Citizens First Corporation Announces Second Quarter 2013 Results

       Citizens First Corporation Announces Second Quarter 2013 Results

PR Newswire

BOWLING GREEN, Ky., Aug. 1, 2013

BOWLING GREEN, Ky., Aug. 1, 2013 /PRNewswire/ --Citizens First Corporation
(NASDAQ: CZFC) today reported results for the second quarter ending June 30,
2013, which include the following:

  oFor the quarter ended June 30, 2013, the Company reported net income of
    $788,000, or $0.30 per diluted common share. This represents an increase
    of $673,000, or $0.35 per diluted common share, from the linked quarter
    ended March 31, 2013. Compared to the quarter ended June 30 a year ago,
    net income increased $62,000 or $0.06 per diluted common share.
  oFor the six months ended June 30, 2013, net income totaled $903,000, or
    $0.25 per diluted common share. This represents a decrease of $631,000,
    or $0.28 per diluted common share, from the net income of $1.5 million in
    the first six months of the previous year.
  oThe Company's net interest margin was 3.77% for the quarter ended June 30,
    2013 compared to 3.96% for the quarter ended March 31, 2013 and 4.06% for
    the quarter ended June 30, 2012, a decrease of 19 basis points for the
    linked quarter and a decrease of 29 basis points from the prior year. The
    Company's net interest margin decreased from the prior quarter primarily
    due to a decrease in loan income for the quarter as the level of
    non-accrual loans remained high.
  oProvision for loan losses was $50,000 for the second quarter of 2013
    compared to $1.3 million for the linked quarter ended March 31, 2013 and
    $450,000 for the quarter ended June 30, 2012. Todd Kanipe, President &
    CEO of Citizens First commented, "We made slight improvements in our level
    of non-performing assets during the second quarter as we moved through the
    liquidation of collateral on several credits. The higher level of
    non-performing assets during 2013 has adversely impacted our margin and
    increased our collection expenses. A majority of our charge-offs during
    the quarter had specific allocations in the allowance for loan losses that
    had been previously established.We continue to work aggressively to
    reduce non-performing assets."
  oOn July 26, 2013, the real estate securing our largest non-performing
    asset, a $3.8 million commercial real estate loan, was sold at auction to
    a third party for $2.5 million less selling costs.Our allowance for loan
    losses as of June 30, 2013 included a specific allocation for the
    deficiency. The deficiency willresult in a charge-off of approximately
    $1.5 million in the third quarter of 2013.

Second Quarter 2013 Compared to First Quarter 2013

Net interest income for the quarter ended June 30, 2013 declined $111,000 from
the previous quarter due to a reduction in loan income, which included the
effect of existing loans repricing at lower rates and the impact of existing
non-accrual loans.

Non-interest income for the three months ended June 30, 2013 increased
$76,000, or 10.6%, compared to the previous quarter, primarily due to an
improvementin service charges on deposit accounts of $30,000. Non-interest
expense for the three months ended June 30, 2013 increased $97,000, or 3.1%,
compared to the previous quarter. Other operating expenses, primarily
collection expenses related to non-performing loans, increased $126,000.

A $50,000 provision for loan losses was recorded for the second quarter of
2013, compared to a $1.3 million provision in the previous quarter. The
provision expense was lower in the second quarter of 2013 as a result of an
$882,000 reduction in nonperforming assets in the current quarter. Net
charge-offs were $635,000 for the second quarter of 2013 compared to $321,000
in the first quarter of 2013. The majority of the charge-offs in the second
quarter of 2013 had specific allocations in the allowance for loan losses that
had been established prior to the current quarter.

Second Quarter 2013 Compared to Second Quarter 2012

Net interest income for the quarter ended June 30, 2013 decreased $120,000, or
3.3%, compared to the previous year. The decrease in net interest income was
impacted by a reduction in interest expense of $121,000 combined with a
decrease in interest income of $241,000. The decrease in interest income was
created by a decline in the yields on loans and taxable securities.

Non-interest income for the three months ended June 30, 2013 increased $2,000,
or 0.3%, compared to the three months ended June 30, 2012, primarily due to an
improvement in non-deposit brokerage fees of $21,000 from the prior year
offset by a decrease in securities gains of $26,000.

Non-interest expense for the three months ended June 30, 2013 increased
$134,000, or 4.4%, compared to the three months ended June 30 2012, due to an
increase in other operating expenses which were primarily collection expenses
related to non-performing loans.

A $50,000 provision for loan losses was recorded for the second quarter of
2013, a decrease of $400,000, from $450,000 in the second quarter of 2012.
Net charge-offs were $636,000 for the second quarter of 2013 compared to net
charge-offs of $479,000 in the second quarter of 2012.

