Citizens First Corporation Announces Fourth Quarter and Year End 2017 Results, Declares Quarterly Common Dividend
BOWLING GREEN, Ky., Jan. 19, 2018 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the year ended December 31, 2017 which include the following:
For the quarter ended December 31, 2017 the Company reported net income of $952,000, or $0.37 per diluted common share (EPS). This represents a decrease of $151,000 from $1.1 million, or $0.43 per diluted common share, for the quarter ended December 31, 2016. For the year ended December 31, 2017, net income totaled $4.09 million, or $1.60 per diluted common share. This represents a decrease of $128,000, or $0.06 per diluted common share, from the net income of $4.22 million for the previous year.
On December 22, 2017, President Trump signed "H.R.1", which among other items reduces the federal corporate tax rate to 21% effective January 1, 2018. As a result, income tax expense increased $401,000 during the quarter due to the Company's deferred tax assets being revalued. "Our quarterly and annual EPS was negatively impacted $0.16 by the deferred tax revaluation," stated Todd Kanipe, President and CEO. "However, the Company will benefit from lower tax rates in 2018 and beyond."
Income before income taxes increased $424,000, or 7.1%, for the year ended December 31, 2017 compared to the previous year. "The Company reduced operating expenses in 2017, and we have maintained excellent credit quality," said Kanipe. "We have also been able to improve our overall capital with a tangible common equity ratio that now exceeds 9%." Shares of CZFC closed at $24.00 as of December 31, 2017, an increase of 33.3% from the closing price of $18.00 at December 31, 2016.
Income Statement Fourth Quarter 2017 Compared to Fourth Quarter 2016
Net interest income increased $127,000, or 3.2%, from the fourth quarter of the prior year. The Company's net interest margin was 3.74% for the quarter ended December 31, 2017, compared to 3.80% for the quarter ended December 31, 2016, a decrease of six basis points. The Company's net interest margin dropped as a result of an increase in the cost of interest-bearing liabilities, which grew by 20 basis points while the yield on earning assets increased by only 10 basis points.
There was a $150,000 credit provision for loan losses in the fourth quarter of the current year compared to no credit or provision in the fourth quarter of the prior year.
Non-interest income decreased $15,000, or 1.7%, from the fourth quarter of the prior year primarily due to a decrease in service charges on deposit accounts of $56,000, partially offset by an increase in other service charges and fees of $43,000.
Non-interest expense decreased $118,000, or 3.7%, from the fourth quarter of the prior year primarily due to a decrease in data processing services of $64,000 and franchise shares and deposit tax expenses of $44,000, partially offset by an increase in professional fees of $36,000.
Income Statement Current Year Compared to Prior Year
Net interest income decreased $56,000, or 0.4%, as the yield on loans decreased and the cost of funds increased from the prior year. The Company's net interest margin was 3.70% for the year ended December 31, 2017, and 3.87% for the year ended December 31, 2016, a decrease of 17 basis points. The Company's net interest margin was impacted by a decrease in the yield on average earning assets of eight basis points coupled with an increase in the cost of average interest-bearing liabilities of 12 basis points.
There was a $150,000 credit provision for loan losses in the current year and an $85,000 credit provision in the prior year.
Non-interest income decreased $72,000, or 2.0%, primarily due to a decrease in service charges on deposit accounts of $159,000, a reduction in gains on the sale of securities of $78,000 and a decrease in gains on the sales of mortgage loans of $58,000, offset by an increase in other service charges and fees of $143,000 and non-deposit brokerage fees of $50,000.
Non-interest expense decreased $487,000, or 3.7%, primarily due to reductions in most categories of expenses, including $176,000 in other expenses, $127,000 in data processing services, $123,000 in occupancy expenses, and $73,000 in personnel expenses.
Credit Quality
Non-performing assets totaled $1.3 million, or 0.29% of total assets, at December 31, 2017 compared to $23,000, or 0.01% of total assets at December 31, 2016, an increase of $1.3 million. The balance is primarily one agricultural-related credit which was moved to non-accrual status during the first quarter of 2017.
