Citizens First Corporation Announces First Quarter 2017 Results

April 20, 2017 14:00

BOWLING GREEN, Ky., April 20, 2017 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the first quarter ending March 31, 2017, which include the following:

For the quarter ended March 31, 2017, the Company reported net income of $907,000, or $0.36 per diluted common share. This represents an increase of $2,000 from $905,000, or $0.36 per diluted common share, for the quarter ended March 31, 2016.

"Increased non-performing loans in the quarter negatively impacted net interest margin, resulting in flat earnings compared to the first quarter of 2016," said Todd Kanipe, President and CEO. "While our credit quality still compares favorably to peer and the industry, we did experience some deterioration in the agricultural portfolio. We believe current reserves are adequate for these loans; however, we anticipate some increased collection expenses as the loans are resolved." Kanipe added, "Though net interest margin pressures persist, loan growth and operating efficiency improved over the first quarter of 2016. We anticipate steady loan demand and deposit growth in our core markets, reflective of the economic growth in the region."

Income Statement

Net interest income decreased $83,000, or 2.1%, as the yield on loans decreased from the prior year. During the first quarter, $95,000 of loan income was reversed as loans totaling $3.0 million were placed on non-accrual status. The Company's net interest margin was 3.68% for the quarter ended March 31, 2017, compared to 3.94% for the quarter ended March 31, 2016, a decrease of 26 basis points. The Company's net interest margin decreased primarily due to a decline in the yield on loans.

There was a $30,000 provision for loan losses in the first quarter of the current year compared to no provision for loan losses in the first quarter of the prior year due to the growth of the loan portfolio and an increase in non-performing assets.

Non-interest income decreased $47,000, or 5.5%, from the prior year primarily due to a decrease in service charges on deposit accounts of $47,000.

Non-interest expense decreased $163,000, or 4.7%, from the prior year primarily due to a reduction in professional fees of $50,000, and a decrease in personnel expense of $50,000.

Credit Quality

Non-performing assets totaled $3.0 million, or 0.65% of total assets, at March 31, 2017 compared to $23,000, or 0.01% of total assets at December 31, 2016, an increase of $3.0 million. Two agricultural-related credits were moved to non-accrual status during the first quarter.

The allowance for loan losses at March 31, 2017 was $4.9 million, or 1.34% of total loans, compared to $4.9 million, or 1.35% of total loans as of December 31, 2016. We consider the size, volume and credit quality of the loan portfolio as well as recent economic and other external influences to record the allowance for loan losses and provision for loan losses that is directionally consistent with our loan portfolio.

Balance Sheet

Total assets at March 31, 2017 were $464.4 million compared to $455.4 million at December 31, 2016. Total assets increased $9.0 million, or 2.0%, from December 31, 2016 to March 31, 2017 due to a growth in loans and interest-bearing deposits in other financial institutions, partially offset by a decline in federal funds sold and available-for-sale securities.

Loans increased $6.2 million, or 1.7%, from December 31, 2016 to March 31, 2017. Deposits increased $3.0 million, or 0.8%, from December 31, 2016 to March 31, 2017. Borrowings from the Federal Home Loan Bank increased $6.0 million, or 17.1%, from December 31, 2016 to March 31, 2017.

Stockholders' equity increased to $43.4 million at March 31, 2017 from $42.4 million at December 31, 2016. The common equity and tangible common equity ratios were 7.83% and 6.97%, respectively, as of March 31, 2017 compared to 7.71% and 6.83%, respectively, at December 31, 2016. The book value and tangible book value per common share ratios were $18.01 and $15.90, respectively, at March 31, 2017 compared to $17.54 and $15.40, respectively, at December 31, 2016.

Dividend to be paid May 17

On April 20, 2017, the Board of Directors declared a cash dividend of $.08 per common share payable May 17, 2017 to shareholders of record as of April 28, 2017.

About Citizens First Corporation

Citizens First Corporation is a bank holding company headquartered in Bowling Green, Kentucky and established in 1999. The Company has branch offices located in Barren, Hart, Simpson and Warren Counties in Kentucky, and a loan production office in Williamson County, Tennessee. Additional information concerning our products and services is available at www.citizensfirstbank.com.

Forward-Looking Statements

Statements in this press release relating to Citizens First Corporation's plans, objectives, expectations or future performance are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based upon the Company's current expectations, but are subject to certain risks and uncertainties that may cause actual results to differ materially. Among the risks and uncertainties that could cause actual results to differ materially are current and future economic and business conditions; possible changes in trade, monetary, and fiscal policies, as well as legislative and regulatory changes; changes in the interest rate environment and our ability to effectively manage interest rate risk and other market risk, credit risk and operational risk; changes in the quality or composition of our loan or investment portfolios; increases in our nonperforming assets, or our inability to recover or absorb losses created by such nonperforming assets; and other factors described in the reports filed by the Company with the Securities and Exchange Commission could also impact current expectations.

