-----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, DENRCZiXg45oEjQqm1xUoIsYRfu25j7DrfO++LzgIu9yQzE6vbBUQK5oqUYmn8wu ZX/guYaZz+fvIyMfNw/VGA== 0000950152-05-005872.txt : 20050712 0000950152-05-005872.hdr.sgml : 20050712 20050712164810 ACCESSION NUMBER: 0000950152-05-005872 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050630 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050712 DATE AS OF CHANGE: 20050712 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: 05950756 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 l14921ae8vk.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) June 30, 2005 ------------- 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 six-month and three-month periods ended June 30, 2005. On July 12, 2005, Citizens & Northern Corporation issued a press release titled "C&N Announces June 30, 2005 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, Citizens & Northern Corporation's "Quarterly Report," a report that includes unaudited financial information, will be mailed to shareholders on or about July 20, 2005. 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 July 12, 2005, titled "C&N Announces June 30, 2005 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: 7/12/05 By: /s/ Craig G. Litchfield ----------------------- Chairman, President and Chief Executive Officer EX-99.1 2 l14921aexv99w1.txt EXHIBIT 99.1 Exhibit 99.1 PRESS RELEASE CITIZENS & NORTHERN BANK Contact: Yvonne Gill July 12, 2005 570-724-0247 ygill@cnbankpa.com C&N ANNOUNCES JUNE 30, 2005 UNAUDITED FINANCIAL RESULTS FOR IMMEDIATE RELEASE: Wellsboro, PA - Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the six months ended June 30, 2005, and for the second quarter 2005, which are highlighted below. FINANCIAL HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2005: o Net Income was $6,593,000 for the six months ended June 30, 2005, down 10.9% from net income of $7,395,000 for the first six months of 2004. Net Income Per Share (Basic and Diluted) was $0.80 for the six months ended June 30, 2005, as compared to $0.90 (Basic and Diluted) for the first six months of 2004. o Return on Average Assets was 1.17% for the first six months of 2005, as compared to 1.35% for the first six months of 2004. Return on Average Equity was 9.96% for the six months ended June 30, 2005, as compared to 11.52% for the first six months of 2004. o Total assets amounted to $1,133,701,000 as of June 30, 2005, up 1.3% from total assets of $1,119,139,000 as of June 30, 2004. o Shareholders' Equity/Average Assets Ratio was 11.06% as of June 30, 2005. 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 by 4.6% for the first six months of 2005 over the same period in 2004, to $0.46 per share. o Despite a flattening yield curve, net interest income of $17,489,000 for the first six months of 2005 was $327,000, or 1.9%, higher than the first six months of 2004. Net loans increased 10.9% as compared to one year earlier, to $604,514,000 as of June 30, 2005. The increase in loan volume has been the major reason for the growth in net interest income over the first half of 2005. o Net realized gains from securities amounted to $1,955,000 for the six months ended June 30, 2005, up $710,000 from the first six months of 2004. The Corporation's volume of investment security sales was high by historical standards during the first six months of 2005, as management identified several bank stocks that were deemed fully valued and also sold selected debt securities in an effort to manage its interest rate risk position. o Noninterest expense increased $1,784,000 (14.3%) in the first six months of 2005 as compared to the first six months of 2004. Furniture and equipment expense increased $574,000, or 79.3%, mainly due to depreciation and maintenance costs associated with the new core banking software system, which was implemented in the fourth quarter 2004. Salaries and wages increased $523,000, or 9.7%. The increase in salaries expense is primarily a reflection of a greater number of employees, resulting from expansion into new branches in Williamsport and South Williamsport in 2004, hiring new employees for the Jersey Shore and Old Lycoming Township branches expected to open within the next six months, and the addition of new employees for support functions, such as Risk Management, Finance and Training. Other expenses increased $293,000, or 9.1%, including an increase in attorney fees of $159,000, mainly related to collection activities on a large commercial credit, and an increase of $135,000 in expenses associated with maintaining and preparing other real estate properties for sale. FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER 