| 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.
