CITIZENS FIRST CORP. BOWLING GREEN, Ky., July 20, 2017 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the second quarter ending June 30, 2017, which include the following:
For the quarter ended June 30, 2017, the Company reported net income of $1.11 million, or $0.43 per diluted common share. This represents an increase of $34,000 from $1.07 million, or $0.42 per diluted common share, for the quarter ended June 30, 2016. For the six months ended June 30, 2017, net income totaled $2.02 million, or $0.79 per diluted common share. This represents an increase of $36,000, or $0.01 per diluted common share, from the net income of $1.98 million in the first six months of the previous year.
As of June 30, 2017, the Company completed the redemption of the 6.5% Cumulative Preferred Stock, which provided an additional $7.1 million in common equity. Outstanding common shares of the Company increased 25% as a result of the preferred shareholders' option to convert preferred shares into common shares. The Company's tangible common equity ratio increased from 6.83% at December 31, 2016 to 8.75% at June 30, 2017. "In addition to improving our tangible common equity, the conversion of the preferred shares will reduce annual preferred dividend expense by $476,000," said Todd Kanipe, President and CEO.
Income Statement Second Quarter 2017 Compared to Second Quarter 2016
Net interest income decreased $45,000, or 1.2%, as the yield on loans decreased and the cost of funds increased from the second quarter of the prior year. The Company's net interest margin was 3.69% for the quarter ended June 30, 2017, compared to 3.92% for the quarter ended June 30, 2016, a decrease of 23 basis points. The Company's net interest margin decreased primarily due to a decline in the yield on loans and an increase in the cost of interest-bearing liabilities.
There was no provision for loan losses in the second quarter of the current year compared to an ($85,000) (credit) provision for loan losses in the second quarter of the prior year.
Non-interest income increased $7,000, or 0.8%, from the prior year primarily due to an increase in lease income of $31,000 and other service charges and fees of $29,000, offset by a decrease in gains on sale of securities of $55,000.
Non-interest expense decreased $177,000, or 5.2%, from the prior year primarily due to a decrease in other expenses of $78,000, a reduction in occupancy expenses of $46,000, and a decrease in personnel expense of $21,000.
Income Statement Current Year Compared to Prior Year
Net interest income decreased $128,000, or 1.6%, as the yield on loans decreased and the cost of funds increased from the prior year. The Company's net interest margin was 3.68% for the six months ended June 30, 2017, and 3.93% for the six months ended June 30, 2016, a decrease of 25 basis points. The Company's net interest margin decreased due to a decrease in the yield on average earning assets coupled with an increase in the cost of average interest-bearing liabilities.
Non-interest income decreased $40,000, or 2.2%, primarily due to a reduction in gains on the sale of securities of $83,000 and a decrease in service charges on deposit accounts of $59,000, offset by an increase in other service charges and fees of $45,000 and lease income of $38,000.
Non-interest expense decreased $340,000, or 5.0%, primarily due to reductions in all categories of expenses, including $71,000 in personnel expenses and $68,000 in occupancy expenses. "We have been successful in lowering operating expenses which has contributed to the improvement of the overall profitability of the Company," Kanipe added.
Credit Quality
Non-performing assets totaled $2.9 million, or 0.63% of total assets, at June 30, 2017 compared to $23,000, or 0.01% of total assets at December 31, 2016, an increase of $2.9 million. Two agricultural-related credits were moved to non-accrual status during the first quarter of 2017.
The allowance for loan losses at June 30, 2017 was $4.9 million, or 1.36% 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 June 30, 2017 were $462.4 million compared to $455.4 million at December 31, 2016. Total assets increased $6.9 million, or 1.5%, from December 31, 2016 to June 30, 2017 due to a growth in loans and interest-bearing deposits in other financial institutions, partially offset by a decline in available-for-sale securities.
Loans increased $1.1 million, or 0.3%, from December 31, 2016 to June 30, 2017. "Higher than anticipated payoffs and softer loan demand resulted in flat average loan balances in the second quarter of 2017," Kanipe noted. Deposits increased $426,000, or 0.1%, from December 31, 2016 to June 30, 2017. Borrowings from the Federal Home Loan Bank increased $5.0 million, or 14.3%, from December 31, 2016 to June 30, 2017.
