CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FULL YEAR AND FOURTH QUARTER 2024 FINANCIAL RESULTS
MANSFIELD, Pa., Jan. 30, 2025 /PRNewswire/ -- Citizens Financial Services, Inc. (NASDAQ:CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three months and year ended December 31, 2024.
Highlights
- Net income was $27.8 million for 2024, which is $10.0 million, or 56.2%, more than 2024's net income due to the one-time merger and acquisition costs and the provision for credit losses on non-purchase credit deteriorated loans (the "NPC Provision") recorded in the second quarter of 2023 as a result of the acquisition of HV Bancorp, Inc., ("HVB"). The effective tax rate for 2024 was 17.4% compared to 17.2% in 2023.
- Net income was $8.0 million for the three months ended December 31, 2024, which is 5.9% more than the net income for 2023's comparable period. The effective tax rate for the three months ended December 31, 2024 was 16.4% compared to 18.3% in the comparable period in 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.
- Net interest income before the provision for credit losses was $86.5 million for 2024, an increase of $6.2 million, or 7.7%, over 2023.
- The provision for credit losses for 2024 was $2.6 million. The provision was significantly impacted by loans that were not sold as part of the Braavo sale that was completed in the first quarter of 2024. The provision for 2024 directly attributable to these loans was $1,806,000. As of December 31, 2024, the Company had approximately $971,000 of Braavo loans of which $774,000 were considering performing as of December 31, 2024.
- Return on average equity for the three months (annualized) and the year ended December 31, 2024 was 10.63% and 9.59% compared to 11.29% and 7.39% for the three months (annualized) and the year ended December 31, 2023, respectively. If accumulated other comprehenisve loss is excluded, the return on average equity for the three months (annualized) and the year ended December 31, 2024 was 9.91% and 8.82% compared to 9.93% and 6.52% for the three months (annualized) and the year ended December 31, 2023, respectively (1). If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average equity for the year ended December 31, 2024 would have been 9.84% (1).
- Return on average tangible equity (non-GAAP) for the three months (annualized) and the year ended December 31, 2024 was 15.10% and 13.84% compared to 16.88% and 10.00% for the three months (annualized) and the year ended December 31, 2023, respectively. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average tangible equity for the year ended December 31, 2024 would have been 14.19% (annualized) (1).
- Return on average assets for the three months (annualized) and the year ended December 31, 2024 was 1.06% and 0.93% compared to 1.01% and 0.67% for the three months (annualized) and the year ended December 31, 2023, respectively. If the provision for the credit losses attributable to the Braavo loans and the gain on the sale of Braavo are excluded, the return on average assets for the year ended December 31, 2024 would have been 0.96% (annualized) (1).
2024 Compared to 2023
- For 2024, net income totaled $27,818,000 which compares to net income of $17,811,000 for 2023, an increase of $10,007,000. Basic and diluted earnings per share were $5.86 and $5.85, respectively, for 2024 compares to $4.02 per share for 2023. Return on equity for 2024 and 2023 was 9.59% and 7.39%, while return on assets was 0.93% and 0.67%, respectively. The increase in performance when comparing 2024 to 2023 was due to the one time costs associated with the acquisition of HVB and the NPC Provision recorded in 2023.
- Net interest income before the provision for credit loss for 2024 totaled $86,445,000 compared to $80,260,000 for 2023, resulting in an increase of $6,195,000, or 7.7%. Average interest earning assets increased $262.0 million in 2024 compared to 2023, primarily due to the HVB acquisition. Average loans increased $290.8 million while average investment securities decreased $31.2 million. The yield on interest earning assets increased 49 basis points to 5.56%, while the cost of interest-bearing liabilities increased 66 basis points to 3.00% due to the rise in market interest rates and competitive pressure. The tax effected net interest margin for 2024 was 3.13% compared to 3.21% for 2023.
- The provision for credit losses for 2024 was $2,587,000 compared to $5,528,000 for 2023, a decrease of $2,941,000. The provision for 2024 was impacted by the Braavo loans as previously mentioned and an increase in past due, non-accrual and classified loans during the final three quarters of 2024. As a result of the HVB acquisition during 2023, the Company recorded a $4.6 million provision for credit losses for loans acquired that did not have any credit deterioration at the time of purchase. Excluding the impact of the acquisition from 2023, the provision would have increased $1,650,000 when comparing 2024 to 2023 with the increase being attributable to the Braavo loans and the increase in past due, non-accrual and substandard loans in 2024.
- Total non-interest income was $15,401,000 for 2024, which is $3,796,000 more than the non-interest income of $11,605,000 for 2023. 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 all increased. Earnings on bank owned life insurance also increased due to the passing of a former employee in the first quarter of 2024. During 2024, the Company experienced a gain on its equity investment portfolio compared to a loss during 2023.
