10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2016

Or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to            

Commission file number: 001-33126

CITIZENS FIRST CORPORATION

(Exact name of registrant as specified in its charter)

Kentucky	61-0912615
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1065 Ashley Street, Bowling Green, Kentucky	42103
(Address of principal executive offices)	(Zip Code)

(270) 393-0700

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for 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  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  o  No  x

Indicate the number of shares outstanding of each of the issuer’s class of common stock, as of the latest practicable date.

1,999,087 shares of Common Stock, no par value, were outstanding at May 10, 2016.

CITIZENS FIRST CORPORATION

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION
ITEM 1	FINANCIAL STATEMENTS	3
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	31
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
ITEM 4	CONTROLS AND PROCEDURES	46
PART II – OTHER INFORMATION
ITEM 6	EXHIBITS	47
SIGNATURES		49

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Part 1. Financial Information

Item 1. Financial Statements

Citizens First Corporation

Consolidated Balance Sheets

	(In Thousands, Except Share Data)
	March 31, 2016		December 31, 2015
	Unaudited
Assets
Cash and due from financial institutions	$	11,430	$	8,865
Federal funds sold	5,305		6,390
Cash and cash equivalents	16,735		15,255
Interest-bearing deposits in other financial institutions	2,728		2,728
Available-for-sale securities	61,671		60,200
Loans held for sale	373		—
Loans, net of allowance for loan losses of $5,044 and $4,916 at March 31, 2016 and December 31, 2015, respectively	325,231		325,866
Premises and equipment, net	9,892		9,998
Bank owned life insurance (BOLI)	8,218		8,174
Federal Home Loan Bank (FHLB) stock, at cost	2,025		2,025
Accrued interest receivable	1,463		1,680
Deferred income taxes	1,265		1,328
Goodwill	4,097		4,097
Core deposit intangible	247		265
Other real estate owned	100		100
Other assets	677		465
Total Assets	$	434,722	$	432,181
Liabilities
Deposits
Noninterest bearing	$	50,365	$	48,522
Savings, NOW and money market	172,340		168,335
Time	140,475		153,531
Total deposits	363,180		370,388
FHLB advances and other borrowings	24,000		15,000
Subordinated debentures	5,000		5,000
Accrued interest payable	220		213
Other liabilities	1,884		2,056
Total Liabilities	394,284		392,657
Stockholders’ Equity
6.5% cumulative convertible preferred stock; no par value, authorized 250 shares, aggregate liquidation preference of $7,998; issued and outstanding 237 and 250 shares at March 31, 2016 and December 31, 2015, respectively	7,261		7,659
Common stock, no par value, authorized 5,000,000 shares; issued and outstanding 1,998,352 and 1,968,777 shares at March 31, 2016 and December 31, 2015, respectively	25,815		25,406
Retained earnings	7,085		6,304
Accumulated other comprehensive income	277		155
Total stockholders’ equity	40,438		39,524
Total liabilities and stockholders’ equity	$	434,722	$	432,181

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation
Unaudited Consolidated Statements of Income

	Three months ended
	(In Thousands, Except Per Share Data)
	March 31, 2016		March 31, 2015
Interest and dividend income
Loans	$	4,103	$	3,949
Taxable securities	178		152
Non-taxable securities	159		176
Federal funds sold and other	36		29
Total interest and dividend income	4,476		4,306
Interest expense
Deposits	528		549
FHLB advances and other	57		71
Subordinated debentures	28		24
Total interest expense	613		644
Net interest income	3,863		3,662
Provision for loan losses	—		80
Net interest income after provision for loan losses	3,863		3,582
Non-interest income
Service charges on deposit accounts	325		317
Other service charges and fees	164		135
Gain on sale of mortgage loans	77		31
Non-deposit brokerage fees	72		92
Lease income	45		73
BOLI income	44		45
Gain on sale of securities available-for-sale	51		—
Total non-interest income	778		693
Non-interest expenses
Salaries and employee benefits	1,784		1,648
Net occupancy expense	483		528
Advertising and public relations	61		52
Professional fees	180		164
Data processing services	256		239
Franchise shares and deposit tax	132		146
FDIC insurance	59		59
Core deposit intangible amortization	18		18
Postage and office supplies	46		40
Other real estate owned expenses	1		—
Other	350		309
Total non-interest expenses	3,370		3,203
Income before income taxes	1,271		1,072
Income taxes	366		290
Net income	905		782
Dividends on preferred stock	124		128
Net income available for common stockholders	$	781	$	654
Basic earnings per common share	$	0.39	$	0.33
Diluted earnings per common share	$	0.36	$	0.29

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation

Unaudited Consolidated Statements of Comprehensive Income

In thousands, except share data

	Three months ended
	(In Thousands, Except Per Share Data)
	March 31, 2016			March 31, 2015
Comprehensive income, net of tax
Net income	$	905		$	782
Other comprehensive income
Reclassification adjustment for gains included in net income	(34		)	—
Change in unrealized gain on available for sale securities	156			249
Total other comprehensive income	122			249
Comprehensive income	$	1,027		$	1,031

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation

Unaudited Consolidated Statements of Changes in Stockholders’ Equity

In thousands, except share data

	Preferred Stock			Common Stock		Retained Earnings			Accumulated Other Comprehensive Income		Total
Balance, January 1, 2016	$	7,659		$	25,406	$	6,304		$	155	$	39,524
Net income						905					905
Conversion of cumulative preferred	(398		)	398							—
Stock based compensation				11							11
Change in accumulated other comprehensive income									122		122
Dividend declared and paid on preferred stock						(124		)			(124		)
Balance, March 31, 2016	$	7,261		$	25,815	$	7,085		$	277	$	40,438

	Preferred Stock		Common Stock		Retained Earnings			Accumulated Other Comprehensive Income (Loss)		Total
Balance, January 1, 2015	$	7,659	$	27,072	$	3,373		$	344	$	38,448
Net income					782					782
Change in accumulated other comprehensive income								249		249
Dividend declared and paid on preferred stock					(128		)			(128		)
Balance, March 31, 2015	$	7,659	$	27,072	$	4,027		$	593	$	39,351

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation

Unaudited Consolidated Statements of Cash Flows

	Three months ended
	(In Thousands)
	March 31, 2016			March 31, 2015
Operating Activities
Net income	$	905		$	782
Items not requiring (providing) cash:
Depreciation and amortization	140			137
Provision for loan losses	—			80
Amortization of premiums and discounts on securities	81			86
Amortization of core deposit intangible	18			18
Deferred income taxes	—			80
Stock based compensation	11			—
BOLI income	(44		)	(45		)
Proceeds from sale of mortgage loans	3,609			1,591
Origination of mortgage loans held for sale	(3,904		)	(1,870		)
Gains on sales of available-for-sale securities	(51		)	—
Gains on sales of mortgage loans	(77		)	(31		)
Write-downs and losses on sale of other real estate owned	—			10
Loss/(Gain) on sale of premises and equipment	4			(4		)
Changes in:
Accrued interest receivable	217			84
Other assets	(213		)	(70		)
Accrued interest payable and other liabilities	(165		)	(166		)
Net cash provided by operating activities	531			682
Investing Activities
Loan originations and payments, net	635			(1,252		)
Purchase of premises and equipment	(37		)	(151		)
Proceeds from maturities of available-for-sale securities	2,309			1,373
Proceeds from sales of available-for-sale securities	2,066			—
Purchase of available-for-sale securities	(5,692		)	(1,009		)
Net cash used in investing activities	(719		)	(1,039		)
Financing Activities
Net change in demand deposits, money market, NOW and savings accounts	5,848			7,535
Net change in time deposits	(13,056		)	16,046
Repayment of FHLB advances	—			(6,000		)
Proceeds from FHLB advances	10,000			—
Repayment of other borrowings	(1,000		)	—
Dividends paid on preferred stock	(124		)	(128		)
Net cash provided by financing activities	1,668			17,453
Increase in Cash and Cash Equivalents	1,480			17,096
Cash and Cash Equivalents, Beginning of Year	15,255			11,322
Cash and Cash Equivalents, End of Quarter	$	16,735		$	28,418
Supplemental Cash Flows Information
Interest paid	$	606		$	633
Income taxes paid	$	310		$	210
Preferred stock transferred into common stock	$	398		$	—
Loans transferred to other real estate owned	$	—		$	80

See Notes to Unaudited Consolidated Financial Statements

7

Citizens First Corporation

Notes to Unaudited Consolidated Financial Statements

Note 1 — Nature of Operations and 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 U.S. generally accepted accounting principles and general practices within the banking industry.  The consolidated financial statements include the accounts of the Company and the Bank.  All significant intercompany transactions and accounts have been eliminated in consolidation.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. 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.

In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in the accompanying unaudited financial statements.  Those adjustments consist only of normal recurring adjustments. Results of interim periods are not necessarily indicative of results to be expected for the full year.  The consolidated balance sheet of the Company as of December 31, 2015 has been derived from the audited consolidated balance sheet of the Company as of that date.

Recent Accounting Pronouncements—In May 2014 the FASB amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and

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improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08 that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent.  The amendments in this update affect this guidance issued in 2014 that is not yet effective.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In January 2016 the FASB issued ASU 2016-01 which amends existing guidance on the classification and measurement of financial instruments.  This new standard revises and entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value.  The new standard is effective for reporting periods beginning after December 15, 2017.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In February 2016 the FASB issued ASU 2016-02 which establishes the principles to report information about the assets and liabilities that arise from leases.  This new standard changes the way operating leases are account for and reflected on the lessee’s balance sheet.  The new standard is intended to increase transparency and comparability by requiring lessees to recognize the financial obligation and right-of-use asset associated with operating leases that have a lease term of more than 12 months on the balance sheet.  The new standard is effective for reporting periods beginning after December 15, 2018.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In March 2016 the FASB issued ASU 2016-09 which provides guidance on share-based payment accounting.  The new standard includes multiple provision intended to simplify various aspects of the accounting for share-based payments.  The new standard is effective for reporting periods beginning after December 15, 2016.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

Note 2 -  Reclassifications

Certain reclassifications have been made to the consolidated financial statements of prior periods to conform to the current period presentation.  These reclassifications do not affect net income or total stockholders’ equity as previously reported.

Note 3 - Available-For-Sale Securities

The following table summarizes the amortized cost and fair value of the available-for sale securities portfolio at March 31, 2016 and December 31, 2015 and the

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corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

	(Dollars in Thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
March 31, 2016
U. S. government agencies and government sponsored entities	$	2,998	$	1	$	(4	)	$	2,995
Agency mortgage-backed securities: residential	31,485		413		(16		)	31,882
State and municipal	23,887		643		(21		)	24,509
Trust preferred security	1,881		—		(581		)	1,300
Corporate bonds	1,000		—		(15		)	985
Total Available-for-Sale Securities	$	61,251	$	1,057	$	(637	)	$	61,671
December 31, 2015
U. S. government agencies and government sponsored entities	$	2,998	$	3	$	(7	)	$	2,994
Agency mortgage-backed securities: residential	29,446		259		(48		)	29,657
State and municipal	24,641		615		(34		)	25,222
Trust preferred security	1,880		—		(540		)	1,340
Corporate bonds	1,000		—		(13)			987
Total Available-for-Sale Securities	$	59,965	$	877	$	(642	)	$	60,200

The amortized cost and fair value of investment securities at March 31, 2016 by contractual maturity were as follows.  Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

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	March 31, 2016
	(Dollars in Thousands)
	Available-For-Sale
	Amortized Cost		Fair Value
Due in one year or less	$	569	$	570
Due from one to five years	13,643		13,804
Due from five to ten years	10,696		11,002
Due after ten years	4,858		4,413
Agency mortgage-backed: residential	31,485		31,882
Total	$	61,251	$	61,671

The following table summarizes the investment securities with unrealized losses by portfolio segment at March 31, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position:

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2016:
U.S. government agencies and government sponsored entities	$	—	$	—		$	995	$	(4	)	$	995	$	(4	)
Agency mortgage-backed: residential	4,639		(16		)	—		—			4,639		(16		)
State and municipal	1,395		(9		)	300		(12		)	1,695		(21		)
Trust preferred security	—		—			1,300		(581		)	1,300		(581		)
Corporate Bonds	985		(15		)	—		—			985		(15		)
Total temporarily impaired	$	7,019	$	(40	)	$	2,595	$	(597	)	$	9,614	$	(637	)

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	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2015:
U.S. government agencies and government sponsored entities	$	—	$	—		$	992	$	(7	)	$	992	$	(7	)
Agency mortgage-backed: residential	7,009		(25		)	1,475		(23		)	8,484		(48		)
State and municipal	3,797		(19		)	617		(15		)	4,414		(34		)
Trust preferred security	—		—			1,340		(540		)	1,340		(540		)
Corporate bonds	987		(13		)	—		—			987		(13		)
Total temporarily impaired	$	11,793	$	(57	)	$	4,424	$	(585	)	$	16,217	$	(642	)

Other-Than-Temporary-Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  Investment securities classified as available-for-sale are generally evaluated for OTTI under ASC Topic 320, “Investments - Debt and Equity Securities.”

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery.  The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

All rated securities are investment grade.  For those that are not rated, the financial condition has been evaluated and no adverse conditions were identified related to repayment.  Declines in fair value are a function of rate differences in the market and market illiquidity.  The Company does not intend or is not expected to be required to sell these securities before recovery of their amortized cost basis.

Approximately 97% of the Company’s unrealized losses 12 months or more relate to its investment in a single trust preferred security.  The security is a single-issuer trust preferred that is not rated. No impairment charge is being taken as no loss of principal or interest is anticipated. All principal and interest payments are being received as scheduled.  On a quarterly basis, we evaluate the creditworthiness of the issuer, a bank holding company with operations in the state of Kentucky.  Based on the issuer’s continued profitability and well-capitalized position, we do not deem that there is credit

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loss.  The decline in fair value is primarily attributable to illiquidity affecting these markets and not the expected cash flows of the individual securities.  We have evaluated the financial condition and near term prospects of the issuer and expect to fully recover our cost basis.  This security continues to pay interest as agreed and future payments are expected to be made as agreed.  This security is not considered to be other-than-temporarily impaired.