Balance Sheet

Total assets at June 30, 2013 were $411.5 million, an increase of $4.9 million
from $406.6 million at December 31, 2012. Average assets during the second
quarter were $419.2 million, an increase of 2.9%, or $11.9 million, from
$407.3 million the second quarter of 2012. Average interest earning assets
increased 4.2%, or $15.7 million, from $372.0 million in the second quarter of
2012 to $387.7 million in the second quarter of 2013.

Loans increased $7.6 million, or 2.5%, from $298.8 million at December 31,
2012 to $306.4 million at June 30, 2013. Total loans averaged $305.5 million
the second quarter of 2013, compared to $304.0 million the second quarter of
2012, an increase of $1.5 million, or 0.5%. Deposits at June 30, 2013 were
$337.2 million, an increase of $5.5 million, or 1.7%, compared to $331.7
million at December 31, 2012. Total deposits averaged $345.7 million the
second quarter of 2013, an increase of $13.9 million, or 4.2%, compared to
$331.8 million during the second quarter of 2012. Average deposits increased
during the year, but the cost of funds declined as higher cost deposits
matured and were renewed at lower rates. 

Non-performing assets totaled $10.0 million at June 30, 2013 compared to $6.3
million at December 31, 2012, an increase of $3.7 million. The allowance for
loan losses at June 30, 2013 was $6.1 million, or 1.98% of total loans,
compared to $5.7 million, or 1.91% of total loans as of December 31, 2012.
The allowance increased due to the increase in nonperforming assets during the
year, as specific allocations in the allowance were provided for these
impaired loans.

A summary of nonperforming assets is presented below:

                                      June   March   December September June

(In thousands)                        30,    31,     31,      30,       30,

                                      2013   2013   2012    2012      2012
Nonaccrual loans                      $6,141 $7,097  $5,384   $5,911    $6,168
Loans 90+ days past due/accruing      -      23      -        60        -
Restructured loans                    3,340  3,528   758      1,388     1,549
Total non-performing loans            9,481  10,648  6,142    7,359     7,717
Other real estate owned               517    232     191      258       214
Total non-performing assets           $9,998 $10,880 $6,333   $7,617    $7,931
Non-performing assets to total assets 2.43%  2.58%   1.56%    1.93%     2.00%

A summary of the allowance for loan losses is presented below:

                                       June   March  December September June

(In thousands)                         30,    31,    31,      30,       30,

                                       2013   2013  2012    2012      2012
Balance at beginning of period         $6,650 $5,721 $5,968   $5,899    $5,928
Provision for loan losses              50     1,250  580      300       450
Charged-off loans                      678    358    838      243       495
Recoveries of previously charged-off   42     37     11       12        16
loans
Balance at end of period               $6,064 $6,650 $5,721   $5,968    $5,899
Allowance for loan losses to total     1.98%  2.21%  1.91%    1.95%     1.97%
loans

At June 30, 2013, total shareholders' equity was $37.8 million compared to
$41.6 million at December 31, 2012, a decrease of $3.8 million. During the
first quarter of 2013, the Company paid $3.3 million to repurchase 94 of the
250 shares of the Series A preferred stock that the Company had issued to the
Treasury on December 19, 2008 under the TARP Capital Purchase Program. At
June 30, 2013, the Company has 93 shares of the Series A preferred stock
outstanding with a balance of approximately $3.3 million. In addition,
accumulated other comprehensive income declined by $1.0 million as long-term
interest rates increased, which impacted unrealized gains and losses in
investment securities.

The Company's tangible equity ratio was 8.08% as of June 30, 2013 compared to
9.08% at December 31, 2012. The tangible book value per common share declined
slightly from $11.32 at December 31, 2012, to $11.14 at June 30, 2013. 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.

Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
Consolidated Statement of Income:
                             Three Months Ended
                             June 30 March 31 December 31 September 30 June 30
                             2013    2013     2012        2012         2012
Interest income    $4,325  $4,428   $4,664      $4,681       $4,566
Interest expense             770     762      809         826          891
Net interest income          3,555   3,666    3,855       3,855        3,675
Provision for loan losses    50      1,250    580         300          450
Non-interest income:
 Service charges on        321     291      351         355          340
deposits
 Other service charges and 158     138      129         138          143
fees
 Gain on sale of mortgage  78      82       82          64           64
loans
 Non-deposit brokerage     78      65       61          54           57
fees
 Lease income              75      74       76          68           68
 BOLI income               56      61       65          66           66
 Securities gains          29      8        -           -            55
 Total                  795     719      764         745          793
Non-interest expenses:
 Personnel expense         1,417   1,441    1,489       1,406        1,414
 Net occupancy expense     465     461      491         489          479
 Advertising and public    110     78       91          92           93
relations
 Professional fees         174     164      176         158          149
 Data processing services  272     265      241         225          221
 Franchise shares and      141     141      141         141          141
deposit tax
 FDIC insurance            26      85       87          83           73
 Core deposit intangible   85      84       84          88           88
amortization
 Postage and office        35      43       40          40           59
supplies
 Other real estate owned   20      11       15          5            105
expenses
 Other                     434     309      236         266          223
 Total                  3,179   3,082    3,091       2,993        3,045
Income before income taxes   1,121   53       948         1,307        973
Provision for income taxes   333     (62)     251         366          247
Net income                   788     115      697         941          726
Preferred dividends and      176     217      225         225          223
discount accretion
Net income available for     $612    $(102)   $472        $716         $503
common shareholders
Basic earnings per common    $0.31   $(0.05)  $0.24       $0.36        $0.25
share
Diluted earnings per common  $0.30   $(0.05)  $0.23       $0.35        $0.24
share





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
Key Operating Statistics:
                           Three Months Ended
                           June30  March31 December 31 September 30 June30
                           2013     2013     2012        2012         2012
Average assets             $419,240 $417,804 $403,975    $397,657     $407,298
Average loans              305,532  303,942  304,249     297,863      304,003
Average deposits           345,738  342,475  325,644     321,828      331,820
Average equity             38,353   40,164   41,629      40,776       39,962
Average common equity      27,445   27,695   27,458      26,618       25,816
Return on average assets   0.75%    0.11%    0.69%       0.94%        0.72%
Return on average equity   8.24%    1.16%    6.66%       9.18%        7.31%
Efficiency ratio           72.17%   68.96%   65.70%      63.88%       66.93%
Non-interest income to     0.76%    0.70%    0.75%       0.75%        0.78%
average assets
Non-interest expenses to   3.04%    2.99%    3.04%       2.99%        3.01%
average assets
Yield on average earning   4.56%    4.76%    5.11%       5.21%        5.03%
assets (tax equivalent)
Cost of average interest   0.92%    0.93%    1.01%       1.04%        1.10%
bearing liabilities
Net interest margin (tax   3.77%    3.96%    4.24%       4.31%        4.06%
equivalent)
Number of FTE employees    98       99       102         103          100
Asset Quality Ratios:
Non-performing loans to    3.09%    3.54%    2.06%       2.41%        2.57%
total loans
Non-performing assets to   2.43%    2.58%    1.56%       1.93%        2.00%
total assets
Allowance for loan losses  1.98%    2.21%    1.91%       1.95%        1.97%
to total loans
Net charge-offs to average 0.63%    0.43%    0.60%       0.45%        0.52%
loans, annualized





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
                                             Six Months Ended
                                             June 30  June 30
                                             2013     2012
Interest income                    $8,753   $9,184
Interest expense                             1,532    1,816
Net interest income                          7,221    7,368
Provision for loan losses                    1,300    820
Non-interest income:
 Service charges on deposits               612      659
 Other service charges and fees            296      262
 Gain on sale of mortgage loans            160      154
 Non-deposit brokerage fees                143      91
 Lease income                              149      136
 BOLI income                               117      132
 Securities gains                          37       55
 Total                                  1,514    1,489
Non-interest expenses:
 Personnel expense                         2,858    2,823
 Net occupancy expense                     926      938
 Advertising and public relations          188      168
 Professional fees                         338      292
 Data processing services                  537      450
 Franchise shares and deposit tax          282      266
 FDIC insurance                            111      145
 Core deposit intangible amortization      169      176
 Postage and office supplies               78       109
 Other real estate owned expenses          31       150
 Other                                     743      455
 Total                                  6,261    5,972
Income before income taxes                   1,174    2,065
Provision for income taxes                   271      531
Net income                                   903      1,534
Preferred dividends and discount accretion   393      447
Net income available for common shareholders $510     $1,087
Basic earnings per common share              $0.26    $0.55
Diluted earnings per common share            $0.25    $0.53





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
Key Operating Statistics:
                                                 Six Months Ended
                                                 June     June

