| Contact: Kathleen Campbell, Marketing Director | | First Citizens Community Bank |
| 570-662-0422 | | 15 S. Main Street |
| 570-662-8512 (fax) | | Mansfield, PA 16933 |
citizens financial services, inc. reports unaudited third quarter 2020 financial results
MANSFIELD, PENNSYLVANIA— October 23, 2020 – Citizens Financial Services, Inc. (OTC Pink: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three and nine months ended September 30, 2020.
Highlights
| • | The acquisition of MidCoast Community Bancorp, Inc. in the first half of 2020 contributed significant growth to net interest income in the third quarter of 2020. |
| • | We received regulatory approval and anticipate opening a full service branch in Kennett Square, Pennsylvania in the fourth quarter of 2020 to further serve customers acquired as part of the MidCoast acquisition. |
| • | Net income for the first nine months of 2020 was $17.9 million, which is 23.7% higher than 2019’s net income through September 30, 2019. The effective tax rate for the first nine months of 2020 was 17.2% compared to 16.3% in the comparable period in 2019. |
| • | Net income was $8.0 million for the three months ended September 30, 2020, which is 54.1% higher than the net income for 2019’s comparable period. The effective tax rate for the three months ended September 30, 2020 was 18.0% compared to 17.0% in the comparable period in 2019. |
| • | Net interest income before the provision for loan losses was $45.6 million for the nine months ended September 30, 2020, an increase of $8.5 million, or 22.9%, over the same period a year ago. |
| • | Non-performing assets and past due loans as a percentage of loans have decreased during 2020. Non-performing assets total 1.14% at September 30, 2020.
|
| • | Return on average equity for the three and nine months (annualized) ended September 30, 2020 was 17.36% and 13.85% compared to 13.74% and 12.99% for the three and nine months (annualized) ended September 30, 2019. |
| • | Return on average tangible equity for the three and nine months (annualized) ended September 30, 2020 was 21.11% and 16.72% compared to 16.42% and 15.60% for the three and nine months (annualized) ended September 30, 2019. (1) |
| • | Return on average assets for the three and nine months (annualized) ended September 30, 2020 was 1.75% and 1.43% compared to 1.43% and 1.33% for the three and nine months (annualized) ended September 30, 2019. |
Covid 19 pandemic response and loan profile
| • | The Company participated in the Paycheck Protection Program (PPP) for loans provided under the auspices of the Small Business Administration (SBA). As of September 30, 2020, the Company had outstanding $53.9 million and 591 loans that were issued through the program. The loans earn interest at 1% and will generate fee income of approximately $2.1 million over the life of the loans. Beginning in the fourth quarter, a portion of these loans will be forgiven by the SBA depending on the customers usage of the proceeds. The SBA has issued guidance for forgiveness with a streamlined approach for loans less than $50,000. Of the PPP loans issues, 343 loans, or 58.0% of the total PPP loans, had an original balance less than $50,000. The outstanding balance for these 343 loans as of September 30, 2020 was approximately $7.1 million. |
| • | Under our loan modification program, we provided relief to customers with outstanding balances of $205.1 million on 534 loans , which includes residential and commercial customers. There are currently, 12 loans outstanding with a balance of $20.2 million that are under modified terms, with $6.6 million returning to original terms in October, with the remaining balance being modified through the end of the year. |
| • | The Company tracks industry concentrations to identify risks that could lead to additional credit exposure. As a result of the Covid 19 pandemic, the Company has determined that Hotels/Motels, restaurants and amusement/theme parks represent a higher level of credit risk. At September 30, 2020, the Company has limited loan concentrations to these industries as follows: |
| o | Hotels/Motels - $41.4 million or 3.0% of outstanding loans |
| o | Restaurants - $27.7 million or 2.0% of outstanding loans |
| o | Amusement/Theme parks - $13.8 million, or 1.0% of outstanding loans |
| • | Agricultural lending continues to be an area of emphasis with the Bank. As of September 30, 2020, agricultural lending comprises 26.1% of total loans. Agriculture was significantly impacted in the early part of the pandemic as dairy farmers were forced to dump milk, and milk futures remain extremely volatile. Other producers experienced difficulties in getting livestock to market and reduced proceeds from sales as well as difficulty in obtaining supplies. A return to stay at home orders and school closures could significantly impact this portion of our loan portfolio. |
Nine Months Ended September 30, 2020 Compared to 2019
| • | For the nine months ended September 30, 2020, net income totaled $17,876,000 which compares to net income of $14,447,000 for the first nine months of 2019, an increase of $3,429,000 or 23.7%. Basic earnings per share of $4.74 for the first nine months of 2020 compares to $4.06 for the first nine months last year. Annualized return on equity for the nine months ended September 30, 2020 and 2019 was 13.85% and 12.99%, while annualized return on assets was 1.43% and 1.33%, respectively. If merger and acquisition costs are excluded, the annualized return on average equity and average assets would be 15.22% and 1.57%, respectively for the 2020 period (non-GAAP). |
| • | Net interest income before the provision for loan loss for the nine months ended September 30, 2020 totaled $45,646,000 compared to $37,150,000 for the nine months ended September 30, 2019, resulting in an increase of $8,496,000, or 22.9%. Average interest earning assets increased $199.2 million for the nine months ended September 30, 2020 compared to the same period last year, primarily due to the MidCoast acquisition. Average loans increased $161.7 million while average investment securities increased $12.6 million. The yield on interest earning assets decreased 12 basis point to 4.49%, while the cost of interest-bearing liabilities decreased 44 basis points to 0.68%. The yield on interest earning assets benefitted approximately $820,000 from pay-offs of a purchase credit impaired loans acquired as part of The First National Bank of Fredericksburg acquisition in 2015. The decrease in the cost of interest-bearing liabilities was due to the Federal Reserve moves in response to the COVID-19 pandemic. The tax effected net interest margin for the nine months ended September 30, 2020 was 3.96% compared to 3.71% for the same period last year. |
| • | The provision for loan losses for the nine months ended September 30, 2020 was $1,500,000 compared to $1,150,000 for the nine months ended September 30, 2019, an increase of $350,000. The provision was higher in 2020 than 2019 primarily due to the economic environment as a result of the COVID-19 pandemic and the higher levels of unemployment, which offsets the fact that loans, excluding the acquisition and PPP loans guaranteed by the SBA, decreased during 2020. |
