U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-QSB
X Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended June 30, 2000
___ Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from _______ to _________
Commission File Number 333-67435
CITIZENS FIRST CORPORATION
(Exact Name of Small Business Issuer as Specified in its Charter)
Kentucky 61-0912615
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1805 Campbell Lane, Bowling Green, Kentucky 42101
(Address of principal executive offices)
Issuer's telephone number, including area code: (270) 393-0700
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No ___
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date:
Class Outstanding at August 14, 2000
Common Stock, no par value 643,053
Transitional Small Disclosure Format: Yes ___ No X
---
<PAGE>
CITIZENS FIRST CORPORATION
TABLE OF CONTENTS
Page No.
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements 3-7
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II. OTHER INFORMATION
ITEM 4. Submission of Matters to a Vote of Security Holders 13
ITEM 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibits 15-18
<PAGE>
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
Consolidated Balance Sheets
(Unaudited)
<CAPTION>
June 30, December 31,
2000 1999
---- ----
<S> <C> <C>
Assets
Cash and due from banks ...................................... $ 2,740,781 $ 2,175,135
Interest-bearing deposits with banks ......................... 22,568 20,204
Federal funds sold ........................................... -- 3,475,000
Securities available for sale (amortized cost of $6,250,186 as
of June 30, 2000; $4,472,022 as of December 31, 1999)
6,196,626 4,389,787
Mortgage loans held for sale .................................. 96,000 114,000
Loans ........................................................ 47,945,754 34,126,628
Less allowance for loan losses ............................... 581,520 400,920
------------ ------------
Net loans ................................................. 47,364,234 33,725,708
Premises and equipment, net .................................. 1,585,486 1,641,257
Other assets ................................................. 613,893 432,219
------------ ------------
Total assets .............................................. $ 58,619,588 $ 45,973,310
============ ============
Liabilities and Shareholders' Equity
Deposits:
Demand deposits ............................................ $ 3,279,864 $ 2,877,867
Savings, NOW and money market deposits ..................... 7,823,228 7,675,636
Time deposits .............................................. 37,112,478 26,576,818
------------ ------------
Total deposits ............................................. 48,215,570 37,130,321
Securities sold under agreements to repurchase ............... 2,423,631 1,487,878
Other short-term borrowings .................................. 1,000,000 --
Other liabilities ............................................ 420,732 506,463
------------ ------------
Total liabilities ......................................... 52,059,933 39,124,662
Shareholders' equity:
Preferred stock, Authorized 500 shares; issued and
outstanding 0 ................... ........................ -- --
Common stock, no par value. Authorized 1,000,000
shares; issued and outstanding 643,053 ................... 7,357,477 7,357,477
Retained earnings .......................................... (762,472) (454,554)
Accumulated other comprehensive income .................... (35,350) (54,275)
------------ ------------
Total shareholders' equity ................................ 6,559,655 6,848,648
------------ ------------
Total liabilities
and shareholders' equity ................................ $ 58,619,588 $ 45,973,310
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended June 30
2000 1999
----- ------
Interest income
<S> <C> <C>
Loans, including fees ............... $ 1,042,776 $ 166,590
Federal funds sold .................. 29,203 30,569
Securities available for sale ....... 94,358 47,947
Interest-bearing deposits with banks 2,480 4,225
--------- ---------
Total interest income ............... 1,168,817 249,331
Interest expense
Deposits ............................ 571,046 71,822
Other short-term borrowings ......... 20,305 326
--------- ---------
Total interest expense .............. 591,351 72,148
--------- ---------
Net interest income ................... 577,466 177,183
Provision for loan losses ........... 118,500 97,500
------- --------
Net interest income after
provision for loan losses ........... 458,966 79,683
------- --------
Non-interest income
Service charges on deposit accounts . 57,484 8,222
Gain (loss) on sales of securities
