EX-99.1 2 fourthquarter07pressrelease.htm PRESS REKEASE FOURTH QUARTER 2007 fourthquarter07pressrelease.htm
 
 
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 Record Earnings for 2007

MANSFIELD, PENNSYLVANIA— January 24, 2008 – Citizens Financial Services, Incorporated (OTC BB: CZFS), parent company of First Citizens National Bank, has released its unaudited financial performance for the fourth quarter of 2007.

Net income for 2007 totaled $6,736,000 compared with $5,800,000 last year, representing an increase of $936,000, or 16.1%.  Net income for the three months ended December 31, 2007 was $1,842,000 which compares to $1,490,000 for the fourth quarter last year.  This is an increase of $352,000, or 23.6%.    Earnings per share for the year ended December 31, 2007 and 2006 were $2.37 and $2.02 per share, respectively, representing a 17.3% increase.  Return on equity for the comparable periods were 14.38% and 13.21%, respectively.

Net interest income before the provision for loan losses totaled $19,102,000, an increase of $1,204,000 compared with last year.  CEO and President Randall E. Black stated,“During the fourth quarter, the Federal Reserve continued to decrease the federal funds rate in an attempt to balance the risks of economic growth against worries about inflation.  The Federal Reserve’s action resulted in a 25 basis point decrease in October and another 25 basis point decrease in December in the federal funds rate.  These decreases have had a positive impact on improving our net interest margin by reducing short term deposit and borrowing costs compared to the reduction of interest rates on our interest sensitive loan portfolio,” stated Mr. Black.

Compared to the year ended December 31, 2006, non-interest expenses increased a modest $287,000, or 1.9%.  “2007 has been an outstanding year for our organization.  Our record financial performance reiterates our commitment to create shareholder value.  Contributing greatly to our success and record financial performance was our ongoing ability in becoming a more efficient organization while simultaneously maintaining outstanding service to our customers,”stated Mr. Black.

Since December of last year, total assets have increased $18.9 million, or 3.3%.  At the end of December total assets were $591.0 million, which compares to $572.2 million as of December 31, 2006.  Since last December, net loans have increased $8.3 million, an increase of 2.0%.  Total deposits have increased $9.5 million while borrowed funds have increased $4.6 million.

Stockholders’ equity, excluding accumulated other comprehensive income, has increased $3.6 million, or 7.9% since last December.  Book value per share at December 31, 2007 was $17.30 compared with $16.04 last year, an increase of 7.8%.  In January, a cash dividend of $.23 per share was declared and will be paid to shareholders on January 25, 2008 to record holders as of January 14, 2008, which represents an increase of 4.5% over the January 2007 dividend.

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)
    
     
 
December 31,
December 31,
(in thousands except share data)
2007
2006
ASSETS:
    
Cash and due from banks:
    
  Noninterest-bearing
 $                10,374  
 $              10,007  
  Interest-bearing
                           15  
                           8  
Total cash and cash equivalents
                   10,389  
                 10,015  
Available-for-sale securities
                 120,802  
               109,743  
Loans (net of allowance for loan losses:
    
  2007, $4,197; 2006, $3,876)
                 419,182  
               410,897  
Premises and equipment
                   12,538  
                 12,892  
Accrued interest receivable
                      2,522  
                   2,458  
Goodwill
                      8,605  
                   8,605  
Bank owned life insurance
                      8,378  
                   8,047  
Other assets
                      8,613  
                   9,511  
     
TOTAL ASSETS
 $              591,029  
 $            572,168  
     
LIABILITIES:
    
Deposits:
    
  Noninterest-bearing
 $                50,944  
 $              48,509  
  Interest-bearing
                 405,084  
               398,006  
Total deposits
                 456,028  
               446,515  
Borrowed funds
                   80,348  
                 75,775  
Accrued interest payable
                      2,199  
                   2,287  
Other liabilities
                      3,926  
                   4,091  
TOTAL LIABILITIES
                 542,501  
               528,668  
STOCKHOLDERS' EQUITY:
    
Common Stock $1.00 par value; authorized, 10,000,000 shares; issued
    
  3,020,538 and 2,992,896 shares for 2007 and 2006, respectively
                      3,020  
                   2,993  
Additional paid-in capital
                   12,511  
                 11,933  
Retained earnings
                   37,590  
                 34,007  
Accumulated other comprehensive loss
                       (348)
                  (1,737)
Unearned restricted stock:  3,149 and 0 shares for 2007 and 2006, respectively
                         (72)
                           -  
Treasury Stock, at cost, 194,883 and 172,954 shares for 2007 and 2006, respectively
                   (4,173)
                  (3,696)
TOTAL STOCKHOLDERS' EQUITY
                   48,528  
                 43,500  
TOTAL LIABILITIES AND
    
