Exhibit 99.1 Press Release dated July 21, 2014
Citizens First Corporation Announces Second Quarter 2014 Results
NEWS For Immediate Release | ||
Contact: Todd Kanipe, CEO tkanipe@citizensfirstbank.com Steve Marcum, CFO smarcum@citizensfirstbank.com Citizens First Corporation 1065 Ashley Street, Suite 150 Bowling Green, KY 42103 270.393.0700 |
BOWLING GREEN, KY, July 21, 2014 – Citizens First Corporation (NASDAQ: CZFC) today reported results for the quarter ending June 30, 2014, which include the following:
| · | For the quarter ended June 30, 2014, the Company reported net income of $733,000, which represents an increase of $42,000 from the linked quarter ended March 31, 2014 and a decrease of $55,000 from the quarter ended June 30, 2013. Earnings per diluted common share for the current quarter were $0.29, an increase of $0.02 from the linked quarter ended March 31, 2014 and a decrease of $0.01 for the quarter ended June 30, 2013. |
| · | For the six months ended June 30, 2014, net income totaled $1.42 million, or $0.56 per diluted common share. This represents an increase of $521,000, or $0.31 per diluted common share, from the net income of $903,000 in the first six months of the previous year. |
| · | The Company’s net interest margin was 3.74% for the quarter ended June 30, 2014 compared to 3.81% for the linked quarter ended March 31, 2014 and 3.77% for the quarter ended June 30, 2013, a decrease of 7 basis points for the linked quarter and a decrease of 3 basis points from the prior year. The Company’s net interest margin decreased from prior periods due to a decline in the yield on loans. |
| · | Total loans increased $16.4 million, or 5.6%, to $311.5 million at June 30, 2014 compared to $295.1 million at December 31, 2013. Total deposits increased $2.8 million, or 0.8%, to $345.8 million at June 30, 2014 compared to $343.0 million at December 31, 2013. Todd Kanipe, President & CEO of Citizens First, commented, “commercial loan growth during the first half of the year along with a much lower provision for loan losses and improved asset quality were significant contributors to improved profitability. We remain encouraged by overall loan demand in our markets.” |
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Second Quarter 2014 Compared to First Quarter 2014
Net interest income for the quarter ended June 30, 2014 improved $31,000 from the previous quarter, or 0.9%, as the volume of average earning assets increased $6.0 million for the second quarter of 2014.
Non-interest income for the three months ended June 30, 2014 increased $129,000, or 20.5%, compared to the previous quarter, primarily due to an increase in service charges on deposits of $35,000 and an increase in security gains of $74,000. Non-interest expense for the three months ended June 30, 2014 increased $71,000, or 2.3%, compared to the previous quarter, primarily due to an increase in other real estate expense.
A $150,000 provision for loan losses was recorded for the second quarter of 2014, compared to a $125,000 provision in the previous quarter, an increase of $25,000. The allowance for loan losses to total loans remained relatively constant at 1.59% compared to 1.60% in the first quarter. Net charge-offs (recoveries) were $24,000 for the second quarter of 2014 compared to $(49,000) in the first quarter of 2014.
Second Quarter 2014 Compared to Second Quarter 2013
Net interest income for the quarter ended June 30, 2014 decreased $26,000, or 0.7%, compared to the previous year. The decrease in net interest income was impacted by a reduction in interest expense of $69,000 combined with a decrease in interest income of $95,000. The decrease in interest income was created by a decline in the yield on loans from 5.28% in the second quarter of 2013 to 5.13% in the second quarter of 2014. Loan yields have declined as maturing loans were repriced at a lower rate.
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Non-interest income for the three months ended June 30, 2014 decreased $37,000, or 4.7%, compared to the three months ended June 30, 2013, primarily due to a decline in gains on sale of mortgage loans.
Non-interest expense for the three months ended June 30, 2014 decreased $46,000, or 1.4%, compared to the three months ended June 30 2013, due to a decrease in legal and collection expenses.
A $150,000 provision for loan losses was recorded for the second quarter of 2014, an increase of $100,000, from $50,000 in the second quarter of 2013. The allowance for loan losses to total loans decreased from 1.98% of total loans at June 30, 2013 to 1.59% at June 30, 2014, primarily due to charge-offs of specific allocations which were included in the allowance at June 30, 2013. Net charge-offs were $24,000 for the second quarter of 2014 compared to net charge-offs of $635,000 in the second quarter of 2013.
