MANSFIELD, Penn., April 25,
2024 /PRNewswire/ -- Citizens Financial Services, Inc
(Nasdaq: CZFS), parent company of First Citizens Community Bank
(the "Bank"), released today its unaudited consolidated financial
results for the three months ended March 31,
2024.
Highlights
- The financial results of the Company continue to benefit from
the acquisition of HV Bancorp, Inc. ("HVB") that closed in the
second quarter of 2023.
- During the first quarter of 2024, the Company completed the
sale of certain assets acquired as part of the HVB acquisition,
which included loans and accrued interest, and software, as well as
transferring certain contracts, processes and employees of a
division internally known as Braavo. The proceeds from the sale
totaled approximately $7.2 million
and generated a pre-tax gain of approximately $1.1 million. Legal fees associated with the sale
totaled approximately $201,000.
- Net income was $7.0 million for
the three months ended March 31,
2024, which is 2.3% more than the net income for 2023's
comparable period. The increase was driven by the gain on the sale
of Braavo, which resulted in a pre-tax gain of approximately
$900,000, net of legal fees. The
effective tax rate for the three months ended March 31, 2024 was 17.4% compared to 19.0% in the
comparable period in 2023, with the decrease being due to an
increase in earnings on bank owned life insurance due to the
passing of a former executive, which is not subject to income tax,
and certain merger and acquisition expenses from 2023 not being tax
deductible.
- Net interest income before the provision for credit losses was
$21.0 million for the three months
ended March 31, 2024, an increase of
$2,878,000, or 15.9%, over the same
period a year ago and was primarily due to the HVB
acquisition.
- Return on average equity for the three months (annualized)
ended March 31, 2024 was 9.10%
compared to 11.49% for the three months (annualized) ended
March 31, 2023.
- Return on average tangible equity for the three months
(annualized) ended March 31, 2024 was
12.80% compared to 13.30% for the three months (annualized) ended
March 31, 2023 (non-GAAP). (1)
- Return on average assets for the three months (annualized)
ended March 31, 2024 was 0.93%
compared to 1.16% for the three months (annualized) ended
March 31, 2023.
- Non-performing assets increased $4,833,000 since March 31,
2023 and total $15,713,000 as
of March 31, 2024, which is
$2.5 million higher than the balance
at December 31, 2023. The increase
from March 31, 2023 and December 2023 is due to loans acquired as part of
the HVB acquisition. As a percent of loans, non-performing assets
totaled 0.70%, 0.59% and 0.63% as of March
31, 2024, December 31, 2023
and March 31, 2023.
First Quarter of 2024 Compared to the First Quarter of
2023
- For the three months ended March 31,
2024, net income totaled $7,024,000 which compares to net income of
$6,867,000 for the comparable period
of 2023, an increase of $157,000 or
2.3%. Basic earnings per share of $1.49 for the three months ended March 31, 2024 compares to $1.71 for the 2023 comparable period. Annualized
return on equity for the three months ended March 31, 2024 and 2023 was 9.10% and 11.49%,
while annualized return on assets was 0.93% and 1.16%,
respectively.
- Net interest income before the provision for credit losses for
the three months ended March 31, 2024
totaled $20,958,000 compared to
$18,080,000 for the three months
ended March 31, 2023, resulting in an
increase of $2,878,000, or 15.9%.
Average interest earning assets increased $545.6 million for the three months ended
March 31, 2024 compared to the same
period last year, primarily due to the HVB acquisition. Average
loans increased $563.1 million, while
average investment securities decreased $30.5 million. The tax effected net interest
margin for the three months ended March 31,
2024 was 3.05% compared to 3.30% for the same period last
year. The yield on interest earning assets increased 92 basis
points to 5.48%, while the cost of interest bearing liabilities
increased 1.34% to 2.99% due to the rise in market interest rates
and competitive pressure.
- Due to the increase in non-performing loans and a change in
estimated prepayment speeds on performing loans, a provision for
credit losses of $785,000 was
recorded in the first quarter of 2024. Due to limited loan
origination activity in the first quarter of 2023, no provision was
recorded for the first quarter of 2023.
- Total non-interest income was $4,971,000 for the three months ended
March 31, 2024, $2,797,000 more than the comparable period last
year. The primary drivers were the gain on the sale of assets
associated with Braavo and activity due to the HVB acquisition. As
a result of the acquisition, service charges, gains on loans sold,
earnings on bank owned life insurance and other income increased.
