EX-99.1 2 thirdquarter10pressrelease.htm PRESS RELEASE ANNOUNCING THIRD QUARTER 10 EARNINGS thirdquarter10pressrelease.htm
Exhibit 99.1
 
 
 
 Contact:   Kathlenn Campbell, Marketing Director  First Citizens National Bank
   570-662-0422  15 South Main Street
   570-662-8512 (fax)  Mansfield, PA 16933
 
 
 
Citizens Financial Services, Inc. Reports Third Quarter 2010 Earnings

MANSFIELD, PENNSYLVANIA— November 1, 2010 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the third quarter ended September 30, 2010.

Net income for the nine months ended September 30, 2010 totaled $8,570,000 which compares to $7,206,000 for the same period last year.  This represents an increase of $1,364,000, or 18.9%.  Earnings per share of $2.96 increased 19.4% from $2.48 per share last year.  Annualized return on equity for the comparable periods was 18.31% and 17.46%, while return on assets was 1.51% and 1.39%, respectively.

Net income for the three months ended September 30, 2010 totaled $2,897,000 which compares to $2,388,000 for the third quarter of 2009, representing an increase of $509,000, or 21.3%.  Earnings per share of $1.00 increased 22.0% from $.82 per share for the same period last year.  Annualized return on equity for the comparable periods was 17.98% and 16.84%, while return on assets was 1.49% and 1.35%, respectively.

As of September 30, 2010, total assets were $789.4 million, which was an increase of $59.9 million from December 31, 2009, and an increase of $82.2 million since September, 2009.  The investment portfolio totaled $230.5 million, an increase of $31.9 million since year-end.  Net loans of $469.2 million have increased $17.7 million, or 3.9%, since December 31, 2009 and have increased $25.4 million since last September.  Total deposits at the end of September totaled $655.2 million, which is an increase of $49.6 million since year end, and have increased $75.4 million since last September, or 13.0%.  The growth in deposits can be attributed to the impact of the Marcellus Shale gas play, our outstanding customer service and the overall financial strength of First Citizens.

CEO and President Randall E. Black stated, “Our continued financial performance is the result of disciplined balance sheet management, emphasis on credit quality and a focus on efficiency.  Net interest income, before the provision for loan loss, increased from $18,819,000 last year through September to $20,569,000 this year, an increase of $1,750,000, or 9.3%.  On a tax equivalent basis, our net interest margin has remained relatively stable at 4.23% this year compared with 4.24% last year.  Although asset yields have declined, particularly yields on investment securities, we have been able to decrease our deposit costs by attracting more low cost deposits along with continuing to roll down the yield curve as a result of the continued low interest rate environment.  Additionally, our non-interest expenses have decreased $143,000 from a year ago.  The soft economy has had an impact on our credit quality.  As of September 30, 2010 non-performing assets as a percent of loans was 3.01%, which is an increase from 1.55% at the end of December 2009.  However, 72.1% of these non-performing assets are paid current.  Most of the increase in non-performing assets is attributable to one large commercial loan, which we believe is well collateralized.  Even with this increase, we continue to compare favorably to other community banks in our industry.  As a result of the increase, the provision for loan losses totaled $840,000 for the nine months ended September 30, 2010 compared with $700,000 last year through nine months.”

Stockholders’ equity totaled $69.6 million at September 30, 2010, representing an increase of $8.1 million, or 13.2%, from December 31, 2009.  Book value per share at September 30, 2010 was $22.70 compared with $20.71 last December, an increase of 9.6%.  Mr. Black also stated, “Regulators and the entire banking industry are focused on capital levels and capital planning.  I am pleased to note that First Citizens remains well capitalized based upon regulatory guidelines.  In fact, our financial strength and strong financial performance thus far in 2010 has enabled us to continue to build our capital levels while still providing an attractive dividend to our shareholders.”  On October 6, 2010, a cash dividend of $.26 per share was declared and will be paid on November 5, 2010 to shareholders of record as of October 15, 2010.  The quarterly cash dividend is an increase of 4% over the dividend declared one year ago.

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.


 
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CITIZENS FINANCIAL SERVICES, INC.
      
CONSOLIDATED BALANCE SHEET
      
(UNAUDITED)
      
       
 
September 30
December 31
September 30
(in thousands except share data)
2010
2009
2009
ASSETS:
      
Cash and due from banks:
      
  Noninterest-bearing
 $           11,392
 $           9,505
 $         10,844
  Interest-bearing
               28,674
            21,944
              9,318
Total cash and cash equivalents
               40,066
            31,449
            20,162
       
Available-for-sale securities
            230,493
          198,582
          197,544
 
      
Loans (net of allowance for loan losses: September 30, 2010, $5,588;
      
  December 31, 2009, $4,888; September 30, 2009, $4,683)
            469,204
          451,496
          443,808
 
      
Premises and equipment
               12,944
            12,227
            11,896
Accrued interest receivable
                 3,636
              3,141
              3,544
Goodwill
               10,256
            10,256
            10,256
Bank owned life insurance
               13,043
            12,667
            12,539
Other assets
                 9,713
              9,659
              7,465
 
 
 
 
TOTAL ASSETS
 $         789,355
 $       729,477
 $       707,214
 
 
 
 
LIABILITIES:
      
Deposits:
      
  Noninterest-bearing
 $           68,794
 $         60,061
 $         56,070
  Interest-bearing
            586,446
          545,498
          523,777
Total deposits
            655,240
          605,559
          579,847
Borrowed funds
               56,454
            54,115
            57,790
Accrued interest payable
                 1,814
              2,037
              2,075
Other liabilities
                 6,225
              6,239
              6,395
TOTAL LIABILITIES
            719,733
          667,950
          646,107
STOCKHOLDERS' EQUITY:
      
