Exhibit 99.1
Contact: | Kathleen Campbell, Marketin Director | First Citizens National Bank |
570-662-0422 | 15 South Main Street | |
570-662-8512 (fax) | Mansfield, PA 16933 |
Citizens Financial Services, Inc. Reports Third Quarter Earnings
MANSFIELD, PENNSYLVANIA— October 26, 2005 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the third quarter of 2005. Net income for the three months and nine months ended September 30, 2005 was $1,318,000 and $3,898,000, respectively. This compares to the three months and nine months ended September 30, 2004 of $1,423,000 and $4,383,000, respectively. Earnings per share were $1.36 through September 2005 compared with $1.53 in 2004, a decrease of 11.1%.
Return on equity (ROE) was 12.53% while return on assets (ROA) was 1.03% for the first nine months of 2005. Likewise, ROE and ROA was 15.04% and 1.22% for the first nine months of 2004, respectively.
CEO and President Randall E. Black stated, “Throughout 2005, we have continued to see our interest rate margin compressed due to the flattened yield curve and have implemented strategies during this period to minimize the impact to our cost of funds. Despite the less than favorable interest rate environment, we have been successful in growing our loan portfolio and increasing deposits. Lastly in July, we declared a 1% stock dividend which was distributed to shareholders along with our normal dividend, which is a continuation of past practice since 1991.”
Net interest income was $13.2 million for the nine month period ending September 30, 2005 compared to $12.9 million for the nine month period ending September 30, 2004, representing a $254,000 or 2.0% increase over the same period a year ago. Net interest margin for the nine months ended September 30 2005 of 4.02% declined from 4.15% in the same period of 2004, which is a reflection of cost of funds increasing 26 basis points over the same time frame resulting in net margin compression.
The company has grown loans organically by $22.0 million since last September, an increase of 6.2%. Total deposits have increased $21.7 million, an increase of 5.3%. We continue to focus on serving our existing customer relationships, while fostering new ones within our current and new Wellsville, NY markets.
Non-interest income was down $454,000 which has been impacted due to the lack of investment security gains in 2005. Through September 2004, $491,000 of investment gains had been recorded compared to none thus far in 2005.
Since last September, stockholders’ equity, excluding accumulated other comprehensive income, has increased $2,013,000 or 5.0%. This equates to a book value per share of $14.87, which is an increase of 4.8% over last year’s book value per share of $14.19.
The cash dividend to be paid on October 28, 2005 to record holders of October 14, 2005 will be $.21 per share. This compares to $.20 per share for the comparable period in 2004, an increase of 5.0%. The annualized dividend yield through September is 4.00%.
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.
CITIZENS FINANCIAL SERVICES, INC. | ||||||||||
CONSOLIDATED BALANCE SHEET | ||||||||||
(UNAUDITED) | ||||||||||
September 30 | December 31 | September 30 | ||||||||
