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Citizens Financial Services, Inc. Reports Unaudited Full Year and Fourth Quarter 2018 Financial Results

MANSFIELD, Pa., Jan. 25, 2019 /PRNewswire/ -- Citizens Financial Services, Inc. (OTC Pink: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three months and year ended December 31, 2018.

Highlights

  • Net income was $18.0 million for 2018, which is 38.5% higher than 2017's net income. The increase in net income is due to an increase in net interest income and the effects of the Tax Cuts and Jobs Act, enacted on December 22, 2017, which lowered the federal corporate income tax rate from 35% to 21% effective January 1, 2018. The effective tax rate for 2018 was 15.9% compared to 31.6% for 2017. The effective tax rate for 2017 was impacted by a one-time adjustment to our net deferred taxes of $1.5 that was charged to income tax expense as a result of the Tax Cuts and Jobs Act. The effective tax rate for 2017, excluding the adjustment would have been 23.6%.
                                                                
  • Net income was $4.5 million for the three months ended December 31, 2018, which is 73.4% higher than the net income for 2017's comparable period. The effective tax rate for the three months ended December 31, 2018 was 15.8% compared to 53.0% in the comparable period in 2017 due to the Tax Cuts and Jobs Act.  If you exclude the one-time adjustment previously mentioned the effective tax rate for the three months ended December 31, 2017 would have been 25.3%.
                                                      
  • Net interest income before the provision for loan losses was $47.2 million for the year ended December 31, 2018, which was an increase of $4.9 million, or 11.7%, compared to 2017.

  • Net loan growth totaled $79.7 million in 2018, or 8.1%. Growth for 2018 was impacted by the pay-off of approximately $15.0 million of participation loans, the proceeds of which were utilized to fund organic growth.  
                                                 
  • Return on average equity for the three months (annualized) and the year ended December 31, 2018 was 12.65% and 13.00%, respectively, compared to 7.82% and 10.04% for the three months (annualized) and the year ended December 31, 2017, respectively.
                                                        
  • Return on average tangible equity for the three months (annualized) and the year ended December 31, 2018 was 15.33% and 15.87%, respectively, compared to 9.49% and 12.22% for the three months (annualized) and the year ended December 31, 2017, respectively. (See reconciliation of GAAP and Non-GAAP measures at the end of the press release.)
                                                               
  • Return on average assets for the three months (annualized) and the year ended December 31, 2018 was 1.27% and 1.29%, respectively, compared to 0.80% and 1.03% for the three months (annualized and the year ended December 31, 2017, respectively.

2018 Compared to 2017

  • For 2018, net income totaled $18,034,000 compared to net income of $13,025,000 for 2017, an increase of $5,009,000 or 38.5%.  Basic earnings per share of $5.14 for 2018 compares to $3.70 for 2017.  The Tax Cut and Jobs Act had both a positive impact on 2018's financial results and had a detrimental impact on 2017 earnings.
                                                          
  • Net interest income before the provision for loan loss for 2018 totaled $47,184,000 compared to $42,254,000 for 2017, resulting in an increase of $4,930,000, or 11.7%. Average interest earning assets increased $143.2 million in 2018 compared to last year.  Average loans increased $160.9 million while average investment securities decreased $22.2 million. The tax effected net interest margin for 2018 was 3.66% compared to 3.80% for 2017. A significant portion of the margin decrease from 2017 to 2018 is attributable to the change in the Federal corporate tax rate from 35% to 21%.
                                                         
  • The provision for loan losses for 2018 was $1,925,000 compared to $2,540,000 for 2017, a decrease of $615,000.  The decreased provision primarily reflects the lower level of loan growth experienced during 2018 compared to 2017.
                                                                  
  • Total non-interest income was $7,735,000 for 2018, which is $921,000 less than non-interest income of $8,656,000 for 2017. Decreases in security gains as a result of selling the majority of the Company's equity investments in 2017 and gains on loans sold were offset by increases in service charge income and brokerage and insurance commissions.
                                                     
