Citizens Financial Services Inc Reports Mixed Results for Q4 and Full Year 2023

Net Income Declines as Company Faces Economic Headwinds

  • Net Income: Q4 net income was $7,540 thousand, a decrease from $7,875 thousand in Q4 2022. Full-year net income was $17,811 thousand, down from $29,060 thousand in 2022.
  • Earnings Per Share (EPS): Basic and diluted EPS for Q4 stood at $1.60, compared to $1.97 in the same period last year. Full-year EPS was $4.06, a significant drop from $7.25 in 2022.
  • Dividends: The quarterly cash dividend increased by 3.1% to $0.49 per share.
  • Return on Assets and Equity: Return on average assets for the year was 0.66%, down from 1.29% in 2022. Return on average equity decreased to 6.52% from 12.98%.
  • Asset Quality: Non-performing assets to total loans rose to 0.59% from 0.43%.
  • Balance Sheet Growth: Total assets increased to $2,975,321 thousand from $2,333,393 thousand in 2022.
  • Market Value: The last reported trade of the month showed a market value of $64.72 per share, down from $76.72 the previous year.
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On January 30, 2024, Citizens Financial Services Inc (CZFS, Financial), the parent company of First Citizens Community Bank, released its 8-K filing, disclosing unaudited financial results for the fourth quarter and full year ended December 31, 2023. The Pennsylvania-chartered bank and trust company, which offers a range of financial services to individual, business, governmental, and institutional customers, reported a decrease in net income for both the quarter and the year compared to the same periods in 2022.

Financial Performance Overview

The bank's net income for the fourth quarter of 2023 was $7,540 thousand, a slight decrease from $7,875 thousand reported in the fourth quarter of the previous year. For the full year, net income saw a more substantial decline, dropping to $17,811 thousand from $29,060 thousand in 2022. This reduction in profitability can be attributed to various economic challenges, including changes in market interest rates and increased provision for credit losses.

The earnings per share (EPS) for the fourth quarter were $1.60, both basic and diluted, compared to $1.97 in the same quarter of the previous year. The full-year EPS also decreased to $4.06 from $7.25 in 2022. Despite these challenges, the company declared a cash dividend of $0.49 per share for the quarter, marking a 3.1% increase over the previous year's dividend, adjusted for a 1% stock dividend declared in June 2023.

Key Financial Metrics

Return on average assets (annualized) for the year was 0.66%, down from 1.29% in 2022, indicating a lower efficiency in generating income from assets. Similarly, the return on average equity (annualized) decreased to 6.52% from 12.98%, reflecting a reduced profitability for shareholders.

Asset quality has seen some deterioration, with non-performing assets to total loans increasing to 0.59% from 0.43%. This could signal potential issues with loan repayments moving forward. However, the bank's balance sheet grew, with total assets increasing to $2,975,321 thousand from $2,333,393 thousand in 2022.

The market value per share at the last reported trade of the month was $64.72, a decrease from $76.72 per share at the end of 2022, which may reflect investor sentiment and market conditions affecting the bank's stock performance.

Conclusion and Outlook

While Citizens Financial Services Inc has demonstrated resilience by increasing its dividend payout, the decline in net income and key performance ratios such as return on assets and equity highlight the economic headwinds faced by the company. The increase in non-performing assets is also a concern that will require close monitoring in the coming year.

Investors and stakeholders will be looking for strategies that the bank will employ to navigate these challenges and improve profitability. The full financial tables and additional details can be found in the company's 8-K filing.

Explore the complete 8-K earnings release (here) from Citizens Financial Services Inc for further details.