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CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED THIRD QUARTER 2024 FINANCIAL RESULTS

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Citizens Financial Services (NASDAQ: CZFS) reported net income of $19.8 million for the first nine months of 2024, a 93.1% increase from the same period in 2023. Net interest income before provision for credit losses was $63.6 million, up 8.9% year-over-year. The company completed the sale of certain Braavo assets in Q1 2024 for $7.2 million, generating a $1.1 million pre-tax gain. Total assets reached $3.03 billion, with net loans increasing by $81.6 million to $2.31 billion. The company declared a quarterly cash dividend of $0.49 per share, representing a 1.0% increase from the previous year.

Citizens Financial Services (NASDAQ: CZFS) ha riportato un reddito netto di 19,8 milioni di dollari nei primi nove mesi del 2024, con un incremento del 93,1% rispetto allo stesso periodo del 2023. Il reddito netto da interessi, prima delle rettifiche per perdite su crediti, è stato di 63,6 milioni di dollari, in aumento dell'8,9% rispetto all'anno precedente. L'azienda ha completato la vendita di alcuni attivi di Braavo nel primo trimestre del 2024 per 7,2 milioni di dollari, generando un guadagno ante imposte di 1,1 milioni di dollari. Gli attivi totali hanno raggiunto i 3,03 miliardi di dollari, con un aumento dei prestiti netti di 81,6 milioni di dollari a 2,31 miliardi di dollari. L'azienda ha dichiarato un dividendo in contante trimestrale di 0,49 dollari per azione, rappresentando un incremento dell'1,0% rispetto all'anno precedente.

Citizens Financial Services (NASDAQ: CZFS) reportó un ingreso neto de 19,8 millones de dólares durante los primeros nueve meses de 2024, un aumento del 93,1% en comparación con el mismo período de 2023. El ingreso neto por intereses antes de la provisión para pérdidas crediticias fue de 63,6 millones de dólares, un incremento del 8,9% interanual. La compañía completó la venta de ciertos activos de Braavo en el primer trimestre de 2024 por 7,2 millones de dólares, generando una ganancia antes de impuestos de 1,1 millones de dólares. Los activos totales alcanzaron los 3,03 mil millones de dólares, con un aumento de los préstamos netos de 81,6 millones de dólares a 2,31 mil millones de dólares. La empresa declaró un dividendo en efectivo trimestral de 0,49 dólares por acción, lo que representa un aumento del 1,0% en comparación con el año anterior.

Citizens Financial Services (NASDAQ: CZFS)는 2024년 첫 9개월 동안 1980만 달러의 순이익을 보고했으며, 이는 2023년 같은 기간 대비 93.1% 증가한 수치입니다. 신용 손실 충당금 이전의 순 이자 수익은 6360만 달러로 전년 대비 8.9% 증가했습니다. 회사는 2024년 1분기에 Braavo의 일부 자산을 720만 달러에 판매하여 세전 110만 달러의 이익을 창출했습니다. 총 자산은 30억 3000만 달러에 도달했으며 순 대출은 8160만 달러 증가하여 23억 1000만 달러에 이르렀습니다. 회사는 주당 0.49달러의 분기 배당금을 선언했으며, 이는 전년 대비 1.0% 증가한 수치입니다.

Citizens Financial Services (NASDAQ: CZFS) a déclaré un revenu net de 19,8 millions de dollars pour les neuf premiers mois de 2024, soit une augmentation de 93,1 % par rapport à la même période en 2023. Le produit net des intérêts avant provisions pour pertes sur créances s'élevait à 63,6 millions de dollars, en hausse de 8,9 % d'une année sur l'autre. La société a conclu la vente de certains actifs de Braavo au premier trimestre 2024 pour 7,2 millions de dollars, générant un gain avant impôt de 1,1 million de dollars. Les actifs totaux ont atteint 3,03 milliards de dollars, les prêts nets ayant augmenté de 81,6 millions de dollars pour atteindre 2,31 milliards de dollars. La société a déclaré un dividende en espèces trimestriel de 0,49 dollar par action, représentant une augmentation de 1,0 % par rapport à l'année précédente.

Citizens Financial Services (NASDAQ: CZFS) berichtete über einen Nettogewinn von 19,8 Millionen Dollar für die ersten neun Monate des Jahres 2024, was einem Anstieg von 93,1% im Vergleich zum gleichen Zeitraum im Jahr 2023 entspricht. Der Nettzinsüberschuss vor Rückstellungen für Kreditausfälle belief sich auf 63,6 Millionen Dollar, was einem Anstieg von 8,9% im Jahresvergleich entspricht. Das Unternehmen schloss den Verkauf bestimmter Braavo-Vermögenswerte im ersten Quartal 2024 für 7,2 Millionen Dollar ab und erzielte einen vorsteuerlichen Gewinn von 1,1 Millionen Dollar. Die Gesam Vermögenswerte erreichten 3,03 Milliarden Dollar, während die Nettokredite um 81,6 Millionen Dollar auf 2,31 Milliarden Dollar anstiegen. Das Unternehmen erklärte eine vierteljährliche Bardividende von 0,49 Dollar pro Aktie, was einem Anstieg von 1,0% im Vergleich zum Vorjahr entspricht.