  • Total non-interest expenses for 2018 totaled $31,557,000 compared to $29,314,000 for the same period last year, which is an increase of $2,243,000, or 7.7%.  Salaries and benefits increased $1,439,000 primarily due to merit increases and branch and loan production office expansion in our central and south central market areas. Occupancy expenses increased as a result of branch expansions. Professional fees increased as a result of an increase in legal fees. The tax effected efficiency ratio for 2018 was 55.04% compared to 54.82% for 2017 and was impacted by the change in the Federal corporate tax rate from 35% to 21%. 
                                                      
  • The provision for income taxes decreased $2,628,000 when comparing 2018 to 2017. Of this decrease, $1,531,000 is attributable to the Tax Cuts and Jobs Act and the immediate write-down of deferred tax assets due to the change in the corporate tax rate that occurred in 2017. The remaining decrease is attributable to the lowered Federal corporate tax rate from 35% to 21%. 

Fourth Quarter of 2018 Compared to the Fourth Quarter of 2017

  • For the three months ended December 31, 2018, net income totaled $4,515,000 which compares to net income of $2,604,000 for the comparable period in 2017, an increase of $1,911,000 or 73.4%. Net income for the fourth quarter of 2017 was significantly impacted by the write-down of net deferred tax assets associated with the Tax Cuts and Jobs Act. Basic earnings per share of $1.29 for three months ended December 31, 2018 compares to $0.74 for the 2017 comparable period. Annualized return on equity for the three months ended December 31, 2018 and 2017 was 12.65% and 7.82%, respectively, while annualized return on assets was 1.27% and 0.80%, respectively.
                                                         
  • Net interest income before the provision for loan loss for the three months ended December 31, 2018 totaled $12,243,000 compared to $11,236,000 for the three months ended December 31, 2017, resulting in an increase of $1,007,000, or 9.0%. Average interest earning assets increased $121.6 million for the three months ended December 31, 2018 compared to the same period last year.  Average loans increased $132.8 million while average investment securities decreased $16.9 million. The tax effected net interest margin for the three months ended December 31, 2018 was 3.73% compared to 3.88% for the same period last year, which was impacted by the change in tax rates between periods.
                                                            
  • The provision for loan losses for the three months ended December 31, 2018 was $625,000 compared to $800,000 for the comparable period in 2017, a decrease of $175,000.  The decreased provision primarily reflects the lower net loan growth experienced during the three months of 2018 compared to the same period in 2017.
                                                        
  • Total non-interest income was $1,977,000 for the three months ended December 31, 2018, which is $835,000 less than the comparable period last year. Decreases in security gains as a result of selling the majority of the Company's equity investments in the fourth quarter of 2017 and gains on loans sold were offset by increases in service charge income and brokerage and insurance commissions.     
                                                 
  • Total non-interest expenses for the three months ended December 31, 2018 totaled $8,235,000 compared to $7,710,000 for the same period last year, which is an increase of $525,000, or 6.8%.  Salaries and benefits increased $218,000 primarily due to the increased costs associated with merit increases and branch and loan production office expansion. Professional fees increased as a result of an increase in legal fees.
                                                             
  • The provision for income taxes decreased $2,089,000 when comparing the three months ended December 31, 2018 to the same period in 2017.  A portion of the decrease, $1,531,000 is attributable to the Tax Cuts and Jobs Act and the immediate write-down of deferred tax assets due to the change in the Federal corporate tax rate that occurred in the fourth quarter of 2017. The remaining decrease is attributable to the lowered Federal corporate tax rate from 35% to 21%.

Balance Sheet and Other Information:

  • At December 31, 2018, total assets were $1.43 billion, compared to $1.36 billion at December 31, 2017. The loan to deposit ratio as of December 31, 2018 was 91.29% compared to 90.55% as of December 31, 2017.
                                                
  • Available for sale securities of $241.0 million at December 31, 2018 decreased $13.8 million from December 31, 2017. Interest bearing time deposits with other banks increased $5.2 million to $15.5 million at December 31, 2018.
                                                      
  • Net loans as of December 31, 2018 totaled $1.07 billion and increased $79.7 million from December 31, 2017, as we continue to benefit from our expansions into the central and southcentral Pennsylvania markets. The growth in 2018 was in commercial, agricultural and construction relationships, which continues the trend from 2017.
                                              
