achieving results - firstcitizensbank.com · achieving results the old fashioned way planning...
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CITIZENSFINANCIAL SERVICES
I N C O R P O R A T E D
2019 Year in Review
Achieving Results the Old Fashioned Way
planning
perseverance
teamwork
grit
Financial Overview - Char ts
(Dol lars in Thousands) (Dol lars in Thousands)
(Dol lars in Thousands) (Dol lars in Thousands)
(Dol lars in Thousands) (Dol lars in Thousands)
• Net Income increased 8.1% to $19.5 million compared to $18 million at December 31, 2018
• Earnings Per Share increased 8.8% to $5.54 versus $5.09 for the year ended December 31, 2018
• Return on Average Assets increased 3.9% to 1.34% compared 1.29% at December 31, 2018
• Return on Average Equity was 13.00% for both periods
• Dividends paid increased 3.2% to $1.78 per share compared to $1.725 per share for 2018
• Shareholders’ Equity increased 11.24% to $154.8 million
• Net Loans increased 3.1% to $1.1 billion
• Assets increased 2.5% to $1.47 billion
• Deposits increased 2.2% to $1.21 billion
WHAT’S THE KEY BEHIND THESE RESULTS?
Well, it starts with our TEAM, and our focus and balance of our four key strategic tenets that I introduced to you in previous years’ annual correspondence.
1. FinancialPerformance–producingexceptionalshareholdervalue
2. Growth–throughrelationshipandgeographicexpansion
3. CustomerExpectations–makingsureweexceedexpectationsateverypointofcontact
4. Community–supportingthewell-beingofourcommunities
Achieving Results the Old Fashioned WayLetter from: Randall E. Black • Chief Executive Officer and President
Welcome Fellow Shareholders, Customers, Coworkers & Friends,
I was taught early on in life that nothing comes easy; it takes hard work, commitment,dedication,vision,preparation,humility,listeningandlearning from others, and learning from your own mistakes to achieve
success(positiveresults).Itistheselifelessonsthatstilldrivemetoday.AsIpenthisyear’sannualharvestreport,ourfinancialyields(results)continuetoreflectallthehardworkofyourTEAMhereatCitizens,asyoucan see in more detail below. Please know that your TEAM put their heart and soulintotheirjobs,asyourengineforCitizensFinancialServices,Inc.
My real focus for this year’s correspondence is to provide you with a betterunderstandingofwhatdrivesourresults,thatis,howpassionateouremployeesandcustomersareaboutyourCompany.Afterall,weareonly as strong as our TEAM and our customers. For our customers, we are theirprovideroffinancialsolutions,helpingthemnavigatethroughtheirfinancialjourney.
DID OUR HARD WORK PAY OFF?
Duringthispastseason,financialhighlightsforCitizensFinancialServices,Inc. for the twelve months ended December 31, 2019 include:
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Aswecontinuetoworkthroughourstrategicplan,whichweuseasourGPS(globalpositioningsystem)toachieveourgoals,it’sthesefourtenetsthatcontinuetokeepusfocused,realizingourcustomersandemployeesareatthecenterofourfocus.Byrollingupoursleevesandgettingourhandsdirty,andexecutingonourplan,wewillcontinuetodriveresultstheoldfashionedway.
WHAT WERE THE MAJOR INITIATIVES IN 2019 THAT IMPACTED OR WILL IMPACT FUTURE GROWTH AND PROFITABILITY?• Theopeningofour28thfull-servicebranchinFivepointville,LancasterCounty,PA.
• The signing of agreements in November of 2019, to complete an upgrade of our internal imaging system, whichwill be implemented in two phases over 2020. We are extremely excited about the impact this new technologywillhave,notjustonourinternalpracticesandprocesses,buttotheoverallcustomerexperience.Withthisupgrade,wewillbeabletocontinuetoprovidecustomerswiththemostrecentlyenhancedtechnologicalproductsandservices,anditalsogivesusthefoundationforfutureinitiatives.
• Wecontinuedtoinvestandincreaseourdigitalbankingalternatives,asweseethisbeingvitaltoourfuturesuccess.
• We upgraded and replaced all of our PCs and updated all our ATMs for Windows 10.
• OurTEAMcontinuedtheexecutionofindividualizedgrowthstrategiesbymarkets.
• Toimproveoperationalefficiency,weclosedourLebanonValleyMallofficeinJanuary2020andareconvenientlyservingthosecustomersfromtwootherLebanonlocationsjustafewmilesaway.
• Andlastbutnotleast,theannouncedacquisitionofMidCoastCommunityBancorp(MidCoast),Wilmington,Delaware, with assets of $266 million, which is scheduled to close April 17, 2020.
WHY DELAWARE?
Asignificantpartofourfiduciaryresponsibilityistocontinuallyevaluateopportunities,bothinternallyandexternally,thatwillincreaseshareholdervalue,withoutchangingtheoverallriskprofileoftheCompany.Growthisakeycontributor to being able to consistently add value for the shareholder and Company. There are two major ways a companycangrow-organically(expandingexistingcustomerrelationships,increasingmarketsharewithincurrentmarketsanddevelopingnewnicheswithincurrentmarkets),orthroughmarketexpansion,bymeansofnewdenovobranchesor(asinourcasewithMidCoastCommunityBancorp),throughmerger&acquisition(M&A).
