Citizens First Corporation Announces Second Quarter 2012 Results

BOWLING GREEN, Ky., July 19, 2012 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the second quarter ending June 30, 2012, which include the following:

• For the quarter ended June 30, 2012, the Company reported net income of $726,000, or $.24 per diluted common share.  This represents a decrease of $82,000, or $.05 per share, from the linked quarter ended March 31, 2012.  Compared to the quarter ended June 30 a year ago, net income decreased $2,000 or $.01 per share.  Provision for loan losses was $450,000 for the second quarter of 2012 compared to $370,000 for the linked quarter ended March 31, 2012 and $300,000 for the quarter ended June 30, 2011. Todd Kanipe, President & CEO of Citizens First commented, "Our earnings declined this quarter due to increased provision expense and margin compression.  While interest income was adversely impacted by nonaccrual loans and repricing within the portfolio, our year-to-date net interest margin remains strong at 4.06%."
• For the six months ended June 30, 2012, net income grew to $1.5 million, or $.53 per diluted common share.  This represents an increase of $90,000, or $0.07 per share, from the net income of $1.4 million in the previous year.
• The Company's net interest margin was 4.06% for the quarter ended June 30, 2012 compared to 4.17% for the quarter ended March 31, 2012 and 4.01% for the quarter ended June 30, 2011, a decrease of 11 basis points for the linked quarter and an increase of 5 basis points from the prior year.  The Company's net interest margin declined from the previous quarter due to a decrease in loan income for the quarter.  Net interest margin for the year was 4.12% compared to 4.06% in the previous year.
• Nonperforming assets increased to $7.9 million at June 30, 2012 compared to $4.9 million at December 31, 2011 and from $4.1 million at June 30, 2011.  The increase in nonperforming assets is primarily attributable to a commercial real estate loan in the hospitality industry totaling $3.9 million which was placed on a nonaccrual status during the second quarter of 2012.

Second Quarter 2012 Compared to First Quarter 2012

Net interest income for the quarter ended June 30, 2012 decreased $16,000, or 0.4%, compared to the previous quarter.  Net interest income decreased due to a decrease in loan income of $42,000, which is primarily attributable to the increase in nonaccrual loans.

Non-interest income for the three months ended June 30, 2012 increased $97,000, or 13.9%, compared to the previous quarter, primarily due to an increase in security gains of $55,000.

Non-interest expense for the three months ended June 30, 2012 increased $120,000, or 4.1%, compared to the previous quarter, primarily due to an increase in other expenses of $95,000.  Other real estate expenses increased $60,000 due to the sale of two properties during the quarter.

A $450,000 provision for loan losses was recorded for the second quarter of 2012, compared to a $370,000 provision in the previous quarter.  The provision expense was higher in the second quarter of 2012 as a result of an increase in net charge-offs.  Net charge-offs were $479,000 for the second quarter of 2012 compared to $307,000 in the first quarter of 2012.

Second Quarter 2012 Compared to Second Quarter 2011

Net interest income for the quarter ended June 30, 2012 increased $446,000, or 13.8%, compared to the previous year.  The increase in net interest income was impacted by a reduction in interest expense of $199,000 combined with an increase in interest income of $247,000. The increase in interest income was fueled by the growth in average loans for the second quarter of 2012 compared to the second quarter of 2011.

Non-interest income for the three months ended June 30, 2012 increased $33,000, or 4.3%, compared to the three months ended June 30, 2011, primarily due to an increase in other services charges and fees of $30,000 from the prior year.

Non-interest expense for the three months ended June 30, 2012 increased $325,000, or 11.9%, compared to the three months ended June 30, 2011, primarily due to an increase in personnel expenses totaling $213,000 and other expenses totaling $96,000.

A $450,000 provision for loan losses was recorded for the second quarter of 2012, compared to a $300,000 provision in the second quarter of 2011, an increase of $150,000, or 50.0%.  Net charge-offs were $479,000 for the second quarter of 2012 compared to net charge-offs of $89,000 in the second quarter of 2011.  The provision expense increased due to the increase in net charge-offs and the growth of the loan portfolio.

Balance Sheet

Total assets at June 30, 2012 were $396.9 million, a decrease of $6.9 million from $403.8 million at December 31, 2011.  Loans increased $5.6 million, or 1.9%, from $294.4 million at December 31, 2011 to $300.0 million at June 30, 2012.  Deposits at June 30, 2012 were $320.8 million, a decrease of $11.9 million, or 3.6%, compared to $332.7 million at December 31, 2011. 

Non-performing assets totaled $7.9 million at June 30, 2012 compared to $4.9 million at December 31, 2011, an increase of $3.0 million.  A commercial real estate loan of $3.9 million was placed on nonaccrual status during the second quarter.  The allowance for loan losses at June 30, 2012 was $5.9 million, or 1.97% of total loans, compared to $5.9 million, or 1.99% of total loans as of December 31, 2011.

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

At June 30, 2012, total shareholders' equity was $40.2 million and total tangible shareholders' equity was $34.9 million.  The Company's tangible equity ratio was 8.91% as of June 30, 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.

SOURCE Citizens First Corporation

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