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Citizens First Corporation Announces Second Quarter 2018 Results

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Citizens First Corporation Announces Second Quarter 2018 Results

- Increase in net income of 24.0% compared to second quarter 2017

- Increase in assets of 5.0% compared to year end 2017

- Loan growth of 2.4% compared to year end 2017

- Deposit growth of 4.4% compared to year end 2017

PR Newswire

BOWLING GREEN, Ky., July 19, 2018 /PRNewswire/ -- Citizens First Corporation (NASDAQ:CZFC) today reported results for the six months ended June 30, 2018 which include the following:

For the quarter ended June 30, 2018 the Company reported net income of $1,374,000, or $0.54 per diluted common share (EPS).  This represents a 24.0% increase or $266,000 from the $1,108,000, or $0.43 per diluted common share, for the quarter ended June 30, 2017.  For the six months ended June 30, 2018, net income totaled $2.46 million, or $0.97 per diluted common share.  This represents an increase of $443,000, a 22.0% increase, or $0.18 per diluted common share, from the net income of $2.02 million in the first six months of the previous year.   "Loan growth and lower income tax expense drove profitability for the first half of the year," said Todd Kanipe, President and CEO.  "The challenge continues to be protecting our margin as interest rates increase in the economy. We've successfully grown our deposits this year, but increasing competition for deposits in our region continues to push up our cost of funds," Kanipe added.

Income Statement Second Quarter 2018 Compared to Second Quarter 2017

Net interest income increased $231,000, or 6.0%, for the second quarter of the current year compared to the second quarter of the prior year.  During the second quarter of 2018, a loan of approximately $5.2 million was paid off prematurely which resulted in the collection of a prepayment penalty of approximately $105,000.  The Company's net interest margin was 3.67% for the quarter ended June 30, 2018, compared to 3.69% for the quarter ended June 30, 2017, a decrease of 2 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 $30,000 provision for loan losses in the second quarter of the current year compared to no provision for loan losses in the second quarter of the prior year.

Non-interest income decreased $11,000, or 1.2%, from the prior year primarily due to a decrease in service charges on deposit accounts of $18,000 and a decrease in gains on sale of mortgage loans of $19,000, offset by an increase in other service charges and fees of $18,000.

Non-interest expense increased $78,000, or 2.4%, from the prior year primarily due to an increase in personnel expense of $118,000, offset by a decrease in data processing services of $46,000.

Income tax expense decreased $154,000, or 32.2% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017.

Income Statement Current Year Compared to Prior Year

Net interest income increased $351,000, or 4.6%, from the prior year.  The Company's net interest margin was 3.61% for the six months ended June 30, 2018, and 3.68% for the six months ended June 30, 2017, a decrease of 7 basis points.  The Company's net interest margin decreased due to an increase in the cost of average interest-bearing liabilities.

There was a $60,000 provision for loan losses in the current year compared to a $30,000 provision in the previous year.

Non-interest income decreased $3,000, or 0.2%, primarily due to a reduction in gains on sale of mortgage loans of $37,000 and gains on the sale of securities of $23,000, offset by an increase in other service charges and fees of $35,000 and non-deposit brokerage fees of $22,000.

Non-interest expense increased $146,000, or 2.2%, primarily due to an increase of $230,000 in personnel expenses offset by a decrease of $105,000 in data processing services.  "We have added four full time equivalent employees over the past year as we strengthen the depth of our retail branching network," Kanipe added.

Income tax expense decreased $271,000, or 32.1% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017.

Credit Quality

Non-performing assets totaled $2.1 million, or 0.43% of total assets, at June 30, 2018 compared to $1.3 million, or 0.29% of total assets at December 31, 2017, an increase of approximately $742,000.   The increase is primarily attributable to one credit secured by real estate which was moved to non-accrual status during the first quarter of 2018. 

The allowance for loan losses at June 30, 2018 was $4.8 million, or 1.24% of total loans, compared to $4.9 million, or 1.36% of total loans as of June 30, 2017.  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, 2018 were $488.6 million, compared to $465.4 million at December 31, 2017. Loans increased $9.1 million, or 2.4%, from December 31, 2017 to June 30, 2018.  Loans declined $5.7 million during the second quarter of 2018, primarily due to the premature payoff of one credit relationship of approximately $5.2 million.  Deposits increased $16.3 million, or 4.4%, from December 31, 2017 to June 30, 2018.  Borrowings from the Federal Home Loan Bank increased $5.0 million, or 12.5%, from December 31, 2017 to June 30, 2018.

Stockholders' equity increased to $47.7 million at June 30, 2018 from $45.8 million at December 31, 2017.  The book value per common share and tangible book value per common share ratios were $18.79 and $17.14, respectively, at June 30, 2018 compared to $18.14 and $16.47, respectively, at December 31, 2017. 

Quarterly Common Dividend Payable August 16

On July 19, 2018, the Board of Directors declared a quarterly cash dividend of $0.07 per common share payable August 16, 2018 to shareholders of record on August 3, 2018. 