Positive
  • Net income increased 93.1% to $19.8 million for first nine months of 2024
  • Net interest income grew 8.9% to $63.6 million
  • Sale of Braavo assets generated $1.1 million pre-tax gain
  • Net loans increased by $81.6 million to $2.31 billion
  • Quarterly dividend increased by 1.0% to $0.49 per share
Negative
  • Non-performing assets increased by $10.9 million since December 2023
  • Net interest margin declined to 3.09% from 3.29% year-over-year
  • Q3 2024 net income slightly decreased to $7.536 million from $7.548 million in Q3 2023

Insights

The Q3 2024 results show mixed performance for Citizens Financial Services. Net income for the first nine months reached $19.8 million, a significant 93.1% increase from 2023, though this was largely due to one-time merger costs in the previous year. The company's core operations show some concerning trends:

The net interest margin declined to 3.09% from 3.25% year-over-year, pressured by rising deposit costs. Non-performing assets increased by $10.9 million since December 2023, primarily from four large commercial relationships acquired in the HVB acquisition. The efficiency ratio and cost of funds metrics suggest growing operational pressures.

However, the loan portfolio grew by $81.6 million since December 2023 and deposits increased by $128.7 million. The allowance for credit losses remains stable at 0.93% of total loans, indicating reasonable credit quality management despite the increase in non-performing assets.

MANSFIELD, Penn., Oct. 30, 2024 /PRNewswire/ -- Citizens Financial Services, Inc. (Nasdaq: CZFS), parent company of First Citizens Community Bank, released today its unaudited consolidated financial results for the three and nine months ended September 30, 2024.

Highlights

  • Net income for the first nine months of 2024 was $19.8 million, which was $9.6 million, or 93.1% more than net income for the nine months ended September 30, 2023 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. The effective tax rate for the first nine months of 2024 was 17.8% compared to 16.4% in the comparable period in 2023.

  • Net income was $7.5 million for the three months ended September 30, 2024 and 2023. The effective tax rate for the three months ended September 30, 2024 was 18.5% compared to 17.5% 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. Legal fees associated with the sale totaled approximately $201,000.

  • Net interest income before the provision for credit losses was $63.6 million for the nine months ended September 30, 2024, an increase of $5.2 million, or 8.9%, over the same period a year ago.

  • The provision for credit losses for the nine months ended September 30, 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 the nine months ended September 30, 2024, directly attributable to these loans was $1,806,000. During the three months ended September 30, 2024, a negative provision for credit losses of $200,000 was recorded. As of September 30, 2024, the Company had approximately $884,000 of Braavo loans all of which were considered performing as of September 30, 2024.

  • Return on average equity for the three and nine months ended September 30, 2024 (annualized) was 9.53% and 8.45% compared to 10.10% and 5.21% for the three and nine months ended September 30, 2023 (annualized). 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 nine months ended September 30, 2024 would have been 8.76% (annualized) (1).

  • Return on average tangible equity for the three and nine months ended September 30, 2024 (annualized) was 14.82% and 13.39% compared to 14.37% and 6.56% for the three and nine months ended September 30, 2023 (annualized). 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 nine months ended September 30, 2024 would have been 13.87% (annualized) (1).

  • Return on average assets for the three and nine months ended September 30, 2024 (annualized) was 1.00% and 0.88% compared to 1.02% and 0.53% for the three and nine months ended September 30, 2023 (annualized). 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 nine months ended September 30, 2024 would have been 0.91% (annualized) (1).

Nine Months Ended September 30, 2024 Compared to 2023

  • For the nine months ended September 30, 2024, net income totaled $19,835,000 which compares to net income of $10,271,000 for the first nine months of 2023, an increase of $9,564,000. Basic earnings per share of $4.18 for the first nine months of 2024 compared to $2.38 for the first nine months last year. Annualized return on equity for the nine months ended September 30, 2024 and 2023 was 8.45% and 5.21%, while annualized return on assets was 0.88% and 0.53%, respectively. The increase in performance when comparing 2024 to 2023 was due to the one time costs associated with the acquisition of HV Bancorp, Inc., ("HVB") and the NPC Provision recorded in 2023.

  • Net interest income before the provision for credit loss for the nine months ended September 30, 2024 totaled $63,582,000 compared to $58,405,000 for the nine months ended September 30, 2023, resulting in an increase of $5,177,000, or 8.9%. Average interest earning assets increased $345.6 million for the nine months ended September 30, 2024 compared to the same period last year, primarily due to the HVB acquisition. Average loans increased $376.7 million while average investment securities decreased $36.9 million. The yield on interest earning assets increased 63 basis points to 5.54%, while the cost of interest-bearing liabilities increased 91 basis points to 3.02% due to the rise in market interest rates and competitive pressure. The tax effected net interest margin for the nine months ended September 30, 2024 was 3.09% compared to 3.25% for the same period last year.

