Exhibit 99.1
Contact:
Kathleen Campbell, Marketing Director First Citizens National Bank
570-662-0422 15 S. Main Street
570-662-8512 (fax) Mansfield, PA 16933
Citizens Financial Services, Inc. Reports Second Quarter Earnings
MANSFIELD, PENNSYLVANIA— July 26, 2005 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the second quarter of 2005. Net income for the three months and six months ended June 30, 2005 was $1,313,000 and $2,580,000, respectively. This compares to the three months and six months ended June 30, 2004 of $1,468,000 and $2,961,000, respectively. Earnings per share were $.91 through June 2005 compared with $1.04 in 2004, a decrease of 12.5%.
Return on equity (ROE) was 12.52% while return on assets (ROA) was 1.02% for the first six months of 2005. Likewise, ROE and ROA was 15.41% and 1.26% for the first six months of 2004, respectively.
Since June of last year, total loans have increased $20.6 million, which represents a 5.87% increase. Total deposits have increased $7.5 million, an increase of 1.81%. CEO and President Randall E. Black stated, “Despite the ongoing effects of the flattening yield curve and the issues it presents to our interest margins, we have been able to increase our loan portfolio and continue to report solid core earnings from operations. Year-to-date net interest income increased $294,000 or 3.5% over the same period a year ago. The lack of security gains has had a significant impact to our overall net income, particularly compared to realized gains of $491,000 recorded for the first six months of 2004.”
During this same period, asset quality has continued to improve such that through June, there has been no provision for loan losses. The ratio of classified assets to regulatory capital has improved from 27.90% as of June 30, 2004 to 20.82% as of June 30, 2005.
Stockholders’ equity, excluding accumulated other comprehensive income, has increased $2,148,000 or 5.45% since last June. In June, 21,453 shares of treasury stock were purchased at a total cost of $462,312. The book value per share of $14.76 represents an increase of 5.3% over last year.
The cash dividend to be paid on July 29, 2005 to record holders of July 15, 2005 will be $.205 per share. This compares to $.195 per share for the comparable period in 2004, an increase of 5.1%. “The increase in dividends of 5.1% over last year reflects the continued profitability of the Company and the Board of Directors’ desire to provide shareholders with overall total return,” stated Mr. Black. The annualized dividend yield through June is 3.86%. Additionally, a 1% stock dividend will be distributed to shareholders, which is a continuation of past practice since 1991.
Citizens Financial Services, Inc., has over 1,500 shareholders, the majority of whom reside in Potter, Tioga, and Bradford Counties where their 15 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. | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||
(UNAUDITED) | ||||||||||
June 30 | December 31 | June 30 | ||||||||
(in thousands) | 2005 | 2004 | 2004 | |||||||
ASSETS: | ||||||||||
Cash and due from banks: | ||||||||||
Noninterest-bearing | $ | 8,607 | $ | 9,162 | $ | 8,782 | ||||
Interest-bearing | 101 | 177 | 3,650 | |||||||
Total cash and cash equivalents | 8,708 | 9,339 | 12,432 | |||||||
Available-for-sale securities | 91,947 | 95,747 | 98,507 | |||||||
Loans (net of allowance for loan losses: 2005, $3,692; | ||||||||||
December 31, 2004, $3,919; and June 30, 2004, $4,129) | 367,684 | 355,774 | 346,668 | |||||||
Premises and equipment | 12,493 | 11,833 | 10,395 | |||||||
Accrued interest receivable | 1,895 | 1,736 | 1,689 | |||||||
Goodwill | 8,605 | 8,605 | 8,605 | |||||||
Core deposit intangible | 973 | 1,262 | 1,551 | |||||||
Bank owned life insurance | 7,598 | 7,449 | 7,299 | |||||||
Other assets | 7,244 | 7,602 | 7,650 | |||||||
TOTAL ASSETS | $ | 507,147 | $ | 499,347 | $ | 494,796 | ||||
LIABILITIES: | ||||||||||
Deposits: | ||||||||||
Noninterest-bearing | $ | 46,764 | $ | 46,866 | $ | 47,157 | ||||
Interest-bearing | 375,668 | 372,208 | 367,754 | |||||||
Total deposits | 422,432 | 419,074 | 414,911 | |||||||
Borrowed funds | 39,199 | 34,975 | 37,313 | |||||||
Accrued interest payable | 1,599 | 1,870 | 1,543 | |||||||
Other liabilities | 2,716 | 2,639 | 2,521 | |||||||
TOTAL LIABILITIES | 465,946 | 458,558 | 456,288 | |||||||
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 June 30, 2004 | 2,938 | 2,938 | 2,910 | |||||||
Additional paid-in capital | 10,804 | 10,804 | 10,213 | |||||||
Retained earnings | 30,324 | 28,894 | 28,332 | |||||||
TOTAL | 44,066 | 42,636 | 41,455 | |||||||
Accumulated other comprehensive (loss) income | (391 | ) | 164 | (936 | ) | |||||
