First Citizens Banc Corp Announces Second Quarter Earnings - KWES NewsWest 9 / Midland, Odessa, Big Spring, TX: newswest9.com |

First Citizens Banc Corp Announces Second Quarter Earnings

Information contained on this page is provided by an independent third-party content provider. WorldNow and this Station make no warranties or representations in connection therewith. If you have any questions or comments about this page please contact pressreleases@worldnow.com.

SOURCE First Citizens Banc Corp

SANDUSKY, Ohio, July 18, 2014 /PRNewswire/ -- First Citizens Banc Corp (NASDAQ: FCZA) ("First Citizens") reported net income attributable to common shares of $1.8 million, or $0.24 per share, for the second quarter of 2014, an increase of 34.2% compared with $1.4 million, or $0.18 per share, for the prior year period.  For the six-month period ended June 30, 2014, First Citizens reported net income available to common shareholders of $3.9 million or $0.50 per share, an increase of 30.1% compared to $3.0 million, or $0.39 per share, in the same period of 2013. 

"During the second quarter, we continued in our efforts to improve our efficiency ratio.  To that end, we completed the closure of three branches, began the process of closing a fourth branch and froze our defined benefit pension plan.  We were also successful in finding new owners for our former buildings.  The one-time net effect of all branch closures will be a gain of $67 thousand.  On an annualized basis, we expect cost savings of $450 thousand.  The movement of customer transactions from teller based to electronic is changing the way many banks view their branch networks.  We continually strive to find a good balance between cost structure and community commitment," said James O. Miller, President and CEO of First Citizens.  "The restructuring of our retirement expenses should initially save $195 thousand, pretax, for 2014."    

Results of Operations:

Net interest income for the second quarter of 2014 increased $485 thousand, or 5.0%, from the prior year's second quarter and for the six months ended June 30 increased $664 thousand, or 3.4%, when compared to the same period of 2013.  The increase in net interest income for the quarter was due both to an increase in interest income of $340 thousand or 3.1% and to a decrease in interest expense of $145 thousand or 11.7%.  The increase in net interest income for the year included an increase in interest income of $369 thousand, or 1.7%, as well as a decrease in interest expenses of $295 thousand, or 11.6%.  The increase in interest income was due primarily to an increase in average loans outstanding of $46.0 million, or 5.7%, partially offset by decreased yield of 17 basis points on loans, when compared to the six months of 2013.  This increase for the second quarter was also due to an increase in average loans outstanding of $48.5 million, or 6.0%, partially offset by decreased yield on loans of 12 basis points, when compared to the same period in 2013.  Net interest margin for the six months of 2014 was 3.63%, 12 basis point lower than the same period in 2013.  The average balance of interest-bearing deposits relating to tax refund processing was $92.6 million for 2014.  Removing the impact of the First Citizen's tax refund processing, the net interest margin would have been 29 basis points higher for the six months of 2014.  For the three months ended June 30, net interest margin was 3.76, 1 basis point lower than the second quarter a year ago.   Mr. Miller continued, "Over the past several years we have seen that our Net Interest Income has been stable throughout changes in the interest rate environment.  With an increase in average loans, a decrease in deposit rates and changes in our funding mix we have continued to manage through this challenging interest rate environment."

The provision for loan losses for the second quarter and six months ended 2014 increased $450 thousand, or 150.0%, and $700 thousand, or 87.5%, compared to the three and six-month periods ended 2013, respectively.  Net Charge offs totaled $2.6 million for the first six months of 2014.  The majority of the charge-offs related to resolution of specific problem credits for which a specific reserve had been allocated.  The increase in provision for loan losses in the first half of 2014 is primarily related to the increased size of the loan portfolio compared to a year ago.  