Note 4 - Loans and Allowance for Loan Losses

Categories of loans include:

	(Dollars in Thousands)
	March 31, 2016			December 31, 2015
Commercial	$	55,682		$	53,516
Commercial real estate:
Construction	20,897			24,167
Other	170,286			169,290
Residential real estate	79,566			79,680
Consumer:
Auto	1,334			1,425
Other	2,510			2,704
Total loans	330,275			330,782
Less allowance for loan losses	(5,044		)	(4,916		)
Net loans	$	325,231		$	325,866

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The following table sets forth an analysis of our allowance for loan losses for the three months ending March 31, 2016 and 2015.

	(Dollars in Thousands)
March 31, 2016	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	812		$	3,431	$	524		$	28		$	121		$	4,916
Provision for loan losses	(174		)	129		82			(4		)	(33		)	—
Loans charged-off	—			—		(8		)	—			—			(8		)
Recoveries	107			25		4			—			—			136
Total ending allowance balance	$	745		$	3,585	$	602		$	24		$	88		$	5,044

	(Dollars in Thousands)
March 31, 2015	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,029		$	3,088		$	582		$	45		$	141	$	4,885
Provision for loan losses	(15		)	135			(43		)	(2		)	5		80
Loans charged-off	—			(17		)	(24		)	(3		)	—		(44		)
Recoveries	21			—			4			1			—		26
Total ending allowance balance	$	1,035		$	3,206		$	519		$	41		$	146	$	4,947

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of March 31, 2016 and December 31, 2015, which includes net deferred loan fees.  As of March 31, 2016 and December 31, 2015, accrued interest receivable of $1.1 million and $1.3 million, respectively, are not considered significant and therefore not included in the recorded investment in loans presented in the following tables.

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	(Dollars in Thousands)
March 31, 2016	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	249	$	41	$	—	$	—	$	326
Collectively evaluated	709		3,336		561		24		88		4,718
Total ending allowance balance	$	745	$	3,585	$	602	$	24	$	88	$	5,044
Loans:
Individually evaluated for impairment	$	138	$	2,027	$	854	$	23	$	—	$	3,042
Collectively evaluated	55,544		189,156		78,712		3,821		—		327,233
Total ending loans balance	$	55,682	$	191,183	$	79,566	$	3,844	$	—	$	330,275

	(Dollars in Thousands)
December 31, 2015	Commercial		Commercial  Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	377	$	20	$	—	$	—	$	433
Collectively evaluated	776		3,054		504		28		121		4,483
Total ending allowance balance	$	812	$	3,431	$	524	$	28	$	121	$	4,916
Loans:
Individually evaluated for impairment	$	145	$	2,066	$	807	$	9	$	—	$	3,027
Collectively evaluated	53,371		191,391		78,873		4,120		—		327,755
Total ending loans balance	$	53,516	$	193,457	$	79,680	$	4,129	$	—	$	330,782

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The following table presents information related to impaired loans by class of loans as of March 31, 2016 and December 31, 2015. In this table presentation the unpaid principal balance of the loans has not been reduced by partial net charge-offs and the recorded investment of the loans was reduced by partial net charge-offs.

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial	$	59	$	59	$	—	$	61	$	61	$	—
Commercial real estate:
Other	651		651		—		643		643		—
Residential real estate	762		762		—		700		700		—
Consumer:							—
Other	23		23		—		—		—		—
Subtotal	$	1,495	$	1,495	$	—	$	1,404	$	1,404	$	—
With an allowance recorded:
Commercial	$	79	$	79	$	36	$	84	$	84	$	36
Commercial real estate:
Other	1,376		1,376		249		1,423		1,423		377
Residential real estate	92		92		41		107		107		20
Consumer:
Other	—		—		—		9		9		—
Subtotal	$	1,547	$	1,547	$	326	$	1,623	$	1,623	$	433
Total	$	3,042	$	3,042	$	326	$	3,027	$	3,027	$	433

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Information on impaired loans for the three months ending March 31, 2016 and 2015 is as follows:

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						March 31, 2015
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
Commercial	$	141	$	3	$	3	$	2,616	$	34	$	24
Commercial real estate:
Construction	—		—		—		—		—		—
Other	2,047		26		21		1,199		14		13
Residential real estate	857		9		8		1,023		12		8
Consumer:
Auto	—		—		—		7		—		—
Other	16		—		—		11		—		—
Total	$	3,061	$	38	$	32	$	4,856	$	60	$	45

The recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2016 and December 31, 2015 are summarized below:

	(Dollars in Thousands)				(Dollars in Thousands)
	March 31, 2016				December 31, 2015
	Loans Past Due Over 90 Days and Still Accruing		Nonaccrual		Loans Past Due Over 90 Days and Still Accruing		Nonaccrual
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction	—		—		—		—
Other	—		439		—		439
Residential real estate	—		151		—		98
Consumer:
Auto	—		—		—		—
Other	—		—		—		—
Total	$	—	$	590	$	—	$	537

Nonaccrual loans and loans past due 90 days still on accrual include individually classified impaired loans.

The following tables present the aging of the recorded investment in past due loans as of March 31, 2016 and December 31, 2015 by class of loans.  Non-accrual loans are included and have been categorized based on their payment status:

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	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
March 31, 2016
Commercial	$	—	$	—	$	—	$	—	$	55,682	$	55,682
Commercial real estate:
Construction	—		—		—		—		20,897		20,897
Other	127		—		439		566		169,720		170,286
Residential real estate	—		52		102		154		79,412		79,566
Consumer:
Auto	—		—		—		—		1,334		1,334
Other	—		—		—		—		2,510		2,510
Subtotal	$	127	$	52	$	541	$	720	$	329,555	$	330,275

	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
December 31, 2015
Commercial	$	—	$	—	$	—	$	—	$	53,516	$	53,516
Commercial real estate:
Construction	—		—		—		—		24,167		24,167
Other	178		—		439		617		168,673		169,290
Residential real estate	329		—		98		427		79,253		79,680
Consumer:
Auto	1		—		—		1		1,424		1,425
Other	—		—		—		—		2,704		2,704
Subtotal	$	508	$	—	$	537	$	1,045	$	329,737	$	330,782

Troubled Debt Restructurings:

The Company reported total troubled debt restructurings of $2.5 million as of March 31, 2016 and December 31, 2015, respectively.  The Company has no commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.  Troubled debt restructurings are included in impaired loans. The modifications of the terms of these loans included reducing the interest rate, granting an interest only payment period, or extending the terms of the debt for customers experiencing financial difficulties. Of the 12 troubled debt restructurings reported at quarter end, all loans were on accrual status.

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The following table presents loans by class modified as trouble debt restructurings that occurred during the quarter ending March 31, 2016 and 2015.

		(Dollars in Thousands)					(Dollars in Thousands)
	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	March 31, 2016					March 31, 2015
Troubled Debt Restructurings:
Consumer	1	$	14	$	14	—	$	—	$	—
Total	1	$	14	$	14	—	$	—	$	—

Specific allocations of $234,000 and $591,000 were reported for troubled debt restructurings as of March 31, 2016 and March 31, 2015. No payment defaults or charge-offs were reported for troubled debt restructurings during the three months ending March 31, 2016 or March 31, 2015.

The terms of certain other loans were modified during the three months ending March 31, 2016 and 2015 that did not meet the definition of a troubled debt restructuring. These loans modified during the three months ending March 31, 2016 have a total recorded investment of $12.0 million as of March 31, 2016. These loans modified during the three months ending March 31, 2015 have a total recorded investment of $9.5 million as of March 31, 2015. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and commercial real estate loans with an outstanding balance greater than $25 thousand and is reviewed on a monthly basis. For residential real estate and consumer loans the

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analysis primarily involves monitoring the past due status of these loans and at such time that these loans are past due, the Company evaluates the loans to determine if a change in risk category is warranted. The Company uses the following definitions for risk ratings:

Special Mention.  Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.  All loans in all loan categories are assigned risk ratings.  Based on the most recent analyses performed, the risk category of loans by class of loans is as follows:

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	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2016
Commercial	$	55,511	$	—	$	171	$	—	$	55,682
Commercial real estate:
Construction	20,897		—		—		—		20,897
Other	160,921		5,725		3,640		—		170,286
Residential real estate	78,940		—		626		—		79,566
Consumer:
Auto	1,334		—		—		—		1,334
Other	2,502		—		8		—		2,510
Total	$	320,105	$	5,725	$	4,445	$	—	$	330,275

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2015
Commercial	$	53,316	$	—	$	200	$	—	$	53,516
Commercial real estate:
Construction	24,167		—		—		—		24,167
Other	159,829		5,753		3,708		—		169,290
Residential real estate	79,033		—		647		—		79,680
Consumer:
Auto	1,425		—		—		—		1,425
Other	2,697		—		7		—		2,704
Total	$	320,467	$	5,753	$	4,562	$	—	$	330,782

Note 5 - Fair Value Measurements

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that are supported by little or no market activity, reflect a company’s own assumptions about market participant

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assumptions of fair value, and are significant to the fair value of the assets or liabilities.

In determining the appropriate levels, the Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The fair value of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (level 1 inputs) or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (level 2 inputs).  The Company does not have any Level 1 securities.  Level 2 securities include certain U.S. agency bonds, collateralized mortgage and debt obligations, and certain municipal securities. The Company also has one Level 3 security. The value of this single issue trust preferred security is obtained on a quarterly basis directly from the originating broker.

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.  Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other Real Estate Owned: Commercial and residential real estate properties classified as other real estate owned (OREO) are measured at fair value, less costs to sell.  Fair values are based on recent real estate appraisals.  These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach.  Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent impaired loans and real estate properties classified as other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by Bank management.  The appraisal values for collateral-dependent impaired loans are discounted to allow for selling expenses and fees, the limited use nature of various properties, the age of the most recent appraisal, and additional discretionary discounts for location, condition, etc. The Bank annually obtains an updated current appraisal value for each OREO property to certify that the fair value has not declined.  For each

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parcel of OREO that has declined in value, the Bank records the decline in value by a direct writedown of the asset.

Assets measured at fair value on a recurring basis:

	Fair Value Measurements at:
	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Securities available-for-sale
U.S. government agencies and government sponsored entities			$	2,995					$	2,994
Agency mortgage-backed securites-residential			31,882						29,657
State and municipal			24,509						25,222
Trust preferred security					1,300						1,340
Corporate bonds			985						987
Total investment securities	$	—	$	60,371	$	1,300	$	—	$	58,860	$	1,340

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31:

	Trust Preferred Security
	2016
Balance of recurring Level 3 assets at January 1	$	1,340
Total losses for the period:
Included in other comprehensive income	(40		)
Balance of recurring Level 3 assets at March 31	$	1,300

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Impaired loans which are measured for impairment using the fair value of collateral for collateral dependent loans, had a principal balance of $484,000 at March 31, 2016 with a valuation allowance of $91,000.  Impaired loans which were measured for impairment using the fair value of collateral for collateral-dependent loans had a principal balance of $537,000 at December 31, 2015, with a valuation allowance of $198,000.  Decreases in the provision for loan losses of $64,000 and $28,000 were recognized for the three months ended March 31, 2016 and 2015, respectively, as a result of net changes in fair values on collateral dependent loans and other factors affecting the provision for loan losses.

Other real estate owned, which is measured at fair value less costs to sell, had a net carrying value of $100,000 at March 31, 2016 and December 31, 2015. Total writedowns of other real estate owned were $0 and $10,000 in the quarters ending March 31, 2016 and 2015, respectively.

The following table presents quantitative and qualitative information about Level 3 fair value measurements for financial instruments measured on a non-recurring basis at March 31, 2016.

	March 31, 2016	Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	347	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(0%)
Residential RE	46	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	12%-50% (31.73%)
Other real estate owned:
Commercial RE	100	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

The following table presents quantitative and qualitative information about Level 3 fair value measurements for financial instruments measured on a non-recurring basis at December 31, 2015.

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	December 31, 2015		Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	$	260	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(50.00%)
Residential	79		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	20%-60% (30.00%)
Other real estate owned:
Commercial RE	100		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

The carrying amount and estimated fair values of financial instruments at March 31, 2016 and December 31, 2015 were as follows:

			Fair Value Measurements at
	Carrying		March 31, 2016
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	16,735	$	16,735			$	16,735
Interest-bearing deposits in other financial institutions	2,728		2,749				2,749
Loans, net of allowance	325,231					326,305	326,305
Loans held for sale	373				380		380
Accrued interest receivable	1,463				327	1,136	1,463
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	222,705	$	222,705			$	222,705
Time deposits	140,475				140,699		140,699
FHLB advances	23,000				22,979		22,979
Other borrowings	1,000				1,000		1,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	220		11		180	29	220

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			Fair Value Measurements at
	Carrying		December 31, 2015
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	15,255	$	15,255	$	$	$	15,255
Interest-bearing deposits in other financial institutions	2,728		$	2,728			2,728
Loans, net of allowance	325,866					326,886	326,886
Accrued interest receivable	1,680				337	1,343	1,680
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	216,857	$	216,857			$	216,857
Time deposits	153,531				153,801		153,801
FHLB advances	13,000				12,902		12,902
Other borrowings	2,000				2,000		2,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	213		9		177	27	213

The methods and assumptions used to estimate fair value are described as follows:

(a)Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

(b)Interest Bearing Deposits in Other Financial Institutions: Fair values are based on quoted market prices.

(c)FHLB Stock: It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(d)Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans held for sale is estimated based upon binding contracts and quotes from first party investors resulting in a Level 2 classification.

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(e)Deposits: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f)FHLB Advances and Other Borrowings/Subordinated Debentures: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(g)Accrued Interest Receivable/Payable: The carrying amounts of accrued interest approximate fair value resulting in a Level 1 or Level 2 classification consistent with the asset/liability they are associated with.

Note 6 - Earnings Per Share

Basic earnings per share have been computed by dividing net income available for common shareholders by the weighted-average number of common shares outstanding for the period.  Diluted earnings per share have been computed the same as basic earnings per share, and assumes the conversion of outstanding stock options, convertible preferred stock and warrants, if dilutive.  The following table reconciles the basic and diluted earnings per share computations for the quarters ending March 31, 2016 and 2015.