This opportunity didn’t just happen, as it was well thought out and part of our strategic discussions during our annualplanningprocess.Whenweevaluateourgrowthopportunities,manythingscomeintoplay,likethestrength of the TEAM, the franchise strength and value, a robust and healthy market with economic growth, geographiccharacteristics,andbalancesheetcomposition.
MidCoast checked all the boxes! The management, employees, and board of directors of MidCoast have created agreatfranchise,inarobust,attractivemarketenrichedwithopportunities.WiththeirheadquartersbeinglocatedinWilmington,DE,just45minutesfromourFivepointville,LancasterCounty,PAbranch,thisadditionwillbolsterourSoutheasternPApresenceandpositionthecombinedcompanyforcontinuedgrowth.AswecurrentlyserviceacustomerbaseinChesterCounty,PAfromourFivepointvillelocation,theadditionofMidCoast’sChesterCountycustomerrelationshipswillstrengthenourpositionwithinthiscounty,andprovideusastrongfoundationforcontinuedgrowth.Inaddition,thehigh-octanecommerciallendingTEAMandloanportfoliothatresidesatMidCoastwillprovidenotonlygrowthopportunities,butwillhelpdiversifythecombinedCompany’sloanportfoliocompositionandgeographicriskexposure.WearealsoattractedtotheDover,DEmarket,asthatareaisenrichedwithagriculturalopportunitieswhichwillprovideadditionalgrowthanddiversificationinbothproductand geography for our ongoing agricultural strategy. And last but not least, we see tremendous opportunity in what we can provide to the MidCoast customers, especially as it relates to deposit and investment products and
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Achieving Results the Old Fashioned Way
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2019 Year in Review
Achieving Results the Old Fashioned Way
services.Weareveryoptimisticthatthiscombinationwillenableustoleverageourexistingproducts,servicesandexpertiseinanattractivemarket,whileatthesametimeaddingaverytalentedTEAMofbankerswhowillcontributesignificantlytoourstrategicgrowthinitiatives.
2019NON-FINANCIALACHIEVEMENTS
Wewereveryfortunateagainthisyeartoreceiveseveralrecognitionsasaresultofourperformance:
• Votedthe#1BankinPennsylvaniabyourcustomersforsatisfactionandtrustinaForbesnationwidesurvey,forthe2ndconsecutiveyear.
• Recognizedforthetwelfthconsecutiveyear,bytheAmericanBankerMagazine,asoneofthetop200communitybanksinthecountrywithassetsunder$2billionforathree-yearaveragereturnonequity.
• Finished the year as the number two agricultural lender headquartered in Pennsylvania and 68th in thenation.
• Earnedanother5-StarratingfromBauerFinancial,Inc.,whichanalyzesandreportsonthefinancialconditionofthenation’sbanks.
I’msoproudofalloftheseaccomplishments,butbeingvoted#1byourcustomersforthesecondconsecutiveyearinarow,tome,istheultimatescorecardwinandatruetestamenttowhatourkeystrengthandadvantageis…our TEAM!
COMMUNITY SUPPORT
The year 2019 was again a year of giving. It is our civic duty and responsibility as a community bank to be a living andbreathingpartnerwithinthecommunitiesweserve.Asistradition,weremained100%committedtotheseprinciples and values as evidenced by the following:
• Donated$325,000to40educationalenrichmentprogramsacrosstwelvecounties,aspartoftheEducationImprovementTaxCredit(EITC)program.Thisbringsourtotaldonationdollarsto$1,325,000overthelast9years.
• ContinuedhostingourannualCancerClassicgolftournamentforthe20thyear,raisinganother$20,600fortheAmericanCancerRelayforLifeprogram.With2019’sdonation,wehaveraisedover$221,000tohelpfightthis deadly disease.
• Partnered with the Central PA Food Bank, through TEAM dress down days and other fundraisers, to provideover 10,000 meals to those in need.
• Donatednearly$108,000towardsvariousorganizationsandeventsdirectlyrelatedtoagricultureeducation.
WHAT’S AHEAD?
Ourpotentialisunlimited!AsourTEAMworksdiligentlyontheacquisitionofMidCoast,wecontinuetoplowaheadfocusingontheintegrationofanewTEAMandmarket,newtechnology,andthecontinuedevaluationof new markets and delivery channels, with the end focus on providing our customers second to none products andservices.NoneofthisispossiblewithoutthehardworkanddedicationofourTEAMofemployees,whoarecommittedtoachievingsuccesstheoldfashionedway.
Withanotheryearofhealthypositiveresultsreported,thecommunitybankingmodelisaliveandstrong.Butwhatshouldweexpectin2020?Comingintoanelectionyear,anythingcanhappen;unemploymenthashitarecordlownationally,andinflationisundercheck,butsignsofapotentialdownturnarelooming.
• Theyieldcurveinvertedforthefirsttimesince2007.
• Generally, economists forecast the probability of a US recession in the coming year at 25%, similar to last year.
• Equally concerning is the central bank’s limited repertoire of monetary tools, with rates trending towardhistorical lows.
• And,ofcourse,potentialrisksfromgeopoliticaltensions,suchasBrexitortheongoingtradewars,warrantconstantattention.
Restassured,nomatterwhattheeconomicconditionsare,onethingyoucancountonisyourTEAMwillworkhardonnavigatingthroughthem.