  • The provision for credit losses for the nine months ended September 30, 2024 was $2,587,000 compared to $5,328,000 for the nine months ended September 30, 2023, a decrease of $2,741,000. 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 second quarter 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 $1,850,000 when comparing the nine month period of 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 $12,062,000 for the nine months ended September 30, 2024, which is $3,946,000 more than the non-interest income of $8,116,000 for the same 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 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 the first nine months of 2024, the Company experienced a gain on its equity investment portfolio compared to a loss during the comparable period in 2023.

  • Total non-interest expenses for the nine months ended September 30, 2024 totaled $48,918,000 compared to $48,902,000 for the same period last year, which is an increase of $16,000. Salary and benefit costs increased $4,024,000 due to an additional 47.8 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 $589,000 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. 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 $2,284,000 when comparing the nine months ended September 30, 2024 to the same period in 2023 as a result of an increase in income before income tax of $11,848,000.

Three Months Ended September 30, 2024 Compared to September 30, 2023

  • For the three months ended September 30, 2024, net income totaled $7,536,000 which compares to net income of $7,548,000 for the comparable period of 2023, a decrease of $12,000. Basic earnings per share was $1.59 for the three months ended September 30, 2024 and 2023. Annualized return on equity for the three months ended September 30, 2024 and 2023 was 9.53% and 10.10%, while annualized return on assets was 1.00% and 1.02%, respectively.

  • Net interest income before the provision for credit loss for the three months ended September 30, 2024 totaled $21,324,000 compared to $22,404,000 for the three months ended September 30, 2023, resulting in a decrease of $1,080,000, or 4.8%. Charged-off interest for three month period ended September 30, 2024 was $345,000 compared to $34,000 for the three months ended September 30, 2023. Average interest earning assets increased $39.4 million for the three months ended September 30, 2024 compared to the same period last year due to organic growth. Average loans increased $85.0 million while average investment securities decreased $39.0 million. The tax effected net interest margin for the three months ended September 30, 2024 was 3.09% compared to 3.29% for the same period last year, which was impacted by the increase in the average cost on interest bearing liabilities of 50 basis points, to 3.06%.

  • During the three months ended September 30, 2024, there was a negative provision for credit losses of $200,000 compared to a provision for credit losses for the three months ended September 30, 2023 of was $475,000. The decrease in the provision was primarily due to changes in qualitative factors in the calculation related to inflation.

  • Total non-interest income was $3,755,000 for the three months ended September 30, 2024, which is $93,000 more than for the comparable period last year. The primary driver was the increase in gains on loans sold. The decrease in earnings on bank owned life insurance was due to the Company receiving $195,000 of death benefits upon the passing of a former employee in the third quarter of 2023.

  • Total non-interest expenses for the three months ended September 30, 2024 totaled $16,029,000 compared to $16,444,000 for the same period last year, which is a decrease of $415,000. Salaries and benefits decreased $290,000 due to a decrease in headcount of 4.4 FTEs and commission expense for the comparable periods. FDIC insurance expense increased $180,000 due to the Company's increased size and the Bank's lower leverage capital ratio. Merger and acquisition costs totaled $623,000 for the third quarter of 2023.

  • The provision for income taxes increased $115,000 when comparing the three months ended September 30, 2024 to the same period in 2023 as a result of an increase in income before income tax of $103,000 and earnings on bank owned life insurance being exempt from Federal income tax. The effective tax rate was 18.5% and 17.5% for the three months ended September 30, 2024 and 2023, respectively.

Balance Sheet and Other Information:

  • At September 30, 2024, total assets were $3.03 billion, compared to $2.98 billion at December 31, 2023 and $2.96 billion at September 30, 2023. The loan to deposit ratio as of September 30, 2024 was 95.14% compared to 96.87% as of December 31, 2023 and 96.20% as of September 30, 2023.

  • Available for sale securities of $419.2 million at September 30, 2024 increased $1.6 million from December 31, 2023 and $1.4 million from September 30, 2023. The yield on the investment portfolio increased from 2.18% to 2.36% on a tax equivalent basis due to securities purchased during a higher rate environment and lower yielding securities maturing. During 2024, we have purchased $36.2 million of investments, which have helped to offset the $42.7 million of investments that have matured or have been called during 2024.

  • Net loans as of September 30, 2024 totaled $2.31 billion an increase of $81.6 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. In comparison to September 30, 2023, loans have grown $84.6 million with increases experienced in multiple portfolio sectors.

  • The allowance for credit losses - loans totaled $21,695,000 at September 30, 2024 which is an increase of $542,000 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 $3,086,000 for the first nine months of 2024. Loan recoveries and charge-offs were $24,000 and $2,568,000, respectively, for the nine months ended September 30, 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 0.93% as of September 30, 2024 and 0.94% as of December 31, 2023.

