BOWLING GREEN, Ky., Aug. 1, 2013 /PRNewswire/ --Citizens First Corporation (NASDAQ: CZFC) today reported results for the second quarter ending June 30, 2013, which include the following:
- For the quarter ended June 30, 2013, the Company reported net income of $788,000, or $0.30 per diluted common share. This represents an increase of $673,000, or $0.35 per diluted common share, from the linked quarter ended March 31, 2013. Compared to the quarter ended June 30 a year ago, net income increased $62,000 or $0.06 per diluted common share.
- For the six months ended June 30, 2013, net income totaled $903,000, or $0.25 per diluted common share. This represents a decrease of $631,000, or $0.28 per diluted common share, from the net income of $1.5 million in the first six months of the previous year.
- The Company's net interest margin was 3.77% for the quarter ended June 30, 2013 compared to 3.96% for the quarter ended March 31, 2013 and 4.06% for the quarter ended June 30, 2012, a decrease of 19 basis points for the linked quarter and a decrease of 29 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 remained high.
- Provision for loan losses was $50,000 for the second quarter of 2013 compared to $1.3 million for the linked quarter ended March 31, 2013 and $450,000 for the quarter ended June 30, 2012. Todd Kanipe, President & CEO of Citizens First commented, "We made slight improvements in our level of non-performing assets during the second quarter as we moved through the liquidation of collateral on several credits. The higher level of non-performing assets during 2013 has adversely impacted our margin and increased our collection expenses. A majority of our charge-offs during the quarter had specific allocations in the allowance for loan losses that had been previously established.We continue to work aggressively to reduce non-performing assets."
- On July 26, 2013, the real estate securing our largest non-performing asset, a $3.8 million commercial real estate loan, was sold at auction to a third party for $2.5 million less selling costs.Our allowance for loan losses as of June 30, 2013 included a specific allocation for the deficiency. The deficiency willresult in a charge-off of approximately $1.5 million in the third quarter of 2013.
Second Quarter 2013 Compared to First Quarter 2013
Net interest income for the quarter ended June 30, 2013 declined $111,000 from the previous quarter due to a reduction in loan income, which included the effect of existing loans repricing at lower rates and the impact of existing non-accrual loans.
Non-interest income for the three months ended June 30, 2013 increased $76,000, or 10.6%, compared to the previous quarter, primarily due to an improvementin service charges on deposit accounts of $30,000. Non-interest expense for the three months ended June 30, 2013 increased $97,000, or 3.1%, compared to the previous quarter. Other operating expenses, primarily collection expenses related to non-performing loans, increased $126,000.
A $50,000 provision for loan losses was recorded for the second quarter of 2013, compared to a $1.3 million provision in the previous quarter. The provision expense was lower in the second quarter of 2013 as a result of an $882,000 reduction in nonperforming assets in the current quarter. Net charge-offs were $635,000 for the second quarter of 2013 compared to $321,000 in the first quarter of 2013. The majority of the charge-offs in the second quarter of 2013 had specific allocations in the allowance for loan losses that had been established prior to the current quarter.
Second Quarter 2013 Compared to Second Quarter 2012
Net interest income for the quarter ended June 30, 2013 decreased $120,000, or 3.3%, compared to the previous year. The decrease in net interest income was impacted by a reduction in interest expense of $121,000 combined with a decrease in interest income of $241,000. The decrease in interest income was created by a decline in the yields on loans and taxable securities.
Non-interest income for the three months ended June 30, 2013 increased $2,000, or 0.3%, compared to the three months ended June 30, 2012, primarily due to an improvement in non-deposit brokerage fees of $21,000 from the prior year offset by a decrease in securities gains of $26,000.
Non-interest expense for the three months ended June 30, 2013 increased $134,000, or 4.4%, compared to the three months ended June 30 2012, due to an increase in other operating expenses which were primarily collection expenses related to non-performing loans.