IN CLOSING
As we put a cap on 2019, it is my pleasure to welcome Mick Jones, CPA, as an employee board member to the CitizensBoardfamily.MickhasbeentheChiefOperatingOfficersince2010andhasbeenaBankdirectorsince2018.Mickwillbeanaddedresourceaswecontinuetotraveldownthisjourneymovingyourcompanyforward.
Our TEAM is composed of many individuals, everyone bringing a special skill set, knowledge, talent and experience tothetableaspartofbuildingoursuccess.However,thereisonespecialpersonwhohasstoodside-by-sidewithmeoverthelast16yearsandhasbeenakeymentortomeformuchlonger.TerryOsborne,ourChiefCreditOfficerhasmovedontohisnextadventureafter45yearswithourcompany.PleasejoinmeinwishingTerryandhisfamilyallthebestinhisnextphaseofthisthingwecalllife.Terry,mayGodcontinuetoblessyouandyours,andThankYou!
I am excited to share with you our redesigned logo. Customer confusion, along with the digital world search engines,havecreatedtheneedforustodifferentiateourselvesfromotherfinancialinstitutionsthathavethewordsFirstorCitizensintheirnames,especiallyasweexpandintonewmarkets.Restassuredournameremainsthesame, as it is who we are. But we have decided that we needed to redesign our logo and to include the acronym
FCCB. Our goal in redesigning the logo was based upon the journey we are all on, not just us as a company, but with our communitiesandcustomers.Wehopethenewlogoreflectstheimpactsuchjourneyshave had on our past, present and will have on our future. Our logo represents:
• TheoriginaljourneytakenbypatriotCaptainWilliamson(symbolizedbythehorse&riderinourpriorlogo)over200yearsagotobuildthefirstroadwaynorththroughtheruggedmountainsofcentralPA,betterknownastheWilliamson Trail.
• Our Company’s journey of growth and movement into new markets.
• Thefinancialpartnershipweprovidetoourcustomersandcommunitiesastheyembarkontheirownlife’sjourneythroughtheirfinanciallifecycles.
We’veexperiencedmanyaccomplishmentsin2019worthcelebrating.ButitiswithgreatsadnessthatwelostapatriarchofCitizens,formerViceChairman,DirectorEmeritusRudolph(Rudy)J.vanderHiel,whopassedawayinOctober. His footprint and impact on our company will be imbedded within us forever.
Inclosing,Iwanttoextendasincerethankyoutoallofourcustomers,whocontinuetoputtheirtrustinustohelpthem achieve many milestones throughout their life’s journey. I also want to thank our shareholders for your ownership, trust and support of our vision and strategy. Andfinally,thankyoutoourTEAM,foryourleadershipandcommitmenttoprovideexceptionalexperiencestoall.
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Achieving Results the Old Fashioned Way
RandallE.Black-ChiefExecutiveOfficerandPresident
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Our Employees Make the Difference
“There would be no business without First Citizens. The entire process was easy, they’vealways been responsive and I can’t recommend them more.” - Richard Lowel, Twisted Bines Beer Company
“Your employees are superior, very responsive and knowledgeable. Big banks lack these qualities. No bank offers better service.” - Kenneth Roberts
“I was working as a Veterinarian but had no capital. I still think it’s kind of amazing they took a bit of a risk with me. They’ve been incredible for my business.”
- Jeff Horst, Animal Health Care of Myerstown
“First Citizens treated us like more than just a number. There’s much more of a personal relationship than we’ve experienced with other banks.” - Elvin Stoltzfus, Stoltzfus Grain
“The Canton Office Employees go above and beyond, ALWAYS. It is definitely your “people” who make the difference.” - Heather Pepper
“Thanks to Kelly at the Isabel Drive office. She caught fraudulent activity on my account and I am beyond grateful!” - Linda Mae
Year-after-year,we’ve been ranked the Best Bank in Pennsylvania for Satisfaction andTrust in a Forbes nationwide customer survey. Want to know our secret? It’s our people.
Hardworking,kindheartedandfun-loving.Weknowit,andourcustomersknowittoo!
“We talked with many banks, but as farmers, it was by far the best choice for us to use First Citizens.”
- Brooke Egleston, Egleston Oink.
“With First Citizens, you get honest and genuine people. It has been an absolute game changer for our business.”
- John Jernagen, J-Town AutoSuds
“I feel very comfortable knowing whatever I need, First Citizens is always there for me and my family.”
- Jill Erb, Floral Designs
Our Employees Make the Difference
Douglas Conant, former CEO of Campbell’s Soup once said, “To win in the marketplace,you must first win in the workplace.” Our CEO, Randy Black, couldn’t agree more,
commenting frequently in his letter that our TEAM is largely responsible for the success of FCCB. Engaged employees who are invested in our mission and understand how to achieve it makes us who we are…and we celebrate them!
Congratulat ions to Heidi Monro and Dora Rodgers,Our 2019 Employees of the Year
Heidi joined FCCB in 2004 as a part-timeteller in Canton, but her potential for being a star performer was quickly evident. She’s experienced several promotions since that time and continues to demonstrate energy and leadership in her office. We’re not the only ones who notice Heidi’s contribution. We receive many comments from her customers about her enthusiasm, positive attitude and her dedication to service.
Dora came to FCCB when we acquired The First NationalBankof Fredericksburg in 2015. TheMount Aetna market is lucky to have her and so
arewe.Sheisajackofalltradesandmasterofmany…coachingandmentoringco-workers,openingnewaccountsandlending,andsheisoneofourverybesttrainers.Herconcernforhelpingcustomersandco-workersisgenuineand greatly appreciated.
