Published: October 21, 2010
Citizens First Corporation Announces Third Quarter 2010 Results
BOWLING GREEN, Ky., Oct. 21 /PRNewswire-FirstCall/ -- Citizens First Corporation (Nasdaq: CZFC) today reported results for the third quarter of 2010, which include the following:
-- For the quarter ended September 30, 2010, the Company reported net
income of $658,000, or $.20 per diluted common share. This represents
an increase of $41,000, or $.02 per share, from the linked quarter ended
June 30, 2010. Compared to the quarter ended September 30 a year ago,
net income increased $331,000 or $.17 per share, an increase of 101.2%.
-- For the nine months ended September 30, 2010, the Company reported net
income of $1.8 million, or $.52 per diluted common share. This
represents an increase of $2.8 million, or $1.44 per share, from the net
loss of ($1.0) million in the previous year.
-- Net interest income for the quarter ended September 30, 2010 increased
$36,000, or 1.2%, from the linked quarter. Net interest income
increased due to lower interest expense on deposits and borrowings for
the third quarter.
-- Net interest income for the nine months ended September 30, 2010
increased $1.2 million, or 14.7%, compared to the previous year. Net
interest income increased as a result of lower interest expense of $1.1
million as maturing deposits and borrowings were repriced at lower
rates.
-- The Company's net interest margin was 4.06% for the quarter ended
September 30, 2010 compared to 4.08% for the quarter ended June 30, 2010
and 3.80% for the quarter ended September 30, 2009, a decrease of 2
basis points for the linked quarter and an increase of 26 basis points
from the prior year. The Company's net interest margin remains strong
due to a decline in the cost of average interest bearing liabilities,
which fell to 1.83% in the third quarter of 2010 compared to 1.95% in
the second quarter of 2010 and 2.23% in the third quarter of 2009. The
yield on average earning assets declined from the linked quarter and the
prior year, totaling 5.64% in the third quarter of 2010 compared to
5.76% in the second quarter of 2010 and 5.73% in the third quarter of
2009, respectively.
-- Provision for loan losses for the quarter ended September 30, 2010 was
$375,000, a decrease of $75,000 from the linked quarter and an increase
of $75,000 from the previous year. Provision expense for the first nine
months of 2010 was $1.2 million, a decrease of $2.3 million from the
provision expense of $3.5 million for the first nine months of 2009.
Net recoveries were $7,000 for the quarter ended September 30, 2010
compared to net charge-offs of $75,000 for the second quarter of 2010
and $181,000 for the third quarter of 2009. The allowance for loan
losses as a percentage of loans has grown to 1.83% as of September 30,
2010 from 1.68% in the second quarter and 1.46% in the third quarter of
2009, as the risk of increased problem loans continues under current
economic conditions.
-- The efficiency ratio improved to 66.97% for the third quarter of 2010
compared to 79.13% for the third quarter of 2009, as a result of
increasing net interest income and reducing operating expenses.
-- Total deposits increased to $289.3 million at September 30, 2010
compared to $288.5 million at December 31, 2009, while total loans
increased to $264.3 million at September 30, 2010 compared to $263.9
million at December 31, 2009.
-- Nonperforming assets remained stable, totaling $2.5 million at September
30, 2010 compared to $2.4 million at December 31, 2009, which represents
an increase of $83,000 or 3.5%. Included in nonperforming assets is
other real estate, which represents properties acquired through
foreclosure, totaling $1.3 million and nonperforming loans of $1.2
million at September 30, 2010. Our nonperforming assets remain at
relatively low levels compared to the banking industry as a whole.
However, we continue to monitor our loan portfolio for loans with noted
weakness and identified increases in our problem loans. Management
believes that the prolonged economic weakness could place additional
pressure on credit quality.
Third Quarter 2010 Compared to Second Quarter 2010
Net interest income for the quarter ended September 30, 2010 increased $36,000, or 1.2%, compared to the previous quarter. Net interest income increased due to a reduction in interest expense of $67,000 which was greater than the decrease in interest income of $31,000.
Non-interest income for the three months ended September 30, 2010 increased $37,000, or 5.0%, compared to the previous quarter, primarily due to an increase in gains from secondary market mortgage operations of $33,000.
Non-interest expense for the three months ended September 30, 2010 increased $78,000, or 3.0%, compared to the previous quarter, primarily due to an increase in other real estate expenses of $76,000.
A $375,000 provision for loan losses was recorded for the third quarter of 2010, compared to a $450,000 provision in the previous quarter. Net recoveries were $7,000 for the third quarter of 2010 compared to net charge-offs of $75,000 in the second quarter of 2010. The provision for loan losses declined in the third quarter due to the decline in net charge-offs. However, in light of the continued weakness in the economy, management continues to monitor the loan portfolio's credit quality. The allowance for loan losses increased as a percentage of loans from 1.68% in the second quarter to 1.83% in the third quarter.