A $50,000 provision for loan losses was recorded for the second quarter of 2013, a decrease of $400,000, from $450,000 in the second quarter of 2012. Net charge-offs were $636,000 for the second quarter of 2013 compared to net charge-offs of $479,000 in the second quarter of 2012.
Balance Sheet
Total assets at June 30, 2013 were $411.5 million, an increase of $4.9 million from $406.6 million at December 31, 2012. Average assets during the second quarter were $419.2 million, an increase of 2.9%, or $11.9 million, from $407.3 million the second quarter of 2012. Average interest earning assets increased 4.2%, or $15.7 million, from $372.0 million in the second quarter of 2012 to $387.7 million in the second quarter of 2013.
Loans increased $7.6 million, or 2.5%, from $298.8 million at December 31, 2012 to $306.4 million at June 30, 2013. Total loans averaged $305.5 million the second quarter of 2013, compared to $304.0 million the second quarter of 2012, an increase of $1.5 million, or 0.5%. Deposits at June 30, 2013 were $337.2 million, an increase of $5.5 million, or 1.7%, compared to $331.7 million at December 31, 2012. Total deposits averaged $345.7 million the second quarter of 2013, an increase of $13.9 million, or 4.2%, compared to $331.8 million during the second 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 $10.0 million at June 30, 2013 compared to $6.3 million at December 31, 2012, an increase of $3.7 million. The allowance for loan losses at June 30, 2013 was $6.1 million, or 1.98% 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 during the year, as specific allocations in the allowance were provided for these impaired loans.
A summary of nonperforming assets is presented below:
(In thousands) | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 |
Nonaccrual loans | $6,141 | $7,097 | $5,384 | $5,911 | $6,168 |
Loans 90+ days past due/accruing | - | 23 | - | 60 | - |
Restructured loans | 3,340 | 3,528 | 758 | 1,388 | 1,549 |
Total non-performing loans | 9,481 | 10,648 | 6,142 | 7,359 | 7,717 |
Other real estate owned | 517 | 232 | 191 | 258 | 214 |
Total non-performing assets | $9,998 | $10,880 | $6,333 | $7,617 | $7,931 |
Non-performing assets to total assets | 2.43% | 2.58% | 1.56% | 1.93% | 2.00% |
A summary of the allowance for loan losses is presented below:
(In thousands) | June 30, 2013 | March 31, 2013 | December 31, 2012 | September 30, 2012 | June 30, 2012 |
Balance at beginning of period | $6,650 | $5,721 | $5,968 | $5,899 | $5,928 |
Provision for loan losses | 50 | 1,250 | 580 | 300 | 450 |
Charged-off loans | 678 | 358 | 838 | 243 | 495 |
Recoveries of previously charged-off loans | 42 | 37 | 11 | 12 | 16 |
Balance at end of period | $6,064 | $6,650 | $5,721 | $5,968 | $5,899 |
Allowance for loan losses to total loans | 1.98% | 2.21% | 1.91% | 1.95% | 1.97% |
At June 30, 2013, total shareholders' equity was $37.8 million compared to $41.6 million at December 31, 2012, a decrease of $3.8 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 June 30, 2013, the Company has 93 shares of the Series A preferred stock outstanding with a balance of approximately $3.3 million. In addition, accumulated other comprehensive income declined by $1.0 million as long-term interest rates increased, which impacted unrealized gains and losses in investment securities.
