Century Next Financial Corporation Reports 2nd Quarter 2021 Results

Rhea-AI Summary

Century Next Financial Corporation (OTCQX: CTUY) reported its 2nd quarter financial results for 2021, revealing a significant decline in net income, totaling $155,000, a 89.8% drop from the previous year's $1.52 million. The company attributed this downturn to a one-time $1.42 million increase in its allowance for loan and lease losses due to a $1.68 million loan charge-off. Despite this, total assets rose by 5% to $540.8 million, with a 5.35% increase in net loans to $442.9 million. Nonperforming assets improved, decreasing from $4.72 million to $2.66 million year-to-date.

Positive

• Total assets increased by 5% to $540.8 million.
• Net loans grew by 5.35% to $442.9 million.
• Nonperforming assets decreased from $4.72 million to $2.66 million.

Negative

• Net income dropped by 89.8% to $155,000 compared to $1.52 million last year.
• Earnings per share (EPS) fell to $0.09 from $0.89 a year ago.
• Increased provision for loan losses amounted to $1.6 million, up from $362,000 last year.

RUSTON, La., July 23, 2021 (GLOBE NEWSWIRE) -- Century Next Financial Corporation (the “Company”) (OTCQX: CTUY), the holding company of Century Next Bank, with $540.8 million in assets, today announced financial results for the 2^nd quarter ended June 30, 2021.

Financial Performance

For the three months ended June 30, 2021, the Company had net income after tax of $155,000 compared to net income of $1.52 million for the three months ended June 30, 2020, a decrease of $1.37 million or 89.8%. Earnings per share (EPS) for the three months ended June 30, 2021 were $0.09 per basic and diluted share compared to $0.89 per basic and $0.87 per diluted share reported for the three months ended June 30, 2020.

For the six months ended June 30, 2021, Century Next Financial Corporation (the “Company”) had net income after tax of $1.44 million compared to net income of $2.53 million for the six months ended June 30, 2020, a decrease of $1.08 million or 42.9%. Earnings per share (EPS) for the six months ended June 30, 2021 were $0.83 per basic and diluted share compared to $1.48 per basic and $1.46 per diluted share reported for the six months ended June 30, 2020.

The decrease in earnings per share for the quarter-to-date and year-to-date periods in 2021 as compared to the same periods in 2020 was due to a one-time addition of $1.42 million to the allowance for loan and lease losses (ALLL) reserve recorded in the 2^nd quarter of 2021. The additional provision for loan losses was determined in the quarterly evaluation of the ALLL and resulted primarily from a single loan charge off of $1.68 million. The addition to the ALLL was necessary to increase the balance to the level calculated in the ALLL model representing an estimate of the appropriate reserve for known and inherent losses remaining in the existing loan portfolio.

On June 8, 2021, the Company paid a 5% stock dividend to shareholders of record May 25, 2021. Earnings per share information for 2020 for the three and six months periods has been revised to reflect the effect of the stock dividend for comparative purposes.

Balance Sheet

Overall, total assets increased by $25.7 million or 5.0% to $540.8 million at June 30, 2021 compared to $515.1 million at December 31, 2020.  

The largest component of assets, loans, net of deferred fees and costs and the allowance for loan losses, including loans held for sale, increased $22.5 million or 5.35% for the six months ended June 30, 2021 compared to December 31, 2020. Total net loans at June 30, 2021 were $442.9 million compared to $420.4 million at December 31, 2020.

Total deposits at June 30, 2021 increased $24.1 million or 5.5% to $465.1 million compared to $441 million at December 31, 2020.  

Total long-term borrowings remained the same at $14.45 million at June 30, 2021 and December 31, 2020.

Income Statement

Net interest income was $5.5 million for the three months ended June 30, 2021 compared to $5.2 million for the three months ended June 30, 2020. This was an increase of $270,000, or 5.2%. For the six months ended June 30, 2021, net interest income was $10.7 million compared to $10.2 million for the six months ended June 30, 2020. This was an increase of $494,000, or 4.8%. The increases in net interest income for the three- and six-month periods were primarily from decreases in interest expense on deposits offset by decreases in interest income on loans and interest-bearing deposits in banks. These decreases continue to reflect the decline in interest rates from early 2020 resulting from actions taken by the Federal Open Market Committee to provide monetary support for economic recovery.

The provision for loan losses amounted to $1.6 million for the three months ended June 30, 2021, compared to $362,000 for the three months ended June 30, 2020. For the six months ended June 30, 2021, provision for loan losses amounted to $1.8 million compared to $724,000 for the three months ended June 30, 2020. The increase in provision for the three- and six-month periods reflect the one-time addition to the ALLL as mentioned under the Financial Performance section.

