CITIZENS FIRST CORP. BOWLING GREEN, Ky., Oct. 19, 2017 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the nine months ended September 30, 2017 which include the following:
For the quarter ended September 30, 2017 the Company reported net income of $1.12 million, or $0.44 per diluted common share. This represents a decrease of $13,000 from $1.14 million, or $0.45 per diluted common share, for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, net income totaled $3.14 million, or $1.23 per diluted common share. This represents an increase of $23,000 from the net income of $3.11 million in the first nine months of the previous year. "While profitability improved over the previous year, it was due primarily to lower operating expenses and credit costs," said Todd Kanipe, President and CEO.
Income Statement Third Quarter 2017 Compared to Third Quarter 2016
Net interest income decreased $55,000, or 1.4%, as the yield on loans decreased and the cost of funds increased from the third quarter of the prior year. The Company's net interest margin was 3.68% for the quarter ended September 30, 2017, compared to 3.83% for the quarter ended September 30, 2016, a decrease of 15 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 a ($30,000) (credit) provision for loan losses in the third quarter of the current year compared to no provision in the third quarter of the prior year.
Non-interest income decreased $17,000, or 1.8%, from the prior year primarily due to a decrease in service charges on deposit accounts of $44,000 and gain on sale of mortgage loans of $31,000, partially offset by an increase in other service charges and fees of $55,000.
Non-interest expense decreased $29,000, or 0.9%, from the prior year primarily due to a decrease in data processing services of $48,000 and other expenses of $37,000, partially offset by an increase in professional fees of $62,000.
Income Statement Current Year Compared to Prior Year
Net interest income decreased $183,000, 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 nine months ended September 30, 2017, and 3.89% for the nine months ended September 30, 2016, a decrease of 21 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 $57,000, or 2.1%, primarily due to a reduction in gains on the sale of securities of $78,000 and a decrease in service charges on deposit accounts of $103,000, offset by an increase in other service charges and fees of $100,000 and non-deposit brokerage fees of $38,000.
Non-interest expense decreased $369,000, or 3.7%, primarily due to reductions in most categories of expenses, including $152,000 in other expenses, $72,000 in personnel expenses and $100,000 in occupancy expenses.
Credit Quality
Non-performing assets totaled $2.6 million, or 0.58% of total assets, at September 30, 2017 compared to $23,000, or 0.01% of total assets at December 31, 2016, an increase of $2.6 million. Two agricultural-related credits were moved to non-accrual status during the first quarter of 2017. Collateral underlying one agricultural credit was sold at auction during the third quarter, and full payment of the loan principal in the amount of $1.2 million is anticipated to be received during the fourth quarter.
The allowance for loan losses at September 30, 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 September 30, 2017 were $455.4 million, the same level as December 31, 2016. Loans increased $2.8 million, or 0.8%, from December 31, 2016 to September 30, 2017. "Loan growth in the third quarter was lower than anticipated; however, we remain encouraged by our pipeline for the remainder of the year and improving loan demand in our markets," Kanipe noted. Deposits, primarily time deposits, decreased $7.8 million, or 2.1%, from December 31, 2016 to September 30, 2017. Borrowings from the Federal Home Loan Bank increased $5.0 million, or 14.3%, from December 31, 2016 to September 30, 2017.
Stockholders' equity increased to $45.4 million at September 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 $17.99 and $16.31, respectively, at September 30, 2017 compared to $17.54 and $15.40, respectively, at December 31, 2016.
Increase in Common Dividend
On October 19, 2017, the Board of Directors declared a cash dividend of $0.10 per common share payable November 16, 2017 to shareholders of record as of October 27, 2017, which represents a 25% increase in the semiannual dividend. Dividends were most recently paid in May, 2017 at $0.08 per common share. "Completing the conversion of preferred shares and eliminating the related costs in the second quarter of this year now gives us the ability to return more capital to our common shareholders. We believe this increased common dividend is consistent with our goal of maximizing total shareholder return," Kanipe added.