| • | Total non-interest income was $7,458,000 for the nine months ended September 30, 2020, which is $1,221,000 more than the non-interest income of $6,237,000 for the same period last year. The primary drivers were an increase of $943,000 in the gain on loans sold, as a result of the number of loans sold in 2020 compared to 2019 due to the low interest environment and an increase in other income of $619,000 due to fee income on derivative transactions for customers. We experienced a $344,000 decrease in the value of equity securities during the first nine months of 2020, compared to an increase of $70,000 in the comparable 2019 period and a decrease in service charges of $391,000 as a result of our COVID-19 response and reduced customer spending as a result of mandatory stay at home orders. Gains of the sale of available for sale securities totaled $370,000 in 2020 compared to $8,000 in 2019. |
| • | Total non-interest expenses for the nine months ended September 30, 2020 totaled $30,026,000 compared to $24,973,000 for the same period last year, which is an increase of $5,053,000, or 20.2%. The primary driver of the increase is the merger and acquisition costs of completing the MidCoast acquisition that total $2,179,000 and the additional salary costs associated with the acquisition. |
| • | The provision for income taxes increased $885,000 when comparing the nine months ended September 30, 2020 to the same period in 2019 as a result of an increase in income before income tax of $4,314,000. The effective tax rate was 17.2% and 16.3% for the first nine months of 2020 and 2019, respectively, compared to the statutory rate of 21%. |
Three Months Ended September 30, 2020 Compared to September 30, 2019
| • | For the three months ended September 30, 2020, net income totaled $8,007,000 which compares to net income of $5,196,000 for the comparable period of 2019, an increase of $2,811,000 or 54.10%. Basic earnings per share of $2.04 for the three months ended September 30, 2020 compares to $1.46 for the 2019 comparable period. Annualized return on equity for the three months ended September 30, 2020 and 2019 was 17.36% and 13.74%, while annualized return on assets was 1.75% and 1.43%, respectively. |
| • | Net interest income before the provision for loan loss for the three months ended September 30, 2020 totaled $16,470,000 compared to $12,899,000 for the three months ended September 30, 2019, resulting in an increase of $3,571,000, or 27.7%. Average interest earning assets increased $348.8 million for the three months ended September 30, 2020 compared to the same period last year as a result of the acquisition. Average loans increased $256.7 million while average investment securities increased $35.2 million. The tax effected net interest margin for the three months ended September 30, 2020 was 3.88% compared to 3.82% for the same period last year, which was impacted by the decrease in the average cost on interest bearing liabilities of 52 basis points, to 0.56%. The tax effected net interest margin benefitted approximately $220,000 from pay-off of a purchase credit impaired loan acquired as part of The First National Bank of Fredericksburg acquisition in 2015. |
| • | The provision for loan losses for the three months ended June 30, 2020 was $550,000, a $150,000 increase to the comparable period in 2019. Organic growth during the third quarter totaled $2.2 million. The provision for 2020 was based on the impact the pandemic is having on local and national economies. |
| • | Total non-interest income was $3,538,000 for the three months ended September 30, 2020, which is $1,361,000 more than for the comparable period last year. The primary drivers were the gains on the sale of available securities of $245,000, the increase in gains of loans sold of $679,000 and in increase in other income of $544,000 due to fee income on derivative transactions for customers. As a result of the pandemic, service charges decreased $113,000 for the three months ended September 30, 2020 when compared to the 2019 period. |
| • | Total non-interest expenses for the three months ended September 30, 2020 totaled $9,692,000 compared to $8,414,000 for the same period last year, which is an increase of $1,278,000, or 15.2%. The increase was due to the additional salary and benefit costs of employees added as a result of the MidCoast acquisition and occupancy expenses associated with the new branches acquired as of the merger. |
| • | The provision for income taxes increased $693,000 when comparing the three months ended September 30, 2020 to the same period in 2019 as a result of an increase in income before income tax of $3,504,000. The effective tax rate was 18.0% and 17.0% for the three months ended September 30, 2020 and 2019, respectively. |
Balance Sheet and Other Information:
| • | At September 30, 2020, total assets were $1.86 billion, compared to $1.47 billion at December 31, 2019 and $1.48 billion at September 30, 2019. |
| • | Available for sale securities of $287.8 million at September 30, 2020 increased $47.1 million from December 31, 2019 and $40.8 million from September 30, 2019. The yield on the investment portfolio decreased from 2.90% to 2.66% on a tax equivalent basis due to a number of securities purchased at a discount that were called in the third quarter of 2019. |
| • | Net loans as of September 30, 2020 totaled $1.35 billion and increased $249.0 million from December 31, 2019 as a result of the acquisition and PPP program. Excluding the acquisition and the PPP program, loans would have decreased $27.2 million during 2020. The decrease in organic loans was driven by early pay-offs and limited opportunities in the first half of 2020. |
| • | The allowance for loan losses totaled $15,169,000 at September 30, 2020 which is an increase of $1,324,000 from December 31, 2019. The increase is due to recording a provision for loan losses of $1,500,000 and recoveries of $80,000, offset by charge-offs of $256,000. The allowance as a percent of total loans was 1.11% as of September 30, 2020 and 1.24% as of December 31, 2019. Loans acquired in an acquisition are marked to fair value and excluded from the allowance, unless there has been a downgrade in the loan since acquisition. Non-performing assets increased in total $204,000 since December 31, 2019 to $15.6 million. As a percent of loans, non-performing assets decreased from 1.38% to 1.14% of total loans. |
| • | Deposits increased $341.6 million from December 31, 2019, to $1.55 billion at September 30, 2020, primarily due to the acquisition, which increased deposits $208.8 million and customers holding more cash due to the pandemic. Brokered CD’s increased $8.8 million. Non-interest-bearing deposits increased $72.5 million due to the acquisition and PPP program. |
| • | Stockholders’ equity totaled $189.1 million at September 30, 2020, compared to $154.8 million at December 31, 2019, an increase of $34.3 million. The increase was attributable to issuing 373,356 shares with a value of $19.2 million as part of the acquisition and net income for the nine months ended September 30, 2020 totaling $17.9 million, offset by net cash dividends for 2020 totaling $4.7 million and net treasury stock activity of $808,000. As a result of changes in interest rates impacting the fair value of investment securities, the unrealized gain on available for sale investment securities, net of tax, improved $3.7 million from December 31, 2019. |
Dividend Declared
On September 1, 2020, the Board of Directors declared a cash dividend of $0.46 per share, which was paid on September 25, 2020 to shareholders of record at the close of business on September 11, 2020. The quarterly cash dividend is an increase of 3.3% over the regular cash dividend of $0.445 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2020.
Citizens Financial Services, Inc. has nearly 1,900 shareholders, the majority of whom reside in markets where its offices are located.
