Attached files
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| 8-K - FOURTH QUARTER 2010 8-K - CITIZENS FINANCIAL SERVICES INC | fourthquarter2010.htm |
EXHIBIT 99.1
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Contact:
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Kathleen Campbell, Marketing Director
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First Citizens National Bank
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570-662-0422
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15 S. Main Street
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570-662-8512 (fax)
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Mansfield, PA 16933
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Citizens Financial Services, Inc. Reports record 2010 Earnings
MANSFIELD, PENNSYLVANIA— January 26, 2011 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the fourth quarter ended December 31, 2010.
Net income for the year ended December 31, 2010 totaled $11,502,000 which compares to $9,864,000 last year. This represents an increase of $1,638,000, or 16.6%. Earnings per share of $3.97 increased 16.8% from $3.40 per share last year. Annualized return on equity for the comparable periods was 18.13% and 17.65%, while return on assets was 1.50% and 1.42%, respectively.
Net income for the three months ended December 31, 2010 totaled $2,932,000 which compares to $2,658,000 for the fourth quarter of 2009, representing an increase of $274,000, or 10.3%. Earnings per share of $1.01 increased 9.8% from $.92 per share for the same period last year. Annualized return on equity for the 2010 and 2009 comparable periods was 17.62% and 18.19%, while return on assets was 1.46% and 1.48%, respectively.
As of December 31, 2010, total assets were $812.5 million, which was an increase of $83.0 million from December 31, 2009. At the end of 2010, the investment portfolio totaled $251.3 million, which is an increase of $52.7 million since the end of 2009. Net loans of $467.6 million have increased $16.1 million, or 3.6%, since December 31, 2009 while total deposits have increased $75.2 million, or 12.4%. The growth in deposits continues to be attributable to the impact of the exploration and extraction of the Marcellus Shale, outstanding customer service and the overall financial strength of First Citizens.
CEO and President Randall E. Black stated, “Our record earnings for 2010 reflect our disciplined balance sheet management, emphasis on credit quality and our continued focus on efficiency. Net interest income, before the provision for loan loss, increased from $25,384,000 last year to $27,660,000 this year, an increase of $2,276,000, or 9.0%. On a tax equivalent basis, our net interest margin on interest earning assets has declined slightly from 4.23% last year to 4.19% this year. This is mostly due to a decline in asset yields, particularly yields on our investment securities. However, we have been able to decrease our deposit costs by attracting additional low cost deposits combined with the benefit of a lower certificates of deposit cost structure, which is result of the current interest environment. Even with our growth, our non-interest expenses have remained flat compared with last year”.
Mr. Black further stated, “In general the economy continues to improve, albeit sporadically and at a relatively slow pace. Locally however, our economy has been significantly impacted by the natural gas exploration efforts of the Marcellus Shale. Local unemployment levels remain relatively high compared to historical levels, but are somewhat lower than statewide and national levels due to the activities associated with the extraction and exploration process. Overall, the economy and slow recovery have had an adverse impact on our credit quality. Non-performing assets as a percent of loans was 2.80% at December 31, 2010 which is an increase from 1.55% at the end of December 2009. However, the level has improved from 3.01% at the end of September, 2010. Additionally, 72.5% of non-performing assets are paid current. Most of the increase in non-performing assets is attributable to one large commercial loan, which is also current and we believe is well collateralized. We continue to compare favorably to other community banks in our industry, even with this increase. As a result of the increase, the provision for loan losses totaled $1,255,000 for 2010 compared with $925,000 last year, an increase of $330,000, or 35.7%”.
Stockholders’ equity totaled $68.7 million at December 31, 2010, representing an increase of $7.2 million, or 11.7%, from December 31, 2009. Book value per share was $23.38 compared with $20.71 last December, an increase of 12.9%. “First Citizens remains well capitalized based upon regulatory guidelines and our strong financial performance during 2010 has enabled us to continue to build our capital levels while still providing an attractive dividend to our shareholders, as evidenced by the December 17, 2010 special cash dividend of 7 ½ cents per share”, stated Mr. Black. Cash dividends paid per share for 2010 totaled $1.095 compared with $1.03 per share in 2009, which represents a 6.3% increase. Additionally, a cash dividend of $.26 per share was declared on January 10, 2011. This dividend will be paid on January 28, 2011 to shareholders of record as of January 17, 2011, which is an increase of 4% over the cash dividend declared one year ago.
