Citizens First Corporation

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Citizens First Corporation Announces First Quarter 2013 Results

BOWLING GREEN, Ky., April 22, 2013 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the first quarter ending March 31, 2013, which include the following:

  • For the quarter ended March 31, 2013, the Company reported net income of $115,000, or a loss of $0.05 per diluted common share.  This represents a decrease of $582,000, or $0.28 per diluted common share, from the linked quarter ended December 31, 2012.  Compared to the quarter ended March 31 a year ago, net income decreased $693,000 or $0.34 per diluted common share.  
  • Provision for loan losses was $1.3 million for the first quarter of 2013 compared to $580,000 for the linked quarter ended December 31, 2012 and $370,000 for the quarter ended March 31, 2012.  Todd Kanipe, President & CEO of Citizens First commented, "Our higher level of non-performing loans in the quarter increased provision expense, adversely impacted margin and increased collection expense.  We are working aggressively to reduce non-performing assets and expect resolution of a number of them in the second quarter."
  • The Company's net interest margin was 3.96% for the quarter ended March 31, 2013 compared to 4.24% for the quarter ended December 31, 2012 and 4.17% for the quarter ended March 31, 2012, a decrease of 28 basis points for the linked quarter and a decrease of 21 basis points from the prior year.  The Company's net interest margin decreased from the prior quarter primarily due to a decrease in loan income for the quarter as the level of non-accrual loans increased. 

First Quarter 2013 Compared to Fourth Quarter 2012

Net interest income for the quarter ended March 31, 2013 declined $189,000 from the previous quarter due to a reduction in loan income, which included the effect of non-accrual loan interest reversed against income in the current quarter.

Non-interest income for the three months ended March 31, 2013 decreased $45,000, or 5.9%, compared to the previous quarter, primarily due to a reduction of service charges on deposit accounts of $60,000.  Non-interest expense for the three months ended March 31, 2013 decreased $9,000, or 0.3%, compared to the previous quarter. Other operating expenses, primarily collection expenses related to non-performing loans, increased $73,000 while personnel expenses decreased $48,000

A $1.3 million provision for loan losses was recorded for the first quarter of 2013, compared to a $580,000 provision in the previous quarter.  The provision expense was higher in the first quarter of 2013 primarily as a result of a $4.6 million increase in nonperforming assets in the current quarter.  Specific allocations in the allowance for loan losses increased as a result of the increased nonperforming assets.  Net charge-offs were $321,000 for the first quarter of 2013 compared to $827,000 in the fourth quarter of 2012.

First Quarter 2013 Compared to First Quarter 2012

Net interest income for the quarter ended March 31, 2013 decreased $26,000, or 0.7%, compared to the previous year.  The decrease in net interest income was impacted by a reduction in interest expense of $164,000 combined with a decrease in interest income of $190,000. The decrease in interest income was created by a decline in the yields on loans and taxable securities, along with the reversal of interest on non-accrual loans.

Non-interest income for the three months ended March 31, 2013 increased $23,000, or 3.3%, compared to the three months ended March 31, 2012, primarily due to an improvement in non-deposit brokerage fees of $31,000 from the prior year.

Non-interest expense for the three months ended March 31, 2013 increased $156,000, or 5.3%, compared to the three months ended March 31, 2012, due to an increase in other operating expenses which were primarily collection expenses related to non-performing loans. In addition, data processing expenses increased $36,000 and personnel expenses increased $32,000.

A $1.3 million provision for loan losses was recorded for the first quarter of 2013, an increase of $880,000, from $370,000 in the first quarter of 2012.  Net charge-offs were $321,000 for the first quarter of 2013 compared to net charge-offs of $307,000 in the first quarter of 2012.

Balance Sheet

Total assets at March 31, 2013 were $422.1 million, an increase of $15.5 million from $406.6 million at December 31, 2012.  Average assets during the first quarter were $417.8 million, an increase of 3.7% or $14.8 million from $403.0 million the first quarter of 2012.  Average interest earning assets increased 5.7% or $20.6 million, from $364.0 million in the first quarter of 2012 to $384.6 million in the first quarter of 2013.

Loans increased $2.3 million, or 0.8%, from $298.8 million at December 31, 2012 to $301.1 million at March 31, 2013.  Total loans averaged $303.9 million the first quarter of 2013, compared to $299.1 million the first quarter of 2012, an increase of $4.8 million.  Deposits at March 31, 2013 were $347.9 million, an increase of $16.2 million, or 4.9%, compared to $331.7 million at December 31, 2012.  Total deposits averaged $342.5 million the first quarter of 2013, an increase of $11.1 million, or 3.3%, compared to $331.4 million during the first quarter of 2012.  Average deposits increased during the year, but the cost of funds declined as higher cost deposits matured and were renewed at lower rates.  