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, 




2018


2017


2016


Assets











Cash and due from financial institutions


$

6,546


$

6,444


$

8,542


Interest-bearing deposits in other financial institutions



30,166



13,532



11,018


Available-for-sale securities



46,432



48,616



53,547


Loans held for sale



147



427



264


Loans



383,289



374,239



359,391


Allowance for loan losses



(4,750)



(4,724)



(4,854)


Premises and equipment, net



8,988



9,140



9,390


Bank owned life insurance (BOLI)



8,615



8,528



8,351


Federal Home Loan Bank (FHLB) stock, at cost



2,065



2,053



2,025


Accrued interest receivable



1,549



1,681



1,622


Deferred income taxes



762



670



1,464


Goodwill and other intangible assets



4,185



4,221



4,291


Other assets



594



555



371


Total Assets


$

488,588


$

465,382


$

455,422


Liabilities











Deposits











Noninterest bearing


$

53,119


$

53,259


$

52,322


Savings, NOW and money market



188,213



175,087



173,620


Time



147,286



143,968



144,497


Total deposits



388,618



372,314



370,439


FHLB advances and other borrowings



45,000



40,000



35,000


Subordinated debentures



5,000



5,000



5,000


Accrued interest payable



347



285



220


Other liabilities



1,946



1,949



2,399


Total Liabilities



440,911



419,548



413,058


Stockholders' Equity











6.5% Cumulative convertible preferred stock







7,261


Common stock



33,201



33,138



25,920


Retained earnings



15,359



13,142



9,706


Accumulated other comprehensive (loss)



(883)



(446)



(523)


Total stockholders' equity



47,677



45,834



42,364


Total liabilities and stockholders' equity


$

488,588


$

465,382


$

455,422


 

 

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, 




2018


2018


2017


2017


2017


Interest and dividend income


$

5,162


$

4,860


$

4,905


$

4,640


$

4,593


Interest expense



1,064



960



858



777



726


   Net interest income



4,098



3,900



4,047



3,863



3,867



















Provision (credit) for loan losses



30



30



(150)



(30)





















Non-interest income

















Service charges on deposit accounts



309



298



315



317



327


Other service charges and fees



319



281



288



317



301


Gain on sale of mortgage loans



69



50



82



79



88


Non-deposit brokerage fees



101



99



97



90



91


Lease income



79



52



52



53



80


BOLI income



44



43



45



44



45


Gain on sale of securities









25




Total non-interest income



921



823



879



925



932



















Non-interest expenses:

















Personnel expense



1,773



1,846



1,740



1,673



1,655


Net occupancy expense



432



453



448



449



446


Advertising and public relations



85



81



78



111



77


Professional fees



172



164



86



160



171


Data processing services



205



194



192



214



251


Franchise shares and deposit tax



120



120



88



132



132


FDIC insurance



43



42



47



52



49


Other



461



459



433



415



432


Total non-interest expenses



3,291



3,359



3,112



3,206



3,213



















Income before income taxes



1,698



1,334



1,964



1,612



1,586


Income taxes



324



250



1,012



490



478


Net income



1,374



1,084



952



1,122



1,108


Dividends on preferred stock











119


Net income available for common stockholders


$

1,374


$

1,084


$

952


$

1,122


$

989


Basic earnings per common share


$

0.54


$

0.43


$

0.38


$

0.44


$

0.47


Diluted earnings per common share


$

0.54


$

0.43


$

0.37


$

0.44


$

0.43


 

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, 




2018


2018


2017


2017


2017


Average:

















Assets


$

478,836


$

476,063


$

462,966


$

449,770


$

454,524


Earning Assets



451,315



448,853



435,458



422,258



427,674


Loans



389,614



384,184



370,173



362,343



363,733


Interest-bearing deposits



328,932



322,627



317,196



312,668



319,883


Deposits



383,144



375,617



369,643



364,798



368,743


Borrowed funds



46,758



52,167



45,000



37,696



39,769


Equity



47,006



46,023



45,907



44,916



44,047


Common equity



47,006



46,023



45,907



44,916



38,240



















Return on average assets



1.15

%


0.92

%


0.82

%


0.99

%


0.98

%

Return on average equity



11.97

%


9.55

%


8.23

%


9.91

%


10.09

%


















Efficiency ratio



65.23

%


70.72

%


62.46

%


66.51

%


66.10

%

Non-interest income to average assets



0.77

%


0.70

%


0.75

%


0.82

%


0.82

%

Non-interest expenses to average assets



2.76

%


2.86

%


2.67

%


2.83

%


2.84

%

Net overhead to average assets



1.99

%


2.16

%


1.91

%


2.01

%


2.01

%

Yield on loans



4.94

%


4.75

%


4.88

%


4.73

%


4.69

%

Yield on investment securities (TE)



2.61

%


2.56

%


2.77

%


2.68

%


2.85

%

Yield on average earning assets (TE)



4.61

%


4.42

%


4.52

%


4.41

%


4.37

%

Cost of average interest bearing liabilities



1.14

%


1.04

%


0.94

%


0.88

%


0.81

%

Net interest margin (TE)



3.67

%


3.55

%


3.74

%


3.68

%


3.69

%

Number of FTE employees



99



96



98



97



95



















Asset Quality Indicators:

