Citizens Financial Services, Inc. has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 18 offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
1
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED BALANCE SHEET
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(UNAUDITED)
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December 31
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December 31
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(in thousands except share data)
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2010
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2009
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ASSETS:
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Cash and due from banks:
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Noninterest-bearing
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$ 9,541
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$ 9,505
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Interest-bearing
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34,454
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21,944
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Total cash and cash equivalents
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43,995
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31,449
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Available-for-sale securities
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251,303
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198,582
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Loans (net of allowance for loan losses: $5,915 at December 31, 2010 and
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$4,888 at December 31, 2009)
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467,602
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451,496
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Premises and equipment
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12,503
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12,227
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Accrued interest receivable
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3,455
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3,141
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Goodwill
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10,256
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10,256
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Bank owned life insurance
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13,171
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12,667
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Other assets
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10,241
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9,659
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TOTAL ASSETS
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$ 812,526
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$ 729,477
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 75,589
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$ 60,061
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Interest-bearing
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605,122
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545,498
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Total deposits
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680,711
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605,559
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Borrowed funds
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55,996
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54,115
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Accrued interest payable
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1,779
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2,037
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Other liabilities
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5,350
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6,239
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TOTAL LIABILITIES
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743,836
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667,950
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STOCKHOLDERS' EQUITY:
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Preferred Stock $1.00 par value; authorized
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3,000,000 shares at December 31, 2010 and none as of December 31, 2009;
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none issued in 2010 or 2009
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-
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-
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Common stock
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$1.00 par value; authorized 15,000,000 shares at December 31, 2010 and 10,000,000 at
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December 31, 2009; issued 3,104,434 shares at December 31, 2010 and
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3,076,253 shares at December 31, 2009
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3,104
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3,076
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Additional paid-in capital
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14,235
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13,457
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Retained earnings
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54,932
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47,353
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Accumulated other comprehensive income
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1,054
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2,041
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Treasury stock, at cost: 212,067 shares at December 31, 2010 and 204,437 shares at
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December 31, 2009
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(4,635)
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(4,400)
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TOTAL STOCKHOLDERS' EQUITY
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68,690
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61,527
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TOTAL LIABILITIES AND
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STOCKHOLDERS' EQUITY
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$ 812,526
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$ 729,477
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2
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED STATEMENT OF INCOME
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(UNAUDITED)
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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(in thousands, except per share data)
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2010
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2009
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2010
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2009
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INTEREST INCOME:
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Interest and fees on loans
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$ 7,774
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$ 7,689
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$ 31,042
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$ 30,305
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Interest-bearing deposits with banks
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35
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16
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90
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43
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Investment securities:
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Taxable
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1,099
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1,397
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4,876
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6,044
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Nontaxable
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805
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612
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2,945
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2,195
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Dividends
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20
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8
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47
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28
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TOTAL INTEREST INCOME
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9,733
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9,722
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39,000
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38,615
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INTEREST EXPENSE:
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Deposits
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2,186
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2,667
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9,560
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11,222
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Borrowed funds
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456
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490
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1,780
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2,009
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TOTAL INTEREST EXPENSE
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2,642
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3,157
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11,340
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13,231
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NET INTEREST INCOME
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7,091
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6,565
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27,660
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25,384
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Provision for loan losses
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415
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225
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1,255
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925
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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6,676
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6,340
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26,405
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24,459
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NON-INTEREST INCOME:
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Service charges
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930
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948
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3,639
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3,612
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Trust
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131
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124
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542
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521
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Brokerage and insurance
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125
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56
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439
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284
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Gains on loans sold
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249
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138
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341
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430
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Investment securities gains, net
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-
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21
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99
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139
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Earnings on bank owned life insurance
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128
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128
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504
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492
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Other
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88
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91
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446
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369
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TOTAL NON-INTEREST INCOME
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1,651
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1,506
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6,010
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5,847
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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2,557
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2,454
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9,850
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9,472
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Occupancy
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321
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290
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1,219
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1,179
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Furniture and equipment
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123
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101
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454
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437
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Professional fees
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172
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201
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681
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660
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Federal deposit insurance
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251
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170
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950
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1,200
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Other
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1,163
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1,230
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4,603
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4,811
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TOTAL NON-INTEREST EXPENSES
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4,587
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4,446
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17,757
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17,759
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Income before provision for income taxes
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3,740
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3,400
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14,658
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12,547
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Provision for income taxes
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808
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742
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3,156
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2,683
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NET INCOME
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$ 2,932
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$ 2,658
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$ 11,502
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$ 9,864
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Earnings Per Share
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$ 1.01
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$ 0.92
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$ 3.97
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$ 3.40
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Cash Dividends Paid Per Share
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$ 0.335
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$ 0.300
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$ 1.095
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$ 1.030
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Weighted average number of shares outstanding
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2,891,698
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2,901,574
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2,895,151
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2,901,669
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3
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Financial Highlights
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Three Months Ended
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Twelve Months Ended
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December 31
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December 31
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2010
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2009
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2010
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2009
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Performance Ratios and Share Data:
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Return on average assets (annualized)
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1.46%
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1.48%
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1.50%
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1.42%
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Return on average equity (annualized)
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17.62%
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18.19%
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18.13%
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17.65%
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Net interest margin (tax equivalent on interest
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earning assets)
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4.08%
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4.21%
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4.19%
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4.23%
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Cash dividends paid per share
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$0.335
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$0.300
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$1.095
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$1.030
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Earnings per share
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$1.01
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$0.92
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$3.97
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$3.40
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Weighted average shares outstanding
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2,891,698
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2,901,574
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2,895,151
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2,901,669
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Balance Sheet Highlights (dollars in thousands):
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December 31, 2010
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December 31, 2009
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Assets
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$ 812,526
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$ 729,477
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Investment securities - Available For Sale
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251,303
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198,582
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Loans (net of unearned income)
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473,517
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456,384
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Allowance for loan losses
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5,915
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4,888
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Deposits
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680,711
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605,559
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Stockholders' Equity
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68,690
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61,527
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Non-performing assets
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13,238
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7,057
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Non-performing assets to total loans
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2.80%
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1.55%
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Average Leverage Ratio
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8.61%
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8.15%
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Common shares outstanding
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2,892,367
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2,871,816
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Book value per share
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$ 23.38
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$ 20.71
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4