(in thousands) | 2005 | 2004 | 2004 | |||||||
ASSETS: | ||||||||||
Cash and due from banks: | ||||||||||
Noninterest-bearing | $ | 7,868 | $ | 9,162 | $ | 8,145 | ||||
Interest-bearing | 540 | 177 | 123 | |||||||
Total cash and cash equivalents | 8,408 | 9,339 | 8,268 | |||||||
Available-for-sale securities | 90,512 | 95,747 | 100,996 | |||||||
Loans (net of allowance for loan losses: 2005, $3,666; | ||||||||||
December 31, 2004, $3,919; and September 30, 2004, $4,109) | 371,852 | 355,774 | 349,381 | |||||||
Premises and equipment | 12,316 | 11,833 | 11,863 | |||||||
Accrued interest receivable | 2,037 | 1,736 | 1,875 | |||||||
Goodwill | 8,605 | 8,605 | 8,605 | |||||||
Core deposit intangible | 828 | 1,262 | 1,406 | |||||||
Bank owned life insurance | 7,669 | 7,449 | 7,374 | |||||||
Other assets | 7,356 | 7,602 | 7,721 | |||||||
TOTAL ASSETS | $ | 509,583 | $ | 499,347 | $ | 497,489 | ||||
LIABILITIES: | ||||||||||
Deposits: | ||||||||||
Noninterest-bearing | $ | 52,246 | $ | 46,866 | $ | 42,420 | ||||
Interest-bearing | 378,436 | 372,208 | 366,592 | |||||||
Total deposits | 430,682 | 419,074 | 409,012 | |||||||
Borrowed funds | 32,814 | 34,975 | 43,753 | |||||||
Accrued interest payable | 1,627 | 1,870 | 1,685 | |||||||
Commitment to purchase investment securities | 300 | - | - | |||||||
Other liabilities | 2,718 | 2,639 | 2,607 | |||||||
TOTAL LIABILITIES | 468,141 | 458,558 | 457,057 | |||||||
STOCKHOLDERS' EQUITY: | ||||||||||
Common Stock | ||||||||||
$1.00 par value; authorized 10,000,000 shares; | ||||||||||
issued 2,965,257 shares in 2005 and 2,937,519 | ||||||||||
shares in 2004 | 2,965 | 2,938 | 2,938 | |||||||
Additional paid-in capital | 11,359 | 10,804 | 10,804 | |||||||
Retained earnings | 30,472 | 28,894 | 28,578 | |||||||
TOTAL | 44,796 | 42,636 | 42,320 | |||||||
Accumulated other comprehensive (loss) income | (880 | ) | 164 | 123 | ||||||
Less: Treasury Stock, at cost 118,715 shares for 2005 and 97,262 | ||||||||||
shares in 2004 | (2,474 | ) | (2,011 | ) | (2,011 | ) | ||||
TOTAL STOCKHOLDERS' EQUITY | 41,442 | 40,789 | 40,432 | |||||||
TOTAL LIABILITIES AND | ||||||||||
STOCKHOLDERS' EQUITY | $ | 509,583 | $ | 499,347 | $ | 497,489 |
CITIZENS FINANCIAL SERVICES, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF INCOME | |||||||||||||
(UNAUDITED) | |||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||
(in thousands, except per share data) | September 30 | September 30 | |||||||||||
2005 | 2004 | 2005 | 2004 | ||||||||||
INTEREST INCOME: | |||||||||||||
Interest and fees on loans | $ | 6,362 | $ | 5,851 | $ | 18,386 | $ | 16,647 | |||||
Interest-bearing deposits with banks | 3 | 1 | 2 | 9 | |||||||||
Investment securities: | |||||||||||||
Taxable | 698 | 846 | 2,240 | 2,590 | |||||||||
Nontaxable | 153 | 76 | 394 | 223 | |||||||||
Dividends | 50 | 81 | 156 | 210 | |||||||||
TOTAL INTEREST INCOME | 7,266 | 6,855 | 21,178 | 19,679 | |||||||||
INTEREST EXPENSE: | |||||||||||||
Deposits | 2,416 | 2,126 | 6,840 | 6,081 | |||||||||
Borrowed funds | 383 | 253 | 1,140 | 684 | |||||||||
TOTAL INTEREST EXPENSE | 2,799 | 2,379 | 7,980 | 6,765 | |||||||||
NET INTEREST INCOME | 4,467 | 4,476 | 13,198 | 12,914 | |||||||||
Provision for loan losses | 30 | - | 30 | - | |||||||||