Stockholders' equity increased to $44.3 million at June 30, 2017 from $42.4 million at December 31, 2016. The book value per common share and tangible book value per common share ratios were $17.55 and $15.87, respectively, at June 30, 2017 compared to $17.54 and $15.40, respectively, at December 31, 2016.
Redemption and Conversion of Cumulative Preferred Stock
On May 15, 2017, the Board of Directors of the Company authorized the redemption of all 229 outstanding shares of the Company's Cumulative Convertible Preferred Stock ("Preferred Shares") as of June 30, 2017 (the "Redemption Date") at the redemption price of $31,992 per share (the Stated Value of the Preferred Shares), plus accrued and unpaid dividends. The Preferred Shares were convertible at the option of the holder, until the day prior to the Redemption Date, into a number of shares of common stock determined by dividing the Stated Value of the Preferred Shares ($31,992) by $14.06, the conversion price.
From May 15, 2017 to the Redemption Date, the Company issued an aggregate of 507,325 shares of common stock upon conversion of 223 Preferred Shares. Six preferred shares with an aggregate redemption price of $191,952 were redeemed. As a result of the conversion of Preferred Shares, the outstanding shares of the Company's common stock have increased from 2,019,052 to 2,526,377 as of June 30, 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)
June 30, December 31, December 31,
2017 2016 2015
---- ---- ----
Assets
Cash and due from financial institutions $6,769 $8,542 $8,865
Federal funds sold - - 6,390
Interest-bearing deposits in other financial institutions 24,351 11,018 2,728
Available-for-sale securities 48,560 53,547 60,200
Loans held for sale - 264 -
Loans 360,470 359,391 330,782
Allowance for loan losses (4,898) (4,854) (4,916)
Premises and equipment, net 9,212 9,390 9,998
Bank owned life insurance (BOLI) 8,439 8,351 8,174
Federal Home Loan Bank (FHLB) stock, at cost 2,053 2,025 2,025
Accrued interest receivable 1,435 1,622 1,680
Deferred income taxes 1,210 1,464 1,328
Goodwill and other intangible assets 4,256 4,291 4,362
Other real estate owned - - 100
Other assets 499 371 465
--- --- ---
Total Assets $462,356 $455,422 $432,181
-------- -------- --------
Liabilities
Deposits
Noninterest bearing $50,404 $52,322 $48,522
Savings, NOW and money market 175,400 173,620 168,335
Time 145,061 144,497 153,531
------- ------- -------
Total deposits 370,865 370,439 370,388
FHLB advances and other borrowings 40,000 35,000 15,000
Subordinated debentures 5,000 5,000 5,000
Accrued interest payable 229 220 213
Other liabilities 1,923 2,399 2,056
----- ----- -----
Total Liabilities 418,017 413,058 392,657
------- ------- -------
Stockholders' Equity
6.5% Cumulative convertible preferred stock - 7,261 7,659
Common stock 33,050 25,920 25,406
Retained earnings 11,321 9,706 6,304
Accumulated other comprehensive income (loss) (32) (523) 155
--- ---- ---
Total stockholders' equity 44,339 42,364 39,524
------ ------ ------
Total liabilities and stockholders' equity $462,356 $455,422 $432,181
======== ======== ========
Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income
Three months ended
(In Thousands, Except Per Share Data and ratios)
June 30, March 31, December 31, September 30, June 30,
2017 2017 2016 2016 2016
---- ---- ---- ---- ----
Interest and dividend income $4,593 $4,457 $4,572 $4,557 $4,536
Interest expense 726 677 652 639 624
--- --- --- --- ---
Net interest income 3,867 3,780 3,920 3,918 3,912
