Attached files
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| 8-K - SECOND QUARTER 2015 8-K - CITIZENS FINANCIAL SERVICES INC | secondquarter2015.htm |
| 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 second quarter 2015 Earnings
MANSFIELD, PENNSYLVANIA— July 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 and six months ended June 30, 2015.
For the three months ended June 30, 2015 net income totaled $3,189,000 which compares to net income of $3,365,000 for the second quarter of 2014, which is a decrease of $176,000, or 5.2%. Earnings per share of $1.06 for the second quarter compares to $1.11 for the second quarter last year. Annualized return on equity for the comparable periods was 12.45% and 13.88%, while return on assets was 1.36% and 1.49%, respectively.
For the six months ended June 30, 2015, net income totaled $6,309,000 which compares to net income of $6,541,000 for the comparable 2014 period. This represents a decrease of $232,000, or 3.5%. Earnings per share of $2.09 for the first six months of 2015 compares to $2.15 last year. Annualized return on equity for the comparable periods was 12.41% and 13.63%, while return on assets was 1.36% and 1.45%, respectively.
Net interest income before the provision for loan loss has decreased from $15,162,000 for the six months ended June 30, 2014, to $15,148,000 for 2015. For the six months ended June 30, 2015, interest income decreased $131,000, which has been offset by a decrease in interest expense of $117,000. The margin has decreased from 3.89% last year to 3.81% for 2015. CEO and President Randall E. Black stated, “Despite the ongoing yield curve challenges that we and other banks are forced to deal with, our financial results remain strong and compare favorably to peers. The challenging yield curve has resulted in continued pressure on the tax-effected yield on interest earning assets, which has decreased from 4.48% for the six months ended June 30, 2014 to 4.36% this year. The cost of interest bearing liabilities has also declined, from .71% last year to .67% in 2015. We have been able to mitigate the declining margin with positive growth in interest earning assets, particularly average loans, which have increased by $25.9 million compared to June 30, 2014”. The provision for loan losses decreased $90,000 for the comparable periods.
At June 30, 2015, total assets were $942.5 million, up from total assets of $914.2 million as of June 30, 2014 and up $17.5 million from total assets of $925.0 million at December 31, 2014. Compared to December 31, 2014, available for sale investments have decreased $1.3 million, mostly due to unattractive yields in the market. However, net loans have increased $17.4 million, or 3.2%, compared to the end of last year. Contributing to this growth is the continued success in growing loans and deposits in the new branch in the Mill Hall / Lock Haven market. Asset quality remains strong, and continues to improve, with non-performing assets to total loans at 1.61% as of June 30, 2015 compared to 1.67% at year end and 1.70% last June. Annualized net charge-offs as a percent of average loans is very low at .03%.
Stockholders’ equity totaled $103.2 million at June 30, 2015, which compares to $100.5 million at December 31, 2014 and $98.2 million at June 30, 2014. For 2015, net income of $6.3 million was offset by cash dividends of $2.4 million and treasury share purchases of $1.0 million. Additionally, the unrealized gain on available for sale investment securities decreased $.5 million from the end of 2014 as a result of changes in interest rates impacting the fair value of investment securities. A cash dividend of $.405 per share was paid on June 26, 2015 to shareholders of record on June 19, 2015. This quarterly cash dividend is an increase of 5.2% over the dividend declared a year ago, adjusted for stock dividends. “Capital levels are very strong and our continued strong financial performance has permitted us to continue paying an attractive cash dividend and reflects the Board of Directors' desire to provide total shareholder return to our shareholder base. Our
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strong capital position has also enabled us to seek growth opportunities, including our recently announced signing of a definitive merger agreement to acquire The First National Bank of Fredericksburg. We are excited about the tremendous opportunity to grow our franchise and expand into the Lebanon Valley Region of Pennsylvania, added Mr. Black”.
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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June 30
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December 31
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June 30
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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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$ 9,910
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$ 10,091
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$ 14,742
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Interest-bearing
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1,002
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1,332
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998
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Total cash and cash equivalents
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10,912
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11,423
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15,740
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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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304,792
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306,146
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312,322
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Loans held for sale
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1,152
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497
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545
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Loans (net of allowance for loan losses: $6,959 at June 30, 2015;
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$6,815 at December 31, 2014 and $6,751 at June 30, 2014)
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564,692
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547,290
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533,126
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Premises and equipment
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12,582
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12,357
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11,501
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Accrued interest receivable
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3,584
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3,644
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3,557
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Goodwill
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10,256
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10,256
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10,256
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Bank owned life insurance
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20,615
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20,309
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14,921
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Other assets
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7,934
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7,166
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9,721
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TOTAL ASSETS
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$ 942,479
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$ 925,048
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$ 914,169
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LIABILITIES:
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Deposits:
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Noninterest-bearing
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$ 100,469
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$ 95,526
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$ 94,434
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Interest-bearing
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691,418
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678,407
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671,022
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Total deposits
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791,887
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773,933
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765,456
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Borrowed funds
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39,194
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41,799
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43,075
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Accrued interest payable
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674
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756
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735
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Other liabilities
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7,499
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8,032
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6,664
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TOTAL LIABILITIES
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839,254
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824,520
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815,930
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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 at June 30, 2015, December 31, 2014 and
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June 30, 2014; issued 3,335,236 shares at June 30, 2015, December 31, 2014 and
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June 30, 2014
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3,335
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3,335
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3,335
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Additional paid-in capital
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25,124
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25,150
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25,142
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Retained earnings
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83,371
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79,512
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76,925
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Accumulated other comprehensive income (loss)
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171
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767
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1,100
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Treasury stock, at cost: 306,560 shares at June 30, 2015; 296,280 shares at
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December 31, 2014 and 296,758 shares at June 30, 2014
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(8,776)
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(8,236)
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(8,263)
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TOTAL STOCKHOLDERS' EQUITY
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103,225
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100,528
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98,239
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TOTAL LIABILITIES AND
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STOCKHOLDERS' EQUITY
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$ 942,479
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$ 925,048
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$ 914,169
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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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Six Months Ended
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June 30,
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June 30,
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(in thousands, except per share data)
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2015
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2014
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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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$ 7,129
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$ 7,118
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$ 14,168
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$ 14,106
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Interest-bearing deposits with banks
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39
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13
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70
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26
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Investment securities:
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Taxable
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765
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849
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1,519
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1,737
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Nontaxable
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801
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840
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1,649
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1,682
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Dividends
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34
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69
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133
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119
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TOTAL INTEREST INCOME
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8,768
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8,889
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17,539
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17,670
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INTEREST EXPENSE:
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Deposits
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1,035
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1,094
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2,044
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2,199
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Borrowed funds
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172
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145
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347
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309
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TOTAL INTEREST EXPENSE
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1,207
