-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Bq8XFsy96tdwRey/sskf4iKKG+lKV0hK5QkMqNSAUSFAb1ugcfp4cATgOlwxxGiC i0GxnrYPuGUUb/ga7Sktnw== 0000950152-04-007305.txt : 20041012 0000950152-04-007305.hdr.sgml : 20041011 20041012131319 ACCESSION NUMBER: 0000950152-04-007305 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20040930 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20041012 DATE AS OF CHANGE: 20041012 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS & NORTHERN CORP CENTRAL INDEX KEY: 0000810958 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232451943 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16084 FILM NUMBER: 041074250 BUSINESS ADDRESS: STREET 1: 90-92 MAIN ST CITY: WELLSBORO STATE: PA ZIP: 16901 BUSINESS PHONE: 7172656171 MAIL ADDRESS: STREET 1: 90-92 MAIN ST CITY: WELLSBORO STATE: PA ZIP: 16901 8-K 1 l09883ae8vk.txt CITIZENS & NORTHERN CORPORATION 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) September 30, 2004 ------------------ CITIZENS & NORTHERN CORPORATION ------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 0-16084 23-2451943 - ---------------------------- ------------ --------------- (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 90-92 Main Street, Wellsboro, PA 16901 - ---------------------------------------- --------- (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (570) 724-3411 -------------- N/A --- (Former name or former address, if changed since last report) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the three-month and nine-month periods ended September 30, 2004. On October 12, 2004, Citizens & Northern Corporation issued a press release titled "C&N Announces September 30, 2004 Unaudited Financial Results," a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Also on October 12, 2004, Citizens & Northern Corporation completed its "Quarterly Report," a report that includes unaudited financial information. The Quarterly Report will be mailed to shareholders with the quarterly dividend checks to be issued October 20, 2004. A copy of the Quarterly Report is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) Exhibits. Exhibit 99.1: Press Release issued by Citizens & Northern Corporation dated October 12, 2004, titled "C&N Announces September 30, 2004 Unaudited Financial Results." Exhibit 99.2: Quarterly Report, which includes unaudited financial information. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized. CITIZENS & NORTHERN CORPORATION Date: 10/12/04 By: /s/ Craig G. Litchfield ----------------------------------------------- Chairman, President and Chief Executive Officer EX-99.1 2 l09883aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 PRESS RELEASE CITIZENS & Northern Bank Contact: Yvonne Gill October 12, 2004 570-724-0212 ygill@cnbankpa.com C&N ANNOUNCES SEPTEMBER 30, 2004 UNAUDITED FINANCIAL RESULTS FOR IMMEDIATE RELEASE: Wellsboro, PA - Citizens & Northern Corporation recently announced the unaudited, consolidated financial results for the nine months ended September 30, 2004, and for the third quarter 2004, which are highlighted below. FINANCIAL HIGHLIGHTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2004: o Net Income was $10,800,000 for the nine months ended September 30, 2004. This result was 9.3% lower than Net Income of $11,910,000 recorded for the first nine months of 2003. Net Income Per Share was $1.33 (Basic) and $1.32 (Diluted) for the nine months ended September 30, 2004, as compared to $1.47 (Basic) and $1.46 (Diluted) for the first nine months of 2003. o Return on Average Assets was 1.30% for the first nine months of 2004, as compared to 1.54% for the first nine months of 2003. Return on Average Equity was 11.28% for the first nine months of 2004, as compared to 13.10% for the first nine months of 2003. o Total assets amounted to $1,135,433,000 as of September 30, 2004, an increase of 8.1% over total assets of $1,050,010,000 as of September 30, 2003. Net loans increased $64,862,000, or 13.0%, as of September 30, 2004, compared to one year earlier. o Shareholders' Equity/Average Assets Ratio was 10.71% as of September 30, 2004. This safety and soundness measurement needs to be at a minimum of 5% to be considered well capitalized by banking regulatory agencies. o Cash Dividends declared by C&N increased 4.8% for the first nine months of 2004 over the first nine months of 2003, to $0.66 per share. Two significant initiatives affected C&N's profitability during the first nine months of 2004: (1) pre-tax losses of $539,000 from start-up expenses and operations of two new branches - the Williamsport branch, which opened in May, and the South Williamsport branch, which opened in September, and (2) non-payroll expenses of $512,000 related to conversion to new