Provision (credit) for loan losses - 30 - - (85)
Non-interest income
Service charges on deposit accounts 327 278 371 361 339
Other service charges and fees 301 264 245 262 272
Gain on sale of mortgage loans 88 68 97 110 91
Non-deposit brokerage fees 91 87 85 83 75
Lease income 80 52 52 61 49
BOLI income 45 43 44 45 44
Gain on sale of securities - 23 - 20 55
--- --- --- --- ---
Total non-interest income 932 815 894 942 925
--- --- --- --- ---
Non-interest expenses:
Personnel expense 1,655 1,734 1,741 1,674 1,676
Net occupancy expense 446 461 471 481 492
Advertising and public relations 77 71 75 86 98
Professional fees 171 130 50 98 137
Data processing services 251 253 256 262 263
Franchise shares and deposit tax 132 132 132 132 132
FDIC insurance 49 49 47 58 59
Other real estate owned expenses - - 1 (8) 23
Other 432 461 457 452 510
--- --- --- --- ---
Total non-interest expenses 3,213 3,291 3,230 3,235 3,390
Income before income taxes 1,586 1,274 1,584 1,625 1,532
Income taxes 478 367 481 490 458
--- --- --- --- ---
Net income 1,108 907 1,103 1,135 1,074
Dividends on preferred stock 119 119 124 124 123
--- --- --- --- ---
Net income available for common stockholders $989 $788 $979 $1,011 $951
==== ==== ==== ====== ====
Basic earnings per common share $0.47 $0.39 $0.49 $0.50 $0.48
===== ===== ===== ===== =====
Diluted earnings per common share $0.43 $0.36 $0.43 $0.45 $0.42
===== ===== ===== ===== =====
Consolidated Financial Highlights (Unaudited)
Key Operating Statistics
Three months ended
(In Thousands, Except Per Share Data and ratios)
June 30, March 31, December 31, September 30, June 30,
2017 2017 2016 2016 2016
---- ---- ---- ---- ----
Average:
Assets $454,524 $452,265 $444,168 $442,042 $439,081
Earning Assets 427,675 424,349 417,161 414,569 409,722
Loans 363,733 363,824 347,046 344,733 338,456
Interest-bearing deposits 319,883 314,939 310,336 304,473 311,084
Deposits 368,743 364,227 360,816 354,953 360,209
Borrowed funds 39,769 43,078 38,429 42,490 35,868
Equity 44,047 42,827 42,652 42,002 40,912
Common equity 38,240 35,718 35,391 34,741 33,651
Return on average assets 0.98% 0.81% 0.99% 1.02% 0.98%
Return on average equity 10.09% 8.59% 10.29% 10.75% 10.56%
Efficiency ratio 66.10% 70.96% 66.20% 65.86% 69.74%
Non-interest income to average assets 0.82% 0.73% 0.80% 0.85% 0.85%
Non-interest expenses to average assets 2.84% 2.95% 2.89% 2.91% 3.11%
Net overhead to average assets 2.01% 2.22% 2.09% 2.06% 2.26%
Yield on loans 4.69% 4.60% 4.86% 4.86% 4.95%
Yield on investment securities (TE) 2.85% 2.87% 2.58% 2.66% 2.77%
Yield on average earning assets (TE) 4.37% 4.32% 4.42% 4.44% 4.53%
Cost of average interest bearing liabilities 0.81% 0.77% 0.74% 0.73% 0.72%
Net interest margin (TE) 3.69% 3.68% 3.80% 3.83% 3.92%
Number of FTE employees 95 94 95 94 96
Asset Quality Indicators:
Non-performing loans to total loans 0.80% 0.83% 0.01% 0.05% 0.06%
Non-performing assets to total assets 0.63% 0.65% 0.01% 0.04% 0.06%
Allowance for loan losses to total loans 1.36% 1.34% 1.35% 1.45% 1.43%
YTD net charge-offs (recoveries) to average loans, annualized (0.01)% (0.02)% (0.01)% (0.05)% (0.07)%
YTD net charge-offs (recoveries) (13) (22) (23) (130) (119)
Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income
Six Months Ended
June 30, June 30,
2017 2016
---- ----
Interest and dividend income $9,050 $9,012
Interest expense 1,403 1,237
Net interest income 7,647 7,775
Provision (credit) for loan losses 30 (85)
Non-interest income
Service charges on deposit accounts 605 664