Veronica Seymour Named 2019 Volunteer of the Year
Communities depend on the giving nature of volunteers which is why we added this recognition to our annual awards…because we are part ofeverycommunityweserve.FCCBwilldonate$500tothenon-profit of Veronica’s choice in honor of her endless hours of giving to organizationssuchastheLionsClub,ChristianCouncilofTroy,Chamberof Commerce, and the local food pantry. Well done Veronica!
Volunteer of the Year: Veronica Seymour with Randall E. Black
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Employee Longevity – It’s a game changer!
Employees of the Year: Heidi Monro and Dora Rodgers with Randall E. Black
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Our Employees Make the Difference “I bank at the Schuylkill Havenbranch. Lori helped fix my account and
FICA rating when my ID was hacked. Thank you to the ladies for your their
tremendous help and friendship.”- Randy Ott
Front Row – Amy Augustine,CindyStone,Chris Howe. Back Row – Becky Probst, Allison Schanbacher, Sabrina Bubeck, Sherri Kramm, Donna Eastabrook,PegShaffer.Missing is Kylie Morse.
Each year, when our employees reach certain employment milestones, they receiveextravacationdaysandsharesofCitizensFinancialServices,Inc.stock.Thelonger
the loyalty, the more they are awarded!
Years of Service Awards
5 Years of Service
Pam Munford, Mick Jones, Heidi Monro
15 Years of Service
MelissaCowles,JeanieSeeley,RobFitzgerald,CoreyDean,TonyaCoursey,SylviaThompson
20 Years of Service
Donna Williammee, Abbie Pritchard
30 Years of Service
EricaYeager,RoyZeafla,DaveMorris,SteveGuillaume
10 Years of Service
Our Employees Make the Difference
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Terry Osborne recentlyretired fromFirstCitizensafter45yearswithour family.HestartedhiscareerwithFirstCitizensin1975astheGeneseeBranchManager.
Hisenergyanddeterminationwerequicklyrecognizedandheadvancedthroughtheorganization,ultimatelyachievingtheroleofExecutiveVicePresidentwherehewasin charge of a growing branch network, consumer and commercial lending, and credit quality. As the bank grew, lending became more complicated and regulated, and so did our need for a seasoned Senior Credit Officer. We turned to Terry Osborne. Terry credits his success and tenure to being part of an outstanding team. “When I started, theBankwasinitsinfancy.Today,Iknowhowamazingourbrandandourpeopleare,and I know how great we can become.”
Terry wasn’t the only employee who left to enjoy retirement. Four other longtime employeesretiredaswell,whotogether,dedicatedover140yearsatFirstCitizens.
In 2019, we wished a happy retirement to these family members:
DianeAnderson-LoanOperations-42yearsMargieWesneski,BlossburgBranchCustomerService-41yearsShirleyMyers,SunsetBranch-29yearsPhilVaughn-UlyssesBranchManager-28years
Can’t Talk about Employee Longevity and Loyalty without talking about Terry Osborne
Zerick Cook joined FCCB as our new Chief Credit Officer upon the retirement of Terry Osborne. Throughout his career, Zerick has held a number of positionswithmultiple organizations,including Director of Corporate and Industrial Lending, Senior Vice President of Business Services, and Regional Executive in the State College market. These roles focused primarily on business lending and leading business lender teams.
Kumi Smalanskas has joined the FCCB family as our new Market Leader in the SouthCentral PA region. Kumi has extensive experience in developing strategic iniatives in a regional capacity, leading teams to achieve growth and profitability. She brings more than
twentyyearsofleadershipexperiencetotheorganization,andthroughouthercareerhasbuilt numerous customer service and sales training programs to strengthen her divisions. Her former roles range from Investment Services Regional Manager to Wealth Management Program Manager.
A Big Welcome to new Family Members Zerick Cook and Kumi Smalanskas
ThelossofaTEAMplayerisalwaysdifficult.Butwhenthatpersonhasbeena mentor and friend, it’s especially hard. Rudy van der Hiel, who passed
away in October, was a treasured member of our board of directors for over 44years.Hesawalotofchangesduringhistenureaswegrewto28officesacross11countiesand$1.4billioninassets.Wearedeeplysaddenedbyhisloss and are honored to have called Rudy our friend.
In Memoriam – Rudy van der Heil
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COMMON STOCK
DividendsDeclared
High Low per share2019
First quarter $59.66 $55.00 $0.445Second quarter $61.39 $59.70 $0.445
Third quarter $60.55 $57.75 $0.450Fourth quarter $61.50 $58.30 $0.450
2018
First quarter $62.38 $61.25 $0.435Second quarter $62.75 $61.49 $0.435Third quarter $63.25 $61.75 $0.440Fourth quarter $62.60 $55.12 $0.440
Share Data:2013 2012 2011 2010 2009
Number of shares authorized 15,000,000 15,000,000 15,000,000 10,000,000 10,000,000Number of shares issued and outstanding at year-end 3,015,049 2,898,403 2,902,663 2,892,367 2,871,816Weighted average shares outstanding - basic* 3,025,315 3,056,078 3,087,221 3,096,234 3,102,752Weighted average shares outstanding - diluted* 3,026,485 3,057,720 3,087,221 3,096,234 3,102,752Cash dividends $3,696,000 $4,601,000 $3,375,000 $3,162,000 $2,951,000
* for purposes of this comparison, the number of weighted average shares outstanding has been adjusted for stock dividends.