Note: This press release may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are not historical facts; rather, they are statements based on the Company's current expectations regarding its business strategies and their intended results and its future performance. Forward-looking statements are preceded by terms such as "expects," "believes," "anticipates," "intends" and similar expressions. Forward-looking statements are not guarantees of future performance. Numerous risks and uncertainties could cause or contribute to the Company's actual results, performance and achievements to be materially different from those expressed or implied by the forward-looking statements. Factors that may cause or contribute to these differences include, without limitation, changes in general economic conditions, including changes in market interest rates and changes in monetary and fiscal policies of the federal government; legislative and regulatory changes; and other factors disclosed periodically in the Company's filings with the Securities and Exchange Commission. Because of the risks and uncertainties inherent in forward-looking statements, readers are cautioned not to place undue reliance on them, whether included in this press release or made elsewhere periodically by the Company or on its behalf. The Company assumes no obligation to update any forward-looking statements except as may be required by applicable law or regulation.
| (1) | See reconciliation of non-gaap measures at the end of the press release |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | |
| CONSOLIDATED FINANCIAL HIGHLIGHTS | | | | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | | | | |
| (Dollars in thousands, except per share data) | | | | | | | | | | | | |
| | | As of or For The | | | As of or For The | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| Income and Performance Ratios | | | | | | | | | | | | |
| Net Income | | $ | 8,007 | | | $ | 5,196 | | | $ | 17,876 | | | $ | 14,447 | |
| Return on average assets (annualized) | | | 1.75 | % | | | 1.43 | % | | | 1.43 | % | | | 1.33 | % |
| Return on average equity (annualized) | | | 17.36 | % | | | 13.74 | % | | | 13.85 | % | | | 12.99 | % |
| Return on average tangible equity (annualized) (a) | | | 21.11 | % | | | 16.42 | % | | | 16.72 | % | | | 15.60 | % |
| Net interest margin (tax equivalent)(a) | | | 3.88 | % | | | 3.82 | % | | | 3.96 | % | | | 3.71 | % |
| Earnings per share - basic (b) | | $ | 2.04 | | | $ | 1.46 | | | $ | 4.74 | | | $ | 4.06 | |
| Earnings per share - diluted (b) | | $ | 2.04 | | | $ | 1.46 | | | $ | 4.74 | | | $ | 4.05 | |
| Cash dividends paid per share (b) | | $ | 0.460 | | | $ | 0.445 | | | $ | 1.460 | | | $ | 1.317 | |
| Number of shares used in computation - basic (b) | | | 3,918,438 | | | | 3,553,996 | | | | 3,769,705 | | | | 3,560,695 | |
| Number of shares used in computation - diluted (b) | | | 3,918,438 | | | | 3,553,996 | | | | 3,771,730 | | | | 3,562,975 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Asset quality | | | | | | | | | | | | | | | | |
| Allowance for loan and lease losses | | $ | 15,169 | | | $ | 13,679 | | | | | | | | | |
| Non-performing assets | | $ | 15,631 | | | $ | 16,823 | | | | | | | | | |
| Allowance for loan and lease losses/total loans | | | 1.11 | % | | | 1.23 | % | | | | | | | | |
| Non-performing assets to total loans | | | 1.14 | % | | | 1.51 | % | | | | | | | | |
| Annualized net (recoveries) charge-offs to total loans | | | 0.06 | % | | | 0.01 | % | | | 0.02 | % | | | 0.04 | % |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Equity | | | | | | | | | | | | | | | | |
| Book value per share (b) | | $ | 47.48 | | | $ | 42.64 | | | | | | | | | |
| Tangible Book value per share (a) (b) | | $ | 39.09 | | | $ | 35.71 | | | | | | | | | |
| Market Value (Last reported trade of month) | | $ | 44.00 | | | $ | 58.40 | | | | | | | | | |
| Common shares outstanding | | | 3,921,408 | | | | 3,525,315 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Other | | | | | | | | | | | | | | | | |
| Average Full Time Equivalent Employees | | | 289.6 | | | | 257.5 | | | | | | | | | |
| Loan to Deposit Ratio | | | 87.96 | % | | | 92.97 | % | | | | | | | | |
| Trust assets under management | | $ | 137,127 | | | $ | 130,383 | | | | | | | | | |
| Brokerage assets under management | | $ | 227,134 | | | $ | 208,969 | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Balance Sheet Highlights | | September 30, | | | December 31, | | | September 30, | | | | | |
| | | | 2020 | | | | 2019 | | | | 2019 | | | | | |
| | | | | | | | | | | | | | | | | |
| Assets | | $ | 1,858,344 | | | $ | 1,466,339 | | | $ | 1,475,005 | | | | | |
| Investment securities | | | 289,534 | | | | 241,407 | | | | 247,677 | | | | | |
| Loans (net of unearned income) | | | 1,365,879 | | | | 1,115,569 | | | | 1,115,034 | | | | | |
| Allowance for loan losses | | | 15,169 | | | | 13,845 | | | | 13,679 | | | | | |
| Deposits | | | 1,552,753 | | | | 1,211,118 | | | | 1,199,304 | | | | | |
| Stockholders' Equity | | | 189,051 | | | | 154,774 | | | | 151,678 | | | | | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
(a) See reconcilation of Non-GAAP measures at the end of the press release | | | | | | | | | | | | | |
| (b) Prior period amounts were adjusted to reflect stock dividends. | | | | | | | | | | | | | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | |
| CONSOLIDATED BALANCE SHEET | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | |
| | | | | | | | | | |
