Century Next Financial Corporation Reports 3rd Quarter 2020 Results

RUSTON, La., Oct. 29, 2020 (GLOBE NEWSWIRE) -- Century Next Financial Corporation (OTCQX: CTUY), the holding company of Century Next Bank, with $505.6 million in assets, today announced financial results for the 3^rd quarter ended September 30, 2020.

Financial Performance

For the three months ended September 30, 2020, Century Next Financial Corporation (the “Company”) had net income after tax of $1.19 million compared to net income of $1.83 million for the three months ended September 30, 2019, a decrease of $648,000 or 35.4%. Earnings per share (EPS) for the three months ended September 30, 2020 were $0.72 per basic and $0.71 per diluted share compared to $1.13 per basic and $1.11 per diluted share reported for the three months ended September 30, 2019.

For the nine months ended September 30, 2020, Century Next Financial Corporation (the “Company”) had net income after tax of $3.71 million compared to net income of $4.21 million for the nine months ended September 30, 2019, a decrease of $500,000 or 11.9%. Earnings per share (EPS) for the nine months ended September 30, 2020 were $2.27 per basic and $2.24 per diluted share compared to $2.60 per basic and $2.55 per diluted share reported for the nine months ended September 30, 2019.

Balance Sheet

Overall, total assets increased by $16.0 million or 3.3% to $505.6 million at September 30, 2020 compared to $489.6 million at December 31, 2019.  

The largest component of assets, loans, net of deferred fees and costs and the allowance for loan losses, including loans held for sale, increased $23.3 million or 5.8% for the nine months ended September 30, 2020 compared to December 31, 2019. Total net loans at September 30, 2020 were $425.3 million compared to $402.0 million at December 31, 2019. Net loan growth reflects increases of $25.9 million in commercial non-real estate loans (including $29.2 million in Paycheck Protection Program loans), $7.4 million in residential 1-4 family HFS, $2.5 million in land loans, $2.0 million in commercial real estate and $1.0 million in multi-family loans. These increases were offset by decreases of $7.9 million in residential 1-4 family loans, $2.4 million in residential construction loans, $1.9 million in consumer non-real estate loans, $1.7 million in agricultural real estate loans, $668,000 in home equity lines of credit and $7,000 in agricultural non-real estate loans. The allowance for loan losses increased by $945,000 or 27.6% to $4.37 million at September 30, 2020 from $3.42 million at December 31, 2019.

Total deposits at September 30, 2020 increased $10.9 million or 2.6% to $432.8 million compared to $421.9 million at December 31, 2019. Growth occurred in noninterest-bearing checking deposits of $19.1 million, savings deposits of $6.3 million, and interest-bearing checking deposits of $4.9 million. The growth was offset by declines in money market deposits of $8.8 million and time deposits of $10.6 million.

Total short-term borrowings decreased to $4,000 at September 30, 2020 from $41,000 at December 31, 2019, a decrease of $37,000 or 90.2%, while long-term borrowings did not change at $14.5 million as of September 30, 2020 compared to December 31, 2019. The net decrease in short-term borrowings was primarily due to the payments made on an Federal Home Loan Bank (FHLB) note.

Income Statement

Net interest income was $5.08 million for the three months ended September 30, 2020 compared to $5.03 million for the three months ended September 30, 2019. This was an increase of $47,000, or 0.9%. For the nine months ended September 30, 2020, net interest income was $15.27 million compared to $14.66 million for the nine months ended September 30, 2019. The increase for the three- and nine-month periods were primarily from decreases in interest expense on deposits and borrowings offset by decreases in interest income on loans and fees and debt securities and other investments. Both decreases reflect the sharp decline in interest rates in early 2020 by the Federal Open Market Committee due to the economic effects of COVID-19.

The provision for loan losses amounted to $362,000 for the three months ended September 30, 2020, compared to $317,000 in provision for the three months ended September 30, 2019. For the nine months ended September 30, 2020, provision for loan losses was $1.09 million compared to $791,000 for the same period in 2019. The increase in loan loss provision for the three- and nine-month periods, as compared to the same periods in the prior year was primarily a reflection of an increased risk awareness and identification of potential credit trend changes due to uncertain economic conditions from COVID-19.

Total non-interest income amounted to $962,000 for the three months ended September 30, 2020 compared to $1.29 million for the three months ended September 30, 2019, a decrease of $327,000 or 25.4%. For the nine months ended September 30, 2020, non-interest income was $2.98 million compared to $2.97 million for the same period in 2019, an increase of $4,000 or 0.1%. The decreases for the three- month period was primarily a result of net loss on sale of loans and decreases in service charges on deposits offset by increases in loan servicing release fees from increased mortgage refinancings. The increases in the nine- month period was primarily a result increases in loan servicing release fees from increased mortgage refinancings; offset by decreases in service charges on deposit accounts and net loss on sale of loans.