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	Quarter ended March 31, 2016						Quarter ended March 31, 2015
				Weighted	Per					Weighted	Per
				Average	Share					Average	Share
	Income			Shares	Amount		Income			Shares	Amount
Basic earnings per share:
Net income	$	905					$	782
Less: Dividends on preferred stock during the quarter	(124		)				(128		)
Net income available to common shareholders	$	781		1,993,577	$	0.39	$	654		1,968,777	$	0.33
Effect of dilutive securities
Stock options	—			95			—			—
Performance share units	—			1,165			—			—
Convertible preferred stock	124			543,950			128			568,890
Warrants	—			—						147,249
Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	905		2,538,787	$	0.36	$	782		2,684,916	$	0.29

Stock options for 4,505 and 29,276 shares of common stock were not considered in computing diluted earnings per common share for March 31, 2016 and 2015, respectively, because they are anti-dilutive.

Note 7 — Regulatory Capital Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  Management believes as of March 31, 2016 and December 31, 2015, the Company and Citizens First Bank, Inc. met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications:  well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.  If adequately capitalized, regulatory approval is required to accept brokered deposits.  If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.  The most recent regulatory

28

notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.  There are no conditions or events since that notification that management believes have changed the institution’s category.

Under quantitative measures established by regulation to ensure capital adequacy, we are required to maintain minimum amounts and ratios of total Tier 1 capital to risk-weighted assets and to total assets. For 2016, interim Final Basel III rules require the Bank to maintain minimum amounts and ratios of common equity Tier I capital to risk-weighted assets. Under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in computing regulatory capital. March 31, 2016 marks the start of the capital conservation buffer. The buffer, which phases in over the next four years, could limit the payment of dividends and discretionary bonuses to officers if a bank fails to maintain required capital levels.

The Company’s and Citizens First Bank, Inc.’s actual capital amounts and ratios are also presented in the following table.

	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	45,531	12.88	%	$	28,290	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,290		13.09	%	28,280		8.0	%	$	35,350	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	41,102		11.62	%	21,218		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	21,210		6.0	%	28,280		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	28,798		8.14	%	15,913		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	15,908		4.5	%	22,978		6.5	%
Tier I Leverage Capital to average assets
Consolidated	41,102		9.57	%	17,183		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		9.76	%	17,160		4.0	%	21,451		5.0	%

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	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	44,762	12.58	%	$	28,463	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,353		13.03	%	28,459		8.0	%	$	35,573	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	40,310		11.33	%	21,348		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	21,344		6.0	%	28,459		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	27,650		7.77	%	16,011		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	16,008		4.5	%	23,123		6.5	%
Tier I Leverage Capital to average assets
Consolidated	39,365		9.46	%	13,961		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		9.83	%	17,043		4.0	%	21,304		5.0	%

Note 8 — Preferred Stock

In 2004, the Company issued 250 shares of Cumulative Convertible Preferred Stock, stated value $31,992 per share (Cumulative Preferred Stock), for an aggregate purchase price of $7,998,000. The Cumulative Preferred Stock was sold for $31,992 per share, is entitled to quarterly cumulative dividends at an annual fixed rate of 6.5% and is convertible into shares of common stock of the Company at an initial conversion price per share of $15.50 (currently $14.06, adjusted for stock dividends) on and after three years after the date of issuance.  As of March 31, 2016, 13 preferred shares have converted to 29,575 common shares.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s discussion and analysis of Citizens First Corporation (the “Company”) is included to provide the shareholders with an expanded narrative of our results of operations, changes in financial condition, liquidity and capital adequacy.  This narrative should be reviewed in conjunction with our consolidated financial statements and notes thereto included in our 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

Forward-Looking Statements

We may from time to time make written or oral statements, including statements contained in this report, which may constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”).  The words “may”, “expect”, “anticipate”, “intend”, “consider”, “plan”, “believe”, “seek”, “should”, “estimate”, and similar expressions are intended to identify such forward-looking statements, but other statements may constitute forward-looking statements.  These statements should be considered subject to various risks and uncertainties.  Such forward-looking statements are made based upon management’s belief as well as assumptions made by, and information currently available to, management pursuant to “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.  Our actual results may differ materially from the results anticipated in forward-looking statements due to a variety of factors.  Among the risks and uncertainties that could cause actual results to differ materially are current and future economic conditions generally and in our market areas, changes in the interest rate environment, overall loan demand, increased competition in the financial services industry which could negatively impact our ability to increase total earning assets, and retention of key personnel.  Actions by the Department of the Treasury and federal and state bank regulators in response to changing economic conditions, changes in interest rates, loan prepayments by and the financial health of our borrowers, and other factors described in the reports filed by us with the Securities and Exchange Commission could also impact current expectations.

Results of Operations

For the quarter ended March 31, 2016, we reported net income of $905,000, or $0.36 per diluted common share, compared to net income of $782,000, or $0.29 per diluted common share in the first quarter of 2015, an increase of $123,000.  The increase in net income is primarily attributable to an increase in earning assets over the prior year.

Our annualized return on average assets, defined as net income divided by average assets, was 0.84% for the three months ended March 31, 2016, compared to 0.74% in March 31, 2015.  Our annualized return on average equity, defined as net income

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divided by average equity, was 9.06% for the three months ending March 31, 2016, compared to 8.13% for the three months ending March 31, 2015.

Net Interest Income

Net interest income, our principal source of earnings, is the difference between the interest income generated by earning assets, such as loans and securities, and the total interest cost of the deposits and borrowings obtained to fund these assets.  Factors that influence the level of net interest income include the volume of earning assets and interest bearing liabilities, yields earned and rates paid, the level of non-performing loans and non-earning assets, and the amount of non-interest bearing deposits supporting earning assets.

Net interest income for the quarter ended March 31, 2016 increased $201,000, or 5.5%, compared to March 31, 2015. The increase in net interest income was a result of an increase in the volume of average earning assets over the previous year.

The net interest margin for the three months ended March 31, 2016 was 3.94%, compared to 3.82% in 2015.  The increase of 12 basis points is attributable to both the decrease in the cost of average interest-bearing liabilities and an increase in the yield on earning assets.

The following tables set forth for the quarter ended March 31, 2016 and 2015, information regarding average balances of assets and liabilities as well as the total dollar amounts of interest income from average interest-earning assets and interest expense on average interest-bearing liabilities and average yields and costs.  Such yields and costs for the periods indicated are derived by dividing income or expense by the average balances of assets or liabilities, respectively, for the periods presented.

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Average Consolidated Balance Sheets and Net Interest Analysis (Dollars in thousands) Quarter ended March 31,

	2016						2015
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
Earning assets:
Federal funds sold	$	4,156	$	5	0.48	%	$	16,142	$	9	0.23	%
Interest-bearing deposits in other
financial institutions	2,726		11		1.62	%	—		—		0.00	%
Available-for-sale securities (1)
Taxable	37,716		178		1.90	%	34,502		152		1.79	%
Nontaxable	23,015		240		4.19	%	24,222		266		4.45	%
Federal Home Loan Bank stock	2,025		20		3.97	%	2,025		20		4.01	%
Loans receivable (2)	333,000		4,103		4.96	%	321,028		3,949		4.99	%
Total interest earning assets	402,638		4,557		4.55	%	397,919		4,396		4.48	%
Non-interest earning assets	30,505						30,291
Total Assets	$	433,143					$	428,210
Interest-bearing liabilities:
NOW accounts	$	126,996	$	122	0.39	%	$	110,499	$	96	0.35	%
Money market accounts	26,111		26		0.40	%	24,573		22		0.36	%
Savings accounts	20,451		9		0.18	%	19,374		9		0.19	%
Time deposits	146,805		371		1.02	%	162,111		422		1.06	%
Total interest-bearing deposits	320,363		528		0.66	%	316,557		549		0.70	%
Borrowings	18,394		57		1.25	%	21,967		71		1.31	%
Subordinated debentures	5,000		28		2.25	%	5,000		24		1.95	%
Total interest-bearing liabilities	343,757		613		0.72	%	343,524		644		0.76	%
Non-interest bearing deposits	47,034						43,682
Other liabilities	2,196						1,975
Total liabilities	392,987						389,181
Stockholders’ equity	40,156						39,029
Total Liabilities and Stockholders’ Equity	$	433,143					$	428,210
Net interest income			$	3,944					$	3,752
Net interest spread (1)					3.83	%					3.72	%
Net interest margin (1) (3)					3.94	%					3.82	%
Return on average assets ratio					0.84	%					0.74	%
Return on average equity ratio					9.06	%					8.13	%
Average equity to assets ratio					9.27	%					9.11	%

(1)  Income and yield stated at a tax equivalent basis for nontaxable securities using the marginal corporate Federal tax rate of 34.0%

(2)  Average loans include non-performing loans.  Interest income includes interest and fees on loans, but does not include interest on loans on non-accrual.

(3)  Net interest income as a percentage of average interest-earning assets.

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Rate/Volume Analysis

The following table sets forth the effects of changing rates and volumes on our net interest income for the three months ended March 31, 2016 and 2015.  Information is provided with respect to (1) effects on interest income attributable to changes in volume (changes in volume multiplied by prior rate) and (2) effects on interest income attributable to changes in rate (changes in rate multiplied by prior volume).  Changes attributable to the combined input of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.

	(Dollars in Thousands)
	Three Months Ended March 31, 2016 Vs. 2015
	Increase (Decrease) Due to
	Rate		Volume		Net
Interest-earning assets:
Federal funds sold	3		(7	)	(4	)
Interest-bearing deposits in other
financial institutions	—		11		11
Available-for-sale securities
Taxable	12		14		26
Nontaxable (1)	(13	)	(13	)	(26	)
Federal Home Loan Bank stock	—		—		—
Loans, net	7		147		154
Total Net Change in income on interest-earning assets	9		152		161
Interest-bearing liabilities:
NOW accounts	12		14		26
Money market accounts	3		1		4
Savings accounts	(1	)	1		—
Time deposits	(11	)	(40	)	(51	)
FHLB and other borrowings	(2	)	(12	)	(14	)
Subordinated debentures	4		—		4
Total Net Change in expense on interest-earning liabilities	5		(36	)	(31	)
Net change in net interest income	4		188		192
Percentage change	2.08	%	97.92	%	100.0	%

(1) Income stated at a fully tax equivalent basis using the marginal corporate Federal tax rate of 34.0%.

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Provision for Loan Losses

No provision for loan losses was recorded for the first quarter of 2016, compared to $80,000 in the first quarter of 2015. The allowance for loan losses to total loans was 1.53% of total loans at March 31, 2016 compared to 1.55% at March 31, 2015. Net charge-offs (recoveries) were ($128,000) for the first quarter of 2016 compared to $18,000 in the first quarter of 2015.

Non-Interest Income

Non-interest income for the three months ended March 31, 2016 increased $85,000, or 12.3%, compared to the three months ended March 31, 2015, primarily due to an increase in gain on sale of mortgage loans and inclusion of $51,000 securities gains in the first quarter of 2016.

Non-Interest Expense

Non-interest expense for the three months ended March 31, 2016 increased $167,000, or 5.2%, compared to the three months ended March 31, 2015, due to an increase in personnel expenses of $136,000, primarily as a result of normal salary adjustments combined with an increase of three full time equivalent employees in the credit division.

Income Taxes

Income tax expense was calculated using our expected effective rate for 2016 and 2015.  We have recognized deferred tax liabilities and assets to show the tax effects of differences between the financial statement and tax bases of assets and liabilities.  Our statutory federal tax rate was 34.0% in both 2016 and 2015. The effective tax rate for the first quarter of 2016 was 28.8% compared to a 27.1% effective tax rate for the first quarter of 2015. The difference between the statutory and effective rates are impacted by such factors as income from tax-exempt loans, tax-exempt income on state and municipal securities, and income on bank owned life insurance.

Balance Sheet Review

Overview

Total assets at March 31, 2016 were $434.7 million, an increase of $2.5 million, or .6%, from $432.2 million at December 31, 2015.  Average assets during the first quarter were $433.1 million, an increase of 1.1%, or $4.9 million, from $428.2 million in the first quarter of 2015.  Average interest earning assets increased 1.2%, or $4.7 million, from $397.9 million in the first quarter of 2015 to $402.6 million in the first quarter of 2016.

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Loans

Loans decreased $507,000, or 0.15%, from $330.8 million at December 31, 2015 to $330.3 million at March 31, 2016.  Total loans averaged $333.0 million the first quarter of 2016, compared to $321.0 million the first quarter of 2015, an increase of $12.0 million, or 3.7%.  We experienced an increase in the commercial and agricultural portfolio during the first three months of the year compared to December 31, 2015. The following table presents a summary of the loan portfolio by category:

	(Dollars in Thousands)
	March 31, 2016				December 31, 2015
			% of Total Loans				% of Total Loans
Commercial and agricultural	$	55,682	16.86	%	$	53,516	16.18	%
Commercial real estate	191,183		57.89	%	193,457		58.48	%
Residential real estate	79,566		24.09	%	79,680		24.09	%
Consumer	3,844		1.16	%	4,129		1.25	%
	$	330,275	100	%	$	330,782	100	%

The majority of our loans are to customers located in south central Kentucky and central Tennessee.  As of March 31, 2016, our twenty largest credit relationships consisted of loans and loan commitments ranging from $3.8 million to $9.4 million.  The aggregate amount of these credit relationships was $97.1 million. As of December 31, 2015, our twenty largest credit relationships consisted of loans and loan commitments ranging from $3.8 million to $6.6 million.  The aggregate amount of these credit relationships was $95.9 million.

Our lending activities are subject to a variety of lending limits imposed by state and federal law.  Citizens First Bank’s secured legal lending limit to a single borrower was approximately $12.5 million at March 31, 2016 and December 31, 2015.

As of March 31, 2016, we had $14.0 million of participations in loans purchased from, and $21.6 million of participations in loans sold to, other banks. As of December 31, 2015, we had $21.1 million of participations in loans purchased from, and $21.8 million of participations in loans sold to, other banks.

The following table sets forth the maturity distribution of the loan portfolio as of March 31, 2016.  Maturities are based on contractual terms.  Our policy is to specifically review and approve all loans renewed; loans are not automatically rolled over.

