Exhibit 99.1
FOR IMMEDIATE RELEASE
| CONTACT: | Kathleen Campbell |
| | Senior Vice President, Marketing |
| | 15 S. Main Street |
| | Mansfield, PA 16933 |
| | 570-662-0422 |
| | 570-662-8512 (fax) |
April 18, 2005
Citizens Financial Services, Inc. Reports First Quarter Earnings
MANSFIELD, PENNSYLVANIA—Randall E. Black, Chief Executive Officer and President of Citizens Financial Services, Inc., (OTC BB: CZFS.OB) holding company for First Citizens National Bank, has reported 2005 first-quarter earnings.
Citizens Financial Services, Inc. reported that net income for three months ended March 31, 2005 was $1,267,000, compared to $1,493,000 for the same period of 2004. Earnings per share for the three months ended March 31, 2005 were $0.45 as compared to the $0.53 for the same period of 2004. This represents a return on average equity of 12.41% and a return on average assets of 1.01%.
Net income from core operations for the three months ended March 31, 2005 excluding security gains, declined $37,000 compared to the three months ended March 31, 2004.
Total assets for Citizens Financial Services, Inc. have grown $37.6 million or 8.0% to $506.4 million from $468.8 million as of March 31, 2004. Deposits grew 6.8% to $413.2 million while net loans increased 16.3% to $364.8 million from one year ago. Total stockholders’ equity, excluding accumulated other comprehensive income, increased $2.8 million, or 7.2% since last March.
The cash dividend to be paid on April 29th to record holders of April 15th will be $.205 per share, as compared to $.195 per share for the same period in 2004, an increase of 5.1%. The average of our common stock’s bid and ask price as of March 31, 2005 was $23.88.
CEO and President Randall E. Black stated, “The flattening yield curve has presented notable challenges to our interest margins as well as the banking industry in general. The flattened yield curve, coupled with the lack of security gains from sales, has had an impact on our first quarter results compared to a year ago. Notwithstanding the above, net interest income in total increased $118,000 over 2004’s first quarter. We have been able to increase our loans in a competitive environment while improving our overall asset quality. This is due in no small part to the dedication of our Board of Directors, management and employees to provide quality financial service solutions to our customers without comprising the level of service our customers have come to expect.”
Inquiries regarding the purchase of the company’s stock may be made through the following brokers: Ferris Baker Watts, Inc. 410-659-4600: Ryan, Beck & Co., 800-395-7926; Schwab Capital Markets LP, 201-963-9100; Monroe Securities, Inc., 800-766-5560; Boenning & Scattergood Inc., 610-828-0400; Keefe, Beuyette & Woods, Inc., 212-554-2600; Knight Equity Markets, LP, 212-336-8790; GVR Co., 800-638-8602; Hill Thompson Magid & Co., 800-631-3083; Powell (EE) & Co., Inc., 412-391-4594 and Pershing Trading Company, 201-413-3531.
Citizens Financial Services, Inc. has over 1,500 shareholders and is the parent company of First Citizens National Bank, which operates fifteen branch offices providing financial services in Bradford, Tioga and Potter Counties.
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.
