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 2008 Earnings
MANSFIELD, PENNSYLVANIA— July 21, 2008 – 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 2008.
Net income for the three months ended June 30, 2008 totaled $2,446,000 which compares to $1,760,000 for the second quarter last year, representing an increase of $686,000, or 38.9%. Earnings per share for the three months ended June 30, 2008 and 2007 were $.87 and $.62 per share, respectively, representing a 40.3% increase. Return on equity for the comparable periods was 19.24% and 15.24%, while return on assets was 1.64% and 1.23%, for the respective time periods.
On a year to date basis net income through June 30, 2008 was $4,467,000 compared with $3,140,000 last year, representing an increase of $1,327,000 or 42.2%. Earnings per share of $1.58 increased 43.6% from $1.10 per share for the same period last year. Return on equity for the comparable periods were 17.80% and 13.68%, while return on assets was 1.50% and 1.10%, respectively.
CEO and President Randall E. Black stated, “The significant improvement in our net interest margin and our continued ability to manage operational efficiencies has resulted in outstanding financial performance for the first six months of 2008. The Federal Reserve’s decision to decrease the federal funds rate by 225 basis points mostly during the first quarter has resulted in an improvement of our net interest margin by reducing our short-term deposit and borrowing costs relative to the impact of the reduction of interest rates on our interest sensitive loan portfolio. Our net interest margin, tax effected, on interest earning assets has improved from 3.72% for the first six months of 2007 to 4.38% for this year.”
Total assets at June 30, 2008 totaled $602.0 million, an increase of $20.7 million from June 30, 2007. The increase in assets principally occurred in the investment portfolio which increased from $118.6 million to $124.7 million, as well as, net loans, which grew $13.2 million to $424.1 million at June 30, 2008. Total deposits have increased 3.7% from $467.9 million at June 30, 2007 to $485.1 million as of June 30, 2008.
Citizens Financial Services, Inc. remains well capitalized, with an equity-to-assets ratio of 8.4%, versus 7.6% as of June 30, 2007. This improvement was largely the result of a $6.2 million, or 14.1% increase in stockholders equity since June 30 of last year. Book value per share at June 30, 2008 was $18.38 compared with $16.67 last June. In July, a cash dividend of $.235 per share was declared and will be paid on July 25, 2008 to shareholders of record, as of July 11, 2008. Also in July, a 1% stock dividend was declared and will be distributed July 25, 2008 as well.
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) | |||
June 30 | December 31 | June 30 | |
(in thousands except share data) | 2008 | 2007 | 2007 |
ASSETS: | |||
Cash and due from banks: | |||
Noninterest-bearing | $ 12,931 | $ 10,374 | $ 10,873 |
Interest-bearing | 1 | 15 | 12 |
Total cash and cash equivalents | 12,932 | 10,389 | 10,885 |
Available-for-sale securities | 124,674 | 120,802 | 118,614 |
Loans (net of allowance for loan losses: 2008, $4,287 | |||
December 31, 2007, $4,197; and June 30, 2007, $4,107) | 424,144 | 419,182 | 410,967 |
Premises and equipment | 12,289 | 12,538 | 12,660 |
Accrued interest receivable | 2,563 | 2,522 | 2,383 |
Goodwill | 8,605 | 8,605 | 8,605 |
Bank owned life insurance | 8,549 | 8,378 | 8,209 |
Other assets | 8,258 | 8,613 | 8,958 |
TOTAL ASSETS | $ 602,014 | $ 591,029 | $ 581,281 |
LIABILITIES: | |||
Deposits: | |||
Noninterest-bearing | $ 56,968 | $ 50,944 | $ 50,753 |
Interest-bearing | 428,161 | 405,084 | 417,189 |
Total deposits | 485,129 | 456,028 | 467,942 |
Borrowed funds | 60,067 | 80,348 | 62,382 |
Accrued interest payable | 1,951 | 2,199 | 2,086 |
Other liabilities | 4,296 | 3,926 | 4,531 |
TOTAL LIABILITIES | 551,443 | 542,501 | 536,941 |
STOCKHOLDERS' EQUITY: | |||
Common stock | |||
$1.00 par value; authorized 10,000,000 shares; issued 3,020,538 shares in | |||
2008 and December 31, 2007; 2,992,896 shares at June 30, 2007 | 3,020 | 3,020 | 2,993 |