  • The allowance for loan losses totaled $12,884,000 at December 30, 2018 which is an increase of $1,694,000 from December 31, 2017.  The increase is due to recording a provision for loan losses of $1,925,000 and recoveries of $134,000, offset by charge-offs of $365,000.  Net charge-offs as a percent of total loans for 2018 was .02%.  The allowance as a percent of total loans was 1.19% as of December 31, 2018 compared to 1.12% as of December 31, 2017. For the year, non-performing assets increased $2.5 million.
                                                      
  • Deposits increased $80.2 million from December 31, 2017, to $1.19 billion at December 31, 2018. We issued $20.0 million in brokered certificates of deposit in the third quarter of 2018, which contributed to a portion of the deposit growth. The remaining growth was primarily attributable to increases in municipal and business deposits. Borrowed funds decreased $23.5 million from December 31, 2017 to $91.2 million at December 31, 2018 as a result of the growth in deposits.   
                                                  
  • Stockholders' equity totaled $139.2 million at December 31, 2018, compared to $129.0 million at December 31, 2017, an increase of $10,218,000.  The increase was attributable to net income of $18.0 million for 2016, offset by cash dividends of $6.1 million and net treasury stock activity of $1,029,000.  As a result of changes in interest rates impacting the fair value of investment securities, the unrealized loss on available for sale investment securities, net of tax, increased $706,000 from December 31, 2017.

Dividend Declared

On December 4, 2018, the Board of Directors declared a cash dividend of $0.440 per share, which was paid on December 28, 2018 to shareholders of record at the close of business on December 14, 2018. The quarterly cash dividend is an increase of 3.3% over the regular cash dividend of $0.426 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2018.

Citizens Financial Services, Inc. has nearly 1,700 shareholders, the majority of whom reside in markets where its 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 FINANCIAL HIGHLIGHTS





(UNAUDITED)





(Dollars in thousands, except per share data)






As of or For The

As of or For The


Three Months Ended

Year Ended


December 31

December 31


2018

2017

2018

2017

Income and Performance Ratios





Net Income 

$              4,515

$          2,604

$          18,034

$        13,025

Return on average assets (d)

1.27%

0.80%

1.29%

1.03%

Return on average equity (d)

12.65%

7.82%

13.00%

10.04%

Return on average tangible equity (b)(d)

15.33%

9.49%

15.87%

12.22%

Net interest margin (tax equivalent) (b)

3.73%

3.88%

3.66%

3.80%

Earnings per share - basic (c)

$                1.29

$            0.74

$               5.14

$            3.70

Earnings per share - diluted (c)

$                1.29

$            0.74

$               5.14

$            3.70

Cash dividends paid per share 

$              0.440

$          0.426

$            1.742

$          1.653











Asset quality





Allowance for loan and lease losses

$            12,884

$        11,190

$          12,884

$        11,190

Non-performing assets

$            14,393

$        11,845

$          14,393

$        11,845

Allowance for loan and lease losses/total loans

1.19%

1.12%

1.19%

1.12%

Non-performing assets to total loans

1.33%

1.18%

1.33%

1.18%

Net charge-offs to total loans (d)

0.05%

0.02%

0.02%

0.03%











Equity





Book value per share (c)

$              40.85

$          37.60

$            40.85

$          37.60

Tangible Book value per share (b) (c)

$              33.74

$          30.43

$            33.74

$          30.43

Market Value (Last trade of period)

$              55.55

$          63.00

$            55.55

$          63.00

Common shares outstanding

3,504,596

3,486,874

3,504,596

3,486,874

Number of shares used in computation - basic (c)

3,498,402

3,517,436

3,505,218

3,515,638

Number of shares used in computation - diluted (c)

3,498,565

3,517,849

3,507,206

3,517,362











Other





Total Risk Based Capital Ratio (a)

13.42%

13.20%

13.42%

13.20%

Tier 1 Risk Based Capital Ratio (a)

12.18%

12.04%

12.18%

12.04%

Common Equity Tier 1 Risk Based Capital Ratio (a)

11.47%

11.27%

11.47%

11.27%

Leverage Ratio

9.15%

9.18%

9.15%

9.18%

Average Full Time Equivalent Employees

258.7

251.6

261.3

252.8

Loan to Deposit Ratio

91.29%

90.55%

91.29%

90.55%











Balance Sheet Highlights 

December 31

December 31




2018

2017








Assets

$      1,430,712

$   1,361,886



Investment securities

241,526

254,782



Loans (net of unearned income)

1,081,883

1,000,525



Allowance for loan losses

12,884

11,190



Deposits

1,185,156

1,104,943



Stockholders' Equity

139,229

129,011








(a) Presented as projected for December 31, 2018  and actual for the remaining period



(b) See reconcilation of GAAP and  Non-GAAP financial measures at the end of the press release


(c) Prior period amounts were adjusted to reflect stock dividends.




