Citizens First Corporation Announces Fourth Quarter 2009 and Year End Results
BOWLING GREEN, Ky., Feb. 17 /PRNewswire-FirstCall/ -- Citizens First Corporation (Nasdaq: CZFC) today reported its results of operations for the fourth quarter and year ending December 31, 2009 which include the following:
- For the quarter ended December 31, 2009, the Company reported a net loss before dividends to preferred shareholders of ($542,000). Net loss available to common shareholders was ($798,000) or, ($0.41) per basic and diluted common share for the quarter ending December 31, 2009. The quarterly operations were impacted by the branch restructuring plan announced in October, an increase in the provision for loan losses, and expenses incurred to defend the Company from the unsuccessful hostile tender offer initiated by Porter Bancorp.
- Net interest income for the quarter ended December 31, 2009 increased $254,000, or 9.5%, compared to the same quarter in the previous year. Net interest income for the twelve month period ended December 31, 2009 increased $80,000, or 0.7%, compared to the previous year.
- The Company's net interest margin was 3.83% for the quarter ended December 31, 2009 compared to 3.44% for the quarter ended December 31, 2008. The Company's net interest margin was 3.63% for the twelve months ended December 31, 2009 compared to 3.52% for the twelve months ended December 31, 2008.
- Provision for loan losses for the quarter ended December 31, 2009 increased $115,000, or 10.7%, for the fourth quarter of 2009 compared to the previous year. Provision for loan losses for the twelve month period ended December 31, 2009 increased $2.8 million, or 143.4%, compared to the previous year.
- Total deposits increased to $288.5 million at December 31, 2009 compared to $273.0 million at December 31, 2008, while total loans declined to $263.9 million at December 31, 2009 compared to $271.7 million at December 31, 2008.
- For the twelve months ending December 31, 2009, the Company reported a net loss before dividends to preferred shareholders of $(1.6) million. Net loss available to common shareholders was $(2.6) million or $(1.32) per basic and diluted common share for the twelve months ended December 31, 2009
Todd Kanipe, President & CEO, stated "The fourth quarter was a challenging time for the company. On October 20, we announced a plan designed to streamline branch delivery and significantly reduce operating expenses in order to improve financial performance and enhance shareholder value. On October 23, Porter Bancorp publicly announced a hostile tender offer to acquire control of Citizens First. The offer was ultimately withdrawn by Porter on December 14; however, not before Citizens First incurred additional fourth quarter expenses of approximately $350,000 defending against this unsolicited tender offer."
Kanipe continued, "Despite the distraction and additional costs related to Porter's hostile attempt, management moved forward with the implementation of its plan, including: the closing of three branches, a 20% reduction in staffing, and the reorganizing of its administrative services. These actions resulted in charges of approximately $300,000 in the fourth quarter, but we expect these changes will reduce operating expenses by approximately $800,000 in 2010."
"During the fourth quarter we expanded the focus of our profit improvement efforts to a complete review of the income statement," Kanipe added. "In addition to the expense reductions announced in October, we instituted more disciplined loan floor pricing and adjusted our deposit charges and waiver policy. We expect these changes to have a positive impact in the first quarter and build throughout the year."
Net interest income for the quarter ended December 31, 2009 increased $254,000, or 9.5%, compared to the previous year. Net interest income for the twelve month period ended December 31, 2009 increased $80,000, or 0.7%, compared to the previous year. This increase in net interest income was impacted by a reduction in interest expense which exceeded the reduction in interest income. The prime rate remained stable throughout 2009 at 3.25%, and both loans and deposits renewed at lower rates throughout the year.
Non-interest income for the three months ended December 31, 2009 decreased $17,000, or 2.5%, compared to the three months ended December 31, 2008, primarily due to a reduction in deposit service charges. Non-interest income for the twelve months ended December 31, 2009 increased $163,000, or 5.7%, compared to the twelve months ended December 31, 2008. The primary increase in non-interest income is due to a $361,000 gain recognized on securities sold during the second quarter of 2009, partially offset by a $243,000 decline in deposit service charges.
Non-interest expense for the three months ended December 31, 2009 increased $396,000, or 13.3%, compared to the three months ended December 31, 2008. Restructuring costs, including severance payments and additional fixed asset expenses, totaled $269,000; while expenses related to the hostile tender offer by Porter Bancorp totaled $351,000. "Absent these non-routine expenses our non-interest expense would have declined approximately $224,000 for the quarter compared to the fourth quarter of 2008. Non-interest expense for the twelve months ended December 31, 2009 increased $1.0 million, or 8.7%, compared to the twelve months ended December 31, 2008. The increase is primarily attributable to the additional expenses incurred in the fourth quarter referenced above, as well as increased FDIC insurance premiums for the year of $295,000.
A $1.2 million provision for loan losses was recorded for the fourth quarter of 2009, compared to a $1.1 million provision in the fourth quarter of 2008. The provision for loan losses for the twelve months ended December 31, 2009 was $4.7 million compared to $1.9 million for the twelve months ended December 31, 2008. The increase in the provision during 2009 is reflective of the current economic environment and the charge-off of a major credit related to the automotive industry. Net charge-offs were $1.0 million for the fourth quarter of 2009 compared to $505,000 in the fourth quarter of 2008. Net charge-offs for 2009 totaled $4.6 million compared to $1.3 million for 2008.