| MARCH 31, 2005 | | | | | | | |
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| PART I - FINANCIAL INFORMATION | | | | | | | |
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| Item 1 - FINANCIAL STATEMENTS | | | | | | | |
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| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | |
| CONSOLIDATED BALANCE SHEET | | | | | | | |
| (UNAUDITED) | | | | | | | |
| | | | | | | | |
| | | March 31 | | December 31 | | March 31 | |
(in thousands) | | | 2005 | | | 2004 | | | 2004 | |
ASSETS: | | | | | | | | | | |
| Cash and due from banks: | | | | | | | | | | |
| Noninterest-bearing | | $ | 7,910 | | $ | 9,162 | | $ | 8,731 | |
| Interest-bearing | | | 100 | | | 177 | | | 3,349 | |
| Total cash and cash equivalents | | | 8,010 | | | 9,339 | | | 12,080 | |
| | | | | | | | | | | |
| Available-for-sale securities | | | 94,611 | | | 95,747 | | | 109,618 | |
| | | | | | | | | | | |
| Loans (net of allowance for loan losses 2005, $3,856; | | | | | | | | | | |
| December 31, 2004, $3,919; and March 31, 2004, $3,874) | | | 364,786 | | | 355,774 | | | 313,549 | |
| | | | | | | | | | | |
| Premises and equipment | | | 11,700 | | | 11,833 | | | 10,479 | |
| Accrued interest receivable | | | 2,036 | | | 1,736 | | | 1,790 | |
| Goodwill | | | 8,605 | | | 8,605 | | | 6,905 | |
| Core deposit intangible | | | 1,117 | | | 1,262 | | | 869 | |
| Bank owned life insurance | | | 7,523 | | | 7,449 | | | 7,221 | |
| Other assets | | | 8,034 | | | 7,602 | | | 6,320 | |
| | | | | | | | | | | |
TOTAL ASSETS | | $ | 506,422 | | $ | 499,347 | | $ | 468,831 | |
| | | | | | | | | | | |
LIABILITIES: | | | | | | | | | | |
| Deposits: | | | | | | | | | | |
| Noninterest-bearing | | $ | 45,642 | | $ | 46,866 | | $ | 44,377 | |
| Interest-bearing | | | 367,582 | | | 372,208 | | | 342,698 | |
| Total deposits | | | 413,224 | | | 419,074 | | | 387,075 | |
| Borrowed funds | | | 48,367 | | | 34,975 | | | 33,944 | |
| Accrued interest payable | | | 1,632 | | | 1,870 | | | 1,547 | |
| Commitment to purchase investment securities | | | - | | | - | | | 4,094 | |
| Other liabilities | | | 2,809 | | | 2,639 | | | 2,644 | |
TOTAL LIABILITIES | | | 466,032 | | | 458,558 | | | 429,304 | |
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| | | | | | | | | | | |
STOCKHOLDERS' EQUITY: | | | | | | | | | | |
| Common Stock | | | | | | | | | | |
| $1.00 par value; authorized 10,000,000 shares; | | | | | | | | | | |
| issued 2,937,519 shares in 2005 and at December 31, 2004 | | | | | | | | | | |
| and 2,909,849 shares at March 31, 2004 | | | 2,938 | | | 2,938 | | | 2,910 | |
| Additional paid-in capital | | | 10,804 | | | 10,804 | | | 10,213 | |
| Retained earnings | | | 29,593 | | | 28,894 | | | 27,413 | |
TOTAL | | | 43,335 | | | 42,636 | | | 40,536 | |
| Accumulated other comprehensive income | | | (934 | ) | | 164 | | | 996 | |
| Less: Treasury Stock, at cost 97,262 shares for 2005 and at | | | | | | | | | | |
| December 31, 2004 and 96,962 shares at March 31, 2004 | | | (2,011 | ) | | (2,011 | ) | | (2,005 | ) |
| | | | | | | | | | | |
TOTAL STOCKHOLDERS' EQUITY | | | 40,390 | | | 40,789 | | | 39,527 | |
TOTAL LIABILITIES AND | | | | | | | | | | |
STOCKHOLDERS' EQUITY | | $ | 506,422 | | $ | 499,347 | | $ | 468,831 | |
CITIZENS FINANCIAL SERVICES, INC. | | | | | | | |
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED) | | | | | | | |
| | | | | | | | |
| | | Three Months Ended |
(in thousands, except per share data) | | March 31 |
INTEREST INCOME: | | | | | | | |
| Interest and fees on loans | | $ | 5,919 | | $ | 5,348 | |
| Interest-bearing deposits with banks | | | - | | | 5 | |
| Investment securities: | | | | | | | |
| Taxable | | | 792 | | | 892 | |
| Nontaxable | | | 117 | | | 85 | |
| Dividends | | | 51 | | | 62 | |
| | | | | | | | |