Earnings on bank owned life insurance also increased due to the
passing of a former employee in the first quarter of 2024. During
the first quarter of 2024, the Company experienced a gain on its
equity investment portfolio compared to a loss in the first quarter
of 2023, both of which were due to market conditions at the
time.
- Total non-interest expenses for the three months ended
March 31, 2024 totaled $16,643,000 compared to $11,778,000 for the same period last year, which
is an increase of $4,865,000, or
41.3%. Salary and benefit costs increased $2,613,000 due to an additional 80.9 FTEs as a
result of the acquisition and merit increases for 2024 as well as
an increase in health insurance costs of $423,000. The increases in occupancy, furniture
and fixtures, software expenses and amortization expenses was due
to the acquisition and additional branches as part of it. FDIC
insurance expense increased $225,000
due to the Company's increased size and the Bank's lower leverage
capital ratio. Professional fees increased due to various legal
matters, of which $201,000 was
related to the sale of certain Braavo assets. Other expenses
increased primarily due to the acquisition, with increases
experienced in subscriptions, marketing and advertising, postage,
printing, data communication expenses and FHLB letter of credit
fees. Independent of the acquisition, other expenses increased due
to insurance reimbursement received in 2023 to cover amounts
previously expensed. Merger and acquisitions costs for the merger
with HVB totaled $244,000 in 2023 and
include professional and consulting fees, printing and travel
related expenses.
- The provision for income taxes decreased $132,000 when comparing the three months ended
March 31, 2024 to the same period in
2023. This decrease was attributable to death benefits received
upon the passing of a former employees and certain expenses in 2023
not being tax deductible. The effective tax rate was 17.4% and
19.0% for the three months ended March 31,
2024 and 2023, respectively.
Balance Sheet and Other Information:
- At March 31, 2024, total assets
were $2.92 billion compared to
$2.98 billion at December 31, 2023 and $2.34 billion at March 31,
2023. The loan to deposit ratio as of March 31, 2024 was 97.25% compared to 96.87% as
of December 31, 2023 and 95.77% as of
March 31, 2023.
- Available for sale securities of $404.9
million at March 31, 2024
decreased $12.7 million from
December 31, 2023 and decreased
$38.6 million from March 31, 2023. The yield on the investment
portfolio increased from 2.12% to 2.29% on a tax equivalent basis
due to securities purchased during a higher rate environment and
lower yielding securities maturing. Investment activity has been
limited in the first quarter of 2024.
- Net loans as of March 31, 2024
totaled $2.22 billion and decreased
$9.6 million from December 31, 2023, due to a decrease in the
amount of student loans outstanding and selling loans as part of
the Braavo disposition. In comparison to March 31, 2023, loans have grown $509.8 million due to the HVB acquisition.
- The allowance for credit losses - loans totaled $21,598,000 at March 31,
2024 which is an increase of $445,000 from December 31,
2023 and is due to change in expected prepayment speeds and
specific reserves on non-performing loans. The provision for credit
losses on loans was $1,112,000 for
the first quarter of 2024. Loan recoveries and charge-offs were
$7,000 and $674,000, respectively, for the three months
ended March 31, 2024 with the
majority of the charge-offs associated with loans acquired as part
of the HVB acquisition. The allowance as a percent of total loans
was 0.96% as of March 31, 2024 and
0.94% as of December 31, 2023.
- Deposits decreased $18.7 million
from December 31, 2023, to
$2.30 billion at March 31, 2024. With the rise in interest rates,
competitive pressure for deposits has increased. Additionally, we
have numerous state and political organizations as customers who
withdrew funds during the first quarter of 2024 to fund various
projects and bond payments.
- Borrowed funds totaled $283.6
million as of March 31, 2024,
a $38.5 million decrease from
December 31, 2023.
- Stockholders' equity totaled $282.7
million at March 31, 2024,
compared to $279.7 million at
December 31, 2023, an increase of
$3.0 million. Excluding accumulated
other comprehensive loss (AOCI), stockholders equity increased
$4.7 million and totals $309.3 million. The increase in stockholders
equity, excluding AOCI, was attributable to net income for the
three months ended March 31, 2024
totaling $7.0 million, offset by cash
dividends for the first quarter totaling $2.3 million. As a result of changes in market
interest rates impacting the fair value of investment securities
and swaps, AOCI decreased $1.7
million from December 31,
2023.
