CITIZENS & NORTHERN CORP - FORM 8-K - EX-99.3 - EXHIBIT 99.3 - October 12, 2012

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8-K - FORM 8-K - CITIZENS & NORTHERN CORPv325887_8k.htm
EX-99.1 - EXHIBIT 99.1 - CITIZENS & NORTHERN CORPv325887_ex99-1.htm
EX-99.2 - EXHIBIT 99.2 - CITIZENS & NORTHERN CORPv325887_ex99-2.htm

 

 

EXHIBIT 99.3 – Supplemental, Unaudited Financial Information

Description: corporate

 

AVAILABLE-FOR-SALE SECURITIES September 30, 2012 June 30, 2012 December 31, 2011
(In Thousands) Amortized Fair Amortized Fair Amortized Fair
  Cost Value Cost Value Cost Value
             
Obligations of U.S. Government agencies $23,181 $23,844 $23,244 $23,916 $24,877 $25,587
Obligations of states and political subdivisions:            
     Tax-exempt 134,651 141,519 135,736 141,140 129,401 132,962
     Taxable 21,766 22,244 19,524 19,924 14,004 14,334
Mortgage-backed securities 85,750 90,357 103,801 108,426 116,602 121,769
Collateralized mortgage obligations,            
     Issued by U.S. Government agencies 188,169 191,945 162,780 165,923 161,818 165,131
Trust preferred securities issued by individual institutions 6,173 6,221 6,179 6,221 7,334 8,146
Collateralized debt obligations:            
     Pooled trust preferred securities - senior tranches 2,515 2,496 2,516 2,386 4,996 4,638
     Pooled trust preferred securities - mezzanine tranches 0 0 0 1,146 0 730
     Other collateralized debt obligations 660 660 660 660 660 660
Total debt securities 462,865 479,286 454,440 469,742 459,692 473,957
Marketable equity securities 5,562 8,028 6,208 8,626 5,643 7,728
Total $468,427 $487,314 $460,648 $478,368 $465,335 $481,685

 

 

 
 

 

 

 

 

 

 

 

 

Summary of Loans by Type        
(Excludes Loans Held for Sale)        
(In Thousands) Sept. 30, June 30, Dec. 31, Sept. 30,
  2012 2012 2011 2011
Residential mortgage:        
  Residential mortgage loans - first liens $317,734 $321,163 $331,015 $334,551
  Residential mortgage loans - junior liens 27,084  27,404  28,851  29,748 
  Home equity lines of credit 32,550  31,858  30,037  29,667 
  1-4 Family residential construction 13,038  10,699  9,959  9,762 
Total residential mortgage 390,406  391,124  399,862  403,728 
Commercial:        
  Commercial loans secured by real estate 163,773  164,771  156,388  149,853 
  Commercial and industrial 49,405  52,704  57,191  55,792 
  Political subdivisions 35,549  36,858  37,620  36,403 
  Commercial construction and land 27,307  26,517  23,518  26,552 
  Loans secured by farmland 10,328  10,079  10,949  10,470 
  Multi-family (5 or more) residential 6,109  6,409  6,583  6,782 
  Agricultural loans 3,181  3,263  2,987  2,819 
  Other commercial loans 329  563  552  561 
Total commercial 295,981  301,164  295,788  289,232 
Consumer 11,762  12,146  12,665  12,919 
Total 698,149  704,434  708,315  705,879 
Less: allowance for loan losses (7,792) (7,657) (7,705) (8,177)
Loans, net $690,357 $696,777 $700,610 $697,702
         
Loans Held for Sale        
(In Thousands) Sept. 30, June 30, Dec. 31, Sept. 30,
  2012 2012 2011 2011
Residential mortgage loans originated        
  and serviced - outstanding balance $87,051 $74,070 $57,577 $46,130
Less: outstanding balance of loans sold (83,205) (70,880) (56,638) (44,912)
Loans held for sale, net $3,846 $3,190 $939 $1,218

 

 

 

 
 

 

 

 

ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES    
(In Thousands)        
  3 Months 3 Months 9 Months 9 Months
  Ended Ended Ended Ended
  Sept. 30, June 30, Sept. 30, Sept. 30,
  2012 2012 2012 2011
Balance, beginning of period $7,657 $7,370 $7,705 $9,107
Charge-offs (113) (115) (404) (967)
Recoveries 12  35  70  235 
Net charge-offs (101) (80) (334) (732)
Provision (credit) for loan losses 236  367  421  (198)
Balance, end of period $7,792 $7,657 $7,792 $8,177

 

 

PAST DUE AND IMPAIRED LOANS, NONPERFORMING ASSETS      
AND TROUBLED DEBT RESTRUCTURINGS (TDRs)        
(In Thousands)        
  Sept. 30, June 30, Dec. 31, Sept. 30,
  2012 2012 2011 2011
Impaired loans with a valuation allowance $4,119 $3,434 $3,433 $3,978
Impaired loans without a valuation allowance 3,718 3,427 4,431 3,807
Total impaired loans $7,837 $6,861 $7,864 $7,785
         