Stock Performance
The Company’s stock is not listed on any stock exchange, but it is quoted on the OTC Pink Market under the trad-ingsymbolCZFS.Pricespresentedinthetablebelowarebidpricesbetweenbroker-dealerspublishedbytheOTCPinkMarket.Thepricesdonotincluderetailmarkupsormarkdownsoranycommissiontothebroker-dealer.Thebid prices do not necessarily reflect prices in actual transactions. Cash dividends are declared on a quarterly basis.
AcopyoftheCompany’sAnnualReportonForm10-KfortheyearendedDecember31,2019,asrequiredtobefiled with the Securities and Exchange Commission, will be furnished without charge upon written request to the Company’s Treasurer at the principal office at 15 South Main Street, Mansfield, PA 16933. The information is also availablethroughtheCompany’swebsiteatwww.firstcitizensbank.comandatthewebsiteoftheSecuritiesandExchange Commission at www.sec.gov.
Common Stock
2019 Year in Review
Selected Financial Data
Selected Financial Data
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(in thousands except share data)Consol idated Balance Sheet
Consolidated Balance SheetDecember 31,
(in thousands, except share data) 2019 2018 2017 2016 2015ASSETS:
Total cash and cash equivalents $ 18,520 $ 16,797 $ 18,517 $ 17,754 $ 24,384
Interest bearing time deposits with other banks 14,256 15,498 10,283 6,955 7,696
Available-for-sale securities 240,706 241,010 254,782 314,017 359,737 Net Loans 1,101,724 1,068,999 989,335 790,725 687,925
Premises and equipment 15,933 16,273 16,523 17,030 17,263 Other assets 75,200 72,135 72,446 76,537 65,979
TOTAL ASSETS $ 1,466,339 $ 1,430,712 $ 1,361,886 $ 1,223,018 $ 1,162,984
LIABILITIES:
Total deposits $ 1,211,118 $ 1,185,156 $ 1,104,943 $ 1,005,503 $ 988,031
Borrowed funds 85,117 91,194 114,664 79,662 41,631 Other liabilities 15,330 15,133 13,268 14,585 13,562
TOTAL LIABILITIES 1,311,565 1,291,483 1,232,875 1,099,750 1,043,224
TOTAL STOCKHOLDERS' EQUITY 154,774 139,229 129,011 123,268 119,760
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,466,339 $ 1,430,712 $ 1,361,886 $ 1,223,018 $ 1,162,984
Consolidated Balance SheetDecember 31, December 31, December 31, December 31, December 31,
(in thousands) 2019 2018 2017 2016 2015
ASSETS:
Cash and cash equivalents:
Noninterest-bearing $ 17,727 $ 15,327 $ 16,347 $ 16,854 $ 14,088
Interest-bearing 793 1,470 2,170 900 10,296
Total cash and cash equivalents: 18,520 16,797 18,517 17,754 24,384
Interest bearing time deposits with other banks 14,256 15,498 10,283 6,955 7,696
Equity securities 701 516 - 0 - 0 - 0
Available-for-sale securities 240,706 241,010 254,782 314,017 359,737
Loans held for sale 815 1,127 1,439 1,827 603
Net Loans 1,101,724 1,068,999 989,335 790,725 687,925
Premises and equipment 15,933 16,273 16,523 17,030 17,263
Accrued interest receivable 4,555 4,452 4,196 4,089 4,211
Goodwill 23,296 23,296 23,296 21,089 21,089
Bank owned life insurance 28,128 27,505 26,883 26,223 25,535
Other assets 17,705 15,239 16,632 23,309 14,541
TOTAL ASSETS $ 1,466,339 $ 1,430,712 $ 1,361,886 $ 1,223,018 $ 1,162,984
LIABILITIES:
Deposits:
Noninterest-bearing $ 203,793 $ 179,971 $ 171,840 $ 147,425 $ 150,960
Interest-bearing 1,007,325 1,005,185 933,103 858,078 837,071
Total deposits 1,211,118 1,185,156 1,104,943 1,005,503 988,031
Borrowed funds 85,117 91,194 114,664 79,662 41,631
Accrued interest payable 1,088 1,076 897 720 734
Other liabilities 14,242 14,057 12,371 13,865 12,828
TOTAL LIABILITIES 1,311,565 1,291,483 1,232,875 1,099,750 1,043,224
STOCKHOLDERS' EQUITY:
Common stock 3,939 3,904 3,870 3,704 3,672
Additional paid-in capital 55,089 53,099 51,108 42,250 40,715
Retained earnings 110,800 99,727 89,982 91,278 85,790
Accumulated other comprehensive loss (629) (3,921) (3,398) (1,392) (236)
Treasury stock, at cost (14,425) (13,580) (12,551) (12,572) (10,181)
TOTAL STOCKHOLDERS' EQUITY 154,774 139,229 129,011 123,268 119,760
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,466,339 $ 1,430,712 $ 1,361,886 $ 1,223,018 $ 1,162,984
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Selected Financial Data
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2019 Year in Review
(1)Amountswereadjustedtoreflectstockdividends. (2)Calculationexcludesaccumulatedothercomprehensiveincome.