The Company's tangible equity ratio was 8.08% as of June 30, 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 $11.14 at June 30, 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 | |||||
June 30 | March 31 | December 31 | September 30 | June 30 | |
2013 | 2013 | 2012 | 2012 | 2012 | |
Interest income | $4,325 | $4,428 | $4,664 | $4,681 | $4,566 |
Interest expense | 770 | 762 | 809 | 826 | 891 |
Net interest income | 3,555 | 3,666 | 3,855 | 3,855 | 3,675 |
Provision for loan losses | 50 | 1,250 | 580 | 300 | 450 |
Non-interest income: | |||||
Service charges on deposits | 321 | 291 | 351 | 355 | 340 |
Other service charges and fees | 158 | 138 | 129 | 138 | 143 |
Gain on sale of mortgage loans | 78 | 82 | 82 | 64 | 64 |
Non-deposit brokerage fees | 78 | 65 | 61 | 54 | 57 |
Lease income | 75 | 74 | 76 | 68 | 68 |
BOLI income | 56 | 61 | 65 | 66 | 66 |
Securities gains | 29 | 8 | - | - | 55 |
Total | 795 | 719 | 764 | 745 | 793 |
Non-interest expenses: | |||||
Personnel expense | 1,417 | 1,441 | 1,489 | 1,406 | 1,414 |
Net occupancy expense | 465 | 461 | 491 | 489 | 479 |
Advertising and public relations | 110 | 78 | 91 | 92 | 93 |
Professional fees | 174 | 164 | 176 | 158 | 149 |
Data processing services | 272 | 265 | 241 | 225 | 221 |
Franchise shares and deposit tax | 141 | 141 | 141 | 141 | 141 |
FDIC insurance | 26 | 85 | 87 | 83 | 73 |
Core deposit intangible amortization | 85 | 84 | 84 | 88 | 88 |
Postage and office supplies | 35 | 43 | 40 | 40 | 59 |
Other real estate owned expenses | 20 | 11 | 15 | 5 | 105 |
Other | 434 | 309 | 236 | 266 | 223 |
Total | 3,179 | 3,082 | 3,091 | 2,993 | 3,045 |
Income before income taxes | 1,121 | 53 | 948 | 1,307 | 973 |
Provision for income taxes | 333 | (62) | 251 | 366 | 247 |
Net income | 788 | 115 | 697 | 941 | 726 |
Preferred dividends and discount accretion | 176 | 217 | 225 | 225 | 223 |
Net income available for common shareholders | $612 | $(102) | $472 | $716 | $503 |
Basic earnings per common share | $0.31 | $(0.05) | $0.24 | $0.36 | $0.25 |
Diluted earnings per common share | $0.30 | $(0.05) | $0.23 | $0.35 | $0.24 |
Consolidated Financial Highlights (Unaudited) In thousands, except per share data and ratios | ||||||
Key Operating Statistics: | ||||||
Three Months Ended | ||||||
June30 | March31 | December 31 | September 30 | June30 | ||
2013 | 2013 | 2012 | 2012 | 2012 | ||
Average assets | $419,240 | $417,804 | $403,975 | $397,657 | $407,298 | |
Average loans | 305,532 | 303,942 | 304,249 | 297,863 | 304,003 | |
Average deposits | 345,738 | 342,475 | 325,644 | 321,828 | 331,820 | |
Average equity | 38,353 | 40,164 | 41,629 | 40,776 | 39,962 | |
Average common equity | 27,445 | 27,695 | 27,458 | 26,618 | 25,816 | |
Return on average assets | 0.75% | 0.11% | 0.69% | 0.94% | 0.72% | |
Return on average equity | 8.24% | 1.16% | 6.66% | 9.18% | 7.31% | |
Efficiency ratio | 72.17% | 68.96% | 65.70% | 63.88% | 66.93% | |
Non-interest income to average assets | 0.76% | 0.70% | 0.75% | 0.75% | 0.78% | |
Non-interest expenses to average assets | 3.04% | 2.99% | 3.04% | 2.99% | 3.01% | |
Yield on average earning assets (tax equivalent) | 4.56% | 4.76% | 5.11% | 5.21% | 5.03% | |