Total loans past due 30-89 days and still accruing $6,001 $5,191 $7,898 $5,142
         
Nonperforming assets:        
  Total nonaccrual loans $7,269 $7,447 $7,197 $7,890
  Total loans past due 90 days or more and still accruing 2,260 1,144 1,267 1,055
  Total nonperforming loans 9,529 8,591 8,464 8,945
  Foreclosed assets held for sale (real estate) 839 904 1,235 1,596
Total nonperforming assets $10,368 $9,495 $9,699 $10,541
         
         
Loans subject to troubled debt restructurings (TDRs):        
  Performing $916 $925 $1,064 $1,072
  Nonperforming 1,753 1,754 2,413 2,874
Total TDRs $2,669 $2,679 $3,477 $3,946
         
Total nonperforming loans as a % of loans 1.36% 1.22% 1.19% 1.27%
Total nonperforming assets as a % of assets 0.79% 0.72% 0.73% 0.80%
Allowance for loan losses as a % of total loans 1.12% 1.09% 1.09% 1.16%
Allowance for loan losses as a % of nonperforming loans 81.77% 89.13% 91.03% 91.41%

 

 

 
 

 

 

 

 

Analysis of Average Daily Balances and Rates          
(Dollars in Thousands)            
  3 Months   3 Months   3 Months  
  Ended Rate of Ended Rate of Ended Rate of
  9/30/2012 Return/ 6/30/2012 Return/ 9/30/2011 Return/
  Average Cost of Average Cost of Average Cost of
  Balance Funds % Balance Funds % Balance Funds %
EARNING ASSETS            
Available-for-sale securities,            
     at amortized cost:            
     Taxable $339,639 2.46% $333,255 3.13% $333,848 3.38%
     Tax-exempt 135,362  5.69% 130,111  5.94% 127,974  5.94%
          Total available-for-sale securities 475,001  3.38% 463,366  3.92% 461,822  4.09%
Interest-bearing due from banks 33,929  0.36% 37,300  0.33% 27,884  0.18%
Loans held for sale 4,293  3.89% 1,865  4.96% 595  6.00%
Loans receivable:            
     Taxable 662,374  6.00% 666,752  6.18% 679,280  6.30%
     Tax-exempt 37,696  6.32% 36,344  6.31% 34,630  6.37%
          Total loans receivable 700,070  6.02% 703,096  6.18% 713,910  6.31%
          Total Earning Assets 1,213,293  4.82% 1,205,627  5.13% 1,204,211  5.31%
Cash 17,466    17,791    18,601   
Unrealized gain/loss on securities 19,310    17,545    10,312   
Allowance for loan losses (7,727)   (7,435)   (8,372)  
Bank premises and equipment 19,106    18,908    21,682   
Intangible Asset - Core Deposit Intangible 165    186    256   
Intangible Asset - Goodwill 11,942    11,942    11,942   
Other assets 46,102    47,046    52,637   
Total Assets $1,319,657   $1,311,610   $1,311,269  
             
INTEREST-BEARING LIABILITIES            
Interest-bearing deposits:            
     Interest checking $166,961 0.12% $156,994 0.13% $158,849 0.22%
     Money market 210,269  0.16% 210,646  0.19% 206,826  0.20%
     Savings 110,133  0.10% 107,514  0.10% 98,434  0.13%
     Certificates of deposit 199,250  1.47% 199,320  1.55% 207,822  1.85%
     Individual Retirement Accounts 141,421  0.73% 144,095  0.91% 151,910  1.51%
     Other time deposits 1,768  0.00% 1,314  0.31% 1,813  0.00%
          Total interest-bearing deposits 829,802  0.56% 819,883  0.62% 825,654  0.85%
Borrowed funds:            
     Short-term 5,369  0.15% 5,650  0.07% 19,935  0.12%
     Long-term 105,811  4.02% 113,301  4.01% 130,980  4.02%
          Total borrowed funds 111,180  3.83% 118,951  3.82% 150,915  3.50%
          Total Interest-bearing Liabilities 940,982  0.94% 938,834  1.03% 976,569  1.26%
Demand deposits 191,301    191,349    170,111   
Other liabilities 8,967    7,774    7,761   
Total Liabilities 1,141,250    1,137,957    1,154,441   
Stockholders' equity, excluding            
     other comprehensive income/loss 166,318    162,721    150,332   
Other comprehensive income/loss 12,089    10,932    6,496   
Total Stockholders' Equity 178,407    173,653    156,828   
Total Liabilities and Stockholders' Equity $1,319,657   $1,311,610   $1,311,269  
Interest Rate Spread   3.88%   4.10%   4.05%
Net Interest Income/Earning Assets   4.09%   4.33%   4.29%
             
Total Deposits (Interest-bearing            
     and Demand) $1,021,103   $1,011,232   $995,765  
             

 

 

(1) Changes in income on tax-exempt securities and loans are presented on a fully tax-equivalent basis, using the Corporation’s marginal federal income tax rate of 35% in 2012 and 34% in 2011.
(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.  