Total non-interest income amounted to $940,000 for the three months ended June 30, 2021 compared to $1.1 million for the three months ended June 30, 2020, a decrease of $209,000 or 18.2%. For the six months ended June 30, 2021,total non-interest income amounted to $1.9 million compared to $2.0 million for the six months ended June 30, 2020, a decrease of $123,000 or 6.1%. The decrease for the three months ended June 30, 2021 was primarily due to decreased loan servicing release fees from the held-for-sale loan activity and other non-interest income. The decrease for the six months ended June 30, 2021 was primarily due to decreased service charges on deposit accounts from reduced overdraft fee activity and loan servicing release fees from the held-for-sale loan activity.

Total non-interest expense increased by $303,000 or 7.4% to $4.4 million for the three months ended June 30, 2021 compared to $4.1 million for the three months ended June 30, 2020. For the six months ended June 30, 2021, total non-interest expense increased by $497,000 or 6.1% to $8.7 million compared to $8.2 million for the six months ended June 30, 2020. The increase in both the three- and six-month periods ending June 30, 2021 was primarily due to increases in salaries and benefits and other operating expense as compared to the same periods in 2020.

The Company’s efficiency ratio, a measure of expense as a percent of total income, increased to 68.36% for the three months ended June 30, 2021 compared to 64.24% for the three months ended June 30, 2020. For the six months ended June 30, 2021, the efficiency ratio increased to 69.25% compared to 67.29% for the six months ended June 30, 2020.

Other Financial Information

Nonperforming assets, including loans past due 90 days or more, nonaccrual loans, and other foreclosed assets, decreased from $4.72 million at December 31, 2020 to $2.66 million at June 30, 2021, a decrease of $2.06 million. Total non-performing assets were 0.49% and 0.92% of totals assets as of June 30, 2021 and December 31, 2020, respectively. This reflects a noted improvement in nonperforming assets year to date in 2021.

Allowance for loan losses was $4.59 million or 1.03% of total loans at June 30, 2021 compared to $4.55 million or 1.07% of total loans at December 31, 2020. Net charge-offs for the three- and six-month periods ended June 30, 2021 were $1.72 and $1.78 million, respectively, compared to net charge-offs of $342,000 and $362,000, respectively, for the three- and six-month periods ended June 30, 2020. The ratios of net charge-offs to average loans outstanding were 0.40% and 0.09% at June 30, 2021 and 2020, respectively.

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)

	June 30, 2021			December 31, 2020
ASSETS
Cash and cash equivalents	$	60,542		$	61,426
Investment securities		6,493			2,558
Loans, net		442,872			420,397
Other assets		30,907			30,689
TOTAL ASSETS	$	540,814		$	515,070
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits	$	465,144		$	441,075
Long-term borrowings		14,454			14,454
Other liabilities		4,656			4,021
Total Liabilities		484,254			459,550
Stockholders' equity		56,560			55,520
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	540,814		$	515,070
Book Value per share	$	31.84		$	32.90

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

(In thousands, except per share data)

	Three Months Ended June 30						Six Months Ended June 30
		2021			2020			2021			2020
Interest Income	$	6,120		$	6,112		$	12,057		$	12,402
Interest Expense		660			922			1,372			2,211
Net Interest Income		5,460			5,190			10,685			10,191
Provision for Loan Losses		1,624			362			1,826			724
Net interest income after provision for loan losses		3,836			4,828			8,859			9,467
Noninterest Income		940			1,149			1,892			2,015
Noninterest Expense		4,375			4,072			8,710			8,213
Income Before Taxes		401			1,905			2,041			3,269
Provision For Income Taxes		246			383			599			743
NET INCOME	$	155		$	1,522		$	1,442		$	2,526
EARNINGS PER SHARE
Basic	$	0.09		$	0.89		$	0.83		$	1.48
Diluted	$	0.09		$	0.87		$	0.83		$	1.46

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
(318) 255-3733

Company Website: www.cnext.bank

FAQ

What were the financial results of Century Next Financial Corporation for the second quarter of 2021?

The company reported a net income of $155,000, a decrease of 89.8% from $1.52 million in the same quarter of 2020.

How did the earnings per share (EPS) change for CTUY in Q2 2021?

EPS for Q2 2021 was $0.09, down from $0.89 in Q2 2020.

What factors contributed to the decline in net income for CTUY?

The decline in net income was primarily due to a one-time $1.42 million addition to the allowance for loan losses.

What was the status of nonperforming assets for CTUY as of June 30, 2021?

Nonperforming assets decreased to $2.66 million, down from $4.72 million at the end of 2020.

How have assets and loans changed for Century Next Financial Corporation in 2021?

Total assets increased by 5% to $540.8 million, while net loans grew by 5.35% to $442.9 million.