Third Quarter 2010 Compared to Third Quarter 2009
Net interest income for the quarter ended September 30, 2010 increased $320,000, or 11.3%, compared to the previous year. The increase in net interest income was impacted by a reduction in interest expense of $226,000 combined with an increase in interest income of $94,000.
Non-interest income for the three months ended September 30, 2010 increased $105,000, or 15.5%, compared to the three months ended September 30, 2009, primarily due to an increase in deposit service charges of $65,000 from the prior year.
Non-interest expense for the three months ended September 30, 2010 decreased $157,000, or 5.5%, compared to the three months ended September 30, 2009, primarily due to a reduction in salaries and benefit expenses totaling $150,000. Salaries and benefits declined as a result of management's reorganizing administrative services and the closing of two branches as announced in the third quarter of 2009. As a result, the number of full time equivalent employees declined from 106 to 86 over the past twelve months.
A $375,000 provision for loan losses was recorded for the third quarter of 2010, compared to a $300,000 provision in the third quarter of 2009, an increase of $75,000 or 25.0%. Net recoveries were $7,000 for the third quarter of 2010 compared to net charge-offs of $181,000 in the third quarter of 2009. Net charge-offs as a percent of average loans were (0.002%) for the third quarter of 2010, compared to 0.07% for the third quarter of 2009.
Balance Sheet
Total assets at September 30, 2010 were $344.4 million, up $0.2 million, or 0.06%, from $344.2 million at December 31, 2009. Loans increased $0.4 million, or 0.15%, from $263.9 million at December 31, 2009 to $264.3 million at September 30, 2010. Deposits at September 30, 2010 were $289.3 million, an increase of $0.8 million, or 0.28%, compared to $288.5 million at December 31, 2009.
Non-performing assets totaled $2.5 million at September 30, 2010 compared to $2.4 million at December 31, 2009, an increase of $83,000. Non-performing loans decreased $46,000 during the year while other real estate owned increased $129,000. Non-performing assets to total assets ratio was 0.72% and 0.69% at September 30, 2010 and December 31, 2009, respectively. The allowance for loan losses at September 30, 2010 was $4.8 million, or 1.83% of total loans, compared to $4.0 million, or 1.51% of total loans as of December 31, 2009.
At September 30, 2010, total shareholders' equity was $38.6 million and total tangible shareholders' equity was $35.0 million. The Company's tangible equity ratio was 10.26% as of September 30, 2010. 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, retention of key personnel and the success of cost savings and expense reductions from branch closures and restructuring. 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
September December September
30 June 30 March 31 31 30
2010 2010 2010 2009 2009
---- ---- ---- ---- ----
Interest income $4,424 $4,455 $4,333 $4,346 $4,330
Interest expense 1,260 1,327 1,337 1,428 1,486
----- ----- ----- ----- -----
Net interest
income 3,164 3,128 2,996 2,918 2,844
Provision for
loan losses 375 450 400 1,247 300
--- --- --- ----- ---
Net interest
income after
provision for
loan losses 2,789 2,678 2,596 1,671 2,544
Non-interest
income 781 744 590 653 676
Non-interest
expense 2,705 2,627 2,542 3,366 2,862
----- ----- ----- ----- -----
Income (loss)
before income
taxes 865 795 644 (1,042) 358
Provision
(benefit) for
income taxes 207 178 113 (462) 31
--- --- --- ---- ---
Net income (loss) 658 617 531 (580) 327
Preferred
dividends and
discount
accretion 257 256 254 256 256
--- --- --- --- ---
Net income (loss)
available for
common
shareholders $401 $361 $277 ($836) $71
==== ==== ==== ===== ===
Basic earnings
(loss) per
common share $0.21 $0.18 $0.14 ($0.42) $0.03
===== ===== ===== ====== =====
Diluted earnings
(loss) per
common share $0.20 $0.18 $0.14 ($0.42) $0.03
===== ===== ===== ====== =====
Three Months Ended
September June March December September
30 30 31 31 30
2010 2010 2010 2009 2009
---- ---- ---- ---- ----
Return on
average
assets 0.75% 0.71% 0.63% (0.67%) 0.38%
Return on
average
equity 6.84% 6.55% 5.77% (6.09%) 3.45%
Efficiency
ratio 66.97% 66.22% 69.06% 91.82% 79.13%
Non-interest
income to
average
assets 0.88% 0.85% 0.70% 0.75% 0.79%
Non-interest
expenses to