core banking software (expected to be implemented in the fourth quarter 2004). In addition to the effects of these initiatives, payroll costs increased substantially, primarily from the addition of several new employees for Lending, Trust and Financial Management, Employee Training and other duties. Also, building-related expenses and other computer-related expenses were up in the first nine months of 2004 compared to the same period in 2003. Overall, noninterest expense increased $3,031,000 (18.7%) in the first nine months of 2004 over the same period in 2003. A lower amount of net realized gains from securities also contributed to lower profitability in the first nine months of 2004, as securities gains amounted to $1,744,000 in the nine months ended September 30, 2004, a reduction of $1,545,000 from the first nine months of 2003. On the positive side, net interest income increased $2,631,000 (11.2%) in the nine months ended September 30, 2004 as compared to the first nine months of 2003. Also, the provision for income taxes decreased $801,000 (30.6%) in the nine months ended September 30, 2004 as compared to the first nine months of 2003. FINANCIAL HIGHLIGHTS FOR THE THIRD QUARTER 2004: o Net Income for the third quarter 2004 was $3,405,000, as compared to $3,918,000 in the third quarter 2003. Core banking system expenses totaled $329,000, and pre-tax losses from the new Williamsport and South Williamsport branches totaled $168,000, in the third quarter 2004. Net securities gains were $201,000 lower in the third quarter 2004 than in the third quarter 2003. Net Income Per Share was $0.42 (Basic and Diluted) for the third quarter 2004, as compared to $0.48 (Basic and Diluted) for the third quarter 2003. o Net Income for the third quarter 2004 was $284,000 (7.7%) lower than second quarter 2004 net income of $3,689,000. o Cash Dividends declared increased to $0.22 per share for the third quarter 2004 from $0.21 per share for the third quarter 2003. Citizens & Northern Bank is a wholly-owned subsidiary of Citizens & Northern Corporation. Citizens & Northern Bank provides complete financial and investment services through 19 full service offices located throughout Tioga, Bradford, Sullivan and Lycoming, Pennsylvania counties. C&N can be found on the web at www.cnbankpa.com. The Company's stock trades on the Over-the-Counter Bulletin Board under the symbol CZNC.OB. EX-99.2 3 l09883aexv99w2.txt EXHIBIT 99.2 EXHIBIT 99.2 Citizens & Northern Corporation 90-92 Main Street, P.O. Box 58 Wellsboro, PA 16901 Phone: (570) 724-3411 Fax: (570) 723-8097 E-Mail: cnemail@cnbankpa.com Web Page: http://www.cnbankpa.com -------------------- ----------------------- Stock Symbol: CZNC.OB Chartered 1864 Member FEDERAL DEPOSIT INSURANCE CORP QUARTERLY REPORT SEPTEMBER 30, 2004 Dear Shareholder: During 2004, there have been many projects and challenges that have occupied our attention and focus. Chief among them are the computer core system conversion, the expansion of our presence in Lycoming County and the forecast of higher interest rates. The conversion to the new computer system is scheduled for the weekend of October 16th and 17th. Our people, under the very capable leadership of Jim Shelmire and Scott Keck, have worked very hard in preparing for this significant event. The costs have been high in both time and money, but we believe the outcome will position us well for future growth in assets and income. On September 7th, we opened our 19th branch office in South Williamsport in our pursuit of establishing a meaningful market presence in Lycoming County. We are moving forward on plans for other full service locations in that market. As the Federal Reserve pursues a strategy of increasing the short-term Federal Funds rate over the next year, our interest spread and margin will be challenged as the costs of funds may increase more rapidly than the return we will realize from our earning assets, most of which are fixed rate. We expect continued growth in the loan portfolio to help reduce some of the impact to earnings of the interest rate squeeze. As we have grown, so has our need for office space. Thus we have plans for a new administrative building in Wellsboro only two blocks from our branch location. The land was purchased the first of October. We hope to break ground before winter sets in. The financial results for the nine months ending September 30th reveal strong growth in the interest margin, up 11.2%, due primarily to a nearly 13% growth in net loans. Net income at $10.8 million was down from last year by 9.3%. The lower net income is due in large part to two factors: $1.051 million in additional expenses incurred thus far for the core banking software conversion and the start-up expenses and operations