Five Year Summary of Operat ions(in thousands except share data)
SELECTED FINANCIAL DATA
FIVE YEAR SUMMARY OF OPERATIONS
2019 2018 2017 2016 2015Interest income $ 61,980 $ 56,758 $ 48,093 $ 43,005 $ 35,653 Interest expense 12,040 9,574 5,839 5,041 4,820 Net interest income 49,940 47,184 42,254 37,964 30,833 Provision for loan losses 1,675 1,925 2,540 1,520 480 Net interest income after provision for loan losses 48,265 45,259 39,714 36,444 30,353 Non-interest income 8,242 7,754 7,621 7,644 6,994 Investment securities gains (losses), net 144 (19) 1,035 255 429 Non-interest expenses 33,341 31,557 29,314 28,671 23,429 Income before provision for income taxes and extraordinary item 23,310 21,437 19,056 15,672 14,347 Provision for income taxes 3,820 3,403 6,031 3,034 2,721 Net income $ 19,490 $ 18,034 $ 13,025 $ 12,638 $ 11,626
Per share data:Net income - Basic (1) $ 5.54 $ 5.09 $ 3.67 $ 3.53 $ 3.52 Net income - Diluted (1) 5.53 5.09 3.67 3.53 3.52 Cash dividends declared (1) 1.78 1.73 1.64 1.55 1.59 Stock dividend 1% 1% 5% 1% 0%Book value (1) (2) 44.08 40.45 37.24 35.08 33.31
Financial Ratios and Data:Return on average stockholders' equity, excluding accumulated other comprehensive income 13.00% 13.00% 10.04% 10.24% 11.20%Return on average assets 1.34% 1.29% 1.03% 1.06% 1.22%Dividends as a percent of net income 32.40% 34.08% 44.97% 44.12% 46.00%Equity to asset ratio 10.31% 9.90% 10.31% 10.35% 10.91%
Loan Quality (dollars in thousands):Non-performing assets $ 15,427 $ 14,393 $ 11,845 $ 12,895 $ 8,508 Non-performing loans $ 12,023 $ 13,792 $ 10,726 $ 11,859 $ 7,154 Non-performing assets as a percent of loans, net of unearned income 1.38% 1.33% 1.18% 1.61% 1.22%Non-performing loans as a percent of loans, net of unearned income 1.08% 1.27% 1.07% 1.48% 1.03%Year-end allowance for loan losses $ 13,845 $ 12,884 $ 11,190 $ 8,886 $ 7,106 Year-end allowance to total loans 1.24% 1.19% 1.12% 1.11% 1.02%Year-end allowance to total non-performing loans 115.15% 93.42% 104.33% 74.93% 99.33%
(1) Amounts were adjusted to reflect stock dividends.(2) Calculation excludes accumulated other comprehensive income
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Selected Financial Data
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(in thousands except share data)
Consol idated Quarter ly Data
CONSOLIDATED QUARTERLY DATA
Three Months Ended,2019 Mar 31 June 30 Sep 30 Dec 31
Interest income $ 15,017 $ 15,502 $ 15,874 $ 15,587
Interest expense 3,102 3,166 2,975 2,797
Net interest income 11,915 12,336 12,899 12,790
Provision for loan losses 400 350 400 525
Non-interest income 2,022 1,997 2,140 2,083
Investment securities gains, net 11 30 37 66
Non-interest expenses 8,322 8,237 8,414 8,368
Income before provision for income taxes 5,226 5,776 6,262 6,046
Provision for income taxes 821 930 1,066 1,003
Net income $ 4,405 $ 4,846 $ 5,196 $ 5,043
Earnings Per Share Basic $ 1.24 $ 1.38 $ 1.48 $ 1.43
Earnings Per Share Diluted $ 1.24 $ 1.38 $ 1.48 $ 1.43
Three Months Ended,
2018 Mar 31 June 30 Sep 30 Dec 31
Interest income $ 13,383 $ 14,028 $ 14,259 $ 15,088
Interest expense 1,963 2,277 2,489 2,845
Net interest income 11,420 11,751 11,770 12,243
Provision for loan losses 500 325 475 625
Non-interest income 1,900 1,835 2,022 1,997
Investment securities gains, net 6 7 (12) (20)
Non-interest expenses 7,832 7,702 7,788 8,235
Income before provision for income taxes 4,994 5,566 5,517 5,360
Provision for income taxes 747 875 936 845
Net income $ 4,247 $ 4,691 $ 4,581 $ 4,515
Earnings Per Share Basic (1) $ 1.19 $ 1.32 $ 1.30 $ 1.28
Earnings Per Share Diluted (1) $ 1.19 $ 1.32 $ 1.30 $ 1.28
1(1)Amountswereadjustedtoreflectstockdividends.