Dividend Declared
On March 5, 2024, the Board of
Directors declared a cash dividend of $0.49 per share, which was paid on March 29, 2024 to shareholders of record at the
close of business on March 15, 2024.
This quarterly cash dividend is an increase of 2.1% over the
regular cash dividend of $0.48 per
share declared one year ago, as adjusted for the 1% stock dividend
declared in June 2023.
Citizens Financial Services, Inc. has nearly 1,900 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.
(1)
|
See reconciliation of
GAAP and non-gaap measures at the end of the press
release
|
CITIZENS FINANCIAL
SERVICES, INC.
|
|
|
|
CONSOLIDATED
FINANCIAL HIGHLIGHTS
|
|
|
|
(UNAUDITED)
|
|
|
|
(Dollars in
thousands, except per share data)
|
|
|
|
|
As of or For
The
|
|
|
Three Months
Ended
|
|
|
March 31,
|
|
|
2024
|
2023
|
|
Income and
Performance Ratios
|
|
|
|
Net Income
|
$
7,024
|
$
6,867
|
|
Return on average
assets (annualized)
|
0.93 %
|
1.16 %
|
|
Return on average
equity (annualized)
|
9.10 %
|
11.49 %
|
|
Return on average
tangible equity (annualized) (a)
|
12.80 %
|
13.30 %
|
|
Net interest margin
(tax equivalent)(a)
|
3.05 %
|
3.30 %
|
|
Earnings per share -
basic (b)
|
$
1.49
|
$
1.71
|
|
Earnings per share -
diluted (b)
|
$
1.49
|
$
1.71
|
|
Cash dividends paid per
share (b)
|
$
0.490
|
$
0.480
|
|
Number of shares used
in computation - basic (b)
|
4,701,853
|
4,005,370
|
|
Number of shares used
in computation - diluted (b)
|
4,701,853
|
4,005,375
|
|
|
|
|
|
|
|
|
|
Asset
quality
|
|
|
|
Allowance for credit
losses - loans
|
$
21,598
|
$
15,250
|
|
Non-performing
assets
|
$
15,713
|
$
10,880
|
|
Allowance for credit
losses - loans/total loans
|
0.96 %
|
0.88 %
|
|
Non-performing assets
to total loans
|
0.70 %
|
0.63 %
|
|
Annualized net
charge-offs to total loans
|
0.12 %
|
0.00 %
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Book value per share
(b)
|
$
65.71
|
$
59.85
|
|
Tangible Book value per
share (a) (b)
|
$
46.76
|
$
51.73
|
|
Market Value (Last
reported trade of month)
|
$
49.20
|
$
83.55
|
|
Common shares
outstanding
|
4,706,991
|
3,971,049
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Average Full Time
Equivalent Employees
|
394.1
|
313.2
|
|
Loan to Deposit
Ratio
|
97.25 %
|
95.77 %
|
|
Trust assets under
management
|
$
173,716
|
$
156,999
|
|
Brokerage assets under
management
|
$
362,408
|
$
294,925
|
|
|
|
|
|
|
|
|
|
Balance Sheet
Highlights
|
March
31,
|
December 31,
|
March 31,
|
|
2024
|
2023
|
2023
|
|
|
|
|
Assets
|
$
2,921,103
|
$ 2,975,321
|
$
2,335,398
|
Investment
securities
|
406,523
|
419,539
|
445,338
|
Loans (net of unearned
income)
|
2,239,659
|
2,248,836
|
1,723,475
|
Allowance for credit
losses - loans
|
21,598
|
21,153
|
15,250
|
Deposits
|
2,302,881
|
2,321,481
|
1,799,687
|
Stockholders'
Equity
|
282,674
|
279,666
|
213,238
|
|
|
|
|
|
|
|
|
(a) See
reconciliation of GAAP and Non-GAAP measures at the end of the
press release
|
(b) Prior period
amounts were adjusted to reflect stock dividends.
|
CITIZENS FINANCIAL
SERVICES, INC.
