Citizens First Corporation Announces Fourth Quarter and Year End 2012 Results

BOWLING GREEN, Ky., Jan. 17, 2013 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the fourth quarter and year ending December 31, 2012, which include the following:

  • For the twelve months ended December 31, 2012, net income grew to a record $3.2 million, or $1.11 per diluted common share.  This represents an increase of $564,000, or $0.30 per share, from the net income of $2.6 million in the previous year.  Provision for loan losses was $1.7 million for 2012 compared to $2.0 million for 2011.  Todd Kanipe, President & CEO of Citizens First commented, "Earnings growth in 2012 was directly attributable to our margin improvement and reduced provision expense.  We improved our deposit mix and reduced overall funding costs by eliminating the majority of our brokered deposits.  We were able to grow our loan portfolio modestly during the year; however, maintaining loan yields in the current interest rate environment remains our primary challenge in 2013."
  • For the quarter ended December 31, 2012, the Company reported net income of $697,000, or $.23 per diluted common share.  This represents a decrease of $244,000, or $.12 per share, from the linked quarter ended September 30, 2012.  Compared to the quarter ended December 31, 2011, net income increased $302,000 or $.14 per share.  Provision for loan losses was $580,000 for the fourth quarter of 2012 compared to $300,000 for the linked quarter ended September 30, 2012 and $1.2 million for the quarter ended December 31, 2011.
  • The Company's net interest margin was 4.24% for the quarter ended December 31, 2012 compared to 4.31% for the quarter ended September 30, 2012 and 4.01% for the quarter ended December 31, 2011, a decrease of 7 basis points for the linked quarter and an increase of 23 basis points from the prior year.  The Company's net interest margin decreased from the previous quarter primarily due to a decrease in loan yield for the quarter.  Net interest margin for the year was 4.20% compared to 4.06% in the previous year.

Fourth Quarter 2012 Compared to Third Quarter 2012

Net interest income for the quarter ended December 31, 2012 remained unchanged compared to the previous quarter.  Non-interest income for the three months ended December 31, 2012 increased $19,000, or 2.6%, compared to the previous quarter, primarily due to an increase in gains on the sale of mortgage loans of $18,000.  Non-interest expense for the three months ended December 31, 2012 increased $98,000, or 3.3%, compared to the previous quarter, primarily due to an increase in personnel expenses of $83,000

A $580,000 provision for loan losses was recorded for the fourth quarter of 2012, compared to a $300,000 provision in the previous quarter.  The provision expense was higher in the fourth quarter of 2012 primarily as a result of an increase in net charge-offs in the current quarter.  Net charge-offs were $827,000 for the fourth quarter of 2012 compared to $231,000 in the third quarter of 2012.

Fourth Quarter 2012 Compared to Fourth Quarter 2011

Net interest income for the quarter ended December 31, 2012 increased $301,000, or 8.5%, compared to the previous year.  The increase in net interest income was impacted by a reduction in interest expense of $170,000 combined with an increase in interest income of $131,000. The increase in interest income was fueled by the growth in average loans of $8.8 million for the fourth quarter of 2012 compared to the fourth quarter of 2011.

Non-interest income for the three months ended December 31, 2012 decreased $159,000, or 17.2%, compared to the three months ended December 31, 2011, primarily due to a decrease in security gains of $141,000 from the prior year.

Non-interest expense for the three months ended December 31, 2012 increased $276,000, or 9.8%, compared to the three months ended December 31, 2011, primarily due to an increase in personnel expenses totaling $134,000 and other expenses totaling $106,000.

A $580,000 provision for loan losses was recorded for the fourth quarter of 2012, a decrease from $1.2 million in the fourth quarter of 2011.  Net charge-offs were $827,000 for the fourth quarter of 2012 compared to net charge-offs of $583,000 in the fourth quarter of 2011.

Balance Sheet

Total assets at December 31, 2012 were $406.6 million, an increase of $2.8 million from $403.8 million at December 31, 2011.  Average assets during 2012 were $403.0 million, an increase of 9.1% or $33.7 million from $369.3 million in 2011.  Average interest earning assets increased 9.1% or $30.6 million in 2012, from $336.8 million in 2011 to $367.4 million in 2012.

Loans increased $4.4 million, or 1.5%, from $294.4 million at December 31, 2011 to $298.8 million at December 31, 2012.  Total loans averaged $301.3 million in 2012, compared to $274.1 million in 2011, an increase of $27.2 million, or 9.9%.  Deposits at December 31, 2012 were $331.7 million, a decrease of $1.0 million, or 0.3%, compared to $332.7 million at December 31, 2011. Total deposits averaged $327.7 million during 2012, an increase of $20.0 million, or 6.5%, compared to $307.7 million during 2011.  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 $6.3 million at December 31, 2012 compared to $4.9 million at December 31, 2011, an increase of $1.4 million.  The majority of non-performing assets is represented by a $3.8 million commercial real estate loan which was placed on nonaccrual status during the second quarter of 2012.

