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MANSFIELD, Penn., April 25, 2024 /PRNewswire/ — Citizens Financial Services, Inc 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.
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(1) |
See reconciliation of GAAP and non-gaap measures at the end of the press release |
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CITIZENS FINANCIAL SERVICES, INC. |
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CONSOLIDATED FINANCIAL HIGHLIGHTS |
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(UNAUDITED) |
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(Dollars in thousands, except per share data) |
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As of or For The |
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Three Months Ended |
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March 31, |
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2024 |
2023 |
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Income and Performance Ratios |
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Net Income |
$ 7,024 |
$ 6,867 |
|
|
Return on average assets (annualized) |
0.93 % |
1.16 % |
|
|
Return on average equity (annualized) |
9.10 % |
11.49 % |
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Return on average tangible equity (annualized) (a) |
12.80 % |
13.30 % |
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Net interest margin (tax equivalent)(a) |
3.05 % |
3.30 % |
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Earnings per share – basic (b) |
$ 1.49 |
$ 1.71 |
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Earnings per share – diluted (b) |
$ 1.49 |
$ 1.71 |
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Cash dividends paid per share (b) |
$ 0.490 |
$ 0.480 |
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Number of shares used in computation – basic (b) |
4,701,853 |
4,005,370 |
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Number of shares used in computation – diluted (b) |
4,701,853 |
4,005,375 |
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Asset quality |
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Allowance for credit losses – loans |
$ 21,598 |
$ 15,250 |
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Non-performing assets |
$ 15,713 |
$ 10,880 |
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Allowance for credit losses – loans/total loans |
0.96 % |
0.88 % |
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Non-performing assets to total loans |
0.70 % |
0.63 % |
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Annualized net charge-offs to total loans |
0.12 % |
0.00 % |
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Equity |
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Book value per share (b) |
$ 65.71 |
$ 59.85 |
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Tangible Book value per share (a) (b) |
$ 46.76 |
$ 51.73 |
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Market Value (Last reported trade of month) |
$ 49.20 |
$ 83.55 |
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Common shares outstanding |
4,706,991 |
3,971,049 |
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Other |
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Average Full Time Equivalent Employees |
394.1 |
313.2 |
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Loan to Deposit Ratio |
97.25 % |
95.77 % |
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Trust assets under management |
$ 173,716 |
$ 156,999 |
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Brokerage assets under management |
$ 362,408 |
$ 294,925 |
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Balance Sheet Highlights |
March 31, |
December 31, |
March 31, |
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2024 |
2023 |
2023 |
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Assets |
$ 2,921,103 |
$ 2,975,321 |
$ 2,335,398 |
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Investment securities |
406,523 |
419,539 |
445,338 |
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Loans (net of unearned income) |
2,239,659 |
2,248,836 |
1,723,475 |
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Allowance for credit losses – loans |
21,598 |
21,153 |
15,250 |
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Deposits |
2,302,881 |
2,321,481 |
1,799,687 |
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Stockholders’ Equity |
282,674 |
279,666 |
213,238 |
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(a) See reconciliation of GAAP and Non-GAAP measures at the end of the press release |
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(b) Prior period amounts were adjusted to reflect stock dividends. |
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CITIZENS FINANCIAL SERVICES, INC. |
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CONSOLIDATED BALANCE SHEET |
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(UNAUDITED) |
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March 31, |
December 31, |
March 31, |
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(in thousands except share data) |
2024 |
2023 |
2023 |
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ASSETS: |
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Cash and due from banks: |
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Noninterest-bearing |
$ 14,047 |
$ 37,733 |
$ 24,249 |
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Interest-bearing |
15,572 |
15,085 |
1,924 |
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Total cash and cash equivalents |
29,619 |
52,818 |
26,173 |
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Interest bearing time deposits with other banks |
3,820 |
4,070 |
6,055 |
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Equity securities |
1,658 |
1,938 |
1,923 |
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Available-for-sale securities |
404,865 |
417,601 |
443,415 |
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Loans held for sale |
8,346 |
9,379 |
671 |
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Loans (net of allowance for credit losses – loans: $21,598 at March 31, 2024; |
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$21,153 at December 31, 2023 and $15,250 at March 31, 2023) |
2,218,061 |
2,227,683 |
1,708,225 |
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Premises and equipment |
21,083 |
21,384 |
17,588 |