  • Non-performing assets totaled $24.0 million as of September 30, 2024, an increase of $10.9 million since December 31, 2023. The increase was driven by four large commercial relationships being placed on non-accrual status during the first nine months of 2024. These loans were acquired as part of the HVB acquisition with three of the loans maturing that are still in the process of being underwritten and extended in accordance with Company policies. Of these relationships, only one required a specific reserve as of September 30, 2024, which was approximately $355,000. Accruing loans past due 30-89 days totaled $7.4 million, a decrease of $3.0 million from December 31, 2023 that was driven by loans transferred to non-accrual status during 2024.

  • Deposits increased $128.7 million from December 31, 2023, to $2.45 billion at September 30, 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, which resulted in an increase in balances in the first nine months of the year. We also increased the amount of outstanding brokered deposits as of September 30, 2024 in comparison to December 31, 2023. At September 30, 2024, brokered deposits totaled $141.6 million compared to $109.3 million at December 31, 2024. At September 30, 2024, the Bank estimates that balances held by customers in excess of the FDIC insurance limit ($250,000 per insured account) totaled $1.24 billion, or 50.5% 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 $695.0 million, or 28.4% of the Bank's total deposits, as of September 30, 2024.

  • Stockholders' equity totaled $298.7 million at September 30, 2024, compared to $279.7 million at December 31, 2023, an increase of $19.0 million. Excluding accumulated other comprehensive loss (AOCI), stockholders' equity increased $13.0 million and totals $317.6 million. The increase in stockholders' equity, excluding AOCI, was attributable to net income for the nine months ended September 30, 2024 totaling $19.8 million, offset by cash dividends for 2024 totaling $7.0 million, net treasury and restricted stock activity of $293,000. As a result of decreases in market interest rates impacting the fair value of investment securities and swaps, AOCI decreased $6.0 million from December 31, 2023.

Dividend Declared

On September 3, 2024, the Board of Directors declared a cash dividend of $0.49 per share, which was paid on September 27, 2024 to shareholders of record at the close of business on September 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 1,900 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

As of or For The


Three Months Ended

Nine Months Ended


September 30,

September 30,


2024

2023

2024

2023

Income and Performance Ratios





Net Income

$              7,536

$          7,548

$          19,835

$        10,271

Return on average assets (annualized)

1.00 %

1.02 %

0.88 %

0.53 %

Return on average equity (annualized)

9.53 %

10.10 %

8.45 %

5.21 %

Return on average tangible equity (annualized) (a)

14.82 %

14.37 %

13.39 %

6.56 %

Net interest margin (tax equivalent) (a)

3.09 %

3.29 %

3.09 %

3.25 %

Earnings per share - basic (b)

$                1.59

$            1.59

$               4.18

$            2.38

Earnings per share - diluted (b)

$                1.59

$            1.59

$               4.17

$            2.38

Cash dividends paid per share (b)

$              0.490

$          0.485

$            1.460

$          1.435

Number of shares used in computation - basic (b)

4,749,679

4,746,541

4,748,988

4,321,848

Number of shares used in computation - diluted (b)

4,751,224

4,746,541

4,753,927

4,321,848











Asset quality





Allowance for credit losses - loans

$            21,695

$        21,455



Non-performing assets

$            24,045

$        13,621



Allowance for credit losses - loans to total loans

0.93 %

0.96 %



Non-performing assets to total loans

1.03 %

0.61 %



Annualized net charge-offs to total loans

0.21 %

0.14 %

0.15 %

0.05 %











Equity





Book value per share (b)

$              62.75

$          55.27



Tangible Book value per share (a) (b)

$              44.08

$          36.62



Market Value (Last reported trade of month)

$              58.75

$          47.92



Common shares outstanding

4,759,730

4,706,111













Other





Average Full Time Equivalent Employees

395.7

400.1

393.0

345.2

Loan to Deposit Ratio

95.14 %

96.20 %



Trust assets under management

$         181,052

$      164,012



Brokerage assets under management

$         388,594

$      305,951













Balance Sheet Highlights 

September 30,

December 31,

September 30,



2024

2023

2023







Assets

$      3,026,468

$   2,975,321

$      2,959,216


Investment securities

420,920

419,539

419,665


Loans (net of unearned income)

2,331,002

2,248,836

2,246,396


Allowance for credit losses - loans

21,695

21,153

21,455


Deposits

2,450,149

2,321,481

2,335,135


Stockholders' Equity

298,654

279,666

262,686



(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)



September 30,

December 31,

September 30,

(in thousands except share data)

2024

2023

2023

ASSETS:




Cash and due from banks:




  Noninterest-bearing

$           26,780

$         37,733

$             25,267

  Interest-bearing

9,983

15,085

18,069

Total cash and cash equivalents

36,763

52,818

43,336





Interest bearing time deposits with other banks

3,820

4,070

4,566





Equity securities

1,730

1,938

1,858





Available-for-sale securities

419,190

417,601

417,807





Loans held for sale

13,520

9,379

14,155





Loans (net of allowance for credit losses - loans: $21,695 at September 30, 2024; 