available for sale, net ............. -- 145,539
Other ............................... 13,507 34,657
--------- ---------
Total non-interest income ........... 70,991 188,418
Non-interest expense
Compensation and benefits ........... 347,668 278,575
Net occupancy expense ............... 36,707 37,867
Furniture and equipment expense ..... 44,325 53,653
Professional fees ................... 38,788 28,105
Postage, printing & supplies ........ 13,355 17,107
Bank franchise and license tax ...... 24,000 15,625
Processing fees ..................... 39,765 19,779
Advertising ......................... 25,728 13,814
Other ............................... 51,206 50,444
------- ---------
Total non-interest expense........... 621,542 514,969
------- ---------
Income (loss) before income taxes ..... $ (91,585) $(246,868)
Income tax expense .................... -- 9,682
--------- ---------
Net income (loss) ..................... $ (91,585) $(256,550)
========= =========
Diluted earnings (loss) per share ..... $ (0.14) $ (0.40)
Basic earnings (loss) per share ....... $ (0.14) $ (0.40)
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
For the six months ended June 30
2000 1999
---- ----
Interest income
<S> <C> <C>
Loans, including fees .............. $ 1,833,406 $ 178,075
Federal funds sold ................. 66,572 65,647
Securities available for sale ...... 189,710 54,113
Interest-bearing deposits with banks 5,047 6,072
--------- ---------
Total interest income .............. 2,094,735 303,907
Interest expense
Deposits ........................... 1,025,360 79,850
Other short-term borrowings ........ 31,677 12,218
--------- ---------
Total interest expense ............. 1,057,037 92,068
--------- ---------
Net interest income .................. 1,037,698 211,839
Provision for loan losses .......... 207,000 122,500
--------- ---------
Net interest income after
provision for loan losses .......... 830,698 89,339
--------- ---------
Non-interest income
Service charges on deposit accounts 93,427 8,572
Gain (loss) on sales of securities
available for sale, net ........... (6,700) 889,245
Other .............................. 20,240 36,124
-------- ---------
Total non-interest income .......... 106,967 933,941
Non-interest expenses
Compensation and benefits .......... 698,818 533,186
Net occupancy expense .............. 75,310 69,215
Furniture and equipment expense .... 99,176 83,487
Professional fees .................. 63,746 48,296
Postage, printing & supplies ....... 27,730 46,587
Bank franchise and license tax ..... 48,356 34,375
Processing fees .................... 68,425 33,091
Advertising ........................ 59,515 54,294
Other .............................. 104,507 72,153
--------- ---------
Total non-interest expenses ........ 1,245,583 974,684
--------- ---------
Income (loss) before income taxes .... (307,918) 48,596
Income tax expense ................... -- 63,545
---------- ---------
Net income (loss) .................... $ (307,918) $ (14,949)
============ =========
Diluted earnings (loss) per share .... $ (0.48) $ (0.03)
Basic earnings (loss) per share ...... $ (0.48) $ (0.03)
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Consolidated Statements of Changes in Shareholders' Equity
(Unaudited)
<TABLE>
For the six months ended June 30
<CAPTION>
2000 1999
----- ----
<S> <C> <C>
Balance January 1 $ 6,848,648 $ 725,042
Net income (loss) .......................... (307,918) (14,949)
Other comprehensive income (loss) net of tax 18,925 (565,941)
Issuance of common stock - 7,336,935
----------- -----------
Balance at end of period ..................... $ 6,559,655 $ 7,481,087
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
Consolidated Statements of Comprehensive Income
(Unaudited)
<TABLE>
For the six months ended June 30
<CAPTION>
2000 1999
----- ----
<S> <C> <C>
Net income (loss) ................................. $(307,918) $(14,949)
Other comprehensive income,(loss) net of tax:
Unrealized holding gains on available for sale
securities arising during the period 14,503 20,960
Reclassification adjustments for gains (losses)
on securities included in net income 4,422 (586,901)
--------- --------
Total other comprehensive income (loss), Net of tax 18,925 (565,941)
--------- --------
Comprehensive income (loss) $(288,993) $(580,890)
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
<TABLE>
Consolidated Statements of Cash Flows
(Unaudited)
For the six months ended June 30
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income .............................................. $ (307,918) $ (14,949)
Adjustments to reconcile net income to cash
provided by operating activities:
Provision for loan losses ............................. 207,000 122,500