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	(Dollars in Thousands)
Loan Maturities as of March 31, 2016	Within One Year		After One but Within Five Years		After Five Years		Total
Commercial and agricultural	$	20,117	$	26,879	$	8,686	$	55,682
Commercial real estate	41,342		105,265		44,576		191,183
Residential real estate	6,468		41,807		31,291		79,566
Consumer	807		2,999		38		3,844
Total	$	68,734	$	176,950	$	84,591	$	330,275

Credit Quality and the Allowance for Loan Losses

The allowance for loan losses represents management’s estimate of probable credit losses incurred in the loan portfolio. Determining the amount of the allowance for loan losses is considered a critical accounting estimate because it requires significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on loans based on historical loss experience, and consideration of current economic trends and conditions, all of which may be susceptible to significant change.

The following table sets forth the breakdown of the allowance for loan losses by loan category at the dates indicated.  This allocation is not intended to suggest how actual losses may occur.

	(Dollars in Thousands)
	March 31, 2016				December 31, 2015
	Amount		% of Loans in Each Category to Toal Loans		Amount		% of Loans in Each Category to Toal Loans
Residential real estate loans	$	602	24.09	%	$	524	24.09	%
Consumer and other loans	24		1.16	%	28		1.25	%
Commercial and agricultural	745		16.86	%	812		16.18	%
Commercial real estate	3,585		57.89	%	3,431		58.48	%
Unallocated	88		0.00	%	121		0.00	%
Total allowance for loan losses	$	5,044	100.00	%	$	4,916	100.00	%

We maintain a modest unallocated amount in the allowance to assist in mitigating inherent risk that cannot be quantitatively or qualitatively determined, including, but not limited to, new loan products and new markets for which insufficient history exists for a robust analysis.  Allocations on individual loans and historical loss rates are reviewed quarterly and adjusted as necessary based on changing borrower and/or collateral conditions and actual collection and charge-off experience. The unallocated portion of the allowance was $88,000 at March 31, 2016 and $121,000 at December 31, 2015.

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The following table sets forth selected asset quality measurements and ratios for the periods indicated:

	(Dollars in Thousands)
	March 31,			December 31,
	2016			2015
Non-accrual loans	$	590		$	537
Loans 90+ days past due/accruing	—			—
Restructured loans on non-accrual	—			—
Total non-performing loans	590			537
Other real estate owned	100			100
Total non-performing assets	$	690		$	637
Non-performing loans to total loans	0.18		%	0.16		%
Non-performing assets to total assets	0.16		%	0.15		%
Net-charge-offs (recoveries) YTD	$	(128	)	$	104
Net charge-offs (recoveries) YTD to average YTD total loans, annualized	(0.15		)%	0.03		%
Allowance for loan losses to non-performing loans	731.01		%	915.46		%
Allowance for loan losses to total loans	1.53		%	1.49		%

Non-performing assets totaled $690,000 at March 31 2016, compared to $637,000 at December 31, 2015, an increase of $53,000. Payoffs and paydowns of $62,000 included the charge off of $8,000 in principal, with decreases offset by the addition of $115,000 in residential real estate loans.

Non-performing loans consist of non-accrual loans and loans 90 days or more past due and still accruing interest. Non-performing assets are defined as non-performing loans, other real estate owned, and repossessed assets. Management classifies commercial and commercial real estate loans as non-accrual when principal or interest is past due 90 days or more and the loan is not adequately collateralized, or earlier when, in the opinion of management, principal or interest is not likely to be paid in accordance with the terms of the obligation. We charge off consumer loans after 120 days of delinquency unless they are adequately secured and in the process of collection. Non-accrual loans are not reclassified as accruing until principal and interest payments are brought current and future payments appear reasonably certain.

Troubled debt restructurings (TDRs) are modified loans in which a concession is provided to a borrower experiencing financial difficulties. Loan modifications are considered TDRs when the concession provided is not available to the borrower through either normal channels or other sources. However, not all loan modifications are TDRs. Our standards relating to loan modifications consider, among other factors, minimum verified income requirements, cash flow analysis, and collateral valuations. However, each potential loan modification is reviewed individually and the terms of the loan are modified to meet a borrower’s specific circumstances at a point in time. TDRs can be classified as either accrual or nonaccrual loans. Non-accrual TDRs are included in non-accrual loans whereas accruing TDRs are excluded because the borrower remains contractually current.

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Loans that exhibit probable or observed credit weaknesses are subject to individual review. Where appropriate, allocations for individual loans are included in the allowance calculation based on management’s estimate of the borrower’s ability to repay the loan given the availability of collateral, other sources of cash flow and legal options available to us.  Included in the review of individual loans are those that are impaired as provided in ASC Topic 310 “Receivables”. We evaluate the collectability of both principal and interest when assessing the need for a loss accrual.  Historical loss rates are applied to other loans not subject to individual allocations.  These historical loss rates may be adjusted for significant factors that, in management’s judgment, reflect the impact of any current conditions on loss recognition.  Factors which management considers in the analysis include the effects of the national and local economies, trends in the nature and volume of loans (delinquencies, charge-offs and non-accrual loans), changes in mix, asset quality trends, risk management and loan administration, changes in internal lending policies and credit standards, and examination results from bank regulatory agencies and our internal credit examiners.

A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement.  Factors considered by management in determining impairment include payment status and the probability of collecting scheduled principal and interest payments when due.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired.  Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed.  Impairment is measured on a loan-by-loan basis for all loan classes by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent.

Securities

The investment securities portfolio is comprised of U.S. Government agency and government sponsored entity securities, agency mortgage-backed securities, tax-exempt securities of states and political subdivisions, a taxable municipal security, a corporate bond, and a trust preferred security. The purchase of nontaxable obligations of states and political subdivisions is a part of managing our effective tax rate.  Securities are all classified as available-for-sale, and averaged $60.7 million for the first three months of 2016, compared to $58.7 million for 2015.

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The tables below present the maturities and yield characteristics of securities as of March 31, 2016 and December 31, 2015.  Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

	(Dollars in Thousands)
				Over			Over
				One Year			Five Years
	One Year or			Through			Through			Over Ten			Total
March 31, 2016	Less			Five Years			Ten Years			Years			Maturities			Fair Value
U.S. Government agencies	$	—		$	2,998		—			$	—		$	2,998		$	2,995
Agency mortgage-backed securities: (1)	327			24,973			6,185			—			31,485			31,882
Municipal securities	569			10,645			8,584			4,089			23,887			24,509
Trust preferred security	—			—			—			1,881			1,881			1,300
Corporate bond	—			—			1,000			—			1,000			985
Total available-for-sale securities	$	896		$	38,616		$	15,769		$	5,970		$	61,251		$	61,671
Percent of total	1.46		%	63.05		%	25.74		%	9.75		%	100.00		%
Weighted average yield(2)	3.59		%	2.48		%	3.49		%	4.12		%	2.91		%

(1)Agency mortgage-backed securities (residential) are grouped into average lives based on March 2016 prepayment projections.

(2)The weighted average yields are based on amortized cost and municipal securitiesare calculated on a full tax- equivalent basis.

	(Dollars in Thousands)
				Over			Over
				One Year			Five Years
	One Year or			Through			Through			Over Ten			Total
December 31, 2015	Less			Five Years			Ten Years			Years			Maturities			Fair Value
U.S. Government agencies	$	—		$	2,998		$	—		$	—		$	2,998		$	2,994
Agency mortgage-backed securities: (1)	315			24,389			4,742			—			$	29,446		29,657
Municipal securities	1,126			10,838			8,086			4,591			$	24,641		25,222
Trust preferred security	—			—			—			1,880			$	1,880		1,340
Corporate bond	—			—			1,000			—			$	1,000		987
Total available-for-sale securities	$	1,441		$	38,225		$	13,828		$	6,471		$	59,965		$	60,200
Percent of total	2.40		%	63.75		%	23.06		%	10.79		%	100.00		%
Weighted average yield(2)	4.31		%	2.45		%	3.43		%	4.07		%	2.88		%

(1)Agency mortgage-backed securities (residential) are grouped into average lives based on December 2015 prepayment projections.

(2)The weighted average yields are based on amortized cost and municipal securitiesare calculated on a full tax- equivalent basis.

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The trust preferred security category consists of one single issue trust preferred security which has experienced a decline in fair value due to inactivity in the market. No impairment charge is being taken as no loss of principal is anticipated and all principal and interest payments are being received as scheduled. The Company does not intend to sell this security and does not believe it will be required to sell this security before recovery. All rated securities are investment grade. For those that are not rated, the financial condition has been evaluated and no adverse conditions were identified related to repayment. Declines in fair value are a function of rate changes in the market and market illiquidity.

Deposits

Our primary funding source for lending and investment activities results from customer deposits and a deposit listing service.  Deposits at March 31, 2016 were $363.2 million, a decrease of $7.2 million, or 1.9%, compared to $370.4 million at December 31, 2015.  Total deposits averaged $367.4 million the first quarter of 2016, an increase of $7.2 million, or 2.0%, compared to $360.2 million during the first quarter of 2015.  Average deposits increased during the year, but the cost of funds declined as higher cost deposits matured and were renewed at lower rates.

Time deposits that meets or exceed the FDIC insurance limit of $250,000 were $11.3 million and $11.5 million at March 31, 2016 and December 31, 2015, respectively. Time deposits of $100,000 or more totaled $64.2 million at March 31, 2016, compared to $73.4 million at December 31, 2015.  Interest expense on time deposits of $100,000 or more was $176,000 for the three months ended March 31, 2016, compared to $197,000 for the three months ended March 31, 2015.  Our cost has decreased as these certificates of deposit matured and were renewed at lower current market rates.  The following table shows the maturities of time deposits as of March 31, 2016.

	(Dollars in Thousands)
	March 31, 2016
Three months or less	$	25,651
Over three through six months	9,761
Over six through twelve months	47,628
Over one year through three years	48,987
Over three years through five years	8,444
Over five years	4
Total	$	140,475

Borrowings

FHLB Advances. We obtain advances from the Federal Home Bank of Cincinnati (FHLB) for funding and liability management.  These advances are collateralized by a blanket agreement of eligible 1-4 family residential mortgage loans and eligible

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commercial real estate. Total advances as of March 31, 2016 were $23.0 million compared to $13.0 million at December 31, 2015. Rates vary based on the term to repayment, and are summarized below as of March 31, 2016:

				(Dollars in  Thousands)
Type	Maturity	Rate		Amount
Fixed	May 25, 2016	0.99	%	3,000
Fixed	June 3, 2016	0.68	%	2,000
Fixed	July 22, 2016	0.70	%	5,000
Fixed	October 21, 2016	0.70	%	5,000
Fixed	December 2, 2016	0.92	%	5,000
Fixed	May 24, 2019	1.72	%	3,000
				$	23,000

At March 31, 2016, we had available collateral to borrow an additional $53.5 million from the FHLB compared to $63.5 million at December 31, 2015.

Other Borrowings.  In 2015, we renewed a credit agreement with a community bank to be used for operating capital and general corporate purposes.  The line has a total availability of $3.0 million, matures November 21, 2016, and bears interest at the prime rate as published in the Money Rates section of The Wall Street Journal, plus 0.25%, with interest payable monthly. The line has a floor rate of 4.5%. The line is secured by the Bank’s common stock.  As of March 31, 2016 the line had a balance of $1.0 million compared to a balance of $2.0 million at December 31, 2015.

At March 31, 2016, we had established Federal Funds lines of credit totaling $18.8 million with three correspondent banks.  No amounts were drawn as of March 31, 2016 or December 31, 2015.

We issued $5.0 million in subordinated debentures in October, 2006.  These trust preferred securities bear an interest rate, which reprices each calendar quarter, of 165 basis points over 3-month LIBOR (London Inter Bank Offering Rate).  Our rate as of March 31, 2016 was 2.26%.  The subordinated debentures may be included with tier 1 capital (with certain limitations) under current regulatory guidelines.

Liquidity

Our objective for liquidity management is to ensure that we have funds available to meet deposit withdrawals and credit demands without unduly penalizing profitability.  In order to maintain a proper level of liquidity, the Bank has several sources of funds available on a daily basis that can be used for liquidity purposes. Those sources of funds include the Bank’s core deposits, cash flow generated by repayment of principal and interest on loans and investment securities; FHLB borrowings; and federal funds

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purchased. While maturities and scheduled amortization of loans and investment securities are generally a predictable source of funds, deposit outflows and mortgage prepayments are influenced significantly by general interest rates, economic conditions, and competition in our local markets.

Our asset and liability management committee meets monthly and monitors the composition of the balance sheet to ensure comprehensive management of interest rate risk and liquidity.  We prepare a monthly cash flow report which forecasts funding needs and availability for the coming months, based on forecasts of loan closings and payoffs, potentially callable securities, and other factors.

Capital

Stockholders’ equity increased $914,000, or 2.3%, from December 31, 2015 to March 31, 2016.  A common dividend of $0.08 per share was paid during the fourth quarter of 2015, which marks the first common dividend paid since 2008.

The Company previously issued 250 shares of Cumulative Convertible Preferred Stock, (Preferred Stock), for an aggregate purchase price of $8.0 million. The Preferred Stock was sold for $31,992 per share, is entitled to quarterly cumulative dividends at an annual fixed rate of 6.5% and is currently convertible into shares of common stock of the Company at an initial conversion price per share of $15.50 (currently $14.06, adjusted for stock dividends).  Approximately 5% of preferred shareholders (holding 13 shares of Preferred Stock) have converted their shares into 29,575 shares of common stock as of March 31, 2016.

We are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks, (Basel III rules) became effective for the Bank on January 1, 2015 with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019. March 31, 2016 marks the start of the capital conservation buffer. The buffer, which phases in over the next four years, could limit the payment of dividends and discretionary bonuses to officers if a bank fails to maintain required capital levels. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. We believe as of December 31, 2015, the Company and the Bank met all capital adequacy requirements to which it is subject.

