Citizens First Corporation Announces Fourth Quarter and Year End 2013 Results; Completes Final TARP Repayment

Citizens First Corporation Announces Fourth Quarter and Year End 2013 Results;
                        Completes Final TARP Repayment

PR Newswire

BOWLING GREEN, Ky., Jan. 16, 2014

BOWLING GREEN, Ky., Jan.16, 2014 /PRNewswire/ --Citizens First Corporation
(NASDAQ: CZFC) today reported results for the fourth quarter and year ending
December 31, 2013, which include the following:

  oFor the quarter ended December 31, 2013, the Company reported net income
    of $702,000, or $0.25 per diluted common share. This represents an
    increase of $469,000, or $0.23 per diluted common share, from the linked
    quarter ended September 30, 2013. Compared to the quarter ended December
    31 a year ago, net income increased $5,000 or $0.02 per diluted common
    share. 
  oFor the twelve months ended December 31, 2013, net income totaled $1.8
    million, or $0.52 per diluted common share. This represents a decrease of
    $1.4 million or $0.59 per diluted common share, from the net income of
    $3.2 million in the previous year.
  oThe Company's net interest margin was 4.03% for the quarter ended December
    31, 2013 compared to 3.88% for the quarter ended September 30, 2013 and
    4.24% for the quarter ended December 31, 2012, an increase of 15 basis
    points for the linked quarter and a decrease of 21 basis points from the
    prior year. The Company's net interest margin increased from the prior
    quarter primarily due to a decline in non-accrual loans and the collection
    of interest on loans which were previously in a non-accrual status.
  oNonperforming assets decreased to $2.0 million at December 31, 2013
    compared to $6.3 million at December 31, 2012. Nonperforming assets
    reached a high of $10.9 million at March 31, 2013. President and CEO Todd
    Kanipe commented, "Reducing our nonperforming assets was a priority in
    2013. Our concentrated efforts to resolve these loans resulted in
    significantly improved levels of both restructured and non-performing
    loans at year end."
  oProvision for loan losses was $450,000 for the fourth quarter of 2013
    compared to $900,000 for the linked quarter ended September 30, 2013 and
    $580,000 for the quarter ended December 31, 2012. Provision expense for
    2013 totaled $2.7 million compared to $1.7 million in 2012. Net
    charge-offs for 2013 total $3.7 million compared to $1.8 million in 2012.
  oOn January 15, 2014, the Company repurchased the remaining 93 shares of
    the Series A Fixed Rate Cumulative Perpetual Preferred (CPP) Stock that
    the Company had issued to the Treasury on December 19, 2008 under the TARP
    Capital Purchase Program of the Emergency Economic Stabilization Act of
    2008. The Company had previously repurchased 157 shares of the original
    250 shares issued. The Company paid approximately $3.3 million, which was
    100% of par value, to repurchase the preferred shares along with the
    accrued dividend for the shares repurchased. The preferred dividend rate
    was scheduled to increase from 5% to 9% during 2014, which would have
    resulted in preferred dividends of $294,000 annually. The warrants
    associated with the CPP investment remain outstanding at the present time.

Fourth Quarter 2013 Compared to Third Quarter 2013

Net interest income for the quarter ended December 31, 2013 improved $95,000
from the previous quarter due to an increase in loan income as the level of
non-accrual loans declined.

Non-interest income for the three months ended December 31, 2013 decreased
$85,000, or 10.7%, compared to the previous quarter, primarily due to a
decrease in the gain on sale of mortgage loans of $45,000. Non-interest
expense for the three months ended December 31, 2013 decreased $218,000, or
6.6%, compared to the previous quarter due to a decrease in legal and
collection expenses.

A $450,000 provision for loan losses was recorded for the fourth quarter of
2013, compared to a $900,000 provision in the previous quarter. The provision
expense was lower in the fourth quarter of 2013 as a result of a decrease in
net charge-offs. Net charge-offs were $617,000 for the fourth quarter of 2013
compared to $2.1 million in the third quarter of 2013. 

Fourth Quarter 2013 Compared to Fourth Quarter 2012

Net interest income for the quarter ended December 31, 2013 decreased
$126,000, or 3.3%, compared to the previous year. The decrease in net
interest income was impacted by a reduction in interest expense of $127,000
combined with a decrease in interest income of $253,000. The decrease in
interest income was created by a decline in the yield on loans from 5.71% in
the fourth quarter of 2012 to 5.42% in the fourth quarter of 2013. Loan
yields have declined as maturing loans were repriced at a lower rate.

Non-interest income for the three months ended December 31, 2013 decreased
$53,000, or 6.9%, compared to the three months ended December 31, 2012,
primarily due to a decline in gains on sale of mortgage loans of $46,000 from
the prior year.