|
|
|
|
CONSOLIDATED BALANCE
SHEET
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
|
|
|
March
31,
|
December 31,
|
March 31,
|
(in thousands except
share data)
|
2024
|
2023
|
2023
|
ASSETS:
|
|
|
|
Cash and due from
banks:
|
|
|
|
Noninterest-bearing
|
$
14,047
|
$
37,733
|
$
24,249
|
Interest-bearing
|
15,572
|
15,085
|
1,924
|
Total cash and cash
equivalents
|
29,619
|
52,818
|
26,173
|
|
|
|
|
Interest bearing time
deposits with other banks
|
3,820
|
4,070
|
6,055
|
|
|
|
|
Equity
securities
|
1,658
|
1,938
|
1,923
|
|
|
|
|
Available-for-sale
securities
|
404,865
|
417,601
|
443,415
|
|
|
|
|
Loans held for
sale
|
8,346
|
9,379
|
671
|
|
|
|
|
Loans (net of allowance
for credit losses - loans: $21,598 at March 31,
2024;
|
|
|
|
$21,153 at December 31, 2023 and $15,250 at March 31,
2023)
|
2,218,061
|
2,227,683
|
1,708,225
|
|
|
|
|
Premises and
equipment
|
21,083
|
21,384
|
17,588
|
Accrued interest
receivable
|
10,596
|
11,043
|
7,176
|
Goodwill
|
85,758
|
85,758
|
31,376
|
Bank owned life
insurance
|
49,418
|
49,897
|
39,573
|
Other
intangibles
|
3,450
|
3,650
|
1,181
|
Fair value of
derivative instruments - asset
|
14,857
|
13,687
|
14,197
|
Deferred tax
asset
|
17,672
|
17,339
|
10,786
|
Other assets
|
51,900
|
59,074
|
27,059
|
|
|
|
|
TOTAL
ASSETS
|
$
2,921,103
|
$ 2,975,321
|
$
2,335,398
|
|
|
|
|
LIABILITIES:
|
|
|
|
Deposits:
|
|
|
|
Noninterest-bearing
|
$
523,844
|
$
523,784
|
$
369,658
|
Interest-bearing
|
1,779,037
|
1,797,697
|
1,430,029
|
Total
deposits
|
2,302,881
|
2,321,481
|
1,799,687
|
Borrowed
funds
|
283,565
|
322,036
|
288,059
|
Accrued interest
payable
|
4,123
|
4,298
|
1,768
|
Fair value of
derivative instruments - liability
|
8,698
|
7,922
|
8,234
|
Other
liabilities
|
39,162
|
39,918
|
24,412
|
TOTAL
LIABILITIES
|
2,638,429
|
2,695,655
|
2,122,160
|
STOCKHOLDERS'
EQUITY:
|
|
|
|
Preferred Stock $1.00
par value; authorized
|
|
|
|
3,000,000
shares; none issued in 2024 or 2023
|
-
|
-
|
-
|
Common stock
|
|
|
|
$1.00 par value;
authorized 25,000,000 shares at March 31, 2024, December 31, 2023
and
|
|
|
|
March 31, 2023:
issued 5,160,754 at March 31, 2024 and December 31, 2023
and
|
|
|
|
4,427,687 at
March 31, 2023
|
5,161
|
5,161
|
4,428
|
Additional paid-in
capital
|
143,227
|
143,233
|
80,926
|
Retained
earnings
|
177,693
|
172,975
|
171,629
|
Accumulated other
comprehensive loss
|
(26,620)
|
(24,911)
|
(26,762)
|
Treasury stock, at
cost: 453,763 at March 31, 2024 and 453,760
shares
|
|
|
|
at December 31,
2023 and 456,638 shares at March 31, 2023
|
(16,787)
|
(16,792)
|
(16,983)
|
TOTAL STOCKHOLDERS'
EQUITY
|
282,674
|
279,666
|
213,238
|
TOTAL LIABILITIES
AND
|
|
|
|
STOCKHOLDERS' EQUITY
|
$
2,921,103
|
$ 2,975,321
|
$
2,335,398
|
CITIZENS FINANCIAL
SERVICES, INC.