(Gain) loss on sale of securities available for sale .. 6,700 (889,245)
Depreciation and amortization of fixed assets ......... 110,240 93,676
Increase in accrued interest receivable ................. (259,256) (131,004)
Decrease (increase) in other assets ..................... 44,371 (86,147)
Increase in accrued interest payable .................... 110,007 24,215
Decrease in other liabilities ........................... (204,019) (303,282)
------------ ------------
Net cash used in operating activities ................ (292,875) (1,184,236)
------------ ------------
Cash flows from investing activities:
Net increase in interest-bearing deposits with banks ... (2,364) (231,593)
Net decrease (increase) in federal funds sold .......... 3,475,000 (1,950,000)
Proceeds from sale of securities available for sale ..... 493,300 971,597
Proceeds from maturities of securities available for sale 3,003,742 310,641
Purchase of securities available for sale ............... (5,279,437) (4,598,943)
Net increase in loans ................................... (13,827,526) (12,192,573)
Purchases of premises and equipment ..................... (25,294) (698,833)
------------ ------------
Net cash used in investing activities ................. (12,162,579) (18,389,704)
------------ ------------
Cash flows from financing activities:
Net increase in deposits ................................ 11,085,249 13,877,201
Net increase (decrease) in short-term borrowings ........ 1,935,851 (917,140)
Proceeds from issuance of common stock .................. -- 7,336,935
------------ ------------
Net cash provided by financing activities ............. 13,021,100 20,296,996
------------ ------------
Net increase in cash and cash equivalents ............... 565,646 723,056
Cash and cash equivalents at beginning of period ........ 2,175,135 16,817
------------ ------------
Cash and cash equivalents at end of period .............. $ 2,740,781 $ 739,873
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
Notes to Consolidated Financial Statements
(1) Summary of Significant Accounting Policies
The accounting and reporting policies of Citizens First
Corporation (the "Company") and its subsidiary Citizens First Bank,
Inc. (the "Bank") conform to generally accepted accounting principles
and general practices within the banking industry. The consolidated
financial statements include the accounts of Citizens First Corporation
and its wholly-owned subsidiary. All significant intercompany
transactions and accounts have been eliminated in consolidation.
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosure of contingent assets and liabilities as
of the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Estimates used in
the preparation of the financial statements are based on various
factors including the current interest rate environment and the general
strength of the local economy. Changes in the overall interest rate
environment can significantly affect the Company's net interest income
and the value of its recorded assets and liabilities. Actual results
could differ from those estimates used in the preparation of the
financial statements.
The financial information presented has been prepared from the
books and records of the Company and is not audited. The accompanying
consolidated financial statements have been prepared in accordance with
the instructions to Form 10-QSB and do not include all of the
information and the footnotes required by generally accepted accounting
principles for complete statements.
In the opinion of management, all adjustments considered necessary
for a fair presentation have been reflected in the accompanying
unaudited financial statements. Results of interim periods are not
necessarily indicative of results to be expected for the full year.
(2) Stock Split
On February 5, 1999 the Company's Board of Directors declared a
stock split of 1.043 to 1. All of the per share calculations and
amounts of outstanding shares included herein for all periods presented
have been restated to give retroactive effect to the stock split.
(3) Reclassification of Initial Public Offering Proceeds
On February 17, 1999 the Company completed the initial public
offering for the sale of 536,667 shares of its no par value common
stock. The proceeds from this offering as well as the proceeds from
common stock outstanding prior to the public offering have been
reflected as a component of common stock on the balance sheet. These
amounts were previously reported as a component of additional paid-in
capital. The reclassification has no impact on equity, net income or
total assets as of or for the quarter ended June 30, 1999.
