Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - CITIZENS & NORTHERN CORP | v325887_8k.htm |
| EX-99.1 - EXHIBIT 99.1 - CITIZENS & NORTHERN CORP | v325887_ex99-1.htm |
| EX-99.3 - EXHIBIT 99.3 - CITIZENS & NORTHERN CORP | v325887_ex99-3.htm |
EXHIBIT 99.2
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
September 30, 2012 QUARTERLY REPORT
I am pleased to again report strong financial results for the third quarter of 2012. Net income for the quarter was $5,494,000 and $16,766,000 year-to-date which equates to a superior Return on Average Assets (ROAA) of 1.70% and Return on Average Equity (ROAE) of 12.85%.
You will note that during the third quarter 2012, C&N generated gains from sales of securities totaling $2,430,000, and also incurred a loss from prepayment of borrowings totaling $2,190,000. The security gains were mainly the result of the sale of a previously written off trust-preferred security and the sale mainly of bank stocks. During the quarter the bank prepaid $12,000,000 of long-term borrowings (repurchase agreements) resulting in the loss previously mentioned. Management estimates the effect on the net interest margin for the next several quarters of prepaying the borrowings, as opposed to reinvesting in securities at current market yields, will be a benefit of approximately 0.05%.
I am proud to announce that Citizens & Northern Bank has been ranked Number One in the nation by Bank Director Magazine’s 2012 Bank Performance Scorecard. C&N placed first out of 195 publicly traded financial institutions in the $1 billion - $5 billion category. The 2012 Bank Performance Scorecard uses five key metrics that measure profitability (core return on average assets and core return on average equity); and asset quality (ratio of nonperforming assets to loans and real estate owned, and ratio of net charge offs to average loans). You can read the article and view all of the rankings here: hhtp://www.bankdirector.com/index.php/magazine/archives/3rd-quarter-2012/.
Trust assets under management have grown 19.31% to $707,571,000 over the past year, reflecting the effect of new accounts as well as net appreciation in asset values.
The market value of Citizens & Northern Corporation (CZNC) stock closed the quarter at $19.61 which represents a 31.97% increase over the past twelve months. The stock was trading at 143.03% of tangible common book value.
A weak economy, a prolonged duration of historically low interest rates, increased regulatory costs due to Dodd-Frank and uncertain future tax policy are just a few of the headwinds facing our industry. Citizens & Northern, with its strong capital base, solid earnings history and dedicated workforce is well positioned to deal with the challenges.
I solicit your continued support and welcome your questions.
Charles H. Updegraff, Jr.
Chairman, President & CEO
CITIZENS & NORTHERN CORPORATION
BOARD OF DIRECTORS
Charles H. Updegraff, Jr. – Chairman
| Dennis F. Beardslee | Raymond R. Mattie |
| Jan E. Fisher | Edward H. Owlett, III |
| R. Bruce Haner | Leonard Simpson |
| Susan E. Hartley | James E. Towner |
| Leo F. Lambert | Ann M. Tyler |
CITIZENS & NORTHERN BANK
1-877-838-2517
OFFICES
428 S. Main Street, ATHENS, PA 18810
3 Main Street, CANISTEO, NY 14823
10 N Main Street, COUDERSPORT, PA 16915