The allowance for loan losses at December 31, 2017 was $4.7 million, or 1.26% of total loans, compared to $4.9 million, or 1.35% of total loans as of December 31, 2016. 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, 2017 were $465.4 million, compared to $455.4 million at December 31, 2016, an increase of $10.0 million or 2.2%. Loans increased $14.8 million, or 4.1%, from December 31, 2016 to December 31, 2017, while available-for-sale securities decreased $4.9 million, or 9.2% from December 31, 2016 to December 31, 2017. Deposits increased $1.9 million, or 0.5%, from December 31, 2016 to December 31, 2017. Borrowings from the Federal Home Loan Bank increased $5.0 million, or 14.3%, from December 31, 2016 to December 31, 2017.
Stockholders' equity increased to $45.8 million at December 31, 2017 from $42.4 million at December 31, 2016. The book value per common share and tangible book value per common share ratios were $18.14 and $16.47, respectively, at December 31, 2017 compared to $17.54 and $15.40, respectively, at December 31, 2016.
Quarterly Common Dividend
On January 18, 2018, the Board of Directors declared a quarterly cash dividend of $0.06 per common share payable February 15, 2018 to shareholders of record on February 2, 2018. Dividends paid during 2017 totaled $0.18 per common share. "Converting from a semiannual dividend to a quarterly dividend will minimize some confusion about the timing of our dividend. We believe this increased common dividend is consistent with our goal of maximizing total shareholder return," Kanipe added.
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) |
|||||||||
| (In Thousands, Except Share Data and ratios) |
|||||||||
| December 31, |
December 31, |
December 31, |
|||||||
| 2017 |
2016 |
2015 |
|||||||
| Assets |
|||||||||
| Cash and due from financial institutions |
$ |
6,444 |
$ |
8,542 |
$ |
8,865 |
|||
| Federal funds sold |
— |
— |
6,390 |
||||||
| Interest-bearing deposits in other financial institutions |
13,532 |
11,018 |
2,728 |
||||||
| Available-for-sale securities |
48,616 |
53,547 |
60,200 |
||||||
| Loans held for sale |
427 |
264 |
— |
||||||
| Loans |
374,239 |
359,391 |
330,782 |
||||||
| Allowance for loan losses |
(4,724) |
(4,854) |
(4,916) |
||||||
| Premises and equipment, net |
9,140 |
9,390 |
9,998 |
||||||
| Bank owned life insurance (BOLI) |
8,528 |
8,351 |
8,174 |
||||||
| Federal Home Loan Bank (FHLB) stock, at cost |
2,053 |
2,025 |
2,025 |
||||||
| Accrued interest receivable |
1,681 |
1,622 |
1,680 |
||||||
| Deferred income taxes |
670 |
1,464 |
1,328 |
||||||
| Goodwill and other intangible assets |
4,221 |
4,291 |
4,362 |
||||||
| Other real estate owned |
— |
— |
100 |
||||||
| Other assets |
555 |
371 |
465 |
||||||
| Total Assets |
$ |
465,382 |
$ |
455,422 |
$ |
432,181 |
|||
| Liabilities |
|||||||||
| Deposits |
|||||||||
| Noninterest bearing |
$ |
53,259 |
$ |
52,322 |
$ |
48,522 |
|||
| Savings, NOW and money market |