Balance Sheet
Total assets at June 30, 2014 were $414.8 million, an increase of $4.6 million from $410.2 million at December 31, 2013. Average assets year-to-date were $416.9 million, a decrease of 0.4%, or $1.6 million, from $418.5 million in 2013. Average interest earning assets decreased 0.4%, or $1.6 million, from $386.1 million year-to-date 2013 to $384.5 million year-to-date 2014.
Loans increased $16.4 million, or 5.6%, from $295.1 million at December 31, 2013 to $311.5 million at June 30, 2014. Total loans averaged $303.5 million for the six months ended June 30, 2014, compared to $304.7 million for the six months ended June 30, 2013, a decrease of $1.2 million, or 0.4%.
Non-performing assets totaled $2.5 million at June 30, 2014 compared to $2.0 million at December 31, 2013, an increase of $468,000. A summary of nonperforming assets is presented below:
| (In thousands) | June 30, 2014 | March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2013 | |
| Nonaccrual loans | $1,035 | $1,104 | $1,026 | $3,784 | $6,141 | |
| Loans 90+ days past due/accruing | 42 | 56 | - | 19 | - | |
| Restructured loans | 806 | 815 | 154 | 2,041 | 3,340 | |
| Total non-performing loans | 1,883 | 1,975 | 1,180 | 5,844 | 9,481 | |
| Other real estate owned | 598 | 631 | 833 | 547 | 517 | |
| Total non-performing assets | $2,481 | $2,606 | $2,013 | $6,391 | $9,998 | |
| Non-performing assets to total assets | 0.60% | 0.62% | 0.49% | 1.56% | 2.43% |
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The allowance for loan losses at June 30, 2014 was $5.0 million, or 1.59% of total loans, compared to $4.7 million, or 1.58% of total loans as of December 31, 2013. The allowance increased due to an increase in outstanding loans for the year. A summary of the allowance for loan losses is presented below:
| (In thousands) | June 30, 2014 | March 31, 2014 | December 31, 2013 | September 30, 2013 | June 30, 2013 | |
| Balance at beginning of period | $4,827 | $4,653 | $4,820 | $6,064 | $6,650 | |
| Provision for loan losses | 150 | 125 | 450 | 900 | 50 | |
| Charged-off loans | 81 | 22 | 788 | 2,198 | 678 | |
| Recoveries of previously charged-off loans | 57 | 71 | 171 | 54 | 42 | |
| Balance at end of period | $4,953 | $4,827 | $4,653 | $4,820 | $6,064 | |
| Allowance for loan losses to total loans | 1.59% | 1.60% | 1.58% | 1.60% | 1.98% |
Deposits at June 30, 2014 were $345.8 million, an increase of $2.8 million, or 0.8%, compared to $343.0 million at December 31, 2013. Total deposits averaged $348.5 million for the six months ended June 30, 2014, an increase of $4.4 million, or 1.3%, compared to $344.1 million during the six months ended June 30, 2013. Average deposits increased during the year, but the cost of funds declined as higher cost deposits matured and were renewed at lower rates.
At June 30, 2014, total shareholders’ equity was $36.8 million compared to $38.3 million at December 31, 2013, a decrease of $1.5 million. During the first quarter of 2014, the Company paid $3.3 million to repurchase the remaining 93 shares of the Series A preferred stock that the Company had issued to the Treasury in 2008 under the TARP Capital Purchase Program.
The Company’s tangible equity ratio declined to 7.85% as of June 30, 2014 compared to 8.28% at December 31, 2013 due to the repurchase of the Company’s Series A preferred stock noted above. The tangible book value per common share improved from $11.51 at December 31, 2013, to $12.47 at June 30, 2014. 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
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in Barren, Hart, Simpson and Warren Counties in Kentucky, and a loan production office in Williamson County, Tennessee.
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.