- Total non-interest expenses for 2024 totaled $65,586,000 compared to $64,822,000 for 2023, which is an increase of $764,000, or 1.2%. Salary and benefit costs increased $4,357,000, or 12.5%, due to an additional 34.3 FTEs as a result of the acquisition, merit increases for 2024, as well as an increase in health insurance costs due to additional headcount and claims. The increases in occupancy, furniture and fixtures, software expenses and amortization expenses was due to the HVB acquisition and additional branches as part of it. FDIC insurance expense increased $521,000 due to the Company's increased size and the Bank's lower leverage capital ratio during the first half of 2024 compared to 2023. Professional fees increased due to increased legal expenses, of which $201,000 was related to the sale of certain Braavo assets. Pennsylvania shares tax increased due to the increased size of the Bank. 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 HVB acquisition, other expenses increased due to insurance reimbursement received in 2023 to cover amounts previously charged-off through expense. Merger and acquisitions costs for the HVB acquisition totaled $9,269,000 in 2023 and included professional and consulting fees, printing, travel, contract termination payments and severance-related expenses.
- The provision for income taxes increased $2,161,000 when comparing 2024 to 2023 as a result of an increase in income before income tax of $12,168,000.
Three Months Ended December 31, 2024 Compared to December 31, 2023
- For the three months ended December 31, 2024, net income totaled $7,983,000 which compares to net income of $7,540,000 for the comparable period of 2023, an increase of $443,000. Basic and diluted earnings per share of $1.68 for the three months ended December 31, 2024 compares to $1.59 for the 2023 comparable period. Annualized return on equity for the three months ended December 31, 2024 and 2023 was 10.63% and 11.29%, while annualized return on assets was 1.06% and 1.01%, respectively.
- Net interest income before the provision for credit loss for the three months ended December 31, 2024 totaled $22,873,000 compared to $21,855,000 for the three months ended December 31, 2023, resulting in an increase of $1,018,000, or 4.7%. Average interest earning assets increased $20.3 million for the three months ended December 31, 2024 compared to the same period last year due to organic growth. Average loans increased $35.8 million while average investment securities decreased $14.0 million. The tax effected net interest margin for the three months ended December 31, 2024 was 3.26% compared to 3.13% for the same period last year, which was impacted by the increase in the average yield on interest earning assets of 16 basis points, to 5.65%.
- There was no provision for credit losses recorded during the three months ended December 31, 2024 compared to a provision of credit losses of $200,000 for the three months ended December 31, 2023. The decrease in the provision is due to lower loan growth in the fourth quarter of 2024 compared to the same period in 2023.
- Total non-interest income was $3,339,000 for the three months ended December 31, 2024, which is $150,000 less than for the comparable period last year. The primary driver was the decrease in gains on loans sold.
- Total non-interest expenses for the three months ended December 31, 2024 totaled $16,668,000 compared to $15,920,000 for the same period last year, which is an increase of $748,000. Salaries and benefits increased $333,000 due primarily an increase in profit sharing expense accrued based on financial results for 2024. Pennsylvania shares tax increased due to the increased size of the Bank and timing and amount contributions that provide tax credits utilized as a reduction of the expense.
- The provision for income taxes decreased $123,000 when comparing the three months ended December 31, 2024 to the same period in 2023 primarily due to tax credits and activity associated with our investments in various low income housing partnerships, as a third investment started to provide credits in the fourth quarter of 2024. The effective tax rate was 16.4% and 18.3% for the three months ended December 31, 2024 and 2023, respectively.
Balance Sheet and Other Information:
- At December 31, 2024, total assets were $3.03 billion, compared to $2.98 billion at December 31, 2023. The loan to deposit ratio as of December 31, 2024 was 97.11% compared to 96.87% as of December 31, 2023.
- Available for sale securities of $425.9 million at December 31, 2024 increased $8.3 million from December 31, 2023. The yield on the investment portfolio increased from 2.20% to 2.44% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. During 2024, we purchased $70.4 million of investments, which offset the $62.9 million of investments that matured or were called during 2024.
- Net loans as of December 31, 2024 totaled $2.29 billion an increase of $63.9 million from December 31, 2023, due to primarily to an increase in student loans outstanding. Loans would have increased an additional $6.1 million, if not for the Braavo disposition.
- The allowance for credit losses - loans totaled $21,699,000 at December 31, 2024 which is an increase of $546,000 from December 31, 2023. The increase is due to change in expected prepayment speeds, changes in economic forecasts and an increase in past due and substandard loans. The provision for credit losses on loans was $3,176,000 for 2024 compared to $901,000 for 2023. Loan recoveries and charge-offs were $43,000 and $2,673,000, respectively, 2024 with the majority of the charge-offs associated with loans acquired as part of the HVB acquisition. If the Braavo charge-offs were excluded, charge-offs as a percent of average loans would decrease from 0.11% to 0.01%. The allowance as a percent of total loans was 0.94% as of December 31, 2024 and 2023.
