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 2010 Earnings
MANSFIELD, PENNSYLVANIA— July 23, 2010 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the second quarter ended June 30, 2010.
Net income for the six months ended June 30, 2010 totaled $5,673,000 which compares to $4,818,000 for the same period last year. This represents an increase of $855,000, or 17.7%. Earnings per share of $1.98 increased 17.9% from $1.68 per share last year. Annualized return on equity for the comparable periods was 18.49% and 17.79%, while return on assets was 1.52% and 1.42%, respectively.
Net income for the three months ended June 30, 2010 totaled $2,927,000 which compares to $2,472,000 for the second quarter of 2009, representing an increase of $455,000, or 18.4%. Earnings per share of $1.02 increased 18.6% from $.86 per share for the same period last year. Annualized return on equity for the comparable periods was 19.09% and 17.99%, while return on assets was 1.57% and 1.43%, respectively.
As of June 30, 2010, total assets were $773.7 million, which was an increase of $44.2 million from December 31, 2009, and an increase of $67.0 million since June, 2009. The investment portfolio totals $217.3 million, an increase of $18.7 million since year-end. Net loans of $467.0 million have increased $15.5 million, or 3.4%, since December 31, 2009 and have increased $29.6 million since last June. Total deposits at the end of June totaled $646.7 million, which is an increase of $41.1 million since year end, and have increased $64.2 million since last June, or 11.0%. The growth in deposits can be attributed to the impact of the Marcellus Shale gas play, our outstanding customer service and the overall financial strength of First Citizens.
CEO and President Randall E. Black stated, “First Citizens continues to be recognized nationally for its financial performance. In June, we were recognized by US Banker as placing 11th in the country for financial performance based upon the three year average return on average equity for the period ended December 31, 2009. This is up from placing 58th in 2008 and 154th in 2007. The impact of the economic environment has had an impact on credit quality, even though we continue to compare favorably to peer. As of June 30, 2010 non-performing assets as a percent of loans was 1.45%, which is an improvement from 1.55% at the end of December 2009, but up from .87% at the end of last June.”
Stockholders’ equity totaled $66.6 million at June 30, 2010, representing an increase of $5.1 million, or 8.3%, from December 31, 2009. Book value per share at June 30, 2010 was $22.17 compared with $20.71 last December, an increase of 7.0%. On July 8, 2010, a cash dividend of $.255 per share as well as a 1% stock dividend was declared and will be paid on July 30, 2010 to shareholders of record as of July 16, 2010. The cash dividend of $.255 per share represents an increase of 4.1% over the July 2009 dividend. First Citizens remains well capitalized with capital levels exceeding regulatory levels. “Our outstanding financial performance gives us the ability to continue providing a very attractive dividend yield to our shareholders,” stated Mr. Black.
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 17 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) | 2010 | 2009 | 2009 |
| ASSETS: | | | |
| Cash and due from banks: | | | |
| Noninterest-bearing | $ 9,656 | $ 9,505 | $ 9,955 |
| Interest-bearing | 30,728 | 21,944 | 31,768 |
| Total cash and cash equivalents | 40,384 | 31,449 | 41,723 |
| | | | |
| Available-for-sale securities | 217,261 | 198,582 | 181,500 |
| | | | |
| Loans (net of allowance for loan losses: June 30, 2010, $5,302; | | | |
| December 31, 2009, $4,888; June 30, 2009, $4,622) | 467,037 | 451,496 | 437,450 |
| | | | |
| Premises and equipment | 12,694 | 12,227 | 11,847 |
| Accrued interest receivable | 3,228 | 3,141 | 2,786 |
| Goodwill | 10,256 | 10,256 | 10,256 |
| Bank owned life insurance | 12,917 | 12,667 | 12,411 |
| Other assets | 9,900 | 9,659 | 8,739 |
| | | | |
| TOTAL ASSETS | $ 773,677 | $ 729,477 | $ 706,712 |
| | | | |
| LIABILITIES: | | | |
| Deposits: | | | |
| Noninterest-bearing | $ 63,954 | $ 60,061 | $ 57,669 |
| Interest-bearing | 582,709 | 545,498 | 524,801 |
| Total deposits | 646,663 | �� 605,559 | 582,470 |
| Borrowed funds | 52,763 | 54,115 | 59,382 |
| Accrued interest payable | 1,787 | 2,037 | 2,048 |