Consolidated Financial Highlights (Unaudited) Consolidated Statement of Condition

	(In Thousands, Except Share Data and ratios)
	March 31,		December 31,		December 31,
	2017		2016		2015
Assets
Cash and due from financial institutions	$	6,715	$	8,542	$	8,865
Federal funds sold		—		—		6,390
Interest-bearing deposits in other financial institutions		22,537		11,018		2,728
Available-for-sale securities		47,125		53,547		60,200
Loans held for sale		221		264		—
Loans		365,562		359,391		330,782
Allowance for loan losses		(4,906)		(4,854)		(4,916)
Premises and equipment, net		9,310		9,390		9,998
Bank owned life insurance (BOLI)		8,394		8,351		8,174
Federal Home Loan Bank (FHLB) stock, at cost		2,025		2,025		2,025
Accrued interest receivable		1,386		1,622		1,680
Deferred income taxes		1,353		1,464		1,328
Goodwill and other intangible assets		4,274		4,291		4,362
Other real estate owned		—		—		100
Other assets		458		371		465
Total Assets	$	464,454	$	455,422	$	432,181
Liabilities
Deposits
Noninterest bearing	$	48,598	$	52,322	$	48,522
Savings, NOW and money market		174,726		173,620		168,335
Time		150,072		144,497		153,531
Total deposits		373,396		370,439		370,388
FHLB advances and other borrowings		41,000		35,000		15,000
Subordinated debentures		5,000		5,000		5,000
Accrued interest payable		235		220		213
Other liabilities		1,436		2,399		2,056
Total Liabilities		421,067		413,058		392,657
Stockholders' Equity
6.5% Cumulative convertible preferred stock		7,016		7,261		7,659
Common stock		26,186		25,920		25,406
Retained earnings		10,493		9,706		6,304
Accumulated other comprehensive income (loss)		(308)		(523)		155
Total stockholders' equity		43,387		42,364		39,524
Total liabilities and stockholders' equity	$	464,454	$	455,422	$	432,181

Consolidated Financial Highlights (Unaudited) Consolidated Statement of Income

	Three months ended
	(In Thousands, Except Per Share Data and ratios)
	March 31,		December 31,		September 30,		June 30,		March 31,
	2017		2016		2016		2016		2016
Interest and dividend income	$	4,457	$	4,572	$	4,557	$	4,536	$	4,476
Interest expense		677		652		639		624		613
Net interest income		3,780		3,920		3,918		3,912		3,863

Provision (credit) for loan losses		30		—		—		(85)		—

Non-interest income
Service charges on deposit accounts		278		371		361		339		325
Other service charges and fees		264		245		262		272		248
Gain on sale of mortgage loans		68		97		110		91		77
Non-deposit brokerage fees		87		85		83		75		72
Lease income		52		52		61		49		45
BOLI income		43		44		45		44		44
Gain on sale of securities		23		—		20		55		51
Total non-interest income		815		894		942		925		862

Non-interest expenses:
Personnel expense		1,734		1,741		1,674		1,676		1,784
Net occupancy expense		461		471		481		492		483
Advertising and public relations		71		75		86		98		61
Professional fees		130		50		98		137		180
Data processing services		253		256		262		263		256
Franchise shares and deposit tax		132		132		132		132		132
FDIC insurance		49		47		58		59		59
Other real estate owned expenses		—		1		(8)		23		1
Other		461		457		452		510		498
Total non-interest expenses		3,291		3,230		3,235		3,390		3,454

Income before income taxes		1,274		1,584		1,625		1,532		1,271
Income taxes		367		481		490		458		366
Net income		907		1,103		1,135		1,074		905
Dividends on preferred stock		119		124		124		123		124
Net income available for common stockholders	$	788	$	979	$	1,011	$	951	$	781
Basic earnings per common share	$	0.39	$	0.49	$	0.50	$	0.48	$	0.39
Diluted earnings per common share	$	0.36	$	0.43	$	0.45	$	0.42	$	0.36

Consolidated Financial Highlights (Unaudited) Key Operating Statistics

	Three months ended
	(In Thousands, Except Per Share Data and ratios)
	March 31,			December 31,			September 30,			June 30,			March 31,
	2017			2016			2016			2016			2016
Average:
Assets	$	452,265		$	444,168		$	442,042		$	439,081		$	433,143
Earning Assets		424,349			417,161			414,569			409,722			402,638
Loans		363,824			347,046			344,733			338,456			333,000
Interest-bearing deposits		314,939			310,336			304,473			311,084			320,363
Deposits		364,227			360,816			354,953			360,209			367,397
Borrowed funds		43,078			38,429			42,490			35,868			23,394
Equity		42,827			42,652			42,002			40,912			40,156
Common equity		35,718			35,391			34,741			33,651			32,831