- Non-performing assets totaled $28.6 million as of December 31, 2024, an increase of $15.4 million since December 31, 2023. The increase was driven by eight large commercial relationships being placed on non-accrual status during 2024. Six of these relationships were acquired as part of the HVB acquisition. Several of the loans matured and took an extended period of time to be underwritten and extended in accordance with Company policies during which time payments were not received resulting the loans being placed on non-accrual status. Several relationships have started making payments under revised terms. Of these relationships, three required specific reserves as of December 31, 2024, which totaled approximately $459,000. Accruing loans past due 30-89 days totaled $8.0 million, a decrease of $2.4 million from December 31, 2023 that was driven by loans transferred to non-accrual status during 2024.
- Deposits increased $60.5 million from December 31, 2023, to $2.38 billion at December 31, 2024. With the rise in market interest rates, competitive pressure for deposits continues to be at the forefront. Additionally, we have numerous state and political organization depositors with seasonal funding timelines. During 2024, brokered certificates of deposit decreased $16.2 million to $93.1 million. At December 31, 2024, the Bank estimates that deposit balances held by customers in excess of the FDIC insurance limit ($250,000 per insured account) totaled $1.16 billion, or 48.7% of the Bank's total deposits. Included in this balance are balances held through Intrafi, which provides customers with additional FDIC insurance, as well as deposits collateralized by securities or letters of credit (almost exclusively municipal deposits). The total of these items was $638.6 million, or 26.8% of the Bank's total deposits, as of December 31, 2024.
- Stockholders' equity totaled $299.7 million at December 31, 2024, compared to $279.7 million at December 31, 2023, an increase of $20.1 million. Excluding accumulated other comprehensive loss (AOCL), stockholders' equity increased $18.7 million to $323.3 million at December 31, 2024. The increase in stockholders' equity, excluding AOCL, was attributable to net income for 2024 totaling $27.8 million, offset by cash dividends for 2024 totaling $9.3 million, net treasury stock activity of $412,000. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCL decreased $1.4 million from December 31, 2023.
Dividend Declared
On December 3, 2024, the Board of Directors declared a cash dividend of $0.49 per share, which was paid on December 27, 2024 to shareholders of record at the close of business on December 13, 2024. The quarterly cash dividend is an increase of 1.0% over the regular cash dividend of $0.485 per share declared one year ago, as adjusted for the 1% stock dividend declared in June 2024.
Citizens Financial Services, Inc. has nearly 1,850 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 | As of or For The | |||
Three Months Ended | Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Income and Performance Ratios | ||||
Net Income | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
Return on average assets (annualized) | 1.06 % | 1.01 % | 0.93 % | 0.67 % |
Return on average equity (annualized) | 10.63 % | 11.29 % | 9.59 % | 7.39 % |
Return on average tangible equity (annualized) (a) | 15.10 % | 16.88 % | 13.84 % | 10.00 % |
Net interest margin (tax equivalent) (a) | 3.26 % | 3.13 % | 3.13 % | 3.21 % |
Earnings per share - basic (b) | $ 1.68 | $ 1.59 | $ 5.86 | $ 4.02 |
Earnings per share - diluted (b) | $ 1.68 | $ 1.59 | $ 5.85 | $ 4.02 |
Cash dividends paid per share (b) | $ 0.490 | $ 0.485 | $ 1.950 | $ 1.920 |
Number of shares used in computation - basic (b) | 4,750,062 | 4,746,719 | 4,750,185 | 4,429,162 |
Number of shares used in computation - diluted (b) | 4,752,505 | 4,746,720 | 4,755,066 | 4,429,162 |
Asset quality | ||||
Allowance for credit losses - loans | $ 21,699 | $ 21,153 | ||
Non-performing assets | $ 28,612 | $ 13,177 | ||
Allowance for credit losses - loans to total loans | 0.94 % | 0.94 % | ||