Selected Financial Data
Page 13
2019 Year in Review
Trust and Investment Services Funds Under Management
TRUST AND INVESTMENT SERVICES FUNDS UNDER MANAGEMENT
2019 2018 2017 2016 2015
INVESTMENTS:
Bonds $ 17,349 $ 17,559 $ 18,672 $ 17,871 $ 16,425
Stocks 18,632 16,372 18,957 18,860 18,574
Savings and Money Market Funds 16,085 16,100 13,076 10,697 12,437
Mutual Funds 75,158 60,847 67,027 59,306 58,644
Mineral interests 4,982 4,500 3,885 2,598 2,781
Mortgages 1,045 1,082 343 456 686
Real Estate 696 839 513 613 565
Cash and Miscellaneous 351 288 247 170 68
TOTAL $ 134,298 $ 117,587 $ 122,720 $ 110,571 $ 110,180
ACCOUNTS:
Trusts $ 34,975 $ 30,736 $ 28,714 $ 26,597 $ 26,746
Guardianships 5,929 2,347 748 1,846 1,274
Employee Benefits 51,870 51,907 57,035 48,692 46,888
Investment Management 41,520 32,595 36,221 33,434 35,268
Custodial 4 2 2 2 4
TOTAL $ 134,298 $ 117,587 $ 122,720 $ 110,571 $ 110,180
1
(market values in thousands)
Company and Shareholder Info
Page 14
A N N UA L M E E T I N G
Theannualmeetingand luncheonforthe shareholdersofCitizensFinancialServices, Inc. will be held at the Tioga County Fairgrounds Youth Building in Whitneyville, PA on April 21, 2020 at 12:00 noon.
Transfer Agent:
BroadridgeCorporateIssuerSolutions,Inc.P.O. Box 1342Brentwood,NY11717-0718Phone:800-733-1121Fax:215-553-5402E-mail:[email protected]
Shareholder Services: FirstCitizensCommunityBankAttn:GinaMarieBoor,AVP15 South Main StreetMansfield,PA16933
F O R M 10- K
TheAnnualReportonForm10-Kwillbe made available upon request or is available through the company’s website,www.firstcitizensbank.com.
I N V E S TO R I N F O R M AT I O N
Stock Listing:
CitizensFinancialServices,Inc.commonstockislistedontheOTCPinkMarketandistradedunderthesymbolCZFS.Forassistanceregardingachangeinregistrationofstockcertificates,replacinglostcertificates/dividendchecks,oraddresschanges, please contact Shareholder Services or the Transfer Agent listed below.
Robert E. DaltonRobert J. Landy, EsquireMark L. DaltonJohn E. Novak Richard E. WilberCarol J. Tama
Rinaldo A. DePaola, Esquire
R. Joseph Landy, Esquire
R. Lowell Coolidge, Esquire, Chairman of the Board
RandallE.Black,CEO&President
AllettaM.Schadler
E. Gene Kosa
David Z. Richards, Jr.
Christopher W. Kunes
Roger C. Graham, Jr.
Robert W. Chappell, Esquire
Terry B. Osborne, EVP
Mickey L. Jones, EVP, CPA
Thomas E. Freeman
F I R S T C I T I Z E N SC O M M U N I T Y B A N K B O A R D O F D I R E C TO R S
Tollfree:800-326-9486Telephone:570-662-2121Website:www.firstcitizensbank.comE-mail:[email protected]
RandallE.Black,CEO&PresidentGina M. Boor, SecretaryMickeyL.Jones,Treasurer&Asst. Secretary, CPA
RETIRED DIRECTORS - CFSI C F S I O F F I C E R S
C O N TA C T
Mickey L. Jones, Treasurer, CPACitizensFinancialServices,Inc.15 South Main StreetMansfield,PA16933
Page 15
2019 Year in Review
MANAGEMENT TEAM
First Row: M.KumiSmalanskas,JeffWilson,Mick Jones, Zerick Cook, Gina Boor Second Row: Sean P. McKinney, Chris Landis, Amy Wood, Dave Richards, Robert Mosso, Kathleen Campbell, Third Row: Steve Guillaume, Randy Black, Dwight Rohrer, Greg Anna (missing from photo-JeffCarr)
Executive Office RandallE.Black,CEO&PresidentGina M. Boor, AVP, Shareholder Services
Finance Mickey L. Jones, EVP, COO Stephen J. Guillaume, SVPPamela R. Munford, VPMatthewM.Lundgren,AVP
Operations Zerick D. Cook, SVP Gregory J. Anna, SVP Robert G. DeWater, VPKeith E. Sampsell, VP Melissa A. Cowles, AVP Renée P. Davis, AVP Bonney J. Welch, AVPLisa A. Banik, AVP Wendy E. Dorsey, AVPMicheleE.Litzelman,AVPDouglas N. Smith, AVP Alison S. Broughton, AVPKathy S. Webster, AVPWendy L. Southard, AVP
Human ResourcesAmy C. Wood, SVP Laura L. Nelson, AVP
Marketing Kathleen M. Campbell, SVP
Training Amy C. Wood, SVP
Investments & TrustRobert B. Mosso, SVP John A. DiGiacomo, VPMatthewA.Stroup,VPKristen D. D’Angelo, AVP Florence L. Prough, AVP Sylvia R. Thompson, AVP
Wal-Mart – 1169 S. Main St Mansfield570-662-8520Beth Weiskopff, AVP
Millerton – 7352 Route 328570-537-2203William J. JacobsonLocal Board(seeTroylisting)
Troy – 1133 W. Main St570-297-2131Veronica R. Seymour, AVPLocal BoardRick HooverGregory S. JonesAmanda MillerRichmond Havens
