Attached files
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| 8-K - FIRST QUARTER 2015 8-K - CITIZENS FINANCIAL SERVICES INC | firstquarter2015.htm |
Exhibit 99.1
| Contact: Kathleen Campbell, Marketing Director | First Citizens Community Bank |
| 570-662-0422 | 15 S. Main Street |
| 570-662-8512 (fax) | Mansfield, PA 16933 |
Citizens Financial Services, Inc. Reports first quarter 2015 Earnings
MANSFIELD, PENNSYLVANIA— April 27, 2015 – 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, 2015.
For the three months ended March 31, 2015, net income totaled $3,120,000 which compares to net income of $3,176,000 for the first quarter of 2014. This represents a decrease of $56,000, or 1.8%. Basic earnings per share of $1.03 for the first quarter compares to $1.04 last year. Annualized return on equity for the comparable periods was 12.38% and 13.38%, while return on assets was 1.36% and 1.41%, respectively.
Net interest income after the provision for loan loss has increased from $7,332,000 for the three months ended March 31, 2014, to $7,467,000 for 2015. Although interest income decreased $10,000, interest expense decreased $85,000 from last year’s first quarter. Additionally, the provision for loan losses decreased $60,000 for the comparable periods. CEO and President Randall E. Black stated, “The margin has increased from 3.87% last year to 3.89%, which is impressive given the difficult economic environment that has been persistent in impacting us and others in our industry. The prolonged interest rate environment has resulted in continued pressure on the tax-effected yield on our interest earning assets, which has decreased from 4.47% last year to 4.44% this year. On a positive note, average interest earning assets has increased by $10.2 million compared to last year, which helped significantly in offsetting the decline in yields”. Notably, loan growth in the first quarter has resulted in an increase in average loans compared to last year of $20.9 million. The cost of interest bearing liabilities has continued to decline, from .72% last year to .67% in 2015.
At March 31, 2015, total assets were $930.0 million, up from total assets of $902.6 million as of March 31, 2014 and up slightly from total assets of $925.0 million at December 31, 2014. From year end 2014, the investment portfolio has decreased $14.2 million mostly due to unattractive yields in the market. However, net loans of $558.3 million as of March 31, 2015 have increased $11.1 million, or 2%, compared to the end of last year. The increase is partly attributable to the success in opening the new branch in the Mill Hall / Lock Haven market. Asset quality remains strong with non-performing assets to total loans being 1.65% as of March 31, 2015 compared to 1.67% at year-end and 1.98% last March. Annualized net charge-offs as a percent of average loans is very low at .01%.
Stockholders’ equity totaled $102.3 million at March 31, 2015, which compares to $100.5 million at December 31, 2014 and $95.6 million at March 31, 2014. For 2015, net income of $3.1 million was offset by cash dividends of $1.2 million and treasury share purchases of $1 million. Additionally, the unrealized gain on available for sale investment securities increased $.8 million from the end of 2014 as a result of changes in interest rates impacting the fair value of investment securities. The Company remains well-capitalized under regulatory capital guidelines.
A cash dividend of $.405 per share was paid on March 27, 2015 to shareholders of record on March 20, 2015. This quarterly cash dividend was an increase of 6% over the dividend declared a year ago, adjusted for stock dividends. “This increase in the dividend continues to reflect the Board of Directors' desire to provide total shareholder return to our shareholder base, added Mr. Black”.
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Citizens Financial Services, Inc. has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties, Pennsylvania and Allegany County, New York, where their 18 offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results and trends could differ materially from those set forth in such statements due to various factors. These factors include operating, legal and regulatory risks; changing economic and competitive conditions and other risks and uncertainties.
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CITIZENS FINANCIAL SERVICES, INC.