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Accrued interest receivable |
10,596 |
11,043 |
7,176 |
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Goodwill |
85,758 |
85,758 |
31,376 |
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Bank owned life insurance |
49,418 |
49,897 |
39,573 |
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Other intangibles |
3,450 |
3,650 |
1,181 |
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Fair value of derivative instruments – asset |
14,857 |
13,687 |
14,197 |
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Deferred tax asset |
17,672 |
17,339 |
10,786 |
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Other assets |
51,900 |
59,074 |
27,059 |
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TOTAL ASSETS |
$ 2,921,103 |
$ 2,975,321 |
$ 2,335,398 |
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LIABILITIES: |
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Deposits: |
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Noninterest-bearing |
$ 523,844 |
$ 523,784 |
$ 369,658 |
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Interest-bearing |
1,779,037 |
1,797,697 |
1,430,029 |
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Total deposits |
2,302,881 |
2,321,481 |
1,799,687 |
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Borrowed funds |
283,565 |
322,036 |
288,059 |
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Accrued interest payable |
4,123 |
4,298 |
1,768 |
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Fair value of derivative instruments – liability |
8,698 |
7,922 |
8,234 |
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Other liabilities |
39,162 |
39,918 |
24,412 |
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TOTAL LIABILITIES |
2,638,429 |
2,695,655 |
2,122,160 |
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STOCKHOLDERS’ EQUITY: |
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Preferred Stock $1.00 par value; authorized |
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3,000,000 shares; none issued in 2024 or 2023 |
– |
– |
– |
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Common stock |
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$1.00 par value; authorized 25,000,000 shares at March 31, 2024, December 31, 2023 and |
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March 31, 2023: issued 5,160,754 at March 31, 2024 and December 31, 2023 and |
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4,427,687 at March 31, 2023 |
5,161 |
5,161 |
4,428 |
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Additional paid-in capital |
143,227 |
143,233 |
80,926 |
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Retained earnings |
177,693 |
172,975 |
171,629 |
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Accumulated other comprehensive loss |
(26,620) |
(24,911) |
(26,762) |
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Treasury stock, at cost: 453,763 at March 31, 2024 and 453,760 shares |
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at December 31, 2023 and 456,638 shares at March 31, 2023 |
(16,787) |
(16,792) |
(16,983) |
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TOTAL STOCKHOLDERS’ EQUITY |
282,674 |
279,666 |
213,238 |
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TOTAL LIABILITIES AND |
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STOCKHOLDERS’ EQUITY |
$ 2,921,103 |
$ 2,975,321 |
$ 2,335,398 |
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CITIZENS FINANCIAL SERVICES, INC. |
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CONSOLIDATED STATEMENT OF INCOME |
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(UNAUDITED) |
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Three Months Ended |
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March 31, |
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(in thousands, except share and per share data) |
2024 |
2023 |
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INTEREST INCOME: |
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Interest and fees on loans |
$ 35,133 |
$ 22,549 |
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Interest-bearing deposits with banks |
243 |
71 |
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Investment securities: |
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Taxable |
1,624 |
1,556 |
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Nontaxable |
532 |
617 |
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Dividends |
401 |
314 |
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TOTAL INTEREST INCOME |
37,933 |
25,107 |
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INTEREST EXPENSE: |
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Deposits |
12,321 |
3,939 |
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Borrowed funds |
4,654 |
3,088 |
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TOTAL INTEREST EXPENSE |
16,975 |
7,027 |
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NET INTEREST INCOME |
20,958 |
18,080 |
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Provision for credit losses |
785 |
– |
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Provision for credit losses – acquisition day 1 non-PCD |
– |
– |
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NET INTEREST INCOME AFTER |
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PROVISION FOR CREDIT LOSSES |
20,173 |
18,080 |
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NON-INTEREST INCOME: |
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Service charges |
1,372 |
1,211 |
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Trust |
244 |
230 |
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Brokerage and insurance |
665 |
514 |
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Gains on loans sold |
417 |
45 |
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Equity security gains (losses), net |
55 |
(218) |
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Available for sale security losses, net |
– |
– |
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Earnings on bank owned life insurance |
668 |
218 |
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Gain on sale of Braavo division |
1,102 |
– |
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Other |
448 |
174 |
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TOTAL NON-INTEREST INCOME |
4,971 |
2,174 |
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NON-INTEREST EXPENSES: |