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Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
| Consolidated Statement of Income: | |||||
| Three Months Ended | |||||
| June 30 | March 31 | Dec 31 | Sept 30 | June 30 | |
| 2014 | 2014 | 2013 | 2013 | 2013 | |
| Interest income | $4,230 | $4,181 | $4,411 | $4,381 | $4,325 |
| Interest expense | 701 | 683 | 682 | 747 | 770 |
| Net interest income | 3,529 | 3,498 | 3,729 | 3,634 | 3,555 |
| Provision for loan losses | 150 | 125 | 450 | 900 | 50 |
| Non-interest income: | |||||
| Service charges on deposits | 296 | 261 | 319 | 341 | 321 |
| Other service charges and fees | 141 | 153 | 133 | 156 | 158 |
| Gain on sale of mortgage loans | 51 | 24 | 36 | 81 | 78 |
| Non-deposit brokerage fees | 75 | 69 | 72 | 91 | 78 |
| Lease income | 74 | 75 | 75 | 74 | 75 |
| BOLI income | 47 | 47 | 49 | 53 | 56 |
| Securities gains | 74 | - | 27 | - | 29 |
| Total | 758 | 629 | 711 | 796 | 795 |
| Non-interest expenses: | |||||
| Personnel expense | 1,486 | 1,527 | 1,419 | 1,382 | 1,417 |
| Net occupancy expense | 479 | 482 | 485 | 499 | 465 |
| Advertising and public relations | 93 | 83 | 65 | 70 | 110 |
| Professional fees | 149 | 153 | 141 | 201 | 174 |
| Data processing services | 248 | 233 | 266 | 280 | 272 |
| Franchise shares and deposit tax | 145 | 146 | 145 | 146 | 141 |
| FDIC insurance | 74 | 77 | 119 | 150 | 26 |
| Core deposit intangible amortization | 82 | 84 | 79 | 84 | 85 |
| Postage and office supplies | 59 | 51 | 38 | 35 | 35 |
| Other real estate owned expenses | 47 | 10 | 46 | 7 | 20 |
| Other | 271 | 216 | 258 | 425 | 434 |
| Total | 3,133 | 3,062 | 3,061 | 3,279 | 3,179 |
| Income before income taxes | 1,004 | 940 | 929 | 251 | 1,121 |
| Provision for income taxes | 271 | 249 | 227 | 18 | 333 |
| Net income | 733 | 691 | 702 | 233 | 788 |
| Preferred dividends and discount accretion | 127 | 132 | 184 | 178 | 176 |
| Net income available for common shareholders | $606 | $559 | $518 | $55 | $612 |
| Basic earnings per common share | $0.31 | $0.28 | $0.26 | $0.03 | $0.31 |
| Diluted earnings per common share | $0.29 | $0.27 | $0.25 | $0.02 | $0.30 |
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Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
| Key Operating Statistics: |
| Three Months Ended | ||||||
June 30 | March 31 | December 31 | September 30 | June 30 | ||
| 2014 | 2014 | 2013 | 2013 | 2013 | ||
| Average assets | $419,630 | $414,089 | $408,792 | $413,293 | $419,240 | |
| Average earning assets | 387,457 | 381,485 | 375,658 | 380,154 | 387,663 | |
| Average loans | 303,489 | 303,438 | 298,833 | 307,618 | 305,532 | |
| Average deposits | 350,943 | 346,089 | 340,938 | 340,067 | 345,738 | |
| Average equity | 36,501 | 36,213 | 38,469 | 37,937 | 38,353 | |
| Average common equity | 28,842 | 28,046 | 27,548 | 27,023 | 27,445 | |
| Return on average assets | 0.70% | 0.68% | 0.68% | 0.22% | 0.75% | |
| Return on average equity | 8.05% | 7.74% | 7.24% | 2.44% | 8.24% | |
| Efficiency ratio | 72.88% | 72.73% | 68.07% | 72.66% | 72.17% | |
| Non-interest income to average assets | 0.72% | 0.62% | 0.69% | 0.77% | 0.76% | |
| Non-interest expenses to average assets | 2.99% | 3.00% | 2.97% | 3.15% | 3.04% | |
| Net overhead to average assets | 2.27% | 2.38% | 2.28% | 2.38% | 2.28% | |
| Yield on loans | 5.13% | 5.14% | 5.42% | 5.26% | 5.28% | |
| Yield on investment securities (TE) | 2.94% | 3.02% | 2.97% | 2.87% | 2.78% | |
| Yield on average earning assets (TE) | 4.47% | 4.53% | 4.75% | 4.66% | 4.56% | |