(d) Annualized for the three month period





 

 

CITIZENS FINANCIAL SERVICES, INC.



CONSOLIDATED BALANCE SHEET



(UNAUDITED)







December 31

December 31

(in thousands except share data)

2018

2017

ASSETS:



Cash and due from banks:



  Noninterest-bearing

$           15,327

$         16,347

  Interest-bearing

1,470

2,170

Total cash and cash equivalents

16,797

18,517




Interest bearing time deposits with other banks

15,498

10,283




Equity securities

516

-




Available-for-sale securities

241,010

254,782




Loans held for sale

1,127

1,439




Loans (net of allowance for loan losses: $12,884 at December 31, 2018 and 



    $11,190 at December 31, 2017)

1,068,999

989,335




Premises and equipment

16,273

16,523

Accrued interest receivable

4,452

4,196

Goodwill

23,296

23,296

Bank owned life insurance

27,505

26,883

Other intangibles

1,623

1,953

Other assets

13,616

14,679




TOTAL ASSETS

$      1,430,712

$    1,361,886




LIABILITIES:



Deposits:



  Noninterest-bearing

$         179,971

$       171,840

  Interest-bearing

1,005,185

933,103

Total deposits

1,185,156

1,104,943

Borrowed funds

91,194

114,664

Accrued interest payable

1,076

897

Other liabilities

14,057

12,371

TOTAL LIABILITIES

1,291,483

1,232,875

STOCKHOLDERS' EQUITY:



Preferred Stock $1.00 par value; authorized



  3,000,000 shares; none issued in 2018 or 2017

-

-

Common stock



  $1.00 par value; authorized 25,000,000 shares at December 31, 2018 and 15,000,000 at     



  December 31, 2017: issued 3,904,212 at December 31, 2018 and  3,869,939 



  at December 31, 2017

3,904

3,870

Additional paid-in capital

53,099

51,108

Retained earnings

99,727

89,982

Accumulated other comprehensive loss

(3,921)

(3,398)

Treasury stock, at cost:  399,616 at December 31, 2018 and 383,065 shares 



  at December 31, 2017 

(13,580)

(12,551)

TOTAL STOCKHOLDERS' EQUITY

139,229

129,011

TOTAL LIABILITIES AND



   STOCKHOLDERS' EQUITY

$      1,430,712

$    1,361,886

 

 

CITIZENS FINANCIAL SERVICES, INC.





CONSOLIDATED STATEMENT OF INCOME





(UNAUDITED)






Three Months Ended

Year  Ended


December 31, 

December 31,

(in thousands, except per share data)

2018

2017

2018

2017

INTEREST INCOME:





Interest and fees on loans

$     13,470

$    11,447

$     50,458

$    42,127

Interest-bearing deposits with banks

101

57

319

186

Investment securities:





    Taxable

1,107

754

3,790

3,095

    Nontaxable

318

557

1,744

2,414

    Dividends

92

80

447

271

TOTAL INTEREST INCOME

15,088

12,895

56,758

48,093

INTEREST EXPENSE:





Deposits

2,215

1,227

6,910

4,625

Borrowed funds

630

432

2,664

1,214

TOTAL INTEREST EXPENSE

2,845

1,659

9,574

5,839

NET INTEREST INCOME

12,243

11,236

47,184

42,254

Provision for loan losses

625

800

1,925

2,540

NET INTEREST INCOME AFTER





    PROVISION FOR LOAN LOSSES

11,618

10,436

45,259

39,714

NON-INTEREST INCOME:





Service charges

1,212

1,133

4,667

4,456

Trust

157

159

705

755

Brokerage and insurance

219

176

790

635

Gains on loans sold

80

195

382

578

Equity security gains (losses), net

(9)

-

-

-

Available for sale security gains (losses), net

(11)

831

(19)

1,035

Earnings on bank owned life insurance

155

161

622

660

Other

174

157

588

537

TOTAL NON-INTEREST INCOME

1,977

2,812

7,735

8,656

NON-INTEREST EXPENSES:





Salaries and employee benefits

4,843

4,625

19,094

17,655

Occupancy 

520

509

2,126

1,988

Furniture and equipment

142

159

536

603

Professional fees

652

411

1,925

1,299

FDIC insurance

90

90

417

385

Pennsylvania shares tax

(15)

(62)

835

705

Amortization of intangibles

72

74

296

297

Merger and acquisition

-

65

-

165

ORE expenses

66

140

158

395

Other

1,865

1,699

6,170

5,822

TOTAL NON-INTEREST EXPENSES

8,235

7,710

31,557

29,314

Income before provision for income taxes

5,360

5,538

21,437

19,056

Provision for income taxes

845

2,934

3,403

6,031

NET INCOME

$        4,515

$      2,604

$      18,034

$    13,025






PER COMMON SHARE DATA:





Net Income - Basic

$          1.29

$        0.74

$          5.14

$        3.70

Net Income - Diluted

$          1.29

$        0.74

$          5.14

$        3.70

Cash Dividends Paid 

$        0.440

$      0.426

$        1.742

$      1.653






Number of shares used in computation - basic

3,498,402

3,517,436

3,505,218

3,515,638

Number of shares used in computation - diluted

3,498,565

3,517,849

3,507,206

3,517,362

 

 

CITIZENS FINANCIAL SERVICES, INC.






QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION





(UNAUDITED)






(in thousands, except share data)


Three Months Ended,




Dec 31

Sept 30

June 30,

March 31,

Dec 31


2018

2018

2018

2018

2017

Interest income

$     15,088

$      14,259

$      14,028

$      13,383

$      12,895

Interest expense

2,845

2,489

2,277

1,963

1,659

Net interest income

12,243

11,770

11,751

11,420

11,236

Provision for loan losses

625

475

325

500

800

Net interest income after provision for loan losses

11,618

11,295

11,426

10,920

10,436

Non-interest income

1,997

2,022

1,835

1,900

1,981

Investment securities gains (losses), net

(20)

(12)

7

6

831

Non-interest expenses

8,235

7,788

7,702

7,832

7,710

Income before provision for income taxes

5,360

5,517

5,566

4,994

5,538

Provision for income taxes

845

936

875

747

2,934

Net income

$       4,515

$        4,581

$        4,691

$        4,247

$        2,604

Earnings Per Share Basic

$         1.29

$          1.31

$          1.34

$          1.21

$          0.74

Earnings Per Share Diluted

$         1.29

$          1.31

$          1.34

$          1.21

$          0.74

 

 

CITIZENS FINANCIAL SERVICES, INC.

CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS

(UNAUDITED)



Three Months Ended December 31,


2018

2017


Average


Average

Average


Average


Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

$

$

%

$

$

%

ASSETS







Interest-bearing deposits at banks

9,294

6

0.26

8,408

3

0.14

Interest bearing time deposits at banks

14,997

95

2.50

10,146

54

2.09

Investment securities

237,342

1,602

2.70

254,277

1,678

2.64

Loans: (2)(3)(4)







  Residential mortgage loans

215,418

2,859

5.29

207,692

2,692

5.14

  Construction loans

32,393

406

4.97

16,864

188

4.43

  Commercial Loans

389,705

5,338

5.43

347,492

4,838

5.52

  Agricultural Loans

323,191

3,826

4.70

255,484

2,784

4.32

  Loans to state & political subdivisions

102,409

1,066

4.13

102,248

1,091

4.23

  Other loans

9,610

184

7.61

10,158

203

7.91

  Loans, net of discount (2)(3)(4)

1,072,726

13,679

5.06

939,938

11,796

4.98

Total interest-earning assets (3)