(4) State Corporate Income Taxes
The Company incurred state corporate income taxes of $9,682 for
the quarter ended June 30, 1999 and $63,545 for the six-month period
then ended because the losses of the Bank are not deductible for state
corporate income tax purposes. Banks in the state of Kentucky are not
assessed corporate income taxes, but are instead taxed based on the
value of their capital accounts. Accordingly, the income or loss from
bank subsidiaries of a holding company is not included in the
calculation of corporate income tax. The Company had taxable income
primarily as the result of gains of $145,539 and $889,245 on the sale
of marketable securities in the three-month and six-month periods ended
June 30, 1999. The Company had no federal income tax liability for the
three-month or six month periods ended June 30, 1999 based on its
consolidated results of operations.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
General
The Company was incorporated under the laws of the
Commonwealth of Kentucky on December 24, 1975 for the purpose of
conducting business as an investment club, and is headquartered in
Bowling Green, Kentucky. In late 1998 and early 1999, the Company filed
the appropriate regulatory applications and received regulatory
approval to become a bank holding company under the Bank Holding
Company Act of 1956, as amended, through its organization and ownership
of its only subsidiary, the Bank. On February 17, 1999, the Company
completed the initial public offering for the sale of 536,667 shares of
its no par value common stock. The proceeds of the sale of the stock
were used to pay start up expenses, liquidate short-term borrowings,
and capitalize the Bank. The Bank opened for business on February 18,
1999.
The Bank operates in two locations. The main office is located
at 1805 Campbell Lane, and the one branch office, which opened on March
22, 1999, is located at 901 Lehman Avenue.
The Company's primary cash requirements are expected to be met
by the anticipated growth of customers' deposits, and through the sale
of investment securities. The Bank has also established federal funds
guidelines with correspondent banks, giving it short-term borrowing
availability, and has established a program allowing it to sell
investment securities under an agreement to repurchase at a later date.
In addition, the Bank is in the process of finalizing arrangements for
borrowing capabilities through the Federal Home Loan Bank of
Cincinnati. Other than these sources, the Company does not anticipate
the need to raise additional funds in the next twelve months. Property
and equipment needed for the operation of the Bank have been purchased
and no additional significant purchases or sales of plant and equipment
are planned. The Company and the Bank are fully staffed and no
significant changes in the number of employees are planned.
The Company follows a corporate strategy which focuses on
providing the Bank's customers with high quality, personal banking
services. The Bank offers a range of products designed to meet the
needs of its customers that include individuals, small businesses,
partnerships and corporations.
Results of Operations
For the three months ended June 30, 2000, the Company reported
a net loss of $91,585, or $0.14 per diluted share, compared to a net
loss of $256,550, or $0.40 per diluted share, for the same period ended
June 30, 1999. These results include a gain on the sale of investment
securities of $145,539 for the quarter ended June 30, 1999. Excluding
these securities transactions, and the related tax effect, the net loss
would have been $392,407 or $0.61 per diluted share for the three
months ended June 30, 1999.
For the six months ended June 30, 2000, the Company reported a
net loss of $307,918, or $0.48 per diluted share, compared to a net
loss of $14,949, or $0.03 per diluted share, for the same period ended
June 30, 1999. Net income includes a loss of $6,700 during the first
six months of 2000, and a gain of $889,245 during the same period in
1999, from the sale of investment securities. Excluding these
securities transactions and the related tax effect, the net loss for
the first six months of 2000 would have been $301,218, or $0.47 per
diluted share, compared to a net loss of $840,649, or $1.68 per diluted
share, during the same period of 1999.
Net Interest Income
Net interest income was $577,466 in the second quarter of
2000, compared with $177,183 in the comparable 1999 period. Second
quarter 2000 interest income of $1,168,817, an increase of $919,486
over the same period in 1999, includes $1,042,776 income on loans,
$94,358 income on investment securities, and $31,683 income on federal
funds sold and interest-bearing deposits with banks. Interest income of
$249,331 during the second quarter of 1999 included $166,590 of income
on loans, $47,947 income on investment securities, and $34,794 income
on federal funds sold and interest-bearing deposits with banks.
Interest expense of $591,351 for second quarter 2000 includes interest
on deposits of $571,046, and $20,305 of other short-term borrowings.
Second quarter 1999 interest expense of $72,148 consists primarily of
interest on deposits.