Cost of average interest bearing liabilities | 0.92% | 0.93% | 1.01% | 1.04% | 1.10% | |
Net interest margin (tax equivalent) | 3.77% | 3.96% | 4.24% | 4.31% | 4.06% | |
Number of FTE employees | 98 | 99 | 102 | 103 | 100 | |
Asset Quality Ratios: | ||||||
Non-performing loans to total loans | 3.09% | 3.54% | 2.06% | 2.41% | 2.57% | |
Non-performing assets to total assets | 2.43% | 2.58% | 1.56% | 1.93% | 2.00% | |
Allowance for loan losses to total loans | 1.98% | 2.21% | 1.91% | 1.95% | 1.97% | |
Net charge-offs to average loans, annualized | 0.63% | 0.43% | 0.60% | 0.45% | 0.52% | |
Consolidated Financial Highlights (Unaudited) In thousands, except per share data and ratios | ||
Six Months Ended | ||
June 30 | June 30 | |
2013 | 2012 | |
Interest income | $8,753 | $9,184 |
Interest expense | 1,532 | 1,816 |
Net interest income | 7,221 | 7,368 |
Provision for loan losses | 1,300 | 820 |
Non-interest income: | ||
Service charges on deposits | 612 | 659 |
Other service charges and fees | 296 | 262 |
Gain on sale of mortgage loans | 160 | 154 |
Non-deposit brokerage fees | 143 | 91 |
Lease income | 149 | 136 |
BOLI income | 117 | 132 |
Securities gains | 37 | 55 |
Total | 1,514 | 1,489 |
Non-interest expenses: | ||
Personnel expense | 2,858 | 2,823 |
Net occupancy expense | 926 | 938 |
Advertising and public relations | 188 | 168 |
Professional fees | 338 | 292 |
Data processing services | 537 | 450 |
Franchise shares and deposit tax | 282 | 266 |
FDIC insurance | 111 | 145 |
Core deposit intangible amortization | 169 | 176 |
Postage and office supplies | 78 | 109 |
Other real estate owned expenses | 31 | 150 |
Other | 743 | 455 |
Total | 6,261 | 5,972 |
Income before income taxes | 1,174 | 2,065 |
Provision for income taxes | 271 | 531 |
Net income | 903 | 1,534 |
Preferred dividends and discount accretion | 393 | 447 |
Net income available for common shareholders | $510 | $1,087 |
Basic earnings per common share | $0.26 | $0.55 |
Diluted earnings per common share | $0.25 | $0.53 |
Consolidated Financial Highlights (Unaudited) In thousands, except per share data and ratios | ||
Key Operating Statistics: | ||
Six Months Ended | ||
June 30 | June 30 | |
2013 | 2012 | |
Average assets | $418,526 | $405,124 |
Average loans | 304,741 | 295,580 |
Average deposits | 344,115 | 331,611 |
Average equity | 39,254 | 39,696 |
Average common equity | 27,570 | 25,556 |
Return on average assets | 0.44% | 0.76% |
Return on average equity | 4.64% | 7.77% |
Efficiency ratio | 70.60% | 66.60% |
Non-interest income to average assets | 0.73% | 0.74% |
Non-interest expenses to average assets | 3.02% | 2.97% |
Yield on average earning assets (tax equivalent) | 4.66% | 5.11% |
Cost of average interest bearing liabilities | 0.92% | 1.13% |
Net interest margin (tax equivalent) | 3.86% | 4.12% |
Consolidated Financial Highlights (Unaudited) In thousands, except per share data and ratios | |||
Consolidated Statement of Condition: | As of | As of | As of |
June 30, | December 31, | December 31, | |
2013 | 2012 | 2011 | |
Cash and cash equivalents | $29,965 | $34,799 | $30,549 |
Available for sale securities | 49,201 | 46,639 | 50,718 |