The allowance for loan losses at December 31, 2012 was $5.7 million, or 1.91% of total loans, compared to $5.9 million, or 1.99% of total loans as of December 31, 2011.  Net charge-offs for the year to date totaled $1.8 million compared to $894,000 in the previous year.  The allowance for loan losses has declined although net charge-offs has increased in comparison as the majority of loans charged off had a specific allocated reserve.

A summary of nonperforming assets is presented below:

(In thousands)


December 31,
 2012

September 
30,

 2012

June  
30,

 2012

March 
31,

 2012

December
31,

 2011

Nonaccrual loans



$5,384

$5,911

$6,168


$2,476



$3,322

Loans 90+ days past due/accruing



-

60

-


-



-

Restructured loans



758

1,388

1,549


1,534



942

Total nonperforming loans



6,142

7,359

7,717


4,010



4,264












Other real estate owned



191

258

214


608



637

Total nonperforming assets



$6,333

$7,617

$7,931


$4,618



$4,901












Ratio of total nonperforming assets to total assets



1.56%

1.93%

 

2.00%


 

1.14%



1.21%

At December 31, 2012, total shareholders' equity was $41.6 million and total tangible shareholders' equity was $36.5 million.  The Company's tangible equity ratio was 9.08% as of December 31, 2012.  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




December 31

September 30

June 30

March 31

December 31


2012

2012

2012

2012

2011

Interest income          

$4,664

$4,681

$4,565

$4,618

$4,533

Interest expense

809

826

889

926

979

Net interest income

3,855

3,855

3,676

3,692

3,554







Provision for loan losses

580

300

450

370

1,200







Non-interest income:






   Service charges on deposits

351

355

340

318

381

   Other service charges and fees

129

138

143

120

121

   Gain on sale of mortgage loans

82

64

64

90

100

   Non-deposit brokerage fees

61

54

57

34

43

   Lease income

76

68

68

68

68

   BOLI income

65

66

66

66

69

   Securities gains

-

-

55

-

141

      Total

764

745

793

696

923







Non-interest expenses:






   Salaries and benefits

1,489

1,406

1,414

1,409

1,355

   Occupancy and equipment

491

489

479

459

455

   Other

1,111

1,098

1,153

1,058

1,005

      Total

3,091

2,993

3,046

2,926

2,815







Income before income taxes

948

1,307

973

1,092

462

Provision for income taxes

251

366

247

284

67

Net income

697

941

726

808

395







Preferred dividends and discount accretion

225

225

223

224

225

Net income available for common shareholders

$472

$716

$503

$584

$170

Basic earnings per common share

$0.24

$0.36

$0.25

$0.30

$0.09

Diluted earnings per common share

$0.23

$0.35

$0.24

$0.29

$0.09


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








Twelve Months Ended





December
31

December
31


2012

2011

Interest income          

$18,528

$17,483

Interest expense

3,450

4,178

Net interest income

15,078

13,305




Provision for loan losses

1,700

2,025




Non-interest income:



   Service charges on deposits

1,365

1,390

   Other service charges and fees

529

472

   Gain on sale of mortgage loans

301

315

   Non-deposit brokerage fees

206

171

   Lease income

279

261

   BOLI income

263

273

   Securities gains

55

215

      Total

2,998

3,097




Non-interest expenses:



   Salaries and benefits

5,718

5,102

   Occupancy and equipment

1,918

1,858

   Other

4,419

4,001

      Total

12,055

10,961




Income before income taxes

4,321

3,416

Provision for income taxes

1,148

807

Net income

3,173

2,609




Preferred dividends and discount accretion

896

958

Net income available for common shareholders

$2,277

$1,651

Basic earnings per common share

$1.16

$0.84

Diluted earnings per common share

$1.11

$0.81







Return on average assets YTD

0.79%

0.71%

Return on average equity YTD

7.84%

6.84%

Net interest margin YTD

4.20%

4.06%

                                                                                   

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

Key Operating Statistics:


Three Months Ended





December 31

September 30

June

 30

March

 31

December 31


2012

2012

2012

2012

2011







Average assets

$403,975

$397,657

$407,298

$402,950

$398,264

Average loans

304,249

297,863

304,003

299,061

295,421

Average deposits

325,644

321,828

331,820

331,400

333,540

Average equity

41,629

40,776

39,962

39,431

39,075

Average common equity

27,458

26,618

25,816

25,296

24,951







Return on average assets

0.69%

0.94%

0.72%

0.81%

0.39%

Return on average equity

6.66%

9.18%

7.31%

8.24%

4.01%







Efficiency ratio

65.70%

63.88%

66.93%

65.44%

61.61%

Non-interest income to average assets

0.75%

0.75%

0.78%

0.69%

0.92%

Non-interest expenses to average assets

3.04%

2.99%

3.01%

2.91%

2.80%

Yield on average earning assets (tax equivalent)