Net interest income was $1,037,698 for the six months ended
June 30, 2000, an increase of $825,859 over the total of $211,839 for
the same period of 1999. Interest income of $2,094,735 for the first
six months of 2000 included $1,833,406 income on loans, $189,710 income
on investment securities, and $71,619 income on federal funds sold and
interest-bearing deposits with banks. Total interest income of $303,907
for the first six months of 1999 consisted of $178,075 income on loans,
$54,113 income on investment securities, and $71,719 income on federal
funds sold and interest-bearing deposits with banks. Interest expense
for the first half of 2000 totaled $1,057,037, composed of $1,025,360
interest on deposits, and $31,677 interest on other short-term
borrowings. The comparable period of 1999 had interest expense of
$92,068, of which $79,850 was interest on deposits, and $12,218 was
interest on other short-term borrowings.
Non-Interest Income
Non-interest income for the three months ended June 30, 2000
and 1999, respectively, was $70,991 and $188,418. The three months
ended June 30, 1999 included a gain on the sale of investment
securities of $145,539. These investments were sold in part so that
additional capital would be available to be contributed to the Bank, in
order to meet minimum capital requirements of the Federal Deposit
Insurance Corporation.
Non-interest income was $106,967 versus $933,941 for the six
months ended June 30, 2000 and 1999, respectively. Non-interest income
for the first six months of 2000 includes a loss of $6,700 on the sale
of investment securities. This loss is due to an investment that was
sold and replaced with a higher-yielding security. Non-interest income
for the same period in 1999 included a gain on the sale of investment
securities of $889,245. Some of this gain was the result of the
previously mentioned sale so that additional capital would be available
to be contributed to the Bank. In addition, at December 31, 1998, the
investment securities owned by the Company included concentrations in
the stocks of certain publicly traded companies. The sale of some of
these securities in early 1999 was an effort to reduce the Company's
exposure to loss.
Non-Interest Expense
Non-interest expense was $621,542 in the second quarter of
2000, up from $514,969 in the same quarter of 1999, an increase of
$106,573 or 21%. Non-interest expense for the six months ended June 30,
2000 and 1999, respectively, was $1,245,583 and $974,684, an increase
of $270,899 or 28%. Expenses for the first half of 2000 include the
costs of a full six months of operations of the Bank, compared to the
comparable period in 1999, during which the Bank opened on February 18,
1999. The majority of the year-to-year increase is in compensation and
benefits expenses, which increased $165,632, or 31%, from $533,186 in
1999 to $698,818 in 2000.
Income Taxes
Income tax expense has been calculated based on the Company's
expected annual rate. Deferred tax liabilities and assets are
recognized for the tax effects of differences between the financial
statement and tax bases of assets and liabilities. A valuation
allowance is established to reduce deferred tax assets if it is more
likely than not that a deferred tax asset will not be realized.
Balance Sheet Review
Overview
Total assets at June 30, 2000 were $58,619,588, up from
$45,973,310 at December 31,1999, and up from $21,834,899 a year ago.
Average total assets increased $39,059,057 over the past year to
$51,205,210. Average earning assets increased $39,378,172 to
$45,208,076 over the past year.
Loans
The Bank experienced annualized loan growth of 81% from
December 31, 1999 to June 30, 2000. At June 30, 2000 loans (excluding
mortgage loans held for sale) totaled $47,945,754 compared with
$34,126,628 at December 31, 1999 and $12,192,573 a year ago.
Asset Quality
The allowance for loan losses was $581,520 at June 30, 2000,
an increase of $180,600, or 45% over the December 31, 1999 level of
$400,920. The allowance represents 1.21% of net loans, up from 1.17% of
net loans as of December 31, 1999.
The Bank had no non-performing loans at June 30, 2000, or at
December 31, 1999. Non-performing loans are defined as non-accrual
loans, loans accruing but past due 90 days or more, and restructured
loans. The Bank had no non-performing assets, which are defined as
non-performing loans, foreclosed real estate, and other foreclosed
property, as of June 30, 2000 or December 31, 1999.