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Salaries and employee benefits |
10,290 |
7,677 |
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Occupancy |
1,324 |
835 |
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Furniture and equipment |
236 |
151 |
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Professional fees |
703 |
381 |
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FDIC insurance expense |
525 |
300 |
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Pennsylvania shares tax |
310 |
298 |
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Amortization of intangibles |
148 |
31 |
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Software expenses |
514 |
351 |
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ORE (income) expenses |
(13) |
26 |
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Merger and acquisition expenses |
– |
244 |
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Other |
2,606 |
1,484 |
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TOTAL NON-INTEREST EXPENSES |
16,643 |
11,778 |
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Income before provision for income taxes |
8,501 |
8,476 |
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Provision for income tax expense |
1,477 |
1,609 |
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NET INCOME |
$ 7,024 |
$ 6,867 |
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PER COMMON SHARE DATA: |
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Net Income – Basic |
$ 1.49 |
$ 1.71 |
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Net Income – Diluted |
$ 1.49 |
$ 1.71 |
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Cash Dividends Paid |
$ 0.490 |
$ 0.480 |
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Number of shares used in computation – basic |
4,701,853 |
4,005,370 |
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Number of shares used in computation – diluted |
4,701,853 |
4,005,375 |
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CITIZENS FINANCIAL SERVICES, INC. |
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QUARTERLY CONDENSED, CONSOLIDATED INCOME (LOSS) STATEMENT INFORMATION |
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(UNAUDITED) |
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(in thousands, except per share data) |
Three Months Ended, |
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March 31, |
Dec 31, |
Sept 30, |
June 30, |
March 31, |
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2024 |
2023 |
2023 |
2023 |
2023 |
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Interest income |
$ 37,933 |
$ 38,512 |
$ 36,689 |
$ 26,810 |
$ 25,107 |
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Interest expense |
16,975 |
16,657 |
14,285 |
8,889 |
7,027 |
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Net interest income |
20,958 |
21,855 |
22,404 |
17,921 |
18,080 |
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Provision for credit losses |
785 |
200 |
475 |
262 |
– |
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Provision for credit losses – acquisition day 1 non-PCD |
– |
– |
– |
4,591 |
– |
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Net interest income after provision for credit losses |
20,173 |
21,655 |
21,929 |
13,068 |
18,080 |
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Non-interest income |
4,916 |
3,410 |
3,593 |
2,405 |
2,392 |
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Investment securities gains (losses), net |
55 |
79 |
69 |
(125) |
(218) |
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Non-interest expenses |
16,643 |
15,920 |
16,444 |
20,680 |
11,778 |
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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 |
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Net income (loss) |
$ 7,024 |
$ 7,540 |
$ 7,548 |
$ (4,144) |
$ 6,867 |
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Earnings (Loss) Per Share Basic |
$ 1.49 |
$ 1.60 |
$ 1.61 |
$ (1.01) |
$ 1.71 |
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Earnings (Loss) Per Share Diluted |
$ 1.49 |
$ 1.60 |
$ 1.61 |
$ (1.01) |
$ 1.71 |
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CITIZENS FINANCIAL SERVICES, INC. |
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CONSOLIDATED AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS |
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(UNAUDITED) |
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Three Months Ended March 31, |
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2024 |
2023 |
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Average |
Average |
Average |
Average |
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Balance (1) |
Interest |
Rate |
Balance (1) |
Interest |
Rate |
|
|
(dollars in thousands) |
$ |
$ |
% |
$ |
$ |
% |
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ASSETS |
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Interest-bearing deposits at banks |
29,184 |
212 |
2.92 |
14,129 |
27 |
0.78 |
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Interest bearing time deposits at banks |
4,054 |
31 |
3.08 |
6,055 |
44 |
3.00 |
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Investment securities: |
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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 |
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Investment securities |
470,460 |
2,699 |
2.29 |
500,950 |
2,651 |
2.12 |
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Loans: (2)(3)(4) |
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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 |
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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 |
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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 |
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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 |
||
|
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 |
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 |
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 |
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 |
||
|
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 |
$ 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 |
SOURCE CITIZENS FINANCIAL SERVICES, INC.
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