Citizens First Corporation Announces Fourth Quarter and Year End 2016 Results

- Increase in 2016 diluted earnings per share of 18.6% compared to 2015

- Increase in 2016 net income of 16.9% compared to 2015

- Growth in outstanding loans of 8.7% compared to 2015

- Non-performing assets down 96% from 2015 to 0.01% of total assets

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Jan 19, 2017, 11:48 ET

BOWLING GREEN, Ky., Jan. 19, 2017 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the fourth quarter and year ending December 31, 2016, which include the following:

For the quarter ended December 31, 2016, the Company reported net income of $1.10 million, or $0.43 per diluted common share. This represents a decrease of $48,000, or $0.02 per diluted common share, from $1.15 million, or $0.45 per diluted common share, for the quarter ended December 31, 2015. For the year ended December 31, 2016, net income totaled $4.22 million, or $1.66 per diluted common share. This represents an increase of $610,000, or $0.26 per diluted common share, from the net income of $3.61 million in the previous year.

"Growth in earning assets combined with improved operating efficiency resulted in record earnings in 2016 for our bank," said Todd Kanipe, President and CEO. "Loan volume strengthened, particularly in the latter half of the fourth quarter, and our credit quality metrics continued their positive trends. Maintaining the net interest margin remains challenging; however, quality loan growth has positioned us for a good start to 2017," Kanipe added.

Shares of CZFC closed at $18.00 as of December 31, 2016, an increase of 31.0% from the closing price of $13.74 at December 31, 2015, and an increase of 51.3% from the closing price of $11.90 at December 31, 2014.

Income Statement Fourth Quarter 2016 Compared to Fourth Quarter 2015

Net interest income increased $49,000, or 1.3%, as the volume of loans increased from the prior year. The Company's net interest margin was 3.80% for the quarter ended December 31, 2016, and 3.94% for the quarter ended December 31, 2015, a decrease of 14 basis points. The Company's net interest margin decreased primarily due to a decline in the yield on loans.

There was no provision for loan losses in the fourth quarter of the current year compared to a negative provision of $65,000 in the fourth quarter of the prior year due to the continued reduction in non-performing assets.

Non-interest income decreased $111,000, or 12.1%, primarily due to a reduction in other service charges and fees of $99,000, and gains on the sale of securities of $68,000.

Non-interest expense decreased $73,000, or 2.3%, primarily due to a reduction in professional fees of $126,000, partially offset by an increase in personnel expense of $93,000.

Income Statement Current Year Compared to Prior Year

Net interest income increased $536,000, or 3.6%, as the volume of earning assets increased from the prior year. The Company's net interest margin was 3.87% for the year ended December 31, 2016, and 3.86% for the year ended December 31, 2015, an increase of 1 basis point. The Company's net interest margin increased due to a decline in the cost of average interest-bearing liabilities.

There was a negative provision for the current year of $85,000 compared to a provision of $135,000 in the prior year due to the continued reduction in non-performing assets.

Non-interest income decreased $8,000, or 0.2%, primarily due to an increase in gains on sale of mortgage loans of $142,000, offset by a decline in other service charges of $82,000 and non-deposit brokerage fees of $49,000.

Non-interest expense decreased $240,000, or 1.8%, primarily due to a decrease in other expenses of $205,000 and professional fees of $245,000, partially offset by an increase in personnel expenses of $340,000.

Credit Quality

Non-performing assets totaled $23,000, or 0.01% of total assets, at December 31, 2016 compared to $637,000, or 0.15% of total assets at December 31, 2015, a decrease of $614,000.

The allowance for loan losses at December 31, 2016 was $4.9 million, or 1.35% of total loans, compared to $4.9 million, or 1.49% of total loans as of December 31, 2015. We consider the size, volume and credit quality of the loan portfolio as well as recent economic and other external influences to record the allowance for loan losses and provision for loan losses that is directionally consistent with our loan portfolio.

Balance Sheet

Total assets at December 31, 2016 were $455.4 million compared to $432.2 million at December 31, 2015. Total assets increased $23.2 million, or 5.4%, from December 31, 2015 to December 31, 2016 due to a growth in loans and interest-bearing deposits in other financial institutions, partially offset by a decline in federal funds sold and available-for-sale securities.