The allowance for loan losses is established through a
provision for loan losses charged to expense. The level of the
allowance is based on management's and the Company Board of Directors
Loan Committee's ongoing review and evaluation of the loan portfolio
and general economic conditions on a monthly basis and by the full
Board of Directors on a quarterly basis. Management's review and
evaluation of the allowance for loan losses is based on an analysis of
historical trends, significant problem loans, current market value of
real estate or collateral and certain economic and other factors
affecting loans and real estate or collateral securing these loans.
Loans are charged off when, in the opinion of management, they are
deemed to be uncollectible. Recognized losses are charged against the
allowance and subsequent recoveries are added to the allowance. While
management uses the best information available to make evaluations,
future adjustments to the allowance may be necessary if economic
conditions differ substantially from the assumptions used in making the
evaluation. The allowance for loan losses is reviewed internally by
personnel independent of the loan department. In addition, the
allowance is subject to periodic evaluation by various regulatory
authorities and may be subject to adjustment based upon information
that is available to them at the time of their examination.
The provision for loan losses was $207,000 for the first six
months of 2000. The provision for losses on loans is established to
provide for losses inherent in the Bank's portfolio and reflects
management's evaluation of the risk in the loan portfolio.
Securities Available for Sale
Securities (all classified as available for sale) increased
from $4,389,787 at December 31, 1999 to $6,196,626 at June 30, 2000. At
June 30, 1999 securities totaled $4,838,248.
Deposits and Borrowed Funds
Total deposits averaged $42,797,649 in the first six months of
2000, an increase of $37,575,099 from the comparable 1999 average. As
of June 30, 2000, total deposits were $48,215,570, and included
$44,935,706 of interest bearing deposits. This compares to total
deposits of $37,130,321 at December 31, 1999 which included $34,252,454
of interest bearing deposits. Total deposits at June 30, 1999, were
$13,877,201, and interest bearing deposits were $12,606,406.
The Bank had $1,423,631 of deposits secured by securities sold
under agreements to repurchase as of June 30, 2000. These obligations,
which mature in one business day, are swept daily from customers'
demand deposit accounts. The balance averaged $1,126,920 for the first
six months of 2000.
The Bank had federal funds purchased of $1,000,000 as well as
$1,000,000 of reverse repurchase security agreements with correspondent
banks as of June 30, 2000.
Capital Resources and Liquidity
The Board of Governors of the Federal Reserve System has
adopted risk based capital and leverage ratio requirements for bank
holding companies. The table below sets forth the Company's capital
ratios as of June 30, 2000, December 31, 1999 and June 30, 1999; the
regulatory minimum capital ratios; and the regulatory minimum capital
ratios for well-capitalized companies:
<TABLE>
<CAPTION>
June 30, December 31, June 30,
2000 1999 1999
----- ----- -----
<S> <C> <C> <C>
Tier 1 risk based ........... 13.39% 18.82% 39.77%
Regulatory minimum ..... 4.00 4.00 4.00
Well-capitalized minimum 6.00 6.00 6.00
Total risk based ............ 14.57% 19.91% 40.45%
Regulatory minimum ..... 8.00 8.00 8.00
Well-capitalized minimum 10.00 10.00 10.00
Leverage .................... 11.24% 15.00% 33.45%
Regulatory minimum ..... 3.00 3.00 3.00
Well-capitalized minimum 5.00 5.00 5.00
</TABLE>
The decrease in capital levels is due in part to the growth in
the Company's total assets, which increases the denominator in the
capital calculation formula. In addition, net operating losses decrease
capital levels, and hence also serve to decrease the capital ratios.
Liquidity is the measure of the Bank's ability to fund
customer's needs for borrowings and deposit withdrawals. In the first
six months of 2000, the Company's principal source of funds has been
the acquisition of customers' deposits, repayment of loans, and other
funds from bank operations. In the same six months of 1999, the
principal source of liquidity was the proceeds from the initial public
offering in the February 1999.