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CONSOLIDATED BALANCE SHEET
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(UNAUDITED)
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March 31
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December 31
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March 31
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(in thousands except share data)
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2015
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2014
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2014
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ASSETS:
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Cash and due from banks:
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Noninterest-bearing
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$ 10,901
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$ 10,091
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$ 10,642
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Interest-bearing
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7,882
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1,332
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767
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Total cash and cash equivalents
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18,783
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11,423
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11,409
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Interest bearing time deposits with other banks
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5,960
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5,960
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2,480
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Available-for-sale securities
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291,904
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306,146
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310,983
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Loans held for sale
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1,029
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497
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242
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Loans (net of allowance for loan losses: $6,922 at March 31, 2015;
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$6,815 at December 31, 2014 and $7,233 at March 31, 2014)
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558,257
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547,290
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525,990
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Premises and equipment
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12,619
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12,357
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10,994
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Accrued interest receivable
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3,636
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3,644
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3,771
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Goodwill
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10,256
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10,256
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10,256
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Bank owned life insurance
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20,461
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20,309
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14,800
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Other assets
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7,067
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7,166
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11,701
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TOTAL ASSETS
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$ 929,972
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$ 925,048
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$ 902,626
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 100,263
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$ 95,526
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$ 95,230
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Interest-bearing
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688,513
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678,407
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658,413
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Total deposits
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788,776
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773,933
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753,643
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Borrowed funds
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29,388
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41,799
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45,728
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Accrued interest payable
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691
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756
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774
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Other liabilities
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8,828
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8,032
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6,897
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TOTAL LIABILITIES
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827,683
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824,520
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807,042
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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; none issued in 2015 or 2014
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Common stock
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$1.00 par value; authorized 15,000,000 shares; issued 3,335,236 shares at March 31, 2015
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and December 31, 2014; 3,305,517 shares at March 31, 2014
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3,335
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3,335
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3,306
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Additional paid-in capital
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25,148
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25,150
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23,623
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Retained earnings
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81,409
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79,512
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76,340
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Accumulated other comprehensive income (loss)
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1,603
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767
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154
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Treasury stock, at cost: 314,704 shares at March 31, 2015; 296,280 shares at
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December 31, 2014 and 288,822 shares at March 31, 2014
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(9,206)
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(8,236)
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(7,839)
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TOTAL STOCKHOLDERS' EQUITY
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102,289
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100,528
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95,584
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TOTAL LIABILITIES AND
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STOCKHOLDERS' EQUITY
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$ 929,972
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$ 925,048
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$ 902,626
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3
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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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March 31,
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(in thousands, except per share data)
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2015
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2014
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INTEREST INCOME:
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Interest and fees on loans
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$ 7,039
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$ 6,988
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Interest-bearing deposits with banks
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31
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13
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Investment securities:
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Taxable
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754
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888
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Nontaxable
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848
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842
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Dividends
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99
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50
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TOTAL INTEREST INCOME
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8,771
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8,781
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INTEREST EXPENSE:
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Deposits
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1,009
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1,105
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Borrowed funds
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175
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164
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TOTAL INTEREST EXPENSE
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1,184
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1,269
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NET INTEREST INCOME
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7,587
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7,512
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Provision for loan losses
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120
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180
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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7,467
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7,332
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NON-INTEREST INCOME:
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Service charges
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976
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1,039
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Trust
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194
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191
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Brokerage and insurance
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127
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120
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Gains on loans sold
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38
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40
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Investment securities gains, net
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126
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171
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Earnings on bank owned life insurance
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152
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121
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Other
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115
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105
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TOTAL NON-INTEREST INCOME
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1,728
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1,787
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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3,056
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2,917
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Occupancy
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369
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350
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Furniture and equipment
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128
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100
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Professional fees
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232
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234
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FDIC insurance
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116
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113
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Pennsylvania shares tax
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201
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193
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Other
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1,233
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1,184
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TOTAL NON-INTEREST EXPENSES
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5,335
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5,091
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Income before provision for income taxes
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3,860
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4,028
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Provision for income taxes
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740
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852
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NET INCOME
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$ 3,120
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$ 3,176
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PER COMMON SHARE DATA:
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Net Income - Basic
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$ 1.03
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$ 1.04
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Net Income - Diluted
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$ 1.03
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$ 1.04
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Cash Dividends Paid
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$ 0.405
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$ 0.382
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Number of shares used in computation - basic
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3,026,265
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3,041,923
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Number of shares used in computation - diluted
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3,026,265
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3,042,117
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Financial Highlights
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Three Months Ended
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March 31
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2015
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2014
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Performance Ratios and Share Data:
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Return on average assets (annualized)
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1.36%
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1.41%
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Return on average equity (annualized)
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12.38%
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13.38%
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Net interest margin (tax equivalent)
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3.89%
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3.87%
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Cash dividends paid per share
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$ 0.405
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$ 0.382
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Earnings per share - basic
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$ 1.03
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$ 1.04
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Earnings per share - diluted
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$ 1.03
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$ 1.04
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Number of shares used in computation - basic
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3,026,265
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3,041,923
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Number of shares used in computation - diluted
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3,026,265
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3,042,117
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Balance Sheet Highlights (dollars in thousands):
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March 31, 2015
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December 31, 2014
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March 31, 2014
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Assets
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$ 929,972
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$ 925,048
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$ 902,626
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Available-for-sale securities
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291,904
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306,146
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310,983
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Loans (net of unearned income)
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565,179
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554,105
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533,223
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Allowance for loan losses
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6,922
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6,815
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7,233
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Deposits
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788,776
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773,933
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753,643
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Stockholders' Equity
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102,289
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100,528
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95,584
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Non-performing assets
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9,326
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9,227
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10,539
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Non-performing assets to total loans
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1.65%
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1.67%
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1.98%
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Annualized net charge-offs to total loans
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0.01%
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0.16%
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0.03%
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Average Leverage Ratio
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11.04%
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10.99%
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10.64%
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Common shares outstanding
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3,020,532
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3,038,956
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3,016,695
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Book value per share
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$ 33.33
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$ 32.83
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$ 31.33
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