Non-interest expense for the three months ended December 31, 2013 decreased
$30,000, or 0.1%, compared to the three months ended December 31 2012, due to
a decrease in personnel expenses.

A $450,000 provision for loan losses was recorded for the fourth quarter of
2013, a decrease of $130,000, from $580,000 in the fourth quarter of 2012.
Net charge-offs were $617,000 for the fourth quarter of 2013 compared to net
charge-offs of $827,000 in the fourth quarter of 2012.

Balance Sheet

Total assets at December 31, 2013 were $410.2 million, an increase of $3.6
million from $406.6 million at December 31, 2012. Average assets during the
fourth quarter were $408.8 million, an increase of 1.2%, or $4.8 million, from
$404.0 million in the fourth quarter of 2012. Average interest earning assets
increased 1.5%, or $5.8 million, from $369.9 million in the fourth quarter of
2012 to $375.7 million in the fourth quarter of 2013.

Loans decreased $3.7 million, or 1.2%, from $298.8 million at December 31,
2012 to $295.1 million at December 31, 2013. Total loans averaged $298.8
million the fourth quarter of 2013, compared to $304.2 million the fourth
quarter of 2012, a decrease of $5.4 million, or 1.8%. For the year of 2013,
loans averaged $304.0 million, an increase of $2.7 million, or 0.9%, from
$301.3 million in 2012.

Deposits at December 31, 2013 were $343.0 million, an increase of $11.3
million, or 3.4%, compared to $331.7 million at December 31, 2012. Total
deposits averaged $340.9 million the fourth quarter of 2013, an increase of
$15.3 million, or 4.7%, compared to $325.6 million during the fourth 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 $2.0 million at December 31, 2013 compared to
$6.3 million at December 31, 2012, a decrease of $4.3 million. Compared to the
prior quarter at September 30, 2013, non-performing assets decreased $4.4
million. During the fourth quarter of 2013, $4.1 million in non-performing
assets were collected or returned to accrual status, $609,000 of
non-performing assets were charged-off, and $368,000 of loans became
non-performing during the quarter.

The allowance for loan losses at December 31, 2013 was $4.7 million, or 1.58%
of total loans, compared to $5.7 million, or 1.91% of total loans as of
December 31, 2012. The allowance decreased as a result of charging off
specific allocations of the allowance that had been established in previous
quarters.

A summary of nonperforming assets is presented below:

                                    December September June   March   December
                                                              31,     31,
(In thousands)                      31,      30,       30,
                                                              2013   2012
                                    2013    2013     2013
Nonaccrual loans                    $1,026   $3,784    $6,141 $7,097  $5,384
Loans 90+ days past due/accruing    -        19        -      23      -
Restructured loans                  154      2,041     3,340  3,528   758
Total non-performing loans          1,180    5,844     9,481  10,648  6,142
Other real estate owned             833      547       517    232     191
Total non-performing assets         $2,013   $6,391    $9,998 $10,880 $6,333
Non-performing assets to total      0.49%    1.56%     2.43%  2.58%   1.56%
assets

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

                                     December September June   March  December
                                                               31,    31,
(In thousands)                       31,      30,       30,
                                                               2013  2012
                                     2013    2013     2013
Balance at beginning of period       $4,820   $6,064    $6,650 $5,721 $5,968
Provision for loan losses            450      900       50     1,250  580
Charged-off loans                    788      2,198     678    358    838
Recoveries of previously charged-off 171      54        42     37     11
loans
Balance at end of period             $4,653   $4,820    $6,064 $6,650 $5,721
Allowance for loan losses to total   1.58%    1.60%     1.98%  2.21%  1.91%
loans

At December 31, 2013, total shareholders' equity was $38.3 million compared to
$41.6 million at December 31, 2012, a decrease of $3.3 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
December 31, 2013, the Company had 93 shares of the Series A preferred stock
outstanding with a balance of approximately $3.3 million.

