Citizens First Corporation (NASDAQ:CZFC) today reported results for the quarter and nine months ending September 30, 2016, which include the following:
For the quarter ended September 30, 2016, the Company reported net income of $1.14 million, or $0.45 per diluted common share. This represents an increase of $360,000, or $0.14 per diluted common share, from $775,000, or $0.31 per diluted common share, for the quarter ended September 30, 2015. “Continued loan growth, improved operating efficiency, and credit quality were the drivers of third quarter profitability,” said Todd Kanipe, President & CEO of Citizens First. “General economic conditions in our markets remain favorable for loan growth. Continued pressure on the net interest margin remains our primary challenge as portfolio loans reprice.”
For the nine months ended September 30, 2016, net income totaled $3.11 million, or $1.23 per diluted common share. This represents an increase of $658,000, or $0.28 per diluted common share, from the net income of $2.46 million in the first nine months of the previous year.
The Board of Directors declared a cash dividend of $0.08 per common share payable November 17, 2016 to shareholders of record as of October 31, 2016. Dividends were most recently paid in May, 2016 and November, 2015 of $0.08 per common share.
Income Statement Third Quarter 2016 Compared to Third Quarter 2015
Net interest income increased $165,000, or 4.4%, as the volume of earning assets increased from the prior year. The Company’s net interest margin was 3.83% for the quarter ended September 30, 2016, and 3.84% for the quarter ended September 30, 2015, a decrease of 1 basis point. The Company’s net interest margin decreased primarily due to a decline in the yield on loans.
There was no provision for loan losses in the third quarter of the current year and the third quarter in the prior year due to the continued reduction in non-performing assets.
Non-interest income increased $12,000, or 1.4%, primarily due to gains on the sale of mortgage loans.
Non-interest expense decreased $385,000, or 10.9%, primarily due to a branch disposal loss of $262,000 that occurred in 2015, and a reduction in professional fees of $85,000.
Income Statement Current Year Compared to Prior Year
Net interest income increased $487,000, or 4.3%, as the volume of earning assets increased from the prior year. The Company’s net interest margin was 3.89% for the nine months ended September 30, 2016, and 3.84% for the nine months ended September 30, 2015, an increase of 5 basis points. The Company’s net interest margin increased due to an increase in the yield on average earning assets coupled with a decline in the cost of average interest-bearing liabilities.
Non-interest income increased $103,000, or 4.4%, primarily due to gains on the sale of securities and gains on sale of mortgage loans, offset by a decline in lease income and non-deposit brokerage fees.
Non-interest expense decreased $167,000, or 1.7%, primarily due to a decrease in branch disposal losses of $235,000 and professional fees of $119,000, partially offset by an increase in personnel expenses, which were a result of normal salary adjustments.
Credit Quality
Non-performing assets totaled $156,000, or 0.04% of total assets, at September 30, 2016 compared to $1.0 million, or 0.24% of total assets at September 30, 2015, a decrease of $857,000.
The allowance for loan losses at September 30, 2016 was $5.0 million, or 1.45% of total loans, compared to $4.9 million, or 1.49% of total loans as of December 31, 2015. We consider 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 our loan portfolio.
Balance Sheet
Total assets at September 30, 2016 were $441.7 million compared to $432.2 million at December 31, 2015. Total assets increased $9.5 million, or 2.2%, from December 31, 2015 to September 30, 2016 due to a growth in loans, partially offset by a decline in available-for-sale securities.
Loans increased $12.4 million, or 3.7%, from December 31, 2015 to September 30, 2016. Deposits decreased $16.6 million, or 4.5%, from December 31, 2015 to September 30, 2016. The decrease in deposits was offset by an increase in borrowings of $23 million.
Stockholders’ equity increased to $42.4 million at September 30, 2016 from $39.5 million at December 31, 2015. The common equity and tangible common equity ratios were 7.95% and 7.05%, respectively, as of September 30, 2016 compared to 7.37% and 6.43%, respectively, at December 31, 2015. The book value and tangible book value per common share ratios were $17.56 and $15.40, respectively, at September 30, 2016 compared to $16.18 and $13.97, respectively, at December 31, 2015.
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 atwww.citizensfirstbank.com.