Noninterest income increased $549 thousand, or 19.4%, compared to the prior year's second quarter and increased $2.0 million, or 32.4%, when compared to the six months of 2013.  The increases in both the three- and six-month periods were primarily due to an increase fee income related to income tax refund processing.  Tax refund processing fees were up $392 thousand, or 852.2% for the second quarter of 2014 compared to the second quarter of 2013 and up $1.9 million, or 443.4% when compared to the six months of 2013, due to increased volume of returns processed.  Wealth management revenue increased $160 thousand, or 25.6%, for the three-month period ended June 30 compared to the same period in 2013 and increased $346 thousand, or 28.2%, for the six-month period ended June 30 compared to the same period in 2013.  The increase in wealth management revenue is due to both an increase in asset valuations as well as an increase in accounts.  These factors were offset by a $ 46.4 million decrease in assets related to out-of-area accounts inherited from a previous acquisition.  First Citizens made the decision to better focus our efforts on local accounts and began the process of moving these accounts out of the Bank.  Assets under management decreased by 1.2% from the end of 2013, to $462.7 million.  The out-of-area accounts were lower yielding accounts and the lost revenue was more than offset by increased revenue related to other assets under management.  Mortgage banking revenue for the six months of 2014 decreased $47 thousand or 16.9% compared to the same period in 2013.  However, mortgage banking revenue for the second quarter increased $50 thousand, or 64.1% compared to the same period of 2013.    Mr. Miller continued, "Mortgage banking has been sluggish for the entire banking industry in 2014.  We have continued to see our pipelines and closed business increase as the year progresses.  Our Wealth Management business has benefited from an increased amount of cross-selling by our commercial lenders as well as a positive stock market.    We are very pleased with the results of our tax refund processing program.  We increased the volume of refunds processed and have been very successful in 2014."    

Noninterest expense decreased $367 thousand, or 3.5%, when compared to the prior year's second quarter and $146 thousand, or 0.7%, when compared to the six months of 2013.  For the quarter and six month periods, the decrease in noninterest expense was primarily attributable to a $564 thousand decrease in pension expense for the second quarter and a decrease of $611 thousand for the six month period.  The decreases in pension costs were offset by increases in salaries and commissions for the quarter and six month periods of $313 thousand and $430 thousand respectively.  As of April 30, 2014, the Company has frozen its pension plan.  While the plan still exists, no new participants will be added and no additional benefits will accrue going forward. 

Balance Sheet

Total assets increased $19.0 million, or 1.6%, from December 31, 2013 to June 30, 2014 due primarily to an increase in loans of $7.9 million or 0.9% as well as an increase in cash and cash equivalents of $16.0 million.    

Total deposits increased $36.6 million, or 3.9%, from December 31, 2013 to June 30, 2014, largely related to cash on deposit from the tax refund processing program.  As of June 30, 2014 the balance related to the tax refund processing program was approximately $34.9 million.  Total shareholder's equity decreased $17.1 million, or 13.3%, from December 31, 2013 to June 30, 2014 as a result of the $23.2 million redemption  of Series A Preferred Stock, partially offset by retained earnings of $3.5 million and changes to Accumulated Other Comprehensive Income. 

Asset Quality

Nonperforming assets decreased $2.9 million, or 11.3%, from December 31, 2013 to June 30, 2014 due to the continuing workout of nonperforming loans with delinquent customers.  Total non-accrual loans decreased $2.8 million, or 13.9%, from December 31, 2013 to June 30, 2014.   Mr. Miller continued, "We continue to be conservative on how we view asset quality.  If we see potential weakness in a credit, we strive to identify it early and reserve appropriately.  We continue to see improvements in non-performing assets.  When we look back to June 2013, we have reduced non-performing loans by $11.3 million.  Non-accrual loans continue to decrease and over 60% of our non-accrual loans are current with their payments."   

First Citizens Banc Corp is a $1.2 billion financial holding company headquartered in Sandusky, Ohio.  The Company's banking subsidiary, The Citizens Banking Company, operates 25 locations in Central and North Central Ohio.

First Citizens Banc Corp may be accessed at www.fcza.com.  The Company's common shares are traded on the NASDAQ Capital Market under the symbol "FCZA".  The Company's depositary shares, each representing a 1/40th ownership interest in a Series B Preferred Share, are traded on the NASDAQ Capital Market under the symbol "FCZAP".

This press release may contain forward-looking statements regarding the financial performance, business prospects, growth and operating strategies of First Citizens. For these statements, First Citizens claims the protections of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Statements in this press release should be considered in conjunction with the other information available about First Citizens, including the information in the filings we make with the Securities and Exchange Commission. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management's expectations and are subject to a number of risks and uncertainties. We have tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "project," "intend," "plan," "believe," "will" and similar expressions in connection with any discussion of future operating or financial performance. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements. Risks and uncertainties that could cause actual results to differ materially include risk factors relating to the banking industry and the other factors detailed from time to time in First Citizens' reports filed with the Securities and Exchange Commission, including those described in "Item 1A Risk Factors" of Part I of First Citizens's Annual Report on Form 10-K for the fiscal year ended December 31, 2013.  Undue reliance should not be placed on the forward-looking statements, which speak only as of the date hereof. First Citizens does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement is made, or reflect the occurrence of unanticipated events, except to the extent required by law.