 

 

 
 

 

 

 

 

Analysis of Average Daily Balances and Rates      
(Dollars in Thousands)        
  9 Months   9 Months  
  Ended Rate of Ended Rate of
  9/30/2012 Return/ 9/30/2011 Return/
  Average Cost of Average Cost of
  Balance Funds % Balance Funds %
EARNING ASSETS        
Available-for-sale securities,        
     at amortized cost:        
     Taxable $334,652 2.96% $332,105 3.43%
     Tax-exempt 131,083  5.88% 127,669  6.01%
          Total available-for-sale securities 465,735  3.79% 459,774  4.14%
Interest-bearing due from banks 35,183  0.34% 29,659  0.20%
Loans held for sale 2,412  4.10% 882  5.46%
Loans receivable:        
     Taxable 665,011  6.15% 682,593  6.36%
     Tax-exempt 36,756  6.33% 34,835  6.40%
          Total loans receivable 701,767  6.16% 717,428  6.36%
          Total Earning Assets 1,205,097  5.07% 1,207,743  5.37%
Cash 17,383    17,745   
Unrealized gain/loss on securities 18,263    5,216   
Allowance for loan losses (7,634)   (8,834)  
Bank premises and equipment 18,971    22,087   
Intangible Asset - Core Deposit Intangible 185    286   
Intangible Asset - Goodwill 11,942    11,942   
Other assets 47,140    56,551   
Total Assets $1,311,347   $1,312,736  
         
INTEREST-BEARING LIABILITIES        
Interest-bearing deposits:        
     Interest checking $161,845 0.13% $163,024 0.28%
     Money market 208,932  0.18% 205,856  0.26%
     Savings 107,403  0.10% 95,648  0.19%
     Certificates of deposit 196,840  1.58% 208,418  1.93%
     Individual Retirement Accounts 143,910  0.87% 156,531  2.33%
     Other time deposits 1,343  0.10% 1,376  0.19%
          Total interest-bearing deposits 820,273  0.62% 830,853  1.06%
Borrowed funds:        
     Short-term 6,144  0.13% 18,747  0.14%
     Long-term 111,552  4.01% 137,321  4.01%
          Total borrowed funds 117,696  3.80% 156,068  3.55%
          Total Interest-bearing Liabilities 937,969  1.02% 986,921  1.46%
Demand deposits 190,644    169,340   
Other liabilities 8,732    7,078   
Total Liabilities 1,137,345    1,163,339   
Stockholders' equity, excluding        
     other comprehensive income/loss 162,627    146,248   
Other comprehensive income/loss 11,375    3,149   
Total Stockholders' Equity 174,002    149,397   
Total Liabilities and Stockholders' Equity $1,311,347   $1,312,736  
Interest Rate Spread   4.05%   3.91%
Net Interest Income/Earning Assets   4.28%   4.18%
         
Total Deposits (Interest-bearing        
     and Demand) $1,010,917   $1,000,193  
         

 

(1) Changes in income on tax-exempt securities and loans are presented on a fully tax-equivalent basis, using the Corporation’s marginal federal income tax rate of 35% in 2012 and 34% in 2011.

 

(2) Nonaccrual loans have been included with loans for the purpose of analyzing net interest earnings.

 

 

 

 
 

 

 

 

COMPARISON OF NONINTEREST INCOME           
(In Thousands) Three Months Ended Nine Months Ended
  Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
  2012 2012 2011 2012 2011
Service charges on deposit accounts $1,290 $1,256 $1,230 $3,707 $3,586
Service charges and fees 239  235  218 694  643 
Trust and financial management revenue 873  960  785 2,762  2,608 
Brokerage revenue 197  288  199 653  551 
Insurance commissions, fees and premiums 62  73  66 169  192 
Interchange revenue from debit card transactions 477  488  490 1,460  1,427 
Net gains from sales of loans 625  373  263 1,263  677 
Increase in cash surrender value of life insurance 111  117  127 347  381 
Net (loss) gain from other real estate (19) (184) 51 (99) 8 
Net gain from premises and equipment 1  270  324 271  324 
Impairment loss on limited partnership investment 0  0  0 0  (948)
Other operating income 247  219  246 730  778 
Total other operating income, before realized          
   gains on available-for-sale securities, net $4,103 $4,095 $3,999 $11,957 $10,227

 

 

 

           
COMPARISON OF NONINTEREST EXPENSE          
(In Thousands) Three Months Ended Nine Months Ended
  Sept. 30, June 30, Sept. 30, Sept. 30, Sept. 30,
  2012 2012 2011 2012 2011
 Salaries and wages $3,594 $3,586 $3,451 $10,755 $10,321
 Pensions and other employee benefits 982 1,090 1,020 3,438 3,344
 Occupancy expense, net 610 628 641 1,874 2,038
 Furniture and equipment expense 475 461 498 1,418 1,435
 FDIC Assessments 165 157 174 468 688
 Pennsylvania shares tax 339 340 345 1,011 984
 Other operating expense 2,042 1,875 1,923 5,897 5,299
 Total noninterest expense, before loss on          
    prepayment of borrowings 8,207 8,137 8,052 24,861 24,109
 Loss on prepayment of borrowings 2,190 143 0 2,333 0
 Total Noninterest Expense $10,397 $8,280 $8,052 $27,194 $24,109

 

 

 

 

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