C&N ANNOUNCES SECOND QUARTER 2014 UNAUDITED FINANCIAL RESULTSPosted Tuesday, 03 March 2015 15:21 | Filed under C&N News
WELLSBORO, PA – Citizens & Northern Corporation (C&N) has announced
its unaudited, consolidated financial results for the three-month and
six-month periods ended June 30, 2014.
Second quarter 2014 net income of $4,163,000, or $0.33 per basic and
diluted share, was down slightly from $0.35 per basic share and $0.34
per diluted share in the first quarter 2014 and down from $0.40 per
basic and diluted share in the second quarter 2013. Net income for the
six months ended June 30, 2014 totaled $8,451,000, or $0.68 per basic
and diluted share, representing an annualized return on average assets
of 1.38% and an annualized return on average equity of 9.16%. Net
income for the first six months of 2014 was down from $0.78 per share
for the first six months of 2013.
Highlights related to C&N’s earnings results were as follows:
● Net interest income totaled $10,273,000 in the second quarter 2014,
up from $10,118,000 in the first quarter 2014 and down 6.1% from
$10,940,000 in the second quarter 2013. For the first six months of
2014, net interest income of $20,391,000 was down $1,596,000 (7.3%) from
the first six months of 2013. In 2013 and the first six months of 2014,
yields earned on securities and loans have fallen by more than interest
rates paid on deposits and borrowings. Also, the average balance of
loans outstanding was $38.2 million (5.7%) lower in the first six months
of 2014 as compared to the first six months of 2013. The net interest
margin was 3.84% in the second quarter 2014, down from 3.89% in the
first quarter 2014. For the first six months of 2014, the net interest
margin was 3.86% as compared to 4.16% for the first six months of 2013.
● The provision for loan losses was $446,000 in the second quarter
2014 as compared to a credit (reduction in expense) of ($311,000) in the
first quarter 2014 and a provision of $66,000 in the second quarter
2013. For the first six months of 2014, the provision for loan losses
totaled $135,000 as compared to a provision of $249,000 for the first
six months of 2013. The higher provision for loan losses in the second
quarter 2014 included an increase in the collectively determined portion
of the allowance for loan losses as a result of an increased level of
net charge-offs. C&N recorded net charge-offs totaling $1,522,000 in
the second quarter 2014, including a charge-off of $1,486,000 related to
one commercial loan relationship for which a specific allowance had been
established in previous quarters.
● Noninterest revenue totaled $3,980,000 in the second quarter 2014,
up $229,000 from the first quarter 2014 but $211,000 lower than in the
second quarter 2013. For the first six months of 2014, noninterest
revenue was $303,000 (3.8%) lower than in the first six months of 2013.
Gains from sales of residential mortgage loans totaled $416,000 in the
first six months of 2014, down from $1,056,000 in the first six months
of 2013, as volume fell mainly because of higher interest rates. Total
Trust and brokerage revenue of $2,654,000 in the first six months of
2014 was $284,000 (12.0%) higher than the total in the first six months
● Realized gains from available-for-sale securities totaled $103,000
in the second quarter 2014 as compared to $31,000 in the first quarter
2014 and $100,000 in the second quarter 2013. In the first six months
of 2014, realized gains from securities totaled $134,000. In
comparison, in the first six months of 2013, C&N generated gains from
sales of securities totaling $1,259,000 and also incurred losses from
prepayment of borrowings of $1,023,000.
● Noninterest expenses, excluding losses from prepayment of
borrowings, totaled $8,347,000 in the second
quarter 2014, down from
$8,524,000 in the first quarter 2014 and $8,520,000 in the second
quarter 2013. Pensions and other employee benefit costs were $166,000
lower in the second quarter 2014 than in the first quarter 2013, mainly
due to the timing of payroll taxes and other payroll-related expenses
that are typically highest in the first quarter of each year. In the
first six months of 2014, total noninterest expenses, excluding losses
from prepayment of borrowings, were $202,000 (1.2%) lower than in the
first six months of 2013. The reduction in noninterest expenses in the
first six months of 2014 included decreases in professional fees of
$326,000 and ATM and interchange processing expense of $155,000, while
pensions and other employee benefit expenses increased $183,000, mainly
due to higher health care costs, and occupancy expenses increased
$123,000 due to higher weather-related maintenance expenses.
Changes in other unaudited financial information are as follows:
● Total assets amounted to $1,256,205,000 at June 30, 2014, up from
$1,235,139,000 at March 31, 2014 and $1,228,344,000 at June 30, 2013.
● Net loans outstanding (excluding mortgage loans held for sale) were
$614,347,000 at June 30, 2014, down from $617,475,000 at March 31, 2014
and down $33.4 million (5.2%) from $647,772,000 at June 30, 2013.
● The outstanding balance of residential mortgages originated by C&N
and sold to third parties, with servicing retained, totaled $150,725,000
at June 30, 2014, up from $147,391,000 at March 31, 2014 and
$126,489,000 at June 30, 2013.
● Total nonperforming assets as a percentage of assets was 1.44% at
June 30, 2014, the same as at March 31, 2014 and up from 0.80% at June
30, 2013. The increase in this ratio has resulted mainly from
classification of two large commercial loans as nonaccrual.
● Deposits and repo sweep accounts totaled $983,876,000 at June 30,
2014, up from $966,563,000 at March 31, 2014 and $955,156,000 at June
● Total shareholders’ equity was $189,173,000 at June 30, 2014, up
from $184,762,000 at March 31, 2014 and $179,361,000 at June 30, 2013.
Tangible common equity as a percentage of tangible assets was 14.24% at
June 30, 2014, up from 13.76% a year earlier.
● Assets under management by C&N’s Trust and Financial Management
Group amounted to $824,279,000 at June 30, 2014, an increase of 13.3%
from a year earlier, reflecting the effect of new accounts as well as
net appreciation in asset values.
Citizens & Northern Corporation is the parent company of Citizens &
Northern Bank, a local, independent community bank providing complete
financial, investment and insurance services through 26 full service
offices throughout Tioga, Bradford, Sullivan, Lycoming, Potter, Cameron
and McKean counties in Pennsylvania and in Canisteo and South Hornell,
NY. C&N can be found on the worldwide web at www.cnbankpa.com. The
Company’s stock is listed on NASDAQ Capital Market Securities under
the symbol CZNC.
Safe Harbor Statement: Except for historical information contained
herein, the matters discussed in this release are forward-looking
statements. Investors are cautioned that all forward-looking statements
involve risks and uncertainty, including without limitation, the
following: changes in monetary and fiscal policies of the Federal
Reserve Board and the U.S. Government, particularly related to changes
in interest rates; changes in general economic conditions; legislative
or regulatory changes; downturn in demand for loan, deposit and other
financial services in the Corporation’s market area; increased
competition from other banks and non-bank providers of financial
services; technological changes and increased technology-related costs;
changes in management’s assessment of realization of securities and
other assets; and changes in accounting principles, or the application
of generally accepted accounting principles. Citizens & Northern
any intention or obligation to publicly update or revise any
forward-looking statements, whether as a result of events or
circumstances after the date hereof or to reflect the occurrence of