EX-99 2 pressrelease.htm EARNINGS RELEASE WITH SUPPORTING FINANCIALS earnings release with supporting financials
Exhibit 99.1

FOR IMMEDIATE RELEASE
        
 CONTACT:   Kathleen Campbell
   Senior Vice President, Marketing
   15 S. Main Street
   Mansfield, PA 16933
   570-662-0422
   570-662-8512 (fax)
 
April 18, 2005
Citizens Financial Services, Inc. Reports First Quarter Earnings
 
MANSFIELD, PENNSYLVANIA—Randall E. Black, Chief Executive Officer and President of Citizens Financial Services, Inc., (OTC BB: CZFS.OB) holding company for First Citizens National Bank, has reported 2005 first-quarter earnings.

Citizens Financial Services, Inc. reported that net income for three months ended March 31, 2005 was $1,267,000, compared to $1,493,000 for the same period of 2004. Earnings per share for the three months ended March 31, 2005 were $0.45 as compared to the $0.53 for the same period of 2004. This represents a return on average equity of 12.41% and a return on average assets of 1.01%.

Net income from core operations for the three months ended March 31, 2005 excluding security gains, declined $37,000 compared to the three months ended March 31, 2004.

Total assets for Citizens Financial Services, Inc. have grown $37.6 million or 8.0% to $506.4 million from $468.8 million as of March 31, 2004. Deposits grew 6.8% to $413.2 million while net loans increased 16.3% to $364.8 million from one year ago. Total stockholders’ equity, excluding accumulated other comprehensive income, increased $2.8 million, or 7.2% since last March.

The cash dividend to be paid on April 29th to record holders of April 15th will be $.205 per share, as compared to $.195 per share for the same period in 2004, an increase of 5.1%. The average of our common stock’s bid and ask price as of March 31, 2005 was $23.88.

CEO and President Randall E. Black stated, “The flattening yield curve has presented notable challenges to our interest margins as well as the banking industry in general. The flattened yield curve, coupled with the lack of security gains from sales, has had an impact on our first quarter results compared to a year ago. Notwithstanding the above, net interest income in total increased $118,000 over 2004’s first quarter. We have been able to increase our loans in a competitive environment while improving our overall asset quality. This is due in no small part to the dedication of our Board of Directors, management and employees to provide quality financial service solutions to our customers without comprising the level of service our customers have come to expect.”

Inquiries regarding the purchase of the company’s stock may be made through the following brokers: Ferris Baker Watts, Inc. 410-659-4600: Ryan, Beck & Co., 800-395-7926; Schwab Capital Markets LP, 201-963-9100; Monroe Securities, Inc., 800-766-5560; Boenning & Scattergood Inc., 610-828-0400; Keefe, Beuyette & Woods, Inc., 212-554-2600; Knight Equity Markets, LP, 212-336-8790; GVR Co., 800-638-8602; Hill Thompson Magid & Co., 800-631-3083; Powell (EE) & Co., Inc., 412-391-4594 and Pershing Trading Company, 201-413-3531.

Citizens Financial Services, Inc. has over 1,500 shareholders and is the parent company of First Citizens National Bank, which operates fifteen branch offices providing financial services in Bradford, Tioga and Potter Counties.

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.
 
1
 

MARCH 31, 2005
              
               
PART I - FINANCIAL INFORMATION
              
               
Item 1 - FINANCIAL STATEMENTS
              
               
CITIZENS FINANCIAL SERVICES, INC.
              
CONSOLIDATED BALANCE SHEET
             
(UNAUDITED)
              
 
              
   
March 31
  
December 31
  
March 31
  
(in thousands)
    
2005
 
 
2004
 
 
2004
 
ASSETS:
                    
Cash and due from banks:
                    
Noninterest-bearing
  
$
7,910
  
$
9,162
  
$
8,731
  
Interest-bearing
    
100
   
177
   
3,349
 
Total cash and cash equivalents
    
8,010
   
9,339
   
12,080
 
                     
Available-for-sale securities
    
94,611
   
95,747
   
109,618
 
 
                    
Loans (net of allowance for loan losses 2005, $3,856;
                    
December 31, 2004, $3,919; and March 31, 2004, $3,874)
    
364,786
   
355,774
   
313,549
 
 
                    
Premises and equipment
    
11,700
   
11,833
   
10,479
 
Accrued interest receivable
    
2,036
   
1,736
   
1,790
 
Goodwill
    
8,605
   
8,605
   
6,905
 
Core deposit intangible
    
1,117
   
1,262
   
869
 
Bank owned life insurance
    
7,523
   
7,449
   
7,221
 
Other assets
    
8,034
   
7,602
   
6,320
 
     
   
   
 
TOTAL ASSETS
  
$
506,422
  
$
499,347
  
$
468,831
  
     
   
   
 
LIABILITIES:
                    
Deposits:
                    
Noninterest-bearing
  
$
45,642
  
$
46,866
  
$
44,377
  
Interest-bearing
    
367,582
   
372,208
   
342,698
 
Total deposits
    
413,224
   
419,074
   
387,075
 
Borrowed funds
    
48,367
   
34,975
   
33,944
 
Accrued interest payable
    
1,632
   
1,870
   
1,547
 
Commitment to purchase investment securities
    
-
   
-
   
4,094
 
Other liabilities
    
2,809
   
2,639
   
2,644
 
TOTAL LIABILITIES
    
466,032
   
458,558
   
429,304
 
 
    