175,087 |
173,620 |
168,335 |
||||||
| Time |
143,968 |
144,497 |
153,531 |
||||||
| Total deposits |
372,314 |
370,439 |
370,388 |
||||||
| FHLB advances and other borrowings |
40,000 |
35,000 |
15,000 |
||||||
| Subordinated debentures |
5,000 |
5,000 |
5,000 |
||||||
| Accrued interest payable |
285 |
220 |
213 |
||||||
| Other liabilities |
1,949 |
2,399 |
2,056 |
||||||
| Total Liabilities |
419,548 |
413,058 |
392,657 |
||||||
| Stockholders' Equity |
|||||||||
| 6.5% Cumulative convertible preferred stock |
— |
7,261 |
7,659 |
||||||
| Common stock |
33,138 |
25,920 |
25,406 |
||||||
| Retained earnings |
13,142 |
9,706 |
6,304 |
||||||
| Accumulated other comprehensive income (loss) |
(446) |
(523) |
155 |
||||||
| Total stockholders' equity |
45,834 |
42,364 |
39,524 |
||||||
| Total liabilities and stockholders' equity |
$ |
465,382 |
$ |
455,422 |
$ |
432,181 |
|||
| Consolidated Financial Highlights (Unaudited) |
|||||||||||||||
| Three months ended |
|||||||||||||||
| (In Thousands, Except Per Share Data and ratios) |
|||||||||||||||
| December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
|||||||||||
| 2017 |
2017 |
2017 |
2017 |
2016 |
|||||||||||
| Interest and dividend income |
$ |
4,905 |
$ |
4,640 |
$ |
4,593 |
$ |
4,457 |
$ |
4,572 |
|||||
| Interest expense |
858 |
777 |
726 |
677 |
652 |
||||||||||
| Net interest income |
4,047 |
3,863 |
3,867 |
3,780 |
3,920 |
||||||||||
| Provision (credit) for loan losses |
(150) |
(30) |
— |
30 |
— |
||||||||||
| Non-interest income |
|||||||||||||||
| Service charges on deposit accounts |
315 |
317 |
327 |
278 |
371 |
||||||||||
| Other service charges and fees |
288 |
317 |
301 |
264 |
245 |
||||||||||
| Gain on sale of mortgage loans |
82 |
79 |
88 |
68 |
97 |
||||||||||
| Non-deposit brokerage fees |
97 |
90 |
91 |
87 |
85 |
||||||||||
| Lease income |
52 |
53 |
80 |
52 |
52 |
||||||||||
| BOLI income |
45 |
44 |
45 |
43 |
44 |
||||||||||
| Gain on sale of securities |
— |
25 |
— |
23 |
— |
||||||||||
| Total non-interest income |
879 |
925 |
932 |
815 |
894 |
||||||||||
| Non-interest expenses: |
|||||||||||||||
| Personnel expense |
1,740 |
1,673 |
1,655 |
1,734 |
1,741 |
||||||||||
| Net occupancy expense |
448 |
449 |
446 |
461 |
471 |
||||||||||
| Advertising and public relations |
78 |
111 |
77 |
71 |
75 |
||||||||||
| Professional fees |
86 |
160 |
171 |
130 |
50 |
||||||||||
| Data processing services |
192 |
214 |
251 |
253 |
256 |
||||||||||
| Franchise shares and deposit tax |
88 |
132 |
132 |
132 |
132 |
||||||||||
| FDIC insurance |
47 |
52 |
49 |
49 |
47 |
||||||||||
| Other |
433 |
415 |
432 |
461 |
458 |
||||||||||
| Total non-interest expenses |
3,112 |
3,206 |
3,213 |
3,291 |
3,230 |
||||||||||
| Income before income taxes |
1,964 |
1,612 |
1,586 |
1,274 |
1,584 |
||||||||||
| Income taxes |
1,012 |
490 |
478 |
367 |
481 |
||||||||||
| Net income |
952 |
1,122 |
1,108 |
907 |
1,103 |
||||||||||