Non-performing assets totaled $10.9 million at March 31, 2013 compared to $6.3 million at December 31, 2012, an increase of $4.6 million.  Total nonperforming assets added during the quarter totaled $4.7 million, which consisted primarily of a commercial loan totaling $1.5 million and a commercial real estate loan totaling $1.8 million.

The allowance for loan losses at March 31, 2013 was $6.7 million, or 2.21% of total loans, compared to $5.7 million, or 1.91% of total loans as of December 31, 2012.  The allowance increased due to the increase in nonperforming assets, as specific allocations in the allowance were provided for these impaired loans.

A summary of nonperforming assets is presented below:

(In thousands)


March

31,

 2013

December 31,

 2012

 September

30,

 2012

June 

30,

 2012

March

 31,

 2012

Nonaccrual loans



$7,097

$5,384

$5,911


$6,168


$2,476

Loans 90+ days past due/accruing



23

-

60


-


-

Restructured loans



3,528

758

1,388


1,549


1,534

Total nonperforming loans



10,648

6,142

7,359


7,717


4,010











Other real estate owned



232

191

258


214


608

Total nonperforming assets



$10,880

$6,333

$7,617


$7,931


$4,618











Ratio of total nonperforming assets to total assets



2.58%

1.56%

1.93%


 

2.00%


 

1.14%

 

At March 31, 2013, total shareholders' equity was $38.1 million compared to $41.6 million at December 31, 2012, a decrease of $3.5 million.  During the first quarter of 2013, the Company paid $3.3 million to repurchase 94 of the 250 shares of the Series A preferred stock that the Company had issued to the Treasury on December 19, 2008 under the TARP Capital Purchase Program.  At March 31, 2013, the Company has 93 shares of the Series A preferred stock outstanding with a balance of approximately $3.3 million.  

The Company's tangible equity ratio was 7.93% as of March 31, 2013 compared to 9.08% at December 31, 2012.  The tangible book value per common share declined slightly from $11.32 at December 31, 2012, to $11.26 at March 31, 2013.  The Company and Citizens First Bank are categorized as "well capitalized" under regulatory guidelines.

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.

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 economic conditions generally and in the market areas of the Company, a continuation or worsening of the current disruption in credit and other markets, goodwill impairment, overall loan demand, increased competition in the financial services industry which could negatively impact the Company's ability to increase total earning assets, and the retention of key personnel.  Actions by the Department of the Treasury and federal and state bank regulators in response to changing economic conditions, changes in interest rates, loan prepayments by and the financial health of the Company's borrowers, 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)

In thousands, except per share data and ratios

Consolidated Statement of Income:



Three Months Ended




March 31

December 31

September 30

June 30

March 31


2013

2012

2012

2012

2012

Interest income          

$4,428

$4,664

$4,681

$4,565

$4,618

Interest expense

762

809

826

889

926

Net interest income

3,666

3,855

3,855

3,676

3,692







Provision for loan losses

1,250

580

300

450

370







Non-interest income:






   Service charges on deposits

291

351

355

340

318

   Other service charges and fees

138

129

138

143

120

   Gain on sale of mortgage loans

82

82

64

64

90

   Non-deposit brokerage fees

65

61

54

57

34

   Lease income

74

76

68

68

68

   BOLI income

61

65

66

66

66

   Securities gains

8

-

-

55

-

      Total

719

764

745

793

696







Non-interest expenses:






   Personnel expense

1,441

1,489

1,406

1,414

1,409

   Net occupancy expense

461

491

489

479

459

   Advertising and public relations

78

91

92

93

75

   Professional fees

164

176

158

149

143

   Data processing services

265

241

225

221

229

   Franchise shares and deposit tax

141

141

141

141

125

   FDIC insurance

85

87

83

73

72

   Core deposit intangible amortization

84

84

88

88

88

   Postage and office supplies

43

40

40

59

50

   Other real estate owned expenses

11

15

5

105

45

   Other

309

236

266

224

231

      Total

3,082

3,091

2,993

3,046

2,926







Income before income taxes

53

948

1,307

973

1,092

Provision for income taxes

(62)

251

366

247

284

Net income

115

697

941

726

808







Preferred dividends and discount accretion

217

225

225

223

224

Net income available for common shareholders

$(102)

$472

$716

$503

$584

Basic earnings per common share

$(0.05)

$0.24

$0.36

$0.25

$0.30

Diluted earnings per common share

$(0.05)

$0.23

$0.35

$0.24

$0.29

 

Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios

Key Operating Statistics:




Three Months Ended






March

 31

December 31

September 30

June

 30

March

 31


2013

2012

2012

2012

2012







Average assets

$417,804

$403,975

$397,657

$407,298

$402,950

Average loans

303,942

304,249

297,863

304,003

299,061

Average deposits

342,475

325,644

321,828

331,820

331,400

Average equity

40,164

41,629

40,776

39,962

39,431

Average common equity

27,695

27,458

26,618

25,816

25,296







Return on average assets

0.11%

0.69%

0.94%

0.72%

0.81%

Return on average equity

1.16%

6.66%

9.18%

7.31%

8.24%







Efficiency ratio

68.96%

65.70%

63.88%

66.93%

65.44%

Non-interest income to average assets

0.70%

0.75%

0.75%

0.78%

0.69%

Non-interest expenses to average assets

2.99%

3.04%

2.99%

3.01%

2.91%

Yield on average earning assets (tax equivalent)

