
0.425
  
$
0.405
  
                           
Weighted average number of shares outstanding
    
2,819,620
   
2,865,637
   
2,829,915
   
2,866,810
 
                           
 

FINANCIAL HIGHLIGHTS
          
(UNAUDITED -IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
          
           
           
   
2006
  
2005
  
Six Months Ended June 30
          
Net Income
  
$
2,762
  
$
2,580
  
Comprehensive Income
    
1,945
   
2,025
 
Per common share data:
              
Earnings per share
  
$
0.98
  
$
0.90
  
Cash dividends per share
  
$
0.425
  
$
0.405
  
Performance Ratios:
              
Return on average assets (annualized)
    
1.02
%
  
1.02
%
Return on average equity (annualized)
    
12.75
%
  
12.52
%
               
               
Three Months Ended June 30
              
Net Income
  
$
1,486
  
$
1,313
  
Per common share data:
              
Earnings per share
  
$
0.53
  
$
0.46
  
Cash dividends per share
  
$
0.215
  
$
0.205
  
Performance Ratios:
              
Return on average assets (annualized)
    
1.09
%
  
1.04
%
Return on average equity (annualized)
    
13.55
%
  
12.63
%
               
               
At June 30
              
Assets
  
$
550,978
  
$
507,147
  
Investment securities:
              
Available for sale
    
101,864
   
91,947
 
Loans (net of unearned income)
    
401,388
   
371,376
 
Allowance for loan losses
    
3,623
   
3,692
 
Deposits
    
437,909
   
422,432
 
Stockholders' Equity
    
41,524
   
41,201
 
Non-performing assets
    
2,954
   
2,806
 
Average Leverage Ratio
    
7.86
%
  
7.94
%
Per common share data:
              
Book value
  
$
15.60
  
$
14.76
  
Market value (average of bid/ask price)
  
$
22.30
  
$
21.35
  
Market price to book value ratio
    
142.92
%
  
144.69
%
               
 

   
 Cash Dividends
  
Common Stock Information:
  
Bid
 
Ask
 
Paid
  
               
Quarter Ended:
              
               
June 30, 2006
  
$
21.60
  
$
23.00
  
$
0.215
  
March 31, 2006
  
$
21.35
  
$
23.25
  
$
0.210
  
December 31, 2005
  
$
20.80
  
$
21.00
  
$
0.210
  
September 30, 2005
  
$
20.10
  
$
20.50
  
$
0.205
  
                     
June 30, 2005
  
$
21.00
  
$
21.70
  
$
0.205
  
March 31, 2005
  
$
23.50
  
$
24.25
  
$
0.200
  
December 31, 2004
  
$
23.65
  
$
24.00
  
$
0.200
  
September 30, 2004
  
$
21.50
  
$
22.15
  
$
0.195