Other service charges and fees 565 520
Gain on sale of mortgage loans 156 168
Non-deposit brokerage fees 178 147
Lease income 132 94
BOLI income 88 88
Gain on sale of securities 23 106
--- ---
Total non-interest income 1,747 1,787
----- -----
Non-interest expenses:
Personnel expense 3,389 3,460
Net occupancy expense 907 975
Advertising and public relations 148 159
Professional fees 301 317
Data processing services 504 519
Franchise shares and deposit tax 264 264
FDIC insurance 98 118
Other real estate owned expenses - 24
Other 893 1,008
--- -----
Total non-interest expenses 6,504 6,844
Income before income taxes 2,860 2,803
Income taxes 845 824
--- ---
Net income 2,015 1,979
Dividends on preferred stock 238 247
--- ---
Net income available for common stockholders $1,777 $1,732
====== ======
Basic earnings per common share $0.86 $0.87
===== =====
Diluted earnings per common share $0.79 $0.78
===== =====
Consolidated Financial Highlights (Unaudited)
Key Operating Statistics
Six Months Ended
(In Thousands, Except Per
Share Data and ratios)
June 30, June 30,
2017 2016
---- ----
Average:
Assets $453,401 $436,112
Earning Assets 426,021 406,181
Loans 363,778 335,728
Interest-
bearing
deposits 317,425 315,724
Deposits 366,498 363,803
Borrowed funds 41,415 29,631
Equity 43,441 40,534
Common equity 36,987 33,241
Return on
average assets 0.90% 0.91%
Return on
average equity 9.35% 9.82%
Efficiency ratio 68.47% 70.63%
Non-interest
income to
average assets 0.78% 0.74%
Non-interest
expenses to
average assets 2.89% 3.07%
Net overhead to
average assets 2.12% 2.33%
Yield on loans 4.65% 4.95%
Yield on
investment
securities (TE) 2.86% 2.77%
Yield on average
earning assets
(TE) 4.34% 4.54%
Cost of average
interest
bearing
liabilities 0.79% 0.72%
Net interest
margin (TE) 3.68% 3.93%
Number of FTE
employees 95 96
Consolidated Financial Highlights (Unaudited)
(In Thousands, Except Share Data and ratios)
June 30, December 31, December 31,
Consolidated Capital Ratios 2017 2016 2015
---- ---- ----
Total shareholders' equity to total assets ratio 9.59% 9.30% 9.15%
Tangible equity ratio (1) 8.75% 8.44% 8.22%
Tangible common equity ratio (1) 8.75% 6.83% 6.43%
Book value per common share $17.55 $17.54 $16.18
Tangible book value per common share (1) $15.87 $15.40 $13.97
End of period common share closing price $22.14 $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)
June 30, December 31, December 31,
Regulation G Non-GAAP Reconciliation: 2017 2016 2015
---- ---- ----
Total shareholders' equity (a) $44,339 $42,364 $39,524
Less:
Preferred stock - (7,261) (7,659)
--- ------ ------
Common equity (b) 44,339 35,103 31,865
Goodwill (4,097) (4,097) (4,097)
Intangible assets (159) (194) (265)
---- ---- ----
Tangible common equity (c) 40,083 30,812 27,503
Add:
Preferred stock - 7,261 7,659
--- ----- -----
Tangible equity (d) 40,083 38,073 35,162
Total assets (e) 462,356 455,422 432,181
Less:
Goodwill (4,097) (4,097) (4,097)
Intangible assets (159) (194) (265)
---- ---- ----
Tangible assets (f) $458,100 $451,131 $427,819
Shares outstanding (in thousands) (g) 2,526 2,001 1,969
Book value per common share (b/g) $17.55 $17.54 $16.18
Tangible book value per common share (c/g) $15.87 $15.40 $13.97
Equity to assets ratio (a/e) 9.59% 9.30% 9.15%
Tangible equity ratio (d/f) 8.75% 8.44% 8.22%
Common equity ratio (b/e) 9.59% 7.71% 7.37%
Tangible common equity ratio (c/f) 8.75% 6.83% 6.43%
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SOURCE Citizens First Corporation