| Dividends on preferred stock |
— |
— |
119 |
119 |
124 |
||||||||||
| Net income available for common stockholders |
$ |
952 |
$ |
1,122 |
$ |
989 |
$ |
788 |
$ |
979 |
|||||
| Basic earnings per common share |
$ |
0.38 |
$ |
0.44 |
$ |
0.47 |
$ |
0.39 |
$ |
0.49 |
|||||
| Diluted earnings per common share |
$ |
0.37 |
$ |
0.44 |
$ |
0.43 |
$ |
0.36 |
$ |
0.43 |
|||||
| Consolidated Financial Highlights (Unaudited) |
||||||||||||||||
| Three months ended |
||||||||||||||||
| (In Thousands, Except Per Share Data and ratios) |
||||||||||||||||
| December 31, |
September 30, |
June 30, |
March 31, |
December 31, |
||||||||||||
| 2017 |
2017 |
2017 |
2017 |
2016 |
||||||||||||
| Average: |
||||||||||||||||
| Assets |
$ |
462,966 |
$ |
449,770 |
$ |
454,524 |
$ |
452,265 |
$ |
444,168 |
||||||
| Earning Assets |
435,458 |
422,258 |
427,674 |
424,349 |
417,161 |
|||||||||||
| Loans |
370,173 |
362,343 |
363,733 |
363,824 |
347,046 |
|||||||||||
| Interest-bearing deposits |
317,196 |
312,668 |
319,883 |
314,939 |
310,336 |
|||||||||||
| Deposits |
369,643 |
364,798 |
368,743 |
364,227 |
360,816 |
|||||||||||
| Borrowed funds |
45,000 |
37,696 |
39,769 |
43,078 |
38,429 |
|||||||||||
| Equity |
45,907 |
44,916 |
44,047 |
42,827 |
42,652 |
|||||||||||
| Common equity |
45,907 |
44,916 |
38,240 |
35,718 |
35,391 |
|||||||||||
| Return on average assets |
0.82 |
% |
0.99 |
% |
0.98 |
% |
0.81 |
% |
0.99 |
% |
||||||
| Return on average equity |
8.23 |
% |
9.91 |
% |
10.09 |
% |
8.59 |
% |
10.29 |
% |
||||||
| Efficiency ratio |
62.46 |
% |
66.51 |
% |
66.10 |
% |
70.96 |
% |
66.2 |
% |
||||||
| Non-interest income to average assets |
0.75 |
% |
0.82 |
% |
0.82 |
% |
0.73 |
% |
0.80 |
% |
||||||
| Non-interest expenses to average assets |
2.67 |
% |
2.83 |
% |
2.84 |
% |
2.95 |
% |
2.89 |
% |
||||||
| Net overhead to average assets |
1.91 |
% |
2.01 |
% |
2.01 |
% |
2.22 |
% |
2.09 |
% |
||||||
| Yield on loans |
4.88 |
% |
4.73 |
% |
4.69 |
% |
4.60 |
% |
4.86 |
% |
||||||
| Yield on investment securities (TE) |
2.77 |
% |
2.68 |
% |
2.85 |
% |
2.87 |
% |
2.58 |
% |
||||||
| Yield on average earning assets (TE) |
4.52 |
% |
4.41 |
% |
4.37 |
% |
4.32 |
% |
4.42 |
% |
||||||
| Cost of average interest bearing liabilities |
0.94 |
% |
0.88 |
% |
0.81 |
% |
0.77 |
% |
0.74 |
% |
||||||
| Net interest margin (TE) |
3.74 |
% |
3.68 |
% |
3.69 |
% |
3.68 |
% |
3.80 |
% |
||||||
| Number of FTE employees |
98 |
97 |
95 |
94 |
95 |
|||||||||||
| Asset Quality Indicators: |
||||||||||||||||
| Non-performing loans to total loans |
0.36 |
% |
0.73 |
% |
0.8 |
% |
0.83 |
% |
0.01 |
% |
||||||
| Non-performing assets to total assets |
0.29 |
% |
0.58 |
% |
0.63 |
% |
0.65 |
% |
0.01 |
% |
||||||
| Allowance for loan losses to total loans |
1.26 |
% |
1.34 |
% |
1.36 |
% |
1.34 |
% |
1.35 |
% |
||||||
| YTD net charge-offs (recoveries) to average loans, annualized |
(0.01) |
% |
— |
% |
(0.01) |
% |
(0.02) |
% |
(0.01) |