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1,239
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2,391
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2,508
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NET INTEREST INCOME
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7,561
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7,650
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15,148
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15,162
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Provision for loan losses
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120
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150
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240
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330
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NET INTEREST INCOME AFTER
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PROVISION FOR LOAN LOSSES
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7,441
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7,500
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14,908
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14,832
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NON-INTEREST INCOME:
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Service charges
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1,028
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1,102
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2,004
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2,141
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Trust
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180
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186
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374
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377
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Brokerage and insurance
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255
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137
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382
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257
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Gains on loans sold
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60
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30
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98
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70
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Investment securities gains, net
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175
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75
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301
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246
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Earnings on bank owned life insurance
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154
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121
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306
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242
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Other
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103
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104
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218
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209
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TOTAL NON-INTEREST INCOME
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1,955
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1,755
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3,683
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3,542
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NON-INTEREST EXPENSES:
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Salaries and employee benefits
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2,993
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2,893
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6,049
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5,810
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Occupancy
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348
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304
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717
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654
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Furniture and equipment
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87
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94
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215
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194
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Professional fees
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180
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208
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412
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442
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FDIC insurance
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116
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116
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232
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229
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Pennsylvania shares tax
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200
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191
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401
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384
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Other
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1,504
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1,194
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2,737
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2,378
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TOTAL NON-INTEREST EXPENSES
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5,428
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5,000
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10,763
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10,091
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Income before provision for income taxes
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3,968
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4,255
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7,828
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8,283
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Provision for income taxes
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779
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890
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1,519
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1,742
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NET INCOME
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$ 3,189
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$ 3,365
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$ 6,309
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$ 6,541
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PER COMMON SHARE DATA:
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Net Income - Basic
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$ 1.06
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$ 1.11
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$ 2.09
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$ 2.15
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Net Income - Diluted
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$ 1.06
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$ 1.11
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$ 2.09
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$ 2.15
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Cash Dividends Paid
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$ 0.405
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$ 0.385
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$ 0.810
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$ 0.770
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Number of shares used in computation - basic
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3,019,661
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3,039,734
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3,022,945
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3,040,822
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Number of shares used in computation - diluted
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3,020,725
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3,040,661
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3,023,479
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3,041,227
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4
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Financial Highlights
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Three Months Ended
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Six Months Ended
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June 30
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June 30
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2015
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2014
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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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1.49%
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1.36%
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1.45%
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Return on average equity (annualized)
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12.45%
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13.88%
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12.41%
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13.63%
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Net interest margin (tax equivalent)
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3.77%
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3.92%
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3.81%
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3.89%
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Cash dividends paid per share
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$ 0.405
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$ 0.385
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$ 0.810
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$ 0.770
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Earnings per share - basic
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$ 1.06
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$ 1.11
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$ 2.09
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$ 2.15
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Earnings per share - diluted
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$ 1.06
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$ 1.11
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$ 2.09
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$ 2.15
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Number of shares used in computation - basic
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3,019,661
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3,039,734
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3,022,945
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3,040,822
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Number of shares used in computation - diluted
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3,020,725
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3,040,661
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3,023,479
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3,041,227
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Balance Sheet Highlights (dollars in thousands):
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June 30, 2015
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December 31, 2014
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June 30, 2014
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Assets
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$ 942,479
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$ 925,048
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$ 914,169
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Investment securities:
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Available for sale
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304,792
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306,146
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312,322
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Loans (net of unearned income)
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571,651
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554,105
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539,877
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Allowance for loan losses
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6,959
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6,815
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6,751
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Deposits
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791,887
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773,933
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765,456
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Stockholders' Equity
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103,225
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100,528
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98,239
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Non-performing assets
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9,208
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9,227
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9,203
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Non-performing assets to total loans
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1.61%
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1.67%
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1.70%
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Annualized net charge-offs to total loans
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0.03%
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0.16%
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0.25%
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Average Leverage Ratio
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11.08%
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10.99%
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10.85%
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Common shares outstanding
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3,028,676
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3,038,956
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3,038,477
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Book value per share
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$ 34.03
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$ 32.83
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$ 31.97
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5