for the two new Williamsport offices; and $1.545 million less in net realized security gains. Total assets increased 8.14% to $1.135 billion. Deposits and repo sweeps increased to over $695 million. Trust assets under management increased by nearly 16.5% to $358 million. Our nonperforming loans increased substantially, on a historical basis, during the second quarter of this year. We continue to monitor the credit quality and we are maintaining an adequate allowance relative to total loans. Our equity position remains strong at 10.71% average equity to average assets. The third quarter dividend of 22 cents per share brings the total dividends paid for 2004 to 66 cents for the three quarters, up 4.8% over the first three quarters of 2003. Thank you for your continued support. Craig G. Litchfield Chairman, President & CEO CITIZENS & NORTHERN CORPORATION BOARD OF DIRECTORS Craig G. Litchfield Chairman of the Board Dennis F. Beardslee Leo F. Lambert R. Robert DeCamp Edward L. Learn Jan E. Fisher Edward H. Owlett, III R. Bruce Haner Leonard Simpson Susan E. Hartley James E. Towner Karl W. Kroeck Ann M. Tyler DIRECTORS EMERITI J. Robert Bower F. David Pennypacker Lawrence F. Mase Donald E. Treat OFFICERS Craig G. Litchfield Chairman, President and Chief Executive Officer Mark A. Hughes Treasurer Kathleen M. Osgood Corporate Secretary CITIZENS & NORTHERN BANK OFFICES 428 S. Main Street, ATHENS, PA 18810 570-888-2291 111 Main Street, DUSHORE, PA 18614 570-928-8124 Main Street, EAST SMITHFIELD, PA 18817 570-596-3131 104 Main Street, ELKLAND, PA 16920 814-258-5111 102 E. Main Street, KNOXVILLE, PA 16928 814-326-4151 Main Street, LAPORTE, PA 18626 570-946-4011 Main Street, LIBERTY, PA 16930 570-324-2331 1085 S. Main Street, MANSFIELD, PA 16933 570-662-1111 Route 220, MONROETON, PA 18832 570-265-2157 3461 Rte.405 Highway, MUNCY, PA 17756 570-546-6666 Thompson Street, RALSTON, PA 17763 570-995-5421 503 N. Elmira Street, SAYRE, PA 18840 570-888-2220 2 E. Mountain Ave., SO. WILLIAMSPORT, PA 17702 570-601-3016 41 Main Street, TIOGA, PA 16946 570-835-5236 428 Main Street, TOWANDA, PA 18848 570-265-6171 Court House Square, TROY, PA 16947 570-297-2159 90-92 Main Street, WELLSBORO, PA 16901 570-724-3411 130 Court Street, WILLIAMSPORT, PA 17701 570-320-0100 Route 6, WYSOX, PA 18854 570-265-9148 TRUST & FINANCIAL MANAGEMENT GROUP 90-92 Main Street, Wellsboro, PA 16901 800-487-8784 428 Main Street, Towanda, PA 18848 888-987-8784 503 N. Elmira Street, Sayre, PA 18840 888-760-8192 3461 Rte 405 Highway, Muncy, PA 17756 570-546-6666 130 Court Street, Williamsport, PA 17701 570-601-6000 ACCOUNT SERVICES - 90-92 Main St, Wellsboro, PA 16901 800-726-2265 BANKCARD SERVICES - 11822 Route 6, Wellsboro PA 16901 800-676-6639 FUNDS MANAGEMENT - 90-92 Main St., Wellsboro, PA 16901 800-577-9397 www.fmt@cnbankpa.com -------------------- INTERNET BANKING - 90-92 Main St., Wellsboro, PA 16901 570-724-0266 www.cnbankpa.com ---------------- C&N FINANCIAL SERVICES CORPORATION - 68 Main Street, Wellsboro, PA 866-ASK-CNFS www.cnfinancialservices.com CONSOLIDATED STATEMENT OF INCOME (In Thousands, Except Per Share Data) (Unaudited)
3 MONTHS ENDED 9 MONTHS ENDED SEPTEMBER SEPTEMBER 2004 2003 2004 2003 (CURRENT) (PRIOR YR) (CURRENT) (PRIOR YR) --------- ---------- --------- ---------- Interest and Dividend Income $ 14,573 $ 13,553 $ 42,931 $ 41,426 Interest Expense 5,665 5,655 16,861 17,987 - ------------------------------------------------------------------------------------------------------------------------------- Interest Margin 8,908 7,898 26,070 23,439 Provision for Loan Losses 350 250 1,050 850 - ------------------------------------------------------------------------------------------------------------------------------- Interest Margin After Provision for Loan Losses 8,558 7,648 25,020 22,589 Other Income 1,627 1,705 5,107 4,873 Realized Gains on Securities, Net 459 660 1,744 3,289 Other Expenses 6,738 5,336 19,255 16,224 - ------------------------------------------------------------------------------------------------------------------------------- Income Before Income Tax Provision 3,906 4,677 12,616 14,527 Income Tax Provision 501 759 1,816 2,617 - ------------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 3,405 $ 3,918 $ 10,800 $ 11,910 =============================================================================================================================== PER SHARE DATA (**): Net Income - Basic $0.42 $0.48 $1.33 $1.47 Net Income - Diluted $0.42 $0.48 $1.32 $1.46 Dividend Per Share $0.22 $0.21 $0.66 $0.63 Number of Shares Used in Computation - Basic 8,101,833 8,090,861 8,104,964 8,088,632 Number of Shares Used in Computation - Diluted 8,145,950 8,151,281 8,154,129 8,135,712
CONSOLIDATED BALANCE SHEET (In Thousands) (Unaudited)