TOTAL INTEREST INCOME | | | 6,879 | | | 6,392 | |
| | | | | | | | |
INTEREST EXPENSE: | | | | | | | |
| Deposits | | | 2,168 | | | 1,964 | |
| Borrowed funds | | | 378 | | | 213 | |
| | | | | | | | |
TOTAL INTEREST EXPENSE | | | 2,546 | | | 2,177 | |
| | | | | | | | |
NET INTEREST INCOME | | | 4,333 | | | 4,215 | |
| Provision for loan losses | | | - | | | - | |
| | | | | | | | |
NET INTEREST INCOME AFTER | | | | | | | |
PROVISION FOR LOAN LOSSES | | | 4,333 | | | 4,215 | |
| | | | | | | | |
NON-INTEREST INCOME: | | | | | | | |
| Service charges | | | 673 | | | 731 | |
| Trust | | | 121 | | | 127 | |
| Brokerage | | | 38 | | | 54 | |
| Insurance | | | 83 | | | 28 | |
| Investment securities gains, net | | | - | | | 287 | |
| Earnings on bank owned life insurance | | | 74 | | | 79 | |
| Other | | | 121 | | | 90 | |
| | | | | | | | |
TOTAL NON-INTEREST INCOME | | | 1,110 | | | 1,396 | |
| | | | | | | | |
NON-INTEREST EXPENSES: | | | | | | | |
| Salaries and employee benefits | | | 1,921 | | | 1,925 | |
| Occupancy | | | 303 | | | 286 | |
| Furniture and equipment | | | 175 | | | 169 | |
| Professional fees | | | 145 | | | 154 | |
| Amortization of intangibles | | | 144 | | | 109 | |
| Other | | | 1,143 | | | 1,028 | |
| | | | | | | | |
TOTAL NON-INTEREST EXPENSES | | | 3,831 | | | 3,671 | |
| | | | | | | | |
| Income before provision for income taxes | | | 1,612 | | | 1,940 | |
| Provision for income taxes | | | 345 | | | 447 | |
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NET INCOME | | $ | 1,267 | | $ | 1,493 | |
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| | | | | | | | |
| | | | | | | | |
Earnings Per Share | | $ | 0.45 | | $ | 0.53 | |
Cash Dividends Declared | | $ | 0.200 | | $ | 0.190 | |
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Financial Highlights | | | | | |
| | | 2005 | | 2004 | |
Three Months Ended March 31 | | | | | |
| Net Income | | $ | 1,267 | | $ | 1,493 | |
| Comprehensive Income | | | 169 | | | 1,533 | |
| Per common share data: | | | | | | | |
| Earnings per share | | $ | 0.45 | | $ | 0.53 | |
| Cash Dividends declared | | $ | 0.200 | | $ | 0.190 | |
| Performance Ratios: | | | | | | | |
| Return on average assets (annualized) | | | 1.01 | % | | 1.29 | % |
| Return on average equity (annualized) | | | 12.41 | % | | 15.72 | % |
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| | | | | | | | |
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At March 31 | | | | | | | |
| Assets | | $ | 506,422 | | $ | 468,831 | |
| Investment securities: | | | | | | | |
| Available for sale | | | 94,611 | | | 109,618 | |
| Loans (net of unearned income) | | | 368,642 | | | 317,423 | |
| Allowance for loan losses | | | 3,856 | | | 3,874 | |
| Deposits | | | 413,224 | | | 387,075 | |
| Stockholders' Equity | | | 40,390 | | | 39,527 | |
| Non-performing assets | | | 2,667 | | | 2,632 | |
| Average Leverage Ratio | | | 7.90 | % | | 8 | % |
| Per common share data: | | | | | | | |
| Book value | | $ | 14.55 | | $ | 14.05 | |
| Market value (average of bid/ask price) | | $ | 23.88 | | $ | 25.13 | |
| Market price to book value ratio | | | 164.10 | % | | 178.86 | % |
| | | | | | | Cash Dividends | |
Common Stock Information: | | Bid | | Ask | | Paid | |
| | | | | | | | |
Quarter Ended: | | | | | | | |
| | | | | | | | |
| March 31, 2005 | | $ | 23.50 | | $ | 24.25 | | $ | 0.200 | |
| December 31, 2004 | | $ | 23.65 | | $ | 24.00 | | $ | 0.200 | |
| September 30, 2004 | | $ | 21.50 | | $ | 22.15 | | $ | 0.195 | |
| June 30, 2004 | | $ | 22.20 | | $ | 22.75 | | $ | 0.195 | |
| | | | | | | | | | | |
| March 31, 2004 | | $ | 25.00 | | $ | 25.25 | | $ | 0.190 | |
| December 31, 2003 | | $ | 23.85 | | $ | 24.15 | | $ | 0.190 | |
| September 30, 2003 | | $ | 24.75 | | $ | 25.50 | | $ | 0.185 | |
| June 30, 2003 | | $ | 27.75 | | $ | 28.00 | | $ | 0.185 | |