Non-performing assets to total loans | 1.24 % | 0.59 % | ||
Annualized net charge-offs to total loans | 0.01 % | 0.09 % | 0.11 % | 0.06 % |
Equity | ||||
Book value per share (b) | $ 62.97 | $ 58.83 | ||
Tangible Book value per share (a) (b) | $ 44.35 | $ 40.02 | ||
Market Value (Last reported trade of month) | $ 63.31 | $ 64.72 | ||
Common shares outstanding | 4,759,612 | 4,706,994 | ||
Other | ||||
Average Full Time Equivalent Employees | 388.5 | 395.3 | 392.0 | 357.7 |
Loan to Deposit Ratio | 97.11 % | 96.87 % | ||
Trust assets under management | $ 180,710 | $ 167,894 | ||
Brokerage assets under management | $ 395,869 | $ 329,446 | ||
Balance Sheet Highlights | December 31, | December 31, | ||
2024 | 2023 | |||
Assets | $ 3,025,724 | $ 2,975,321 | ||
Investment securities | 427,659 | 419,539 | ||
Loans (net of unearned income) | 2,313,242 | 2,248,836 | ||
Allowance for credit losses - loans | 21,699 | 21,153 | ||
Deposits | 2,382,028 | 2,321,481 | ||
Stockholders' Equity | 299,734 | 279,666 | ||
(a) See reconcilation 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) | ||
December 31, | December 31, | |
(in thousands except share data) | 2024 | 2023 |
ASSETS: | ||
Cash and due from banks: | ||
Noninterest-bearing | $ 30,284 | $ 37,733 |
Interest-bearing | 11,918 | 15,085 |
Total cash and cash equivalents | 42,202 | 52,818 |
Interest bearing time deposits with other banks | 3,820 | 4,070 |
Equity securities | 1,747 | 1,938 |
Available-for-sale securities | 425,912 | 417,601 |
Loans held for sale | 9,607 | 9,379 |
Loans (net of allowance for credit losses - loans: $21,699 at December 31, 2024; | ||
$21,153 at December 31, 2023) | 2,291,543 | 2,227,683 |
Premises and equipment | 21,395 | 21,384 |
Accrued interest receivable | 10,307 | 11,043 |
Goodwill | 85,758 | 85,758 |
Bank owned life insurance | 50,341 | 49,897 |
Other intangibles | 2,892 | 3,650 |
Fair value of derivative instruments - asset | 10,370 | 13,687 |
Deferred tax asset | 15,199 | 17,339 |
Other assets | 54,631 | 59,074 |
TOTAL ASSETS | $ 3,025,724 | $ 2,975,321 |
LIABILITIES: | ||
Deposits: | ||
Noninterest-bearing | $ 532,776 | $ 523,784 |
Interest-bearing | 1,849,252 | 1,797,697 |
Total deposits | 2,382,028 | 2,321,481 |
Borrowed funds | 297,721 | 322,036 |
Accrued interest payable | 4,693 | 4,298 |
Fair value of derivative instruments - liability | 5,817 | 7,922 |
Other liabilities | 35,731 | 39,918 |
TOTAL LIABILITIES | 2,725,990 | 2,695,655 |
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 December 31, 2024, and 2023: | ||
issued 5,207,577 at December 31, 2024 and 5,160,754 at December 31, 2023 | 5,208 | 5,161 |
Additional paid-in capital | 144,984 | 143,233 |
Retained earnings | 189,443 | 172,975 |
Accumulated other comprehensive loss | (23,521) | (24,911) |
Treasury stock, at cost: 447,965 at December 31, 2024 and 453,760 shares | ||
at December 31, 2023 | (16,380) | (16,792) |
TOTAL STOCKHOLDERS' EQUITY | 299,734 | 279,666 |
TOTAL LIABILITIES AND | ||
STOCKHOLDERS' EQUITY | $ 3,025,724 | $ 2,975,321 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
CONSOLIDATED STATEMENT OF INCOME | ||||
(UNAUDITED) | ||||
Three Months Ended | Year Ended | |||
December 31, | December 31, | |||
(in thousands, except share and per share data) | 2024 | 2023 | 2024 | 2023 |
INTEREST INCOME: | ||||
Interest and fees on loans | $ 36,630 | $ 35,637 | $ 142,688 | $ 116,075 |
Interest-bearing deposits with banks | 156 | 274 | 851 | 736 |
Investment securities: | ||||
Taxable | 2,112 | 1,663 | 7,135 | 6,636 |
Nontaxable | 524 | 535 | 2,093 | 2,264 |
Dividends | 371 | 403 | 1,550 | 1,407 |
TOTAL INTEREST INCOME | 39,793 | 38,512 | 154,317 | 127,118 |
INTEREST EXPENSE: | ||||
Deposits | 13,875 | 12,180 | 52,326 | 31,699 |
Borrowed funds | 3,045 | 4,477 | 15,536 | 15,159 |
TOTAL INTEREST EXPENSE | 16,920 | 16,657 | 67,862 | 46,858 |
NET INTEREST INCOME | 22,873 | 21,855 | 86,455 | 80,260 |
Provision for credit losses | - | 200 | 2,587 | 937 |
Provision for credit losses - acquisition day 1 non-PCD | - | - | - | 4,591 |
NET INTEREST INCOME AFTER | ||||