 

First Citizens Banc Corp
Financial Highlights
(dollars in thousands, except share amounts)






Consolidated Condensed Statement of Income














Three Months Ended


Six Months Ended


June 30,


June 30,


(unaudited)


(unaudited)


2014


2013


2014


2013









Interest income

11,365


11,025


22,680


22,311

Interest expense

1,099


1,244


2,248


2,543

Net interest income

10,266


9,781


20,432


19,768

Provision for loan losses

750


300


1,500


800

Net interest income after provision

9,516


9,481


18,932


18,968

Noninterest income

3,380


2,831


8,004


6,047

Noninterest expense

9,979


10,346


20,408


20,554

Income before taxes

2,917


1,966


6,528


4,461

Income tax expense

677


309


1,577


891

Net income

2,240


1,657


4,951


3,570

Preferred stock dividends 

406


290


1,061


580

Net income available 








to common shareholders

1,834


1,367


3,890


2,990









Dividends per common share

$             0.05


$             0.04


$             0.09


$             0.07









Earnings per common share,








basic

$             0.24


$             0.18


$             0.50


$             0.39

diluted

$             0.21


$             0.18


$             0.43


$             0.39









Average shares outstanding,








basic

7,707,917


7,707,917


7,707,917


7,707,917

diluted

10,904,848


7,707,917


10,904,848


7,707,917









Selected financial ratios:








Return on average assets

0.74%


0.58%


0.78%


0.61%

Return on average equity

8.18%


6.34%


8.84%


6.89%

Dividend payout ratio

17.21%


18.61%


14.01%


15.11%

Net interest margin (tax equivalent)

3.76%


3.77%


3.63%


3.75%

 

 

 Selected Balance Sheet Items 






 June 30, 


 December 31, 


2014


2013






 (unaudited) 



 Cash and due from financial institutions 

$                  49,893


$                  33,883

 Investment securities 

197,680


199,613

 Loans held for sale 

2,168


438

 Loans 

867,978


861,241

 Less allowance for loan losses 

15,395


16,528

 Net loans 

852,583


844,713

 Other securities 

12,548


15,424

 Fixed assets 

16,158


16,927

 Goodwill and other intangibles 

23,610


24,013

 Bank owned life insurance 

19,400


19,145

 Other assets 

12,463


13,390

 Total assets 

1,186,503


1,167,546





 Total deposits 

979,136


942,475

 Federal Home Loan Bank advances 

37,500


37,726

 Securities sold under agreements to repurchase 

17,881


20,053

 Subordinated debentures 

29,427


29,427

 Accrued expenses and other liabilities 

11,320


9,489

 Total shareholders' equity 

111,239


128,376

 Toal liabilities and shareholders' equity 

1,186,503


1,167,546





 Shares outstanding at period end 

7,707,917


7,707,917





 Book value per share 

$                    11.43


$                    10.65

 Tangible book value per share 

8.37


7.53

 Equity to asset ratio 

9.38%


11.00%





Selected asset quality ratios:




Allowance for loan losses to total loans

1.77%


1.92%

Non-performing assets to total assets

1.93%


2.22%

Allowance for loan losses to non-performing loans

67.95%


64.33%





Non-performing asset analysis




Nonaccrual loans

$                  17,612


$                  20,458

Troubled debt restructurings

5,044


5,234

Other real estate owned

282


173

Total

$                  22,938


$                  25,865

 

 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












Three Months Ended


June 30,


March 31,


December 31,


September 30,


June 30,

End of Period Balances

2014


2014


2013


2013


2013











Assets










Cash and due from banks

$       49,893


$     119,715


$       33,883


$       50,093


$        62,104

Securities available for sale

197,680


203,997


199,613


200,356


199,866

Loans held for sale

2,168


545


438


4,891


756

Loans

867,978


857,368


861,241


819,571


810,106

Allowance for loan losses

(15,395)


(16,767)


(16,528)


(17,297)


(19,405)

Net Loans

852,583


840,601


844,713


802,274


790,701

Other securities

12,548


12,414


15,424


15,433


15,540

Fixed assets

16,158


16,485


16,927


16,563


16,881

Goodwill and other intangibles

23,610


23,811


24,013


24,223


24,435

Bank owned life insurance

19,400


19,275


19,145


19,013


18,881

Other assets

12,463


14,044


13,390


14,941


14,084

Total Assets

$  1,186,503


$  1,250,887


$  1,167,546


$  1,147,787


$  1,143,248











Liabilities










Total Deposits

$     979,136


$  1,044,820


$     942,475


$     942,458


$      938,205

Federal Home Loan Bank advances

37,500


37,717


37,726


37,735


40,244

Securities sold under agreement to repurchase

17,881


17,949


20,053


20,810


19,421

Subordinated debentures

29,427


29,427


29,427


29,427


29,427

Accrued expenses and other liabilities

11,320


12,363


9,489


14,441


13,792

Total liabilities

1,075,264


1,142,276


1,039,170


1,044,871


1,041,089











Shareholders' equity










Preferred shares, Series A

-


-


23,184


23,184


23,184

Preferred shares, Series B

23,132


23,132


23,132


-


-

Common Stock

114,365


114,365


114,365


114,365


114,365

Accumulated deficit

(7,300)


