Citizens First Corporation Announces Fourth Quarter 2011 and Year End Results

BOWLING GREEN, Ky., Jan. 26, 2012 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the fourth quarter and year ending December 30, 2011, which include the following:

• For the quarter ended December 31, 2011, the Company reported net income of $395,000, or $.09 per diluted common share.  This represents a decrease of $375,000, or $.17 per share, from the linked quarter ended September 30, 2011.  Compared to the quarter ended December 31 a year ago, net income decreased $338,000 or $.14 per share.  Provision for loan losses was $1.2 million for the fourth quarter of 2011 compared to $300,000 for the linked quarter ended September 30, 2011 and $350,000 for the quarter ended December 31, 2010. Todd Kanipe, President & CEO of Citizens First commented, "The increase in our provision for loan losses for the quarter is a result of our growth in the loan portfolio and our identification of specific allocations in our allowance for three loans placed on nonaccrual status.  Our core earnings remain strong and we are excited about the growth of our balance sheet.  We continue to aggressively monitor the loan portfolio for borrowers who might be at risk of suffering adverse financial conditions impacting their ability to repay their loan."

• For the twelve months ended December 31, 2011, the Company reported net income of $2.6 million, or $.81 per diluted common share.  This represents an increase of $70,000, or $.06 per share, from the net income of $2.5 million in the previous year.

• The Company's net interest margin was 4.01% for the quarter ended December 31, 2011 compared to 4.11% for the quarter ended September 30, 2011 and 4.13% for the quarter ended December 31, 2010, a decrease of 10 basis points for the linked quarter and a decrease of 12 basis points from the prior year.  The Company's net interest margin declined due to an increase in the level of fed funds sold for the quarter and year.

• The efficiency ratio improved to 61.61% for the fourth quarter of 2011 compared to 65.19% for the fourth quarter of 2010, as a result of increasing net interest income and reducing operating expenses.

• Total deposits increased 15.2% to $332.7 million at December 31, 2011 compared to $288.7 million at December 31, 2010, while total loans increased 9.7% to $294.4 million at December 31, 2011 compared to $268.3 million at December 31, 2010.

• Nonperforming assets increased to $4.9 million at December 31, 2011 compared to $3.1 million at September 30, 2011 and $2.6 million at December 31, 2010.  Two credit relationships related to the food services industry totaling $1.5 million and a $780,000 credit secured by real estate were all placed on nonaccrual status during the quarter.  Specific allocations in the allowance for loan losses have been made for these loans which have been measured for impairment.

A summary of nonperforming assets is presented for the periods indicated:

Fourth Quarter 2011 Compared to Third Quarter 2011

Net interest income for the quarter ended December 31, 2011 increased $252,000, or 7.6%, compared to the previous quarter.  Net interest income increased due to an increase in interest income of $220,000, which was primarily loan income, combined with a reduction in interest expense of $32,000.

Non-interest income for the three months ended December 31, 2011 increased $171,000, or 22.7%, compared to the previous quarter, primarily due to an increase in security gains of $128,000 and services charges on deposit accounts of $28,000.

Non-interest expense for the three months ended December 31, 2011 increased $94,000, or 3.5%, compared to the previous quarter, primarily due to an increase in salaries and benefits of $116,000.

A $1.2 million provision for loan losses was recorded for the fourth quarter of 2011, compared to a $300,000 provision in the previous quarter.  Net charge-offs were $267,000 for the fourth quarter of 2011 compared to $583,000 in the third quarter of 2011.  The allowance for loan losses increased as a percentage of loans from 1.76% in the third quarter to 1.99% in the fourth quarter.

Fourth Quarter 2011 Compared to Fourth Quarter 2010

Net interest income for the quarter ended December 31, 2011 increased $331,000, or 10.3 %, 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 $161,000.

Non-interest income for the three months ended December 31, 2011 increased $164,000, or 21.6%, compared to the three months ended December 31, 2010, primarily due to an increase in securities gains of $141,000 from the prior year.

Non-interest expense for the three months ended December 31, 2011 increased $157,000, or 5.9%, compared to the three months ended December 31, 2010, primarily due to an increase in personnel expenses totaling $95,000.

A $1.2 million provision for loan losses was recorded for the fourth quarter of 2011, compared to a $350,000 provision in the fourth quarter of 2010, an increase of $850,000.  Net charge-offs were $267,000 for the fourth quarter of 2011 compared to net charge-offs of $188,000 in the fourth quarter of 2010.

Full Year Comparison

Net interest income for the twelve months ended December 31, 2011 increased $794,000, or 6.3%, compared to the previous year.  Net interest income increased as a result of lower interest expense of $895,000 as maturing deposits and borrowings were repriced at lower rates.

Provision for loan losses for the twelve month period ended December 31, 2011 was $2.0 million, an increase of $450,000 from $1.6 million for the previous year.  Net charge-offs were $1.2 million for the year ended December 31, 2011 compared to $562,000 for 2010.  Net charge-offs as a percent of average loans were 0.42% for the year to date 2011, compared to 0.21% for the year to date 2010.  

Balance Sheet

Total assets at December 31, 2011 were $403.8 million, up $54.1 million, or 15.5%, from $349.7 million at December 31, 2010.  Loans increased $26.1 million, or 9.7%, from $268.3 million at December 31, 2010 to $294.4 million at December 31, 2011.  Deposits at December 31, 2011 were $332.7 million, an increase of $44 million, or 15.2%, compared to $288.7 million at December 31, 2010.  

Non-performing assets totaled $4.9 million at December 31, 2011 compared to $2.6 million at December 31, 2010, an increase of $2.3 million.  The allowance for loan losses at December 31, 2011 was $5.9 million, or 1.99% of total loans, compared to $5.0 million, or 1.86% of total loans as of December 31, 2010.

At December 31, 2011, total shareholders' equity was $38.9 million and total tangible shareholders' equity was $33.4 million.  The Company's tangible equity ratio was 8.39% as of December 31, 2011.  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.

1. 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 reconciliation of this ratio and per share amount to GAAP.

SOURCE Citizens First Corporation