Loans increased $28.9 million, or 8.7%, from December 31, 2015 to December 31, 2016. Deposits increased $51,000, or 0.01%, from December 31, 2015 to December 31, 2016. Borrowings from the Federal Home Loan Bank increased $20.0 million.

Stockholders' equity increased to $42.4 million at December 31, 2016 from $39.5 million at December 31, 2015. The common equity and tangible common equity ratios were 7.71% and 6.83%, respectively, as of December 31, 2016 compared to 7.37% and 6.43%, respectively, at December 31, 2015. The book value and tangible book value per common share ratios were $17.54 and $15.40, respectively, at December 31, 2016 compared to $16.18 and $13.97, respectively, at December 31, 2015.

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, and a loan production office in Williamson County, Tennessee. Additional information concerning our products and services is available at www.citizensfirstbank.com.

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 current and future economic and business conditions; possible changes in trade, monetary, and fiscal policies, as well as legislative and regulatory changes; changes in the interest rate environment and our ability to effectively manage interest rate risk and other market risk, credit risk and operational risk; changes in the quality or composition of our loan or investment portfolios; increases in our nonperforming assets, or our inability to recover or absorb losses created by such nonperforming assets; 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) Consolidated Statement of Condition

	(In Thousands, Except Share Data and ratios)
	December 31,		December 31,		December 31,
	2016		2015		2014
Assets
Cash and due from financial institutions	$	8,542	$	8,865	$	7,962
Federal funds sold		—		6,390		3,360
Interest-bearing deposits in other financial institutions		11,018		2,728		—
Available-for-sale securities		53,547		60,200		58,986
Loans held for sale		264		—		—
Loans		359,391		330,782		318,477
Allowance for loan losses		(4,854)		(4,916)		(4,885)
Premises and equipment, net		9,390		9,998		10,758
Bank owned life insurance (BOLI)		8,351		8,174		7,993
Federal Home Loan Bank (FHLB) stock, at cost		2,025		2,025		2,025
Accrued interest receivable		1,622		1,680		1,527
Deferred income taxes		1,464		1,328		1,479
Goodwill and other intangible assets		4,291		4,362		4,433
Other real estate owned		—		100		198
Other assets		371		465		501
Total Assets	$	455,422	$	432,181	$	412,814
Liabilities
Deposits
Noninterest bearing	$	52,322	$	48,522	$	41,975
Savings, NOW and money market		173,620		168,335		148,935
Time		144,497		153,531		150,874
Total deposits		370,439		370,388		341,784
FHLB advances and other borrowings		35,000		15,000		25,500
Subordinated debentures		5,000		5,000		5,000
Accrued interest payable		220		213		231
Other liabilities		2,399		2,056		1,851
Total Liabilities		413,058		392,657		374,366
Stockholders' Equity
6.5% Cumulative convertible preferred stock		7,261		7,659		7,659
Common stock		25,920		25,406		27,072
Retained earnings		9,706		6,304		3,373
Accumulated other comprehensive income		(523)		155		344
Total stockholders' equity		42,364		39,524		38,448
Total liabilities and stockholders' equity	$	455,422	$	432,181	$	412,814

Consolidated Financial Highlights (Unaudited) Consolidated Statement of Income

	Three months ended
	(In Thousands, Except Per Share Data and ratios)
	Dec 31,		Sept 30,		June 30,		March 31,		Dec 31,
	2016		2016		2016		2016		2015
Interest and dividend income	$	4,572	$	4,557	$	4,536	$	4,476	$	4,494
Interest expense		652		639		624		613		623
Net interest income		3,920		3,918		3,912		3,863		3,871

Provision (credit) for loan losses		—		—		(85)		—		(65)

Non-interest income
Service charges on deposit accounts		371		361		339		325		360
Other service charges and fees		161		172		179		164		260
Gain on sale of mortgage loans		97		110		91		77		63
Non-deposit brokerage fees		85		83		75		72		82
Lease income		52		61		49		45		43
BOLI income		44		45		44		44		45
Gain on sale of securities		—		20		55		51		68
Total non-interest income		810		852		832		778		921

