Citizens First Corporation Announces Third Quarter 2018 Results

BOWLING GREEN, Ky., Oct. 18, 2018 /PRNewswire/ -- Citizens First Corporation (NASDAQ: CZFC) today reported results for the third quarter ended September 30, 2018 which include the following:

For the quarter ended September 30, 2018 the Company reported net income of $1.20 million, or $0.47 per diluted common share (EPS).  This represents a 6.8% increase or $76,000 from the $1.12 million, or $0.44 per diluted common share, for the quarter ended September 30, 2017.  For the nine months ended September 30, 2018, net income totaled $3.66 million, or $1.44 per diluted common share.  This represents an increase of $519,000, a 16.5% increase, or $0.21 per diluted common share, from the net income of $3.14 million in the first nine months of the previous year.  "While profitability improved over 2017, margin pressure and softening loan demand continue to present challenges for us," said Todd Kanipe, President and CEO.  "Market competition for deposits has intensified.  As a result, cost of funding has outpaced improvements in loan yields," Kanipe added.

Income Statement Third Quarter 2018 Compared to Third Quarter 2017

Net interest income increased $49,000, or 1.3%, for the third quarter of the current year compared to the third quarter of the prior year.  The Company's net interest margin was 3.43% for the quarter ended September 30, 2018, compared to 3.68% for the quarter ended September 30, 2017, a decrease of 25 basis points.  The Company's net interest margin decreased primarily due to an increase in the cost of interest-bearing liabilities which exceeded the increase in the yield on earning assets.

There was a $30,000 provision for loan losses in the third quarter of the current year compared to a $30,000 credit for loan losses in the third quarter of the prior year.

Non-interest income decreased $13,000, or 1.4%, from the prior year primarily due to a decrease in service charges on deposit accounts of $26,000 and a decrease in gains on sale of securities of $25,000, offset by an increase in non-deposit brokerage fees of $20,000 and gain on sale of mortgage loans of $16,000.

Non-interest expenses increased $79,000, or 2.5%, from the prior year primarily due to an increase in personnel expense of $57,000, and an increase in other expense of $55,000.

Income tax expenses decreased $179,000, or 36.5% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017.

Income Statement Current Year Compared to Prior Year

Net interest income increased $400,000, or 3.5%, from the prior year.  The Company's net interest margin was 3.55% for the nine months ended September 30, 2018, and 3.68% for the nine months ended September 30, 2017, a decrease of 13 basis points.  The Company's net interest margin decreased due to an increase in the cost of average interest-bearing liabilities.

There was a $90,000 provision for loan losses in the current year compared to no provision in the previous year.

Non-interest income decreased $16,000, or 0.6%, primarily due to a decrease in service charges on deposit accounts of $24,000, a reduction in gains on sale of mortgage loans of $21,000 and gains on the sale of securities of $48,000, offset by an increase in other service charges and fees of $37,000 and non-deposit brokerage fees of $42,000.

Non-interest expense increased $225,000, or 2.3%, primarily due to an increase of $287,000 in personnel expenses and $82,000 increase in other expenses offset by a decrease of $111,000 in data processing services.

Income tax expenses decreased $450,000, or 33.7% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017.

Credit Quality

Non-performing assets totaled $2.0 million, or 0.43% of total assets, at September 30, 2018 compared to $1.3 million, or 0.29% of total assets at December 31, 2017, an increase of approximately $670,000.   The increase is primarily attributable to one credit secured by real estate which was moved to non-accrual status during the first quarter of 2018. 

The allowance for loan losses at September 30, 2018 was $4.8 million, or 1.29% of total loans, compared to $4.7 million, or 1.26% of total loans as of December 31, 2017.  The Company considers 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 the Company's loan portfolio.

Balance Sheet

Total assets at September 30, 2018 were $473.7 million, compared to $465.4 million at December 31, 2017. Loans decreased $3.6 million, or 1%, from December 31, 2017 to September 30, 2018. Deposits increased $10.3 million, or 2.8%, from December 31, 2017 to September 30, 2018.  Borrowings from the Federal Home Loan Bank decreased $5.0 million, or 12.5%, from December 31, 2017 to September 30, 2018.

Stockholders' equity increased to $48.6 million at September 30, 2018 from $45.8 million at December 31, 2017.  The book value per common share and tangible book value per common share ratios were $19.14 and $17.50, respectively, at September 30, 2018 compared to $18.14 and $16.47, respectively, at December 31, 2017. 

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

Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income

Consolidated Financial Highlights (Unaudited)
Key Operating Statistics

Consolidated Financial Highlights (Unaudited)
Consolidated Statement of Income

Consolidated Financial Highlights (Unaudited)
Key Operating Statistics

Consolidated Financial Highlights (Unaudited)

(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.

SOURCE Citizens First Corporation