Citizens Financial Services, Inc. Reports First Quarter 2014 Earnings
MANSFIELD, Pa., April 28, 2014 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC BB: CZFS), parent company of First Citizens Community Bank, has released its unaudited financial performance for the three months ended March 31, 2014.
For the three months ended March 31, 2014, net income totaled $3,176,000 which compares to net income of $3,287,000 for the first quarter of 2013. This represents a decrease of $111,000, or 3.4%. Earnings per share of $1.05 for the first quarter compares to $1.08 last year. Annualized return on equity for the comparable periods was 13.38% and 15.22%, while return on assets was 1.41% and 1.50%, respectively.
CEO and President Randall E. Black stated, "Financial results continue to remain strong and continue to place us near the top of our peers, even though performance is slightly below 2013's first quarter results. Margin compression and increasing regulatory burdens continue to be the primary factors in our first quarter results. However, our results reflect our commitment to remain a strong, well-capitalized, local community bank committed to serving our communities and customers, as well as providing exceptional shareholder return and value. We continue to focus on our strategic plan, which includes investments in technology, new products and services, and wealth management resources. During the first quarter, we introduced our mobile banking app which is an example of our commitment to serving our customers and meeting their needs for better and more convenient banking products and services."
Net interest income, before the provision for loan losses, increased from $7,313,000 for the three months ended March 31, 2013, to $7,512,000 for 2014. Although interest income decreased $218,000, interest expense decreased $417,000 from last year's first quarter resulting in an overall increase in net interest income of $199,000 over the comparable periods. "The margin decreased from 3.90% last year to 3.87% this year due to the continued difficult economic environment that has been persistent in impacting us and others in our industry. The prolonged interest rate environment has resulted in a continued decrease in the tax-effected yield on interest earning assets, from 4.72% last year to 4.47% this year. Interest earning assets, mostly loans, increased by $28 million compared to last year, which helped significantly in offsetting the decline in yields. The cost of interest bearing liabilities declined from .99% last year to .72% in 2014," added Mr. Black.
At March 31, 2014, total assets were $902.6 million, up from total assets of $883 million as of March 31, 2013 and down slightly from total assets of $914.9 million at December 31, 2013. The investment portfolio has decreased $6.3 million from year-end 2013. Net loans of $526 million as of the end of March have decreased $7.5 million, or 1.4%, compared to the end of last year. However, net loans have increased $29.2 million from the end of March 2013. Asset quality remains strong. As of March 31, 2014, non-performing assets totaled $10.5 million and represented 1.98% of loans. This compares to 1.88% as of December 31, 2013. Annualized net charge-offs as a percent of average loans remains very low at .03%.
Stockholders' equity totaled $95.6 million at March 31, 2014, which compares to $92.1 million at December 31, 2013. Net income of $3.2 million was offset by cash dividends of $1.2 million. Additionally, the unrealized gain on available for sale investment securities increased $1.4 million from the end of 2013 as a result of changes in interest rates impacting the fair value of investment securities. A cash dividend of $.385 per share was paid on March 28, 2014 to shareholders of record on March 21, 2014. This quarterly cash dividend is an increase of 35% over the dividend declared a 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 18 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 |
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| (UNAUDITED) |
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| March 31 |
December 31 |
March 31 |
|
| (in thousands except share data) |
2014 |
2013 |
2013 |
| ASSETS: |
|||
| Cash and due from banks: |
|||
| Noninterest-bearing |
$ 10,642 |
$ 8,899 |
$ 6,162 |
| Interest-bearing |
767 |
1,184 |
30,952 |
| Total cash and cash equivalents |
11,409 |
10,083 |
37,114 |
| Interest bearing time deposits with other banks |
2,480 |
2,480 |
- |
| Available-for-sale securities |
310,983 |
317,301 |
300,176 |
| Loans held for sale |
242 |
278 |
- |
| Loans (net of allowance for loan losses: $7,233 at March 31, 2014; |
|||
| $7,098 at December 31, 2013 and $6,928 at March 31, 2013) |
525,990 |
533,514 |
496,795 |
| Premises and equipment |
10,994 |
11,105 |
11,446 |
| Accrued interest receivable |
3,771 |
3,728 |
3,840 |
| Goodwill |
10,256 |
10,256 |
10,256 |
| Bank owned life insurance |
14,800 |
14,679 |
14,301 |
| Other assets |
11,701 |
11,510 |
9,022 |
| TOTAL ASSETS |
$ 902,626 |
$ 914,934 |
$ 882,950 |
| LIABILITIES: |