| | | September 30, | | | December 31, | | | September 30, | |
| (in thousands except share data) | | 2020 | | | 2019 | | | 2019 | |
| ASSETS: | | | | | | | | | |
| Cash and due from banks: | | | | | | | | | |
| Noninterest-bearing | | $ | 15,922 | | | $ | 17,727 | | | $ | 19,005 | |
| Interest-bearing | | | 59,387 | | | | 793 | | | | 1,081 | |
| Total cash and cash equivalents | | | 75,309 | | | | 18,520 | | | | 20,086 | |
| | | | | | | | | | | | | |
| Interest bearing time deposits with other banks | | | 13,758 | | | | 14,256 | | | | 14,256 | |
| | | | | | | | | | | | | |
| Equity securities | | | 1,696 | | | | 701 | | | | 650 | |
| | | | | | | | | | | | | |
| Available-for-sale securities | | | 287,838 | | | | 240,706 | | | | 247,027 | |
| | | | | | | | | | | | | |
| Loans held for sale | | | 19,320 | | | | 815 | | | | 1,430 | |
| | | | | | | | | | | | | |
| Loans (net of allowance for loan losses: $15,169 at September 30, 2020; | | | | | | | | | | | | |
| $13,845 at December 31, 2019 and $13,679 at September 30, 2019) | | | 1,350,710 | | | | 1,101,724 | | | | 1,101,355 | |
| | | | | | | | | | | | | |
| Premises and equipment | | | 17,720 | | | | 15,933 | | | | 15,881 | |
| Accrued interest receivable | | | 6,164 | | | | 4,555 | | | | 4,476 | |
| Goodwill | | | 31,376 | | | | 23,296 | | | | 23,296 | |
| Bank owned life insurance | | | 32,408 | | | | 28,128 | | | | 27,968 | |
| Other intangibles | | | 1,538 | | | | 1,346 | | | | 1,400 | |
| Other assets | | | 20,507 | | | | 16,359 | | | | 17,180 | |
| | | | | | | | | | | | | |
| TOTAL ASSETS | | $ | 1,858,344 | | | $ | 1,466,339 | | | $ | 1,475,005 | |
| | | | | | | | | | | | | |
| LIABILITIES: | | | | | | | | | | | | |
| Deposits: | | | | | | | | | | | | |
| Noninterest-bearing | | $ | 276,286 | | | $ | 203,793 | | | $ | 199,046 | |
| Interest-bearing | | | 1,276,467 | | | | 1,007,325 | | | | 1,000,258 | |
| Total deposits | | | 1,552,753 | | | | 1,211,118 | | | | 1,199,304 | |
| Borrowed funds | | | 99,602 | | | | 85,117 | | | | 109,840 | |
| Accrued interest payable | | | 1,006 | | | | 1,088 | | | | 1,052 | |
| Other liabilities | | | 15,932 | | | | 14,242 | | | | 13,131 | |
| TOTAL LIABILITIES | | | 1,669,293 | | | | 1,311,565 | | | | 1,323,327 | |
| STOCKHOLDERS' EQUITY: | | | | | | | | | | | | |
| Preferred Stock $1.00 par value; authorized | | | | | | | | | | | | |
| 3,000,000 shares; none issued in 2020 or 2019 | | | - | | | | - | | | | - | |
| Common stock | | | | | | | | | | | | |
| $1.00 par value; authorized 25,000,000 shares at September 30, 2020, December 31, 2019 and | | | | | | | | | |
| September 30, 2019: issued 3,976,986 at September 30, 2020 and 3,938,668 at December 31, 2019 | | | | | |
| and September 30, 2019 | | | 4,350 | | | | 3,939 | | | | 3,939 | |
| Additional paid-in capital | | | 75,867 | | | | 55,089 | | | | 55,096 | |
| Retained earnings | | | 121,203 | | | | 110,800 | | | | 107,342 | |
| Accumulated other comprehensive income (loss) | | | 2,865 | | | | (629 | ) | | | (289 | ) |
| Treasury stock, at cost: 428,934 at September 30, 2020 and 413,607 shares | | | | | | | | | | | | |
| at December 31, 2019 and 413,353 shares at September 30, 2019 | | | (15,234 | ) | | | (14,425 | ) | | | (14,410 | ) |
| TOTAL STOCKHOLDERS' EQUITY | | | 189,051 | | | | 154,774 | | | | 151,678 | |
| TOTAL LIABILITIES AND | | | | | | | | | | | | |
| STOCKHOLDERS' EQUITY | | $ | 1,858,344 | | | $ | 1,466,339 | | | $ | 1,475,005 | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | |
| CONSOLIDATED STATEMENT OF INCOME | | | | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | | | | |
| | | Three Months Ended | | | Nine Months Ended | |
| | | September 30, | | | September 30, | |
| (in thousands, except per share data) | | 2020 | | | 2019 | | | 2020 | | | 2019 | |
| INTEREST INCOME: | | | | | | | | | | | | |
| Interest and fees on loans | | $ | 16,718 | | | $ | 13,915 | | | $ | 46,763 | | | $ | 41,005 | |
| Interest-bearing deposits with banks | | | 106 | | | | 103 | | | | 298 | | | | 311 | |
| Investment securities: | | | | | | | | | | | | | | | | |
| Taxable | | | 979 | | | | 1,361 | | | | 3,212 | | | | 3,597 | |
| Nontaxable | | | 485 | | | | 378 | | | | 1,337 | | | | 1,109 | |
| Dividends | | | 98 | | | | 117 | | | | 275 | | | | 371 | |
| TOTAL INTEREST INCOME | | | 18,386 | | | | 15,874 | | | | 51,885 | | | | 46,393 | |
| INTEREST EXPENSE: | | | | | | | | | | | | | | | | |
| Deposits | | | 1,635 | | | | 2,315 | | | | 5,279 | | | | 7,027 | |
| Borrowed funds | | | 281 | | | | 660 | | | | 960 | | | | 2,216 | |
| TOTAL INTEREST EXPENSE | | | 1,916 | | | | 2,975 | | | | 6,239 | | | | 9,243 | |
| NET INTEREST INCOME | | | 16,470 | | | | 12,899 | | | | 45,646 | | | | 37,150 | |
| Provision for loan losses | | | 550 | | | | 400 | | | | 1,500 | | | | 1,150 | |
| NET INTEREST INCOME AFTER | | | | | | | | | | | | | | | | |
| PROVISION FOR LOAN LOSSES | | | 15,920 | | | | 12,499 | | | | 44,146 | | | | 36,000 | |
| NON-INTEREST INCOME: | | | | | | | | | | | | | | | | |
| Service charges | | | 1,112 | | | | 1,225 | | | | 3,107 | | | | 3,498 | |
| Trust | | | 199 | | | | 148 | | | | 542 | | | | 589 | |
| Brokerage and insurance | | | 352 | | | | 289 | | | | 941 | | | | 843 | |
| Gains on loans sold | | | 855 | | | | 176 | | | | 1,282 | | | | 339 | |
| Equity security gains (losses), net | | | (33 | ) | | | 29 | | | | (276 | ) | | | 70 | |
| Available for sale security gains (losses), net | | | 185 | | | | 8 | | | | 302 | | | | 8 | |
| Earnings on bank owned life insurance | | | 180 | | | | 158 | | | | 514 | | | | 463 | |