(8,747)


(10,823)


(11,268)


(12,544)

Treasury stock

(17,235)


(17,235)


(17,235)


(17,235)


(17,235)

Accumulated other comprehensive income

(1,723)


(2,904)


(4,247)


(6,130)


(5,611)

Total shareholders' equity

111,239


108,611


128,376


102,916


102,159











Total liabilities and shareholders' equity

$  1,186,503


$  1,250,887


$  1,167,546


$  1,147,787


$  1,143,248











Average Balances










Assets:










Earning assets

$  1,171,483


$  1,211,151


$  1,091,609


$  1,091,198


$  1,102,456

Securities

216,999


221,135


216,848


217,078


219,086

Loans

857,765


853,642


819,152


813,888


811,761

Liabilities and shareholders' equity










Total deposits

$  1,065,859


$  1,123,070


$     965,370


$     965,556


$      974,948

Interest-bearing deposits

730,367


729,717


731,778


734,013


736,661

Interest-bearing liabilities

87,659


91,092


89,496


89,758


90,462

Total shareholders' equity

112,967


116,119


103,563


103,493


104,463

 

 

Supplemental Financial Information

(Unaudited - Dollars in thousands except share data)












Three Months Ended


June 30,


March 31,


December 31,


September 30,


June 30,

Income statement

2014


2014


2013


2013


2013











Total interest income

$         11,365


$         11,315


$         11,443


$         11,127


$         11,025

Total interest expense

1,099


1,150


1,153


1,210


1,244

Net interest income

10,266


10,165


10,290


9,917


9,781

Provision for loan losses

750


750


-


300


300

Noninterest income

3,380


4,624


2,939


3,077


2,831

Noninterest expense

9,979


10,428


12,087


10,745


10,346

Income before taxes

2,917


3,611


1,142


1,949


1,966

Income tax expense

677


899


99


383


309

Net income

$            2,240


$            2,712


$            1,043


$            1,566


$            1,657











Common stock dividend paid

$               385


$               308


$               308


$               308


$               308

Preferred stock dividend paid

$               406


$               655


$               290


$               290


$               290











Per share data




















Basic net income per common share

$              0.24


$              0.27


$              0.10


$              0.17


$              0.18

Diluted net income per common share

0.21


0.22


0.09


0.17


0.18

Dividends per common share

0.05


0.04


0.04


0.04


0.04

Average common shares outstanding - basic

7,707,917


7,707,917


7,707,917


7,707,917


7,707,917

Average common shares outstanding - diluted

10,904,848


10,904,848


7,821,780


7,707,917


7,707,917











Asset quality










Allowance for loan losses, beginning of period

$         16,767


$         16,528


$         17,297


$         19,405


$         19,710

Charge-offs

(2,332)


(652)


(1,084)


(2,600)


(985)

Recoveries

210


141


315


192


380

Provision

750


750


-


300


300

Allowance for loan losses, end of period

$         15,395


$         16,767


$         16,528


 

$ 17,297


$         19,405











Ratios










Allowance to total loans

1.77%


1.96%


1.92%


2.11%


2.40%

Allowance to nonperforming assets

67.11%


62.14%


63.90%


56.97%


56.64%

Allowance to nonperforming loans

67.95%


62.60%


64.33%


57.27%


57.22%











Nonperforming assets










Nonperforming loans

$         22,656


$         26,786


$         25,692


$         30,203


$         33,912

Other real estate owned

282


196


173


158


350

Total nonperforming assets

$         22,938


$         26,982


$         25,865


$         30,361


$         34,262











Capital and liquidity










Tier 1 leverage ratio

9.77%


8.58%


11.64%


9.55%


9.38%

Tier 1 risk-based capital ratio

13.67%


13.39%


15.82%


13.26%


13.44%

Total risk-based capital ratio

14.92%


14.67%


17.08%


14.66%


14.92%

Tangible common equity ratio

5.55%


5.03%


5.08%


4.94%


4.87%

 

 

©2012 PR Newswire. All Rights Reserved.