|||
| Deposits: |
|||
| Noninterest-bearing |
$ 95,230 |
$ 85,585 |
$ 85,330 |
| Interest-bearing |
658,413 |
662,731 |
651,591 |
| Total deposits |
753,643 |
748,316 |
736,921 |
| Borrowed funds |
45,728 |
66,932 |
45,556 |
| Accrued interest payable |
774 |
895 |
1,039 |
| Other liabilities |
6,897 |
6,735 |
8,664 |
| TOTAL LIABILITIES |
807,042 |
822,878 |
792,180 |
| STOCKHOLDERS' EQUITY: |
|||
| Preferred Stock $1.00 par value; authorized |
|||
| 3,000,000 shares at March 31, 2014, December 31, 2013 and March 31, 2013; |
|||
| none issued in 2014 or 2013 |
- |
- |
- |
| Common stock |
|||
| $1.00 par value; authorized 15,000,000 shares at March 31, 2014, December 31, 2013 and |
|||
| March 31, 2013; issued 3,305,517 shares at March 31, 2014 and December 31, 2013; |
|||
| 3,161,324 shares at March 31, 2013 |
3,306 |
3,306 |
3,161 |
| Additional paid-in capital |
23,623 |
23,562 |
16,534 |
| Retained earnings |
76,340 |
74,325 |
74,276 |
| Accumulated other comprehensive income (loss) |
154 |
(1,225) |
3,627 |
| Treasury stock, at cost: 288,822 shares at March 31, 2014; 290,468 shares at |
|||
| December 31, 2013 and 267,729 shares at March 31, 2013 |
(7,839) |
(7,912) |
(6,828) |
| TOTAL STOCKHOLDERS' EQUITY |
95,584 |
92,056 |
90,770 |
| TOTAL LIABILITIES AND |
|||
| STOCKHOLDERS' EQUITY |
$ 902,626 |
$ 914,934 |
$ 882,950 |
| The accompanying notes are an integral part of these unaudited consolidated financial statements. |
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| CITIZENS FINANCIAL SERVICES, INC. |
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| CONSOLIDATED STATEMENT OF INCOME |
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| (UNAUDITED) |
||
| Three Months Ended |
||
| March 31, |
||
| (in thousands, except per share data) |
2014 |
2013 |
| INTEREST INCOME: |
||
| Interest and fees on loans |
$ 6,988 |
$ 7,137 |
| Interest-bearing deposits with banks |
13 |
10 |
| Investment securities: |
||
| Taxable |
888 |
963 |
| Nontaxable |
842 |
869 |
| Dividends |
50 |
20 |
| TOTAL INTEREST INCOME |
8,781 |
8,999 |
| INTEREST EXPENSE: |
||
| Deposits |
1,105 |
1,328 |
| Borrowed funds |
164 |
358 |
| TOTAL INTEREST EXPENSE |
1,269 |
1,686 |
| NET INTEREST INCOME |
7,512 |
7,313 |
| Provision for loan losses |
180 |
150 |
| NET INTEREST INCOME AFTER |
||
| PROVISION FOR LOAN LOSSES |
7,332 |
7,163 |
| NON-INTEREST INCOME: |
||
| Service charges |
995 |
1,024 |
| Trust |
191 |
201 |
| Brokerage and insurance |
120 |
92 |
| Gains on loans sold |
40 |
111 |
| Investment securities gains, net |
171 |
196 |
| Earnings on bank owned life insurance |
121 |
124 |
| Other |
105 |
104 |
| TOTAL NON-INTEREST INCOME |
1,743 |
1,852 |
| NON-INTEREST EXPENSES: |
||
| Salaries and employee benefits |
2,917 |
2,805 |
| Occupancy |
350 |
342 |
| Furniture and equipment |
100 |
102 |
| Professional fees |
234 |
229 |
| FDIC insurance |
113 |
112 |
| Pennsylvania shares tax |
193 |
183 |
| Other |
1,140 |
1,049 |
| TOTAL NON-INTEREST EXPENSES |
5,047 |
4,822 |
| Income before provision for income taxes |
4,028 |
4,193 |
| Provision for income taxes |
852 |
906 |
| NET INCOME |
$ 3,176 |
$ 3,287 |
| PER COMMON SHARE DATA: |
||
| Net Income - Basic |
$ 1.05 |
$ 1.08 |
| Net Income - Diluted |
$ 1.05 |
$ 1.08 |
| Cash Dividends Paid |
$ 0.385 |
$ 0.272 |
| Number of shares used in computation - basic |
3,012,204 |
3,033,716 |
| Number of shares used in computation - diluted |
3,012,398 |
3,034,165 |
| Financial Highlights |
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| Three Months Ended |
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| March 31 |
|||
| 2014 |
2013 |
||
| Performance Ratios and Share Data: |
|||
| Return on average assets (annualized) |
1.41% |
1.50% |
|
| Return on average equity (annualized) |
13.38% |
15.22% |
|
| Net interest margin (tax equivalent) |
3.87% |
3.90% |
|
| Cash dividends paid per share |
$ 0.385 |
$ 0.272 |
|
| Earnings per share - basic |
$ 1.05 |
$ 1.08 |
|
| Earnings per share - diluted |
$ 1.05 |
$ 1.08 |
|
| Number of shares used in computation - basic |
3,012,204 |
3,033,716 |
|
| Number of shares used in computation - diluted |
3,012,398 |
3,034,165 |
|
| Balance Sheet Highlights (dollars in thousands): |
March 31, 2014 |
December 31, 2013 |
March 31, 2013 |
| Assets |
$ 902,626 |
$ 914,934 |
$ 882,950 |
| Investment securities: |
|||
| Available for sale |
310,983 |
317,301 |
300,176 |
| Loans (net of unearned income) |
533,223 |
540,612 |
503,723 |
| Allowance for loan losses |
7,233 |
7,098 |
6,928 |
| Deposits |
753,643 |
748,316 |
736,921 |
| Stockholders' Equity |
95,584 |
92,056 |
90,770 |
| Non-performing assets |
10,538 |
10,154 |
8,911 |
| Non-performing assets to total loans |
1.98% |
1.88% |
1.77% |
| Annualized net charge-offs to total loans |
0.03% |
0.02% |
0.01% |
| Average Leverage Ratio |
10.64% |
10.42% |
9.96% |
| Common shares outstanding |
3,016,695 |
3,015,049 |
2,893,595 |
| Book value per share |
$ 31.63 |
$ 30.94 |
$ 28.69 |
SOURCE Citizens Financial Services, Inc.
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