1,334,359

15,382

4.57

1,212,769

13,531

4.43

Cash and due from banks

6,751



7,142



Bank premises and equipment

16,253



16,583



Other assets

69,318



66,145



Total non-interest earning assets

92,322



89,870



Total assets

1,426,681



1,302,639



LIABILITIES AND STOCKHOLDERS' EQUITY







Interest-bearing liabilities:







  NOW accounts

327,144

515

0.62

326,133

310

0.38

  Savings accounts

201,903

137

0.27

181,784

49

0.11

  Money market accounts

171,149

527

1.22

130,895

181

0.55

  Certificates of deposit

298,395

1,036

1.38

260,090

687

1.05

Total interest-bearing deposits

998,591

2,215

0.88

898,902

1,227

0.54

Other borrowed funds

93,440

630

2.67

97,867

432

1.75

Total interest-bearing liabilities

1,092,031

2,845

1.03

996,769

1,659

0.66

Demand deposits

178,479



157,482



Other liabilities

13,410



15,159



Total non-interest-bearing liabilities

191,889



172,641



Stockholders' equity

142,761



133,229



Total liabilities & stockholders' equity

1,426,681



1,302,639



Net interest income (3)


12,537



11,872


Net interest spread (5)



3.54%



3.77%

Net interest income as a percentage







  of average interest-earning assets (3)



3.73%



3.88%

Ratio of interest-earning assets







  to interest-bearing liabilities



122%



122%








(1) Averages are based on daily averages.







(2) Includes loan origination and commitment fees.







(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using   a statutory federal income tax rate



       of 21% for 2018 and 34% for 2017. See reconciliation of GAAP to Non-GAAP measures at the end of the press release




(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.




(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets





      and the average rate paid on interest-bearing liabilities.







 

 

CITIZENS FINANCIAL SERVICES, INC.

CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS

(UNAUDITED)



Year Ended December 31,


2018

2017


Average


Average

Average


Average


Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

$

$

%

$

$

%

ASSETS







Interest-bearing deposits at banks

8,929

20

0.22

8,790

15

0.17

Interest bearing time deposits at banks

12,734

299

2.35

8,346

171

2.05

Investment securities

256,719

6,445

2.51

278,951

7,023

2.52

Loans: (2)(3)(4)







  Residential mortgage loans

214,458

11,205

5.22

206,321

10,660

5.17

  Construction loans

25,698

1,235

4.80

24,299

1,040

4.28

  Commercial Loans

388,037

20,611

5.31

329,767

17,525

5.31

  Agricultural Loans

305,003

13,638

4.47

214,200

9,251

4.32

  Loans to state & political subdivisions

101,496

3,759

3.70

98,427

4,146

4.21

  Other loans

9,558

737

7.71

10,341

823

7.96

  Loans, net of discount (2)(3)(4)

1,044,250

51,185

4.90

883,355

43,445

4.92

Total interest-earning assets (3)

1,322,632

57,949

4.38

1,179,442

50,654

4.29

Cash and due from banks

6,807



6,774



Bank premises and equipment

16,338



16,799



Other assets

54,722



55,910



Total non-interest earning assets

77,867



79,483



Total assets

1,400,499



1,258,925



LIABILITIES AND STOCKHOLDERS' EQUITY







Interest-bearing liabilities:







  NOW accounts

326,040

1,642

0.50

323,105

1,139

0.35

  Savings accounts

192,727

323

0.17

179,557

191

0.11

  Money market accounts

164,916

1,618

0.98

127,888

650

0.51

  Certificates of deposit

276,213

3,327

1.20

261,758

2,645

1.01

Total interest-bearing deposits

959,896

6,910

0.72

892,308

4,625

0.52

Other borrowed funds

117,912

2,664

2.26

68,536

1,214

1.77

Total interest-bearing liabilities

1,077,808

9,574

0.89

960,844

5,839

0.61

Demand deposits

171,353



153,523



Other liabilities

12,647



14,802



Total non-interest-bearing liabilities

184,000



168,325



Stockholders' equity

138,691



129,756



Total liabilities & stockholders' equity

1,400,499



1,258,925



Net interest income (3)


48,375



44,815


Net interest spread (5)



3.49%



3.68%

Net interest income as a percentage







  of average interest-earning assets (3)



3.66%



3.80%

Ratio of interest-earning assets







  to interest-bearing liabilities



123%



123%








(1) Averages are based on daily averages.







