-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, QnMj8oDtzAolEEIwNIpJLWxF20R3/YdlTls/eIZk9SLDFOKpncXOcd4LV6QHz8gx SnsGfLjLBOSZHPrf21LlhA== 0000950152-06-003132.txt : 20060412 0000950152-06-003132.hdr.sgml : 20060412 20060412162113 ACCESSION NUMBER: 0000950152-06-003132 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20060331 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20060412 DATE AS OF CHANGE: 20060412 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CITIZENS & NORTHERN CORP CENTRAL INDEX KEY: 0000810958 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232451943 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-16084 FILM NUMBER: 06756176 BUSINESS ADDRESS: STREET 1: 90-92 MAIN ST CITY: WELLSBORO STATE: PA ZIP: 16901 BUSINESS PHONE: 7172656171 MAIL ADDRESS: STREET 1: 90-92 MAIN ST CITY: WELLSBORO STATE: PA ZIP: 16901 8-K 1 l19633ae8vk.txt CITIZENS & NORTHERN CORPORATION 8-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) March 31, 2006 -------------- CITIZENS & NORTHERN CORPORATION ---------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 0-16084 23-2451943 - ---------------------------- ------------ ------------------ (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) 90-92 Main Street, Wellsboro, PA 16901 - ---------------------------------------- --------- (Address of Principal Executive Office) (Zip Code) Registrant's telephone number, including area code (570) 724-3411 -------------- N/A ----------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the three-month period ended March 31, 2006. On April 12, 2006, Citizens & Northern Corporation issued a press release titled "C&N Announces First Quarter 2006 Unaudited Financial Results," a copy of which is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. Also, Citizens & Northern Corporation's "Quarterly Report," a report that includes unaudited financial information, will be mailed to shareholders on or about April 19, 2006. A copy of the Quarterly Report is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (a) Not applicable. (b) Not applicable. (c) Not applicable. (d) Exhibits. Exhibit 99.1: Press Release issued by Citizens & Northern Corporation dated April 12, 2006, titled "C&N Announces First Quarter 2006 Unaudited Financial Results." Exhibit 99.2: Quarterly Report, which includes unaudited financial information. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly authorized. CITIZENS & NORTHERN CORPORATION Date: 4/12/06 By: Craig G. Litchfield /s/ ----------------------- Chairman, President and Chief Executive Officer EX-99.1 2 l19633aexv99w1.txt EX-99.1 Exhibit 99.1 PRESS RELEASE CITIZENS & Northern BANK Contact: Yvonne Gill April 12, 2006 570-724-0247 yvonneg@cnbankpa.com C&N ANNOUNCES FIRST QUARTER 2006 UNAUDITED FINANCIAL RESULTS FOR IMMEDIATE RELEASE: Wellsboro, PA - Citizens & Northern Corporation announced the unaudited, consolidated financial results for Citizens & Northern Corporation and subsidiaries for the three months ended March 31, 2006, which are highlighted below. FINANCIAL HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2006: o Net Income was $2,820,000 for the three months ended March 31, 2006. In the first quarter 2005, net income was $3,295,000, or 14.4% higher than in the first quarter 2006. Net Income Per Share was $0.34 (Basic and Diluted) for the first quarter 2006, as compared to $0.40 (Basic) and $0.39 (Diluted) for the first quarter 2005. Net income for the first quarter 2006 was also lower than fourth quarter 2005 earnings of $3,104,000, or $0.37 Per Share (Basic and Diluted). o Return on Average Assets was 0.97% for the first quarter 2006, as compared to 1.17% for the first quarter 2005. Return on Average Equity was 8.51% for the first quarter 2006, as compared to 9.87% for the first quarter 2005. o Cash Dividends