| Other liabilities | 5,861 | 6,239 | 6,203 |
| TOTAL LIABILITIES | 707,074 | 667,950 | 650,103 |
| STOCKHOLDERS' EQUITY: | | | |
| Common stock | | | |
| $1.00 par value; authorized 15,000,000 shares at June 30, 2010; 10,000,000 at | | | |
| December 31, 2009 and June 30, 2009; issued 3,076,253 shares at June 30, 2010 and | | | |
| December 31, 2009; 3,048,288 shares at June 30, 2009 | 3,076 | 3,076 | 3,048 |
| Additional paid-in capital | 13,486 | 13,457 | 12,888 |
| Retained earnings | 51,575 | 47,353 | 44,471 |
| Accumulated other comprehensive income | 3,112 | 2,041 | 548 |
| Treasury stock, at cost: 212,486 shares at June 30, 2010; 204,437 shares at | | | |
| December 31, 2009 and 202,287 shares at June 30, 2009 | (4,646) | (4,400) | (4,346) |
| TOTAL STOCKHOLDERS' EQUITY | 66,603 | 61,527 | 56,609 |
| TOTAL LIABILITIES AND | | | |
| STOCKHOLDERS' EQUITY | $ 773,677 | $ 729,477 | $ 706,712 |
| 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) | 2010 | 2009 | 2010 | 2009 |
| INTEREST INCOME: | | | | |
| Interest and fees on loans | $ 7,752 | $ 7,558 | $ 15,486 | $ 15,035 |
| Interest-bearing deposits with banks | 17 | 10 | 31 | 12 |
| Investment securities: | | | | |
| Taxable | 1,264 | 1,541 | 2,599 | 3,181 |
| Nontaxable | 727 | 514 | 1,368 | 985 |
| Dividends | 7 | 6 | 13 | 13 |
| TOTAL INTEREST INCOME | 9,767 | 9,629 | 19,497 | 19,226 |
| INTEREST EXPENSE: | | | | |
| Deposits | 2,519 | 2,863 | 5,061 | 5,778 |
| Borrowed funds | 439 | 496 | 880 | 1,019 |
| TOTAL INTEREST EXPENSE | 2,958 | 3,359 | 5,941 | 6,797 |
| NET INTEREST INCOME | 6,809 | 6,270 | 13,556 | 12,429 |
| Provision for loan losses | 235 | 150 | 540 | 300 |
| NET INTEREST INCOME AFTER | | | | |
| PROVISION FOR LOAN LOSSES | 6,574 | 6,120 | 13,016 | 12,129 |
| NON-INTEREST INCOME: | | | | |
| Service charges | 937 | 894 | 1,790 | 1,706 |
| Trust | 135 | 113 | 281 | 276 |
| Brokerage and insurance | 141 | 53 | 223 | 153 |
| Gains on loans sold | 35 | 162 | 48 | 209 |
| Investment securities gains, net | 35 | 102 | 99 | 118 |
| Earnings on bank owned life insurance | 125 | 115 | 249 | 236 |
| Other | 116 | 96 | 224 | 191 |
| TOTAL NON-INTEREST INCOME | 1,524 | 1,535 | 2,914 | 2,889 |
| NON-INTEREST EXPENSES: | | | | |
| Salaries and employee benefits | 2,416 | 2,329 | 4,857 | 4,625 |
| Occupancy | 297 | 296 | 603 | 617 |
| Furniture and equipment | 111 | 124 | 217 | 234 |
| Professional fees | 153 | 164 | 333 | 295 |
| Federal deposit insurance | 217 | 378 | 454 | 753 |
| Other | 1,162 | 1,200 | 2,220 | 2,339 |
| TOTAL NON-INTEREST EXPENSES | 4,356 | 4,491 | 8,684 | 8,863 |
| Income before provision for income taxes | 3,742 | 3,164 | 7,246 | 6,155 |
| Provision for income taxes | 815 | 692 | 1,573 | 1,337 |
| NET INCOME | $ 2,927 | $ 2,472 | $ 5,673 | $ 4,818 |
| | | | | |
| Earnings Per Share | $ 1.02 | $ 0.86 | $ 1.98 | $ 1.68 |
| Cash Dividends Paid Per Share | $ 0.255 | $ 0.245 | $ 0.505 | $ 0.485 |
| | | | | |
| Weighted average number of shares outstanding | 2,870,299 | 2,874,101 | 2,870,390 | 2,873,292 |
| Financial Highlights | | | | | |
| | | | | | |
| | Three Months Ended | | | Six Months Ended | |
| | June 30 | | | June 30 | |
| | 2010 | 2009 | | 2010 | 2009 |
| Performance Ratios and Share Data: | | | | | |
| Return on average assets (annualized) | 1.57% | 1.43% | | 1.52% | 1.42% |
| Return on average equity (annualized) | 19.09% | 17.99% | | 18.49% | 17.79% |
| Net interest margin (tax equivalent) | 4.17% | 4.21% | | 4.26% | 4.27% |
| Cash dividends paid per share | $0.255 | $0.245 | | $0.505 | $0.485 |
| Earnings per share | $1.02 | $0.86 | | $1.98 | $1.68 |
| Weighted average shares outstanding | 2,870,299 | 2,874,101 | | 2,870,390 | 2,873,292 |
| Balance Sheet Highlights (dollars in thousands): | June 30, 2010 | December 31, 2009 | June 30, 2009 |
| | | | |
| Assets | $773,677 | $729,477 | $706,712 |
| Investment securities - Available For Sale | 217,261 | 198,582 | 181,500 |
| Loans (net of unearned income) | 472,339 | 456,384 | 442,072 |
| Allowance for loan losses | 5,302 | 4,888 | 4,622 |
| Deposits | 646,663 | 605,559 | 582,470 |
| Stockholders' Equity | 66,603 | 61,527 | 56,609 |
| Non-performing assets | 6,833 | 7,057 | 3,829 |
| Non-performing assets to total loans | 1.45% | 1.55% | 0.87% |
| Average Leverage Ratio | 8.36% | 8.15% | 7.92% |
| Common shares outstanding | 2,863,767 | 2,871,816 | 2,846,001 |
| Book value per share | $22.17 | $20.71 | $19.70 |