Non-interest expenses:
Personnel expense		1,741		1,674		1,676		1,784		1,648
Net occupancy expense		471		481		492		483		464
Advertising and public relations		75		86		98		61		80
Professional fees		50		98		137		180		176
Data processing services		256		262		263		256		262
Franchise shares and deposit tax		132		132		132		132		96
FDIC insurance		47		58		59		59		61
Other real estate owned expenses		1		(8)		23		1		52
Other		373		362		417		414		380
Total non-interest expenses		3,146		3,145		3,297		3,370		3,219

Income before income taxes		1,584		1,625		1,532		1,271		1,638
Income taxes		481		490		458		366		487
Net income		1,103		1,135		1,074		905		1,151
Dividends on preferred stock		124		124		123		124		131
Net income available for common stockholders	$	979	$	1,011	$	951	$	781	$	1,020
Basic earnings per common share	$	0.49	$	0.50	$	0.48	$	0.39	$	0.52
Diluted earnings per common share	$	0.43	$	0.45	$	0.42	$	0.36	$	0.45

Consolidated Financial Highlights (Unaudited) Key Operating Statistics

	Three months ended
	(In Thousands, Except Per Share Data and ratios)
	Dec 31,			Sept 30,			June 30,			March 31,			Dec 31,
	2016			2016			2016			2016			2015
Average:
Assets	$	444,168		$	442,042		$	439,081		$	433,143		$	430,174
Earning Assets		417,161			414,569			409,722			402,638			399,055
Loans		347,046			344,733			338,456			333,000			329,131
Interest-bearing deposits		310,336			304,473			311,084			320,363			316,979
Deposits		360,816			354,953			360,209			367,397			365,401
Borrowed funds		38,429			42,490			35,868			23,394			23,179
Equity		42,652			42,002			40,912			40,156			39,181
Common equity		35,391			34,741			33,651			32,831			31,522

Return on average assets		0.99	%		1.02	%		0.98	%		0.84	%		1.06	%
Return on average equity		10.29	%		10.75	%		10.56	%		9.06	%		11.66	%

Efficiency ratio		65.59	%		65.21	%		69.15	%		72.15	%		66.91	%
Non-interest income to average assets		0.73	%		0.77	%		0.76	%		0.72	%		0.85	%
Non-interest expenses to average assets		2.82	%		2.83	%		3.02	%		3.13	%		2.97	%
Net overhead to average assets		2.09	%		2.06	%		2.26	%		2.41	%		2.12	%
Yield on loans		4.86	%		4.86	%		4.95	%		4.96	%		4.97	%
Yield on investment securities (TE)		2.58	%		2.66	%		2.77	%		2.77	%		2.84	%
Yield on average earning assets (TE)		4.42	%		4.44	%		4.53	%		4.55	%		4.55	%
Cost of average interest bearing liabilities		0.74	%		0.73	%		0.72	%		0.72	%		0.73	%
Net interest margin (TE)		3.80	%		3.83	%		3.92	%		3.94	%		3.94	%
Number of FTE employees		95			94			96			98			98

Asset Quality Indicators:
Non-performing loans to total loans		0.01	%		0.05	%		0.06	%		0.18	%		0.16	%
Non-performing assets to total assets		0.01	%		0.04	%		0.06	%		0.16	%		0.15	%
Allowance for loan losses to total loans		1.35	%		1.45	%		1.43	%		1.53	%		1.49	%
YTD net charge-offs (recoveries) to average loans, annualized		(0.01)	%		(0.05)	%		(0.07)	%		(0.15)	%		0.03	%
YTD net charge-offs (recoveries)		(23)			(130)			(119)			(128)			104

Consolidated Financial Highlights (Unaudited) Consolidated Statement of Income

	Twelve Months Ended
	December 31,		December 31,
	2016		2015
Interest and dividend income	$	18,141	$	17,684
Interest expense		2,528		2,607
Net interest income		15,613		15,077

Provision (credit) for loan losses		(85)		135

Non-interest income
Service charges on deposit accounts		1,396		1,421
Other service charges and fees		676		758
Gain on sale of mortgage loans		375		233
Non-deposit brokerage fees		315		364
Lease income		207		245
BOLI income		177		181
Gain on sale of securities		126		78
Total non-interest income		3,272		3,280