43

Our capital ratios, calculated in accordance with regulatory guidelines, were as follows:

	(Dollars in Thousands)
	Actual				For Capital Adequacy  Purposes				To Be Well Capitalized  Under Prompt Corrective  Action Provisions
March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	45,531	12.88	%	$	28,290	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,290		13.09	%	28,280		8.0	%	$	35,350	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	41,102		11.62	%	21,218		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	21,210		6.0	%	28,280		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	28,798		8.14	%	15,913		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	15,908		4.5	%	22,978		6.5	%
Tier I Leverage Capital to average assets
Consolidated	41,102		9.57	%	17,183		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		9.76	%	17,160		4.0	%	21,451		5.0	%

	(Dollars in Thousands)
	Actual				For Capital Adequacy  Purposes				To Be Well Capitalized  Under Prompt Corrective  Action Provisions
December 31, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	44,762	12.58	%	$	28,463	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,353		13.03	%	28,459		8.0	%	$	35,573	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	40,310		11.33	%	21,348		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	21,344		6.0	%	28,459		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	27,650		7.77	%	16,011		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	16,008		4.5	%	23,123		6.5	%
Tier I Leverage Capital to average assets
Consolidated	39,365		9.46	%	13,961		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		9.83	%	17,043		4.0	%	21,304		5.0	%

44

ITEM 3.  Quantitative and Qualitative Disclosures about Market Risk

We use a simulation model as a tool to monitor and evaluate interest rate risk exposure.  The model is designed to measure the sensitivity of net interest income and net income to changing interest rates over future time periods.  Forecasting net interest income and its sensitivity to changes in interest rates requires us to make assumptions about the volume and characteristics of many attributes, including assumptions relating to the replacement of maturing earning assets and liabilities.  Other assumptions include, but are not limited to, projected prepayments, projected new volume, and the predicted relationship between changes in market interest rates and changes in customer account balances.  These effects are combined with our estimate of the most likely rate environment to produce a forecast of net interest income and net income.  The forecasted results are then adjusted for the effect of a gradual increase and decrease in market interest rates on our net interest income and net income.  Because assumptions are inherently uncertain, the model cannot precisely estimate net interest income or net income or the effect of interest rate changes on net interest income and net income.  Actual results could differ significantly from simulated results.

At March 31, 2016, the model indicated that if rates were to increase by 200 basis points during the remainder of the calendar year, then net interest income would increase 9.45% over the next twelve months.  The model indicated that if rates were to decrease by 200 basis points over the same period, then net interest income would decrease 2.07%.  The table below notes the projected changes in net interest income as indicated by the model for increases in rates up to 400 basis points and decreases in rates to 200 basis points.

Projections for: April 2016 - March 2017

Projected  Interest  Rate  Change	Estimated  Value	Net Interest  Income $  Change  From Base	% Change  From Base
+400	18,580,729	3,077,445	19.85	%
+300	17,776,985	2,273,701	14.67	%
+200	16,968,694	1,465,410	9.45	%
Base	15,503,284	0	0.00	%
-200	15,182,561	-320,724	-2.07	%

45

Item 4.  Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have reviewed and evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report, and have concluded that our disclosure controls and procedures were adequate and effective in all material respects to ensure that all material information required to be disclosed in this report has been made known to them in a timely fashion.

There was no change in our internal controls over financial reporting that occurred during the relevant period that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting, subsequent to the date of the Chief Executive Officer’s and Chief Financial Officer’s evaluation, nor were there any material weaknesses in the controls which required corrective action.

46

PART II-OTHER INFORMATION

Item 6. Exhibits

EXHIBIT INDEX

3.1Second Amended and Restated Articles of Incorporation of Citizens First Corporation, (incorporated by reference to Exhibit 3.1 of the Registrant’s Current Report on Form 8-K filed November 24, 2015).

3.2Amended and Restated Bylaws of Citizens First Corporation (incorporated by reference to Exhibit 3 of the Registrant’s Current Report on Form 8-K filed November 24, 2015).

4.1Second Amended and Restated Articles of Incorporation of Citizens First Corporation, (see Exhibit 3.1).

4.2Amended and Restated Bylaws of Citizens First Corporation (see Exhibit 3.2).

4.3Copy of Registrants’ Agreement Pursuant to Item 601(b) (4) (iii) (A) of Regulation S-K dated March 30, 2007 with respect to certain debt instruments (incorporated by reference to Exhibit 4.4 of the Registrant’s Form 10K-SB dated March 31, 2007; file number 001-33126).

31.1Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

31.2Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.

32.1Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350.

32.2Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350.

101Interactive data files: (i) Consolidated Balance Sheets at March 31, 2016 and December 31, 2015, (ii) the Consolidated Statements of Income for the three months ended March 31, 2016 and March 31, 2015, (iii) the Consolidated Statement of Stockholders’ Equity for the three months ended March 31, 2016 and March 31, 2015, (iv) Consolidated Statements of Cash Flows for the three month periods ended March 31, 2016 and 2015, and (v) Notes to Consolidated Financial Statements.**

**Pursuant to Rule 406T of Regulation S-T, the interactive data files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for

47

purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under these sections.

48

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: May 10, 2016	/s/M. Todd Kanipe
	M. Todd Kanipe
	President and Chief Executive Officer
Date: May 10, 2016	/s/ J. Steven Marcum
	J. Steven Marcum
	Executive Vice President and Chief Financial Officer

49

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act

I, M Todd Kanipe certify that:

1.I have reviewed this Form 10-Q of Citizens First Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the

1

small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/M. Todd Kanipe

M. Todd Kanipe

President and Chief Executive Officer

2

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act

I, J. Steven Marcum certify that:

1.I have reviewed this Form 10-Q of Citizens First Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the

1

small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2016

/s/J. Steven Marcum

J. Steven Marcum

Executive Vice President and Chief Financial Officer

2

EX-32.1

Exhibit 32.1

Section 1350 Certification

In connection with the Quarterly Report of Citizens First Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, M. Todd Kanipe, President and Chief Executive Officer of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/M. Todd Kanipe
	M. Todd Kanipe
	President and Chief Executive Officer
	(Principal Executive Officer)

Date: May 10, 2016

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed ‘filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section.  This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act or otherwise subject to the liability of that section.

1

EX-32.2

Exhibit 32.2

Section 1350 Certification

In connection with the Quarterly Report of Citizens First Corporation (the “Company”) on Form 10-Q for the period ended March 31, 2016, as filed with the Securities and Exchange Commission on the date hereof (the “Report”) I, J. Steven Marcum, Executive Vice President, Finance and Chief Financial Officer, of the Company, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

By:	/s/ J. Steven Marcum
	J. Steven Marcum
	Executive Vice President and Chief Financial Officer
	(Principal Financial Officer)

Date: May 10, 2016

This certification is being furnished as required by Rule 13a-14(b) under the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code, and shall not be deemed ‘filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. This certification shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act or otherwise subject to the liability of that section.

1

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2016	May. 12, 2016
Document and Entity Information
Entity Registrant Name	CITIZENS FIRST CORP
Entity Central Index Key	0001073475
Document Type	10-Q
Document Period End Date	Mar. 31, 2016
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		1,999,087
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q1

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Assets
Cash and due from financial institutions	$ 11,430	$ 8,865
Federal funds sold	5,305	6,390
Cash and cash equivalents	16,735	15,255
Interest-bearing deposits in other financial institutions	2,728	2,728
Available-for-sale securities	61,671	60,200
Loans held for sale	373
Loans, net of allowance for loan losses of $5,044 and $4,916 at March 31, 2016 and December 31, 2015, respectively	325,231	325,866
Premises and equipment, net	9,892	9,998
Bank owned life insurance (BOLI)	8,218	8,174
Federal Home Loan Bank (FHLB) stock, at cost	2,025	2,025
Accrued interest receivable	1,463	1,680
Deferred income taxes	1,265	1,328
Goodwill	4,097	4,097
Core deposit intangible	247	265
Other real estate owned	100	100
Other assets	677	465
Total Assets	434,722	432,181
Deposits
Noninterest bearing	50,365	48,522
Savings, NOW and money market	172,340	168,335
Time	140,475	153,531
Total deposits	363,180	370,388
FHLB advances and other borrowings	24,000	15,000
Subordinated debentures	5,000	5,000
Accrued interest payable	220	213
Other liabilities	1,884	2,056
Total Liabilities	394,284	392,657
Stockholders' Equity
6.5% cumulative preferred stock; no par value, authorized 250 shares, aggregate liquidation preference of $7,998; issued and outstanding 237 and 250 shares at March 31, 2016 and December 31, 2015, respectively	7,261	7,659
Common stock, no par value, authorized 5,000,000 shares; issued and outstanding 1,998,352 and 1,968,777 shares at March 31, 2016 and December 31, 2015, respectively	25,815	25,406
Retained earnings	7,085	6,304
Accumulated other comprehensive income	277	155
Total stockholders' equity	40,438	39,524
Total liabilities and stockholders' equity	$ 434,722	$ 432,181

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Consolidated Balance Sheets
Loans, allowance for loan losses (in dollars)	$ 5,044	$ 4,916
Preferred stock, dividend rate (as a percent)	6.50%	6.50%
Preferred stock no par value	$ 0	$ 0
Preferred stock, authorized shares	250	250
Preferred stock, aggregate liquidation preference (in dollars)	$ 7,998	$ 7,998
Preferred stock, issued shares	237	250
Preferred stock, outstanding shares	237	250
Common stock no par value	$ 0	$ 0
Common stock, authorized shares	5,000,000	5,000,000
Common stock, issued shares	1,998,352	1,968,777
Common stock, outstanding shares	1,998,352	1,968,777

XML

Consolidated Statements of Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Interest and dividend income
Loans	$ 4,103	$ 3,949
Taxable securities	178	152
Non-taxable securities	159	176
Federal funds sold and other	36	29
Total interest and dividend income	4,476	4,306
Interest expense
Deposits	528	549
FHLB advances and other	57	71
Subordinated debentures	28	24
Total interest expense	613	644
Net interest income	3,863	3,662
Provision for loan losses		80
Net interest income after provision for loan losses	3,863	3,582
Non-interest income
Service charges on deposit accounts	325	317
Other service charges and fees	164	135
Gains on sale of mortgage loans	77	31
Non-deposit brokerage fees	72	92
Lease income	45	73
BOLI income	44	45
Gain on sale of securities available-for-sale	51
Total non-interest income	778	693
Non-interest expenses
Salaries and employee benefits	1,784	1,648
Net occupancy expense	483	528
Advertising and public relations	61	52
Professional fees	180	164
Data processing services	256	239
Franchise shares and deposit tax	132	146
FDIC insurance	59	59
Core deposit intangible amortization	18	18
Postage and office supplies	46	40
Other real estate owned expenses	1
Other	350	309
Total non-interest expenses	3,370	3,203
Income before income taxes	1,271	1,072
Income taxes	366	290
Net income	905	782
Dividends on preferred stock	124	128
Net income available for common stockholders	$ 781	$ 654
Basic earnings per common share (in dollars per share)	$ 0.39	$ 0.33
Diluted earnings per common share (in dollars per share)	$ 0.36	$ 0.29

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Comprehensive income, net of tax
Net income	$ 905	$ 782
Other comprehensive income
Reclassification adjustment for gains included in net income	(34)
Change in unrealized gain on available for sale securities	156	249
Total other comprehensive income	122	249
Comprehensive income	$ 1,027	$ 1,031

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands	Preferred Stock	Common Stock	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
Balance at Dec. 31, 2014	$ 7,659	$ 27,072	$ 3,373	$ 344	$ 38,448
Increase (Decrease) in Stockholders' Equity
Net income			782		782
Change in accumulated other comprehensive income				249	249
Dividend declared and paid on preferred stock			(128)		(128)
Balance at Mar. 31, 2015	7,659	27,072	4,027	593	39,351
Balance at Dec. 31, 2015	7,659	25,406	6,304	155	39,524
Increase (Decrease) in Stockholders' Equity
Net income			905		905
Conversion of cumulative preferred	(398)	398
Stock based compensation		11			11
Change in accumulated other comprehensive income				122	122
Dividend declared and paid on preferred stock			(124)		(124)
Balance at Mar. 31, 2016	$ 7,261	$ 25,815	$ 7,085	$ 277	$ 40,438

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Operating Activities
Net income	$ 905	$ 782
Items not requiring (providing) cash:
Depreciation and amortization	140	137
Provision for loan losses		80
Amortization of premiums and discounts on securities	81	86
Amortization of core deposit intangible	18	18
Deferred income taxes		80
Stock based compensation	11
BOLI income	(44)	(45)
Proceeds from sale of mortgage loans held for sale	3,609	1,591
Origination of mortgage loans held for sale	(3,904)	(1,870)
Gains on sales of available-for-sale securities	(51)
Gains on sales of mortgage loans	(77)	(31)
Write-downs and losses on other real estate owned		10
Loss/(Gain) on sale premises and equipment	4	(4)
Changes in:
Accrued interest receivable	217	84
Other assets	(213)	(70)
Accrued interest payable and other liabilities	(165)	(166)
Net cash provided by operating activities	531	682
Investing Activities
Loan originations and payments, net	635	(1,252)
Purchase of premises and equipment	(37)	(151)
Proceeds from maturities of available-for-sale securities	2,309	1,373
Proceeds from sales of available-for-sale securities	2,066
Purchase of available-for-sale securities	(5,692)	(1,009)
Net cash used in investing activities	(719)	(1,039)
Financing Activities
Net change in demand deposits, money market, NOW and savings accounts	5,848	7,535
Net change in time deposits	(13,056)	16,046
Repayment of FHLB advances		(6,000)
Proceeds from FHLB advances	10,000
Repayment of other borrowings	(1,000)
Dividends paid on preferred stock	(124)	(128)
Net cash provided by financing activities	1,668	17,453
Increase in Cash and Cash Equivalents	1,480	17,096
Cash and Cash Equivalents, Beginning of Year	15,255	11,322
Cash and Cash Equivalents, End of Quarter	16,735	28,418
Supplemental Cash Flows Information
Interest paid	606	633
Income taxes paid	310	210
Preferred stock transferred into common stock	$ 398
Loans transferred to other real estate owned		$ 80

XML

Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2016

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Note 1 — Nature of Operations and 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 U.S. generally accepted accounting principles and general practices within the banking industry.  The consolidated financial statements include the accounts of the Company and the Bank.  All significant intercompany transactions and accounts have been eliminated in consolidation.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. 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.

In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in the accompanying unaudited financial statements.  Those adjustments consist only of normal recurring adjustments. Results of interim periods are not necessarily indicative of results to be expected for the full year.  The consolidated balance sheet of the Company as of December 31, 2015 has been derived from the audited consolidated balance sheet of the Company as of that date.