Forward-Looking Statements
This report contains certain forward-looking statements,
either expressed or implied, which are provided to assist the reader in
making judgments about the Company's possible future financial
performance. Such statements are subject to certain risks and
uncertainties, including without limitation changes in economic
conditions in the Company's market area, changes in policies by
regulatory agencies, fluctuations in interest rates, demand for loans
in the Company's market area, competition, and those risks and
uncertainities discussed under the heading "Risk Factors" in the
Company's Registration Statement on Form SB-2 as filed with the
Securities and Exchange Commission. The factors listed above could
affect the Company's financial performance and could cause the
Company's actual results for future periods to differ materially from
any opinions or statements expressed or implied with respect to future
periods in any current statements.
<PAGE>
Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders was held on April 27, 2000. The
following Board of Directors were elected to the terms as listed with the vote
totals as shown:
<TABLE>
One-Year Terms Ending in 2001
<CAPTION>
Votes Votes
Votes for abstained against
--------- ---------- -------
<S> <C> <C> <C>
Billy J. Bell ............................... 608,628 0 0
James H. Lucas .............................. 608,628 0 0
Joe B. Natcher, Jr .......................... 598,628 0 10,000
Two-Year Terms Ending in 2002
Barry D. Bray ............................... 608,628 0 0
Tommy W. Cole ............................... 608,628 0 0
John T. Perkins ............................. 609,078 0 0
Three-Year Terms Ending in 2003
Jerry E. Baker .............................. 609,078 0 0
Mary D. Cohron .............................. 608,628 0 0
Floyd H. Ellis .............................. 597,278 0 11,350
</TABLE>
The shareholders voted to amend the Company's Articles of Incorporation
in the form of an amended Article VII. The amended Article VII provides that the
Company's Board of Directors will be classified into three classes, each of
which would serve three year terms. Total votes for the amended Articles of
Incorporation were 622,478 votes to approve the amendment and 150 votes to
abstain.
The shareholders cast 563,581 votes to ratify the appointment of Baird,
Kurtz & Dobson as the Company's independent public accountants for 2000. 30,897
votes were cast against this proposal and 14,150 votes were abstained.
There were no broker nonvotes on any of the item voted on at the Annual Meeting.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the Exhibit Index of this Form 10-QSB are
filed as a part of this report.
(b) Reports on Form 8-K
An 8-K was filed on April 27, 2000 announcing the appointment of Bill
Wright as the Corporation's Chief Financial Officer effective May 15,
2000. Gregg Hall, the former Chief Financial Officer, resigned effective
June 16, 2000.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CITIZENS FIRST CORPORATION
Date: August 14, 2000 /s/ Mary D. Cohron
------------------
President and Chief Executive Officer
(Principal Executive Officer)
August 14, 2000 /s/ Bill D. Wright
------------------
Bill D. Wright
Vice-President and Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
Exhibits
3.1 Articles of Restatement and Amendment to Articles of Incorporation of
Bowling Green Investors, Ltd. (now Citizens First Corporation)
(incorporated by reference to Exhibit 3.1 of the corporation's
Registration Statement on Form SB-2 [No. 333-67435]).
3.3 Articles of Amendment to Articles of Restatement and Amendment to
Articles of Incorporation of Citizens First Corporation (incorporated by
reference to Exhibit 3.3 of the corporation's Registration Statement on
Form SB-2 [No. 333-67435]).
3.4 Articles of Amendment to Restated Articles of Incorporation of
Citizens First Corporation.(Included as Exhibit 4.1)
4 Articles of Restatement and Amendment to Articles of Incorporation of
Bowling Green Investors, Ltd.(now Citizens First Corporation)
(incorporated by reference to Exhibit 4 of
the corporation's Registration Statement on Form SB-2 [No. 333-67435]).
4.1 Articles of Amendment to Restated Articles of Incorporation of
Citizens First Corporation.
10.16Employment Agreement between Citizens First Corporation and Bill D. Wright
(incorporated by reference to Exhibit 10 of the Corporation's
Form 8-K dated April 27,2000).
11 Statement re: Computation of per share earnings.
27 Financial Data Schedule for the quarter ended June 30, 2000
(for SEC use only).
