FOR IMMEDIATE RELEASE
CONTACT: | Kathleen Campbell, CFMP |
Senior Vice President, Marketing | |
15 S. Main Street | |
Mansfield, PA 16933 | |
570-662-0422 | |
570-662-8512 (fax) |
January 21, 2004
CITIZENS FINANCIAL SERVICES, INC. RELEASES 2003 YEAR-END EARNINGS
MANSFIELD, PENNSYLVANIA – Citizens Financial Services, Inc. (OTC BB: CZFS), the holding company for First Citizens National Bank, releases 2003 year-end earnings. Total assets, total loans and total deposits for the year 2003 all increased. Total assets grew $31.2 million or 7.2% to $463.9 million while total loans increased by $19.2 million or 6.4% to reach $317.7 million and total deposits of $385.7 million represented an increase of $12.6 million or 3.4%. Net income for the fourth quarter 2003 was $1.3 million, a 4.5% decrease over the comparable quarter in 2002.
Net income for the year was $4.9 million as compared to $5.6 million in 2002, a 12.8% decrease. Earnings per share for the year ended December 31, 2003 was $1.72, a 12.2% decrease over one year ago. Even though loans, deposits and total assets grew, overall net income was considerably impacted by the consulting and non-compete agreement provided to the organization’s retiring president. The Board of Directors entered into a consulting and non-compete agreement with Richard E. Wilber, President and CEO of Citizens Financial Services, Inc. and First Citizens National Bank which went into effect upon Mr. Wilber’s retirement on September 30, 2003. As part of the consulting and non-compete agreement, Mr. Wilber will provide consulting services at the request of the Board of Directors and wi ll adhere to certain non-compete provisions. The financial impact of this agreement was an after-tax charge to earnings of approximately $554,500 in the third quarter of 2003. Without the effect of this charge to the 2003 earnings, earnings per share for the year ended December 31, 2003 would have been approximately $1.91.
Cash dividends declared in the fourth quarter 2003 were $.19 (a $.76 annualized rate) versus $.175 (a $.70 annualized rate) in the comparable quarter of 2002, an 8.6% increase. In addition, the common stock price has improved approximately 13.1% over the past year and 71.1% over the past two years.
Interim President, John M. Thomas, M.D. stated, "We are pleased with the 2003 year-end earnings especially in light of the facts that the low interest rates continue to be challenging and that a significant charge against earnings was made in the third quarter. The strength of the Bank lies with hardworking, dedicated employees, who, I am sure, will make it possible for the Bank to meet any and all challenges that lie ahead."
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.
Financial Highlights(In thousands, except per share and ratio data.) | |||||||
(Unaudited) | |||||||
2003 |
|
| 2002 | ||||
Twelve Months Ended December 31 | |||||||
Net income | $ | 4,879 | $ | 5,595 | |||
Comprehensive income | 3,282 | 6,935 | |||||
Per common share data: | |||||||
Earnings per share | 1.72 | 1.96 | |||||
Cash dividends declared | 0.74 | 0.68 | |||||
Performance ratios: | |||||||
Return on average assets | 1.11 | % | 1.30 | % | |||
Return on average equity | 13.22 | % | 16.53 | % | |||
Three Months Ended December 31 | |||||||
Net income | $ | 1,326 | $ | 1,389 | |||
Per common share data: | |||||||
Earnings per share | 0.47 | 0.49 | |||||
Cash dividends declared | 0.19 | 0.175 | |||||
Performance ratios: | |||||||
Return on average assets | 1.20 | % | 1.28 | % | |||
Return on average equity | 14.29 | % | 15.77 | % | |||
At December 31 | |||||||
Assets | $ | 463,878 | $ | 432,658 | |||
Investment securities: | |||||||
Available-for-sale | 106,587 | 100,725 | |||||
Loans (net of unearned income) | 317,657 | 298,457 | |||||
Allowance for loan losses | 3,620 | 3,621 | |||||
Deposits | 385,691 | 373,051 | |||||
Stockholders' Equity | 38,529 | 38,406 | |||||
Non-performing assets | 2,994 | 3,293 | |||||
Average leverage ratio | 6.75 | % | 6.48 | % | |||
Per common share data: | |||||||
Book value | $ | 13.70 | $ | 13.59 | |||
Market value (average of bid/ask price) | 24.00 | 21.23 | |||||
Market price to book value ratio | 175.18 | % | 156.22 | % |