Recent Accounting Pronouncements—In May 2014 the FASB amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08 that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent.  The amendments in this update affect this guidance issued in 2014 that is not yet effective.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In January 2016 the FASB issued ASU 2016-01 which amends existing guidance on the classification and measurement of financial instruments.  This new standard revises and entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value.  The new standard is effective for reporting periods beginning after December 15, 2017.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In February 2016 the FASB issued ASU 2016-02 which establishes the principles to report information about the assets and liabilities that arise from leases.  This new standard changes the way operating leases are account for and reflected on the lessee’s balance sheet.  The new standard is intended to increase transparency and comparability by requiring lessees to recognize the financial obligation and right-of-use asset associated with operating leases that have a lease term of more than 12 months on the balance sheet.  The new standard is effective for reporting periods beginning after December 15, 2018.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In March 2016 the FASB issued ASU 2016-09 which provides guidance on share-based payment accounting.  The new standard includes multiple provision intended to simplify various aspects of the accounting for share-based payments.  The new standard is effective for reporting periods beginning after December 15, 2016.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

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Reclassifications

3 Months Ended

Mar. 31, 2016

Reclassifications

Reclassifications

Note 2 -  Reclassifications

Certain reclassifications have been made to the consolidated financial statements of prior periods to conform to the current period presentation.  These reclassifications do not affect net income or total stockholders’ equity as previously reported.

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Available-For-Sale Securities

3 Months Ended

Mar. 31, 2016

Available-For-Sale Securities

Available-For-Sale Securities

Note 3 - Available-For-Sale Securities

The following table summarizes the amortized cost and fair value of the available-for sale securities portfolio at March 31, 2016 and December 31, 2015 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income:

	(Dollars in Thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
March 31, 2016
U. S. government agencies and government sponsored entities	$	2,998	$	1	$	(4	)	$	2,995
Agency mortgage-backed securities: residential	31,485		413		(16		)	31,882
State and municipal	23,887		643		(21		)	24,509
Trust preferred security	1,881		—		(581		)	1,300
Corporate bonds	1,000		—		(15		)	985
Total Available-for-Sale Securities	$	61,251	$	1,057	$	(637	)	$	61,671
December 31, 2015
U. S. government agencies and government sponsored entities	$	2,998	$	3	$	(7	)	$	2,994
Agency mortgage-backed securities: residential	29,446		259		(48		)	29,657
State and municipal	24,641		615		(34		)	25,222
Trust preferred security	1,880		—		(540		)	1,340
Corporate bonds	1,000		—		(13)			987
Total Available-for-Sale Securities	$	59,965	$	877	$	(642	)	$	60,200

The amortized cost and fair value of investment securities at March 31, 2016 by contractual maturity were as follows.  Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	March 31, 2016
	(Dollars in Thousands)
	Available-For-Sale
	Amortized Cost		Fair Value
Due in one year or less	$	569	$	570
Due from one to five years	13,643		13,804
Due from five to ten years	10,696		11,002
Due after ten years	4,858		4,413
Agency mortgage-backed: residential	31,485		31,882
Total	$	61,251	$	61,671

The following table summarizes the investment securities with unrealized losses by portfolio segment at March 31, 2016 and December 31, 2015, aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position:

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2016:
U.S. government agencies and government sponsored entities	$	—	$	—		$	995	$	(4	)	$	995	$	(4	)
Agency mortgage-backed: residential	4,639		(16		)	—		—			4,639		(16		)
State and municipal	1,395		(9		)	300		(12		)	1,695		(21		)
Trust preferred security	—		—			1,300		(581		)	1,300		(581		)
Corporate Bonds	985		(15		)	—		—			985		(15		)
Total temporarily impaired	$	7,019	$	(40	)	$	2,595	$	(597	)	$	9,614	$	(637	)

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2015:
U.S. government agencies and government sponsored entities	$	—	$	—		$	992	$	(7	)	$	992	$	(7	)
Agency mortgage-backed: residential	7,009		(25		)	1,475		(23		)	8,484		(48		)
State and municipal	3,797		(19		)	617		(15		)	4,414		(34		)
Trust preferred security	—		—			1,340		(540		)	1,340		(540		)
Corporate bonds	987		(13		)	—		—			987		(13		)
Total temporarily impaired	$	11,793	$	(57	)	$	4,424	$	(585	)	$	16,217	$	(642	)

Other-Than-Temporary-Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  Investment securities classified as available-for-sale are generally evaluated for OTTI under ASC Topic 320, “Investments - Debt and Equity Securities.”

In determining OTTI under the ASC Topic 320 model, management considers many factors, including: (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer, (3) whether the market decline was affected by macroeconomic conditions, and (4) whether the entity has the intent to sell the debt security or more likely than not will be required to sell the debt security before its anticipated recovery.  The assessment of whether an other-than-temporary decline exists involves a high degree of subjectivity and judgment and is based on the information available to management at a point in time.

All rated securities are investment grade.  For those that are not rated, the financial condition has been evaluated and no adverse conditions were identified related to repayment.  Declines in fair value are a function of rate differences in the market and market illiquidity.  The Company does not intend or is not expected to be required to sell these securities before recovery of their amortized cost basis.

Approximately 97% of the Company’s unrealized losses 12 months or more relate to its investment in a single trust preferred security.  The security is a single-issuer trust preferred that is not rated. No impairment charge is being taken as no loss of principal or interest is anticipated. All principal and interest payments are being received as scheduled.  On a quarterly basis, we evaluate the creditworthiness of the issuer, a bank holding company with operations in the state of Kentucky.  Based on the issuer’s continued profitability and well-capitalized position, we do not deem that there is credit loss.  The decline in fair value is primarily attributable to illiquidity affecting these markets and not the expected cash flows of the individual securities.  We have evaluated the financial condition and near term prospects of the issuer and expect to fully recover our cost basis.  This security continues to pay interest as agreed and future payments are expected to be made as agreed.  This security is not considered to be other-than-temporarily impaired.

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Loans and Allowance for Loan Losses

3 Months Ended

Mar. 31, 2016

Loans and Allowance for Loan Losses

Loans and Allowance for Loan Losses

Note 4 - Loans and Allowance for Loan Losses

Categories of loans include:

	(Dollars in Thousands)
	March 31, 2016			December 31, 2015
Commercial	$	55,682		$	53,516
Commercial real estate:
Construction	20,897			24,167
Other	170,286			169,290
Residential real estate	79,566			79,680
Consumer:
Auto	1,334			1,425
Other	2,510			2,704
Total loans	330,275			330,782
Less allowance for loan losses	(5,044		)	(4,916		)
Net loans	$	325,231		$	325,866

The following table sets forth an analysis of our allowance for loan losses for the three months ending March 31, 2016 and 2015.

	(Dollars in Thousands)
March 31, 2016	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	812		$	3,431	$	524		$	28		$	121		$	4,916
Provision for loan losses	(174		)	129		82			(4		)	(33		)	—
Loans charged-off	—			—		(8		)	—			—			(8		)
Recoveries	107			25		4			—			—			136
Total ending allowance balance	$	745		$	3,585	$	602		$	24		$	88		$	5,044

	(Dollars in Thousands)
March 31, 2015	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,029		$	3,088		$	582		$	45		$	141	$	4,885
Provision for loan losses	(15		)	135			(43		)	(2		)	5		80
Loans charged-off	—			(17		)	(24		)	(3		)	—		(44		)
Recoveries	21			—			4			1			—		26
Total ending allowance balance	$	1,035		$	3,206		$	519		$	41		$	146	$	4,947

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method as of March 31, 2016 and December 31, 2015, which includes net deferred loan fees.  As of March 31, 2016 and December 31, 2015, accrued interest receivable of $1.1 million and $1.3 million, respectively, are not considered significant and therefore not included in the recorded investment in loans presented in the following tables.

	(Dollars in Thousands)
March 31, 2016	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	249	$	41	$	—	$	—	$	326
Collectively evaluated	709		3,336		561		24		88		4,718
Total ending allowance balance	$	745	$	3,585	$	602	$	24	$	88	$	5,044
Loans:
Individually evaluated for impairment	$	138	$	2,027	$	854	$	23	$	—	$	3,042
Collectively evaluated	55,544		189,156		78,712		3,821		—		327,233
Total ending loans balance	$	55,682	$	191,183	$	79,566	$	3,844	$	—	$	330,275

	(Dollars in Thousands)
December 31, 2015	Commercial		Commercial  Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	377	$	20	$	—	$	—	$	433
Collectively evaluated	776		3,054		504		28		121		4,483
Total ending allowance balance	$	812	$	3,431	$	524	$	28	$	121	$	4,916
Loans:
Individually evaluated for impairment	$	145	$	2,066	$	807	$	9	$	—	$	3,027
Collectively evaluated	53,371		191,391		78,873		4,120		—		327,755
Total ending loans balance	$	53,516	$	193,457	$	79,680	$	4,129	$	—	$	330,782

The following table presents information related to impaired loans by class of loans as of March 31, 2016 and December 31, 2015. In this table presentation the unpaid principal balance of the loans has not been reduced by partial net charge-offs and the recorded investment of the loans was reduced by partial net charge-offs.

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial	$	59	$	59	$	—	$	61	$	61	$	—
Commercial real estate:
Other	651		651		—		643		643		—
Residential real estate	762		762		—		700		700		—
Consumer:							—
Other	23		23		—		—		—		—
Subtotal	$	1,495	$	1,495	$	—	$	1,404	$	1,404	$	—
With an allowance recorded:
Commercial	$	79	$	79	$	36	$	84	$	84	$	36
Commercial real estate:
Other	1,376		1,376		249		1,423		1,423		377
Residential real estate	92		92		41		107		107		20
Consumer:
Other	—		—		—		9		9		—
Subtotal	$	1,547	$	1,547	$	326	$	1,623	$	1,623	$	433
Total	$	3,042	$	3,042	$	326	$	3,027	$	3,027	$	433

Information on impaired loans for the three months ending March 31, 2016 and 2015 is as follows:

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						March 31, 2015
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
Commercial	$	141	$	3	$	3	$	2,616	$	34	$	24
Commercial real estate:
Construction	—		—		—		—		—		—
Other	2,047		26		21		1,199		14		13
Residential real estate	857		9		8		1,023		12		8
Consumer:
Auto	—		—		—		7		—		—
Other	16		—		—		11		—		—
Total	$	3,061	$	38	$	32	$	4,856	$	60	$	45

The recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of March 31, 2016 and December 31, 2015 are summarized below:

	(Dollars in Thousands)				(Dollars in Thousands)
	March 31, 2016				December 31, 2015
	Loans Past Due Over 90 Days and Still Accruing		Nonaccrual		Loans Past Due Over 90 Days and Still Accruing		Nonaccrual
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction	—		—		—		—
Other	—		439		—		439
Residential real estate	—		151		—		98
Consumer:
Auto	—		—		—		—
Other	—		—		—		—
Total	$	—	$	590	$	—	$	537

Nonaccrual loans and loans past due 90 days still on accrual include individually classified impaired loans.

The following tables present the aging of the recorded investment in past due loans as of March 31, 2016 and December 31, 2015 by class of loans.  Non-accrual loans are included and have been categorized based on their payment status:

	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
March 31, 2016
Commercial	$	—	$	—	$	—	$	—	$	55,682	$	55,682
Commercial real estate:
Construction	—		—		—		—		20,897		20,897
Other	127		—		439		566		169,720		170,286
Residential real estate	—		52		102		154		79,412		79,566
Consumer:
Auto	—		—		—		—		1,334		1,334
Other	—		—		—		—		2,510		2,510
Subtotal	$	127	$	52	$	541	$	720	$	329,555	$	330,275

	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
December 31, 2015
Commercial	$	—	$	—	$	—	$	—	$	53,516	$	53,516
Commercial real estate:
Construction	—		—		—		—		24,167		24,167
Other	178		—		439		617		168,673		169,290
Residential real estate	329		—		98		427		79,253		79,680
Consumer:
Auto	1		—		—		1		1,424		1,425
Other	—		—		—		—		2,704		2,704
Subtotal	$	508	$	—	$	537	$	1,045	$	329,737	$	330,782

Troubled Debt Restructurings:

The Company reported total troubled debt restructurings of $2.5 million as of March 31, 2016 and December 31, 2015, respectively.  The Company has no commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings.  Troubled debt restructurings are included in impaired loans. The modifications of the terms of these loans included reducing the interest rate, granting an interest only payment period, or extending the terms of the debt for customers experiencing financial difficulties. Of the 12 troubled debt restructurings reported at quarter end, all loans were on accrual status.

The following table presents loans by class modified as trouble debt restructurings that occurred during the quarter ending March 31, 2016 and 2015.

		(Dollars in Thousands)					(Dollars in Thousands)
	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	March 31, 2016					March 31, 2015
Troubled Debt Restructurings:
Consumer	1	$	14	$	14	—	$	—	$	—
Total	1	$	14	$	14	—	$	—	$	—

Specific allocations of $234,000 and $591,000 were reported for troubled debt restructurings as of March 31, 2016 and March 31, 2015. No payment defaults or charge-offs were reported for troubled debt restructurings during the three months ending March 31, 2016 or March 31, 2015.

The terms of certain other loans were modified during the three months ending March 31, 2016 and 2015 that did not meet the definition of a troubled debt restructuring. These loans modified during the three months ending March 31, 2016 have a total recorded investment of $12.0 million as of March 31, 2016. These loans modified during the three months ending March 31, 2015 have a total recorded investment of $9.5 million as of March 31, 2015. The modification of these loans involved either a modification of the terms of a loan to borrowers who were not experiencing financial difficulties or a delay in a payment that was considered to be insignificant.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and commercial real estate loans with an outstanding balance greater than $25 thousand and is reviewed on a monthly basis. For residential real estate and consumer loans the analysis primarily involves monitoring the past due status of these loans and at such time that these loans are past due, the Company evaluates the loans to determine if a change in risk category is warranted. The Company uses the following definitions for risk ratings:

Special Mention.  Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard.  Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful.  Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be Pass rated loans.  All loans in all loan categories are assigned risk ratings.  Based on the most recent analyses performed, the risk category of loans by class of loans is as follows:

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2016
Commercial	$	55,511	$	—	$	171	$	—	$	55,682
Commercial real estate:
Construction	20,897		—		—		—		20,897
Other	160,921		5,725		3,640		—		170,286
Residential real estate	78,940		—		626		—		79,566
Consumer:
Auto	1,334		—		—		—		1,334
Other	2,502		—		8		—		2,510
Total	$	320,105	$	5,725	$	4,445	$	—	$	330,275

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2015
Commercial	$	53,316	$	—	$	200	$	—	$	53,516
Commercial real estate:
Construction	24,167		—		—		—		24,167
Other	159,829		5,753		3,708		—		169,290
Residential real estate	79,033		—		647		—		79,680
Consumer:
Auto	1,425		—		—		—		1,425
Other	2,697		—		7		—		2,704
Total	$	320,467	$	5,753	$	4,562	$	—	$	330,782

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Fair Value Measurements

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

Fair Value Measurements

Note 5 - Fair Value Measurements

Fair value is the exchange price that would be received to sell an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair values:

Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Significant other observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, and other inputs that are observable or can be corroborated by observable market data.

