Exhbit 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 Record 2006 Earnings
MANSFIELD, PENNSYLVANIA— January 19, 2007 - Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the fourth quarter of 2006.
Net income for the twelve months ended December 31, 2006 was $5,800,000 which compares to $5,274,000 last year, an increase of $526,000 or 10.0%. Earnings per share for the year are $2.04 compared with $1.83 last year, representing an increase of 11.5%. Our net income for the three months ended December 31, 2006 was $1,490,000, which compares to $1,376,000 for the same period last year. This represents an increase of 8.3%.
Return on equity for the twelve months ended December 31, 2006 and 2005 was 13.21% and 12.63%, respectively. For the three months ended December 31, 2006, return on equity was 13.30% compared with 12.92% for the same period in 2005.
CEO and President Randall E. Black stated, “Although the banking environment remains difficult, we will look back at 2006 as a memorable year for our organization. The yield curve remained inverted based upon the Federal Reserve’s reluctance to decrease short-term interest rates. This has negatively impacted our net interest margin, as well as most financial institutions across the country and within our service area. The goods news is that despite the difficult interest rate environment, we have recorded record earnings of $5.8 million. These results reflect our continued focus on cost savings and tax planning to offset the impact of our decreased interest margins. In fact, our non-interest expenses for the twelve months ended December 31, 2006 totaled $15,027,000 compared with $15,387,000 for 2005, a decrease of $360,000. For that same period, the provision for income taxes has decreased $209,000 even though income before taxes has increased $317,000.”
Since last year, total assets have increased $43.0 million, or 8.1%. At the end of December, total assets were $572.2 million compared to $529.2 million last December. Net loans have increased $31.8 million since last December, an increase of 8.4%. Deposits have increased $16.7 million and borrowed funds have increased $23.1 million to fund the overall growth in assets.
Stockholders’ Equity, excluding accumulated other comprehensive income, has increased $2.1 million, or 5.0% since last December. Book value per share at December 31, 2006 was $16.04 compared with $15.00 last year, an increase of 6.9%. In December, a cash dividend of $.22 per share was declared and will be paid to shareholders on January 26, 2007 to record holders as of January 12, 2007. This represents an increase of 4.8% over 2005’s fourth quarter dividend.
Mr. Black also noted that “54,239 shares of treasury stock have been repurchased during 2006 since the Board of Directors approved the stock repurchase plan on January 17, 2006. This plan provides an avenue for our shareholders to adjust their individual portfolios as needed from time to time.”
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 16 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) | |||||||
December 31 | December 31 | ||||||
(in thousands except share data) | 2006 | 2005 | |||||
ASSETS: | |||||||
Cash and cash equivalents: | |||||||
Noninterest-bearing | $ | 10,007 | $ | 8,498 | |||
Interest-bearing | 8 | 111 | |||||
Total cash and cash equivalents | 10,015 | 8,609 | |||||
Available-for-sale securities | 109,743 | 102,602 | |||||
Loans (net of allowance for loan losses: | |||||||
2006, $3,876; December 31, 2005, $3,664) | 410,897 | 379,139 | |||||
Premises and equipment | 12,892 | 12,305 | |||||
Accrued interest receivable | 2,458 | 2,164 | |||||
Goodwill | 8,605 | 8,605 | |||||
Bank owned life insurance | 8,047 | 7,743 | |||||
Other assets | 9,511 | 8,074 | |||||
TOTAL ASSETS | $ | 572,168 | $ | 529,241 | |||
LIABILITIES: | |||||||
Deposits: | |||||||
Noninterest-bearing | $ | 48,509 | $ | 50,600 | |||
Interest-bearing | 398,006 | 379,199 | |||||
Total deposits | 446,515 | 429,799 | |||||
Borrowed funds | 75,775 | 52,674 | |||||
Accrued interest payable | 2,287 | 1,862 | |||||
Commitment to purchase investment securities | - | 752 | |||||
Other liabilities | 4,091 | 2,593 | |||||
TOTAL LIABILITIES | 528,668 | 487,680 | |||||
STOCKHOLDERS' EQUITY: | |||||||
Common Stock $1.00 par value; authorized | |||||||
10,000,000 shares; issued 2,992,896 and | |||||||
2,965,257 shares in 2006 and 2005, respectively | 2,993 | 2,965 | |||||
Additional paid-in capital | 11,933 | 11,359 | |||||
Retained earnings | 34,007 | 31,251 | |||||
TOTAL | 48,933 | 45,575 | |||||
Accumulated other comprehensive loss | (1,737 | ) | (1,540 | ) | |||
Less: Treasury Stock, at cost | |||||||
172,954 and 118,715 shares for 2006 and 2005, respectively | (3,696 | ) | (2,474 | ) | |||
TOTAL STOCKHOLDERS' EQUITY | 43,500 | 41,561 | |||||