111 Main Street, DUSHORE, PA 18614
563 Main Street, EAST SMITHFIELD, PA 18817
104 Main Street, ELKLAND, PA 16920
135 East Fourth Street, EMPORIUM, PA 15834
6250 County Route 64, HORNELL, NY 14843
230-232 Railroad Street, JERSEY SHORE, PA 17740
102 E. Main Street, KNOXVILLE, PA 16928
514 Main Street, LAPORTE, PA 18626
4534 Williamson Trail LIBERTY, PA 16930
1085 S. Main Street, MANSFIELD, PA 16933
612 James Monroe Avenue, MONROETON, PA 18832
3461 Rte.405 Highway, MUNCY, PA 17756
100 Maple Street, PORT ALLEGANY, PA 16743
24 Thompson Street, RALSTON, PA 17763
1827 Elmira Street, SAYRE, PA 18840
2 E. Mountain Ave., SO. WILLIAMSPORT, PA 17702
41 Main Street, TIOGA, PA 16946
428 Main Street, TOWANDA, PA18848
Court House Square, TROY, PA 16947
90-92 Main Street, WELLSBORO, PA 16901
130 Court Street, WILLIAMSPORT, PA 17701
1510 Dewey Ave., WILLIAMSPORT, PA 17702
Route 6, WYSOX, PA 18854
TRUST & FINANCIAL MANAGEMENT GROUP
| 3 Main Street, Canisteo, NY 14823 | 607-698-4295 |
| 10 N Main Street, Coudersport, PA 16915 | 800-921-9150 |
| 1827 Elmira Street, Sayre, PA 18840 | 888-760-8192 |
| 428 Main Street, Towanda, PA 18848 | 888-987-8784 |
| 90-92 Main Street, Wellsboro, PA 16901 | 888-487-8784 |
| 130 Court Street, Williamsport, PA 17701 | 866-732-7213 |
| ACCOUNT SERVICES - 90-92 Main St., Wellsboro, PA 16901 | |
| BANKCARD SERVICES -90-92 Main St., Wellsboro PA 16901 | 800-577-8001 |
| ELECTRONIC BANKING – 10 Nichols St., Wellsboro, PA 16901 | 877-838-2517 |
| www.cnbankpa.com |
| C&N FINANCIAL SERVICES CORPORATION – 90-92 Main Street, Wellsboro, PA | 866-ASK-CNFS |
| www.cnfinancialservices.com |
|
CONDENSED, CONSOLIDATED EARNINGS INFORMATION |
|||||
| (In Thousands, Except Per Share Data) (Unaudited) | |||||
| 3RD | 2ND | 3RD | 9 MONTHS ENDED | ||
| QUARTER | QUARTER | QUARTER | SEPT. | ||
| 2012 | 2012 | 2011 | 2012 | 2011 | |
| (Current) | (Prior Qtr) | (Prior Yr) | (Current) | (Prior Yr) | |
| Interest and Dividend Income | $13,836 | $14,529 | $15,317 | $43,141 | $46,058 |
| Interest Expense | 2,228 | 2,401 | 3,108 | 7,131 | 10,752 |
| Net Interest Income | 11,608 | 12,128 | 12,209 | 36,010 | 35,306 |
| Provision (Credit) for Loan Losses | 236 | 367 | (37) | 421 | (198) |
| Net Interest Income After Provision (Credit) for Loan Losses | 11,372 | 11,761 | 12,246 | 35,589 | 35,504 |
| Other Income | 4,103 | 4,095 | 3,999 | 11,957 | 10,227 |
| Net Gains on Available-for-sale Securities | 2,430 | 203 | 26 | 2,631 | 2,028 |
| Loss on Prepayment of Borrowings | 2,190 | 143 | 0 | 2,333 | 0 |
| Other Noninterest Expenses | 8,207 | 8,137 | 8,052 | 24,861 | 24,109 |
| Income Before Income Tax Provision | 7,508 | 7,779 | 8,219 | 22,983 | 23,650 |
| Income Tax Provision | 2,014 | 2,094 | 2,230 | 6,217 | 6,423 |
| Net Income | $5,494 | $5,685 | $5,989 | $16,766 | $17,227 |
| PER COMMON SHARE DATA: | |||||
| Net Income – Basic | $0.45 | $0.46 | $0.49 | $1.37 | $1.42 |
| Net Income - Diluted | $0.45 | $0.46 | $0.49 | $1.37 | $1.42 |
| Dividend Per Share | $0.22 | $0.20 | $0.15 | $0.60 | $0.42 |
| Number Shares Used in Computation - Basic | 12,244,797 | 12,225,808 | 12,150,910 | 12,225,895 | 12,167,563 |
| Number Shares Used in Computation - Diluted | 12,270,685 | 12,242,833 | 12,153,861 | 12,252,357 | 12,170,611 |
| CONDENSED, CONSOLIDATED BALANCE SHEET DATA | |||