declared by C&N increased by 4.4% for the first quarter 2006 over the first quarter 2005, to $0.24 per share. o Total assets amounted to $1,160,644,000 as of March 31, 2006, up 2.7% from March 31, 2005. The increase in assets resulted almost exclusively from C&N's acquisition of First State Bank (through the acquisition of Canisteo Valley Corporation, the parent company of First State Bank) in the third quarter 2005. o Net loans increased 8.8%, to $644,071,000 at March 31, 2006 from $592,118,000 at March 31, 2005. Excluding First State Bank's net loans balance as of March 31, 2006, the increase in net loans was 4.9%. o Total deposits and repo sweep accounts increased 10.1%, to $777,078,000 at March 31, 2006 from $705,786,000 at March 31, 2005. Excluding First State Bank, the increase in deposits and repo sweeps was 4.9%. o Assets under management by C&N's Trust and Financial Management Group increased 19.9%, to $474,708,000 at March 31, 2006 from $395,843,000 at March 31, 2005. In the first quarter 2006, Trust assets under management increased as a result of adding some significant new retirement plan accounts, as well as by stock market appreciation. o Tangible Equity/Tangible Assets Ratio was 10.78% at March 31, 2006. Banking regulatory agencies consider 5% to be the minimum threshold, for purposes of this ratio, for banks to be considered well capitalized. Despite growth in loans and deposits, the net interest margin decreased $151,000, or 1.7%, in the first quarter 2006 as compared to the first quarter 2005. Increases in short-term interest rates contributed to a 22.2% increase in interest expense, while relatively flat long-term rates dampened the positive earnings effect of the growth in loans. Further, in light of the flat (and at times, inverted) yield curve, the opportunities were very limited for earning a positive spread from maintaining borrowed funds and holding investment securities. Accordingly, the balance of available-for-sale securities at March 31, 2006 was $37,099,000 lower than the balance one year earlier, and the March 31, 2006 balance of short-term (excluding customer repurchase agreements) and long-term borrowings was $41,155,000 lower than one year earlier. Noninterest expense increased $715,000 (10.0%) in the first quarter 2006 over 2005. Much of the increase in noninterest expense in the first quarter 2006 was attributable to operations and start-up costs in new markets, as noninterest expense for First State Bank, the Jersey Shore office (which opened in August 2005) and the Old Lycoming Township office (which opened in March 2006) totaled $627,000. Excluding these amounts, the net increase in noninterest expense in the first quarter 2006 over the first quarter 2005 was 1.2%. The provision for loan losses was $600,000 in the first quarter 2006, an increase of $225,000 over the first quarter 2005. The higher loan loss provision in the first quarter 2006 was mainly due to estimates of possible future charge-offs on some large commercial loans. Helping to offset some of effects of tighter margins and higher expenses were increases in realized securities gains and a lower income tax provision. Net realized gains from sales of securities amounted to $1,315,000 in the first quarter 2006, an increase of $249,000 over net securities gains of $1,066,000 for the first quarter 2005. Most of the gains realized in the first quarter 2006 were from sales of bank stocks. The income tax provision was $426,000 for the first quarter 2006, or 13.1% of pre-tax earnings, down from the first quarter 2005 income tax provision of $707,000. Citizens & Northern Corporation is the parent company of Citizens & Northern Bank and First State Bank. Citizens & Northern Bank is a local, independent community bank providing complete financial, investment and insurance