CITIZENS FIRST CORP. BOWLING GREEN, Ky., Jan. 22, 2019 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the year ended December 31, 2018 which include the following:
For the quarter ended December 31, 2018 the Company reported net income of $1.16 million, or $0.45 per diluted common share (EPS). This represents a 22% increase or $211,000 from the $952,000, or $0.37 per diluted common share, for the quarter ended December 31, 2017. For the twelve months ended December 31, 2018, net income totaled $4.82 million, or $1.89 per diluted common share. This represents an increase of $731,000, an 18% increase, or $0.29 per diluted common share, from the net income of $4.09 million in the previous year. "Despite challenges in the second half of the year, our company produced record earnings per share in 2018," said Todd Kanipe, President and CEO. "Aided by low credit costs and decreased tax expense, diluted earnings per share improved 18% over 2017," Kanipe said. "While funding costs in our markets have moderated, we expect deposit competition and loan demand to remain challenging in 2019," Kanipe added.
Income Statement Fourth Quarter 2018 Compared to Fourth Quarter 2017
Net interest income decreased $212,000, or 5.2%, for the fourth quarter of 2018 compared to the fourth quarter of the prior year. The Company's net interest margin was 3.43% for the quarter ended December 31, 2018, compared to 3.74% for the quarter ended December 31, 2017, a decrease of 31 basis points. The Company's net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities which exceeded the increase in the yield on earning assets.
There was a $70,000 provision for loan losses in the fourth quarter of the current year compared to a $150,000 credit for loan losses in the fourth quarter of the prior year.
Non-interest income increased $73,000, or 8.3%, from the prior year primarily due to a increase in service charges on deposit accounts of $17,000, an increase in gains on sale of mortgage loans of $24,000, an increase in non-deposit brokerage fees of $12,000 and an increase in other service charges and fees of $19,000.
Non-interest expenses increased $202,000, or 6.5%, from the prior year primarily due to an increase in personnel expense of $72,000, an increase in professional fees of $68,000, and an increase in franchise taxes of $32,000.
Income tax expenses decreased $772,000, or 76.3% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017, as well as additional expense related to the deferred tax asset being revalued in 2017.
Income Statement Current Year Compared to Prior Year
Net interest income increased $188,000, or 1.2%, from the prior year. The Company's net interest margin was 3.52% for the year ended December 31, 2018, and 3.70% for the year ended December 31, 2017, a decrease of 18 basis points. The Company's net interest margin decreased due to an increase in the cost of average interest-bearing liabilities.
There was a $160,000 provision for loan losses in the current year compared to a $150,000 credit in the previous year, an increase of $310,000.
Non-interest income increased $57,000, or 1.6%, primarily due to an increase in other service charges and fees of $56,000 and non-deposit brokerage fees of $54,000, offset by gains on the sale of securities of $48,000 in the prior year.
Non-interest expense increased $427,000, or 3.3%, primarily due to an increase of $359,000 in personnel expenses, $99,000 in professional fees and $103,000 increase in other expenses, offset by a decrease of $101,000 in data processing services.
Income tax expenses decreased $1.2 million, or 52.1% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017, as well as additional expense related to the deferred tax asset being revalued in 2017.
Credit Quality
Non-performing assets totaled $1.3 million, or 0.27% of total assets, at December 31, 2018 compared to $1.3 million, or 0.29% of total assets at December 31, 2017, a decrease of approximately $46,000. The allowance for loan losses at December 31, 2018 was $4.4 million, or 1.18% of total loans, compared to $4.7 million, or 1.26% of total loans as of December 31, 2017. The Company considers 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 the Company's loan portfolio.
Balance Sheet
Total assets at December 31, 2018 were $476.0 million, compared to $465.4 million at December 31, 2017, an increase of 2.3%. Loans decreased $2.7 million, or 0.7%, from December 31, 2017 to December 31, 2018. Deposits increased $16.3 million, or 4.4%, from December 31, 2017 to December 31, 2018. Borrowings from the Federal Home Loan Bank decreased $10.0 million, or 25.0%, from December 31, 2017 to December 31, 2018.