   
       
                     
STOCKHOLDERS' EQUITY:
                    
Common Stock
                    
$1.00 par value; authorized 10,000,000 shares;
                    
issued 2,937,519 shares in 2005 and at December 31, 2004
                    
and 2,909,849 shares at March 31, 2004
    
2,938
   
2,938
   
2,910
 
Additional paid-in capital
    
10,804
   
10,804
   
10,213
 
Retained earnings
    
29,593
   
28,894
   
27,413
 
TOTAL
    
43,335
   
42,636
   
40,536
 
Accumulated other comprehensive income
    
(934
)
  
164
   
996
 
Less: Treasury Stock, at cost 97,262 shares for 2005 and at
                   
December 31, 2004 and 96,962 shares at March 31, 2004
    
(2,011
)
  
(2,011
)
  
(2,005
)
                     
TOTAL STOCKHOLDERS' EQUITY
    
40,390
   
40,789
   
39,527
 
TOTAL LIABILITIES AND
                    
STOCKHOLDERS' EQUITY
  
$
506,422
  
$
499,347
  
$
468,831
  
 
2
 
CITIZENS FINANCIAL SERVICES, INC.
              
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
              
 
              
 
  
 Three Months Ended
(in thousands, except per share data)
  
 March 31
INTEREST INCOME:
              
Interest and fees on loans
  
$
5,919
  
$
5,348
  
Interest-bearing deposits with banks
    
-
   
5
 
Investment securities:
              
Taxable
    
792
   
892
 
Nontaxable
    
117
   
85
 
Dividends
    
51
   
62
 
     
   
 
TOTAL INTEREST INCOME
    
6,879
   
6,392
 
     
   
 
INTEREST EXPENSE:
              
Deposits
    
2,168
   
1,964
 
Borrowed funds
    
378
   
213
 
     
   
 
TOTAL INTEREST EXPENSE
    
2,546
   
2,177
 
     
   
 
NET INTEREST INCOME
    
4,333
   
4,215
 
Provision for loan losses
    
-
   
-
 
     
   
 
NET INTEREST INCOME AFTER
              
PROVISION FOR LOAN LOSSES
    
4,333
   
4,215
 
     
   
 
NON-INTEREST INCOME:
              
Service charges
    
673
   
731
 
Trust
    
121
   
127
 
Brokerage
    
38
   
54
 
Insurance
    
83
   
28
 
Investment securities gains, net
    
-
   
287
 
Earnings on bank owned life insurance
    
74
   
79
 
Other
    
121
   
90
 
               
TOTAL NON-INTEREST INCOME
    
1,110
   
1,396
 
           
 
NON-INTEREST EXPENSES:
              
Salaries and employee benefits
    
1,921
   
1,925
 
Occupancy
   
303
   
286
 
Furniture and equipment
    
175
   
169
 
Professional fees
    
145
   
154
 
Amortization of intangibles
    
144
   
109
 
Other
    
1,143
   
1,028
 
     
   
 
TOTAL NON-INTEREST EXPENSES
    
3,831
   
3,671
 
     
   
 
Income before provision for income taxes
    
1,612
   
1,940
 
Provision for income taxes
    
345
   
447
 
     
   
 
NET INCOME
  
$
1,267
  
$
1,493
  
 
              
 
              
     
   
 
Earnings Per Share
  
$
0.45
  
$
0.53
  
Cash Dividends Declared
  
$
0.200
  
$
0.190
  
               
3

Financial Highlights
          
   
2005
 
2004
  
Three Months Ended March 31
          
Net Income
  
$
1,267
  
$
1,493
  
Comprehensive Income
    
169
    
1,533
  
Per common share data:
              
Earnings per share
  
$
0.45
  
$
0.53
  
Cash Dividends declared
  
$
0.200
  
$
0.190
  
Performance Ratios:
              
Return on average assets (annualized)
    
1.01
%
  
1.29
%
Return on average equity (annualized)
    
12.41
%
  
15.72
%
               
               
               
At March 31
              
Assets
  
$
506,422
  
$
468,831
  
Investment securities:
              
Available for sale
    
94,611
    
109,618
 
Loans (net of unearned income)
    
368,642
    
317,423
  
Allowance for loan losses
    
3,856
    
3,874
  
Deposits
    
413,224
   
387,075
  
Stockholders' Equity
    
40,390
   
39,527
  
Non-performing assets
    
2,667
   
2,632
  
Average Leverage Ratio
    
7.90
%
  
8
%
Per common share data:
              
Book value
  
$
14.55
  
$
14.05
  
Market value (average of bid/ask price)
  
$
23.88
  
$
25.13
  
Market price to book value ratio
    
164.10
%
  
178.86
%
 

           
Cash Dividends
  
Common Stock Information:
  
Bid
 
Ask
 
Paid
  
               
Quarter Ended:
              
               
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
  
June 30, 2004
  
$
22.20
  
$
22.75
  
$
0.195
  
                     
March 31, 2004
  
$
25.00
  
$
25.25
  
$
0.190
  
December 31, 2003
  
$
23.85
  
$
24.15
  
$
0.190
  
September 30, 2003
  
$
24.75
  
$
25.50
  
$
0.185
  
June 30, 2003
  
$
27.75
  
$
28.00
  
$
0.185
  
 
4