|
|
|
CONSOLIDATED
STATEMENT OF INCOME
|
|
|
(UNAUDITED)
|
|
|
|
Three Months
Ended
|
|
March
31,
|
(in thousands,
except share and per share data)
|
2024
|
2023
|
INTEREST
INCOME:
|
|
|
Interest and fees on
loans
|
$
35,133
|
$
22,549
|
Interest-bearing
deposits with banks
|
243
|
71
|
Investment
securities:
|
|
|
Taxable
|
1,624
|
1,556
|
Nontaxable
|
532
|
617
|
Dividends
|
401
|
314
|
TOTAL INTEREST
INCOME
|
37,933
|
25,107
|
INTEREST
EXPENSE:
|
|
|
Deposits
|
12,321
|
3,939
|
Borrowed
funds
|
4,654
|
3,088
|
TOTAL INTEREST
EXPENSE
|
16,975
|
7,027
|
NET INTEREST
INCOME
|
20,958
|
18,080
|
Provision for credit
losses
|
785
|
-
|
Provision for credit
losses - acquisition day 1 non-PCD
|
-
|
-
|
NET INTEREST INCOME
AFTER
|
|
|
PROVISION FOR CREDIT LOSSES
|
20,173
|
18,080
|
NON-INTEREST
INCOME:
|
|
|
Service
charges
|
1,372
|
1,211
|
Trust
|
244
|
230
|
Brokerage and
insurance
|
665
|
514
|
Gains on loans
sold
|
417
|
45
|
Equity security gains
(losses), net
|
55
|
(218)
|
Available for sale
security losses, net
|
-
|
-
|
Earnings on bank owned
life insurance
|
668
|
218
|
Gain on sale of Braavo
division
|
1,102
|
-
|
Other
|
448
|
174
|
TOTAL NON-INTEREST
INCOME
|
4,971
|
2,174
|
NON-INTEREST
EXPENSES:
|
|
|
Salaries and employee
benefits
|
10,290
|
7,677
|
Occupancy
|
1,324
|
835
|
Furniture and
equipment
|
236
|
151
|
Professional
fees
|
703
|
381
|
FDIC insurance
expense
|
525
|
300
|
Pennsylvania shares
tax
|
310
|
298
|
Amortization of
intangibles
|
148
|
31
|
Software
expenses
|
514
|
351
|
ORE (income)
expenses
|
(13)
|
26
|
Merger and acquisition
expenses
|
-
|
244
|
Other
|
2,606
|
1,484
|
TOTAL NON-INTEREST
EXPENSES
|
16,643
|
11,778
|
Income before provision
for income taxes
|
8,501
|
8,476
|
Provision for income
tax expense
|
1,477
|
1,609
|
NET
INCOME
|
$
7,024
|
$
6,867
|
|
|
|
PER COMMON SHARE
DATA:
|
|
|
Net Income -
Basic
|
$
1.49
|
$
1.71
|
Net Income -
Diluted
|
$
1.49
|
$
1.71
|
Cash Dividends
Paid
|
$
0.490
|
$
0.480
|
|
|
|
Number of shares used
in computation - basic
|
4,701,853
|
4,005,370
|
Number of shares used
in computation - diluted
|
4,701,853
|
4,005,375
|
CITIZENS FINANCIAL
SERVICES, INC.
|
|
|
|
|
|
QUARTERLY CONDENSED,
CONSOLIDATED INCOME (LOSS) STATEMENT INFORMATION
|
|
|
|
|
(UNAUDITED)
|
|
|
|
|
|
(in thousands,
except per share data)
|
|
Three Months
Ended,
|
|
|
|
March
31,
|
Dec 31,
|
Sept 30,
|
June 30,
|
March 31,
|
|
2024
|
2023
|
2023
|
2023
|
2023
|
Interest
income
|
$
37,933
|
$
38,512
|
$
36,689
|
$
26,810
|
$
25,107
|
Interest
expense
|
16,975
|
16,657
|
14,285
|
8,889
|
7,027
|
Net interest
income
|
20,958
|
21,855
|
22,404
|
17,921
|
18,080
|
Provision for credit
losses
|
785
|
200
|
475
|
262
|
-
|
Provision for credit
losses - acquisition day 1 non-PCD
|
-
|
-
|
-
|
4,591
|
-
|
Net interest income
after provision for credit losses
|
20,173
|
21,655
|
21,929
|
13,068
|
18,080
|
Non-interest
income
|
4,916
|
3,410
|
3,593
|
2,405
|
2,392
|
Investment