NET INTEREST INCOME AFTER | |||||||||||||
PROVISION FOR LOAN LOSSES | 4,437 | 4,476 | 13,168 | 12,914 | |||||||||
NON-INTEREST INCOME: | |||||||||||||
Service charges | 784 | 783 | 2,203 | 2,265 | |||||||||
Trust | 161 | 86 | 368 | 332 | |||||||||
Brokerage | 45 | 40 | 138 | 152 | |||||||||
Insurance | 61 | 61 | 205 | 150 | |||||||||
Gains on loans sold | 24 | 17 | 45 | 37 | |||||||||
Investment securities gains, net | - | - | - | 491 | |||||||||
Earnings on bank owned life insurance | 71 | 75 | 220 | 233 | |||||||||
Other | 85 | 91 | 289 | 262 | |||||||||
TOTAL NON-INTEREST INCOME | 1,231 | 1,153 | 3,468 | 3,922 | |||||||||
NON-INTEREST EXPENSES: | |||||||||||||
Salaries and employee benefits | 1,993 | 1,905 | 5,888 | 5,677 | |||||||||
Occupancy | 262 | 259 | 846 | 812 | |||||||||
Furniture and equipment | 156 | 181 | 491 | 517 | |||||||||
Professional fees | 132 | 131 | 408 | 443 | |||||||||
Amortization of intangibles | 145 | 145 | 434 | 362 | |||||||||
Other | 1,133 | 1,159 | 3,439 | 3,314 | |||||||||
TOTAL NON-INTEREST EXPENSES | 3,821 | 3,780 | 11,506 | 11,125 | |||||||||
Income before provision for income taxes | 1,847 | 1,849 | 5,130 | 5,711 | |||||||||
Provision for income taxes | 529 | 426 | 1,232 | 1,328 | |||||||||
NET INCOME | $ | 1,318 | $ | 1,423 | $ | 3,898 | $ | 4,383 | |||||
Earnings Per Share | $ | 0.46 | $ | 0.50 | $ | 1.36 | $ | 1.53 | |||||
Cash Dividends Per Share | $ | 0.205 | $ | 0.195 | $ | 0.610 | $ | 0.580 | |||||
Weighted average number of shares outstanding | 2,846,542 | 2,867,995 | 2,859,980 | 2,868,177 |
Financial Highlights | |||||||
2005 | 2004 | ||||||
Nine Months Ended September 30 | |||||||
Net Income | $ | 3,898 | $ | 4,383 | |||
Comprehensive Income | 2,855 | 3,550 | |||||
Per common share data: | |||||||
Earnings per share | $ | 1.36 | $ | 1.53 | |||
Cash dividends per share | $ | 0.610 | $ | 0.580 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.03 | % | 1.22 | % | |||
Return on average equity (annualized) | 12.53 | % | 15.04 | % | |||
Three Months Ended September 30 | |||||||
Net Income | $ | 1,318 | $ | 1,423 | |||
Per common share data: | |||||||
Earnings per share | $ | 0.46 | $ | 0.50 | |||
Cash dividends per share | $ | 0.205 | $ | 0.195 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.03 | % | 1.15 | % | |||
Return on average equity (annualized) | 12.55 | % | 14.31 | % | |||
At September 30 | |||||||
Assets | $ | 509,583 | $ | 497,489 | |||
Investment securities: | |||||||
Available for sale | 90,512 | 100,996 | |||||
Loans (net of unearned income) | 375,518 | 353,490 | |||||
Allowance for loan losses | 3,666 | 4,109 | |||||
Deposits | 430,682 | 409,012 | |||||
Stockholders' Equity | 41,442 | 40,432 | |||||
Non-performing assets | 2,857 | 2,588 | |||||
Average Leverage Ratio | 8.03 | % | 7.74 | % | |||
Per common share data: | |||||||
Book value | $ | 14.87 | $ | 14.19 | |||
Market value (average of bid/ask price) | $ | 20.30 | $ | 21.83 | |||
Market price to book value ratio | 136.5 | % | 153.8 | % |
Cash Dividends | ||||||||||
Common Stock Information: | Bid | Ask | Per Share | |||||||
Quarter Ended: | ||||||||||
September 30, 2005 | $ | 20.10 | $ | 20.50 | $ | 0.205 | ||||
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 |