| Other | | | 688 | | | | 144 | | | | 1,046 | | | | 427 | |
| TOTAL NON-INTEREST INCOME | | | 3,538 | | | | 2,177 | | | | 7,458 | | | | 6,237 | |
| NON-INTEREST EXPENSES: | | | | | | | | | | | | | | | | |
| Salaries and employee benefits | | | 6,102 | | | | 5,096 | | | | 17,411 | | | | 15,129 | |
| Occupancy | | | 714 | | | | 530 | | | | 1,891 | | | | 1,639 | |
| Furniture and equipment | | | 267 | | | | 165 | | | | 587 | | | | 501 | |
| Professional fees | | | 417 | | | | 343 | | | | 1,180 | | | | 1,101 | |
| FDIC insurance expense | | | 135 | | | | (20 | ) | | | 341 | | | | 196 | |
| Pennsylvania shares tax | | | 275 | | | | 275 | | | | 809 | | | | 825 | |
| Amortization of intangibles | | | 57 | | | | 66 | | | | 162 | | | | 198 | |
| Merger and acquisition | | | - | | | | 275 | | | | 2,179 | | | | 275 | |
| Software expenses | | | 324 | | | | 244 | | | | 817 | | | | 699 | |
| ORE expenses | | | 30 | | | | 92 | | | | 221 | | | | 308 | |
| Other | | | 1,371 | | | | 1,348 | | | | 4,428 | | | | 4,102 | |
| TOTAL NON-INTEREST EXPENSES | | | 9,692 | | | | 8,414 | | | | 30,026 | | | | 24,973 | |
| Income before provision for income taxes | | | 9,766 | | | | 6,262 | | | | 21,578 | | | | 17,264 | |
| Provision for income taxes | | | 1,759 | | | | 1,066 | | | | 3,702 | | | | 2,817 | |
| NET INCOME | | $ | 8,007 | | | $ | 5,196 | | | $ | 17,876 | | | $ | 14,447 | |
| | | | | | | | | | | | | | | | | |
| PER COMMON SHARE DATA: | | | | | | | | | | | | | | | | |
| Net Income - Basic | | $ | 2.04 | | | $ | 1.46 | | | $ | 4.74 | | | $ | 4.06 | |
| Net Income - Diluted | | $ | 2.04 | | | $ | 1.46 | | | $ | 4.74 | | | $ | 4.05 | |
| Cash Dividends Paid | | $ | 0.460 | | | $ | 0.445 | | | $ | 1.460 | | | $ | 1.317 | |
| | | | | | | | | | | | | | | | | |
| Number of shares used in computation - basic | | | 3,918,438 | | | | 3,553,996 | | | | 3,769,705 | | | | 3,560,695 | |
| Number of shares used in computation - diluted | | | 3,918,438 | | | | 3,553,996 | | | | 3,771,730 | | | | 3,562,975 | |
| | | | | | | | | | | | | | | | | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | | | | |
| QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION | | | | | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | | | | | | | |
| (in thousands, except share data) | | | | | Three Months Ended, | | | | | | | |
| | | Sept 30, | | | June 30, | | | March 31, | | | Dec 31, | | | Sept 30, | |
| | | 2020 | | | 2020 | | | 2020 | | | 2019 | | | 2019 | |
| Interest income | | $ | 18,386 | | | $ | 18,160 | | | $ | 15,339 | | | $ | 15,587 | | | $ | 15,874 | |
| Interest expense | | | 1,916 | | | | 1,874 | | | | 2,449 | | | | 2,797 | | | | 2,975 | |
| Net interest income | | | 16,470 | | | | 16,286 | | | | 12,890 | | | | 12,790 | | | | 12,899 | |
| Provision for loan losses | | | 550 | | | | 550 | | | | 400 | | | | 525 | | | | 400 | |
| Net interest income after provision for loan losses | | | 15,920 | | | | 15,736 | | | | 12,490 | | | | 12,265 | | | | 12,499 | |
| Non-interest income | | | 3,386 | | | | 1,941 | | | | 2,105 | | | | 2,083 | | | | 2,140 | |
| Investment securities gains (losses), net | | | 152 | | | | 128 | | | | (254 | ) | | | 66 | | | | 37 | |
| Non-interest expenses | | | 9,692 | | | | 11,413 | | | | 8,921 | | | | 8,368 | | | | 8,414 | |
| Income before provision for income taxes | | | 9,766 | | | | 6,392 | | | | 5,420 | | | | 6,046 | | | | 6,262 | |
| Provision for income taxes | | | 1,759 | | | | 1,054 | | | | 889 | | | | 1,003 | | | | 1,066 | |
| Net income | | $ | 8,007 | | | $ | 5,338 | | | $ | 4,531 | | | $ | 5,043 | | | $ | 5,196 | |
| Earnings Per Share Basic | | $ | 2.04 | | | $ | 1.27 | | | $ | 1.42 | | | $ | 1.46 | | | $ | 1.46 | |
| Earnings Per Share Diluted | | $ | 2.04 | | | $ | 1.27 | | | $ | 1.42 | | | $ | 1.46 | | | $ | 1.46 | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS | |
| (UNAUDITED) | | | | | | | | | | | | | | | | | | |
| | | Three Months Ended September 30, | | |
| | | 2020 | | 2019 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance (1) | | | Interest | | | Rate | | | Balance (1) | | | Interest | | | Rate | |
| (dollars in thousands) | | $ | | | | | | | $ | % | | | $ | | | | | | | $ | % | |
| ASSETS | | | | | | | | | | | | | | | | | | | | | | |
| Short-term investments: | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits at banks | | | 67,954 | | | | 14 | | | | 0.08 | | | | 10,047 | | | | 6 | | | | 0.24 | |
| Total short-term investments | | | 67,954 | | | | 14 | | | | 0.08 | | | | 10,047 | | | | 6 | | | | 0.24 | |
| Interest bearing time deposits at banks | | | 14,143 | | | | 92 | | | | 2.59 | | | | 15,100 | | | | 97 | | | | 2.55 | |
| Investment securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 192,641 | | | | 1,077 | | | | 2.24 | | | | 182,113 | | | | 1,478 | | | | 3.25 | |
| Tax-exempt (3) | | | 84,097 | | | | 614 | | | | 2.92 | | | | 59,464 | | | | 477 | | | | 3.22 | |
| Investment securities | | | 276,738 | | | | 1,691 | | | | 2.45 | | | | 241,577 | | | | 1,955 | | | | 3.24 | |
| Loans: (2)(3)(4) | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | 209,161 | | | | 2,807 | | | | 5.34 | | | | 215,748 | | | | 2,892 | | | | 5.32 | |
| Construction loans | | | 29,087 | | | | 356 | | | | 4.87 | | | | 13,149 | | | | 176 | | | | 5.31 | |
| Commercial Loans | | | 652,380 | | | | 8,472 | | | | 5.17 | | | | 424,662 | | | | 5,863 | | | | 5.48 | |
| Agricultural Loans | | | 356,164 | | | | 3,971 | | | | 4.44 | | | | 344,897 | | | | 4,018 | | | | 4.62 | |