securities gains (losses), net
|
55
|
79
|
69
|
(125)
|
(218)
|
Non-interest
expenses
|
16,643
|
15,920
|
16,444
|
20,680
|
11,778
|
Income (loss) before
provision for income taxes
|
8,501
|
9,224
|
9,147
|
(5,332)
|
8,476
|
Provision for income
tax expense (benefit)
|
1,477
|
1,684
|
1,599
|
(1,188)
|
1,609
|
Net income
(loss)
|
$
7,024
|
$
7,540
|
$
7,548
|
$
(4,144)
|
$
6,867
|
Earnings (Loss) Per
Share Basic
|
$
1.49
|
$
1.60
|
$
1.61
|
$
(1.01)
|
$
1.71
|
Earnings (Loss) Per
Share Diluted
|
$
1.49
|
$
1.60
|
$
1.61
|
$
(1.01)
|
$
1.71
|
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
March 31,
|
|
2024
|
2023
|
|
Average
|
|
Average
|
Average
|
|
Average
|
|
Balance
(1)
|
Interest
|
Rate
|
Balance (1)
|
Interest
|
Rate
|
(dollars in
thousands)
|
$
|
$
|
%
|
$
|
$
|
%
|
ASSETS
|
|
|
|
|
|
|
Interest-bearing
deposits at banks
|
29,184
|
212
|
2.92
|
14,129
|
27
|
0.78
|
Interest bearing time
deposits at banks
|
4,054
|
31
|
3.08
|
6,055
|
44
|
3.00
|
Investment
securities:
|
|
|
|
|
|
|
Taxable
|
362,963
|
2,025
|
2.23
|
380,537
|
1,870
|
1.97
|
Tax-exempt
(3)
|
107,497
|
674
|
2.51
|
120,413
|
781
|
2.59
|
Investment
securities
|
470,460
|
2,699
|
2.29
|
500,950
|
2,651
|
2.12
|
Loans:
(2)(3)(4)
|
|
|
|
|
|
|
Residential
mortgage loans
|
359,720
|
5,059
|
5.66
|
212,015
|
2,704
|
5.17
|
Construction
loans
|
189,898
|
3,491
|
7.39
|
85,432
|
1,139
|
5.41
|
Commercial
Loans
|
1,236,308
|
19,519
|
6.35
|
935,212
|
12,325
|
5.34
|
Agricultural
Loans
|
344,468
|
4,405
|
5.14
|
344,291
|
4,253
|
5.01
|
Loans to state
& political subdivisions
|
56,648
|
550
|
3.90
|
59,318
|
543
|
3.71
|
Other
loans
|
110,140
|
2,217
|
8.10
|
97,833
|
1,692
|
7.01
|
Loans, net of
discount (2)(3)(4)
|
2,297,182
|
35,241
|
6.17
|
1,734,101
|
22,656
|
5.30
|
Total
interest-earning assets
|
2,800,880
|
38,183
|
5.48
|
2,255,235
|
25,378
|
4.56
|
Cash and due from
banks
|
9,822
|
|
|
7,039
|
|
|
Bank premises and
equipment
|
21,289
|
|
|
17,617
|
|
|
Other assets
|
178,841
|
|
|
90,409
|
|
|
Total non-interest
earning assets
|
209,952
|
|
|
115,065
|
|
|
Total
assets
|
3,010,832
|
|
|
2,370,300
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
Interest-bearing
liabilities:
|
|
|
|
|
|
|
NOW
accounts
|
799,968
|
5,223
|
2.63
|
510,198
|
1,517
|
1.21
|
Savings
accounts
|
302,091
|
387
|
0.52
|
319,408
|
206
|
0.26
|
Money market
accounts
|
381,042
|
2,793
|
2.95
|
321,178
|
1,274
|
1.61
|
Certificates of
deposit
|
422,420
|
3,918
|
3.73
|
279,244
|
942
|
1.37
|
Total interest-bearing
deposits
|
1,905,521
|
12,321
|
2.60
|
1,430,028
|
3,939
|
1.12
|
Other borrowed
funds
|
375,972
|
4,654
|
4.98
|
299,119
|
3,088
|
4.19
|
Total
interest-bearing liabilities
|
2,281,493
|
16,975
|
2.99
|
1,729,147
|
7,027
|
1.65
|
Demand
deposits
|
370,951
|
|
|
375,003
|
|
|
Other
liabilities
|
49,488
|
|
|
27,064
|
|
|
Total
non-interest-bearing liabilities
|
420,439
|
|
|
402,067
|
|
|
Stockholders'
equity
|
308,900
|
|
|
239,086
|
|
|
Total liabilities