Stockholders' equity increased to $50.0 million at December 31, 2018 from $45.8 million at December 31, 2017, an increase of $4.2 million or 9.2%. The book value per common share and tangible book value per common share ratios were $19.71 and $18.07, respectively, at December 31, 2018 compared to $18.14 and $16.47, respectively, at December 31, 2017.
Quarterly Common Dividend Payable February 21
On January 17, 2019, the Board of Directors declared a quarterly cash dividend of $0.07 per common share payable February 21, 2019 to shareholders of record on February 4, 2019.
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 | |||||||||
December 31, | December 31, | December 31, | |||||||
2018 | 2017 | 2016 | |||||||
Assets | |||||||||
Cash and due from financial institutions | $ | 8,875 | $ | 6,444 | $ | 8,542 | |||
Federal funds sold | 10,000 | — | — | ||||||
Interest-bearing deposits in other financial institutions | 16,010 | 13,532 | 11,018 | ||||||
Available-for-sale securities | 47,098 | 48,616 | 53,547 | ||||||
Loans held for sale | 269 | 427 | 264 | ||||||
Loans | 371,544 | 374,239 | 359,391 | ||||||
Allowance for loan losses | (4,373) | (4,724) | (4,854) | ||||||
Premises and equipment, net | 8,861 | 9,140 | 9,390 | ||||||
Bank owned life insurance (BOLI) | 8,705 | 8,528 | 8,351 | ||||||
Federal Home Loan Bank (FHLB) stock, at cost | 2,065 | 2,053 | 2,025 | ||||||
Accrued interest receivable | 1,683 | 1,681 | 1,622 | ||||||
Deferred income taxes | 545 | 670 | 1,464 | ||||||
Goodwill and other intangible assets | 4,150 | 4,221 | 4,291 | ||||||
Other assets | 550 | 555 | 371 | ||||||
Total Assets | $ | 475,982 | $ | 465,382 | $ | 455,422 | |||
Liabilities | |||||||||
Deposits | |||||||||
Noninterest bearing | $ | 55,006 | $ | 53,259 | $ | 52,322 | |||
Savings, NOW and money market | 192,762 | 175,087 | 173,620 | ||||||
Time | 140,841 | 143,968 | 144,497 | ||||||
Total deposits | 388,609 | 372,314 | 370,439 | ||||||
FHLB advances and other borrowings | 30,000 | 40,000 | 35,000 | ||||||
Subordinated debentures | 5,000 | 5,000 | 5,000 | ||||||
Accrued interest payable | 410 | 285 | 220 | ||||||
Other liabilities | 1,944 | 1,949 | 2,399 | ||||||
Total Liabilities | 425,963 | 419,548 | 413,058 | ||||||
Stockholders' Equity | |||||||||
6.5% Cumulative convertible preferred stock | — | — | 7,261 | ||||||
Common stock | 33,309 | 33,138 | 25,920 | ||||||
Retained earnings | 17,365 | 13,142 | 9,706 | ||||||
Accumulated other comprehensive (loss) | (655) | (446) | (523) | ||||||
Total stockholders' equity | 50,019 | 45,834 | 42,364 | ||||||
Total liabilities and stockholders' equity | $ | 475,982 | $ | 465,382 | $ | 455,422 | |||
Consolidated Financial Highlights (Unaudited) | |||||||||||||||
Consolidated Statement of Income | |||||||||||||||
Three months ended | |||||||||||||||
(In Thousands, Except Per Share Data and ratios) | |||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||
Interest and dividend income | $ | 5,112 | $ | 5,094 | $ | 5,162 | $ | 4,860 | $ | 4,905 | |||||
Interest expense | 1,277 | 1,182 | 1,064 | 960 | 858 | ||||||||||