TOTAL LIABILITIES AND | |||||||
STOCKHOLDERS' EQUITY | $ | 572,168 | $ | 529,241 |
CITIZENS FINANCIAL SERVICES, INC. | |||||||||||||
CONSOLIDATED STATEMENT OF INCOME | |||||||||||||
(UNAUDITED) | |||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||
December 31, | December 31, | ||||||||||||
(in thousands, except per share data) | 2006 | 2005 | 2006 | 2005 | |||||||||
INTEREST INCOME: | |||||||||||||
Interest and fees on loans | $ | 7,461 | $ | 6,525 | $ | 28,101 | $ | 24,911 | |||||
Interest-bearing deposits with banks | - | - | - | 3 | |||||||||
Investment securities: | |||||||||||||
Taxable | 978 | 739 | 3,526 | 2,979 | |||||||||
Nontaxable | 224 | 202 | 903 | 596 | |||||||||
Dividends | 98 | 54 | 321 | 210 | |||||||||
TOTAL INTEREST INCOME | 8,761 | 7,520 | 32,851 | 28,699 | |||||||||
INTEREST EXPENSE: | |||||||||||||
Deposits | 3,295 | 2,532 | 11,685 | 9,373 | |||||||||
Borrowed funds | 880 | 487 | 3,268 | 1,627 | |||||||||
TOTAL INTEREST EXPENSE | 4,175 | 3,019 | 14,953 | 11,000 | |||||||||
NET INTEREST INCOME | 4,586 | 4,501 | 17,898 | 17,699 | |||||||||
Provision for loan losses | 105 | 30 | 330 | 60 | |||||||||
NET INTEREST INCOME AFTER | |||||||||||||
PROVISION FOR LOAN LOSSES | 4,481 | 4,471 | 17,568 | 17,639 | |||||||||
NON-INTEREST INCOME: | |||||||||||||
Service charges | 799 | 762 | 3,140 | 2,965 | |||||||||
Trust | 115 | 106 | 487 | 474 | |||||||||
Brokerage | 23 | 45 | 166 | 183 | |||||||||
Insurance | 6 | 55 | 94 | 260 | |||||||||
Investment securities gains, net | - | - | 4 | - | |||||||||
Earnings on bank owned life insurance | 80 | 74 | 304 | 294 | |||||||||
Other | 157 | 186 | 521 | 512 | |||||||||
TOTAL NON-INTEREST INCOME | 1,180 | 1,228 | 4,716 | 4,688 | |||||||||
NON-INTEREST EXPENSES: | |||||||||||||
Salaries and employee benefits | 1,948 | 1,757 | 8,026 | 7,645 | |||||||||
Occupancy | 278 | 295 | 1,123 | 1,142 | |||||||||
Furniture and equipment | 151 | 167 | 593 | 658 | |||||||||
Professional fees | 180 | 128 | 551 | 536 | |||||||||
Amortization | 36 | 145 | 252 | 578 | |||||||||
Other | 1,108 | 1,397 | 4,482 | 4,828 | |||||||||
TOTAL NON-INTEREST EXPENSES | 3,701 | 3,889 | 15,027 | 15,387 | |||||||||
Income before provision for income taxes | 1,960 | 1,810 | 7,257 | 6,940 | |||||||||
Provision for income taxes | 470 | 434 | 1,457 | 1,666 | |||||||||
NET INCOME | $ | 1,490 | $ | 1,376 | $ | 5,800 | $ | 5,274 | |||||
Earnings Per Share | $ | 0.53 | $ | 0.48 | $ | 2.04 | $ | 1.83 | |||||
Cash Dividends Paid Per Share | $ | 0.22 | $ | 0.21 | $ | 0.86 | $ | 0.82 | |||||
Weighted average number of shares outstanding | 2,826,065 | 2,874,181 | 2,844,125 | 2,884,232 |
FINANCIAL HIGHLIGHTS | |||||||
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA) | |||||||
2006 | 2005 | ||||||
Twelve Months Ended December 31 | |||||||
Net Income | $ | 5,800 | $ | 5,274 | |||
Comprehensive Income | 5,603 | 3,570 | |||||
Per common share data: | |||||||
Earnings per share | $ | 2.04 | $ | 1.83 | |||
Cash dividends paid per share | $ | 0.86 | $ | 0.82 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.05 | % | 1.04 | % | |||
Return on average equity (annualized) | 13.21 | % | 12.63 | % | |||
Three Months Ended December 31 | |||||||
Net Income | $ | 1,490 | $ | 1,376 | |||
Per common share data: | |||||||
Earnings per share | $ | 0.53 | $ | 0.48 | |||
Cash dividends paid per share | $ | 0.22 | $ | 0.21 | |||
Performance Ratios: | |||||||
Return on average assets (annualized) | 1.05 | % | 1.06 | % | |||
Return on average equity (annualized) | 13.30 | % | 12.92 | % | |||
At December 31 | |||||||
Assets | $ | 572,168 | $ | 529,241 | |||
Investment securities: | |||||||
Available for sale | 109,743 | 102,602 | |||||
Loans (net of unearned income) | 414,773 | 382,803 | |||||
Allowance for loan losses | 3,876 | 3,664 | |||||
Deposits | 446,515 | 429,799 | |||||
Stockholders' Equity | 43,500 | 41,561 | |||||
Non-performing assets | 4,116 | 2,854 | |||||
Average Leverage Ratio | 7.82 | % | 8.04 | % | |||
Per common share data: | |||||||
Book value (excluding other comprehensive income) | $ | 16.04 | $ | 15.00 | |||
Market value (average of bid/ask price) | $ | 22.75 | $ | 20.90 | |||
Market price to book value ratio | 141.82 | % | 139.33 | % | |||
Per share calculations give retroactive effect to stock dividends declared by the Company. |
Cash Dividends | ||||||||||
Common Stock Information: | Bid | Ask | Paid | |||||||
Quarter Ended: | ||||||||||
December 31, 2006 | $ | 22.00 | $ | 23.50 | $ | 0.220 | ||||
September 30, 2006 | $ | 22.00 | $ | 23.00 | $ | 0.215 | ||||
June 30, 2006 | $ | 21.60 | $ | 23.00 | $ | 0.215 | ||||
March 31, 2006 | $ | 21.35 | $ | 23.25 | $ | 0.210 | ||||
December 31, 2005 | $ | 20.80 | $ | 21.00 | $ | 0.210 | ||||
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 |