average
assets (3.06%) (3.01%) (3.00%) (3.88%) (3.33%)
Net interest
margin (tax
equivalent) 4.06% 4.08% 4.04% 3.83% 3.80%
Number of full
time
equivalent
employees 86 91 89 88 106
Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
Consolidated Statement of Income:
Nine Months Ended
September September
30 30
2010 2009
---- ----
Interest income $13,212 $13,086
Interest expense 3,924 4,985
----- -----
Net interest income 9,288 8,101
Provision for loan
losses 1,225 3,500
----- -----
Net interest income
after provision for
loan losses 8,063 4,601
Non-interest income 2,115 2,349
Non-interest expense 7,874 8,981
----- -----
Income before income
taxes 2,304 (2,031)
Provision (benefit) for
income taxes 498 (987)
--- ----
Net income (loss) 1,806 (1,044)
Preferred dividends and
discount accretion 767 764
--- ---
Net income (loss)
available for common
shareholders $1,039 ($1,808)
====== =======
Basic earnings (loss)
per common share $0.53 ($0.92)
===== ======
Diluted earnings (loss)
per common share $0.52 ($0.92)
===== ======
September September
30 30
2010 2009
---- ----
Return on average
assets 0.69% (0.40)%
Return on average
equity 6.38% (3.52)%
Efficiency ratio 67.37% 83.62%
Non-interest income
to average assets 0.81% 0.90%
Non-interest
expenses to average
assets (3.03)% (3.45)%
Net interest margin
(tax equivalent) 4.06% 3.57%
Number of full time
equivalent employees 86 106
Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
Consolidated
Statement of
Condition: As of As of As of
September December September
30, 31, 30,
2010 2009 2009
---- ---- ----
Cash and cash
equivalents $11,693 $9,756 $13,355
Available for sale
securities 40,513 41,059 38,733
Loans held for sale 844 295 2,877
Loans 264,283 263,922 259,408
Allowance for loan
losses (4,839) (3,988) (3,777)
Intangible assets 3,670 3,868 3,936
Other assets 28,279 29,319 27,208
------ ------ ------
Total assets $344,443 $344,231 $341,740
======== ======== ========
Deposits $289,316 $288,520 $275,774
Securities sold under
repurchase
agreements 786 800 1,517
FHLB advances 8,500 11,500 19,500
Other borrowings 5,000 5,000 5,000
Other liabilities 2,221 1,553 1,971
----- ----- -----
Total liabilities 305,823 307,373 303,762
Preferred stock 16,230 16,182 16,166
Common stock 27,072 27,072 27,072
Retained deficit (4,833) (5,873) (5,036)
Accumulated other
comprehensive income
(loss) 151 (523) (224)
--- ---- ----
Total shareholders'
equity 38,620 36,858 37,978
------ ------ ------
Total liabilities and
shareholders' equity $344,443 $344,231 $341,740
======== ======== ========
September September
30, December 30,
2010 31, 2009 2009
---------- -------- ----------
Asset Quality
Ratios:
Non-performing
loans to total
loans 0.45% 0.47% 1.04%
Non-performing
assets to
total assets 0.72% 0.69% 1.02%
Allowance for
loan losses to
total loans 1.83% 1.51% 1.46%
Net charge-
offs to
average loans (0.002%) 0.39% 0.07%
Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
September
30, December September
2010 31, 2009 30, 2009
---------- -------- ---------
Capital Ratios:
Tier 1 leverage 10.81% 10.52% 11.01%
Tier 1 risk-
based capital 13.30% 12.54% 13.05%
Total risk
based capital 14.56% 13.79% 14.30%
Tangible equity
to tangible
assets ratio
(1) 10.26% 9.69% 10.08%
Book value per
common share $11.37 $10.50 $11.08
Tangible book
value per
common share
(1) $9.51 $8.53 $9.08
Shares
outstanding
(in thousands) 1,969 1,969 1,969
(1) The tangible equity to tangible assets 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- September September
GAAP 30, December 30,
Reconciliation: 2010 31, 2009 2009
---------- -------- ----------
Total
shareholders'
equity $38,620 $36,858 $37,978
Less:
Preferred stock (16,230) (16,182) (16,166)
Goodwill (2,575) (2,575) (2,575)
Intangible assets (1,095) (1,293) (1,361)
------ ------ ------
Tangible common
equity (a) 18,720 16,808 17,876
Add:
Preferred stock 16,230 16,182 16,166
------ ------ ------
Tangible equity
(b) $34,950 $32,990 $34,042
Total assets $344,443 $344,231 $341,740
Less:
Goodwill (2,575) (2,575) (2,575)
Intangible assets (1,095) (1,293) (1,361)
------ ------ ------
Tangible assets
(c) $340,773 $340,363 $337,804
Shares
outstanding (in
thousands) (d) 1,969 1,969 1,969
Tangible book
value per common
share (a/d) $9.51 $8.53 $9.08
Tangible equity
ratio (b/c) 10.26% 9.69% 10.08%
SOURCE Citizens First Corporation
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