| Cost of average interest bearing liabilities | 0.83% | 0.83% | 0.83% | 0.89% | 0.92% | |
| Net interest margin (TE) | 3.74% | 3.81% | 4.03% | 3.88% | 3.77% | |
| Number of FTE employees | 99 | 98 | 100 | 100 | 98 | |
| Asset Quality Ratios: | ||||||
| Non-performing loans to total loans | 0.60% | 0.65% | 0.40% | 1.94% | 3.09% | |
| Non-performing assets to total assets | 0.60% | 0.62% | 0.49% | 1.56% | 2.43% | |
| Allowance for loan losses to total loans | 1.59% | 1.60% | 1.58% | 1.60% | 1.98% | |
| YTD net charge-offs (recoveries) to average loans, annualized | (0.03)% | (0.06)% | 1.22% | 1.36% | 0.63% | |
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Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
| Six Months Ended | ||
| June 30 | June 30 | |
| 2014 | 2013 | |
| Interest income | $8,411 | $8,753 |
| Interest expense | 1,384 | 1,532 |
| Net interest income | 7,027 | 7,221 |
| Provision for loan losses | 275 | 1,300 |
| Non-interest income: | ||
| Service charges on deposits | 557 | 612 |
| Other service charges and fees | 294 | 296 |
| Gain on sale of mortgage loans | 75 | 160 |
| Non-deposit brokerage fees | 144 | 143 |
| Lease income | 149 | 149 |
| BOLI income | 94 | 117 |
| Securities gains | 74 | 37 |
| Total | 1,387 | 1,514 |
| Non-interest expenses: | ||
| Personnel expense | 3,013 | 2,858 |
| Occupancy expense | 961 | 926 |
| Advertising and public relations | 176 | 188 |
| Professional fees | 302 | 338 |
| Data processing services | 481 | 537 |
| Franchise shares and deposit tax | 291 | 282 |
| FDIC insurance | 151 | 111 |
| Core deposit intangible amortization | 166 | 169 |
| Postage and office supplies | 110 | 78 |
| Other real estate owned expenses | 57 | 31 |
| Other | 487 | 743 |
| Total | 6,195 | 6,261 |
| Income before income taxes | 1,944 | 1,174 |
| Provision for income taxes | 520 | 271 |
| Net income | 1,424 | 903 |
| Preferred dividends and discount accretion | 259 | 393 |
| Net income available for common shareholders | $1,165 | $510 |
| Basic earnings per common share | $0.59 | $0.26 |
| Diluted earnings per common share | $0.56 | $0.25 |
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Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
| Key Operating Statistics: |
| Six Months Ended | ||
June 30 | June 30 | |
| 2014 | 2013 | |
| Average assets | $416,873 | $418,526 |
| Average earning assets | 384,487 | 386,147 |
| Average loans | 303,464 | 304,741 |
| Average deposits | 348,529 | 344,115 |
| Average equity | 36,358 | 39,254 |
| Average common equity | 28,446 | 27,570 |
| Return on average assets | 0.69% | 0.44% |
| Return on average equity | 7.90% | 4.64% |
| Efficiency ratio | 72.81% | 70.60% |
| Non-interest income to average assets | 0.67% | 0.73% |
| Non-interest expenses to average assets | 3.00% | 3.02% |
| Net overhead to average assets | 2.33% | 2.29% |
| Yield on loans | 5.13% | 5.39% |
| Yield on investment securities (TE) | 2.97% | 2.87% |
| Yield on average earning assets (TE) | 4.50% | 4.66% |
| Cost of average interest bearing liabilities | 0.83% | 0.92% |
| Net interest margin (TE) | 3.77% | 3.86% |
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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, | |
| 2014 | 2013 | 2012 | |
| Cash and due from financial institutions | $ 11,055 | $ 8,572 | $9,549 |
| Federal funds sold | 11,775 | 28,490 | 25,250 |
| Available for sale securities | 55,405 | 51,633 | 46,639 |
| Loans held for sale | 286 | - | 61 |