% |
||||||
| YTD net charge-offs (recoveries) |
(22) |
2 |
(13) |
(22) |
(23) |
|||||||||||
| Consolidated Financial Highlights (Unaudited) |
|||||||
| Year Ended |
|||||||
| December 31, |
December 31, |
||||||
| 2017 |
2016 |
||||||
| Interest and dividend income |
$ |
18,595 |
$ |
18,141 |
|||
| Interest expense |
3,038 |
2,528 |
|||||
| Net interest income |
15,557 |
15,613 |
|||||
| Provision (credit) for loan losses |
(150) |
(85) |
|||||
| Non-interest income |
|||||||
| Service charges on deposit accounts |
1,237 |
1,396 |
|||||
| Other service charges and fees |
1,170 |
1,027 |
|||||
| Gain on sale of mortgage loans |
317 |
375 |
|||||
| Non-deposit brokerage fees |
365 |
315 |
|||||
| Lease income |
237 |
207 |
|||||
| BOLI income |
177 |
177 |
|||||
| Gain on sale of securities |
48 |
126 |
|||||
| Total non-interest income |
3,551 |
3,623 |
|||||
| Non-interest expenses: |
|||||||
| Personnel expense |
6,802 |
6,875 |
|||||
| Net occupancy expense |
1,804 |
1,927 |
|||||
| Advertising and public relations |
337 |
320 |
|||||
| Professional fees |
547 |
465 |
|||||
| Data processing services |
910 |
1,037 |
|||||
| Franchise shares and deposit tax |
484 |
528 |
|||||
| FDIC insurance |
197 |
223 |
|||||
| Other real estate owned expenses |
— |
17 |
|||||
| Other |
1,741 |
1,917 |
|||||
| Total non-interest expenses |
12,822 |
13,309 |
|||||
| Income before income taxes |
6,436 |
6,012 |
|||||
| Income taxes |
2,347 |
1,795 |
|||||
| Net income |
4,089 |
4,217 |
|||||
| Dividends on preferred stock |
238 |
495 |
|||||
| Net income available for common stockholders |
$ |
3,851 |
$ |
3,722 |
|||
| Basic earnings per common share |
$ |
1.68 |
$ |
1.86 |
|||
| Diluted earnings per common share |
$ |
1.60 |
$ |
1.66 |
|||
| Consolidated Financial Highlights (Unaudited) |
|||||||
| Twelve Months Ended |
|||||||
| (In Thousands, Except Per |
|||||||
| Share Data and ratios) |
|||||||
| December 31, |
December 31, |
||||||
| 2017 |
2016 |
||||||
| Average: |
|||||||
| Assets |
$ |
454,897 |
$ |
439,628 |
|||
| Earning Assets |
427,451 |
411,049 |
|||||
| Loans |
365,028 |
340,836 |
|||||
| Interest-bearing deposits |
316,168 |
311,138 |
|||||
| Deposits |
366,862 |
360,827 |
|||||
| Borrowed funds |
41,381 |
35,075 |
|||||
| Equity |
44,434 |
41,345 |
|||||
| Common equity |
41,233 |
34,068 |
|||||
| Return on average assets |
0.90 |
% |
0.96 |
% |
|||
| Return on average equity |
9.20 |
% |
10.20 |
% |
|||
| Efficiency ratio |
66.43 |
% |
67.99 |
% |
|||
| Non-interest income to average assets |
0.78 |
% |
0.74 |
% |
|||
| Non-interest expenses to average assets |
2.82 |
% |
2.95 |
% |
|||
| Net overhead to average assets |
2.04 |
% |
2.20 |
% |
|||
| Yield on loans |
4.72 |
% |
4.90 |
% |
|||
| Yield on investment securities (TE) |
2.79 |
% |
2.70 |
% |
|||
| Yield on average earning assets (TE) |
4.41 |
% |
4.49 |
% |
|||
| Cost of average interest bearing liabilities |
0.85 |
% |
0.73 |
% |
|||