Non-performing assets totaled $2.4 million at December 31, 2009 compared to $3.7 million at December 31, 2008, a decrease of $1.3 million. Non-performing assets to total assets ratio was 0.70% and 1.03% at December 31, 2009 and December 31, 2008, respectively. The allowance for loan losses at December 31, 2009 was $4.0 million, or 1.50% of total loans, compared to $3.8 million, or 1.40% of total loans as of December 31, 2008. "Our non-performing assets improved as we worked to recognize and resolve problem loans and liquidate foreclosed properties. The allowance for loan losses was increased to reflect economic conditions in south central Kentucky, which we continue to closely monitor," Kanipe added.
Total assets at December 31, 2009 were $344.3 million, down $10.8 million, or 3.0%, from $355.1 million at December 31, 2008. Loans decreased $7.8 million, or 2.9%, from $271.7 million at December 31, 2008 to $263.9 million at December 31, 2009. Deposits at December 31, 2009 were $288.5 million, an increase of $15.5 million, or 5.7%, compared to $273.0 million at December 31, 2008.
At December 31, 2009, total shareholders' equity was $36.9 million and total tangible shareholders' equity was $33.0 million. The Company's tangible equity ratio was 9.70% as of December 31, 2009. 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, retention of key personnel and the success of cost savings and expense reductions from planned branch closures and restructuring. 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 Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
Interest income $4,346 $4,806 $17,432 $20,531
Interest expense 1,428 2,142 6,413 9,592
----- ----- ----- -----
Net interest income 2,918 2,664 11,019 10,939
Provision for loan losses 1,190 1,075 4,690 1,927
----- ----- ----- -----
Net interest income
after provision for
loan losses 1,728 1,589 6,329 9,012
Non-interest income 653 670 3,002 2,839
Non-interest expense 3,366 2,970 12,347 11,360
Goodwill impairment 0 8,698 0 8,698
--- ----- --- -----
Income (loss) before
income taxes (985) (9,409) (3,016) (8,207)
Provision (benefit)
for income taxes (443) (2,733) (1,430) (2,566)
---- ------ ------ ------
Net income/(loss) (542) (6,676) (1,586) (5,641)
Preferred dividends
and discount accretion 256 145 1,020 534
--- --- ----- ---
Net income (loss)
available for common
shareholders ($798) ($6,821) ($2,606) ($6,175)
===== ======= ======= =======
Basic and diluted
earnings (loss) per
common share ($0.41) ($3.46) ($1.32) ($3.14)
Consolidated Statement of Condition: December 31, December 31,
2009 2008
Cash and cash equivalents $9,756 $15,331
Available for sale securities 41,059 39,928
Loans held for sale 295 553
Loans 263,922 271,745
Allowance for loan losses (3,955) (3,816)
Intangible assets 3,868 4,144
Other assets 29,324 27,240
------ ------
Total assets $344,269 $355,125
======== ========
Deposits $288,520 $273,015
Securities sold under repurchase agreements 800 8,258
FHLB advances 11,500 27,500
Other borrowings 5,000 5,000
Other liabilities 1,553 2,067
----- -----
Total liabilities 307,373 315,840
Preferred stock 16,182 16,118
Common stock 27,072 27,058
Retained deficit (5,835) (3,228)
Accumulated other comprehensive loss (523) (663)
---- ----
Total shareholders' equity 36,896 39,285
------ ------
Total liabilities and shareholders' equity $344,269 $355,125
======== ========
Selected Financial Ratios, annualized (Unaudited):
Three Months Ended Twelve Months Ended
December 31, December 31,
2009 2008 2009 2008
Return on average assets (0.62%) (7.40%) (0.46%) (1.56%)
Return on average equity (5.70%) (68.93%) (4.05%) (14.82%)
Efficiency ratio 91.82% 340.17% 87.90% 141.67%
Non-interest income to
average assets 0.75% 0.74% 0.86% 0.78%
Non-interest expenses to
average assets (3.88%) (12.92%) (3.56%) (5.44%)
Net interest margin (1) 3.83% 3.44% 3.63% 3.52%
December 31, 2009 December 31, 2008
Asset Quality:
Non-performing loans to total loans 0.47% 0.94%
Non-performing assets to total assets 0.70% 1.03%
Loan loss reserve to total loans 1.50% 1.40%
Capital:
Tier 1 Leverage 10.53% 11.31%
Tier 1 Risk-Based Capital 12.55% 13.52%
Total Risk Based Capital 13.80% 14.77%
Tangible equity to tangible assets ratio(2) 9.70% 10.01%
Book value per common share $10.52 $11.77
Tangible book value per common share (2) $8.56 $9.66
Shares outstanding (in thousands) 1,969 1,969
- Presented on a tax-equivalent basis for tax-exempt securities
- The tangible equity to tangible assets 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 a reconciliation of this ratio and per share amount to GAAP.
Regulation G Non-GAAP Reconciliation:
Total shareholders' equity $36,896 $39,285
Less:
Preferred stock (16,182) (16,118)
Goodwill (2,575) (2,575)
Intangible assets (1,293) (1,569)
------ ------
Tangible common equity (a) 16,846 19,023
Add:
Preferred stock 16,182 16,118
------ ------
Tangible equity (b) $33,028 $35,141
Total assets $344,269 $355,125
Less:
Goodwill (2,575) (2,575)
Intangible assets (1,293) (1,569)
------ ------
Tangible assets (c) $340,401 $350,981
Shares outstanding (in thousands) (d) 1,969 1,969
Tangible book value per common share (a/d) $8.56 $9.66
Tangible equity ratio (b/c) 9.70% 10.01%
SOURCE Citizens First Corporation
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