PROVISION FOR CREDIT LOSSES | 22,873 | 21,655 | 83,868 | 74,732 |
NON-INTEREST INCOME: | ||||
Service charges | 1,356 | 1,443 | 5,749 | 5,639 |
Trust | 187 | 181 | 816 | 764 |
Brokerage and insurance | 608 | 495 | 2,381 | 1,924 |
Gains on loans sold | 596 | 737 | 2,316 | 1,464 |
Equity security gains (losses), net | 18 | 79 | 145 | (144) |
Available for sale security losses, net | - | - | - | (51) |
Earnings on bank owned life insurance | 350 | 313 | 1,684 | 1,254 |
Gain on sale of Braavo division | - | - | 1,102 | - |
Other | 224 | 241 | 1,208 | 755 |
TOTAL NON-INTEREST INCOME | 3,339 | 3,489 | 15,401 | 11,605 |
NON-INTEREST EXPENSES: | ||||
Salaries and employee benefits | 9,725 | 9,392 | 39,347 | 34,990 |
Occupancy | 1,208 | 1,253 | 5,013 | 4,123 |
Furniture and equipment | 247 | 254 | 1,038 | 822 |
Professional fees | 578 | 688 | 2,599 | 1,962 |
FDIC insurance expense | 407 | 475 | 1,996 | 1,475 |
Pennsylvania shares tax | 248 | (310) | 1,114 | 583 |
Amortization of intangibles | 132 | 154 | 564 | 373 |
Software expenses | 445 | 510 | 1,953 | 1,784 |
ORE (recovery) expenses | (34) | 40 | 212 | 166 |
Merger and acquisition expenses | - | - | - | 9,269 |
Other | 3,712 | 3,464 | 11,750 | 9,275 |
TOTAL NON-INTEREST EXPENSES | 16,668 | 15,920 | 65,586 | 64,822 |
Income before provision for income taxes | 9,544 | 9,224 | 33,683 | 21,515 |
Provision for income tax expense | 1,561 | 1,684 | 5,865 | 3,704 |
NET INCOME | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
PER COMMON SHARE DATA: | ||||
Net Income - Basic | $ 1.68 | $ 1.59 | $ 5.86 | $ 4.02 |
Net Income - Diluted | $ 1.68 | $ 1.59 | $ 5.85 | $ 4.02 |
Cash Dividends Paid | $ 0.490 | $ 0.485 | $ 1.950 | $ 1.920 |
Number of shares used in computation - basic | 4,750,062 | 4,746,719 | 4,750,185 | 4,429,162 |
Number of shares used in computation - diluted | 4,752,505 | 4,746,720 | 4,755,066 | 4,429,162 |
CITIZENS FINANCIAL SERVICES, INC. | |||||
QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION | |||||
(UNAUDITED) | |||||
(in thousands, except per share data) | Three Months Ended, | ||||
Dec 31, | Sept 30, | June 30, | March 31, | Dec 31, | |
2024 | 2024 | 2024 | 2024 | 2023 | |
Interest income | $ 39,793 | $ 38,689 | $ 37,902 | $ 37,933 | $ 38,512 |
Interest expense | 16,920 | 17,365 | 16,602 | 16,975 | 16,657 |
Net interest income | 22,873 | 21,324 | 21,300 | 20,958 | 21,855 |
Provision (negative) for credit losses | - | (200) | 2,002 | 785 | 200 |
Net interest income after provision (negative) for credit losses | 22,873 | 21,524 | 19,298 | 20,173 | 21,655 |
Non-interest income | 3,321 | 3,596 | 3,423 | 4,916 | 3,410 |
Investment securities gains (losses), net | 18 | 159 | (87) | 55 | 79 |
Non-interest expenses | 16,668 | 16,029 | 16,246 | 16,643 | 15,920 |
Income before provision for income taxes | 9,544 | 9,250 | 6,388 | 8,501 | 9,224 |
Provision for income tax expense | 1,561 | 1,714 | 1,113 | 1,477 | 1,684 |
Net income | $ 7,983 | $ 7,536 | $ 5,275 | $ 7,024 | $ 7,540 |
Earnings Per Share - Basic | $ 1.68 | $ 1.59 | $ 1.11 | $ 1.48 | $ 1.59 |
Earnings Per Share - Diluted | $ 1.68 | $ 1.59 | $ 1.11 | $ 1.48 | $ 1.59 |
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, | ||||||
2024 | 2023 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Interest-bearing deposits at banks | 17,680 | 126 | 2.84 | 18,507 | 239 | 5.12 |
Interest bearing time deposits at banks | 3,820 | 30 | 3.12 | 4,410 | 35 | 3.06 |
Investment securities: | ||||||
Taxable | 368,221 | 2,483 | 2.70 | 377,292 | 2,066 | 2.19 |
Tax-exempt (3) | 103,375 | 664 | 2.57 | 108,353 | 678 | 2.50 |
Investment securities | 471,596 | 3,147 | 2.67 | 485,645 | 2,744 | 2.26 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 355,108 | 5,146 | 5.77 | 358,735 | 5,120 | 5.66 |
Construction loans | 173,427 | 3,276 | 7.51 | 197,420 | 3,653 | 7.34 |
Commercial Loans | 1,248,114 | 19,716 | 6.28 | 1,208,249 | 19,482 | 6.40 |
Agricultural Loans | 355,557 | 5,275 | 5.90 | 339,720 | 4,302 | 5.02 |
Loans to state & political subdivisions | 55,333 | 555 | 3.99 | 56,710 | 562 | 3.93 |