| Loans | 311,455 | 295,068 | 298,754 |
| Allowance for loan losses | (4,953) | (4,653) | (5,721) |
| Premises and equipment, net | 10,880 | 11,054 | 11,568 |
| Bank owned life insurance (BOLI) | 7,900 | 7,806 | 7,587 |
| Federal Home Loan Bank Stock, at cost | 2,025 | 2,025 | 2,025 |
| Accrued interest receivable | 1,536 | 1,554 | 1,660 |
| Deferred income taxes | 1,614 | 2,279 | 2,180 |
| Intangible assets | 4,596 | 4,762 | 5,094 |
| Other real estate owned | 598 | 833 | 191 |
| Other assets | 639 | 752 | 1,719 |
| Total Assets | $414,811 | $410,175 | $406,556 |
| Deposits: | |||
| Noninterest bearing | $ 44,972 | $ 39,967 | $ 41,725 |
| Savings, NOW and money market | 139,293 | 143,602 | 111,194 |
| Time | 161,545 | 159,382 | 178,814 |
| Total deposits | $345,810 | $342,951 | $331,733 |
| FHLB advances and other borrowings | 25,300 | 22,000 | 26,000 |
| Subordinated debentures | 5,000 | 5,000 | 5,000 |
| Accrued interest payable | 239 | 243 | 238 |
| Other liabilities | 1,661 | 1,634 | 2,019 |
| Total Liabilities | 378,010 | 371,828 | 364,990 |
| 6.5% Cumulative preferred stock | 7,659 | 7,659 | 7,659 |
| Series A preferred stock | - | 3,266 | 6,519 |
| Common stock | 27,072 | 27,072 | 27,072 |
| Retained earnings (deficit) | 1,818 | 653 | (430) |
| Accumulated other comprehensive income (loss) | 252 | (303) | 746 |
| Total Stockholders’ Equity | 36,801 | 38,347 | 41,566 |
| Total Liabilities and Stockholders’ Equity | $414,811 | $410,175 | $406,556 |
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Consolidated Financial Highlights (Unaudited)
In thousands, except per share data and ratios
| June 30 2014 | December 31, 2013 | December 31, 2012 | ||
| Capital Ratios: | ||||
| Tier 1 leverage | 8.90% | 9.57% | 10.20% | |
| Tier 1 risk-based capital | 11.44% | 12.56% | 13.16% | |
| Total risk based capital | 12.69% | 13.81% | 14.41% | |
| Tangible equity ratio (1) | 7.85% | 8.28% | 9.08% | |
| Tangible common equity ratio (1) | 5.98% | 5.59% | 5.55% | |
| Book value per common share | $14.80 | $13.93 | $13.91 | |
| Tangible book value per common share (1) | $12.47 | $11.51 | $11.32 | |
| End of period common share closing price | $11.00 | $9.86 | $8.78 | |
| _____________ |
| (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: | June 30, 2014 | December 31, 2013 | December 31, 2012 | |
| Total shareholders’ equity (a) | $36,801 | $38,348 | $41,566 | |
| Less: | ||||
| Preferred stock | (7,659) | (10,925) | (14,178) | |
| Common equity (b) | 29,142 | 27,423 | 27,388 | |
| Goodwill | (4,097) | (4,097) | (4,097) | |
| Intangible assets | (499) | (665) | (997) | |
| Tangible common equity (c) | 24,546 | 22,661 | 22,294 | |
| Add: | ||||
| Preferred stock | 7,659 | 10,925 | 14,178 | |
| Tangible equity (d) | $32,205 | $33,586 | $36,472 | |
| Total assets (e) | $414,811 | $410,175 | $406,556 | |
| Less: | ||||
| Goodwill | (4,097) | (4,097) | (4,097) | |
| Intangible assets | (499) | (665) | (997) | |
| Tangible assets (f) | $410,215 | $405,413 | $401,462 | |
| Shares outstanding (in thousands) (g) | 1,969 | 1,969 | 1,969 | |
| Book value per common share (b/g) | $14.80 | $13.93 | $13.91 | |
| Tangible book value per common share (c/g) | $12.47 | $11.51 | $11.32 | |
| Total shareholders’ equity to total assets ratio (a/e) | 8.87% | 9.35% | 10.22% | |
| Tangible equity ratio (d/f) | 7.85% | 8.28% | 9.08% | |
| Tangible common equity ratio (c/f) | 5.98% | 5.59% | 5.55% |
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