2005: o Net Income in the second quarter 2005 was $3,298,000, or 3.7%, lower than second quarter 2004 Net Income of $3,689,000. Net Income for the second quarter 2005 was almost identical to first quarter 2005 Net income of $3,295,000. Net Income Per Share (Basic and Diluted) was $0.40 in the second quarter 2005, the same as the first quarter 2005, but down from $0.45 (Basic and Diluted) in the second quarter 2004. o Cash Dividends declared by C&N increased to $0.23 per share for the second quarter 2005 from $0.22 per share for the second quarter 2004. C&N, founded in 1864, is a local, independent community bank providing complete financial, investment and insurance services through 19 full service offices throughout Tioga, Bradford, Sullivan and Lycoming counties. Citizens & Northern Bank is a wholly-owned subsidiary of Citizens & Northern Corporation, which has assets in excess of $1 billion. C&N can be found on the worldwide web at www.cnbankpa.com. The Company's stock trades on the NASDAQ SmallCap Market under the symbol CZNC. EX-99.2 3 l14921aexv99w2.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 Chartered 1864 FEDERAL DEPOSIT INSURANCE CORP JUNE 30, 2005 QUARTERLY REPORT - ------------- Dear Shareholder: Our planned opening of the Jersey Shore office has been temporarily delayed due to the failure of a landscaping retaining wall. Further engineering has been completed to assure that the new wall will be sound. We expect the opening to be delayed about one month as a result. Once the Jersey Shore site is completed, we will begin the Old Lycoming Township office, which we plan to have opened by January 2006. Our new administration building is well under way and we expect to move in by November. The acquisition of the Canisteo Valley Corporation, the parent company of First State Bank, should be completed during the third quarter of this year. The people of First State Bank and we are eager to begin the process of bringing our organizations together. Financial results for the first 6 months of 2005 continue to be affected by the increased costs from the expansion into Williamsport and Lycoming County and the costs associated with the new core processing system. Additionally, as the Federal Reserve continues to increase the Fed Funds rate, longer-term rates have remained relatively unchanged. This has had the effect of reducing our interest rate spread. Interest and dividend income have increased 4.38%, or $1.24 million as a result or our growing loan portfolio, while interest expense increased 8.18%, or $916 thousand due to deposit rate competitive pressures. The interest margin increased 1.9%, or $327 thousand, which was not enough to offset the other expenses increase of 14.25% or $1.784 million. Net income as compared to the same period of 2004 is down 10.85%. We believe that these current expense increases due to the branch expansion and the new core system are investments that will enhance future revenues and net income. Total assets increased from last year by only 1.3%. Loan demand and origination remains strong with an increase of 10.85%, $59.1 million. The loan portfolio increase was funded primarily by a decrease in available-for-sale securities of 10.01%, or $50.4 million. Deposits and repo sweeps increased by a modest 2.77%, or $19.066 million and borrowed funds decreased by approximately the same amount. Trust assets under management compared to the same period last year increased by 11.73% to over $401 million. Our stock was added to the Russell 2000(R) on June 24th, which has created a great deal of trading by institutional investors. The increased institutional demand has positively affected the share price. We continue to be excited by the opportunities for growth that lie before us. 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 F. David Pennypacker 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 18810570-888-2291 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, PA18848570-265-6171 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 16901800-487-8784 428 Main Street, Towanda, PA 18848888-987-8784 503 N. Elmira Street, Sayre, PA 18840888-760-8192 3461 Rte 405 Highway, Muncy, PA 17756570-546-6666 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 6 MONTHS ENDED JUNE JUNE 2005 2004 2005 2004 (CURRENT) (PRIOR YR) (CURRENT) (PRIOR YR) Interest and Dividend Income $ 14,908 $ 14,343 $ 29,601 $ 28,358 Interest Expense 6,155 5,493 12,112 11,196 - ------------------------------------------------------------------------------------------------------------------------- Interest Margin 8,753 8,850 17,489 17,162 Provision for Loan Losses 375 350 750 700 - ------------------------------------------------------------------------------------------------------------------------- Interest Margin After Provision for Loan Losses 8,500 16,739 16,462 8,378 Other Income 1,889 1,855 3,592 3,480 Realized Gains on Securities, Net 929 321 1,995 1,285 Other Expenses 7,173 6,289 14,301 12,517 - ------------------------------------------------------------------------------------------------------------------------- Income Before Income Tax Provision 4,023 4,387 8,025 8,710 Income Tax Provision 725 698 1,432 1,315 - ------------------------------------------------------------------------------------------------------------------------- NET INCOME $ 3,298 $ 3,689 $ 6,593 $ 7,395 ========================================================================================================================= PER SHARE DATA (**): Net Income - Basic $0.40 $0.45 $0.80 $0.90 Net Income - Diluted $0.40 $0.45 $0.80 $0.90 Dividend Per Share $0.23 $0.22 $0.46 $0.44 Number Shares Used in Computation - Basic 8,210,469 8,182,034 8,201,902 8,187,606 Number Shares Used in Computation - Diluted 8,274,780 8,229,149 8,269,365 8,239,222
CONSOLIDATED BALANCE SHEET (In Thousands, Except Per Share Data) (Unaudited)
JUNE 30, JUNE 30, 2005 2004 ---- ---- ASSETS Cash & Due from Banks $ 16,653 $ 15,334 Available-for-Sale Securities 453,288 503,700 Loans, Net 604,514 545,360 Other Assets 59,246 54,745 - -------------------------------------------------------------------------------------------------- TOTAL ASSETS $1,133,701 $1,119,139 ================================================================================================== LIABILITIES Deposits $ 685,105 $ 670,098 Repo Sweep Accounts 21,812 17,753 - -------------------------------------------------------------------------------------------------- Total Deposits and Repo Sweeps 706,917 687,851 Borrowed Funds 283,349 302,353 Other Liabilities 10,619 7,778 - -------------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,000,885 997,982 - -------------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Shareholders' Equity, Excluding Net Unrealized Gains/Losses on Available-for sale Securities 124,338 117,060 Net Unrealized Gains/Losses on Available- for-sale Securities (*) 8,478 4,097 - -------------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 132,816 121,157 - -------------------------------------------------------------------------------------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $1,133,701 $1,119,139 ==================================================================================================
CONSOLIDATED FINANCIAL HIGHLIGHTS (In Thousands, Except Per Share Data) (Unaudited)
6 MONTHS ENDED % JUNE INCREASE 2005 2004 (DECREASE) ---- ---- ---------- EARNINGS PERFORMANCE Net Income $ 6,593 $ 7,395 -10.85% Return on Average Assets 1.17% 1.35% -13.33% Return on Average Assets, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 1.18% 1.37% -13.87% Return on Average Equity 9.96% 11.52% -13.54% Return on Average Equity, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 10.67% 12.74% -16.25% BALANCE SHEET HIGHLIGHTS Total Assets $ 1,133,701 $ 1,119,139 1.30% Available-for-Sale Securities 453,288 503,700 -10.01% Loans (Net) 604,514 545,360 10.85% Allowance for Loan Losses 7,037 6,609 6.48% Deposits and Repo Sweep Accounts 706,917 687,851 2.77% Trust Assets Under Management 401,360 359,230 11.73% SHAREHOLDERS' VALUE (PER SHARE) (**) Net Income - Basic $ 0.80 $ 0.90 -11.11% Net Income - Diluted $ 0.80 $ 0.90 -11.11% Dividends $ 0.46 $ 0.44 4.55% Book Value $ 16.18 $ 14.81 9.25% Book Value, Excluding Unrealized Gains/Losses on Available-for- sale Securities (***) $ 15.14 $ 14.31 5.80% Market Value (Last Trade) $ 31.24 $ 25.20 23.97% Market Value / Book Value 193.08% 170.16% 13.47% Market Value / Book Value, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 206.34% 176.10% 17.17% Price Earnings Multiple 19.53 14.00 39.50% Dividend Yield 2.94% 3.49% -15.76% SAFETY AND SOUNDNESS Shareholders' Equity / Average Assets, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 11.06% 10.76% 2.79% Nonperforming Assets / Total Assets 0.70% 0.75% -6.67% Allowance for Loan Losses / Total Loans 1.15% 1.20% -4.17% Risk Based Capital Ratio 18.45% 19.40% -4.90% AVERAGE BALANCES Average Assets $ 1,130,873 $ 1,096,969 3.09% Average Assets, Excluding Unrealized Gains/Losses on Available-for-sale Securities 1,117,488 1,078,350 3.63% Average Equity 132,410 128,340 3.17% Average Equity, Excluding Unrealized Gains/Losses on Available-for-sale Securities 123,576 116,052 6.48%
(*) 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 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-----