CITIZENS FINANCIAL SERVICES, INC. | |||||||
CONSOLIDATED BALANCE SHEET | |||||||
(UNAUDITED) | |||||||
December 31 | December 31 | ||||||
(in thousands) | 2003 | 2002 | |||||
ASSETS: | |||||||
Cash and due from banks: | |||||||
Noninterest-bearing | $ | 9,624 | $ | 11,173 | |||
Interest-bearing | 327 | 421 | |||||
Total cash and cash equivalents | 9,951 | 11,594 | |||||
Available-for-sale securities | 106,587 | 100,725 | |||||
Loans (net of allowance for loan losses 2003, $3,620; | |||||||
2002, $3,621) | 314,037 | 294,836 | |||||
Premises and equipment | 10,645 | 11,134 | |||||
Accrued interest receivable | 1,703 | 1,976 | |||||
Goodwill | 6,905 | 6,905 | |||||
Core deposit intangible | 978 | 1,413 | |||||
Bank owned life insurance | 7,142 | - | |||||
Other assets | 5,930 | 4,075 | |||||
TOTAL ASSETS | $ | 463,878 | $ | 432,658 | |||
LIABILITIES: | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 46,820 | $ | 40,143 | |||
Interest-bearing | 338,871 | 332,908 | |||||
Total deposits | 385,691 | 373,051 | |||||
Borrowed funds | 27,796 | 17,027 | |||||
Subordinate debentures | 7,500 | - | |||||
Accrued interest payable | 1,888 | 2,077 | |||||
Other liabilities | 2,474 | 2,097 | |||||
TOTAL LIABILITIES | 425,349 | 394,252 | |||||
STOCKHOLDERS' EQUITY: | |||||||
Common Stock | |||||||
$1.00 par value; authorized 10,000,000 shares; | |||||||
issued 2,909,849 shares in 2003 and | |||||||
2,882,070 shares in 2002, respectively | 2,910 | 2,882 | |||||
Additional paid-in capital | 10,213 | 9,473 | |||||
Retained earnings | 26,455 | 24,447 | |||||
TOTAL | 39,578 | 36,802 | |||||
Accumulated other comprehensive income | 956 | 2,553 | |||||
Less: Treasury Stock, at cost | |||||||
96,962 and 55,162 shares in 2003 and 2002, respectively | (2,005 | ) | (949 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 38,529 | 38,406 | |||||
TOTAL LIABILITIES AND | |||||||
STOCKHOLDERS' EQUITY | $ | 463,878 | $ | 432,658 | |||
CITIZENS FINANCIAL SERVICES, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
(in thousands, except per share data) | December 31 | December 31 | |||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||
INTEREST INCOME: | |||||||||||||
Interest and fees on loans | $ | 5,435 | $ | 5,530 | $ | 21,593 | $ | 21,600 | |||||
Interest-bearing deposits with banks | 2 | 7 | 29 | 65 | |||||||||
Investment securities: | |||||||||||||
Taxable | 755 | 1,027 | 3,222 | 4,711 | |||||||||
Nontaxable | 94 | 139 | 457 | 634 | |||||||||
Dividends | 79 | 88 | 314 | 367 | |||||||||
TOTAL INTEREST INCOME | 6,365 | 6,791 | 25,615 | 27,377 | |||||||||
INTEREST EXPENSE: | |||||||||||||
Deposits | 1,997 | 2,389 | 8,501 | 10,012 | |||||||||
Borrowed funds | 103 | 102 | 325 | 392 | |||||||||
TOTAL INTEREST EXPENSE | 2,100 | 2,491 | 8,826 | 10,404 | |||||||||
NET INTEREST INCOME | 4,265 | 4,300 | 16,789 | 16,973 | |||||||||
Provision for loan losses | 60 | 135 | 435 | 435 | |||||||||
NET INTEREST INCOME AFTER | |||||||||||||
PROVISION FOR LOAN LOSSES | 4,205 | 4,165 | 16,354 | 16,538 | |||||||||
NON-INTEREST INCOME: | |||||||||||||
Service charges | 757 | 795 | 3,018 | 3,130 | |||||||||
Trust | 185 | 132 | 622 | 562 | |||||||||
Gains on Loans Sold | 23 | 99 | 349 | 185 | |||||||||
Realized securities gains, net | 39 | - | 553 | 254 | |||||||||
Other | 217 | 234 | 770 | 915 | |||||||||
TOTAL NON-INTEREST INCOME | 1,221 | 1,260 | 5,312 | 5,046 | |||||||||
NON-INTEREST EXPENSES: | |||||||||||||
Salaries and employee benefits | 1,788 | 1,693 | 8,304 | 7,120 | |||||||||
Occupancy | 254 | 253 | 1,025 | 998 | |||||||||
Furniture and equipment | 180 | 193 | 713 | 881 | |||||||||
Professional fees | 208 | 238 | 694 | 667 | |||||||||
Amortization | 109 | 109 | 435 | 457 | |||||||||
Other | 1,210 | 1,112 | 4,330 | 4,103 | |||||||||
TOTAL NON-INTEREST EXPENSES | 3,749 | 3,598 | 15,501 | 14,226 | |||||||||
Income before provision for income taxes | 1,677 | 1,827 | 6,165 | 7,358 | |||||||||
Provision for income taxes | 351 | 438 | 1,286 | 1,763 | |||||||||
NET INCOME | $ | 1,326 | $ | 1,389 | $ | 4,879 | $ | 5,595 | |||||
Earnings Per Share | $ | 0.47 | $ | 0.49 | $ | 1.72 | $ | 1.96 | |||||
Cash Dividend Declared | $ | 0.190 | $ | 0.175 | $ | 0.740 | $ | 0.680 | |||||