Citizens Financial Services, Inc. Reports Strong Financial Performance for Year Ended 2024

Citizens Financial Services, Inc. has recently unveiled its unaudited financial results for the year concluded on December 31, 2024. This report exhibits notable growth, demonstrating resilience amid the challenges encountered, particularly from recent mergers and acquisitions.

Key Highlights

The parent company of First Citizens Community Bank reported a net income of $27.8 million in 2024, indicating an impressive 56.2% increase from the previous year's net income, which amounted to $17.8 million. This surge in earnings reflects the company's effective navigation through the complexities associated with the acquisition of HV Bancorp, Inc. Furthermore, the effective tax rate for 2024 was slightly higher at 17.4% compared to 17.2% in 2023.

For the fourth quarter alone, Citizens Financial recorded a net income of $8.0 million, representing a 5.9% increase in comparison to the same period in 2023. Notably, the effective tax rate for this quarter showed a decrease, dropping to 16.4%, down from 18.3% in the previous year.

Strategic Operational Moves

During the first quarter of 2024, the company strategically sold certain assets that were part of the HVB acquisition, including loans and software integral to operations. This sale yielded around $7.2 million in proceeds, alongside a pre-tax gain of approximately $1.1 million. These efforts appear to have bolstered the company’s financial standing significantly, showcasing its adeptness in asset management post-acquisition.

Toward Profitability

In terms of net interest income before accounting for credit losses, Citizens Financial reported substantial growth, reaching $86.5 million for the full year, a rise of $6.2 million or 7.7% from 2023. However, it’s essential to point out that the provision for credit losses amounted to $2.6 million, an indication of the challenges posed by loans not included in the Braavo asset sale completed earlier in 2024. As of the year-end, Citizens held approximately $971,000 in Braavo loans, with $774,000 being classified as performing loans.

Financial Ratios and Indicators

The performance metrics further reflect Citizens Financial’s strong position within the banking sector. The annualized return on average equity reached 9.59% for the year, up from 7.39% in 2023, despite some challenges in the previous year due to one-time costs. Additionally, the return on average assets improved to 0.93% for 2024, in comparison to 0.67% the year prior.

Non-Interest Income and Expenses

Citizens Financial experienced a total non-interest income of $15.4 million in 2024, a significant increase compared to $11.6 million in 2023. This improvement can be attributed to several factors, including increased service charges and gains on loan sales, aided by the HVB acquisition.

Conversely, total non-interest expenses also rose slightly to $65.6 million from $64.8 million in 2023. A notable contributor to this hike in expenses was the increase in employee benefits, amounting to a $4.4 million rise, driven largely by the increase in full-time equivalents resulting from the HVB acquisition.

Asset Management and Future Prospects

By the end of December 2024, total assets for Citizens Financial reached $3.03 billion, up from $2.98 billion in 2023. As the company continues to adapt to market conditions and manage growth effectively, the financial stability looks promising as competitive pressures evolve. Moreover, with deposits increasing to $2.38 billion, the bank remains resilient, showcasing a healthy loan-to-deposit ratio of 97.11%.

In closing, Citizens Financial Services, Inc. stands at a pivotal moment, navigating through complex post-merger operations while exhibiting strong financial results and a commitment to sustaining growth. With a focus on strategic asset management and an expanding market presence, the company is poised for continued success in the coming years.