services through 21 full service offices throughout Tioga, Bradford, Sullivan and Lycoming counties in Pennsylvania. First State Bank provides banking services through its offices in Canisteo and South Hornell, NY. C&N can be found on the worldwide web at www.cnbankpa.com. First State Bank can be found on the web at www.fsbcanisteo.com. The Company's stock is listed on NASDAQ Capital Market Securities under the symbol CZNC. EX-99.2 3 l19633aexv99w2.txt EX-99.2 EXHIBIT 99.2 CITIZENS & NORTHERN CORPORATION 90-92 Main Street, P.O. Box 58 Wellsboro, PA 16901 Phone: (570) 724-3411 Fax: (570) 723-8097 E-Mail: cnemail@cnbankpa.com Web Page: http://www.cnbankpa.com -------------------- ----------------------- Stock Symbol: CZNC Chartered 1864 Member FEDERAL DEPOSIT INSURANCE CORP MARCH 31, 2006 QUARTERLY REPORT Dear Shareholder: As former US Supreme Court Justice Oliver Wendell Holmes, Jr. once said, "I find the great thing in this world is not so much where we stand, as in what direction we are moving. To reach the port of heaven, we must sail sometimes with the wind and sometimes against it, but we must sail, and not drift, nor lie at anchor." That sentiment very much applies to your company at this juncture in its history. We have set out on an ambitious course of building a significant market share of the Lycoming County market with the completion of our 4th and 5th community offices in the past six months (Jersey Shore and Old Lycoming). In the past five years we have opened five community offices in Lycoming County for a total of six. We have also opened and occupied during the first quarter of 2006 a new Administration Building, which provides the space we have been lacking for the support staff. Additionally, we have taken on the challenge of bringing First State Bank of Canisteo, New York into the C&N family. Our Trust and Financial Management Group has restructured its client delivery process and has grown assets under management by nearly 20% since last year. We are creating opportunities for your company's future at the very time the Federal Reserve is raising short-term interest rates. The rate curve is nearly flat: i.e., there is very little difference between over-night borrowing rates and the ten and thirty year rates. Fortunately, loan rates have risen and demand is strong due to our Lycoming County and commercial lending initiatives. However, there is no opportunity to leverage our equity through borrowings that can be invested in fixed income securities, thus the security portfolio is contracting. The financial results for the quarter are not what we have been used to, and are affected by both the shrinking margins and the additional overhead expenses associated with our growth strategy. As we sail into the future awaiting a more favorable interest environment, we are actively taking steps to position C&N for future profitable growth. Thank you for your continued support. Craig G. Litchfield Chairman, President & CEO CITIZENS & NORTHERN CORPORATION BOARD OF DIRECTORS Craig G. Litchfield Chairman of the Board Dennis F. Beardslee Leo F. Lambert R. Robert DeCamp Edward L. Learn Jan E. Fisher Edward H. Owlett, III R. Bruce Haner Leonard Simpson Susan E. Hartley James E. Towner Karl W. Kroeck Ann M. Tyler DIRECTOR EMERITUS F. David Pennypacker CITIZENS & NORTHERN BANK OFFICES 428 S. Main Street, ATHENS, PA 18810 570-888-2291 111 Main Street, DUSHORE, PA 18614 570-928-8124 Main Street, EAST SMITHFIELD, PA 18817 570-596-3131 104 Main Street, ELKLAND, PA 16920 814-258-5111 230-232 Railroad Street, JERSEY SHORE, PA 17740 570-398-4555 102 E. Main Street, KNOXVILLE, PA 16928 814-326-4151 Main Street, LAPORTE, PA 18626 570-946-4011 Main Street, LIBERTY, PA 16930 570-324-2331 1085 S. Main Street, MANSFIELD, PA 16933 570-662-1111 RR 2 Box 3036, MONROETON, PA 18832 