Net interest income | 3,835 | 3,912 | 4,098 | 3,900 | 4,047 | ||||||||||
Provision (credit) for loan losses | 70 | 30 | 30 | 30 | (150) | ||||||||||
Non-interest income | |||||||||||||||
Service charges on deposit accounts | 332 | 291 | 309 | 298 | 315 | ||||||||||
Other service charges and fees | 307 | 319 | 319 | 281 | 288 | ||||||||||
Gain on sale of mortgage loans | 106 | 95 | 69 | 50 | 82 | ||||||||||
Non-deposit brokerage fees | 109 | 110 | 101 | 99 | 97 | ||||||||||
Lease income | 53 | 52 | 79 | 52 | 52 | ||||||||||
BOLI income | 45 | 45 | 44 | 43 | 45 | ||||||||||
Total non-interest income | 952 | 912 | 921 | 823 | 879 | ||||||||||
Non-interest expenses: | |||||||||||||||
Personnel expense | 1,812 | 1,730 | 1,773 | 1,846 | 1,740 | ||||||||||
Net occupancy expense | 436 | 457 | 432 | 453 | 448 | ||||||||||
Advertising and public relations | 91 | 102 | 85 | 81 | 78 | ||||||||||
Professional fees | 154 | 156 | 172 | 164 | 86 | ||||||||||
Data processing services | 202 | 208 | 205 | 194 | 192 | ||||||||||
Franchise shares and deposit tax | 120 | 120 | 120 | 120 | 88 | ||||||||||
FDIC insurance | 45 | 42 | 43 | 42 | 47 | ||||||||||
Other | 454 | 470 | 461 | 459 | 433 | ||||||||||
Total non-interest expenses | 3,314 | 3,285 | 3,291 | 3,359 | 3,112 | ||||||||||
Income before income taxes | 1,403 | 1,509 | 1,698 | 1,334 | 1,964 | ||||||||||
Income taxes | 240 | 311 | 324 | 250 | 1,012 | ||||||||||
Net income | 1,163 | 1,198 | 1,374 | 1,084 | 952 | ||||||||||
Dividends on preferred stock | — | — | — | — | — | ||||||||||
Net income available for common stockholders | $ | 1,163 | $ | 1,198 | $ | 1,374 | $ | 1,084 | $ | 952 | |||||
Basic earnings per common share | $ | 0.46 | $ | 0.47 | $ | 0.54 | $ | 0.43 | $ | 0.38 | |||||
Diluted earnings per common share | $ | 0.45 | $ | 0.47 | $ | 0.54 | $ | 0.43 | $ | 0.37 | |||||
Consolidated Financial Highlights (Unaudited) | |||||||||||||||||
Key Operating Statistics | |||||||||||||||||
Three months ended | |||||||||||||||||
(In Thousands, Except Per Share Data and ratios) | |||||||||||||||||
December 31, | September 30, | June 30, | March 31, | December 31, | |||||||||||||
2018 | 2018 | 2018 | 2018 | 2017 | |||||||||||||
Average: | |||||||||||||||||
Assets | $ | 473,070 | $ | 482,506 | $ | 478,836 | $ | 476,063 | $ | 462,966 | |||||||
Earning Assets | 445,855 | 454,914 | 451,315 | 448,853 | 435,458 | ||||||||||||
Loans | 367,921 | 377,140 | 389,614 | 384,184 | 370,173 | ||||||||||||
Interest-bearing deposits | 329,096 | 333,043 | 328,932 | 322,627 | 317,196 | ||||||||||||
Deposits | 381,687 | 388,124 | 383,144 | 375,617 | 369,643 | ||||||||||||
Borrowed funds | 39,783 | 43,685 | 46,758 | 52,167 | 45,000 | ||||||||||||
Equity | 49,090 | 48,242 | 47,006 | 46,023 | 45,907 | ||||||||||||
Common equity | 49,090 | 48,242 | 47,006 | 46,023 | 45,907 | ||||||||||||
Return on average assets | 0.98% | 0.99% | 1.15% | 0.92% | 0.82% | ||||||||||||
Return on average equity | 9.41% | 9.85% | 11.97% | 9.55% | 8.23% | ||||||||||||
Efficiency ratio | 68.87% | 67.74% | 65.23% | 70.72% | 62.46% | ||||||||||||