& stockholders' equity
|
3,010,832
|
|
|
2,370,300
|
|
|
Net interest
income
|
|
21,208
|
|
|
18,351
|
|
Net interest spread
(5)
|
|
|
2.49 %
|
|
|
2.91 %
|
Net interest income as
a percentage
|
|
|
|
|
|
|
of average
interest-earning assets
|
|
|
3.05 %
|
|
|
3.30 %
|
Ratio of
interest-earning assets
|
|
|
|
|
|
|
to
interest-bearing liabilities
|
|
|
123 %
|
|
|
130 %
|
|
|
|
|
|
|
|
(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 2024 and 2023. See
reconciliation of GAAP and 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 CREDIT
LOSSES
|
(UNAUDITED)
|
|
|
|
|
|
(Excludes Loans Held
for Sale)
|
|
|
|
|
|
(In
Thousands)
|
|
|
|
|
|
|
March
31,
|
December 31,
|
September
30,
|
June
30,
|
March 31,
|
|
2024
|
2023
|
2023
|
2023
|
2023
|
Real estate:
|
|
|
|
|
|
Residential
|
$
357,779
|
$
359,990
|
$
356,381
|
$
358,025
|
$
212,793
|
Commercial
|
1,115,900
|
1,092,887
|
1,081,123
|
1,080,513
|
878,972
|
Agricultural
|
318,413
|
314,802
|
314,164
|
312,302
|
312,793
|
Construction
|
184,506
|
195,826
|
175,320
|
156,927
|
75,745
|
Consumer
|
53,101
|
61,316
|
115,753
|
42,701
|
87,101
|
Other commercial
loans
|
129,438
|
136,168
|
120,347
|
120,288
|
64,133
|
Other agricultural
loans
|
24,345
|
30,673
|
26,648
|
30,615
|
32,052
|
State & political
subdivision loans
|
56,177
|
57,174
|
56,660
|
61,471
|
59,886
|
Total loans
|
2,239,659
|
2,248,836
|
2,246,396
|
2,162,842
|
1,723,475
|
Less: allowance for
credit losses - loans
|
21,598
|
21,153
|
21,455
|
21,652
|
15,250
|
Net loans
|
$
2,218,061
|
$ 2,227,683
|
$ 2,224,941
|
$ 2,141,190
|
$ 1,708,225
|
|
|
|
|
|
|
Past due and
non-performing assets
|
|
|
|
|
|
|
|
|
|
|
|
Total Loans past due
30-89 days and still accruing
|
$
6,311
|
$
10,457
|
$
5,960
|
$
4,828
|
$
1,336
|
|
|
|
|
|
|
Non-accrual
loans
|
$
14,693
|
$
12,187
|
$
13,139
|
$
13,073
|
$
10,404
|
Loans past due 90 days
or more and accruing
|
820
|
516
|
8
|
139
|
48
|
Non-performing
loans
|
$
15,513
|
$
12,703
|
$
13,147
|
$
13,212
|
$
10,452
|
OREO
|
200
|
474
|
474
|
426
|
428
|
Total Non-performing
assets
|
$
15,713
|
$
13,177
|
$
13,621
|
$
13,638
|
$
10,880
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
Analysis of the
Allowance for Credit Losses - Loans
|
March
31,
|
December 31,
|
September
30,
|
June 30,
|
March 31,
|
(In
Thousands)
|
2024
|
2023
|
2023
|
2023
|
2023
|
Balance, beginning of
period
|
$
21,153
|
$
21,455
|
$
21,652
|
$
15,250
|
$
18,552
|
Impact of Adopting ASC
326
|
-
|
-
|
-
|
-
|
(3,300)
|
Charge-offs
|
(674)
|
(510)
|
(808)
|
(4)
|
(7)
|
Recoveries
|
7
|
8
|
10
|
26
|
5
|
Net (charge-offs)
recoveries
|
(667)
|
(502)
|
(798)
|
22
|
(2)
|
PCD allowance for
credit loss at acquisition
|
-
|
-
|
-
|
1,689
|
-
|
Provision for credit
losses - loans
|
1,112
|
200
|
601
|
100
|
-
|
Provision for credit
losses - acquisition day 1 non-PCD
|
-
|
-
|
-
|
4,591
|
-
|
Balance, end of
period
|
$
21,598
|
$
21,153
|
$
21,455
|
$
21,652
|
$
15,250
|
CITIZENS FINANCIAL
SERVICES, INC.