Level 3 — Significant unobservable inputs that are supported by little or no market activity, reflect a company’s own assumptions about market participant assumptions of fair value, and are significant to the fair value of the assets or liabilities.

In determining the appropriate levels, the Company used the following methods and significant assumptions to estimate the fair value of each type of financial instrument:

Investment Securities: The fair value of securities available-for-sale are determined by obtaining quoted prices on nationally recognized securities exchanges (level 1 inputs) or matrix pricing, which is a mathematical technique used widely in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (level 2 inputs).  The Company does not have any Level 1 securities.  Level 2 securities include certain U.S. agency bonds, collateralized mortgage and debt obligations, and certain municipal securities. The Company also has one Level 3 security. The value of this single issue trust preferred security is obtained on a quarterly basis directly from the originating broker.

Impaired Loans: The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals.  These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach.  Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Other Real Estate Owned: Commercial and residential real estate properties classified as other real estate owned (OREO) are measured at fair value, less costs to sell.  Fair values are based on recent real estate appraisals.  These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach.  Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available.  Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value.

Appraisals for collateral-dependent impaired loans and real estate properties classified as other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by Bank management.  The appraisal values for collateral-dependent impaired loans are discounted to allow for selling expenses and fees, the limited use nature of various properties, the age of the most recent appraisal, and additional discretionary discounts for location, condition, etc. The Bank annually obtains an updated current appraisal value for each OREO property to certify that the fair value has not declined.  For each parcel of OREO that has declined in value, the Bank records the decline in value by a direct writedown of the asset.

Assets measured at fair value on a recurring basis:

	Fair Value Measurements at:
	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Securities available-for-sale
U.S. government agencies and government sponsored entities			$	2,995					$	2,994
Agency mortgage-backed securites-residential			31,882						29,657
State and municipal			24,509						25,222
Trust preferred security					1,300						1,340
Corporate bonds			985						987
Total investment securities	$	—	$	60,371	$	1,300	$	—	$	58,860	$	1,340

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31:

	Trust Preferred Security
	2016
Balance of recurring Level 3 assets at January 1	$	1,340
Total losses for the period:
Included in other comprehensive income	(40		)
Balance of recurring Level 3 assets at March 31	$	1,300

Impaired loans which are measured for impairment using the fair value of collateral for collateral dependent loans, had a principal balance of $484,000 at March 31, 2016 with a valuation allowance of $91,000.  Impaired loans which were measured for impairment using the fair value of collateral for collateral-dependent loans had a principal balance of $537,000 at December 31, 2015, with a valuation allowance of $198,000.  Decreases in the provision for loan losses of $64,000 and $28,000 were recognized for the three months ended March 31, 2016 and 2015, respectively, as a result of net changes in fair values on collateral dependent loans and other factors affecting the provision for loan losses.

Other real estate owned, which is measured at fair value less costs to sell, had a net carrying value of $100,000 at March 31, 2016 and December 31, 2015. Total writedowns of other real estate owned were $0 and $10,000 in the quarters ending March 31, 2016 and 2015, respectively.

The following table presents quantitative and qualitative information about Level 3 fair value measurements for financial instruments measured on a non-recurring basis at March 31, 2016.

	March 31, 2016	Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	347	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(0%)
Residential RE	46	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	12%-50% (31.73%)
Other real estate owned:
Commercial RE	100	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

The following table presents quantitative and qualitative information about Level 3 fair value measurements for financial instruments measured on a non-recurring basis at December 31, 2015.

	December 31, 2015		Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	$	260	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(50.00%)
Residential	79		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	20%-60% (30.00%)
Other real estate owned:
Commercial RE	100		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

The carrying amount and estimated fair values of financial instruments at March 31, 2016 and December 31, 2015 were as follows:

			Fair Value Measurements at
	Carrying		March 31, 2016
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	16,735	$	16,735			$	16,735
Interest-bearing deposits in other financial institutions	2,728		2,749				2,749
Loans, net of allowance	325,231					326,305	326,305
Loans held for sale	373				380		380
Accrued interest receivable	1,463				327	1,136	1,463
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	222,705	$	222,705			$	222,705
Time deposits	140,475				140,699		140,699
FHLB advances	23,000				22,979		22,979
Other borrowings	1,000				1,000		1,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	220		11		180	29	220

			Fair Value Measurements at
	Carrying		December 31, 2015
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	15,255	$	15,255	$	$	$	15,255
Interest-bearing deposits in other financial institutions	2,728		$	2,728			2,728
Loans, net of allowance	325,866					326,886	326,886
Accrued interest receivable	1,680				337	1,343	1,680
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	216,857	$	216,857			$	216,857
Time deposits	153,531				153,801		153,801
FHLB advances	13,000				12,902		12,902
Other borrowings	2,000				2,000		2,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	213		9		177	27	213

The methods and assumptions used to estimate fair value are described as follows:

(a) Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

(b) Interest Bearing Deposits in Other Financial Institutions: Fair values are based on quoted market prices.

(c) FHLB Stock: It is not practical to determine the fair value of FHLB stock due to restrictions placed on its transferability.

(d) Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: For variable rate loans that reprice frequently and with no significant change in credit risk, fair values are based on carrying values resulting in a Level 3 classification. Fair values for other loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as described previously. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price. The fair value of loans held for sale is estimated based upon binding contracts and quotes from first party investors resulting in a Level 2 classification.

(e) Deposits: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e., their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate certificates of deposit approximate their fair values at the reporting date resulting in a Level 2 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(f) FHLB Advances and Other Borrowings/Subordinated Debentures: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification. The fair values of the Company’s Subordinated Debentures are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 3 classification.

(g) Accrued Interest Receivable/Payable: The carrying amounts of accrued interest approximate fair value resulting in a Level 1 or Level 2 classification consistent with the asset/liability they are associated with.

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Earnings Per Share

3 Months Ended

Mar. 31, 2016

Earnings Per Share

Earnings Per Share

Note 6 - Earnings Per Share

Basic earnings per share have been computed by dividing net income available for common shareholders by the weighted-average number of common shares outstanding for the period.  Diluted earnings per share have been computed the same as basic earnings per share, and assumes the conversion of outstanding stock options, convertible preferred stock and warrants, if dilutive.  The following table reconciles the basic and diluted earnings per share computations for the quarters ending March 31, 2016 and 2015.

	Quarter ended March 31, 2016						Quarter ended March 31, 2015
				Weighted	Per					Weighted	Per
				Average	Share					Average	Share
	Income			Shares	Amount		Income			Shares	Amount
Basic earnings per share:
Net income	$	905					$	782
Less: Dividends on preferred stock during the quarter	(124		)				(128		)
Net income available to common shareholders	$	781		1,993,577	$	0.39	$	654		1,968,777	$	0.33
Effect of dilutive securities
Stock options	—			95			—			—
Performance share units	—			1,165			—			—
Convertible preferred stock	124			543,950			128			568,890
Warrants	—			—						147,249
Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	905		2,538,787	$	0.36	$	782		2,684,916	$	0.29

Stock options for 4,505 and 29,276 shares of common stock were not considered in computing diluted earnings per common share for March 31, 2016 and 2015, respectively, because they are anti-dilutive.

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Regulatory Capital Matters

3 Months Ended

Mar. 31, 2016

Regulatory Capital Matters

Regulatory Capital Matters

Note 7 — Regulatory Capital Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies.  Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by regulators.  Failure to meet capital requirements can initiate regulatory action.  Management believes as of March 31, 2016 and December 31, 2015, the Company and Citizens First Bank, Inc. met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications:  well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition.  If adequately capitalized, regulatory approval is required to accept brokered deposits.  If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.  The most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.  There are no conditions or events since that notification that management believes have changed the institution’s category.

Under quantitative measures established by regulation to ensure capital adequacy, we are required to maintain minimum amounts and ratios of total Tier 1 capital to risk-weighted assets and to total assets. For 2016, interim Final Basel III rules require the Bank to maintain minimum amounts and ratios of common equity Tier I capital to risk-weighted assets. Under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in computing regulatory capital. March 31, 2016 marks the start of the capital conservation buffer. The buffer, which phases in over the next four years, could limit the payment of dividends and discretionary bonuses to officers if a bank fails to maintain required capital levels.

The Company’s and Citizens First Bank, Inc.’s actual capital amounts and ratios are also presented in the following table.

	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	45,531	12.88	%	$	28,290	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,290		13.09	%	28,280		8.0	%	$	35,350	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	41,102		11.62	%	21,218		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	21,210		6.0	%	28,280		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	28,798		8.14	%	15,913		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	15,908		4.5	%	22,978		6.5	%
Tier I Leverage Capital to average assets
Consolidated	41,102		9.57	%	17,183		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		9.76	%	17,160		4.0	%	21,451		5.0	%

	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	44,762	12.58	%	$	28,463	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,353		13.03	%	28,459		8.0	%	$	35,573	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	40,310		11.33	%	21,348		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	21,344		6.0	%	28,459		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	27,650		7.77	%	16,011		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	16,008		4.5	%	23,123		6.5	%
Tier I Leverage Capital to average assets
Consolidated	39,365		9.46	%	13,961		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		9.83	%	17,043		4.0	%	21,304		5.0	%

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Preferred Stock

3 Months Ended

Mar. 31, 2016

Preferred Stock.

Preferred Stock

Note 8 — Preferred Stock

In 2004, the Company issued 250 shares of Cumulative Convertible Preferred Stock, stated value $31,992 per share (Cumulative Preferred Stock), for an aggregate purchase price of $7,998,000. The Cumulative Preferred Stock was sold for $31,992 per share, is entitled to quarterly cumulative dividends at an annual fixed rate of 6.5% and is convertible into shares of common stock of the Company at an initial conversion price per share of $15.50 (currently $14.06, adjusted for stock dividends) on and after three years after the date of issuance.  As of March 31, 2016, 13 preferred shares have converted to 29,575 common shares.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2016

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations and 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 U.S. generally accepted accounting principles and general practices within the banking industry.  The consolidated financial statements include the accounts of the Company and the Bank.  All significant intercompany transactions and accounts have been eliminated in consolidation.

Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted.  These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2015 Annual Report on Form 10-K filed with the Securities and Exchange Commission.

The preparation of financial statements in conformity with U.S. 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.

In the opinion of management, all adjustments considered necessary for a fair presentation have been reflected in the accompanying unaudited financial statements.  Those adjustments consist only of normal recurring adjustments. Results of interim periods are not necessarily indicative of results to be expected for the full year.  The consolidated balance sheet of the Company as of December 31, 2015 has been derived from the audited consolidated balance sheet of the Company as of that date.

Recent Accounting Pronouncements

Recent Accounting Pronouncements—In May 2014 the FASB amended existing guidance related to revenue from contracts with customers. This amendment supersedes and replaces nearly all existing revenue recognition guidance, including industry-specific guidance, establishes a new control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time, provides new and more detailed guidance on specific topics and expands and improves disclosures about revenue. In addition, this amendment specifies the accounting for some costs to obtain or fulfill a contract with a customer. These amendments are effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. In March 2016, the FASB issued ASU 2016-08 that clarifies how to apply revenue recognition guidance related to whether an entity is a principal or an agent.  The amendments in this update affect this guidance issued in 2014 that is not yet effective.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In January 2016 the FASB issued ASU 2016-01 which amends existing guidance on the classification and measurement of financial instruments.  This new standard revises and entity’s accounting related to the classification and measurement of investments in equity securities and the presentation of certain fair value changes for financial liabilities measured at fair value.  The new standard is effective for reporting periods beginning after December 15, 2017.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In February 2016 the FASB issued ASU 2016-02 which establishes the principles to report information about the assets and liabilities that arise from leases.  This new standard changes the way operating leases are account for and reflected on the lessee’s balance sheet.  The new standard is intended to increase transparency and comparability by requiring lessees to recognize the financial obligation and right-of-use asset associated with operating leases that have a lease term of more than 12 months on the balance sheet.  The new standard is effective for reporting periods beginning after December 15, 2018.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

In March 2016 the FASB issued ASU 2016-09 which provides guidance on share-based payment accounting.  The new standard includes multiple provision intended to simplify various aspects of the accounting for share-based payments.  The new standard is effective for reporting periods beginning after December 15, 2016.  The Bank is currently evaluating the impact of this new accounting standard on the consolidated financial statements.