Less: Treasury Stock, at cost 118,715 shares for 2005 and 97,262 at | ||||||||||
December 31, 2004 and June 30, 2004 | (2,474 | ) | (2,011 | ) | (2,011 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 41,201 | 40,789 | 38,508 | |||||||
TOTAL LIABILITIES AND | ||||||||||
STOCKHOLDERS' EQUITY | $ | 507,147 | $ | 499,347 | $ | 494,796 |
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CITIZENS FINANCIAL SERVICES, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF INCOME | |||||||||||||
(UNAUDITED) | |||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||
(in thousands, except per share data) | June 30 | June 30 | |||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
INTEREST INCOME: | |||||||||||||
Interest and fees on loans | $ | 6,105 | $ | 5,447 | $ | 12,024 | $ | 10,795 | |||||
Interest-bearing deposits with banks | - | 3 | - | 8 | |||||||||
Investment securities: | |||||||||||||
Taxable | 749 | 852 | 1,541 | 1,744 | |||||||||
Nontaxable | 124 | 62 | 242 | 147 | |||||||||
Dividends | 55 | 67 | 106 | 129 | |||||||||
TOTAL INTEREST INCOME | 7,033 | 6,431 | 13,913 | 12,823 | |||||||||
INTEREST EXPENSE: | |||||||||||||
Deposits | 2,256 | 1,992 | 4,425 | 3,956 | |||||||||
Borrowed funds | 379 | 217 | 757 | 430 | |||||||||
TOTAL INTEREST EXPENSE | 2,635 | 2,209 | 5,182 | 4,386 | |||||||||
NET INTEREST INCOME | 4,398 | 4,222 | 8,731 | 8,437 | �� | ||||||||
Provision for loan losses | - | - | - | - | |||||||||
NET INTEREST INCOME AFTER | |||||||||||||
PROVISION FOR LOAN LOSSES | 4,398 | 4,222 | 8,731 | 8,437 | |||||||||
NON-INTEREST INCOME: | |||||||||||||
Service charges | 746 | 751 | 1,419 | 1,482 | |||||||||
Trust | 86 | 119 | 208 | 246 | |||||||||
Brokerage | 55 | 58 | 93 | 112 | |||||||||
Insurance | 61 | 60 | 144 | 88 | |||||||||
Gains on loans sold | 12 | 12 | 22 | 21 | |||||||||
Investment securities gains, net | - | 204 | - | 491 | |||||||||
Earnings on bank owned life insurance | 75 | 79 | 149 | 158 | |||||||||
Other | 100 | 93 | 202 | 172 | |||||||||
TOTAL NON-INTEREST INCOME | 1,135 | 1,376 | 2,237 | 2,770 | |||||||||
NON-INTEREST EXPENSES: | |||||||||||||
Salaries and employee benefits | 1,974 | 1,847 | 3,895 | 3,772 | |||||||||
Occupancy | 282 | 267 | 585 | 553 | |||||||||
Furniture and equipment | 160 | 165 | 335 | 335 | |||||||||
Professional fees | 131 | 158 | 275 | 312 | |||||||||
Amortization of intangibles | 144 | 109 | 289 | 217 | |||||||||
Other | 1,171 | 1,129 | 2,306 | 2,155 | |||||||||
TOTAL NON-INTEREST EXPENSES | 3,862 | 3,675 | 7,685 | 7,344 | |||||||||
Income before provision for income taxes | 1,671 | 1,923 | 3,283 | 3,863 | |||||||||
Provision for income taxes | 358 | 455 | 703 | 902 | |||||||||
NET INCOME | $ | 1,313 | $ | 1,468 | $ | 2,580 | $ | 2,961 | |||||
Earnings Per Share | $ | 0.46 | $ | 0.52 | $ | 0.91 | $ | 1.04 | |||||
Cash Dividends Declared | $ | 0.205 | $ | 0.195 | $ | 0.405 | $ | 0.385 |
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FINANCIAL HIGHLIGHTS | |||||||
(UNAUDITED) | |||||||
(in thousands, except per share data and ratio data) | |||||||
2005 | 2004 | ||||||
Six Months Ended June 30 | |||||||
Net Income | $ | 2,580 | $ | 2,961 | |||
Comprehensive Income | 2,025 | 1,069 | |||||
Per common share data: | |||||||
Earnings per share | $ | 0.91 | $ | 1.04 | |||
Cash Dividends declared | $ | 0.405 | $ | 0.385 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.02 | % | 1.26 | % | |||
Return on average equity (annualized) | 12.52 | % | 15.41 | % | |||
Three Months Ended June 30 | |||||||
Net Income | $ | 1,313 | $ | 1,468 | |||
Per common share data: | |||||||
Earnings per share | $ | 0.46 | $ | 0.52 | |||
Cash Dividends declared | $ | 0.205 | $ | 0.195 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.04 | % | 1.23 | % | |||
Return on average equity (annualized) | 12.63 | % | 15.12 | % | |||
At June 30 | |||||||
Assets | $ | 507,147 | $ | 494,796 | |||
Investment securities: | |||||||
Available for sale | 91,947 | 98,507 | |||||
Loans (net of unearned income) | 371,376 | 350,797 | |||||
Allowance for loan losses | 3,692 | 4,129 | |||||
Deposits | 422,432 | 414,911 | |||||
Stockholders' Equity | 41,201 | 38,508 | |||||
Non-performing assets | 2,806 | 3,299 | |||||
Average Leverage Ratio | 7.94 | % | 7.81 | % | |||
Per common share data: | |||||||
Book value | $ | 14.76 | $ | 14.02 | |||
Market value (average of bid/ask price) | $ | 21.35 | $ | 22.48 | |||
Market price to book value ratio | 144.69 | % | 160.31 | % |
Cash Dividends | ||||||||||
Common Stock Information: | Bid | Ask | Paid | |||||||
Quarter Ended: | ||||||||||
June 30, 2005 | $ | 21.00 | $ | 21.70 | $ | 0.205 | ||||
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 |
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