Other loans | 139,567 | 2,770 | 7.90 | 130,468 | 2,627 | 7.99 |
Loans, net of discount (2)(3)(4) | 2,327,106 | 36,738 | 6.28 | 2,291,302 | 35,746 | 6.19 |
Total interest-earning assets | 2,820,202 | 40,041 | 5.65 | 2,799,864 | 38,764 | 5.49 |
Cash and due from banks | 9,088 | 11,215 | ||||
Bank premises and equipment | 21,291 | 21,446 | ||||
Other assets | 186,815 | 191,231 | ||||
Total non-interest earning assets | 217,194 | 223,892 | ||||
Total assets | 3,037,396 | 3,023,756 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
NOW accounts | 759,604 | 4,648 | 2.43 | 816,067 | 5,344 | 2.60 |
Savings accounts | 289,798 | 367 | 0.50 | 312,575 | 417 | 0.53 |
Money market accounts | 422,624 | 3,351 | 3.15 | 400,971 | 2,910 | 2.88 |
Certificates of deposit | 544,320 | 5,509 | 4.03 | 401,932 | 3,509 | 3.46 |
Total interest-bearing deposits | 2,016,346 | 13,875 | 2.74 | 1,931,545 | 12,180 | 2.50 |
Other borrowed funds | 273,604 | 3,045 | 4.43 | 351,492 | 4,477 | 5.05 |
Total interest-bearing liabilities | 2,289,950 | 16,920 | 2.94 | 2,283,037 | 16,657 | 2.89 |
Demand deposits | 395,714 | 389,927 | ||||
Other liabilities | 29,545 | 46,888 | ||||
Total non-interest-bearing liabilities | 425,259 | 436,815 | ||||
Stockholders' equity | 322,187 | 303,904 | ||||
Total liabilities & stockholders' equity | 3,037,396 | 3,023,756 | ||||
Net interest income | 23,121 | 22,107 | ||||
Net interest spread (5) | 2.71 % | 2.60 % | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.26 % | 3.13 % | ||||
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 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 AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN ON A FULLY TAX-EQUIVALENT BASIS | ||||||
(UNAUDITED) | ||||||
Year Ended December 31, | ||||||
2024 | 2023 | |||||
Average | Average | Average | Average | |||
Balance (1) | Interest | Rate | Balance (1) | Interest | Rate | |
(dollars in thousands) | $ | $ | % | $ | $ | % |
ASSETS | ||||||
Interest-bearing deposits at banks | 28,264 | 730 | 2.58 | 24,470 | 572 | 2.34 |
Interest bearing time deposits at banks | 3,878 | 121 | 3.09 | 5,255 | 164 | 3.10 |
Investment securities: | ||||||
Taxable | 359,724 | 8,685 | 2.41 | 383,241 | 8,043 | 2.10 |
Tax-exempt (3) | 105,141 | 2,650 | 2.52 | 112,806 | 2,866 | 2.54 |
Investment securities | 464,865 | 11,335 | 2.44 | 496,047 | 10,909 | 2.20 |
Loans: (2)(3)(4) | ||||||
Residential mortgage loans | 356,292 | 20,758 | 5.83 | 290,971 | 15,918 | 5.47 |
Construction loans | 182,714 | 13,607 | 7.45 | 135,315 | 9,485 | 7.01 |
Commercial Loans | 1,242,182 | 78,912 | 6.35 | 1,081,488 | 64,561 | 5.97 |
Agricultural Loans | 350,588 | 18,978 | 5.41 | 342,980 | 17,061 | 4.97 |
Loans to state & political subdivisions | 55,919 | 2,213 | 3.96 | 59,308 | 2,299 | 3.88 |
Other loans | 107,656 | 8,654 | 8.04 | 94,519 | 7,204 | 7.62 |
Loans, net of discount (2)(3)(4) | 2,295,351 | 143,122 | 6.24 | 2,004,581 | 116,528 | 5.81 |
Total interest-earning assets | 2,792,358 | 155,308 | 5.56 | 2,530,353 | 128,173 | 5.07 |
Cash and due from banks | 9,306 | 9,341 | ||||
Bank premises and equipment | 21,124 | 19,871 | ||||
Other assets | 183,674 | 139,474 | ||||
Total non-interest earning assets | 214,104 | 168,686 | ||||
Total assets | 3,006,462 | 2,699,039 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Interest-bearing liabilities: | ||||||
NOW accounts | 765,445 | 19,205 | 2.51 | 666,505 | 13,396 | 2.01 |
Savings accounts | 296,275 | 1,532 | 0.52 | 318,299 | 1,314 | 0.41 |
Money market accounts | 397,942 | 12,482 | 3.14 | 364,385 | 8,713 | 2.39 |
Certificates of deposit | 481,862 | 19,107 | 3.97 | 328,553 | 8,276 | 2.52 |
Total interest-bearing deposits | 1,941,524 | 52,326 | 2.70 | 1,677,742 | 31,699 | 1.89 |
Other borrowed funds | 323,409 | 15,536 | 4.80 | 326,577 | 15,159 | 4.64 |
Total interest-bearing liabilities | 2,264,933 | 67,862 | 3.00 | 2,004,319 | 46,858 | 2.34 |
Demand deposits | 385,702 | 382,979 | ||||
Other liabilities | 40,593 | 38,419 | ||||
Total non-interest-bearing liabilities | 426,295 | 421,398 | ||||
Stockholders' equity | 315,234 | 273,322 | ||||