The Company's tangible equity ratio was 8.28% as of December 31, 2013 compared
to 9.08% at December 31, 2012. The tangible book value per common share
improved slightly from $11.32 at December 31, 2012, to $11.51 at December 31,
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
                                        Dec 31 Sept 30 June 30 March 31 Dec 31
                                        2013   2013    2013    2013     2012
Interest income               $4,411 $4,381  $4,325  $4,428   $4,664
Interest expense                        682    747     770     762      809
Net interest income                     3,729  3,634   3,555   3,666    3,855
Provision for loan losses               450    900     50      1,250    580
Non-interest income:
 Service charges on deposits          319    341     321     291      351
 Other service charges and fees       133    156     158     138      129
 Gain on sale of mortgage loans       36     81      78      82       82
 Non-deposit brokerage fees           72     91      78      65       61
 Lease income                         75     74      75      74       76
 BOLI income                          49     53      56      61       65
 Securities gains                     27     -       29      8        -
 Total                             711    796     795     719      764
Non-interest expenses:
 Personnel expense                    1,419  1,382   1,417   1,441    1,489
 Net occupancy expense                485    499     465     461      491
 Advertising and public relations     65     70      110     78       91
 Professional fees                    141    201     174     164      176
 Data processing services             266    280     272     265      241
 Franchise shares and deposit tax     145    146     141     141      141
 FDIC insurance                       119    150     26      85       87
 Core deposit intangible amortization 79     84      85      84       84
 Postage and office supplies          38     35      35      43       40
 Other real estate owned expenses     46     7       20      11       15
 Other                                258    425     434     309      236
 Total                             3,061  3,279   3,179   3,082    3,091
Income before income taxes              929    251     1,121   53       948
Provision for income taxes              227    18      333     (62)     251
Net income                              702    233     788     115      697
Preferred dividends and discount        184    178     176     217      225
accretion
Net income available for common         $518   $55     $612    $(102)   $472
shareholders
Basic earnings per common share         $0.26  $0.03   $0.31   $(0.05)  $0.24
Diluted earnings per common share       $0.25  $0.02   $0.30   $(0.05)  $0.23

Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
Key Operating Statistics:
                                 Three Months Ended
                                 December September June     March    December
                                                                      31
                                 31      30       30      31
                                 2013     2013      2013     2013     2012
Average assets                   $408,792 $413,293  $419,240 $417,804 $403,975
Average earning assets           375,658  380,154   387,663  384,614  369,927
Average loans                    298,833  307,618   305,532  303,942  304,249
Average deposits                 340,938  340,067   345,738  342,475  325,644
Average equity                   38,469   37,937    38,353   40,164   41,629
Average common equity            27,548   27,023    27,445   27,695   27,458
Return on average assets         0.68%    0.22%     0.75%    0.11%    0.69%
Return on average equity         7.24%    2.44%     8.24%    1.16%    6.66%
Efficiency ratio                 68.07%   72.66%    72.17%   68.96%   65.70%
Non-interest income to average   0.69%    0.77%     0.76%    0.70%    0.75%
assets
Non-interest expenses to average 2.97%    3.15%     3.04%    2.99%    3.04%
assets
Yield on loans                   5.42%    5.26%     5.28%    5.50%    5.71%
Yield on investment securities   2.97%    2.87%     2.78%    2.97%    2.96%
(TE)
Yield on average earning assets  4.75%    4.66%     4.56%    4.76%    5.11%
(TE)
Cost of average interest bearing 0.83%    0.89%     0.92%    0.93%    1.01%
liabilities
Net interest margin (tax         4.03%    3.88%     3.77%    3.96%    4.24%
equivalent)
Number of FTE employees          100      100       98       99       102
Asset Quality Ratios:
Non-performing loans to total    0.40%    1.94%     3.09%    3.54%    2.06%
loans
Non-performing assets to total   0.49%    1.56%     2.43%    2.58%    1.56%
assets
Allowance for loan losses to     1.58%    1.60%     1.98%    2.21%    1.91%
total loans
YTD net charge-offs to average   1.22%    1.36%     0.63%    0.43%    0.60%
loans, annualized





Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
                                             Twelve Months Ended
                                             December  December
                                             31        31
                                             2013      2012
Interest income                    $17,545   $18,528
Interest expense                             2,961     3,450
Net interest income                          14,584    15,078
Provision for loan losses                    2,650     1,700
Non-interest income:
 Service charges on deposits               1,272     1,365
 Other service charges and fees            585       529
 Gain on sale of mortgage loans            277       301
 Non-deposit brokerage fees                306       206
 Lease income                              298       279
 BOLI income                               219       263
 Securities gains                          64        55
 Total                                  3,021     2,998
Non-interest expenses:
 Personnel expense                         5,659     5,718
 Net occupancy expense                     1,910     1,918
 Advertising and public relations          323       352
 Professional fees                         680       627
 Data processing services                  1,083     916
 Franchise shares and deposit tax          573       548
 FDIC insurance                            380       314
 Core deposit intangible amortization      332       349
 Postage and office supplies               151       189
 Other real estate owned expenses          84        170
 Other                                     1,426     954
 Total                                  12,601    12,055
Income before income taxes                   2,354     4,321
Provision for income taxes                   516       1,148
Net income                                   1,838     3,173
Preferred dividends and discount accretion   755       896
Net income available for common shareholders $1,083    $2,277
Basic earnings per common share              $0.55     $1.16
Diluted earnings per common share            $0.52     $1.11

Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
Key Operating Statistics:
                                                 Twelve Months Ended
                                                 December  December