| Loans to state & political subdivisions | | | 83,671 | | | | 872 | | | | 4.15 | | | | 96,192 | | | | 958 | | | | 3.95 | |
| Other loans | | | 30,460 | | | | 401 | | | | 5.24 | | | | 9,566 | | | | 196 | | | | 8.13 | |
| Loans, net of discount (2)(3)(4) | | | 1,360,923 | | | | 16,879 | | | | 4.93 | | | | 1,104,214 | | | | 14,103 | | | | 5.07 | |
| Total interest-earning assets | | | 1,719,758 | | | | 18,676 | | | | 4.32 | | | | 1,370,938 | | | | 16,161 | | | | 4.68 | |
| Cash and due from banks | | | 7,350 | | | | | | | | | | | | 5,944 | | | | | | | | | |
| Bank premises and equipment | | | 17,802 | | | | | | | | | | | | 15,967 | | | | | | | | | |
| Other assets | | | 90,238 | | | | | | | | | | | | 58,869 | | | | | | | | | |
| Total non-interest earning assets | | | 115,390 | | | | | | | | | | | | 80,780 | | | | | | | | | |
| Total assets | | | 1,835,148 | | | | | | | | | | | | 1,451,718 | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | | 406,635 | | | | 211 | | | | 0.21 | | | | 335,279 | | | | 590 | | | | 0.70 | |
| Savings accounts | | | 247,414 | | | | 96 | | | | 0.15 | | | | 221,771 | | | | 218 | | | | 0.39 | |
| Money market accounts | | | 218,682 | | | | 215 | | | | 0.39 | | | | 167,229 | | | | 505 | | | | 1.20 | |
| Certificates of deposit | | | 382,551 | | | | 1,113 | | | | 1.16 | | | | 266,385 | | | | 1,002 | | | | 1.49 | |
| Total interest-bearing deposits | | | 1,255,282 | | | | 1,635 | | | | 0.52 | | | | 990,664 | | | | 2,315 | | | | 0.93 | |
| Other borrowed funds | | | 98,350 | | | | 281 | | | | 1.14 | | | | 102,622 | | | | 660 | | | | 2.56 | |
| Total interest-bearing liabilities | | | 1,353,632 | | | | 1,916 | | | | 0.56 | | | | 1,093,286 | | | | 2,975 | | | | 1.08 | |
| Demand deposits | | | 280,457 | | | | | | | | | | | | 194,024 | | | | | | | | | |
| Other liabilities | | | 16,611 | | | | | | | | | | | | 13,139 | | | | | | | | | |
| Total non-interest-bearing liabilities | | | 297,068 | | | | | | | | | | | | 207,163 | | | | | | | | | |
| Stockholders' equity | | | 184,448 | | | | | | | | | | | | 151,269 | | | | | | | | | |
| Total liabilities & stockholders' equity | | | 1,835,148 | | | | | | | | | | | | 1,451,718 | | | | | | | | | |
| Net interest income | | | | | | | 16,760 | | | | | | | | | | | | 13,186 | | | | | |
| Net interest spread (5) | | | | | | | | | | | 3.76 | % | | | | | | | | | | | 3.60 | % |
| Net interest income as a percentage | | | | | | | | | | | | | | | | | | | | | | | | |
| of average interest-earning assets | | | | | | | | | | | 3.88 | % | | | | | | | | | | | 3.82 | % |
| Ratio of interest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| to interest-bearing liabilities | | | | | | | | | | | 127 | % | | | | | | | | | | | 125 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Averages are based on daily averages. | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) Includes loan origination and commitment fees. | | | | | | | | | | | | | | | | | | | | | | | | |
| (3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using | | | | | | | | | | | | | |
| a statutory federal income tax rate of 21% for 2020 and 2019. See reconciliation of non-gaap measures at the end | | | | | |
| of the press release | | | | | | | | | | | | | | | | | | | | | | | | |
| (4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. | |
| (5) Interest rate spread represents the difference between the average rate earned on interest-earning assets | | | | | |
| and the average rate paid on interest-bearing liabilities. | | | | | | | | | | | | | | | | | | | | | | | | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | | | | | | | |
| CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS | |
| (UNAUDITED) | | | | | | | | | | | | | | | | | | |
| | | Nine Months Ended September 30, | |
| | | 2020 | | 2019 | |
| | | Average | | | | | | Average | | | Average | | | | | | Average | |
| | | Balance (1) | | | Interest | | | Rate | | | Balance (1) | | | Interest | | | Rate | |
| (dollars in thousands) | | $ | | | | | | | $ | % | | | $ | | | | | | | $ | % | |
| ASSETS | | | | | | | | | | | | | | | | | | | | | | |
| Short-term investments: | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing deposits at banks | | | 35,580 | | | | 23 | | | | 0.09 | | | | 9,546 | | | | 19 | | | | 0.27 | |
| Total short-term investments | | | 35,580 | | | | 23 | | | | 0.09 | | | | 9,546 | | | | 19 | | | | 0.27 | |
| Interest bearing time deposits at banks | | | 14,266 | | | | 275 | | | | 2.57 | | | | 15,364 | | | | 292 | | | | 2.54 | |
| Investment securities: | | | | | | | | | | | | | | | | | | | | | | | | |
| Taxable | | | 185,220 | | | | 3,487 | | | | 2.51 | | | | 189,157 | | | | 3,968 | | | | 2.80 | |
| Tax-exempt (3) | | | 74,664 | | | | 1,693 | | | | 3.02 | | | | 58,150 | | | | 1,404 | | | | 3.22 | |
| Investment securities | | | 259,884 | | | | 5,180 | | | | 2.66 | | | | 247,307 | | | | 5,372 | | | | 2.90 | |
| Loans: (2)(3)(4) | | | | | | | | | | | | | | | | | | | | | | | | |
| Residential mortgage loans | | | 212,912 | | | | 8,450 | | | | 5.30 | | | | 215,325 | | | | 8,584 | | | | 5.33 | |
| Construction loans | | | 25,715 | | | | 952 | | | | 4.95 | | | | 20,576 | | | | 796 | | | | 5.17 | |
| Commercial Loans | | | 556,133 | | | | 22,282 | | | | 5.35 | | | | 415,287 | | | | 17,064 | | | | 5.49 | |
| Agricultural Loans | | | 357,498 | | | | 12,096 | | | | 4.52 | | | | 338,266 | | | | 11,657 | | | | 4.61 | |
| Loans to state & political subdivisions | | | 89,407 | | | | 2,709 | | | | 4.05 | | | | 98,680 | | | | 2,910 | | | | 3.94 | |