Non-interest income to average assets | 0.80% | 0.75% | 0.77% | 0.70% | 0.75% | ||||||||||||
Non-interest expenses to average assets | 2.78% | 2.70% | 2.76% | 2.86% | 2.67% | ||||||||||||
Net overhead to average assets | 1.98% | 1.95% | 1.99% | 2.16% | 1.91% | ||||||||||||
Yield on loans | 4.99% | 4.89% | 4.94% | 4.75% | 4.88% | ||||||||||||
Yield on investment securities (TE) | 2.73% | 2.51% | 2.61% | 2.56% | 2.77% | ||||||||||||
Yield on average earning assets (TE) | 4.57% | 4.46% | 4.61% | 4.42% | 4.52% | ||||||||||||
Cost of average interest bearing liabilities | 1.37% | 1.24% | 1.14% | 1.04% | 0.94% | ||||||||||||
Net interest margin (TE) | 3.43% | 3.43% | 3.67% | 3.55% | 3.74% | ||||||||||||
Number of FTE employees | 97 | 98 | 99 | 96 | 98 | ||||||||||||
Asset Quality Indicators: | |||||||||||||||||
Non-performing loans to total loans | 0.35% | 0.54% | 0.54% | 0.54% | 0.36% | ||||||||||||
Non-performing assets to total assets | 0.27% | 0.43% | 0.43% | 0.43% | 0.29% | ||||||||||||
Allowance for loan losses to total loans | 1.18% | 1.29% | 1.24% | 1.21% | 1.26% | ||||||||||||
YTD net charge-offs (recoveries) to | 0.13% | 0.01% | 0.02% | 0.06% | (0.01)% | ||||||||||||
YTD net charge-offs (recoveries) | 511 | 38 | 34 | 61 | (20) | ||||||||||||
Consolidated Financial Highlights (Unaudited) | ||||||
Consolidated Statement of Income | ||||||
Year Ended | ||||||
(In Thousands, Except Per Share Data and ratios) | ||||||
December 31, | December 31, | |||||
2018 | 2017 | |||||
Interest and dividend income | $ | 20,228 | $ | 18,595 | ||
Interest expense | 4,483 | 3,038 | ||||
Net interest income | 15,745 | 15,557 | ||||
Provision for loan losses | 160 | (150) | ||||
Non-interest income | ||||||
Service charges on deposit accounts | 1,230 | 1,237 | ||||
Other service charges and fees | 1,226 | 1,170 | ||||
Gain on sale of mortgage loans | 320 | 317 | ||||
Non-deposit brokerage fees | 419 | 365 | ||||
Lease income | 236 | 237 | ||||
BOLI income | 177 | 177 | ||||
Gain on sale of securities | — | 48 | ||||
Total non-interest income | 3,608 | 3,551 | ||||
Non-interest expenses: | ||||||
Personnel expense | 7,161 | 6,802 | ||||
Net occupancy expense | 1,778 | 1,804 | ||||
Advertising and public relations | 359 | 337 | ||||
Professional fees | 646 | 547 | ||||
Data processing services | 809 | 910 | ||||
Franchise shares and deposit tax | 480 | 484 | ||||
FDIC insurance | 172 | 197 | ||||
Other | 1,844 | 1,741 | ||||
Total non-interest expenses | 13,249 | 12,822 | ||||
Income before income taxes | 5,944 | 6,436 | ||||
Income taxes | 1,125 | 2,347 | ||||
Net income | 4,819 | 4,089 | ||||
Dividends on preferred stock | — | 238 | ||||
Net income available for common stockholders | $ | 4,819 | $ | 3,851 | ||
Basic earnings per common share | $ | 1.90 | $ | 1.68 | ||
Diluted earnings per common share | $ | 1.89 | $ | 1.60 | ||
Consolidated Financial Highlights (Unaudited) | |||||
Key Operating Statistics | |||||
Year Ended | |||||
(In Thousands, Except Per | |||||
Share Data and ratios) | |||||
December 31, | December 31, | ||||
2018 | 2017 | ||||