Return on average assets		0.81	%		0.99	%		1.02	%		0.98	%		0.84	%
Return on average equity		8.59	%		10.29	%		10.75	%		10.56	%		9.06	%

Efficiency ratio		70.96	%		66.20	%		65.86	%		69.74	%		72.64	%
Non-interest income to average assets		0.73	%		0.80	%		0.85	%		0.85	%		0.80	%
Non-interest expenses to average assets		2.95	%		2.89	%		2.91	%		3.11	%		3.21	%
Net overhead to average assets		2.22	%		2.09	%		2.06	%		2.26	%		2.41	%
Yield on loans		4.60	%		4.86	%		4.86	%		4.95	%		4.96	%
Yield on investment securities (TE)		2.87	%		2.58	%		2.66	%		2.77	%		2.77	%
Yield on average earning assets (TE)		4.32	%		4.42	%		4.44	%		4.53	%		4.55	%
Cost of average interest bearing liabilities		0.77	%		0.74	%		0.73	%		0.72	%		0.72	%
Net interest margin (TE)		3.68	%		3.80	%		3.83	%		3.92	%		3.94	%
Number of FTE employees		94			95			94			96			98

Asset Quality Indicators:
Non-performing loans to total loans		0.83	%		0.01	%		0.05	%		0.06	%		0.18	%
Non-performing assets to total assets		0.65	%		0.01	%		0.04	%		0.06	%		0.16	%
Allowance for loan losses to total loans		1.34	%		1.35	%		1.45	%		1.43	%		1.53	%
YTD net charge-offs (recoveries) to average loans, annualized		(0.02)	%		(0.01)	%		(0.05)	%		(0.07)	%		(0.15)	%
YTD net charge-offs (recoveries)		(22)			(23)			(130)			(119)			(128)

Consolidated Financial Highlights (Unaudited)

	(In Thousands, Except Share Data and ratios)
	March 31,			December 31,			December 31,
Consolidated Capital Ratios	2017			2016			2015

Total shareholders' equity to total assets ratio		9.34	%		9.30	%		9.15	%
Tangible equity ratio (1)		8.50	%		8.44	%		8.22	%
Tangible common equity ratio (1)		6.97	%		6.83	%		6.43	%
Book value per common share	$	18.01		$	17.54		$	16.18
Tangible book value per common share (1)	$	15.90		$	15.40		$	13.97
End of period common share closing price	$	18.05		$	18.00		$	13.74


(1)	The tangible equity ratio, tangible common equity ratio and tangible book value per common share, while not required by accounting principles generally accepted in the United States of America (GAAP), are considered critical metrics with which to analyze banks. The ratio and per share amount have been included to facilitate a greater understanding of the Company's capital structure and financial condition. See the Regulation G Non-GAAP Reconciliation table for reconciliation of this ratio and per share amount to GAAP.


	(In Thousands, Except Share Data and ratios)
	March 31,			December 31,			December 31,
Regulation G Non-GAAP Reconciliation:	2017			2016			2015

Total shareholders' equity (a)	$	43,387		$	42,364		$	39,524
Less:
Preferred stock		(7,016)			(7,261)			(7,659)
Common equity (b)		36,371			35,103			31,865
Goodwill		(4,097)			(4,097)			(4,097)
Intangible assets		(177)			(194)			(265)
Tangible common equity (c)		32,097			30,812			27,503
Add:
Preferred stock		7,016			7,261			7,659
Tangible equity (d)		39,113			38,073			35,162

Total assets (e)		464,454			455,422			432,181
Less:
Goodwill		(4,097)			(4,097)			(4,097)
Intangible assets		(177)			(194)			(265)
Tangible assets (f)	$	460,180		$	451,131		$	427,819
Shares outstanding (in thousands) (g)		2,019			2,001			1,969

Book value per common share (b/g)	$	18.01		$	17.54		$	16.18
Tangible book value per common share (c/g)	$	15.90		$	15.40		$	13.97
Equity to assets ratio (a/e)		9.34	%		9.30	%		9.15	%
Tangible equity ratio (d/f)		8.50	%		8.44	%		8.22	%
Common equity ratio (b/e)		7.83	%		7.71	%		7.37	%
Tangible common equity ratio (c/f)		6.97	%		6.83	%		6.43	%

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SOURCE Citizens First Corporation

Citizens First Corporation Announces First Quarter 2017 Results

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