5.11%

5.21%

5.03%

5.20%

5.09%

Cost of average interest bearing liabilities

1.01%

1.04%

1.10%

1.15%

1.22%

Net interest margin (tax equivalent)

4.24%

4.31%

4.06%

4.17%

4.01%

Number of FTE employees

102

103

100

101

100







Asset Quality Ratios:






Non-performing loans to total loans

2.06%

2.41%

2.57%

1.32%

1.45%

Non-performing assets to total assets

1.56%

1.93%

2.00%

1.14%

1.21%

Allowance for loan losses to total loans

1.91%

1.95%

1.97%

1.95%

1.99%

Net charge-offs to average loans, annualized

0.60%

0.45%

0.52%

0.41%

0.42%









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

Consolidated Statement of Condition:

As of

As of

As of


December 31,

December 31,

December 31,

2012

2011

2010

Cash and cash equivalents

$34,799

$30,549

$14,811

Available for sale securities

46,639

50,718

39,531

Loans held for sale

61

180

151

Loans

298,754

294,352

268,303

Allowance for loan losses

(5,721)

(5,865)

(5,001)

Premises and equipment, net

11,568

11,849

10,352

Bank owned life insurance (BOLI)

7,587

7,324

7,051

Federal Home Loan Bank Stock, at cost

2,025

2,025

2,025

Accrued interest receivable

1,660

1,858

1,940

Deferred income taxes

2,871

3,382

3,677

Intangible assets

5,094

5,443

3,604

Other real estate owned

191

637

1,368

Other assets

1,028

1,342

1,919

  Total Assets

$406,556

$403,794

$349,731





Deposits:




    Noninterest bearing

$ 41,725

$ 38,352

$ 36,250

    Savings, NOW and money market

111,194

116,968

72,612

    Time

178,814

177,411

179,878

      Total deposits

$331,733

$332,731

$288,740

FHLB advances and other borrowings

26,000

25,000

15,712

Subordinated debentures

5,000

5,000

5,000

Other liabilities

2,257

2,191

1,970

Total Liabilities

364,990

364,922

311,422

6.5% Cumulative preferred stock

7,659

7,659

7,659

Series A preferred stock

6,519

6,471

8,586

Common stock

27,072

27,072

27,072

Retained deficit

(430)

(2,706)

(4,357)

Accumulated other comprehensive income (loss)

746

376

(651)

Total Stockholders' Equity

41,566

38,872

38,309

Total Liabilities and Stockholders' Equity

$406,556

$403,794

$349,731

 

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



December 31, 2012

December 31, 2011

December 31, 2010

Capital Ratios:





Tier 1 leverage


10.20%

9.46%

10.98%

Tier 1 risk-based capital


13.16%

11.86%

13.31%

Total risk based capital


14.41%

13.11%

14.57%

Tangible equity ratio (1)


9.08%

8.39%

10.02%

Tangible common equity ratio (1)


5.55%

4.84%

5.33%

Book value per common share


$13.91

$12.57

$11.21

Tangible book value per common share (1)


$11.32

$9.80

$9.37

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:


December 31, 2012

December 31, 2011

December 31, 2010






Total shareholders' equity (a)


$41,566

$38,872

$38,309

Less:





   Preferred stock


(14,178)

(14,130)

(16,245)

Common equity (b)


27,388

24,742

22,064

   Goodwill


(4,097)

(4,097)

(2,575)

   Intangible assets


(997)

(1,346)

(1,029)

Tangible common equity (c)


22,294

19,299

18,460

Add:





   Preferred stock


14,178

14,130

16,245

Tangible equity (d)


$36,472

$33,429

$34,705






Total assets (e)


$406,556

$403,794

$349,890

Less:





   Goodwill


(4,097)

(4,097)

(2,575)

   Intangible assets


(997)

(1,346)

(1,029)

Tangible assets (f)


$401,462

$398,351

$346,286

Shares outstanding (in thousands) (g)


1,969

1,969

1,969






Book value per common share (b/g)


$13.91

$12.57

$11.21

Tangible book value per common share (c/g)


$11.32

$9.80

$9.37






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


10.22%

9.63%

10.95%

Tangible equity ratio (d/f)


9.08%

8.39%

10.02%

Tangible common equity ratio (c/f)


5.55%

4.84%

5.33%

 

SOURCE Citizens First Corporation



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http://www.citizensfirstbank.com

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