Gillett – 33178 Route 14Andrew O. Clark570-596-2679Local Board(seeTroylisting)
Canton – 53 W. Main St570-673-3103MistiL.Machmer,AVPLocal BoardFrank WatsonPhilip C. Rockwell
Towanda – 111 Main St570-265-6137Lorraine F. Brown, AVPLocal BoardThomas J. McDonald, Jr., MDMark GannonAnthony J. VentelloJohnL.HuntingtonStephen J. Novak
Sayre – 306 W. Lockhart St570-888-6602Steven R. HickeyLocal Board(seeTowandaBoard)
N O R T H E R N R E G I O N
Retail Banking Services JeffreyB.Carr,SVPJanet E. Holmes, VPDiane K. Wilson, VP Cathy C. Pientka, AVPKristinaM.Bogaczyk,AVP
Commercial Banking ServicesJeffreyL.Wilson,EVPChristopher S. Landis, SVP Erin M. Cole, VPRobertP.Fitzgerald,VPDavid G. Morris, VPPatrick E. Prough, VP Kiera N. Carneiro, AVP
O F F I C E L O C AT I O N S Mansfield – 15 S. Main St 570-662-2121Beth Weiskopff, AVPLocal BoardGaryR.ButtersChristopher D. JonesJody ThomasThomas J. D’AngeloSamuel H. KnipeShane Nickerson
Blossburg – 300 Main St570-638-2115BethA.Weiskopff,AVPLocal Board (SeeMansfieldBoard)
Wellsboro – 1 Pearl St570-724-2600Sabrina Bubeck, AVPLocal BoardBenjamin LargeyChristopherLantzJames K. StagerEdward Osgood
Company Information
Company Information
Page 16
Community Off ices - Tol l Free to Al l Locat ions - 800-326-9486
Sayre – 1778 Elmira St570-888-4900Steven R. Hickey, AVPLocal Board (seepreviousSayrelisting)
LeRaysville – 960 Main St 570-744-2431Debra S. Donnelly, AVPLocal BoardGerald A. HistandRichard R. JonesMartha D. Young
Rome – 847 Main St570-247-5100Debra S. Donnelly, AVPLocal Board(seeLeRaysvillelisting)
Ulysses – 502 Main St814-848-7572L. Abbie Pritchard, AVPLocal BoardVictor O. Brown, DMD PCDouglas Kibbe
Genesee – 391 Main St814-228-3201Alaina F. Knisely, AVPLocal Board(seeUlysseslisting)
Wellsville, NY – 10 Main St585-593-7290L. Abbie Pritchard, AVPLocal BoardMary Kate ColeMichael FinnKevin LaForgeArlen Calcote
CENTRAL REGION
Market ExecutiveDavid Z. Richards, Jr., EVP
Winfield Loan Production Office1157 West Branch Parkway, Suite 2570-768-4203Blaine T. Fessler, VPFrancis G. Strause, VPA. LukeVastine,AVP
Mt. Aetna – 7635 Lancaster Ave717-202-2239KellyE.Wetzel,VP
Mount Joy – 720 E Main St717-928-9050Maryann T. Payne
Fivepointville - 1015 Dry Tavern Rd Denver, PA 17517717-335-1875JamieR.Lutz
Schuylkill Haven – 45 W. Main St866-779-4102Lori A. Faller
Friedensburg – 1549 Long Run Rd866-779-4113Beth A. Reed
AG BANKING DIVISION
Randall E. Black, CEO and PresidentChristopher S. Landis, SVPDwight D. Rohrer, SVPBlaine T. Fessler, VP Sean P. McKinney, VPJeffreyR.Bollinger,VPErin M. Cole, VPJason R. Landis, VPFrancis G. Strause, VPDavid G. Morris, VPKiera N. Carneiro, AVPBenjamin Landis
Agricultural Advisory Board - NorthDaleHoffmanGene KosaPhil RockwellTim WebsterMartha YoungDean JacksonJohn PainterJeffBarnes
Agricultural Advisory Board - SouthBrent CopenhaverChrisHoffmanChris Pierce DelvinMartinPeter HughesRobert Brubaker, JrElvinStoltzfus
Mill Hall – 39 King Arthur Dr 570-748-6469MargaretJ.Shaffer,AVPLocal BoardJay B. AlexanderSteven J. BasonRobert A. MaguireJames HarbachMichael Talone
State College – 141 W. Beaver Ave814-231-8010Christopher M. DaherJamiA.Tomczuk,VPJennifer M. Cadman, VPJessica L. Chobody, VP
SOUTHCENTRAL REGION
Retail Banking ServicesM. Kumi Smalanskas, SVPJames A. Rovito, VPJessie M. Eichelberger, AVP
Commercial Banking ServicesDwight D. Rohrer, SVPSean P. McKinney, VPJeffreyR.Bollinger,VPOwen E. Heller, VPJason R. Landis, VPJeffreyJ.Rae,VPAlex N. Myers
Regional BoardPaul Kilgore, EsquireEugeneKreitzer,Sr.Wilmer StonerChris Pierce Robert WalbornDale Burkholder
OFFICE LOCATIONS
Fredericksburg – 3016 S. Pine Grove St717-202-2255KellyE.Wetzel,VP
Lebanon – 1690 N. 7th St717-202-2252Dawn M. Miele, AVP
Lebanon – 450 Isabel Dr717-202-3978David S. Leggat
Consistently Ranked the #1 Bankin Pennsylvania for Satisfaction and Trust in a Forbes Nationwide Customer Survey
CITIZENSFINANCIAL SERVICES
I N C O R P O R A T E D
Cit izens F inancia l Serv ices , Inc .15 South Main StreetMansf ie ld, Pennsylvania 16933570-662-2121800-326-9486www.f i rstc i t izensbank.com
©2020 Cit izens F inancia l Serv ices , Inc . , A l l r ights reserved. Pr inted in U.S .A.