(2) Includes loan origination and commitment fees.







(3) Tax exempt interest revenue is shown on a tax equivalent basis for proper comparison using   a statutory federal income tax rate




       of 21% for 2018 and 34% for 2017. See reconciliation of GAAP to Non-GAAP measures at the end of the press release




(4) Income on non-accrual loans is accounted for on a cash basis, and the loan balances are included in interest-earning assets.




(5) Interest rate spread represents the difference between the average rate earned on interest-earning assets





      and the average rate paid on interest-bearing liabilities.







 

 

CITIZENS FINANCIAL SERVICES, INC.

CONSOLIDATED SUMMARY OF LOANS BY TYPE; NON-PERFORMING ASSETS; and ALLOWANCE FOR LOAN LOSSES


(UNAUDITED)






(Excludes Loans Held for Sale)






(In Thousands)







December 31,

September 30,

June 30, 

March 31, 

December 31, 


2018

2018

2018

2018

2017

Real estate:






  Residential

$     215,305

$      213,255

$       213,242

$      215,349

$      214,479

  Commercial

319,265

312,982

309,571

320,381

308,084

  Agricultural

284,520

280,569

262,691

248,710

239,957

  Construction

33,913

30,262

27,901

22,239

13,502

Consumer

9,858

9,702

9,740

9,672

9,944

Other commercial loans

74,118

72,219

75,002

74,930

72,013

Other agricultural loans

42,186

39,917

42,131

40,396

37,809

State & political subdivision loans

102,718

101,425

99,922

100,061

104,737

Total loans

1,081,883

1,060,331

1,040,200

1,031,738

1,000,525

Less allowance for loan losses

12,884

12,383

11,941

11,587

11,190

Net loans

$  1,068,999

$   1,047,948

$   1,028,259

$   1,020,151

$      989,335







Past due and non-performing assets












Total Loans past due 30-89 days and still accruing

$          3,308

$          3,127

$           5,143

$          5,660

$          3,489







Non-accrual loans

$       13,724

$        14,530

$         10,931

$        11,433

$        10,171

Loans past due 90 days or more and accruing

68

302

1,046

429

555

Non-performing loans

$       13,792

$        14,832

$         11,977

$        11,862

$        10,726

OREO

601

628

471

952

1,119

Total Non-performing assets

$       14,393

$        15,460

$         12,448

$        12,814

$        11,845




















3 Months 

3 Months 

3 Months 

3 Months 

3 Months 


Ended

Ended

Ended

Ended

Ended

Analysis of the Allowance for loan Losses

December 31,

September 30,

June 30,

March 31,

December 31,

(In Thousands)

2018

2018

2018

2018

2017

Balance, beginning of period

$       12,383

$        11,941

$         11,587

$        11,190

$        10,447

Charge-offs

(140)

(48)

(61)

(116)

(73)

Recoveries

16

15

90

13

16

Net (charge-offs) recoveries

(124)

(33)

29

(103)

(57)

Provision for loan losses

625

475

325

500

800

Balance, end of period

$       12,884

$        12,383

$         11,941

$        11,587

$        11,190

 

 

CITIZENS FINANCIAL SERVICES, INC.



Reconciliation of GAAP and Non-GAAP Financial Measures



(Dollars in thousands, except per share data)







As of 


December 31, 2018


2018

2017

Tangible Equity



Stockholders' Equity - GAAP

$      139,229

$           129,011

Accumulated other comprehensive loss

(3,921)

(3,398)

Intangible Assets

24,919

25,249

Non-GAAP Tangible Equity

118,231

107,160

Shares outstanding adjusted for June 2018 stock Dividend

3,504,596

3,521,146

Tangible Book value per share

$           33.74

$               30.43











As of 


December 31, 2018


2018

2017

Tangible Equity per share



Stockholders' Equity - GAAP

$           39.73

$               36.64

Adjustments for accumulated other comprehensive loss

(1.12)

(0.96)

Book value per share

40.85

37.60

Adjustments for intangible assets

7.11

7.17

Tangible Book value per share

$           33.74

$               30.43

 

Cision

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