                                                 30      30
                                                 2013     2012
Average assets                                   $418,526 $405,124
Average loans                                    304,741  295,580
Average deposits                                 344,115  331,611
Average equity                                   39,254   39,696
Average common equity                            27,570   25,556
Return on average assets                         0.44%    0.76%
Return on average equity                         4.64%    7.77%
Efficiency ratio                                 70.60%   66.60%
Non-interest income to average assets            0.73%    0.74%
Non-interest expenses to average assets          3.02%    2.97%
Yield on average earning assets (tax equivalent) 4.66%    5.11%
Cost of average interest bearing liabilities     0.92%    1.13%
Net interest margin (tax equivalent)             3.86%    4.12%





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
Consolidated Statement of Condition:        As of    As of        As of
                                            June 30, December 31, December 31,
                                            2013     2012         2011
Cash and cash equivalents                   $29,965  $34,799      $30,549
Available for sale securities               49,201   46,639       50,718
Loans held for sale                         156      61           180
Loans                                       306,397  298,754      294,352
Allowance for loan losses                   (6,064)  (5,721)      (5,865)
Premises and equipment, net                 11,294   11,568       11,849
Bank owned life insurance (BOLI)            7,704    7,587        7,324
Federal Home Loan Bank Stock, at cost       2,025    2,025        2,025
Accrued interest receivable                 1,666    1,660        1,858
Deferred income taxes                       3,222    2,180        2,973
Intangible assets                           4,925    5,094        5,443
Other real estate owned                     517      191          637
Other assets                                474      1,719        1,751
 Total Assets                              $411,482 $406,556     $403,794
Deposits:
 Noninterest bearing                     $ 42,007 $ 41,724     $ 38,352
 Savings, NOW and money market           110,494  111,195      116,968
 Time                                    184,725  178,814      177,411
 Total deposits                        $337,226 $331,733     $332,731
FHLB advances and other borrowings          28,300   26,000       25,000
Subordinated debentures                     5,000    5,000        5,000
Other liabilities                           3,180    2,257        2,191
Total Liabilities                           373,706  364,990      364,922
6.5% Cumulative preferred stock             7,659    7,659        7,659
Series A preferred stock                    3,253    6,519        6,471
Common stock                                27,072   27,072       27,072
Retained earnings (deficit)                 79       (430)        (2,706)
Accumulated other comprehensive income      (287)    746          376
(loss)
Total Stockholders' Equity                  37,776   41,566       38,872
Total Liabilities and Stockholders' Equity  $411,482 $406,556     $403,794





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
                                         June 30, December 31, December 31,

                                         2013     2012         2011
Capital Ratios:
Tier 1 leverage                          9.82%    10.20%       9.46%
Tier 1 risk-based capital                12.87%   13.16%       11.94%
Total risk based capital                 14.13%   14.41%       13.19%
Tangible equity ratio (1)                8.08%    9.08%        8.39%
Tangible common equity ratio (1)         5.40%    5.55%        4.84%
Book value per common share              $13.64   $13.91       $12.57
Tangible book value per common share (1) $11.14   $11.32       $9.80
Shares outstanding (in thousands)        1,969    1,969        1,969
_____________

    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
(1) 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.





Regulation G Non-GAAP Reconciliation:  June 30, 2013 December 31, December 31,
                                                     2012         2011
Total shareholders' equity (a)         $37,776       $41,566      $38,872
Less:
 Preferred stock                     (10,912)      (14,178)     (14,130)
Common equity (b)                      26,864        27,388       24,742
 Goodwill                            (4,097)       (4,097)      (4,097)
 Intangible assets                   (828)         (997)        (1,346)
Tangible common equity (c)             21,939        22,294       19,299
Add:
 Preferred stock                     10,912        14,178       14,130
Tangible equity (d)                    $32,851       $36,472      $33,429
Total assets (e)                       $411,482      $406,556     $403,794
Less:
 Goodwill                            (4,097)       (4,097)      (4,097)
 Intangible assets                   (828)         (997)        (1,346)
Tangible assets (f)                    $406,557      $401,462     $398,351
Shares outstanding (in thousands) (g)  1,969         1,969        1,969
Book value per common share (b/g)      $13.64        $13.91       $12.57
Tangible book value per common share   $11.14        $11.32       $9.80
(c/g)
Total shareholders' equity to total    9.18%         10.22%       9.63%
assets ratio (a/e)
Tangible equity ratio (d/f)            8.08%         9.08%        8.39%
Tangible common equity ratio (c/f)     5.40%         5.55%        4.84%



SOURCE Citizens First Corporation

Contact: Todd Kanipe, CEO, tkanipe@citizensfirstbank.com, or Steve Marcum,
CFO, smarcum@citizensfirstbank.com, both of Citizens First Corporation,
270.393.0700