Preferred Stock $1.00 par value; authorized
      
  3,000,000 shares 2010 and none in 2009; none issued in 2010 or 2009
                          -
                      -
                      -
Common stock
      
  $1.00 par value; authorized 15,000,000 shares at September 30, 2010; 10,000,000 at
      
     December 31, 2009 and September 30, 2009; issued 3,104,434 shares at September 30,
    
     2010; 3,076,253 shares at  December 31, 2009 and September 30, 2009
                 3,104
              3,076
              3,076
Additional paid-in capital
               14,219
            13,457
            13,455
Retained earnings
               52,968
            47,353
            45,557
Accumulated other comprehensive income
                 3,984
              2,041
              3,365
Treasury stock, at cost:  212,737 shares at September 30, 2010; 204,437 shares at
      
  December 31, 2009 and 202,287 shares at September 30, 2009
               (4,653)
             (4,400)
             (4,346)
TOTAL STOCKHOLDERS' EQUITY
               69,622
            61,527
            61,107
TOTAL LIABILITIES AND
      
   STOCKHOLDERS' EQUITY
 $         789,355
 $       729,477
 $       707,214

 
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CITIZENS FINANCIAL SERVICES, INC.
        
CONSOLIDATED STATEMENT OF INCOME
        
(UNAUDITED)
        
 
Three Months Ended
Nine Months Ended
 
September  30,
September  30,
(in thousands, except per share data)
2010
2009
2010
2009
INTEREST INCOME:
        
Interest and fees on loans
 $        7,782
 $      7,581
 $      23,268
 $    22,616
Interest-bearing deposits with banks
                 24
               15
                 55
               27
Investment securities:
 
 
 
 
    Taxable
           1,178
         1,466
           3,777
         4,647
    Nontaxable
               772
             598
           2,140
         1,583
    Dividends
                 14
                 7
                 27
               20
TOTAL INTEREST INCOME
           9,770
         9,667
         29,267
       28,893
INTEREST EXPENSE:
        
Deposits
           2,313
         2,777
           7,374
         8,555
Borrowed funds
               444
             500
           1,324
         1,519
TOTAL INTEREST EXPENSE
           2,757
         3,277
           8,698
       10,074
NET INTEREST INCOME
           7,013
         6,390
         20,569
       18,819
Provision for loan losses
               300
             400
               840
             700
NET INTEREST INCOME AFTER
        
    PROVISION FOR LOAN LOSSES
           6,713
         5,990
         19,729
       18,119
NON-INTEREST INCOME:
        
Service charges
               919
             958
           2,709
         2,664
Trust
               130
             121
               411
             397
Brokerage and insurance
                 91
               75
               314
             228
Gains on loans sold
                 44
               83
                 92
             292
Investment securities gains, net
                    -
                 -
                 99
             118
Earnings on bank owned life insurance
               127
             128
               376
             364
Other
               134
               87
               358
             278
TOTAL NON-INTEREST INCOME
           1,445
         1,452
           4,359
         4,341
NON-INTEREST EXPENSES:
        
Salaries and employee benefits
           2,436
         2,393
           7,293
         7,018
Occupancy
               295
             272
               898
             889
Furniture and equipment
               114
             102
               331
             336
Professional fees
               176
             164
               509
             459
Federal deposit insurance
               245
             277
               699
         1,030
Other
           1,220
         1,242
           3,440
         3,581
TOTAL NON-INTEREST EXPENSES
           4,486
         4,450
         13,170
       13,313
Income before provision for income taxes
           3,672
         2,992
         10,918
         9,147
Provision for income taxes
               775
             604
           2,348
         1,941
NET INCOME
 $        2,897
 $      2,388
 $        8,570
 $      7,206
 
        
Earnings Per Share
 $          1.00
 $        0.82
 $          2.96
 $        2.48
Cash Dividends Paid Per Share
 $        0.255
 $      0.245
 $        0.760
 $      0.730
         
Weighted average number of shares outstanding
   2,891,875
  2,902,147
   2,896,314
  2,901,701

 
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Financial Highlights
        
         
 
Three Months Ended
Nine Months Ended
 
September 30
September 30
 
2010
2009
2010
2009
Performance Ratios and Share Data:
        
    Return on average assets (annualized)
1.49%
1.35%
1.51%
1.39%
    Return on average equity (annualized)
17.98%
16.84%
18.31%
17.46%
    Net interest margin (tax equivalent)
4.17%
4.16%
4.23%
4.24%
    Cash dividends paid per share
$0.255
$0.245
$0.760
$0.730
    Earnings per share
$1.00
$0.82
$2.96
$2.48
    Weighted average shares outstanding
                       2,891,875
                     2,902,147
                    2,896,314
                     2,901,701
 
 
 

Balance Sheet Highlights (dollars in thousands):
September 30, 2010
December 31, 2009
September 30, 2009
       
Assets
 $                     789,355
 $                     729,477
 $                    707,214
Investment securities - Available For Sale
230,493
198,582
197,544
Loans (net of unearned income)
474,792
456,384
448,491
Allowance for loan losses
5,588
4,888
4,683
Deposits
655,240
605,559
579,847
Stockholders' Equity
69,622
61,527
61,107
Non-performing assets
14,270
7,057
6,517
Non-performing assets to total loans
3.01%
1.55%
1.45%
Average Leverage Ratio
8.37%
8.15%
8.04%
Common shares outstanding
2,891,697
2,871,816
2,873,966
Book value per share
 $                           22.70
 $                         20.71
 $                        20.09

 
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