    $21,153 at December 31, 2023 and $21,455 at September 30, 2023)

2,309,307

2,227,683

2,224,941





Premises and equipment

21,237

21,384

21,421

Accrued interest receivable

10,803

11,043

10,327

Goodwill

85,758

85,758

84,758

Bank owned life insurance

50,084

49,897

49,586

Other intangibles

3,083

3,650

3,866

Fair value of derivative instruments - asset

8,993

13,687

18,144

Deferred tax asset

14,449

17,339

21,384

Other assets

47,731

59,074

43,067





TOTAL ASSETS

$      3,026,468

$    2,975,321

$        2,959,216





LIABILITIES:




Deposits:




  Noninterest-bearing

$         548,218

$       523,784

$           542,144

  Interest-bearing

1,901,931

1,797,697

1,792,991

Total deposits

2,450,149

2,321,481

2,335,135

Borrowed funds

231,732

322,036

316,151

Accrued interest payable

5,549

4,298

2,726

Fair value of derivative instruments - liability

4,763

7,922

10,694

Other liabilities

35,621

39,918

31,824

TOTAL LIABILITIES

2,727,814

2,695,655

2,696,530

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 September 30, 2024, December 31, 2023 and      




  September 30, 2023: issued 5,207,343 at September 30, 2024 and 5,160,754 at December 31, 2023 and  




  September 30, 2023

5,207

5,161

5,161

Additional paid-in capital

144,927

143,233

143,302

Retained earnings

183,792

172,975

167,740

Accumulated other comprehensive loss

(18,916)

(24,911)

(36,643)

Treasury stock, at cost:  447,613 at September 30, 2024 and 453,760 shares 




  at December 31, 2023 and 454,643 shares at September 30, 2023

(16,356)

(16,792)

(16,874)

TOTAL STOCKHOLDERS' EQUITY

298,654

279,666

262,686

TOTAL LIABILITIES AND




   STOCKHOLDERS' EQUITY

$      3,026,468

$    2,975,321

$        2,959,216

 

CITIZENS FINANCIAL SERVICES, INC.

CONSOLIDATED STATEMENT OF INCOME

(UNAUDITED)


Three Months Ended

Nine Months Ended


September 30, 

September 30, 

(in thousands, except share and per share data)

2024

2023

2024

2023

INTEREST INCOME:





Interest and fees on loans

$     35,858

$       33,772

$   106,058

$    80,438

Interest-bearing deposits with banks

190

264

695

462

Investment securities:





    Taxable

1,736

1,734

5,023

4,973

    Nontaxable

517

540

1,569

1,729

    Dividends

388

379

1,179

1,004

TOTAL INTEREST INCOME

38,689

36,689

114,524

88,606

INTEREST EXPENSE:





Deposits

13,475

10,100

38,451

19,519

Borrowed funds

3,890

4,185

12,491

10,682

TOTAL INTEREST EXPENSE

17,365

14,285

50,942

30,201

NET INTEREST INCOME

21,324

22,404

63,582

58,405

(Negative) provision for credit losses

(200)

475

2,587

737

Provision for credit losses - acquisition day 1 non-PCD

-

-

-

4,591

NET INTEREST INCOME AFTER





    (NEGATIVE) PROVISION FOR CREDIT LOSSES

21,524

21,929

60,995

53,077

NON-INTEREST INCOME:





Service charges

1,636

1,692

4,393

4,196

Trust

184

172

629

583

Brokerage and insurance

545

473

1,773

1,429

Gains on loans sold

752

460

1,648

674

Equity security gains (losses), net

159

69

127

(223)

Available for sale security losses, net

-

-

-

(51)

Earnings on bank owned life insurance

338

489

1,334

941

Gain on sale of Braavo division

-

-

1,102

-

Other

141

307

1,056

567

TOTAL NON-INTEREST INCOME

3,755

3,662

12,062

8,116

NON-INTEREST EXPENSES:





Salaries and employee benefits

9,715

10,005

29,622

25,598

Occupancy 

1,215

1,221

3,805

2,870

Furniture and equipment

260

255

791

568

Professional fees

620

506

2,021

1,274

FDIC insurance expense

555

375

1,589

1,000

Pennsylvania shares tax

226

297

866

893

Amortization of intangibles

136

157

432

219

Software expenses

500

551

1,508

1,274

ORE expenses

84

111

246

126

Merger and acquisition expenses

-

623

-

9,269

Other

2,718

2,343

8,038

5,811

TOTAL NON-INTEREST EXPENSES

16,029

16,444

48,918

48,902

Income before provision for income taxes

9,250

9,147

24,139

12,291

Provision for income tax expense 

1,714

1,599

4,304

2,020

NET INCOME

$       7,536

$         7,548

$     19,835

$    10,271






PER COMMON SHARE DATA:





Net Income - Basic

$          1.59

$           1.59

$          4.18

$        2.38

Net Income - Diluted

$          1.59

$           1.59

$          4.17

$        2.38

Cash Dividends Paid 

$       0.490

$         0.485

$       1.460

$      1.435






Number of shares used in computation - basic

4,749,679

4,746,541

4,748,988

4,321,848

Number of shares used in computation - diluted

4,751,224

4,746,541

4,753,927

4,321,848

 

CITIZENS FINANCIAL SERVICES, INC.