|
|
|
Reconciliation of
GAAP and Non-GAAP Financial Measures
|
|
|
(UNAUDITED)
|
|
|
(Dollars in
thousands, except per share data)
|
|
|
|
|
|
|
As of
|
|
March 31
|
|
2024
|
2023
|
Tangible
Equity
|
|
|
Stockholders Equity -
GAAP
|
$
282,674
|
$
213,238
|
Accumulated other
comprehensive loss
|
26,620
|
26,762
|
Intangible
Assets
|
(89,208)
|
(32,557)
|
Tangible Equity -
Non-GAAP
|
220,086
|
207,443
|
Shares outstanding
adjusted for June 2023 stock Dividend
|
4,706,991
|
4,010,258
|
Tangible Book value per
share - Non-GAAP
|
$
46.76
|
$
51.73
|
|
|
|
|
As of
|
|
March 31
|
|
2024
|
2023
|
Tangible Equity per
share
|
|
|
Stockholders Equity per
share - GAAP
|
$
60.05
|
$
53.17
|
Adjustments for
accumulated other comprehensive loss
|
5.66
|
6.68
|
Book value per
share
|
65.71
|
59.85
|
Adjustment for
intangible assets
|
(18.95)
|
(8.12)
|
Tangible Book value per
share - Non-GAAP
|
$
46.76
|
$
51.73
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
March 31
|
|
2024
|
2023
|
Return on Average
Tangible Equity
|
|
|
Average Stockholders
Equity - GAAP
|
$
282,484
|
$
207,873
|
Average Accumulated
Other Comprehensive Loss
|
26,416
|
31,213
|
Average Intangible
Assets
|
(89,321)
|
(32,608)
|
Average Tangible Equity
- Non-GAAP
|
219,579
|
206,478
|
Net Income -
GAAP
|
$
7,024
|
$
6,867
|
Annualized Return on
Average Tangible Equity Non-GAAP
|
12.80 %
|
13.30 %
|
|
|
|
|
For the Three Months
Ended
|
|
March 31
|
|
2024
|
2023
|
Return on Average
Assets and Equity Excluding sale of Braavo assets, net of
legal fees and merger and acquisition costs
|
|
|
Net Income -
GAAP
|
$
7,024
|
$
6,867
|
Boli death
benefits
|
-
|
-
|
After tax gain on sale
of Braavo, net of legal fees
|
(712)
|
-
|
After tax merger and
acquisition costs
|
-
|
244
|
Net Income excluding
merger and acquisition costs - Non-GAAP
|
$
6,312
|
$
7,111
|
Average
Assets
|
3,010,832
|
2,370,300
|
Annualized Return on
Average assets, Excluding sale of Braavo assets, net of legal
fees
and merger and acquisition costs - Non-GAAP
|
0.84 %
|
1.20 %
|
|
|
|
Average Stockholders
Equity - GAAP
|
$
308,900
|
$
239,086
|
Annualized Return on
Average stockholders equity, Excluding sale of Braavo assets, net
of
legal fees and merger and acquisition costs -
Non-GAAP
|
8.17 %
|
11.90 %
|
|
|
|
Average Tangible Equity
- Non-GAAP
|
219,579
|
206,478
|
Annualized Return on
Average Tangible Equity Excluding sale of Braavo assets, net
of
legal fees and merger and acquisition costs -
Non-GAAP
|
11.50 %
|
13.78 %
|
|
|
|
|
For the Three Months
Ended
|
|
March 31
|
|
2024
|
2023
|
Earnings per share,
Excluding sale of Braavo assets, net of legal fees and
merger and acquisition costs
|
|
|
Net Income -
GAAP
|
$
7,024
|
$
7,875
|
Boli death
benefits
|
-
|
|
After tax gain on sale
of Braavo, net of legal fees
|
(712)
|
-
|
After Tax merger and
acquisition costs
|
-
|
244
|
Net income excluding
one time items - Non-GAAP
|
$
6,312
|
$
8,119
|
Number of shares used
in computation - basic
|
4,701,853
|
4,005,375
|
Earnings per share,
Excluding sale of Braavo assets, net of legal fees and merger
and
acquisition costs - Non-GAAP
|
$
1.34
|
$
2.03
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
March 31
|
Reconciliation of
net interest income on fully taxable equivalent
basis
|
2024
|
2023
|
Total interest
income
|
$
37,933
|
$
25,107
|
Total interest
expense
|
16,975
|
7,027
|
Net interest
income
|
20,958
|
18,080
|
Tax equivalent
adjustment
|
250
|
271
|
Net interest income
(fully taxable equivalent) - Non-GAAP
|
$
21,208
|
$
18,351
|
View original
content:https://www.prnewswire.com/news-releases/citizens-financial-services-inc-reports-unaudited-first-quarter-2024-financial-results-302127935.html
SOURCE CITIZENS FINANCIAL SERVICES, INC.