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Citizens First Corporation Announces Fourth Quarter and Year End 2018 Results, Declares Quarterly Common Dividend

BOWLING GREEN, Ky. , Jan. 22, 2019 /PRNewswire/ -- Citizens First Corporation ( CZFC ) today reported results for the year ended December 31, 2018 which include the following:

For the quarter ended December 31, 2018 the Company reported net income of $1.16 million , or $0.45 per diluted common share (EPS).  This represents a 22% increase or $211,000 from the $952,000 , or $0.37 per diluted common share, for the quarter ended December 31, 2017 .  For the twelve months ended December 31, 2018 , net income totaled $4.82 million , or $1.89 per diluted common share.  This represents an increase of $731,000 , an 18% increase, or $0.29 per diluted common share, from the net income of $4.09 million in the previous year. "Despite challenges in the second half of the year, our company produced record earnings per share in 2018," said Todd Kanipe , President and CEO. "Aided by low credit costs and decreased tax expense, diluted earnings per share improved 18% over 2017," Kanipe said.  "While funding costs in our markets have moderated, we expect deposit competition and loan demand to remain challenging in 2019," Kanipe added.

Income Statement Fourth Quarter 2018 Compared to Fourth Quarter 2017

Net interest income decreased $212,000 , or 5.2%, for the fourth quarter of 2018 compared to the fourth quarter of the prior year.  The Company's net interest margin was 3.43% for the quarter ended December 31, 2018 , compared to 3.74% for the quarter ended December 31, 2017 , a decrease of 31 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 $70,000 provision for loan losses in the fourth quarter of the current year compared to a $150,000 credit for loan losses in the fourth quarter of the prior year.

Non-interest income increased $73,000 , or 8.3%, from the prior year primarily due to a increase in service charges on deposit accounts of $17,000 ,  an increase in gains on sale of mortgage loans of $24,000 ,  an increase in non-deposit brokerage fees of $12,000 and an increase in other service charges and fees of $19,000 .

Non-interest expenses increased $202,000 , or 6.5%, from the prior year primarily due to an increase in personnel expense of $72,000 , an increase in professional fees of $68,000 , and an increase in franchise taxes of $32,000 .

Income tax expenses decreased $772,000 , or 76.3% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017, as well as additional expense related to the deferred tax asset being revalued in 2017.

Income Statement Current Year Compared to Prior Year

Net interest income increased $188,000 , or 1.2%, from the prior year.  The Company's net interest margin was 3.52% for the year ended December 31, 2018 , and 3.70% for the year ended December 31, 2017 , a decrease of 18 basis points.  The Company's net interest margin decreased due to an increase in the cost of average interest-bearing liabilities.

There was a $160,000 provision for loan losses in the current year compared to a $150,000 credit in the previous year, an increase of $310,000 .

Non-interest income increased $57,000 , or 1.6%, primarily due to an increase in other service charges and fees of $56,000 and non-deposit brokerage fees of $54,000 , offset by gains on the sale of securities of $48,000 in the prior year.

Non-interest expense increased $427,000 , or 3.3%, primarily due to an increase of $359,000 in personnel expenses, $99,000 in professional fees and $103,000 increase in other expenses, offset by a decrease of $101,000 in data processing services.

Income tax expenses decreased $1.2 million , or 52.1% due to a marginal rate of 21% in 2018 compared to a rate of 34% in 2017, as well as additional expense related to the deferred tax asset being revalued in 2017.

Credit Quality

Non-performing assets totaled $1.3 million , or 0.27% of total assets, at December 31, 2018 compared to $1.3 million , or 0.29% of total assets at December 31, 2017 , a decrease of approximately $46,000 .   The allowance for loan losses at December 31, 2018 was $4.4 million , or 1.18% 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 December 31, 2018 were $476.0 million , compared to $465.4 million at December 31, 2017 , an increase of 2.3%. Loans decreased $2.7 million , or 0.7%, from December 31, 2017 to December 31, 2018. Deposits increased $16.3 million , or 4.4%, from December 31, 2017 to December 31, 2018.  Borrowings from the Federal Home Loan Bank decreased $10.0 million , or 25.0%, from December 31, 2017 to December 31, 2018.

Stockholders' equity increased to $50.0 million at December 31, 2018 from $45.8 million at December 31, 2017 , an increase of $4.2 million or 9.2%.  The book value per common share and tangible book value per common share ratios were $19.71 and $18.07 , respectively, at December 31, 2018 compared to $18.14 and $16.47 , respectively, at December 31 , 2017.

Quarterly Common Dividend Payable February 21

On January 17, 2019 , the Board of Directors declared a quarterly cash dividend of $0.07 per common share payable February 21, 2019 to shareholders of record on February 4 , 2019.