                                                 31       31
                                                 2013      2012
Average assets                                   $414,753  $402,958
Average earning assets                           381,992   367,379
Average loans                                    303,977   301,292
Average deposits                                 342,294   327,651
Average equity                                   38,724    40,454
Average common equity                            27,426    26,301
Return on average assets                         0.44%     0.79%
Return on average equity                         4.75%     7.84%
Efficiency ratio                                 70.48%    65.67%
Non-interest income to average assets            0.73%     0.74%
Non-interest expenses to average assets          3.04%     2.99%
Yield on average earning assets (tax equivalent) 4.68%     5.13%
Cost of average interest bearing liabilities     0.89%     1.08%
Net interest margin (tax equivalent)             3.91%     4.20%

Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
Consolidated Statement of Condition:    As of        As of        As of
                                        December 31, December 31, December 31,
                                        2013         2012         2011
Cash and cash equivalents               $37,062      $34,799      $30,549
Available for sale securities           51,633       46,639       50,718
Loans held for sale                     -            61           180
Loans                                   295,068      298,754      294,352
Allowance for loan losses               (4,653)      (5,721)      (5,865)
Premises and equipment, net             11,054       11,568       11,849
Bank owned life insurance (BOLI)        7,806        7,587        7,324
Federal Home Loan Bank Stock, at cost   2,025        2,025        2,025
Accrued interest receivable             1,554        1,660        1,858
Deferred income taxes                   2,279        2,180        2,973
Intangible assets                       4,762        5,094        5,443
Other real estate owned                 833          191          637
Other assets                            752          1,719        1,751
 Total Assets                          $410,175     $406,556     $403,794
Deposits:
 Noninterest bearing                 $ 39,967     $ 41,725     $ 38,352
 Savings, NOW and money market       143,602      111,194      116,968
 Time                                159,382      178,814      177,411
 Total deposits                    $342,951     $331,733     $332,731
FHLB advances and other borrowings      22,000       26,000       25,000
Subordinated debentures                 5,000        5,000        5,000
Other liabilities                       1,877        2,257        2,191
Total Liabilities                       371,828      364,990      364,922
6.5% Cumulative preferred stock         7,659        7,659        7,659
Series A preferred stock                3,266        6,519        6,471
Common stock                            27,072       27,072       27,072
Retained earnings (deficit)             653          (430)        (2,706)
Accumulated other comprehensive income  (303)        746          376
(loss)
Total Stockholders' Equity              38,347       41,566       38,872
Total Liabilities and Stockholders'     $410,175     $406,556     $403,794
Equity



Consolidated Financial Highlights (Unaudited)

In thousands, except per share data and ratios
                                         December December December
                                         31, 2013 31, 2012 31, 2011
Capital Ratios:
Tier 1 leverage                          9.57%    10.20%   9.46%
Tier 1 risk-based capital                12.56%   13.16%   11.94%
Total risk based capital                 13.81%   14.41%   13.19%
Tangible equity ratio (1)                8.28%    9.08%    8.39%
Tangible common equity ratio (1)         5.59%    5.55%    4.84%
Book value per common share              $13.93   $13.91   $12.57
Tangible book value per common share (1) $11.51   $11.32   $9.80
Shares outstanding (in thousands)        1,969    1,969    1,969
_____________

(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.

Regulation G Non-GAAP Reconciliation:               December December December
                                                    31, 2013 31, 2012 31, 2011
Total shareholders' equity (a)                      $38,348  $41,566  $38,872
Less:
 Preferred stock                                  (10,925) (14,178) (14,130)
Common equity (b)                                   27,423   27,388   24,742
 Goodwill                                         (4,097)  (4,097)  (4,097)
 Intangible assets                                (665)    (997)    (1,346)
Tangible common equity (c)                          22,661   22,294   19,299
Add:
 Preferred stock                                  10,925   14,178   14,130
Tangible equity (d)                                 $33,586  $36,472  $33,429
Total assets (e)                                    $410,175 $406,556 $403,794
Less:
 Goodwill                                         (4,097)  (4,097)  (4,097)
 Intangible assets                                (665)    (997)    (1,346)
Tangible assets (f)                                 $405,413 $401,462 $398,351
Shares outstanding (in thousands) (g)               1,969    1,969    1,969
Book value per common share (b/g)                   $13.93   $13.91   $12.57
Tangible book value per common share (c/g)          $11.51   $11.32   $9.80
Total shareholders' equity to total assets ratio    9.35%    10.22%   9.63%
(a/e)
Tangible equity ratio (d/f)                         8.28%    9.08%    8.39%
Tangible common equity ratio (c/f)                  5.59%    5.55%    4.84%



SOURCE Citizens First Corporation

Website: http://www.citizensfirstbank.com
Contact: Todd Kanipe, CEO, tkanipe@citizensfirstbank.com, or Steve Marcum,
CFO, smarcum@citizensfirstbank.com, Citizens First Corporation, 270.393.0700
 
Press spacebar to pause and continue. Press esc to stop.