QUARTERLY CONDENSED, CONSOLIDATED INCOME STATEMENT INFORMATION

(UNAUDITED)

(in thousands, except per share data)


Three Months Ended,



June 30,

June 30,

March 31,

Dec 31,

Sept 30,


2024

2024

2024

2023

2023

Interest income

$     38,689

$      37,902

$      37,933

$      38,512

$      36,689

Interest expense

17,365

16,602

16,975

16,657

14,285

Net interest income

21,324

21,300

20,958

21,855

22,404

(Negative) provision for credit losses

(200)

2,002

785

200

475

Provision for credit losses - acquisition day 1 non-PCD

-

-

-

-

-

Net interest income after (negative) provision for credit losses

21,524

19,298

20,173

21,655

21,929

Non-interest income

3,596

3,423

4,916

3,410

3,593

Investment securities  gains (losses), net

159

(87)

55

79

69

Non-interest expenses

16,029

16,246

16,643

15,920

16,444

Income before provision for income taxes

9,250

6,388

8,501

9,224

9,147

Provision for income tax expense

1,714

1,113

1,477

1,684

1,599

Net income 

$       7,536

$        5,275

$        7,024

$        7,540

$        7,548

Earnings Per Share - Basic

$         1.59

$          1.11

$          1.48

$          1.59

$          1.59

Earnings Per Share - Diluted

$         1.59

$          1.11

$          1.48

$          1.59

$          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 September 30,


2024

2023


Average


Average

Average


Average


Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

$

$

%

$

$

%

ASSETS







Short-term investments:







Interest-bearing deposits at banks

18,374

160

3.44

24,096

225

3.70

Total short-term investments

18,374

160

3.44

24,096

225

3.70

Interest bearing time deposits at banks

3,820

30

3.12

4,579

39

3.38

Investment securities:







  Taxable

352,377

2,124

2.41

386,806

2,113

2.19

  Tax-exempt (3)

104,342

653

2.50

108,959

683

2.51

Investment securities

456,719

2,777

2.43

495,765

2,796

2.26

Loans: (2)(3)(4)







  Residential mortgage loans

355,551

5,322

5.95

357,388

4,925

5.47

  Construction loans

183,521

3,473

7.53

166,204

3,339

7.97

  Commercial Loans

1,234,951

19,522

6.29

1,196,675

18,983

6.29

  Agricultural Loans

356,105

4,816

5.38

342,499

4,285

4.96

  Loans to state & political subdivisions

55,418

553

3.97

60,820

611

3.99

  Other loans

111,717

2,282

8.13

88,710

1,750

7.83

  Loans, net of discount (2)(3)(4)

2,297,263

35,968

6.23

2,212,296

33,893

6.08

Total interest-earning assets

2,776,176

38,935

5.58

2,736,736

36,953

5.36

Cash and due from banks

9,119



10,696



Bank premises and equipment

20,864



21,401



Other assets

197,275



190,431



Total non-interest earning assets

227,258



222,528



Total assets

3,003,434



2,959,264



LIABILITIES AND STOCKHOLDERS' EQUITY







Interest-bearing liabilities:







  NOW accounts

736,449

4,559

2.46

789,513

4,468

2.25

  Savings accounts

293,990

387

0.52

326,452

426

0.52

  Money market accounts

406,363

3,366

3.30

403,628

2,682

2.64

  Certificates of deposit

502,226

5,163

4.09

347,783

2,524

2.88

Total interest-bearing deposits

1,939,028

13,475

2.76

1,867,376

10,100

2.15

Other borrowed funds

319,909

3,890

4.84

347,326

4,185

4.78

Total interest-bearing liabilities

2,258,937

17,365

3.06

2,214,702

14,285

2.56

Demand deposits

393,632



408,531



Other liabilities

34,487



37,118



Total non-interest-bearing liabilities

428,119



445,649



Stockholders' equity

316,378



298,913



Total liabilities & stockholders' equity

3,003,434



2,959,264



Net interest income


21,570



22,668


Net interest spread (5)



2.52 %



2.80 %

Net interest income as a percentage







  of average interest-earning assets



3.09 %



3.29 %

Ratio of interest-earning assets







  to interest-bearing liabilities



123 %



124 %


(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)



Nine Months Ended September 30,


2024

2023


Average


Average

Average


Average


Balance (1)

Interest

Rate

Balance (1)

Interest

Rate

(dollars in thousands)

$

$

%

$

$

%

ASSETS







Short-term investments:







Interest-bearing deposits at banks

29,242

605

2.76

21,772

333

2.04

Total short-term investments

29,242

605

2.76

21,772

333

2.04

Interest bearing time deposits at banks

3,898

90

3.08

5,540

129

3.11

Investment securities:







  Taxable

356,871

6,202

2.32

385,246

5,977

2.07

  Tax-exempt (3)

105,734

1,986

2.50

114,307

2,188

2.55

Investment securities

462,605

8,188

2.36

499,553

8,165

2.18

Loans: (2)(3)(4)







  Residential mortgage loans

357,089

15,612

5.84

268,562

10,797

5.38

  Construction loans

185,832

10,331

7.43

114,386

5,831

6.82

  Commercial Loans

1,240,425

59,196

6.37

1,039,006

45,079

5.80

  Agricultural Loans

348,919

13,703

5.25

344,079

12,759

4.96

  Loans to state & political subdivisions

56,116

1,659

3.95

60,183

1,736

3.86

  Other loans

96,942

5,882

8.10

82,405

4,579

7.43

  Loans, net of discount (2)(3)(4)

2,285,323

106,383

6.22

1,908,621

80,781

5.66

Total interest-earning assets

2,781,068

115,266

5.54

2,435,486

89,408

4.91

Cash and due from banks

9,379



8,709



Bank premises and equipment

21,068



19,340



Other assets

184,561



126,075



Total non-interest earning assets

215,008



154,124



Total assets

2,996,076



2,589,610



LIABILITIES AND STOCKHOLDERS' EQUITY







Interest-bearing liabilities:







  NOW accounts

767,406

14,557

2.53

616,103

8,052

1.75

  Savings accounts

298,450

1,165

0.52

320,227

897

0.37

  Money market accounts

389,655

9,131

3.13

352,055

5,802

2.20

  Certificates of deposit

460,890

13,598

3.94

303,825

4,768

2.10

Total interest-bearing deposits

1,916,401

38,451

2.68

1,592,210

19,519

1.64

Other borrowed funds

340,132

12,491

4.91

318,180

10,682

4.49

Total interest-bearing liabilities

2,256,533

50,942

3.02

1,910,390

30,201

2.11

Demand deposits

382,340



380,638



Other liabilities

44,303



35,566



Total non-interest-bearing liabilities

426,643



416,204



Stockholders' equity

312,900



263,016



Total liabilities & stockholders' equity

2,996,076



2,589,610



Net interest income


64,324



59,207


Net interest spread (5)



2.52 %



2.80 %

Net interest income as a percentage







  of average interest-earning assets



3.09 %



3.25 %

Ratio of interest-earning assets







  to interest-bearing liabilities



123 %



127 %


(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)


September 30,

June 30,

March 31,

December 31,

September 30,


2024

2024

2024

2023

2023

Real estate:






  Residential

$         353,254

$        354,588

$       357,779

$      359,990

$      356,381

  Commercial

1,110,548

1,110,269

1,115,900

1,092,887

1,081,123

  Agricultural

331,734

327,057

318,413

314,802

314,164

  Construction

178,706

180,157

184,506

195,826

175,320

Consumer

143,064

70,542

53,101

61,316

115,753

Other commercial loans

134,285

130,851

129,438

136,168

120,347

Other agricultural loans

24,537

26,247

24,345

30,673

26,648

State & political subdivision loans

54,874

56,005

56,177

57,174

56,660

Total loans

2,331,002

2,255,716

2,239,659

2,248,836

2,246,396

Less: allowance for credit losses - loans

21,695

22,797

21,598

21,153

21,455

Net loans

$     2,309,307

$    2,232,919

$   2,218,061

$   2,227,683

$   2,224,941







Past due and non-performing assets












Total Loans past due 30-89 days and still accruing

$             7,423

$          20,652

$           6,311

$        10,457

$          5,960







Non-accrual loans

$           20,858

$          14,949

$         14,693

$        12,187

$        13,139

Loans past due 90 days or more and accruing

701

285

820

516

8

Non-performing loans

$           21,559

$          15,234

$         15,513

$        12,703

$        13,147

OREO

2,486

2,690

200

474

474

Total Non-performing assets

$           24,045

$          17,924

$         15,713

$        13,177

$        13,621




















Three Months Ended

Analysis of the Allowance for Credit Losses - Loans

September 30,

June 30,

March 31,

December 31,

September 30,

(In Thousands)

2024

2024

2024

2023

2023

Balance, beginning of period

$           22,797

$          21,598

$         21,153

$        21,455

$        21,652

Impact of Adopting ASC 326

-

-

-

-

-

Charge-offs

(1,212)

(682)

(674)

(510)

(808)

Recoveries

10

7

7

8

10

Net (charge-offs) recoveries

(1,202)

(675)

(667)

(502)

(798)

PCD allowance for credit loss at acquisition

-

-

-

-

-

Provision for credit losses - loans

100

1,874

1,112

200

601

Provision for credit losses - acquisition day 1 non-PCD

-

-

-

-

-

Balance, end of period

$           21,695

$          22,797

$         21,598

$        21,153

$        21,455

 

CITIZENS FINANCIAL SERVICES, INC.