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
Per Share Data and ratios)



December 31, 


December 31, 


December 31, 



2018


2017


2016

Assets










Cash and due from financial institutions


$

8,875


$

6,444


$

8,542

Federal funds sold



10,000





Interest-bearing deposits in other financial institutions



16,010



13,532



11,018

Available-for-sale securities



47,098



48,616



53,547

Loans held for sale



269



427



264

Loans



371,544



374,239



359,391

Allowance for loan losses



(4,373)



(4,724)



(4,854)

Premises and equipment, net



8,861



9,140



9,390

Bank owned life insurance (BOLI)



8,705



8,528



8,351

Federal Home Loan Bank (FHLB) stock, at cost



2,065



2,053



2,025

Accrued interest receivable



1,683



1,681



1,622

Deferred income taxes



545



670



1,464

Goodwill and other intangible assets



4,150



4,221



4,291

Other assets



550



555



371

Total Assets


$

475,982


$

465,382


$

455,422

Liabilities










Deposits










Noninterest bearing


$

55,006


$

53,259


$

52,322

Savings, NOW and money market



192,762



175,087



173,620

Time



140,841



143,968



144,497

Total deposits



388,609



372,314



370,439

FHLB advances and other borrowings



30,000



40,000



35,000

Subordinated debentures



5,000



5,000



5,000

Accrued interest payable



410



285



220

Other liabilities



1,944



1,949



2,399

Total Liabilities



425,963



419,548



413,058

Stockholders' Equity










6.5% Cumulative convertible preferred stock







7,261

Common stock



33,309



33,138



25,920

Retained earnings



17,365



13,142



9,706

Accumulated other comprehensive (loss)



(655)



(446)



(523)

Total stockholders' equity



50,019



45,834



42,364

Total liabilities and stockholders' equity


$

475,982


$

465,382


$

455,422

Consolidated Financial Highlights (Unaudited)

Consolidated Statement of Income





Three months ended



(In Thousands, Except Per Share Data and ratios)



December 31, 


September 30, 


June 30, 


March 31, 


December 31, 



2018


2018


2018


2018


2017

Interest and dividend income


$

5,112


$

5,094


$

5,162


$

4,860


$

4,905

Interest expense



1,277



1,182



1,064



960



858

   Net interest income



3,835



3,912



4,098



3,900



4,047

















Provision (credit) for loan losses



70



30



30



30



(150)

















Non-interest income
















Service charges on deposit accounts



332



291



309



298



315

Other service charges and fees



307



319



319



281



288

Gain on sale of mortgage loans



106



95



69



50



82

Non-deposit brokerage fees



109



110



101



99



97

Lease income



53



52



79



52



52

BOLI income



45



45



44



43



45

Total non-interest income



952



912



921



823



879

















Non-interest expenses:
















Personnel expense



1,812



1,730



1,773



1,846



1,740

Net occupancy expense



436



457



432



453



448

Advertising and public relations



91



102



85



81



78

Professional fees



154



156



172



164



86

Data processing services



202



208



205



194



192

Franchise shares and deposit tax



120



120



120



120



88

FDIC insurance



45



42



43



42



47

Other



454



470



461



459



433

Total non-interest expenses



3,314



3,285



3,291



3,359



3,112

















Income before income taxes



1,403



1,509



1,698



1,334



1,964

Income taxes



240



311



324



250



1,012

Net income



1,163



1,198



1,374



1,084



952

Dividends on preferred stock











Net income available for common stockholders


$

1,163


$

1,198


$

1,374


$

1,084


$

952

Basic earnings per common share


$

0.46


$

0.47


$

0.54


$

0.43


$

0.38

Diluted earnings per common share


$

0.45


$

0.47


$

0.54


$

0.43


$

0.37

Consolidated Financial Highlights (Unaudited)

Key Operating Statistics






Three months ended




(In Thousands, Except Per Share Data and ratios)




December 31, 


September 30, 


June 30, 


March 31, 


December 31, 




2018


2018


2018


2018


2017

Average:
















Assets


$

473,070


$

482,506


$

478,836


$

476,063


$

462,966

Earning Assets



445,855



454,914



451,315



448,853



435,458

Loans



367,921



377,140



389,614



384,184



370,173

Interest-bearing deposits



329,096



333,043



328,932



322,627



317,196

Deposits



381,687



388,124



383,144



375,617



369,643

Borrowed funds



39,783



43,685



46,758



52,167



45,000

Equity



49,090



48,242



47,006



46,023



45,907

Common equity



49,090



48,242



47,006



46,023



45,907

















Return on average assets



0.98%



0.99%



1.15%



0.92%



0.82%

Return on average equity



9.41%



9.85%



11.97%



9.55%



8.23%

















Efficiency ratio



68.87%



67.74%



65.23%



70.72%



62.46%

Non-interest income to average assets



0.80%



0.75%



0.77%



0.70%



0.75%

Non-interest expenses to average assets



2.78%



2.70%



2.76%



2.86%



2.67%

Net overhead to average assets



1.98%



1.95%



1.99%



2.16%



1.91%

Yield on loans



4.99%



4.89%



4.94%



4.75%



4.88%

Yield on investment securities (TE)



2.73%



2.51%



2.61%



2.56%



2.77%

Yield on average earning assets (TE)



4.57%



4.46%



4.61%



4.42%



4.52%

Cost of average interest bearing liabilities



1.37%



1.24%



1.14%



1.04%



0.94%

Net interest margin (TE)



