Citizens Financial Services (CZFS) Q3 2024 earnings summary

Executive summary

• Net income for the first nine months of 2024 was $19.8 million, up 93.1% year-over-year, driven by the absence of prior year merger and acquisition costs and lower provision for credit losses.

• Net income for Q3 2024 was $7.5 million, nearly flat compared to Q3 2023; basic EPS for both periods was $1.59.

• Annualized return on assets and equity for the nine months were 0.88% and 8.45%, respectively, up from 0.53% and 6.56% a year ago.

• The company completed the sale of the Braavo division in Q1 2024, generating a pre-tax gain of $1.1 million.

Financial highlights

• Net interest income for the nine months rose 8.9% to $63.6 million; Q3 net interest income was $21.3 million, down 4.8% year-over-year.

• Non-interest income for the nine months increased 48.6% to $12.1 million, mainly from loan sales, Braavo division sale, and HVB acquisition activity.

• Non-interest expenses were flat year-over-year at $48.9 million for the nine months; Q3 expenses decreased 2.5% to $16.0 million.

• Total assets reached $3.03 billion, up $51.1 million since year-end 2023; loans grew to $2.33 billion.

• Deposits increased $128.7 million to $2.45 billion; borrowed funds decreased $90.3 million to $231.7 million.

Outlook and guidance

• Management expects sufficient liquidity from core deposits, FHLB financing, and investment maturities to meet obligations.

• The company continues to monitor interest rate risk and expects its investment strategy to mitigate exposure in various rate environments.

• Management anticipates recognizing $8.2 million in low-income housing tax credits over the next 12 years.

• Management notes ongoing competitive pressure for deposits due to higher market interest rates and seasonal funding from state and political organization depositors.

• Forward-looking statements caution about risks from economic conditions, interest rates, and regulatory changes.