Reconciliation of GAAP and Non-GAAP Financial Measures

(UNAUDITED)

(Dollars in thousands, except per share data)



As of 




September 30,




2024

2023



Tangible Equity





Stockholders Equity - GAAP

$         298,654

$           262,686



Intangible Assets

(88,841)

(88,624)



Tangible Equity - Non-GAAP

209,813

174,062



Shares outstanding adjusted for June 2024 stock Dividend

4,759,730

4,752,700



Tangible Book value per share - Non-GAAP

$              44.08

$               36.62









As of 




September 30




2024

2023



Tangible Equity per share





Stockholders Equity per share - GAAP

$              62.75

$               55.27



Adjustment for intangible assets

(18.67)

(18.65)



Tangible Book value per share - Non-GAAP

$              44.08

$               36.62














For the Three Months Ended

For the Nine Months Ended


September 30

September 30


2024

2023

2024

2023

Return on Average Tangible Equity





Average Stockholders Equity - GAAP

$         292,315

$           266,899

$              286,681

$         232,326

Average Intangible Assets

(88,931)

(88,743)

(89,123)

(54,386)

Average Tangible Equity - Non-GAAP

203,384

178,156

197,558

177,940

Net Income - GAAP

$              7,536

$               7,548

$                19,835

$           10,271

Annualized Return on Average Tangible Equity Non-GAAP

14.82 %

16.95 %

13.39 %

7.70 %







For the Three Months Ended

For the Nine Months Ended


September 30

September 30


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

$              7,536

$               7,548

$                19,835

$           10,271

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

-

496

-

7,513

Net Income excluding merger and acquisition costs - Non-GAAP

$              7,536

$               8,044

$                20,550

$           21,411

Average Assets

3,003,434

2,959,264

2,996,076

2,589,610

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

1.00 %

1.09 %

0.91 %

1.10 %






Average Stockholders Equity - GAAP

$         316,378

$           298,913

$              312,900

$         263,016

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

9.53 %

10.76 %

8.76 %

10.85 %






Average Tangible Equity - Non-GAAP

203,384

178,156

197,558

177,940

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

14.82 %

18.06 %

13.87 %

16.04 %







For the Three Months Ended

For the Nine Months Ended


September 30

September 30


2024

2023

2024

2023

Earnings per share, Excluding sale of Braavo assets, net of legal fees
and merger and acquisition costs





Net Income - GAAP

$              7,536

$               7,548

$                19,835

$           10,271

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

-

496

-

7,513

Net income excluding one time items - Non-GAAP

$              7,536

$               8,044

$                20,550

$           21,411

Number of shares used in computation - basic

4,751,224

4,746,541

4,753,927

4,321,848

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

$                1.59

$                 1.69

$                     4.32

$               4.95












For the Three Months Ended

For the Nine Months Ended


September 30

September 30

Reconciliation of net interest income on fully taxable equivalent basis

2024

2023

2024

2023

Total interest income

$           38,689

$             36,689

$              114,524

$           88,606

Total interest expense

17,365

14,285

50,942

30,201

Net interest income

21,324

22,404

63,582

58,405

Tax equivalent adjustment

246

264

742

802

Net interest income (fully taxable equivalent) - Non-GAAP

$           21,570

$             22,668

$                64,324

$           59,207

 

Cision View original content:https://www.prnewswire.com/news-releases/citizens-financial-services-inc-reports-unaudited-third-quarter-2024-financial-results-302292036.html

SOURCE Citizens Financial Services, Inc.

FAQ

What was Citizens Financial Services (CZFS) net income for Q3 2024?

Citizens Financial Services reported net income of $7.536 million for Q3 2024, slightly down from $7.548 million in Q3 2023.

What was CZFS's dividend payment for Q3 2024?

CZFS declared a cash dividend of $0.49 per share, paid on September 27, 2024, representing a 1.0% increase from the previous year.

How much did CZFS's non-performing assets increase in 2024?

Non-performing assets increased by $10.9 million since December 31, 2023, reaching $24.0 million as of September 30, 2024.

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Citizens Financial Services, Inc.

NASDAQ:CZFS

CZFS Rankings

#3480 Ranked by Market Cap
#1084 Ranked by Dividends

CZFS Latest News

Jul 30, 2024
CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED SECOND QUARTER 2024 FINANCIAL RESULT
Apr 25, 2024
CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FIRST QUARTER 2024 FINANCIAL RESULTS
Jan 30, 2024
/C O R R E C T I O N -- CITIZENS FINANCIAL SERVICES, INC./
Jan 30, 2024
CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED FULL YEAR AND FOURTH QUARTER 2023 FINANCIAL RESULTS
Oct 23, 2023
CITIZENS FINANCIAL SERVICES, INC. REPORTS UNAUDITED THIRD QUARTER 2023 FINANCIAL RESULTS

CZFS Stock Data

324.14M
4.76M
6.34%
25.06%
0.66%
Banks - Regional
State Commercial Banks
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United States of America
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