   STOCKHOLDERS' EQUITY
 $              591,029  
 $            572,168  
 

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)
  
2007
    
2006
    
2007
    
2006
  
INTEREST INCOME:
                        
Interest and fees on loans
   $ 7,787     $ 7,461     $ 30,398     $ 28,101  
Interest-bearing deposits with banks
     1       -       5       -  
Investment securities:
                                
    Taxable
     1,115       978       4,316       3,526  
    Nontaxable
     267       224       958       903  
    Dividends
     90       98       347       321  
TOTAL INTEREST INCOME
     9,260       8,761       36,024       32,851  
INTEREST EXPENSE:
                                
Deposits
     3,258       3,295       13,363       11,685  
Borrowed funds
     899       880       3,559       3,268  
TOTAL INTEREST EXPENSE
     4,157       4,175       16,922       14,953  
NET INTEREST INCOME
     5,103       4,586       19,102       17,898  
Provision for loan losses
     140       105       365       330  
NET INTEREST INCOME AFTER
                                
    PROVISION FOR LOAN LOSSES
     4,963       4,481       18,737       17,568  
NON-INTEREST INCOME:
                                
Service charges
     841       799       3,210       3,140  
Trust
     132       115       520       487  
Brokerage and insurance
     45       29       132       260  
Investment securities (losses) gains, net
     (53 )     -       (29 )     4  
Gains on sales of foreclosed properties
     -       33       396       80  
Earnings on bank owned life insurance
     86       80       331       304  
Other
     138       124       525       441  
TOTAL NON-INTEREST INCOME
     1,189       1,180       5,085       4,716  
NON-INTEREST EXPENSES:
                                
Salaries and employee benefits
     2,130       1,948       8,386       8,026  
Occupancy
     274       278       1,151       1,123  
Furniture and equipment
     134       151       539       593  
Professional fees
     176       180       645       551  
Amortization of intangibles
     36       36       144       252  
Other
     1,042       1,108       4,449       4,482  
TOTAL NON-INTEREST EXPENSES
     3,792       3,701       15,314       15,027  
Income before provision for income taxes
     2,360       1,960       8,508       7,257  
Provision for income taxes
     518       470       1,772       1,457  
NET INCOME
   $ 1,842     $ 1,490     $ 6,736     $ 5,800  
                                 
Earnings Per Share
   $ 0.65     $ 0.52     $ 2.37     $ 2.02  
Cash Dividends Paid Per Share
   $ 0.23     $ 0.22     $ 0.90     $ 0.86  
                                 
Weighted average number of shares outstanding
     2,832,834       2,853,706       2,840,973       2,871,766  



Financial Highlights
            
             
(Unaudited - In thousands, except per share and ratio data)
            
   
2007
    
2006
  
Twelve Months Ended December 31
            
Net Income
   $ 6,736     $ 5,800  
Comprehensive Income
     8,125       6,689  
Per common share data:
                
    Earnings per share
   $ 2.37     $ 2.02  
    Cash dividends paid per share
   $ 0.90     $ 0.86  
Performance Ratios:
                
    Return on average assets (annualized)
     1.16 %     1.05 %
    Return on average equity (annualized)
     14.38 %     13.21 %
                 
                 
Three Months Ended December 31
                
Net Income
   $ 1,842     $ 1,490  
Per common share data:
                
    Earnings per share
   $ 0.65     $ 0.52  
    Cash dividends paid per share
   $ 0.23     $ 0.22  
Performance Ratios:
                
    Return on average assets (annualized)
     1.26 %     1.05 %
    Return on average equity (annualized)
     15.26 %     13.30 %
                 
                 
At December 31
                
Assets
   $ 591,029     $ 572,168  
Investment securities:
                
    Available for sale
     120,802       109,743  
Loans (net of unearned income)
     423,379       414,773  
Allowance for loan losses
     4,197       3,876  
Deposits
     456,028       446,515  
Stockholders' Equity
     48,528       43,500  
Non-performing assets
     2,393       4,116  
Average Leverage Ratio
     8.20 %     7.82 %
Per common share data:
                
    Book value
   $ 17.30     $ 16.04  
    Market value (average of bid/ask price)
     20.23       22.75  
    Market price to book value ratio
     116.96 %     141.82 %
 

 
Common Stock Information:
      
     
Cash Dividends
Quarter Ended:
Bid
Ask
Paid
       
December 31, 2007
$20.00
$20.45
$0.230
September 30, 2007
$21.50
$22.00
$0.225
June 30, 2007
$21.20
$22.50
$0.225
March 31, 2007
$22.55
$23.00
$0.220
       
December 31, 2006
$22.00
$23.50
$0.220
September 30, 2006
$22.00
$23.00
$0.215
June 30, 2006
$21.60
$23.00
$0.215
March 31, 2006
$21.35
$23.25
$0.210