CITIZENS FINANCIAL SERVICES INC MANSFIELD, Pa., Jan. 30, 2017 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC BB: CZFS), parent company of First Citizens Community Bank, released today its unaudited financial results for the three months and year ended December 31, 2016.
Net income totaled $12.6 million for the year ended December 31, 2016, which compares to net income of $11.6 million last year. Results for 2015 were impacted by the acquisition of the First National Bank of Fredericksburg (FNB) and related merger and acquisition costs of $1.1 million on a pre-tax basis. For the year ended December 31, 2016, the provision for loan loss totaled $1,520,000, which compares to $480,000 for the prior year and is primarily attributable to overall loan growth. Basic earnings per share of $3.78 for the year ended December 31, 2016 compares to $3.79 per share for last year. Annualized return on equity for the year ended December 31, 2016 and 2015 was 10.24% and 11.20%, while return on assets was 1.06% and 1.22%, respectively.
For the three months ended December 31, 2016, net income totaled $3.2 million which compares to net income of $2.5 million for the fourth quarter of 2015, an increase of $711,000. Fourth quarter 2015 results were impacted by FNB merger related costs of $698,000 on a pre-tax basis. The provision for loan loss for the quarter ended December 31, 2016 was $750,000, which compares to $120,000 for the same quarter last year. Basic earnings per share of $.95 for the fourth quarter of 2016 compares to $.79 per share for the fourth quarter last year. Annualized return on equity for the three months ended December 31, 2016 and 2015 was 10.12% and 9.12%, while annualized return on assets was 1.05% and .99%, respectively.
Net interest income before the provision for loan loss increased from $30.8 million for the year ended December 31, 2015 to $38.0 million for 2016, an increase of $7,131,000 or 23.1%. This increase is attributable to loan growth, both from the FNB acquisition and significant organic growth during 2016, particularly in the second half of the year. The net interest margin has decreased from 3.76% last year to 3.68% for 2016 primarily due to competitive pressures.
CEO and President Randall E. Black stated, "2016 was a very exciting time for our Company. We were busy integrating the December 2015 acquisition of FNB into First Citizen's culture. We experienced significant growth as evidenced by the addition of several lending teams, the opening of a loan production office in Winfield, Pennsylvania, and the opening of a new branch location in Mount Joy, Pennsylvania. Growth and expansion have been a key focus for us. As a result of this focus the company has begun to achieve this initiative, particularly in loan growth, as total loans have increased over $104.0 million, or 15%. In the fourth quarter alone, loans increased $48.3 million."
At December 31, 2016, total assets were $1.22 billion which compares to $1.16 billion at December 31, 2015. Available for sale securities of $314.0 million at December 31, 2016 decreased $45.7 million from December 31, 2015 to fund growth in the loan portfolio. Net loans have increased $102.8 million compared to the end of last year. Loan growth has been funded through the decrease in the investment portfolio, a $17.5 million increase in deposits, and an increase in borrowed funds of $38.0 million.
Stockholders' equity totaled $123.3 million at December 31, 2016, which compares to $119.8 million at December 31, 2015, an increase of $3.5 million. Net income for the year ended December 31, 2016 totaling $12.6 million was offset by cash dividends of $5.5 million and net treasury share purchases of $2.4 million. As a result of changes in interest rates impacting the fair value of investment securities, accumulated other comprehensive income attributable to the unrealized gain on available for sale investment securities decreased $1.2 million from the end of 2015. A cash dividend for the fourth quarter of 2016 of $.42 per share was paid on December 30, 2016 to shareholders of record on December 16, 2016, and represents an increase of 2.4% over the regular cash dividend paid a year ago.
Citizens Financial Services, Inc. has nearly 1,700 shareholders, the majority of whom reside in markets where 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.
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
December 31 December 31
(in thousands except share data) 2016 2015
------------------------------- ---- ----
ASSETS:
Cash and due from banks:
Noninterest-bearing $16,854 $14,088
Interest-bearing 900 10,296
---------------- --- ------
Total cash and cash equivalents 17,754 24,384
Interest bearing time deposits with other banks 6,955 7,696
Available-for-sale securities 314,017 359,737
Loans held for sale 1,827 603
Loans (net of allowance for loan losses: $8,886 at December 31, 2016 and
$7,106 at December 31, 2015) 790,725 687,925
Premises and equipment 17,030 17,263
Accrued interest receivable 4,089 4,211
Goodwill 21,089 21,089
Bank owned life insurance 26,223 25,535
Other intangibles 2,096 2,437
Other assets 21,213 12,104
------------ ------ ------
TOTAL ASSETS $1,223,018 $1,162,984
============ ========== ==========
LIABILITIES:
Deposits:
Noninterest-bearing $147,425 $150,960
Interest-bearing 858,078 837,071
---------------- ------- -------
Total deposits 1,005,503 988,031
Borrowed funds 79,662 41,631
Accrued interest payable 720 734
Other liabilities 13,865 12,828
----------------- ------ ------
TOTAL LIABILITIES 1,099,750 1,043,224
----------------- --------- ---------
STOCKHOLDERS' EQUITY:
Preferred Stock $1.00 par value; authorized
3,000,000 shares; none issued in 2016 or 2015
Common stock
$1.00 par value; authorized 15,000,000 shares at December 31, 2016 and December 31, 2015;
issued 3,704,375 at December 31, 2016 and 3,671,751 shares at December 31, 2015 3,704 3,672
Additional paid-in capital 42,250 40,715
Retained earnings 91,278 85,790
Accumulated other comprehensive loss (1,392) (236)
Treasury stock, at cost: 384,671 shares at December 31, 2016 and 335,876 shares at
December 31, 2015 (12,572) (10,181)
------- -------
TOTAL STOCKHOLDERS' EQUITY 123,268 119,760
-------------------------- ------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $1,223,018 $1,162,984
==================== ========== ==========
CITIZENS FINANCIAL SERVICES, INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
Three Months Ended Twelve Months Ended
December 31 December 31
----------- -----------
(in thousands, except per share data) 2016 2015 2016 2015
------------------------------------ ---- ---- ---- ----
INTEREST INCOME:
Interest and fees on loans $9,457 $7,623 $35,844 $29,039
Interest-bearing deposits with banks 36 39 221 142
Investment securities:
Taxable 887 785 3,687 3,102
Nontaxable 711 754 2,970 3,152
Dividends 78 50 283 218
--------- --- --- --- ---
TOTAL INTEREST INCOME 11,169 9,251 43,005 35,653
--------------------- ------ ----- ------ ------
INTEREST EXPENSE:
Deposits 1,053 1,025 4,247 4,113
Borrowed funds 240 186 794 707
-------------- --- --- --- ---
TOTAL INTEREST EXPENSE 1,293 1,211 5,041 4,820
---------------------- ----- ----- ----- -----
NET INTEREST INCOME 9,876 8,040 37,964 30,833
Provision for loan losses 750 120 1,520 480
------------------------- --- --- ----- ---
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 9,126 7,920 36,444 30,353
------------------------- ----- ----- ------ ------
NON-INTEREST INCOME:
Service charges 1,116 1,068 4,461 4,126
Trust 154 150 693 673
Brokerage and insurance 188 157 766 720
Gains on loans sold 224 221 449 404
Investment securities gains (losses), net 100 (1) 255 429
Earnings on bank owned life insurance 172 164 688 628
Other 138 116 587 443
TOTAL NON-INTEREST INCOME 2,092 1,875 7,899 7,423
------------------------- ----- ----- ----- -----
NON-INTEREST EXPENSES:
Salaries and employee benefits 4,343 3,386 16,410 12,504
Occupancy 515 360 1,900 1,424
Furniture and equipment 152 183 644 506
Professional fees 258 232 1,094 846
FDIC insurance 80 116 572 464
Pennsylvania shares tax 60 111 690 713
Amortization of intangibles 81 - 327 -
Merger and acquisition costs - 698 - 1,103
ORE expenses 155 283 389 969
Other 1,614 1,445 6,645 4,900
----- ----- ----- ----- -----
TOTAL NON-INTEREST EXPENSES 7,258 6,814 28,671 23,429
--------------------------- ----- ----- ------ ------
Income before provision for income taxes 3,960 2,981 15,672 14,347
Provision for income taxes 789 521 3,034 2,721
-------------------------- --- --- ----- -----
NET INCOME $3,171 $2,460 $12,638 $11,626
========== ====== ====== ======= =======
PER COMMON SHARE DATA:
Net Income - Basic $0.95 $0.79 $3.78 $3.79
================== ===== ===== ===== =====
Net Income - Diluted $0.95 $0.79 $3.78 $3.79
==================== ===== ===== ===== =====
Cash Dividends Paid $0.42 $0.41 $1.66 $1.71
=================== ===== ===== ===== =====
Number of shares used in computation - basic 3,327,811 3,099,598 3,341,933 3,063,906
Number of shares used in computation - diluted 3,327,854 3,099,731 3,343,489 3,065,266
Financial Highlights (Unaudited)
-------------------------------
Three Months Ended Twelve Months Ended
December 31, December 31,
2016 2015 2016 2015
Performance Ratios and Share Data:
Return on average assets (annualized for the three 1.05% 0.99% 1.06% 1.22%
month period)
Return on average equity (annualized for the three 10.12% 9.12% 10.24% 11.20%
month period)
Net interest margin (tax equivalent) 3.75% 3.73% 3.68% 3.76%
Cash dividends paid per share $0.42 $0.41 $1.66 $1.71
Earnings per share - basic $0.95 $0.79 $3.78 $3.79
Earnings per share - diluted $0.95 $0.79 $3.78 $3.79
Number of shares used in computation - basic 3,327,811 3,099,598 3,341,933 3,063,906
Number of shares used in computation - diluted 3,327,854 3,099,731 3,343,489 3,065,266
Balance Sheet Highlights (dollars in thousands, December 31, 2016 December 31, 2015
except per share Data):
Assets $1,223,018 $1,162,984
Investment securities - Available for sale: 314,017 359,737
Loans (net of unearned income) 799,611 695,031
Allowance for loan losses (8,886) (7,106)
Deposits 1,005,503 988,031
Stockholders' Equity 123,268 119,760
Non-performing assets 12,895 8,508
Non-performing assets to total loans 1.61% 1.22%
Annualized net charge-offs recoveries to total loans -0.03% 0.03%
Average Leverage Ratio 9.46% 11.01%
Common shares outstanding 3,319,704 3,335,875
Book value per share $37.55 $35.62
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SOURCE Citizens Financial Services, Inc.