Appointment of Corporate Directors
On October 19, 2017, the Board of Directors appointed Mark Iverson as a Class II director of the Company and of the Bank, effective immediately, and Jeff Perkins as a Class II director of the Company and of the Bank, effective immediately. "These gentlemen bring significant executive and financial experience to our board room as well as an understanding of the needs of consumer and business customers in our core markets," Kanipe commented.
Mark Iverson, age 55, is a Certified Public Accountant, and the General Manager of Bowling Green Municipal Utilities in Bowling Green, Kentucky. Mr. Iverson graduated from Western Kentucky University and currently resides in Bowling Green, Kentucky. He serves on the Board of Directors of the Tennessee Valley Public Power Association and previously served as Chairman of the Board of the Bowling Green Area Chamber of Commerce. It is expected that Mr. Iverson will serve on the Audit and Governance Committees of the Board.
Jeff Perkins, age 55, is a Certified Public Accountant and the President of Mid-South Lumber and Supply Company in Bowling Green, Kentucky. Mr. Perkins graduated from Western Kentucky University and currently resides in Franklin, Kentucky. He has served as President of the Kentucky Building Material Association and served on the board and finance committees of the Independent Builders Supply Association. It is expected that Mr. Perkins will serve on the Audit and Compensation Committees of the Board.
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)
September 30, December 31, December 31,
2017 2016 2015
---- ---- ----
Assets
Cash and due from financial institutions $7,452 $8,542 $8,865
Federal funds sold - - 6,390
Interest-bearing deposits in other financial institutions 18,086 11,018 2,728
Available-for-sale securities 45,044 53,547 60,200
Loans held for sale 341 264 -
Loans 362,208 359,391 330,782
Allowance for loan losses (4,852) (4,854) (4,916)
Premises and equipment, net 9,115 9,390 9,998
Bank owned life insurance (BOLI) 8,483 8,351 8,174
Federal Home Loan Bank (FHLB) stock, at cost 2,053 2,025 2,025
Accrued interest receivable 1,505 1,622 1,680
Deferred income taxes 1,105 1,464 1,328
Goodwill and other intangible assets 4,238 4,291 4,362
Other real estate owned - - 100
Other assets 597 371 465
--- --- ---
Total Assets $455,375 $455,422 $432,181
-------- -------- --------
Liabilities
Deposits
Noninterest bearing $51,306 $52,322 $48,522
Savings, NOW and money market 172,178 173,620 168,335
Time 139,113 144,497 153,531
------- ------- -------
Total deposits 362,597 370,439 370,388
FHLB advances and other borrowings 40,000 35,000 15,000
Subordinated debentures 5,000 5,000 5,000
Accrued interest payable 254 220 213
Other liabilities 2,083 2,399 2,056
----- ----- -----
Total Liabilities 409,934 413,058 392,657
------- ------- -------
Stockholders' Equity
6.5% Cumulative convertible preferred stock - 7,261 7,659
Common stock 33,081 25,920 25,406
Retained earnings 12,443 9,706 6,304
Accumulated other comprehensive income (loss) (83) (523) 155
--- ---- ---
Total stockholders' equity 45,441 42,364 39,524
------ ------ ------
Total liabilities and stockholders' equity $455,375 $455,422 $432,181
======== ======== ========
Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income
Three months ended
(In Thousands, Except Per Share Data and ratios)
September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
---- ---- ---- ---- ----
Interest and dividend income $4,640 $4,593 $4,457 $4,572 $4,557
Interest expense 777 726 677 652 639