Additional paid-in capital | 12,519 | 12,511 | 11,935 |
Retained earnings | 40,743 | 37,590 | 35,892 |
Accumulated other comprehensive loss | (1,319) | (348) | (2,551) |
Unearned restricted stock, at cost: 7,205 shares for 2008; 3,149 shares at | |||
December 31, 2007; and 3,074 shares for June 30, 2007 | (162) | (72) | (72) |
Treasury stock, at cost: 196,927 shares for 2008; 194,883 shares at December 31, 2007; | |||
and 180,140 shares at June 30, 2007 | (4,230) | (4,173) | (3,857) |
TOTAL STOCKHOLDERS' EQUITY | 50,571 | 48,528 | 44,340 |
TOTAL LIABILITIES AND | |||
STOCKHOLDERS' EQUITY | $ 602,014 | $ 591,029 | $ 581,281 |
The accompanying notes are an integral part of these unaudited consolidated financial statements. | |||
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED STATEMENT OF INCOME | ||||
(UNAUDITED) | ||||
Three Months Ended | Six Months Ended | |||
June 30, | June 30, | |||
(in thousands, except per share data) | 2008 | 2007 | 2008 | 2007 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 7,645 | $ 7,539 | $ 15,309 | $ 14,896 |
Investment securities: | ||||
Taxable | 1,132 | 1,057 | 2,255 | 2,071 |
Nontaxable | 353 | 225 | 689 | 449 |
Dividends | 56 | 78 | 141 | 169 |
TOTAL INTEREST INCOME | 9,186 | 8,899 | 18,394 | 17,585 |
INTEREST EXPENSE: | ||||
Deposits | 2,728 | 3,430 | 5,671 | 6,740 |
Borrowed funds | 628 | 806 | 1,485 | 1,732 |
TOTAL INTEREST EXPENSE | 3,356 | 4,236 | 7,156 | 8,472 |
NET INTEREST INCOME | 5,830 | 4,663 | 11,238 | 9,113 |
Provision for loan losses | - | 45 | 120 | 165 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR LOAN LOSSES | 5,830 | 4,618 | 11,118 | 8,948 |
NON-INTEREST INCOME: | ||||
Service charges | 871 | 812 | 1,647 | 1,560 |
Trust | 136 | 127 | 303 | 264 |
Brokerage and insurance | 74 | 31 | 118 | 49 |
Gain on sales of foreclosed properties | - | 373 | - | 396 |
Earnings on bank owned life insurance | 86 | 82 | 171 | 162 |
Other | 151 | 166 | 288 | 287 |
TOTAL NON-INTEREST INCOME | 1,318 | 1,591 | 2,527 | 2,718 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 2,158 | 2,033 | 4,314 | 4,126 |
Occupancy | 281 | 308 | 595 | 609 |
Furniture and equipment | 128 | 140 | 261 | 268 |
Professional fees | 148 | 155 | 329 | 320 |
Other | 1,223 | 1,320 | 2,354 | 2,410 |
TOTAL NON-INTEREST EXPENSES | 3,938 | 3,956 | 7,853 | 7,733 |
Income before provision for income taxes | 3,210 | 2,253 | 5,792 | 3,933 |
Provision for income taxes | 764 | 493 | 1,325 | 793 |
NET INCOME | $ 2,446 | $ 1,760 | $ 4,467 | $ 3,140 |
Earnings Per Share | $ 0.87 | $ 0.62 | $ 1.58 | $ 1.10 |
Cash Dividends Paid Per Share | $ 0.235 | $ 0.225 | $ 0.465 | $ 0.445 |
Weighted average number of shares outstanding | 2,825,116 | 2,843,514 | 2,825,323 | 2,845,454 |
The accompanying notes are an integral part of these unaudited consolidated financial statements. | ||||
Financial Highlights | ||||
(Unaudited - dollars in thousands except per share and ratio data) | ||||
Three Months Ended | Six Months Ended | |||
June 30 | June 30 | |||
2008 | 2007 | 2008 | 2007 | |
Performance Ratios and Share Data: | ||||
Return on average assets (annualized) | 1.64% | 1.23% | 1.50% | 1.10% |
Return on average equity (annualized) | 19.24% | 15.24% | 17.80% | 13.68% |
Net interest margin (tax equivalent) | 4.52% | 3.81% | 4.38% | 3.72% |
Cash dividends paid per share | $ 0.235 | $ 0.225 | $ 0.465 | $ 0.445 |
Earnings per share | $ 0.87 | $ 0.62 | $ 1.58 | $ 1.10 |
Weighted average shares outstanding | 2,825,116 | 2,843,514 | 2,825,323 | 2,845,454 |
Balance Sheet Highlights: | June 30, 2008 | December 31, 2007 | June 30, 2007 |
Assets | $ 602,014 | $ 591,029 | $ 581,281 |
Investment securities: | |||
Available for sale | 124,674 | 120,802 | 118,614 |
Loans (net of unearned income) | 428,431 | 423,379 | 415,074 |
Allowance for loan losses | 4,287 | 4,197 | 4,107 |
Deposits | 485,129 | 456,028 | 467,942 |
Stockholders' Equity | 50,571 | 48,528 | 44,340 |
Non-performing assets | 3,360 | 2,393 | 2,754 |
Non-performing assets to total loans | 0.78% | 0.57% | 0.66% |
Average Leverage Ratio | 8.50% | 8.20% | 8.05% |
Common shares outstanding | 2,823,611 | 2,825,655 | 2,812,756 |
Book value per share | $ 18.38 | $ 17.30 | $ 16.67 |