Citizens Financial Services, Inc. Reports A 19% Increase in Second Quarter 2012 Earnings

  Citizens Financial Services, Inc. Reports A 19% Increase in Second Quarter
                                2012 Earnings

PR Newswire

MANSFIELD, Pa., July 25, 2012

MANSFIELD, Pa., July 25, 2012 /PRNewswire/ -- Citizens Financial Services,
Incorporated (OTC BB: CZFS), parent company of First Citizens Community Bank,
has released its unaudited financial performance for the quarter ended June
30, 2012.

For the three months ended June 30, 2012, net income totaled $3,753,000 which
compares to $3,147,000 for the same period last year. This represents an
increase of $606,000, or 19.26%. Earnings per share of $1.30 increased 20.46%
from $1.08 per share last year.

For the six months ended June 30, 2012, net income totaled $7,202,000 which
compares to $5,977,000 for the same period last year. This represents an
increase of $1,225,000, or 20.50%. Earnings per share of $2.49 increased
21.57% from $2.05 per share last year.  Annualized return on equity for the
comparable periods was 18.58% and 17.22%, while return on assets was 1.63% and
1.44%, respectively.

Net interest income, before the provision for loan losses, increased from
$14,012,000 for the six months ended June 30, 2011 to $15,223,000  this year,
an increase of $1,211,000, or 8.6%. On a tax equivalent basis, our net
interest margin on interest earning assets has increased from 3.96% last year
to 4.04% this year. Yields on interest earning assets decreased 23 basis
points, but was offset by a decrease of 35 basis points on interest bearing
liabilities.  In particular, yields on investment securities decreased 38
basis points.  CEO and President Randall E. Black stated, "The unprecedented
low interest rate environment has continued to make investing difficult. 
Primarily, we have invested in short-term investments in order to manage for
long-term profitability by having available liquidity when market conditions
and investment opportunities improve.  We have been able to off-set declining
investment yields by decreasing our deposit costs."

As of June, 30, 2012, total assets were $881.4 million, which was an increase
of $2.8 million from December 31, 2011.  The investment portfolio totaled
$323.1 million, which is an increase of $4.3 million from the December 31,
2011 balance of $318.8 million.  Net loans have increased $9.5 million to a
total of $490.5 million at June 30, 2012 from the end of December.  Since June
30, 2011, net loans have increased $19.7 million, or 4.2%.  Through June $14.2
million of residential mortgages have been originated which have been sold on
the secondary market compared with $5.1 million last year.

The provision for loan losses for the first six months of 2012 totaled
$210,000 which compares to $375,000 recorded last year.  Credit quality
continues to improve and compares favorably to peer.  As of June 30, 2012,
non-performing assets as a percent of loans was 1.89%, which compares to 2.11%
as of December 31, 2011 and 2.25% as of June 30, 2011.  Through June,
annualized net charge-offs as a percent of average loans remains very low at
.02%.

Stockholders' equity totaled $86.5 million at June 30, 2012, which is an
increase of $5.1 million, or 6.2%, from December 31, 2011 and an increase of
$11.2 million from June 30, 2011.  First Citizens continues to remain well
capitalized based upon regulatory guidelines.  On July 10, 2012 a cash
dividend of $.30 per share along with a 1% stock dividend were declared to
shareholders of record as of July 20, 2012.  The cash dividend will be paid on
July 27, 2012 and represents an increase of 13.2% over the July 2011 cash
dividend of $.265 per share.

"Our financial performance remains strong as we focus on remaining a strong,
well-capitalized, local community bank committed to serving our communities
and customers, as well as providing outstanding shareholder return and value,"
commented 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.

 

CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
                                             June 30     December 31 June 30
(in thousands except share data)             2012        2011        2011
ASSETS:
Cash and due from banks:
  Noninterest-bearing                        $           $           $        
                                             12,525      9,960        11,318
  Interest-bearing                           5,243       20,472      33,114
Total cash and cash equivalents              17,768      30,432      44,432
Available-for-sale securities                323,131     318,823     288,610
Loans (net of allowance for loan losses:
$6,650 at June 30, 2012;
    $6,487 at December 31, 2011 and $6,163   490,482     481,022     470,749
at June 30, 2011)
Premises and equipment                       11,515      11,702      11,956
Accrued interest receivable                  3,800       3,621       3,717
Goodwill                                     10,256      10,256      10,256
Bank owned life insurance                    13,919      13,669      13,416
Other assets                                 10,479      9,042       9,846
TOTAL ASSETS                                 $           $           $      
                                             881,350     878,567      852,982
LIABILITIES:
Deposits:
  Noninterest-bearing                        $           $           $        
                                             86,218      85,605       80,545
  Interest-bearing                           652,549     648,388     632,582
Total deposits                               738,767     733,993     713,127
Borrowed funds                               47,066      53,882      55,408
Accrued interest payable                     1,222       1,512       1,556
Other liabilities                            7,754       7,712       7,592
TOTAL LIABILITIES                            794,809     797,099     777,683
STOCKHOLDERS' EQUITY:
Preferred Stock $1.00 par value; authorized
  3,000,000 shares at June 30, 2012,
December 31, 2011 and

  June 30, 2011; 
    none issued in 2012 or 2011              -           -           -
Common stock
  $1.00 par value; authorized 15,000,000
shares at June 30, 2012,

  December 31, 2011 and
  June 30, 2011;   issued 3,132,866 shares
at June 30, 2012 and