Loans held for sale | 156 | 61 | 180 |
Loans | 306,397 | 298,754 | 294,352 |
Allowance for loan losses | (6,064) | (5,721) | (5,865) |
Premises and equipment, net | 11,294 | 11,568 | 11,849 |
Bank owned life insurance (BOLI) | 7,704 | 7,587 | 7,324 |
Federal Home Loan Bank Stock, at cost | 2,025 | 2,025 | 2,025 |
Accrued interest receivable | 1,666 | 1,660 | 1,858 |
Deferred income taxes | 3,222 | 2,180 | 2,973 |
Intangible assets | 4,925 | 5,094 | 5,443 |
Other real estate owned | 517 | 191 | 637 |
Other assets | 474 | 1,719 | 1,751 |
Total Assets | $411,482 | $406,556 | $403,794 |
Deposits: | |||
Noninterest bearing | $ 42,007 | $ 41,724 | $ 38,352 |
Savings, NOW and money market | 110,494 | 111,195 | 116,968 |
Time | 184,725 | 178,814 | 177,411 |
Total deposits | $337,226 | $331,733 | $332,731 |
FHLB advances and other borrowings | 28,300 | 26,000 | 25,000 |
Subordinated debentures | 5,000 | 5,000 | 5,000 |
Other liabilities | 3,180 | 2,257 | 2,191 |
Total Liabilities | 373,706 | 364,990 | 364,922 |
6.5% Cumulative preferred stock | 7,659 | 7,659 | 7,659 |
Series A preferred stock | 3,253 | 6,519 | 6,471 |
Common stock | 27,072 | 27,072 | 27,072 |
Retained earnings (deficit) | 79 | (430) | (2,706) |
Accumulated other comprehensive income (loss) | (287) | 746 | 376 |
Total Stockholders' Equity | 37,776 | 41,566 | 38,872 |
Total Liabilities and Stockholders' Equity | $411,482 | $406,556 | $403,794 |
Consolidated Financial Highlights (Unaudited) In thousands, except per share data and ratios | ||||
June 30, 2013 | December 31, 2012 | December 31, 2011 | ||
Capital Ratios: | ||||
Tier 1 leverage | 9.82% | 10.20% | 9.46% | |
Tier 1 risk-based capital | 12.87% | 13.16% | 11.94% | |
Total risk based capital | 14.13% | 14.41% | 13.19% | |
Tangible equity ratio (1) | 8.08% | 9.08% | 8.39% | |
Tangible common equity ratio (1) | 5.40% | 5.55% | 4.84% | |
Book value per common share | $13.64 | $13.91 | $12.57 | |
Tangible book value per common share (1) | $11.14 | $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: | June 30, 2013 | December 31, 2012 | December 31, 2011 |
Total shareholders' equity (a) | $37,776 | $41,566 | $38,872 |
Less: | |||
Preferred stock | (10,912) | (14,178) | (14,130) |
Common equity (b) | 26,864 | 27,388 | 24,742 |
Goodwill | (4,097) | (4,097) | (4,097) |
Intangible assets | (828) | (997) | (1,346) |
Tangible common equity (c) | 21,939 | 22,294 | 19,299 |
Add: | |||
Preferred stock | 10,912 | 14,178 | 14,130 |
Tangible equity (d) | $32,851 | $36,472 | $33,429 |
Total assets (e) | $411,482 | $406,556 | $403,794 |
Less: | |||
Goodwill | (4,097) | (4,097) | (4,097) |
Intangible assets | (828) | (997) | (1,346) |
Tangible assets (f) | $406,557 | $401,462 | $398,351 |
Shares outstanding (in thousands) (g) | 1,969 | 1,969 | 1,969 |
Book value per common share (b/g) | $13.64 | $13.91 | $12.57 |
Tangible book value per common share (c/g) | $11.14 | $11.32 | $9.80 |
Total shareholders' equity to total assets ratio (a/e) | 9.18% | 10.22% | 9.63% |
Tangible equity ratio (d/f) | 8.08% | 9.08% | 8.39% |
Tangible common equity ratio (c/f) | 5.40% | 5.55% | 4.84% |
SOURCE Citizens First Corporation