570-265-2157 3461 Rte.405 Highway, MUNCY, PA 17756 570-546-6666 Thompson Street, RALSTON, PA 17763 570-995-5421 1827 Elmira Street, SAYRE, PA 18840 570-888-2220 2 E. Mountain Ave., SO. WILLIAMSPORT, PA 17702 570-601-3016 41 Main Street, TIOGA, PA 16946 570-835-5236 428 Main Street, TOWANDA, PA18848 570-265-6171 Court House Square, TROY, PA 16947 570-297-2159 90-92 Main Street, WELLSBORO, PA 16901 570-724-3411 130 Court Street, WILLIAMSPORT, PA 17701 570-320-0100 1510 Dewey Ave., WILLIAMSPORT, PA 17702 570-323-9305 Route 6, WYSOX, PA 18854 570-265-9148 TRUST & FINANCIAL MANAGEMENT GROUP 90-92 Main Street, WELLSBORO, PA 16901 800-487-8784 428 Main Street, TOWANDA, PA 18848 888-987-8784 503 N. Elmira Street, SAYRE, PA 18840 888-760-8192 3461 Rte 405 Highway, MUNCY, PA 17756 570-546-6666 130 Court Street, WILLIAMSPORT, PA 17701 570-601-6000 ACCOUNT SERVICES - 90-92 Main St., Wellsboro, PA 16901 800-726-2265 BANKCARD SERVICES - 10 Nichols St., Wellsboro PA 16901 800-676-6639 CASH MANAGEMENT / INTERNET BANKING - 10 Nichols St., Wellsboro, PA 16901 570-724-0266 www.cnbankpa.com FUNDS MANAGEMENT - 10 Nichols St., Wellsboro, PA 16901 800-577-9397 www.fmt@cnbankpa.com C&N FINANCIAL SERVICES CORPORATION - 68 Main Street, Wellsboro, PA 866-ASK-CNFS www.cnfinancialservices.com CANISTEO VALLEY CORPORATION 3 Main Street, Canisteo, NY 14823 607-698-4295 FIRST STATE BANK OFFICES 3 Main Street, CANISTEO, NY 14823 607-698-4295 6250 County Route 64, HORNELL, NY 14843 607-324-4081 www.fsbcanisteo.com CONSOLIDATED STATEMENT OF INCOME (In Thousands, Except Per Share Data) (Unaudited)
3 MONTHS ENDED MARCH 2006 2005 (CURRENT) (PRIOR YR) --------- ---------- Interest and Dividend Income $ 15,863 $ 14,693 Interest Expense 7,278 5,957 - --------------------------------------------------------------------------------------------- Interest Margin 8,736 8,585 Provision for Loan Losses 600 375 - --------------------------------------------------------------------------------------------- Interest Margin After Provision for Loan Losses 8,361 7,985 Other Income 1,789 1,703 Realized Gains on Securities, Net 1,315 1,066 Other Expenses 7,843 7,128 - --------------------------------------------------------------------------------------------- Income Before Income Tax Provision 4,002 3,246 Income Tax Provision 426 707 - --------------------------------------------------------------------------------------------- NET INCOME $ 2,820 $ 3,295 ============================================================================================= PER SHARE DATA (**): Net Income - Basic $0.34 $0.40 Net Income - Diluted $0.34 $0.39 Dividend Per Share $0.24 $0.23 Number Shares Used in Computation - Basic 8,296,922 8,275,172 Number Shares Used in Computation - Diluted 8,335,009 8,346,220
CONSOLIDATED BALANCE SHEET (In Thousands, Except Per Share Data) (Unaudited)
MARCH 31, MARCH 31, 2006 2005 ---- ---- ASSETS Cash & Due from Banks $ 21,462 $ 13,285 Available-for-Sale Securities 427,975 465,074 Loans, Net 644,071 592,118 Intangible Assets 3,321 - Other Assets 63,815 59,184 - --------------------------------------------------------------------------------------------- TOTAL ASSETS $ 1,160,644 $1,129,661 ============================================================================================= LIABILITIES Deposits $ 752,714 $ 684,619 Repo Sweep Accounts 24,364 21,167 - --------------------------------------------------------------------------------------------- Total Deposits and Repo Sweeps 777,078 705,786 Borrowed Funds 245,239 286,394 Other Liabilities 8,279 8,656 - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES 1,030,596 1,000,836 - --------------------------------------------------------------------------------------------- SHAREHOLDERS' EQUITY Shareholders' Equity, Excluding Net Unrealized Gains/Losses on Available-for sale Securities 127,716 122,875 Net Unrealized Gains/Losses on Available- for-sale Securities (*) 2,332 5,950 - --------------------------------------------------------------------------------------------- TOTAL SHAREHOLDERS' EQUITY 130,048 128,825 - --------------------------------------------------------------------------------------------- TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $ 1,160,644 $1,129,661 =============================================================================================