| Other loans | | | 17,878 | | | | 794 | | | | 5.93 | | | | 9,680 | | | | 562 | | | | 7.76 | |
| Loans, net of discount (2)(3)(4) | | | 1,259,543 | | | | 47,283 | | | | 5.01 | | | | 1,097,814 | | | | 41,573 | | | | 5.06 | |
| Total interest-earning assets | | | 1,569,273 | | | | 52,761 | | | | 4.49 | | | | 1,370,031 | | | | 47,256 | | | | 4.61 | |
| Cash and due from banks | | | 7,643 | | | | | | | | | | | | 6,243 | | | | | | | | | |
| Bank premises and equipment | | | 17,152 | | | | | | | | | | | | 16,120 | | | | | | | | | |
| Other assets | | | 75,238 | | | | | | | | | | | | 56,978 | | | | | | | | | |
| Total non-interest earning assets | | | 100,033 | | | | | | | | | | | | 79,341 | | | | | | | | | |
| Total assets | | | 1,669,306 | | | | | | | | | | | | 1,449,372 | | | | | | | | | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | | | | | | | | | | | | | | | | | |
| Interest-bearing liabilities: | | | | | | | | | | | | | | | | | | | | | | | | |
| NOW accounts | | | 374,347 | | | | 904 | | | | 0.32 | | | | 331,084 | | | | 1,756 | | | | 0.71 | |
| Savings accounts | | | 237,873 | | | | 387 | | | | 0.22 | | | | 216,858 | | | | 608 | | | | 0.37 | |
| Money market accounts | | | 196,985 | | | | 810 | | | | 0.55 | | | | 163,443 | | | | 1,520 | | | | 1.24 | |
| Certificates of deposit | | | 333,044 | | | | 3,178 | | | | 1.27 | | | | 282,754 | | | | 3,143 | | | | 1.49 | |
| Total interest-bearing deposits | | | 1,142,249 | | | | 5,279 | | | | 0.62 | | | | 994,139 | | | | 7,027 | | | | 0.95 | |
| Other borrowed funds | | | 92,120 | | | | 960 | | | | 1.39 | | | | 108,975 | | | | 2,216 | | | | 2.72 | |
| Total interest-bearing liabilities | | | 1,234,369 | | | | 6,239 | | | | 0.68 | | | | 1,103,114 | | | | 9,243 | | | | 1.12 | |
| Demand deposits | | | 246,424 | | | | | | | | | | | | 184,159 | | | | | | | | | |
| Other liabilities | | | 16,390 | | | | | | | | | | | | 13,817 | | | | | | | | | |
| Total non-interest-bearing liabilities | | | 262,814 | | | | | | | | | | | | 197,976 | | | | | | | | | |
| Stockholders' equity | | | 172,123 | | | | | | | | | | | | 148,282 | | | | | | | | | |
| Total liabilities & stockholders' equity | | | 1,669,306 | | | | | | | | | | | | 1,449,372 | | | | | | | | | |
| Net interest income | | | | | | | 46,522 | | | | | | | | | | | | 38,013 | | | | | |
| Net interest spread (5) | | | | | | | | | | | 3.81 | % | | | | | | | | | | | 3.49 | % |
| Net interest income as a percentage | | | | | | | | | | | | | | | | | | | | | | | | |
| of average interest-earning assets | | | | | | | | | | | 3.96 | % | | | | | | | | | | | 3.71 | % |
| Ratio of interest-earning assets | | | | | | | | | | | | | | | | | | | | | | | | |
| to interest-bearing liabilities | | | | | | | | | | | 127 | % | | | | | | | | | | | 124 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| (1) Averages are based on daily averages. | | | | | | | | | | | | | | | | | | | | | | | | |
| (2) Includes loan origination and commitment fees. | | | | | | | | | | | | | | | | | | | | | | | | |
| (3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using | | | | | | | | | |
| a statutory federal income tax rate of 21% for 2019 and 2018. See reconciliation of non-gaap measures at the end | |
| of the press release | | | | | | | | | | | | | | | | | | | | | | | | |
| (4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets. | |
| (5) Interest rate spread represents the difference between the average rate earned on interest-earning assets | |
| and the average rate paid on interest-bearing liabilities. | | | | | | | | | | | | | | | | | | | | | | | | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | | | | |
| CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR LOAN LOSSES | |
| (UNAUDITED) | | | | | | | | | | | | | | | |
| (Excludes Loans Held for Sale) | | | | | | | | | | | | | | | |
| (In Thousands) | | | | | | | | | | | | | | | |
| | | September 30, | | | June 30, | | | March 31, | | | December 31, | | | September 30, | |
| | | 2020 | | | 2020 | | | 2020 | | | 2019 | | | 2019 | |
| Real estate: | | | | | | | | | | | | | | | |
| Residential | | $ | 208,084 | | | $ | 210,789 | | | $ | 216,179 | | | $ | 217,088 | | | $ | 215,717 | |
| Commercial | | | 535,456 | | | | 513,598 | | | | 338,490 | | | | 342,023 | | | | 349,269 | |
| Agricultural | | | 310,702 | | | | 313,136 | | | | 300,606 | | | | 311,464 | | | | 305,948 | |
| Construction | | | 28,656 | | | | 31,744 | | | | 17,926 | | | | 15,519 | | | | 11,448 | |
| Consumer | | | 30,625 | | | | 30,973 | | | | 9,533 | | | | 9,947 | | | | 9,709 | |
| Other commercial loans | | | 129,731 | | | | 132,503 | | | | 71,038 | | | | 69,970 | | | | 76,785 | |
| Other agricultural loans | | | 40,790 | | | | 44,912 | | | | 46,170 | | | | 55,112 | | | | 50,334 | |
| State & political subdivision loans | | | 81,835 | | | | 85,978 | | | | 93,778 | | | | 94,446 | | | | 95,824 | |
| Total loans | | | 1,365,879 | | | | 1,363,633 | | | | 1,093,720 | | | | 1,115,569 | | | | 1,115,034 | |
| Less: allowance for loan losses | | | 15,169 | | | | 14,827 | | | | 14,247 | | | | 13,845 | | | | 13,679 | |
| Net loans | | $ | 1,350,710 | | | $ | 1,348,806 | | | $ | 1,079,473 | | | $ | 1,101,724 | | | $ | 1,101,355 | |
| | | | | | | | | | | | | | | | | | | | | |
| Past due and non-performing assets | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| Total Loans past due 30-89 days and still accruing | | $ | 3,449 | | | $ | 4,986 | | | $ | 3,159 | | | $ | 2,711 | | | $ | 2,672 | |
| | | | | | | | | | | | | | | | | | | | | |
| Non-accrual loans | | $ | 11,711 | | | $ | 10,693 | | | $ | 11,302 | | | $ | 11,536 | | | $ | 13,223 | |