--- --- --- --- ---
Net interest income 3,863 3,867 3,780 3,920 3,918
Provision (credit) for loan losses (30) - 30 - -
Non-interest income
Service charges on deposit accounts 317 327 278 371 361
Other service charges and fees 317 301 264 245 262
Gain on sale of mortgage loans 79 88 68 97 110
Non-deposit brokerage fees 90 91 87 85 83
Lease income 53 80 52 52 61
BOLI income 44 45 43 44 45
Gain on sale of securities 25 - 23 - 20
--- --- --- --- ---
Total non-interest income 925 932 815 894 942
--- --- --- --- ---
Non-interest expenses:
Personnel expense 1,673 1,655 1,734 1,741 1,674
Net occupancy expense 449 446 461 471 481
Advertising and public relations 111 77 71 75 86
Professional fees 160 171 130 50 98
Data processing services 214 251 253 256 262
Franchise shares and deposit tax 132 132 132 132 132
FDIC insurance 52 49 49 47 58
Other real estate owned expenses - - - 1 (8)
Other 415 432 461 457 452
--- --- --- --- ---
Total non-interest expenses 3,206 3,213 3,291 3,230 3,235
Income before income taxes 1,612 1,586 1,274 1,584 1,625
Income taxes 490 478 367 481 490
--- --- --- --- ---
Net income 1,122 1,108 907 1,103 1,135
Dividends on preferred stock - 119 119 124 124
--- --- --- --- ---
Net income available for common stockholders $1,122 $989 $788 $979 $1,011
====== ==== ==== ==== ======
Basic earnings per common share $0.44 $0.47 $0.39 $0.49 $0.50
===== ===== ===== ===== =====
Diluted earnings per common share $0.44 $0.43 $0.36 $0.43 $0.45
===== ===== ===== ===== =====
Consolidated Financial Highlights (Unaudited)
Key Operating Statistics
Three months ended
(In Thousands, Except Per Share Data and ratios)
September 30, June 30, March 31, December 31, September 30,
2017 2017 2017 2016 2016
---- ---- ---- ---- ----
Average:
Assets $449,770 $454,524 $452,265 $444,168 $442,042
Earning Assets 422,258 427,674 424,349 417,161 414,569
Loans 362,343 363,733 363,824 347,046 344,733
Interest-bearing deposits 312,668 319,883 314,939 310,336 304,473
Deposits 364,798 368,743 364,227 360,816 354,953
Borrowed funds 37,696 39,769 43,078 38,429 42,490
Equity 44,916 44,047 42,827 42,652 42,002
Common equity 44,916 38,240 35,718 35,391 34,741
Return on average assets 0.99% 0.98% 0.81% 0.99% 1.02%
Return on average equity 9.91% 10.09% 8.59% 10.29% 10.75%
Efficiency ratio 66.51% 66.10% 70.96% 66.20% 65.86%
Non-interest income to average assets 0.82% 0.82% 0.73% 0.80% 0.85%
Non-interest expenses to average assets 2.83% 2.84% 2.95% 2.89% 2.91%
Net overhead to average assets 2.01% 2.01% 2.22% 2.09% 2.06%
Yield on loans 4.73% 4.69% 4.60% 4.86% 4.86%
Yield on investment securities (TE) 2.68% 2.85% 2.87% 2.58% 2.66%
Yield on average earning assets (TE) 4.41% 4.37% 4.32% 4.42% 4.44%
Cost of average interest bearing liabilities 0.88% 0.81% 0.77% 0.74% 0.73%
Net interest margin (TE) 3.68% 3.69% 3.68% 3.80% 3.83%
Number of FTE employees 97 95 94 95 94
Asset Quality Indicators:
Non-performing loans to total loans 0.73% 0.80% 0.83% 0.01% 0.05%
Non-performing assets to total assets 0.58% 0.63% 0.65% 0.01% 0.04%
Allowance for loan losses to total loans 1.34% 1.36% 1.34% 1.35% 1.45%
YTD net charge-offs (recoveries) to - % (0.01)% (0.02)% (0.01)% (0.05)%
average loans, annualized
YTD net charge-offs (recoveries) 2 (13) (22) (23) (130)
Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income
Nine Months Ended
September 30, September 30,
2017 2016
---- ----
Interest and dividend income $13,690 $13,569
Interest expense 2,180 1,876
Net interest income 11,510 11,693
Provision (credit) for loan losses - (85)
Non-interest income