3.43%



3.43%



3.67%



3.55%



3.74%

Number of FTE employees



97



98



99



96



98

















Asset Quality Indicators:
















Non-performing loans to total loans



0.35%



0.54%



0.54%



0.54%



0.36%

Non-performing assets to total assets



0.27%



0.43%



0.43%



0.43%



0.29%

Allowance for loan losses to total loans



1.18%



1.29%



1.24%



1.21%



1.26%

YTD net charge-offs (recoveries) to
average loans, annualized



0.13%



0.01%



0.02%



0.06%



(0.01)%

YTD net charge-offs (recoveries)



511



38



34



61



(20)

Consolidated Financial Highlights (Unaudited)

Consolidated Statement of Income





Year Ended




(In Thousands, Except Per Share Data and ratios)



December 31, 


December 31, 



2018


2017

Interest and dividend income


$

20,228


$

18,595

Interest expense



4,483



3,038

   Net interest income



15,745



15,557








Provision  for loan losses



160



(150)








Non-interest income







Service charges on deposit accounts



1,230



1,237

Other service charges and fees



1,226



1,170

Gain on sale of mortgage loans



320



317

Non-deposit brokerage fees



419



365

Lease income



236



237

BOLI income



177



177

Gain on sale of securities





48

Total non-interest income



3,608



3,551








Non-interest expenses:







Personnel expense



7,161



6,802

Net occupancy expense



1,778



1,804

Advertising and public relations



359



337

Professional fees



646



547

Data processing services



809



910

Franchise shares and deposit tax



480



484

FDIC insurance



172



197

Other



1,844



1,741

Total non-interest expenses



13,249



12,822








Income before income taxes



5,944



6,436

Income taxes



1,125



2,347

Net income



4,819



4,089

Dividends on preferred stock





238

Net income available for common stockholders


$

4,819


$

3,851

Basic earnings per common share


$

1.90


$

1.68

Diluted earnings per common share


$

1.89


$

1.60

Consolidated Financial Highlights (Unaudited)

Key Operating Statistics





Year Ended



(In Thousands, Except Per



Share Data and ratios)



December 31, 

December 31, 



2018

2017

Average:






Assets


$

477,624

$

454,897

Earning Assets



450,237


427,451

Loans



379,663


365,028

Interest-bearing deposits



328,455


316,168

Deposits



382,176


366,862

Borrowed funds



45,559


41,381

Equity



47,600


44,434

Common equity



47,600


41,233







Return on average assets



1.01%


0.90%

Return on average equity



10.12%


9.20%







Efficiency ratio



68.10%


66.43%

Non-interest income to average assets



0.76%


0.78%

Non-interest expenses to average assets



2.77%


2.82%

Net overhead to average assets



2.01%


2.04%

Yield on loans



4.89%


4.72%

Yield on investment securities (TE)



2.60%


2.79%

Yield on average earning assets (TE)



4.52%


4.41%

Cost of average interest bearing liabilities



1.20%


0.85%

Net interest margin (TE)



3.52%


3.70%

Number of FTE employees



97


98

Consolidated Financial Highlights (Unaudited)





(In Thousands, Except Per Share Data and ratios)



December 31, 

December 31, 

December 31, 

Consolidated Capital Ratios


2018

2017

2016









Total shareholders' equity to total assets ratio



10.51%


9.85%


9.30%

Tangible equity ratio (1)



9.72%


9.02%


8.44%

Tangible common equity ratio (1)



9.72%


9.02%


6.83%

Book value per common share


$

19.71

$

18.14

$

17.54

Tangible book value per common share (1)


$

18.07

$

16.47

$

15.40

End of period common share closing price


$

21.43

$

24.00

$

18.00



(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 Per Share Data and ratios)



December 31, 


December 31, 


December 31, 

Regulation G Non-GAAP Reconciliation:


2018


2017


2016











Total shareholders' equity (a)


$

50,019


$

45,834


$

42,364

Less:










Preferred stock







(7,261)

Common equity (b)



50,019



45,834



35,103

Goodwill



(4,097)



(4,097)



(4,097)

Intangible assets



(53)



(124)



(194)

Tangible common equity (c)



45,869



41,613



30,812

Add:










Preferred stock







7,261

Tangible equity (d)



45,869



41,613



38,073











Total assets (e)



475,982



465,382



455,422

Less:










Goodwill



(4,097)



(4,097)



(4,097)

Intangible assets



(53)



(124)



(194)

Tangible assets (f)


$

471,832


$

461,161


$

451,131

Shares outstanding (in thousands) (g)



2,538



2,526



2,001











Book value per common share (b/g)


$

19.71


$

18.14


$

17.54

Tangible book value per common share (c/g)


$

18.07


$

16.47


$

15.40

Equity to assets ratio (a/e)



10.51%



9.85%



9.30%

Tangible equity ratio (d/f)



9.72%



9.02%



8.44%

Common equity ratio (b/e)



10.51%



9.85%



7.71%

Tangible common equity ratio (c/f)



9.72%



9.02%



6.83%

Cision

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