Total liabilities & stockholders' equity | 3,006,462 | 2,699,039 | ||||
Net interest income | 87,446 | 81,315 | ||||
Net interest spread (5) | 2.56 % | 2.73 % | ||||
Net interest income as a percentage | ||||||
of average interest-earning assets | 3.13 % | 3.21 % | ||||
Ratio of interest-earning assets | ||||||
to interest-bearing liabilities | 123 % | 126 % | ||||
(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) | |||||
December 31, | September 30, | June 30, | March 31, | December 31, | |
2024 | 2024 | 2024 | 2024 | 2023 | |
Real estate: | |||||
Residential | $ 351,398 | $ 353,254 | $ 354,588 | $ 357,779 | $ 359,990 |
Commercial | 1,121,435 | 1,110,548 | 1,110,269 | 1,115,900 | 1,092,887 |
Agricultural | 327,722 | 331,734 | 327,057 | 318,413 | 314,802 |
Construction | 164,326 | 178,706 | 180,157 | 184,506 | 195,826 |
Consumer | 133,207 | 143,064 | 70,542 | 53,101 | 61,316 |
Other commercial loans | 131,310 | 134,285 | 130,851 | 129,438 | 136,168 |
Other agricultural loans | 29,662 | 24,537 | 26,247 | 24,345 | 30,673 |
State & political subdivision loans | 54,182 | 54,874 | 56,005 | 56,177 | 57,174 |
Total loans | 2,313,242 | 2,331,002 | 2,255,716 | 2,239,659 | 2,248,836 |
Less: allowance for credit losses - loans | 21,699 | 21,695 | 22,797 | 21,598 | 21,153 |
Net loans | $ 2,291,543 | $ 2,309,307 | $ 2,232,919 | $ 2,218,061 | $ 2,227,683 |
Past due and non-performing assets | |||||
Total Loans past due 30-89 days and still accruing | $ 8,015 | $ 7,423 | $ 20,652 | $ 6,311 | $ 10,457 |
Non-accrual loans | $ 25,701 | $ 20,858 | $ 14,949 | $ 14,693 | $ 12,187 |
Loans past due 90 days or more and accruing | 276 | 701 | 285 | 820 | 516 |
Non-performing loans | $ 25,977 | $ 21,559 | $ 15,234 | $ 15,513 | $ 12,703 |
Other real estate owned | 2,635 | 2,486 | 2,690 | 200 | 474 |
Total Non-performing assets | $ 28,612 | $ 24,045 | $ 17,924 | $ 15,713 | $ 13,177 |
Three Months Ended | |||||
Analysis of the Allowance for Credit Losses - Loans | December 31, | September 30, | June 30, | March 31, | December 31, |
(In Thousands) | 2024 | 2024 | 2024 | 2024 | 2023 |
Balance, beginning of period | $ 21,695 | $ 22,797 | $ 21,598 | $ 21,153 | $ 21,455 |
Charge-offs | (105) | (1,212) | (682) | (674) | (510) |
Recoveries | 19 | 10 | 7 | 7 | 8 |
Net (charge-offs) recoveries | (86) | (1,202) | (675) | (667) | (502) |
Provision for credit losses - loans | 90 | 100 | 1,874 | 1,112 | 200 |
Balance, end of period | $ 21,699 | $ 21,695 | $ 22,797 | $ 21,598 | $ 21,153 |
CITIZENS FINANCIAL SERVICES, INC. | ||||
Reconciliation of GAAP and Non-GAAP Financial Measures | ||||
(UNAUDITED) | ||||
(Dollars in thousands, except per share data) | ||||
As of | ||||
December 31, | ||||
2024 | 2023 | |||
Tangible Equity | ||||
Stockholders Equity - GAAP | $ 299,734 | $ 279,666 | ||
Intangible Assets | (88,650) | (89,408) | ||
Tangible Equity - Non-GAAP | 211,084 | 190,258 | ||
Shares outstanding adjusted for June 2024 stock Dividend | 4,759,612 | 4,753,583 | ||
Tangible Book value per share - Non-GAAP | $ 44.35 | $ 40.02 | ||
As of | ||||
December 31, | ||||
2024 | 2023 | |||
Tangible Equity per share | ||||
Stockholders Equity per share - GAAP | $ 62.97 | $ 58.83 | ||
Adjustment for intangible assets | (18.62) | (18.81) | ||
Tangible Book value per share - Non-GAAP | $ 44.35 | $ 40.02 | ||
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Return on Average Assets Excluding Accumulated Other Comprehensive Loss (AOCL) | ||||
Average Stockholders Equity - GAAP | $ 3,015,467 | $ 2,987,084 | $ 2,981,322 | $ 2,666,841 |
Average AOCL | (21,929) | (36,672) | (25,140) | (32,198) |
Average Assets, Excluding AOCL - Non-GAAP | 3,037,396 | 3,023,756 | 3,006,462 | 2,699,039 |
Net Income - GAAP | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
Annualized Return on Average Assets-GAAP | 1.06 % | 1.01 % | 0.93 % | 0.67 % |
Annualized Return on Average Assets, Excluding AOCL - Non-GAAP | 1.05 % | 1.00 % | 0.93 % | 0.66 % |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Return on Average Equity Excluding Accumulated Other Comprehensive Loss (AOCL) | ||||
