Citizens First Corporation Announces Third Quarter 2017 Results, Increase in Common Dividend and Election of Two Corporate Directors

BOWLING GREEN, Ky., Oct. 19, 2017 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the nine months ended September 30, 2017 which include the following:

For the quarter ended September 30, 2017 the Company reported net income of $1.12 million, or $0.44 per diluted common share.  This represents a decrease of $13,000 from $1.14 million, or $0.45 per diluted common share, for the quarter ended September 30, 2016.  For the nine months ended September 30, 2017, net income totaled $3.14 million, or $1.23 per diluted common share.  This represents an increase of $23,000 from the net income of $3.11 million in the first nine months of the previous year.   "While profitability improved over the previous year, it was due primarily to lower operating expenses and credit costs," said Todd Kanipe, President and CEO.

Income Statement Third Quarter 2017 Compared to Third Quarter 2016

Net interest income decreased $55,000, or 1.4%, as the yield on loans decreased and the cost of funds increased from the third quarter of the prior year.  The Company's net interest margin was 3.68% for the quarter ended September 30, 2017, compared to 3.83% for the quarter ended September 30, 2016, a decrease of 15 basis points.  The Company's net interest margin decreased primarily due to a decline in the yield on loans and an increase in the cost of interest-bearing liabilities.

There was a ($30,000) (credit) provision for loan losses in the third quarter of the current year compared to no provision in the third quarter of the prior year.

Non-interest income decreased $17,000, or 1.8%, from the prior year primarily due to a decrease in service charges on deposit accounts of $44,000 and gain on sale of mortgage loans of $31,000, partially offset by an increase in other service charges and fees of $55,000.

Non-interest expense decreased $29,000, or 0.9%, from the prior year primarily due to a decrease in data processing services of $48,000 and other expenses of $37,000, partially offset by an increase in professional fees of $62,000.

Income Statement Current Year Compared to Prior Year

Net interest income decreased $183,000, or 1.6%, as the yield on loans decreased and the cost of funds increased from the prior year.  The Company's net interest margin was 3.68% for the nine months ended September 30, 2017, and 3.89% for the nine months ended September 30, 2016, a decrease of 21 basis points.  The Company's net interest margin decreased due to a decrease in the yield on average earning assets coupled with an increase in the cost of average interest-bearing liabilities.

Non-interest income decreased $57,000, or 2.1%, primarily due to a reduction in gains on the sale of securities of $78,000 and a decrease in service charges on deposit accounts of $103,000, offset by an increase in other service charges and fees of $100,000 and non-deposit brokerage fees of $38,000.

Non-interest expense decreased $369,000, or 3.7%, primarily due to reductions in most categories of expenses, including $152,000 in other expenses, $72,000 in personnel expenses and $100,000 in occupancy expenses.

Credit Quality

Non-performing assets totaled $2.6 million, or 0.58% of total assets, at September 30, 2017 compared to $23,000, or 0.01% of total assets at December 31, 2016, an increase of $2.6 million.   Two agricultural-related credits were moved to non-accrual status during the first quarter of 2017.  Collateral underlying one agricultural credit was sold at auction during the third quarter, and full payment of the loan principal in the amount of $1.2 million is anticipated to be received during the fourth quarter.

The allowance for loan losses at September 30, 2017 was $4.9 million, or 1.34% 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 September 30, 2017 were $455.4 million, the same level as December 31, 2016.  Loans increased $2.8 million, or 0.8%, from December 31, 2016 to September 30, 2017.  "Loan growth in the third quarter was lower than anticipated; however, we remain encouraged by our pipeline for the remainder of the year and improving loan demand in our markets," Kanipe noted.  Deposits, primarily time deposits, decreased $7.8 million, or 2.1%, from December 31, 2016 to September 30, 2017.  Borrowings from the Federal Home Loan Bank increased $5.0 million, or 14.3%, from December 31, 2016 to September 30, 2017.

Stockholders' equity increased to $45.4 million at September 30, 2017 from $42.4 million at December 31, 2016.  The book value per common share and tangible book value per common share ratios were $17.99 and $16.31, respectively, at September 30, 2017 compared to $17.54 and $15.40, respectively, at December 31, 2016. 

Increase in Common Dividend

On October 19, 2017, the Board of Directors declared a cash dividend of $0.10 per common share payable November 16, 2017 to shareholders of record as of October 27, 2017, which represents a 25% increase in the semiannual dividend.  Dividends were most recently paid in May, 2017 at $0.08 per common share.  "Completing the conversion of preferred shares and eliminating the related costs in the second quarter of this year now gives us the ability to return more capital to our common shareholders.  We believe this increased common dividend is consistent with our goal of maximizing total shareholder return," Kanipe added.

Appointment of Corporate Directors

On October 19, 2017, the Board of Directors appointed Mark Iverson as a Class II director of the Company and of the Bank, effective immediately, and Jeff Perkins as a Class II director of the Company and of the Bank, effective immediately.  "These gentlemen bring significant executive and financial experience to our board room as well as an understanding of the needs of consumer and business customers in our core markets," Kanipe commented.

Mark Iverson, age 55, is a Certified Public Accountant, and the General Manager of Bowling Green Municipal Utilities in Bowling Green, Kentucky.  Mr. Iverson graduated from Western Kentucky University and currently resides in Bowling Green, Kentucky.  He serves on the Board of Directors of the Tennessee Valley Public Power Association and previously served as Chairman of the Board of the Bowling Green Area Chamber of Commerce.  It is expected that Mr. Iverson will serve on the Audit and Governance Committees of the Board.

Jeff Perkins, age 55, is a Certified Public Accountant and the President of Mid-South Lumber and Supply Company in Bowling Green, Kentucky.  Mr. Perkins graduated from Western Kentucky University and currently resides in Franklin, Kentucky. He has served as President of the Kentucky Building Material Association and served on the board and finance committees of the Independent Builders Supply Association.  It is expected that Mr. Perkins will serve on the Audit and Compensation Committees of the Board.

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.

SOURCE Citizens First Corporation

Related Links

http://www.citizensfirstbank.com