  December 31, 2011;
  3,104,434 shares at June 30, 2011          3,133       3,133       3,104
Additional paid-in capital                   15,364      15,313      14,295
Retained earnings                            68,813      63,337      59,393
Accumulated other comprehensive income       4,990       4,949       3,244
Treasury stock, at cost:  243,784 shares at
June 30, 2012;

  230,203 shares at
  December 31, 2011 and 214,942 shares at    (5,759)     (5,264)     (4,737)
June 30, 2011
TOTAL STOCKHOLDERS' EQUITY                   86,541      81,468      75,299
TOTAL LIABILITIES AND
   STOCKHOLDERS' EQUITY                      $           $           $      
                                             881,350     878,567      852,982

 

CITIZENS FINANCIAL
SERVICES, INC.
CONSOLIDATED STATEMENT
OF INCOME
(UNAUDITED)
                         Three Months Ended          Six Months Ended
                         June 30,                    June 30,
(in thousands, except    2012          2011          2012         2011
per share data)
INTEREST INCOME:
Interest and fees on     $       7,439 $      7,463  $     14,904 $    14,858
loans
Interest-bearing         1             20            6            42
deposits with banks
Investment securities:
    Taxable              1,237         1,176         2,434        2,348
    Nontaxable           920           892           1,874        1,757
    Dividends            16            14            32           29
TOTAL INTEREST INCOME    9,613         9,565         19,250       19,034
INTEREST EXPENSE:
Deposits                 1,555         2,046         3,221        4,134
Borrowed funds           393           443           806          888
TOTAL INTEREST EXPENSE   1,948         2,489         4,027        5,022
NET INTEREST INCOME      7,665         7,076         15,223       14,012
Provision for loan       105           150           210          375
losses
NET INTEREST INCOME
AFTER
    PROVISION FOR LOAN   7,560         6,926         15,013       13,637
LOSSES
NON-INTEREST INCOME:
Service charges          1,129         1,128         2,207        2,073
Trust                    151           146           324          303
Brokerage and insurance  75            123           225          218
Gains on loans sold      131           34            185          75
Investment securities    213           114           321          234
gains, net
Earnings on bank owned   126           124           250          245
life insurance
Other                    208           129           364          269
TOTAL NON-INTEREST       2,033         1,798         3,876        3,417
INCOME
NON-INTEREST EXPENSES:
Salaries and employee    2,668         2,518         5,421        5,033
benefits
Occupancy                314           329           624          719
Furniture and equipment  96            106           202          223
Professional fees        224           172           492          329
FDIC insurance           115           250           238          500
Pennsylvania shares tax  160           146           326          293
Other                    1,092         1,189         2,221        2,393
TOTAL NON-INTEREST       4,669         4,710         9,524        9,490
EXPENSES
Income before provision  4,924         4,014         9,365        7,564
for income taxes
Provision for income     1,171         867           2,163        1,587
taxes
NET INCOME               $             $       3,147 $            $      5,977
                          3,753                       7,202
PER COMMON SHARE DATA:
Net Income - Basic       $             $        1.08 $            $      
                          1.30                        2.49         2.05
Net Income - Diluted     $             $        1.08 $            $      
                          1.30                        2.49         2.05
Cash Dividends Paid      $             $      0.265  $            $      0.525
                          0.300                       0.595
Number of shares used in 2,886,012     2,915,708     2,890,849    2,916,526
computation - basic
Number of shares used in 2,887,421     2,915,708     2,891,473    2,916,526
computation - diluted

 

Financial Highlights
                       Three Months Ended            Six Months Ended
                       June 30                       June 30
                       2012           2011           2012          2011
Performance Ratios and
Share Data:
    Return on average  1.69%          1.50%          1.63%         1.44%
assets (annualized)
    Return on average  18.72%         17.85%         18.58%        17.22%
equity (annualized)
    Net interest
margin (tax            4.03%          3.93%          4.04%         3.96%
equivalent)
    Cash dividends     $              $              $             $          
paid per share                                 0.265     0.595      0.525
                       0.300
    Earnings per share $              $              $             $          
- basic                                                    2.49       2.05
                       1.30            1.08
    Earnings per share $              $              $             $          
- diluted                                                  2.49       2.05
                       1.30            1.08
Number of shares used  2,886,012      2,915,708      2,890,849     2,916,526
in computation - basic
Number of shares used
in computation -       2,887,421      2,915,708      2,891,473     2,916,526
diluted
Balance Sheet                         December 31,
Highlights (dollars in June 30, 2012  2011           June 30, 2011
thousands):
Assets                 $              $              $852,982
                              881,350       878,567
Investment securities:
    Available for sale 323,131        318,823        288,610
Loans (net of unearned 497,132        487,509        476,912
income)
Allowance for loan     6,650          6,487          6,163
losses
Deposits               738,767        733,933        713,127
Stockholders' Equity   86,541         81,468         75,299
Non-performing assets  9,403          10,300         10,725
Non-performing assets  1.89%          2.11%          2.25%
to total loans
Annualized net
charge-offs to total   0.02%          0.02%          0.05%
loans
Average Leverage Ratio 9.20%          8.83%          8.53%
Common shares          2,881,266      2,902,663      2,889,492
outstanding
                       $              $            
Book value per share                                 $24.94
                       28.23          26.36

 

SOURCE Citizens Financial Services, Inc.

Website: http://www.firstcitizensbank.com
Contact: Kathleen Campbell, Marketing Director, First Citizens Community Bank,
+1-570-662-0422, or +1-570-662-8512 (fax)