Average Stockholders Equity - GAAP | $ 300,258 | $ 267,232 | $ 290,094 | $ 241,124 |
Average AOCL | (21,929) | (36,672) | (25,140) | (32,198) |
Average Stockholder's Equity, Excluding AOCL - Non-GAAP | 322,187 | 303,904 | 315,234 | 273,322 |
Net Income - GAAP | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
Annualized Return on Average Stockholder's Equity-GAAP | 10.63 % | 11.29 % | 9.59 % | 7.39 % |
Annualized Return on Average Stockholder's Equity, Excluding AOCL - Non-GAAP | 9.91 % | 9.93 % | 8.82 % | 6.52 % |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Return on Average Tangible Equity | ||||
Average Stockholders Equity - GAAP | $ 300,258 | $ 267,232 | $ 290,094 | $ 241,124 |
Average Intangible Assets | (88,757) | (88,536) | (89,031) | (62,993) |
Average Tangible Equity - Non-GAAP | 211,501 | 178,696 | 201,063 | 178,131 |
Net Income - GAAP | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
Annualized Return on Average Tangible Equity Non-GAAP | 15.10 % | 16.88 % | 13.84 % | 10.00 % |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Return on Average Assets and Equity Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale and merger and acquisition costs | ||||
Net Income - GAAP | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
After tax gain on sale of Braavo, net of legal fees | - | - | (712) | - |
After tax provisision associatated with Braavo loans remaining after sale | - | - | 1,427 | - |
After tax provision for credit losses - acquisition day 1 non-PCD | - | - | - | 3,627 |
After Tax merger and acquisition costs | - | - | - | 7,513 |
Net Income excluding merger and acquisition costs - Non-GAAP | $ 7,983 | $ 7,540 | $ 28,533 | $ 28,951 |
Average Assets | 3,015,467 | 2,987,084 | 2,981,322 | 2,666,841 |
Annualized Return on Average assets, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax and merger and acquisition costs - Non-GAAP | 1.06 % | 1.01 % | 0.96 % | 1.09 % |
Average Stockholders Equity - GAAP | $ 300,258 | $ 267,232 | $ 290,094 | $ 241,124 |
Annualized Return on Average stockholders equity, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax and merger and acquisition costs - Non-GAAP | 10.63 % | 11.29 % | 9.84 % | 12.01 % |
Average Tangible Equity - Non-GAAP | 211,501 | 178,696 | 201,063 | 178,131 |
Annualized Return on Average Tangible Equity Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax, and merger and acquisition costs - Non-GAAP | 15.10 % | 16.88 % | 14.19 % | 16.25 % |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
2024 | 2023 | 2024 | 2023 | |
Earnings per share, Excluding sale of Braavo assets, net of legal fees and merger and acquisition costs | ||||
Net Income - GAAP | $ 7,983 | $ 7,540 | $ 27,818 | $ 17,811 |
After tax gain on sale of Braavo, net of legal fees | - | - | (712) | - |
After tax provisision associatated with Braavo loans remaining after sale | - | - | 1,427 | - |
After tax provision for credit losses - acquisition day 1 non-PCD | - | - | - | 3,627 |
After Tax merger and acquisition costs | - | - | - | 7,513 |
Net income excluding one time items - Non-GAAP | $ 7,983 | $ 7,540 | $ 28,533 | $ 28,951 |
Number of shares used in computation - basic | 4,750,062 | 4,746,719 | 4,750,185 | 4,429,162 |
Basic and Diluted earnings per share, Excluding sale of Braavo assets, net of legal fees, provision associated with Braavo loans remaining after sale, net of tax, and merger and acquisition costs - Non-GAAP | $ 1.68 | $ 1.59 | $ 6.01 | $ 6.54 |
For the Three Months Ended | For the Year Ended | |||
December 31, | December 31, | |||
Reconciliation of net interest income on fully taxable equivalent basis | 2024 | 2023 | 2024 | 2023 |
Total interest income | $ 39,793 | $ 38,512 | $ 154,317 | $ 127,118 |
Total interest expense | 16,920 | 16,657 | 67,862 | 46,858 |
Net interest income | 22,873 | 21,855 | 86,455 | 80,260 |
Tax equivalent adjustment | 248 | 252 | 991 | 1,055 |
Net interest income (fully taxable equivalent) - Non-GAAP | $ 23,121 | $ 22,107 | $ 87,446 | $ 81,315 |
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SOURCE Citizens Financial Services, Inc.