CONSOLIDATED FINANCIAL HIGHLIGHTS (In Thousands, Except Per Share Data) (Unaudited)
3 MONTHS ENDED % MARCH INCREASE 2006 2005 (DECREASE) ---- ---- ---------- EARNINGS PERFORMANCE Net Income $ 2,820 $ 3,295 -14.42% Return on Average Assets 0.97% 1.17% -17.09% Return on Average Assets, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 0.98% 1.18% -16.95% Return on Average Equity 8.51% 9.87% -13.78% Return on Average Equity, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 8.80% 10.70% -17.76% BALANCE SHEET HIGHLIGHTS Total Assets $ 1,160,644 $ 1,129,661 2.74% Available-for-Sale Securities 427,975 465,074 -7.98% Loans (Net) 644,071 592,118 8.77% Allowance for Loan Losses 8,915 6,925 28.74% Deposits and Repo Sweep Accounts 777,078 705,786 10.10% Trust Assets Under Management 474,708 395,843 19.92% SHAREHOLDERS' VALUE (PER SHARE) (**) Net Income - Basic $ 0.34 $ 0.40 -15.00% Net Income - Diluted $ 0.34 $ 0.39 -12.82% Dividends $ 0.24 $ 0.23 4.35% Book Value $ 15.69 $ 15.54 0.97% Book Value, Excluding Unrealized Gains/Losses on Available-for- sale Securities (***) $ 15.41 $ 14.82 3.98% Market Value (Last Trade) $ 24.20 $ 28.51 -15.12% Market Value / Book Value 154.24% 183.46% -15.93% Market Value / Book Value, Excluding Unrealized Gains/Losses on Available-for-Sale Securities (***) 157.04% 192.38% -18.37% Price Earnings Multiple 17.97 17.82 -0.17% Dividend Yield 3.97% 3.23% 22.91% SAFETY AND SOUNDNESS Tangible Equity / Tangible Assets, Excluding Unrealized Gains/Losses on Available-for- sale Securities 10.78% 10.96% -1.64% Nonperforming Assets / Total Assets 0.79% 0.77% 2.60% Allowance for Loan Losses / Total Loans 1.37% 1.16% 18.10% Risk Based Capital Ratio 18.06% 18.73% -3.58% AVERAGE BALANCES Average Assets $ 1,160,356 $ 1,131,167 2.58% Average Assets, Excluding Unrealized Gains/Losses on Available-for-sale Securities 1,152,988 1,115,540 3.36% Average Equity 132,609 133,494 -0.66% Average Equity, Excluding Unrealized Gains/Losses on Available-for-sale Securities 128,173 123,180 4.05%
(*) Net unrealized gains/losses on available-for-sale securities are presented as "Accumulated Other Comprehensive Income" in the annual and quarterly financial statements filed with the Securities and Exchange Commission. (**) For purposes of per share calculations, the market value and number of outstanding shares have been retroactively adjusted for the effects of 1% stock dividends issued in January of each year presented. (***) Generally accepted accounting principles ("GAAP") require that available-for-sale securities be reported at fair value, with unrealized gains and losses excluded from earnings and reported separately through shareholders' equity, net of tax. Management believes there is an inherent mismatch between the income statement and balance sheet related to unrealized gains/losses that may create a material inconsistency in the calculation of earnings-based ratios. Further, the amount of unrealized gains or losses may vary widely from period-to-period, depending on the financial markets as a whole and interest rate movements. Therefore, management has provided these "non-GAAP" ratios because we believe they provide meaningful information for evaluating the Corporation's financial position and results of operations. -----END PRIVACY-ENHANCED MESSAGE-----