Average: | |||||
Assets | $ | 477,624 | $ | 454,897 | |
Earning Assets | 450,237 | 427,451 | |||
Loans | 379,663 | 365,028 | |||
Interest-bearing deposits | 328,455 | 316,168 | |||
Deposits | 382,176 | 366,862 | |||
Borrowed funds | 45,559 | 41,381 | |||
Equity | 47,600 | 44,434 | |||
Common equity | 47,600 | 41,233 | |||
Return on average assets | 1.01% | 0.90% | |||
Return on average equity | 10.12% | 9.20% | |||
Efficiency ratio | 68.10% | 66.43% | |||
Non-interest income to average assets | 0.76% | 0.78% | |||
Non-interest expenses to average assets | 2.77% | 2.82% | |||
Net overhead to average assets | 2.01% | 2.04% | |||
Yield on loans | 4.89% | 4.72% | |||
Yield on investment securities (TE) | 2.60% | 2.79% | |||
Yield on average earning assets (TE) | 4.52% | 4.41% | |||
Cost of average interest bearing liabilities | 1.20% | 0.85% | |||
Net interest margin (TE) | 3.52% | 3.70% | |||
Number of FTE employees | 97 | 98 | |||
Consolidated Financial Highlights (Unaudited) | |||||||
(In Thousands, Except Per Share Data and ratios) | |||||||
December 31, | December 31, | December 31, | |||||
Consolidated Capital Ratios | 2018 | 2017 | 2016 | ||||
Total shareholders' equity to total assets ratio | 10.51% | 9.85% | 9.30% | ||||
Tangible equity ratio (1) | 9.72% | 9.02% | 8.44% | ||||
Tangible common equity ratio (1) | 9.72% | 9.02% | 6.83% | ||||
Book value per common share | $ | 19.71 | $ | 18.14 | $ | 17.54 | |
Tangible book value per common share (1) | $ | 18.07 | $ | 16.47 | $ | 15.40 | |
End of period common share closing price | $ | 21.43 | $ | 24.00 | $ | 18.00 | |
(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 Per Share Data and ratios) | |||||||||
December 31, | December 31, | December 31, | |||||||
Regulation G Non-GAAP Reconciliation: | 2018 | 2017 | 2016 | ||||||
Total shareholders' equity (a) | $ | 50,019 | $ | 45,834 | $ | 42,364 | |||
Less: | |||||||||
Preferred stock | — | — | (7,261) | ||||||
Common equity (b) | 50,019 | 45,834 | 35,103 | ||||||
Goodwill | (4,097) | (4,097) | (4,097) | ||||||
Intangible assets | (53) | (124) | (194) | ||||||
Tangible common equity (c) | 45,869 | 41,613 | 30,812 | ||||||
Add: | |||||||||
Preferred stock | — | — | 7,261 | ||||||
Tangible equity (d) | 45,869 | 41,613 | 38,073 | ||||||
Total assets (e) | 475,982 | 465,382 | 455,422 | ||||||
Less: | |||||||||
Goodwill | (4,097) | (4,097) | (4,097) | ||||||
Intangible assets | (53) | (124) | (194) | ||||||
Tangible assets (f) | $ | 471,832 | $ | 461,161 | $ | 451,131 | |||
Shares outstanding (in thousands) (g) | 2,538 | 2,526 | 2,001 | ||||||
Book value per common share (b/g) | $ | 19.71 | $ | 18.14 | $ | 17.54 | |||
Tangible book value per common share (c/g) | $ | 18.07 | $ | 16.47 | $ | 15.40 | |||
Equity to assets ratio (a/e) | 10.51% | 9.85% | 9.30% | ||||||
Tangible equity ratio (d/f) | 9.72% | 9.02% | 8.44% | ||||||
Common equity ratio (b/e) | 10.51% | 9.85% | 7.71% | ||||||
Tangible common equity ratio (c/f) | 9.72% | 9.02% | 6.83% | ||||||
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SOURCE Citizens First Corporation