4.76%

5.11%

5.21%

5.03%

5.20%

Cost of average interest bearing liabilities

0.93%

1.01%

1.04%

1.10%

1.15%

Net interest margin (tax equivalent)

3.96%

4.24%

4.31%

4.06%

4.17%

Number of FTE employees

99

102

103

100

101







Asset Quality Ratios:






Non-performing loans to total loans

3.54%

2.06%

2.41%

2.57%

1.32%

Non-performing assets to total assets

2.58%

1.56%

1.93%

2.00%

1.14%

Allowance for loan losses to total loans

2.21%

1.91%

1.95%

1.97%

1.95%

Net charge-offs to average loans, annualized

0.43%

0.60%

0.45%

0.52%

0.41%








 

 


Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios









Consolidated Statement of Condition:

As of

As of

As of


March 31,

December 31,

December 31,

2013

2012

2011

Cash and cash equivalents

$45,621

$34,799

$30,549

Available for sale securities

50,485

46,639

50,718

Loans held for sale

143

61

180

Loans

301,111

298,754

294,352

Allowance for loan losses

(6,650)

(5,721)

(5,865)

Premises and equipment, net

11,421

11,568

11,849

Bank owned life insurance (BOLI)

7,648

7,587

7,324

Federal Home Loan Bank Stock, at cost

2,025

2,025

2,025

Accrued interest receivable

1,582

1,660

1,858

Deferred income taxes

2,436

2,180

2,973

Intangible assets

5,010

5,094

5,443

Other real estate owned

232

191

637

Other assets

1,029

1,719

1,751

  Total Assets

$422,093

$406,556

$403,794





Deposits:




    Noninterest bearing

$ 45,119

$ 41,724

$ 38,352

    Savings, NOW and money market

114,220

111,195

116,968

    Time

188,585

178,814

177,411

      Total deposits

$347,924

$331,733

$332,731

FHLB advances and other borrowings

29,300

26,000

25,000

Subordinated debentures

5,000

5,000

5,000

Other liabilities

1,778

2,257

2,191

Total Liabilities

384,002

364,990

364,922

6.5% Cumulative preferred stock

7,659

7,659

7,659

Series A preferred stock

3,247

6,519

6,471

Common stock

27,072

27,072

27,072

Retained deficit

(532)

(430)

(2,706)

Accumulated other comprehensive income (loss)

645

746

376

Total Stockholders' Equity

38,091

41,566

38,872

Total Liabilities and Stockholders' Equity

$422,093

$406,556

$403,794

 

 

 


Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios



March 31,

2013

December 31,

2012

December 31,

2011

Capital Ratios:





Tier 1 leverage


9.06%

10.20%

9.46%

Tier 1 risk-based capital


12.08%

13.16%

11.86%

Total risk based capital


13.33%

14.41%

13.11%

Tangible equity ratio (1)


7.93%

9.08%

8.39%

Tangible common equity ratio (1)


5.32%

5.55%

4.84%

Book value per common share


$13.81

$13.91

$12.57

Tangible book value per common share (1)


$11.26

$11.32

$9.80

Shares outstanding (in thousands)


1,969

1,969

1,969

_____________





(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.

 

 

Regulation G Non-GAAP Reconciliation:


March 31, 2013

December 31, 2012

December 31, 2011






Total shareholders' equity (a)


$38,091

$41,566

$38,872

Less:





   Preferred stock


(10,906)

(14,178)

(14,130)

Common equity (b)


27,185

27,388

24,742

   Goodwill


(4,097)

(4,097)

(4,097)

   Intangible assets


(913)

(997)

(1,346)

Tangible common equity (c)


22,175

22,294

19,299

Add:





   Preferred stock


10,906

14,178

14,130

Tangible equity (d)


$33,081

$36,472

$33,429






Total assets (e)


$422,093

$406,556

$403,794

Less:





   Goodwill


(4,097)

(4,097)

(4,097)

   Intangible assets


(913)

(997)

(1,346)

Tangible assets (f)


$417,083

$401,462

$398,351

Shares outstanding (in thousands) (g)


1,969

1,969

1,969






Book value per common share (b/g)


$13.81

$13.91

$12.57

Tangible book value per common share (c/g)


$11.26

$11.32

$9.80






Total shareholders' equity to total assets ratio (a/e)


9.02%

10.22%

9.63%

Tangible equity ratio (d/f)


7.93%

9.08%

8.39%

Tangible common equity ratio (c/f)


5.32%

5.55%

4.84%

SOURCE Citizens First Corporation

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