Non-performing loans to total loans



0.54

%


0.54

%


0.36

%


0.73

%


0.80

%

Non-performing assets to total assets



0.43

%


0.43

%


0.29

%


0.58

%


0.63

%

Allowance for loan losses to total loans



1.24

%


1.21

%


1.26

%


1.34

%


1.36

%

YTD net charge-offs (recoveries) to average
loans, annualized



0.02

%


0.06

%


(0.01)

%


%


(0.01)

%

YTD net charge-offs (recoveries)



34



61



(20)



2



(13)


 

 

Consolidated Financial Highlights (Unaudited)

Consolidated Statement of Income





Six Months Ended




June 30, 


June 30, 




2018


2017


Interest and dividend income


$

10,022


$

9,050


Interest expense



2,024



1,403


   Net interest income



7,998



7,647










Provision  for loan losses



60



30










Non-interest income








Service charges on deposit accounts



607



605


Other service charges and fees



600



565


Gain on sale of mortgage loans



119



156


Non-deposit brokerage fees



200



178


Lease income



131



132


BOLI income



87



88


Gain on sale of securities





23


Total non-interest income



1,744



1,747










Non-interest expenses:








Personnel expense



3,619



3,389


Net occupancy expense



885



907


Advertising and public relations



166



148


Professional fees



336



301


Data processing services



399



504


Franchise shares and deposit tax



240



264


FDIC insurance



85



98


Other



920



893


Total non-interest expenses



6,650



6,504










Income before income taxes



3,032



2,860


Income taxes



574



845


Net income



2,458



2,015


Dividends on preferred stock





238


Net income available for common stockholders


$

2,458


$

1,777


Basic earnings per common share


$

0.97


$

0.86


Diluted earnings per common share


$

0.97


$

0.79


 

 

Consolidated Financial Highlights (Unaudited)

Key Operating Statistics





Six Months Ended




(In Thousands, Except Per




Share Data and ratios)




June 30, 


June 30, 




2018


2017


Average:








Assets


$

477,457


$

453,401


Earning Assets



450,090



426,021


Loans



386,914



363,778


Interest-bearing deposits



325,797



317,425


Deposits



379,401



366,498


Borrowed funds



49,448



41,415


Equity



46,517



43,441


Common equity



46,517



36,987










Return on average assets



1.04

%


0.90

%

Return on average equity



10.66

%


9.35

%









Efficiency ratio



67.90

%


68.47

%

Non-interest income to average assets



0.74

%


0.78

%

Non-interest expenses to average assets



2.81

%


2.89

%

Net overhead to average assets



2.07

%


2.12

%

Yield on loans



4.84

%


4.65

%

Yield on investment securities (TE)



2.58

%


2.86

%

Yield on average earning assets (TE)



4.51

%


4.34

%

Cost of average interest bearing liabilities



1.09

%


0.79

%

Net interest margin (TE)



3.61

%


3.68

%

Number of FTE employees



99



95


 

 

Consolidated Financial Highlights (Unaudited)





(In Thousands, Except Share Data and ratios)




June 30, 


December 31, 


December 31, 


Consolidated Capital Ratios


2018


2017


2016













Total shareholders' equity to total assets ratio



9.76

%


9.85

%


9.30

%

Tangible equity ratio (1)



8.98

%


9.02

%


8.44

%

Tangible common equity ratio (1)



8.98

%


9.02

%


6.83

%

Book value per common share


$

18.79


$

18.14


$

17.54


Tangible book value per common share (1)


$

17.14


$

16.47


$

15.40


End of period common share closing price


$

26.08


$

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 Share Data and ratios)




June 30, 


December 31, 


December 31, 


Regulation G Non-GAAP Reconciliation:


2018


2017


2016













Total shareholders' equity (a)


$

47,677


$

45,834


$

42,364


Less:











Preferred stock







(7,261)


Common equity (b)



47,677



45,834



35,103


Goodwill



(4,097)



(4,097)



(4,097)


Intangible assets



(88)



(124)



(194)


Tangible common equity (c)



43,492



41,613



30,812


Add:











Preferred stock







7,261


Tangible equity (d)



43,492



41,613



38,073













Total assets (e)



488,588



465,382



455,422


Less:











Goodwill



(4,097)



(4,097)



(4,097)


Intangible assets



(88)



(124)



(194)


Tangible assets (f)


$

484,403


$

461,161


$

451,131


Shares outstanding (in thousands) (g)



2,538



2,526



2,001













Book value per common share (b/g)


$

18.79


$

18.14


$

17.54


Tangible book value per common share (c/g)


$

17.14


$

16.47


$

15.40


Equity to assets ratio (a/e)



9.76

%


9.85

%


9.30

%

Tangible equity ratio (d/f)



8.98

%


9.02

%


8.44

%

Common equity ratio (b/e)



9.76

%


9.85

%


7.71

%

Tangible common equity ratio (c/f)



8.98

%


9.02

%


6.83

%

 

Cision View original content:http://www.prnewswire.com/news-releases/citizens-first-corporation-announces-second-quarter-2018-results-300683805.html

SOURCE Citizens First Corporation

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