Non-interest expenses:
Personnel expense		6,875		6,535
Net occupancy expense		1,927		1,980
Advertising and public relations		320		330
Professional fees		465		710
Data processing services		1,037		1,001
Franchise shares and deposit tax		528		533
FDIC insurance		223		244
Other real estate owned expenses		17		94
Other		1,566		1,771
Total non-interest expenses		12,958		13,198

Income before income taxes		6,012		5,024
Income taxes		1,795		1,417
Net income		4,217		3,607
Dividends on preferred stock		495		520
Net income available for common stockholders	$	3,722	$	3,087
Basic earnings per common share	$	1.86	$	1.57
Diluted earnings per common share	$	1.66	$	1.40

Consolidated Financial Highlights (Unaudited) Key Operating Statistics

	Twelve Months Ended
	(In Thousands, Except Per
	Share Data and ratios)
	December 31,			December 31,
	2016			2015
Average:
Assets	$	439,628		$	430,180
Earning Assets		411,049			399,420
Loans		340,836			322,256
Interest-bearing deposits		311,138			320,551
Deposits		360,827			365,788
Borrowed funds		35,075			23,488
Equity		41,345			38,726
Common equity		34,068			31,067

Return on average assets		0.96	%		0.84	%
Return on average equity		10.20	%		9.32	%

Efficiency ratio		67.99	%		70.84	%
Non-interest income to average assets		0.74	%		0.76	%
Non-interest expenses to average assets		2.95	%		3.07	%
Net overhead to average assets		2.20	%		2.31	%
Yield on loans		4.90	%		5.04	%
Yield on investment securities (TE)		2.70	%		2.84	%
Yield on average earning assets (TE)		4.49	%		4.52	%
Cost of average interest bearing liabilities		0.73	%		0.76	%
Net interest margin (TE)		3.87	%		3.86	%
Number of FTE employees		95			98

Consolidated Financial Highlights (Unaudited)

	(In Thousands, Except Share Data and ratios)
	December 31,			December 31,			December 31,
Consolidated Capital Ratios	2016			2015			2014

Total shareholders' equity to total assets ratio		9.30	%		9.15	%		9.31	%
Tangible equity ratio (1)		8.44	%		8.22	%		8.33	%
Tangible common equity ratio (1)		6.83	%		6.43	%		6.45	%
Book value per common share	$	17.54		$	16.18		$	15.64
Tangible book value per common share (1)	$	15.40		$	13.97		$	13.39
End of period common share closing price	$	18.00		$	13.74		$	11.90

(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.


	(In Thousands, Except Share Data and ratios)
	December 31,			December 31,			December 31,
Regulation G Non-GAAP Reconciliation:	2016			2015			2014

Total shareholders' equity (a)	$	42,364		$	39,524		$	38,448
Less:
Preferred stock		(7,261)			(7,659)			(7,659)
Common equity (b)		35,103			31,865			30,789
Goodwill		(4,097)			(4,097)			(4,097)
Intangible assets		(194)			(265)			(336)
Tangible common equity (c)		30,812			27,503			26,356
Add:
Preferred stock		7,261			7,659			7,659
Tangible equity (d)		38,073			35,162			34,015

Total assets (e)		455,422			432,181			412,814
Less:
Goodwill		(4,097)			(4,097)			(4,097)
Intangible assets		(194)			(265)			(336)
Tangible assets (f)	$	451,131		$	427,819		$	408,381
Shares outstanding (in thousands) (g)		2,001			1,969			1,969

Book value per common share (b/g)	$	17.54		$	16.18		$	15.64
Tangible book value per common share (c/g)	$	15.40		$	13.97		$	13.39
Equity to assets ratio (a/e)		9.30	%		9.15	%		9.31	%
Tangible equity ratio (d/f)		8.44	%		8.22	%		8.33	%
Common equity ratio (b/e)		7.71	%		7.37	%		7.46	%
Tangible common equity ratio (c/f)		6.83	%		6.43	%		6.45	%

SOURCE Citizens First Corporation

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