SEPT. 30, SEPT. 30, 2004 2003 --------- --------- ASSETS Cash & Due from Banks $ 14,282 $ 18,458 Available-for-Sale Securities 499,572 482,064 Loans, Net 564,867 500,005 Other Assets 56,712 49,483 - ------------------------------------------------------------------------------------------------------- TOTAL ASSETS $1,135,433 $1,050,010 ======================================================================================================= LIABILITIES Deposits $ 672,875 $ 652,728 Repo Sweep Accounts 22,961 22,866 - ------------------------------------------------------------------------------------------------------- Total Deposits and Repo Sweeps 695,836 675,594 Borrowed Funds 298,191 238,997 Other Liabilities 12,402 13,313 - ------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,006,429 927,904 - ------------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Shareholders' Equity, Excluding Net Unrealized Gains/Losses on Available-for-sale Securities 118,769 110,619 Net Unrealized Gains/Losses on Available- for-sale Securities (*) 10,235 11,487 - ------------------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 129,004 122,106 - ------------------------------------------------------------------------------------------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $1,135,433 $1,050,010 =======================================================================================================
CONSOLIDATED FINANCIAL HIGHLIGHTS (In Thousands, Except Per Share Data) (Unaudited)
9 MONTHS ENDED % SEPTEMBER INCREASE 2004 2003 (DECREASE) ---- ---- ---------- EARNINGS PERFORMANCE Net Income $ 10,800 $ 11,910 -9.32% Return on Average Assets 1.30% 1.54% -15.58% Return on Average Assets, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 1.32% 1.57% -15.92% Return on Average Equity 11.28% 13.10% -13.89% Return on Average Equity, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 12.33% 14.76% -16.46% BALANCE SHEET HIGHLIGHTS Total Assets $1,135,433 $1,050,010 8.14% Available-for-Sale Securities 499,572 482,064 3.63% Loans (Net) 564,867 500,005 12.97% Allowance for Loan Losses 6,570 5,898 11.39% Deposits and Repo Sweep Accounts 695,836 675,594 3.00% Trust Assets Under Management 358,349 307,623 16.49% SHAREHOLDERS' VALUE (PER SHARE) (**) Net Income - Basic $ 1.33 $ 1.47 -9.52% Net Income - Diluted $ 1.32 $ 1.46 -9.59% Dividends $ 0.66 $ 0.63 4.76% Book Value $ 15.92 $ 15.09 5.50% Book Value, Excluding Unrealized Gains/Losses on Available-for- sale Securities (***) $ 14.66 $ 13.67 7.24% Market Value (Last Trade) $ 25.00 $ 26.24 -4.73% Market Value / Book Value 157.04% 173.89% -9.69% Market Value / Book Value, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 170.53% 191.95% -11.16% Price Earnings Multiple 14.10 13.39 5.30% Dividend Yield 3.52% 3.20% 10.00% SAFETY AND SOUNDNESS Shareholders' Equity / Average Assets, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 10.71% 10.66% 0.47% Nonperforming Assets / Total Assets 0.67% 0.13% 415.38% Allowance for Loan Losses / Total Loans 1.15% 1.17% -1.71% Risk Based Capital Ratio 18.92% 20.55% -7.93% AVERAGE BALANCES Average Assets $1,107,753 $1,029,638 7.59% Average Assets, Excluding Unrealized Gains/Losses on Available-for-sale Securities 1,091,299 1,008,972 8.16% Average Equity 127,687 121,200 5.35% Average Equity, Excluding Unrealized Gains/Losses on Available-for-sale Securities 116,828 107,561 8.62%
(*) Net unrealized gains/losses on available-for-sale securities are presented as "Accumulated Other Comprehensive Income" in the annual and quarterly financial statements filed with the Securities and Exchange Commission. (**) For purposes of per share calculations, the market value and number of outstanding shares have been retroactively adjusted for the effects of the 3-for-2 stock split issued in April 2003, and for 1% stock dividends issued in January of each year presented. (***) Generally accepted accounting principles ("GAAP") require that available-for-sale securities be reported at fair value, with unrealized gains and losses excluded from earnings and reported separately through shareholders' equity, net of tax. Management believes there is an inherent mismatch between the income statement and balance sheet related to unrealized gains/losses that may create a material inconsistency in the calculation of earnings-based ratios. Further, the amount of unrealized gains or losses may vary widely from period-to-period, depending on the financial markets as a whole and interest rate movements. Therefore, management has provided these "non-GAAP" ratios because we believe they provide meaningful information for evaluating the Corporation's financial position and results of operations. -----END PRIVACY-ENHANCED MESSAGE-----