| Loans past due 90 days or more and accruing | | | 1,194 | | | | 654 | | | | 164 | | | | 487 | | | | 103 | |
| Non-performing loans | | $ | 12,905 | | | $ | 11,347 | | | $ | 11,466 | | | $ | 12,023 | | | $ | 13,326 | |
| OREO | | | 2,726 | | | | 2,853 | | | | 3,056 | | | | 3,404 | | | | 3,497 | |
| Total Non-performing assets | | $ | 15,631 | | | $ | 14,200 | | | $ | 14,522 | | | $ | 15,427 | | | $ | 16,823 | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | |
| | | 3 Months | | | 3 Months | | | 3 Months | | | 3 Months | | | 3 Months | |
| | | Ended | | | Ended | | | Ended | | | Ended | | | Ended | |
| Analysis of the Allowance for loan Losses | | September 30, | | | June 30, | | | March 31, | | | December 31, | | | September 30, | |
| (In Thousands) | | | 2020 | | | | 2020 | | | | 2020 | | | | 2019 | | | | 2019 | |
| Balance, beginning of period | | $ | 14,827 | | | $ | 14,247 | | | $ | 13,845 | | | $ | 13,679 | | | $ | 13,304 | |
| Charge-offs | | | (237 | ) | | | (10 | ) | | | (9 | ) | | | (370 | ) | | | (34 | ) |
| Recoveries | | | 29 | | | | 40 | | | | 11 | | | | 11 | | | | 9 | |
| Net (charge-offs) recoveries | | | (208 | ) | | | 30 | | | | 2 | | | | (359 | ) | | | (25 | ) |
| Provision for loan losses | | | 550 | | | | 550 | | | | 400 | | | | 525 | | | | 400 | |
| Balance, end of period | | $ | 15,169 | | | $ | 14,827 | | | $ | 14,247 | | | $ | 13,845 | | | $ | 13,679 | |
| CITIZENS FINANCIAL SERVICES, INC. | | | | | | | | | | | | |
| Reconciliation of GAAP and Non-GAAP Financial Measures | | | | | | | | | | |
| (UNAUDITED) | | | | | | | | | | | | |
| (Dollars in thousands, except per share data) | | | | | | | | | | | | |
| | | | | | | | | | | | | |
| | | As of | | | | | | | |
| | | September 30 | | | | | | | |
| | | 2020 | | | 2019 | | | | | | | |
| Tangible Equity | | | | | | | | | | | | |
| Stockholders Equity - GAAP | | $ | 189,051 | | | $ | 151,678 | | | | | | | |
| Accumulated other comprehensive (gain) loss | | | (2,865 | ) | | | 289 | | | | | | | |
| Intangible Assets | | | (32,914 | ) | | | (24,696 | ) | | | | | | |
| Tangible Equity - Non-GAAP | | | 153,272 | | | | 127,271 | | | | | | | |
| Shares outstanding adjusted for June 2019 stock Dividend | | | 3,921,408 | | | | 3,563,633 | | | | | | | |
| Tangible Book value per share (a) | | $ | 39.09 | | | $ | 35.71 | | | | | | | |
| | | | | | | | | | | | | | | |
| | | As of | | | | | | | |
| | | September 30 | | | | | | | |
| | | | 2020 | | | | 2019 | | | | | | | |
| Tangible Equity per share | | | | | | | | | | | | | | |
| Stockholders Equity per share - GAAP | | $ | 48.21 | | | $ | 42.56 | | | | | | | |
| Adjustments for accumulated other comprehensive loss | | | (0.73 | ) | | | 0.08 | | | | | | | |
| Book value per share | | | 47.48 | | | | 42.64 | | | | | | | |
| Adjustments for intangible assets | | | (8.39 | ) | | | (6.93 | ) | | | | | | |
| Tangible Book value per share - Non-GAAP | | $ | 39.09 | | | $ | 35.71 | | | | | | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30 | | | September 30 | |
| | | | 2020 | | | | 2019 | | | | 2020 | | | | 2019 | |
| Return on Average Tangible Equity | | | | | | | | | | | | | | | | |
| Average Stockholders Equity - GAAP | | $ | 187,486 | | | $ | 151,054 | | | $ | 173,979 | | | $ | 146,124 | |
| Average Accumulated Other Comprehensive Loss | | | 3,038 | | | | (215 | ) | | | 1,856 | | | | (2,158 | ) |
| Average Intangible Assets | | | 32,730 | | | | 24,710 | | | | 29,548 | | | | 24,792 | |
| Average Tangible Equity - Non-GAAP | | | 151,718 | | | | 126,559 | | | | 142,575 | | | | 123,490 | |
| Net Income | | $ | 8,007 | | | $ | 5,196 | | | $ | 17,876 | | | $ | 14,447 | |
| Annualized Return on Average Tangible Equity | | | 21.11 | % | | | 16.42 | % | | | 16.72 | % | | | 15.60 | % |
| | | | | | | | | | | | | | | | | |
| | | For the Three Months September 30, 2020 | | For the Nne Months September 30, 2020 | | | | | | | | |
| Return on Average Assets and Equity Excluding Merger and Acquisition Costs | | | | | | | | | | | | | |
| Net Income | | $ | 8,007 | | | $ | 17,876 | | | | | | | | | |
| After Tax merger and acquisition costs | | | - | | | | 1,766 | | | | | | | | | |
| Net Income excluding merger and acquisition costs | | $ | 8,007 | | | $ | 19,642 | | | | | | | | | |
| Average Assets | | | 1,835,148 | | | | 1,669,306 | | | | | | | | | |
| Annualized Return on Average stockholders equity, excluding Merger and Acquisition costs | | | 1.75 | % | | | 1.57 | % | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Average Stockholders Equity - GAAP | | $ | 184,448 | | | $ | 172,123 | | | | | | | | | |
| Annualized Return on Average stockholders equity, excluding Merger and Acquisition costs | | | 17.36 | % | | | 15.22 | % | | | | | | | | |
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| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Nine Months Ended | |
| | | September 30 | | | September 30 | |
| Reconciliation of net interest income on fully taxable equivalent basis | | | 2020 | | | | 2019 | | | | 2020 | | | | 2019 | |
| Total interest income | | $ | 18,386 | | | $ | 15,874 | | | $ | 51,885 | | | $ | 46,393 | |
| Total interest expense | | | 1,916 | | | | 2,975 | | | | 6,239 | | | | 9,243 | |
| Net interest income | | | 16,470 | | | | 12,899 | | | | 45,646 | | | | 37,150 | |
| Tax equivalent adjustment | | | 290 | | | | 287 | | | | 876 | | | | 863 | |
| Net interest income (fully taxable equivalent) | | $ | 16,760 | | | $ | 13,186 | | | $ | 46,522 | | | $ | 38,013 | |