| (In Thousands, Except Per Share Data) (Unaudited) | |||
| SEPT. 30, | JUNE 30, | SEPT. 30, | |
| 2012 | 2012 | 2011 | |
| ASSETS | |||
| Cash & Due from Banks | $42,496 | $69,158 | $55,754 |
| Available-for-sale Securities | 487,314 | 478,368 | 472,113 |
| Loans Held for Sale | 3,846 | 3,190 | 1,218 |
| Loans, Net | 690,357 | 696,777 | 697,702 |
| Intangible Assets | 12,098 | 12,117 | 12,182 |
| Other Assets | 73,898 | 67,917 | 73,085 |
| TOTAL ASSETS | $1,310,009 | $1,327,527 | $1,312,054 |
| LIABILITIES | |||
| Deposits | 1,013,010 | 1,029,456 | 995,730 |
| Repo Sweep Accounts | 4,657 | 4,242 | 19,234 |
| Total Deposits and Repo Sweeps | 1,017,667 | 1,033,698 | 1,014,964 |
| Borrowed Funds | 104,954 | 110,038 | 128,024 |
| Other Liabilities | 7,242 | 7,729 | 7,856 |
| TOTAL LIABILITIES | 1,129,863 | 1,151,465 | 1,150,844 |
| SHAREHOLDERS' EQUITY | |||
| Common Shareholders' Equity, Excluding Accumulated | |||
| Other Comprehensive Income (Loss) | 168,320 | 165,008 | 152,726 |
| Accumulated Other Comprehensive Income (Loss): | |||
| Net Unrealized Gains/Losses on | |||
| Available-for-sale Securities | 12,278 | 11,519 | 8,787 |
| Defined Benefit Plans | (452) | (465) | (303) |
| TOTAL SHAREHOLDERS' EQUITY | 180,146 | 176,062 | 161,210 |
| TOTAL LIABILITIES & SHAREHOLDERS' EQUITY | $1,310,009 | $1,327,527 | $1,312,054 |
| CONDENSED, CONSOLIDATED FINANCIAL HIGHLIGHTS | |||
| (In Thousands, Except Per Share Data) (Unaudited) | |||
| 9 MONTHS ENDED | % | ||
| SEPT. 30, | INCREASE | ||
| 2012 | 2011 | (DECREASE) | |
| EARNINGS PERFORMANCE | |||
| Net Income | $16,766 | $17,227 | -2.68% |
| Return on Average Assets | 1.70% | 1.75% | -2.86% |
| Return on Average Equity | 12.85% | 15.37% | -16.40% |
| BALANCE SHEET HIGHLIGHTS | |||
| Total Assets | $1,310,009 | $1,312,054 | -0.16% |
| Available-for-Sale Securities | 487,314 | 472,113 | 3.22% |
| Loans (Net) | 690,357 | 697,702 | -1.05% |
| Allowance for Loan Losses | 7,792 | 8,177 | -4.71% |
| Deposits and Repo Sweep Accounts | 1,017,667 | 1,014,964 | 0.27% |
| Trust Assets Under Management | 707,571 | 593,034 | 19.31% |
| SHAREHOLDERS' VALUE | |||
| (PER COMMON SHARE) | |||
| Net Income - Basic | $1.37 | $1.42 | -3.52% |
| Net Income - Diluted | $1.37 | $1.42 | -3.52% |
| Dividends | $0.60 | $0.42 | 42.86% |
| Common Book Value | $14.70 | $13.28 | 10.69% |
| Tangible Common Book Value | $13.71 | $12.28 | 11.64% |
| Market Value (Last Trade) | $19.61 | $14.86 | 31.97% |
| Market Value / Common Book Value | 133.40% | 111.90% | 19.22% |
| Market Value / Tangible Common Book Value | 143.03% | 121.01% | 18.20% |
| Price Earnings Multiple | 10.74 | 7.85 | 36.82% |
| Dividend Yield | 4.08% | 3.77% | 8.22% |
| SAFETY AND SOUNDNESS | |||
| Tangible Common Equity / Tangible Assets | 12.95% | 11.46% | 13.00% |
| Nonperforming Assets / Total Assets | 0.79% | 0.80% | -1.25% |
| Allowance for Loan Losses / Total Loans | 1.12% | 1.16% | -3.45% |
| Total Risk Based Capital Ratio (a) | 22.96% | 20.16% | 13.89% |
| Tier 1 Risk Based Capital Ratio (a) | 21.72% | 18.92% | 14.80% |
| Leverage Ratio (a) | 12.04% | 10.54% | 14.23% |
| AVERAGE BALANCES | |||
| Average Assets | $1,311,347 | $1,312,736 | -0.11% |
| Average Equity | $174,002 | $149,397 | 16.47% |
| (a) Capital ratios for the most recent period are estimated. |