MANSFIELD, Pa., July 19 /PRNewswire-FirstCall/ -- Citizens Financial Services, Incorporated (BULLETIN BOARD: CZFS) , parent company of First Citizens National Bank, has released its unaudited financial performance for the second quarter of 2006.
Net income for the three months ended June 30, 2006 was $1,486,000, which compares to $1,313,000 for the same period last year. This represents an increase of 13.2%. On a year to date basis, net income was $2,762,000 compared with $2,580,000 last year, an increase of 7.1%. Earnings per share for the year are $.98 compared with $.90 for the first six months of 2005, representing an increase of 8.9%.
Return on equity for the six months ended June 30, 2006 and 2005 was 12.75% and 12.52%, respectively. For the three months ended June 30, 2006, return on equity was 13.55% compared with 12.63% for the same period in 2005. Income before taxes has increased from $3,283,000 for the first six months in 2005 to $3,420,000 in 2006, an increase of $137,000. Excluding the provision for loan losses, income before taxes increased $257,000, representing a 7.8% increase. Due to tax planning strategies using tax-exempt investments and loans, the provision for income taxes decreased from $703,000 last year to $658,000 this year, a savings of $45,000.
CEO and President Randall E. Black stated, "The interest rate environment continues to be less than favorable for our bank as well as others that are dealing with the same challenges. The sustained flat yield curve continues to put pressure on our interest rate margin as the Federal Reserve has maintained its policy of monetary tightening by increasing short-term interest rates. However, we have been able to produce positive financial performance through cost control and managing our effective tax rate, while expanding our franchise into Wellsville, New York."
Since June of last year, total assets have increased $43.8 million, or 8.6%. At the end of June, total assets were $550.9 million compared to $507.1 million last June. Net loans have increased $30.1 million since last June, an increase of 8.2%. Deposits have increased $15.5 million and borrowed funds have increased $27.9 million to fund the overall growth in assets.
Stockholders' Equity, excluding accumulated other comprehensive income, has increased $2.3 million, or 5.5% since last June. There have been 34,247 shares of treasury stock repurchased during 2006 since the Board of Directors approved a stock repurchase plan on January 17, 2006. Book value per share at June 30, 2006 was $15.60 compared with $14.76 last year, an increase of 5.7%. In June, a cash dividend of $.215 per share was declared and will be paid to shareholders on July 28, 2006 to record holders as of July 14, 2006. This represents an increase of 4.9%. Additionally, a 1% stock dividend will be distributed July 28, 2006 to shareholders of record as of July 14th.
Mr. Black noted that "construction is well under way on our new branch in Wellsville, New York. We expect a completion date during the fourth quarter of this year and continue to be optimistic about our potential to grow our bank in New York."
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) 2006 2005 2005
ASSETS:
Cash and due from banks:
Noninterest-bearing $10,925 $8,498 $8,607
Interest-bearing 6 111 101
Total cash and cash equivalents 10,931 8,609 8,708
Available-for-sale securities 101,864 102,602 91,947
Loans (net of allowance for loan
losses: 2006, $3,623; December 31,
2005, $3,664; and June 30, 2005,
$3,692) 397,765 379,139 367,684
Premises and equipment 12,199 12,305 12,493
Accrued interest receivable 2,109 2,164 1,895
Goodwill 8,605 8,605 8,605
Core deposit intangible 503 684 973
Bank owned life insurance 7,889 7,743 7,598
Other assets 9,113 7,390 7,244
TOTAL ASSETS $550,978 $529,241 $507,147
LIABILITIES:
Deposits:
Noninterest-bearing $50,289 $50,600 $46,764
Interest-bearing 387,620 379,199 375,668
Total deposits 437,909 429,799 422,432
Borrowed funds 67,116 52,674 39,199
Accrued interest payable 1,739 1,862 1,599
Commitment to purchase investments - 752 -
Other liabilities 2,690 2,593 2,716
TOTAL LIABILITIES 509,454 487,680 465,946
STOCKHOLDERS' EQUITY:
Common Stock
$1.00 par value; authorized
10,000,000 shares; issued
2,965,257 shares in 2006 and
at December 31, 2005 and
2,937,519 shares at June 30, 2005 2,965 2,965 2,938
Additional paid-in capital 11,359 11,359 10,804
Retained earnings 32,809 31,251 30,324
TOTAL 47,133 45,575 44,066
Accumulated other comprehensive loss (2,357) (1,540) (391)
Less: Treasury Stock, at cost
152,962 shares for 2006,
118,715 shares at December 31,
2005 and 97,262 shares at
June 30, 2005 (3,252) (2,474) (2,474)
TOTAL STOCKHOLDERS' EQUITY 41,524 41,561 41,201
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $550,978 $529,241 $507,147
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Six Months Ended
(in thousands, except per June 30, June 30,
share data) 2006 2005 2006 2005
INTEREST INCOME:
Interest and fees on loans $6,894 $6,105 $13,413 $12,024
Investment securities:
Taxable 879 749 1,698 1,541
Nontaxable 221 124 447 242
Dividends 82 55 149 106
TOTAL INTEREST INCOME 8,076 7,033 15,707 13,913
INTEREST EXPENSE:
Deposits 2,722 2,256 5,323 4,425
Borrowed funds 876 379 1,539 757
TOTAL INTEREST EXPENSE 3,598 2,635 6,862 5,182
NET INTEREST INCOME 4,478 4,398 8,845 8,731
Provision for loan losses 60 - 120 -
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 4,418 4,398 8,725 8,731
NON-INTEREST INCOME:
Service charges 809 746 1,515 1,419
Trust 108 86 237 208
Brokerage 39 55 97 93
Insurance 20 61 56 144
Investment securities gains
(losses), net 5 - (1) -
Earnings on bank owned life
insurance 74 75 146 149
Other 136 112 273 224
TOTAL NON-INTEREST INCOME 1,191 1,135 2,323 2,237
NON-INTEREST EXPENSES:
Salaries and employee benefits 1,987 1,974 4,023 3,895
Occupancy 276 282 584 585
Furniture and equipment 144 160 296 335
Professional fees 106 131 246 275
Amortization 36 144 180 289
Other 1,188 1,171 2,299 2,306
TOTAL NON-INTEREST EXPENSES 3,737 3,862 7,628 7,685
Income before provision for
income taxes 1,872 1,671 3,420 3,283
Provision for income taxes 386 358 658 703
NET INCOME $1,486 $1,313 $2,762 $2,580
Earnings Per Share $0.53 $0.46 $0.98 $0.90
Cash Dividends Per Share $0.215 $0.205 $0.425 $0.405
Weighted average number of
shares outstanding 2,819,620 2,865,637 2,829,915 2,866,810
FINANCIAL HIGHLIGHTS
(UNAUDITED - IN THOUSANDS, EXCEPT PER SHARE AND RATIO DATA)
2006 2005
Six Months Ended June 30
Net Income $2,762 $2,580
Comprehensive Income 1,945 2,025
Per common share data:
Earnings per share $0.98 $0.90
Cash dividends per share $0.425 $0.405
Performance Ratios:
Return on average assets (annualized) 1.02% 1.02%
Return on average equity (annualized) 12.75% 12.52%
Three Months Ended June 30
Net Income $1,486 $1,313
Per common share data:
Earnings per share $0.53 $0.46
Cash dividends per share $0.215 $0.205
Performance Ratios:
Return on average assets (annualized) 1.09% 1.04%
Return on average equity (annualized) 13.55% 12.63%
At June 30
Assets $550,978 $507,147
Investment securities:
Available for sale 101,864 91,947
Loans (net of unearned income) 401,388 371,376
Allowance for loan losses 3,623 3,692
Deposits 437,909 422,432
Stockholders' Equity 41,524 41,201
Non-performing assets 2,954 2,806
Average Leverage Ratio 7.86% 7.94%
Per common share data:
Book value $15.60 $14.76
Market value (average of bid/ask price) $22.30 $21.35
Market price to book value ratio 142.92% 144.69%
Cash
Dividends
Common Stock Information: Bid Ask Paid
Quarter Ended:
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
December 31, 2004 $23.65 $24.00 $0.200
September 30, 2004 $21.50 $22.15 $0.195