Total non-interest expense increased by $529,000 or 14.4% to $4.19 million for the three months ended September 30, 2020 compared to $3.67 million for the three months ended September 30, 2019. For the nine months ended September 30, 2020, non-interest expense was $12.41 million compared to $11.58 million for the same period in 2019, an increase of $827,000 or 7.1%. The majority of the increases for the three-month period was primarily due to salaries and employee benefits, occupancy and equipment, advertising expenses, legal and professional fees, FDIC deposit insurance due to a credit applied in 2019, and expenses from maintenance of foreclosed assets. These increases were offset by decreases in data processing, audit and examination fees, and other operating expenses. For the nine-month period, increases occurred in salaries and benefits, occupancy and equipment, advertising, legal and professional fees, and FDIC deposit insurance. These increases were offset by decreases in data processing, audit and examination fees, foreclosed assets due primarily to writedowns, and other operating expenses.

The Company’s efficiency ratio, a measure of expense as a percent of total income, increased to 69.43% for the three months ended September 30, 2020 compared to 57.98% for the three months ended September 30, 2019. For the nine months ended September 30, 2020, the efficiency ratio was 68.00% compared to 65.69% for the same nine-month period of 2019.

Other Financial Information

Nonperforming assets, including loans past due 90 days or more, nonaccrual loans, and other foreclosed assets, increased from $4.1 million at December 31, 2019 to $5.7 million at September 30, 2020. Total non-performing assets were 1.12% and 0.84% of totals assets as of September 30, 2020 and December 31, 2019, respectively. The increase was primarily due to an increase in nonaccrual loans. Allowance for loan losses was $4.37 million or 1.02% of total loans at September 30, 2020 compared to $3.42 million or 0.84% of total loans at December 31, 2019. Net charge-offs for the year-to-date period ended September 30, 2020 were $141,000 compared to net charge-offs of $240,000 for the year-to-date period ended September 30, 2019. The ratios of net charge-offs to average loans outstanding were 0.03% and 0.06% at September 30, 2020 and September 30, 2019, respectively.

COVID-19 Related Information

The Company is continuing to monitor the economic impact from the COVID-19 restrictions to business operations as it relates to both business and consumer customers of its bank subsidiary and the potential impact to credit quality and future earnings. During the second and third quarters of 2020, the Company’s bank subsidiary, Century Next Bank, made approximately $29.2 million in paycheck protection program loans to businesses seeking assistance. Although economic conditions may have a negative effect on bank customer throughout the remainder of 2020, the Company will continue to monitor conditions and react as appropriate to mitigate risks to its financial condition.

Company Information

Century Next Financial Corporation is the holding company for Century Next Bank (the “Bank”) which conducts business from its main office in Ruston, Louisiana. The Company was formed in 2010 and is subject to the regulatory oversight of the Board of Governors of the Federal Reserve System. The Bank is a wholly-owned subsidiary and is an insured federally-chartered covered savings association subject to the regulatory oversight of the Office of the Comptroller of the Currency. The Bank was established in 1905 and is headquartered in Ruston, Louisiana. The Bank is a full-service bank with four locations in Louisiana including two banking offices in Ruston, one banking office in Monroe, one banking office in West Monroe, and four locations in Arkansas including two banking offices in Crossett, one banking office in Hamburg, and one drive-through location with limited services in Fountain Hill. The Bank emphasizes professional and personal banking service directed primarily to small and medium-sized businesses, professionals, and individuals. The Bank provides a full range of banking services including its primary business of real estate lending to residential and commercial customers.

Statements contained in this news release which are not historical facts may be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words like “believe,” “expect,” “anticipate,” “estimate,” and “intend” or future or conditional verbs such as “will,” “would,” “should,” “could,” or “may.” We undertake no obligation to update any forward-looking statements.

Century Next Financial Corporation and Subsidiary
Condensed Consolidated Balance Sheets (unaudited)

(In thousands, except per share data)

	September 30, 2020				December 31, 2019
ASSETS
Cash and cash equivalents	$	46,668			$	54,100
Investment securities		2,567				2,589
Loans, net		425,323				402,033
Other assets		31,037				30,884
TOTAL ASSETS	$	505,595			$	489,606
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	$	432,789			$	421,855
Short-term borrowings		4				41
Long-term borrowings		14,454				14,454
Other liabilities		4,446				3,119
Total Liabilities		451,693				439,469
Stockholders' equity		53,902				50,137
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	505,595			$	489,606
Book Value per share	$	32.01			$	30.16

Century Next Financial Corporation and Subsidiary
Consolidated Statements of Income (unaudited)

(In thousands, except per share data)

	Three Months Ended September 30								Nine Months Ended September 30
		2020				2019				2020				2019
Interest Income	$	5,935			$	6,601			$	18,337			$	19,049
Interest Expense		856				1,569				3,067				4,391
Net Interest Income		5,079				5,032				15,270				14,658
Provision for Loan Losses		362				317				1,086				791
Net interest income after provision for loan losses		4,717				4,715				14,184				13,867
Noninterest Income		962				1,289				2,976				2,972
Noninterest Expense		4,194				3,665				12,408				11,581
Income Before Taxes		1,485				2,339				4,752				5,258
Provision For Income Taxes		300				506				1,042				1,048
NET INCOME	$	1,185			$	1,833			$	3,710			$	4,210
EARNINGS PER SHARE
Basic	$	0.72			$	1.13			$	2.27			$	2.60
Diluted	$	0.71			$	1.11			$	2.24			$	2.55

Century Next Financial Corporation Contact Information:

William D. Hogan, President & Chief Executive Officer or
Mark A. Taylor, CPA CGMA, Executive Vice President & Chief Financial Officer
[phone]

Company Website: www.cnext.bank