| Net interest margin (TE) |
3.70 |
% |
3.87 |
% |
|||
| Number of FTE employees |
98 |
95 |
|||||
| Consolidated Financial Highlights (Unaudited) |
||||||||||
| (In Thousands, Except Share Data and ratios) |
||||||||||
| December 31, |
December 31, |
December 31, |
||||||||
| Consolidated Capital Ratios |
2017 |
2016 |
2015 |
|||||||
| Total shareholders' equity to total assets ratio |
9.85 |
% |
9.30 |
% |
9.15 |
% |
||||
| Tangible equity ratio (1) |
9.02 |
% |
8.44 |
% |
8.22 |
% |
||||
| Tangible common equity ratio (1) |
9.02 |
% |
6.83 |
% |
6.43 |
% |
||||
| Book value per common share |
$ |
18.14 |
$ |
17.54 |
$ |
16.18 |
||||
| Tangible book value per common share (1) |
$ |
16.47 |
$ |
15.40 |
$ |
13.97 |
||||
| End of period common share closing price |
$ |
24.00 |
$ |
18.00 |
$ |
13.74 |
||||
| (1) The tangible equity ratio, tangible common equity ratio and tangible book value per common share, while not |
||||||||||
| (In Thousands, Except Share Data and ratios) |
||||||||||
| December 31, |
December 31, |
December 31, |
||||||||
| Regulation G Non-GAAP Reconciliation: |
2017 |
2016 |
2015 |
|||||||
| Total shareholders' equity (a) |
$ |
45,834 |
$ |
42,364 |
$ |
39,524 |
||||
| Less: |
||||||||||
| Preferred stock |
— |
(7,261) |
(7,659) |
|||||||
| Common equity (b) |
45,834 |
35,103 |
31,865 |
|||||||
| Goodwill |
(4,097) |
(4,097) |
(4,097) |
|||||||
| Intangible assets |
(124) |
(194) |
(265) |
|||||||
| Tangible common equity (c) |
41,613 |
30,812 |
27,503 |
|||||||
| Add: |
||||||||||
| Preferred stock |
— |
7,261 |
7,659 |
|||||||
| Tangible equity (d) |
41,613 |
38,073 |
35,162 |
|||||||
| Total assets (e) |
465,382 |
455,422 |
432,181 |
|||||||
| Less: |
||||||||||
| Goodwill |
(4,097) |
(4,097) |
(4,097) |
|||||||
| Intangible assets |
(124) |
(194) |
(265) |
|||||||
| Tangible assets (f) |
$ |
461,161 |
$ |
451,131 |
$ |
427,819 |
||||
| Shares outstanding (in thousands) (g) |
2,526 |
2,001 |
1,969 |
|||||||
| Book value per common share (b/g) |
$ |
18.14 |
$ |
17.54 |
$ |
16.18 |
||||
| Tangible book value per common share (c/g) |
$ |
16.47 |
$ |
15.40 |
$ |
13.97 |
||||
| Equity to assets ratio (a/e) |
9.85 |
% |
9.30 |
% |
9.15 |
% |
||||
| Tangible equity ratio (d/f) |
9.02 |
% |
8.44 |
% |
8.22 |
% |
||||
| Common equity ratio (b/e) |
9.85 |
% |
7.71 |
% |
7.37 |
% |
||||
| Tangible common equity ratio (c/f) |
9.02 |
% |
6.83 |
% |
6.43 |
% |
||||
| Regulation G non-GAAP Reconciliation: |
Diluted Earnings Per Share |
|||||||||||
| EPS Impact |
EPS Excluding |
|||||||||||
| Impact on |
of Tax |
Reported EPS |
Impact of Tax |
|||||||||
| Net Income |
Legislation |
(GAAP) |
Legislation (non-GAAP) |
|||||||||
| Tax legislation |
$ |
401 |
$ |
0.16 |
$ |
$ |
||||||
| 4th quarter 2017 impact |
401 |
0.16 |
0.37 |
0.53 |
||||||||
| 2017 full year impact |
401 |
0.16 |
1.60 |
1.76 |
||||||||
SOURCE Citizens First Corporation
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