Service charges on deposit accounts 922 1,025
Other service charges and fees 882 782
Gain on sale of mortgage loans 235 278
Non-deposit brokerage fees 268 230
Lease income 185 155
BOLI income 132 133
Gain on sale of securities 48 126
--- ---
Total non-interest income 2,672 2,729
----- -----
Non-interest expenses:
Personnel expense 5,062 5,134
Net occupancy expense 1,356 1,456
Advertising and public relations 259 245
Professional fees 461 415
Data processing services 718 781
Franchise shares and deposit tax 396 396
FDIC insurance 150 176
Other real estate owned expenses - 16
Other 1,308 1,460
----- -----
Total non-interest expenses 9,710 10,079
Income before income taxes 4,472 4,428
Income taxes 1,335 1,314
----- -----
Net income 3,137 3,114
Dividends on preferred stock 238 371
--- ---
Net income available for common stockholders $2,899 $2,743
====== ======
Basic earnings per common share $1.30 $1.37
===== =====
Diluted earnings per common share $1.23 $1.23
===== =====
Consolidated Financial Highlights (Unaudited)
Key Operating Statistics
Nine Months Ended
(In Thousands, Except Per
Share Data and ratios)
September 30, September 30,
2017 2016
---- ----
Average:
Assets $452,177 $438,103
Earning Assets 424,753 408,997
Loans 363,294 338,751
Interest-bearing deposits 315,822 311,945
Deposits 365,925 360,831
Borrowed funds 40,161 33,949
Equity 43,938 41,027
Common equity 39,659 33,745
Return on average assets 0.93% 0.95%
Return on average equity 9.55% 10.14%
Efficiency ratio 67.81% 68.79%
Non-interest income to
average assets 0.79% 0.75%
Non-interest expenses to
average assets 2.87% 2.99%
Net overhead to average
assets 2.08% 2.24%
Yield on loans 4.67% 4.92%
Yield on investment
securities (TE) 2.80% 2.73%
Yield on average earning
assets (TE) 4.37% 4.51%
Cost of average interest
bearing liabilities 0.82% 0.72%
Net interest margin (TE) 3.68% 3.89%
Number of FTE employees 97 96
Consolidated Financial Highlights (Unaudited)
(In Thousands, Except Share Data and ratios)
September 30, December 31, December 31,
Consolidated Capital
Ratios 2017 2016 2015
---- ---- ----
Total shareholders'
equity to total
assets ratio 9.98% 9.30% 9.15%
Tangible equity
ratio (1) 9.13% 8.44% 8.22%
Tangible common
equity ratio (1) 9.13% 6.83% 6.43%
Book value per
common share $17.99 $17.54 $16.18
Tangible book value
per common share
(1) $16.31 $15.40 $13.97
End of period common
share closing price $23.84 $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)
September 30, December 31, December 31,
Regulation G Non-GAAP Reconciliation: 2017 2016 2015
---- ---- ----
Total shareholders' equity (a) $45,441 $42,364 $39,524
Less:
Preferred stock - (7,261) (7,659)
--- ------ ------
Common equity (b) 45,441 35,103 31,865
Goodwill (4,097) (4,097) (4,097)
Intangible assets (141) (194) (265)
---- ---- ----
Tangible common equity (c) 41,203 30,812 27,503
Add:
Preferred stock - 7,261 7,659
--- ----- -----
Tangible equity (d) 41,203 38,073 35,162
Total assets (e) 455,375 455,422 432,181
Less:
Goodwill (4,097) (4,097) (4,097)
Intangible assets (141) (194) (265)
---- ---- ----
Tangible assets (f) $451,137 $451,131 $427,819
Shares outstanding (in thousands) (g) 2,526 2,001 1,969
Book value per common share (b/g) $17.99 $17.54 $16.18
Tangible book value per common share (c/g) $16.31 $15.40 $13.97
Equity to assets ratio (a/e) 9.98% 9.30% 9.15%
Tangible equity ratio (d/f) 9.13% 8.44% 8.22%
Common equity ratio (b/e) 9.98% 7.71% 7.37%
Tangible common equity ratio (c/f) 9.13% 6.83% 6.43%
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SOURCE Citizens First Corporation