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Available-For-Sale Securities (Tables)

3 Months Ended

Mar. 31, 2016

Available-For-Sale Securities

Summary of the amortized cost and fair value of the available for sale investment securities portfolio

	(Dollars in Thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
March 31, 2016
U. S. government agencies and government sponsored entities	$	2,998	$	1	$	(4	)	$	2,995
Agency mortgage-backed securities: residential	31,485		413		(16		)	31,882
State and municipal	23,887		643		(21		)	24,509
Trust preferred security	1,881		—		(581		)	1,300
Corporate bonds	1,000		—		(15		)	985
Total Available-for-Sale Securities	$	61,251	$	1,057	$	(637	)	$	61,671
December 31, 2015
U. S. government agencies and government sponsored entities	$	2,998	$	3	$	(7	)	$	2,994
Agency mortgage-backed securities: residential	29,446		259		(48		)	29,657
State and municipal	24,641		615		(34		)	25,222
Trust preferred security	1,880		—		(540		)	1,340
Corporate bonds	1,000		—		(13)			987
Total Available-for-Sale Securities	$	59,965	$	877	$	(642	)	$	60,200

Summary of the amortized cost and fair value of investment securities by contractual maturity

	March 31, 2016
	(Dollars in Thousands)
	Available-For-Sale
	Amortized Cost		Fair Value
Due in one year or less	$	569	$	570
Due from one to five years	13,643		13,804
Due from five to ten years	10,696		11,002
Due after ten years	4,858		4,413
Agency mortgage-backed: residential	31,485		31,882
Total	$	61,251	$	61,671

Summary of the investment securities with unrealized losses aggregated by investment category and length of time that individual securities have been in continuous unrealized loss position

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
March 31, 2016:
U.S. government agencies and government sponsored entities	$	—	$	—		$	995	$	(4	)	$	995	$	(4	)
Agency mortgage-backed: residential	4,639		(16		)	—		—			4,639		(16		)
State and municipal	1,395		(9		)	300		(12		)	1,695		(21		)
Trust preferred security	—		—			1,300		(581		)	1,300		(581		)
Corporate Bonds	985		(15		)	—		—			985		(15		)
Total temporarily impaired	$	7,019	$	(40	)	$	2,595	$	(597	)	$	9,614	$	(637	)

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of Securities	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2015:
U.S. government agencies and government sponsored entities	$	—	$	—		$	992	$	(7	)	$	992	$	(7	)
Agency mortgage-backed: residential	7,009		(25		)	1,475		(23		)	8,484		(48		)
State and municipal	3,797		(19		)	617		(15		)	4,414		(34		)
Trust preferred security	—		—			1,340		(540		)	1,340		(540		)
Corporate bonds	987		(13		)	—		—			987		(13		)
Total temporarily impaired	$	11,793	$	(57	)	$	4,424	$	(585	)	$	16,217	$	(642	)

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Loans and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2016

Loans and Allowance for Loan Losses

Schedule of categories of loans

	(Dollars in Thousands)
	March 31, 2016			December 31, 2015
Commercial	$	55,682		$	53,516
Commercial real estate:
Construction	20,897			24,167
Other	170,286			169,290
Residential real estate	79,566			79,680
Consumer:
Auto	1,334			1,425
Other	2,510			2,704
Total loans	330,275			330,782
Less allowance for loan losses	(5,044		)	(4,916		)
Net loans	$	325,231		$	325,866

Schedule of activity in the allowance for loan losses

	(Dollars in Thousands)
March 31, 2016	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	812		$	3,431	$	524		$	28		$	121		$	4,916
Provision for loan losses	(174		)	129		82			(4		)	(33		)	—
Loans charged-off	—			—		(8		)	—			—			(8		)
Recoveries	107			25		4			—			—			136
Total ending allowance balance	$	745		$	3,585	$	602		$	24		$	88		$	5,044

	(Dollars in Thousands)
March 31, 2015	Commercial			Commercial Real Estate			Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	1,029		$	3,088		$	582		$	45		$	141	$	4,885
Provision for loan losses	(15		)	135			(43		)	(2		)	5		80
Loans charged-off	—			(17		)	(24		)	(3		)	—		(44		)
Recoveries	21			—			4			1			—		26
Total ending allowance balance	$	1,035		$	3,206		$	519		$	41		$	146	$	4,947

Schedule of balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on the impairment method

	(Dollars in Thousands)
March 31, 2016	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	249	$	41	$	—	$	—	$	326
Collectively evaluated	709		3,336		561		24		88		4,718
Total ending allowance balance	$	745	$	3,585	$	602	$	24	$	88	$	5,044
Loans:
Individually evaluated for impairment	$	138	$	2,027	$	854	$	23	$	—	$	3,042
Collectively evaluated	55,544		189,156		78,712		3,821		—		327,233
Total ending loans balance	$	55,682	$	191,183	$	79,566	$	3,844	$	—	$	330,275

	(Dollars in Thousands)
December 31, 2015	Commercial		Commercial  Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	36	$	377	$	20	$	—	$	—	$	433
Collectively evaluated	776		3,054		504		28		121		4,483
Total ending allowance balance	$	812	$	3,431	$	524	$	28	$	121	$	4,916
Loans:
Individually evaluated for impairment	$	145	$	2,066	$	807	$	9	$	—	$	3,027
Collectively evaluated	53,371		191,391		78,873		4,120		—		327,755
Total ending loans balance	$	53,516	$	193,457	$	79,680	$	4,129	$	—	$	330,782

Schedule of impaired loans by class of loans

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial	$	59	$	59	$	—	$	61	$	61	$	—
Commercial real estate:
Other	651		651		—		643		643		—
Residential real estate	762		762		—		700		700		—
Consumer:							—
Other	23		23		—		—		—		—
Subtotal	$	1,495	$	1,495	$	—	$	1,404	$	1,404	$	—
With an allowance recorded:
Commercial	$	79	$	79	$	36	$	84	$	84	$	36
Commercial real estate:
Other	1,376		1,376		249		1,423		1,423		377
Residential real estate	92		92		41		107		107		20
Consumer:
Other	—		—		—		9		9		—
Subtotal	$	1,547	$	1,547	$	326	$	1,623	$	1,623	$	433
Total	$	3,042	$	3,042	$	326	$	3,027	$	3,027	$	433

	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						March 31, 2015
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
Commercial	$	141	$	3	$	3	$	2,616	$	34	$	24
Commercial real estate:
Construction	—		—		—		—		—		—
Other	2,047		26		21		1,199		14		13
Residential real estate	857		9		8		1,023		12		8
Consumer:
Auto	—		—		—		7		—		—
Other	16		—		—		11		—		—
Total	$	3,061	$	38	$	32	$	4,856	$	60	$	45

Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans

	(Dollars in Thousands)				(Dollars in Thousands)
	March 31, 2016				December 31, 2015
	Loans Past Due Over 90 Days and Still Accruing		Nonaccrual		Loans Past Due Over 90 Days and Still Accruing		Nonaccrual
Commercial	$	—	$	—	$	—	$	—
Commercial real estate:
Construction	—		—		—		—
Other	—		439		—		439
Residential real estate	—		151		—		98
Consumer:
Auto	—		—		—		—
Other	—		—		—		—
Total	$	—	$	590	$	—	$	537

Schedule of aging of the recorded investment in past due loans by class of loans

	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
March 31, 2016
Commercial	$	—	$	—	$	—	$	—	$	55,682	$	55,682
Commercial real estate:
Construction	—		—		—		—		20,897		20,897
Other	127		—		439		566		169,720		170,286
Residential real estate	—		52		102		154		79,412		79,566
Consumer:
Auto	—		—		—		—		1,334		1,334
Other	—		—		—		—		2,510		2,510
Subtotal	$	127	$	52	$	541	$	720	$	329,555	$	330,275

	(Dollars in Thousands)
	30-59 Days Past Due		60-89 Days Past Due		Over 90 Days Past Due		Total Past Due		Current		Total
December 31, 2015
Commercial	$	—	$	—	$	—	$	—	$	53,516	$	53,516
Commercial real estate:
Construction	—		—		—		—		24,167		24,167
Other	178		—		439		617		168,673		169,290
Residential real estate	329		—		98		427		79,253		79,680
Consumer:
Auto	1		—		—		1		1,424		1,425
Other	—		—		—		—		2,704		2,704
Subtotal	$	508	$	—	$	537	$	1,045	$	329,737	$	330,782

Schedule of loans by class modified as troubled debt restructurings

		(Dollars in Thousands)					(Dollars in Thousands)
	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
	March 31, 2016					March 31, 2015
Troubled Debt Restructurings:
Consumer	1	$	14	$	14	—	$	—	$	—
Total	1	$	14	$	14	—	$	—	$	—

Schedule of risk category of loans by class of loans based on the most recent analyses performed

	Pass		Special Mention		Substandard		Doubtful		Total
March 31, 2016
Commercial	$	55,511	$	—	$	171	$	—	$	55,682
Commercial real estate:
Construction	20,897		—		—		—		20,897
Other	160,921		5,725		3,640		—		170,286
Residential real estate	78,940		—		626		—		79,566
Consumer:
Auto	1,334		—		—		—		1,334
Other	2,502		—		8		—		2,510
Total	$	320,105	$	5,725	$	4,445	$	—	$	330,275

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2015
Commercial	$	53,316	$	—	$	200	$	—	$	53,516
Commercial real estate:
Construction	24,167		—		—		—		24,167
Other	159,829		5,753		3,708		—		169,290
Residential real estate	79,033		—		647		—		79,680
Consumer:
Auto	1,425		—		—		—		1,425
Other	2,697		—		7		—		2,704
Total	$	320,467	$	5,753	$	4,562	$	—	$	330,782

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Fair Value Measurements

Schedule of assets measured at fair value on a recurring basis

	Fair Value Measurements at:
	(Dollars in Thousands)						(Dollars in Thousands)
	March 31, 2016						December 31, 2015
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Securities available-for-sale
U.S. government agencies and government sponsored entities			$	2,995					$	2,994
Agency mortgage-backed securites-residential			31,882						29,657
State and municipal			24,509						25,222
Trust preferred security					1,300						1,340
Corporate bonds			985						987
Total investment securities	$	—	$	60,371	$	1,300	$	—	$	58,860	$	1,340

Schedule of reconciliation of all assets measured at fairvalue on a recurring basis using significant unobservable inputs (Level 3)

	Trust Preferred Security
	2016
Balance of recurring Level 3 assets at January 1	$	1,340
Total losses for the period:
Included in other comprehensive income	(40		)
Balance of recurring Level 3 assets at March 31	$	1,300

Schedule of quantitative and qualitative information about Level 3 fair value measurements for financial instruments measured on a non-recurring basis

	March 31, 2016	Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	347	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(0%)
Residential RE	46	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	12%-50% (31.73%)
Other real estate owned:
Commercial RE	100	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

	December 31, 2015		Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial RE	$	260	Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(50.00%)
Residential	79		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	20%-60% (30.00%)
Other real estate owned:
Commercial RE	100		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.65%)

Schedule of carrying amount and estimated fair values of financial instruments

			Fair Value Measurements at
	Carrying		March 31, 2016
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	16,735	$	16,735			$	16,735
Interest-bearing deposits in other financial institutions	2,728		2,749				2,749
Loans, net of allowance	325,231					326,305	326,305
Loans held for sale	373				380		380
Accrued interest receivable	1,463				327	1,136	1,463
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	222,705	$	222,705			$	222,705
Time deposits	140,475				140,699		140,699
FHLB advances	23,000				22,979		22,979
Other borrowings	1,000				1,000		1,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	220		11		180	29	220

			Fair Value Measurements at
	Carrying		December 31, 2015
	Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	15,255	$	15,255	$	$	$	15,255
Interest-bearing deposits in other financial institutions	2,728		$	2,728			2,728
Loans, net of allowance	325,866					326,886	326,886
Accrued interest receivable	1,680				337	1,343	1,680
Federal Home Loan Bank stock	2,025						N/A
Financial Liabilities
Demand and savings deposits	$	216,857	$	216,857			$	216,857
Time deposits	153,531				153,801		153,801
FHLB advances	13,000				12,902		12,902
Other borrowings	2,000				2,000		2,000
Subordinate debentures	5,000					2,434	2,434
Accrued interest payable	213		9		177	27	213

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2016

Earnings Per Share

Schedule of reconciliation of basic and diluted earnings per share computations

	Quarter ended March 31, 2016						Quarter ended March 31, 2015
				Weighted	Per					Weighted	Per
				Average	Share					Average	Share
	Income			Shares	Amount		Income			Shares	Amount
Basic earnings per share:
Net income	$	905					$	782
Less: Dividends on preferred stock during the quarter	(124		)				(128		)
Net income available to common shareholders	$	781		1,993,577	$	0.39	$	654		1,968,777	$	0.33
Effect of dilutive securities
Stock options	—			95			—			—
Performance share units	—			1,165			—			—
Convertible preferred stock	124			543,950			128			568,890
Warrants	—			—						147,249
Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	905		2,538,787	$	0.36	$	782		2,684,916	$	0.29

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Regulatory Capital Matters (Tables)

3 Months Ended

Mar. 31, 2016

Regulatory Capital Matters

Schedule of the Company's and the Bank's actual capital amounts and ratios

	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
March 31, 2016	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	45,531	12.88	%	$	28,290	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,290		13.09	%	28,280		8.0	%	$	35,350	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	41,102		11.62	%	21,218		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	21,210		6.0	%	28,280		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	28,798		8.14	%	15,913		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,864		11.84	%	15,908		4.5	%	22,978		6.5	%
Tier I Leverage Capital to average assets
Consolidated	41,102		9.57	%	17,183		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,864		9.76	%	17,160		4.0	%	21,451		5.0	%

	(Dollars in Thousands)
	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	44,762	12.58	%	$	28,463	8.0	%	N/A		N/A
Citizens First Bank, Inc.	46,353		13.03	%	28,459		8.0	%	$	35,573	10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	40,310		11.33	%	21,348		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	21,344		6.0	%	28,459		8.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	27,650		7.77	%	16,011		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,901		11.78	%	16,008		4.5	%	23,123		6.5	%
Tier I Leverage Capital to average assets
Consolidated	39,365		9.46	%	13,961		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,901		9.83	%	17,043		4.0	%	21,304		5.0	%

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Available-For-Sale Securities - Amortized Cost and Fair Value with Gross Unrealized Gains and Losses (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	$ 61,251	$ 59,965
Gross Unrealized Gains	1,057	877
Gross Unrealized Losses	(637)	(642)
Fair Value	61,671	60,200
U. S. government agencies and government sponsored entities
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	2,998	2,998
Gross Unrealized Gains	1	3
Gross Unrealized Losses	(4)	(7)
Fair Value	2,995	2,994
Agency mortgage-backed securities-residential
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	31,485	29,446
Gross Unrealized Gains	413	259
Gross Unrealized Losses	(16)	(48)
Fair Value	31,882	29,657
State and municipal
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	23,887	24,641
Gross Unrealized Gains	643	615
Gross Unrealized Losses	(21)	(34)
Fair Value	24,509	25,222
Trust preferred security
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	1,881	1,880
Gross Unrealized Losses	(581)	(540)
Fair Value	1,300	1,340
Corporate bonds
Amortized cost and fair value of the available for sale investment securities portfolio
Amortized Cost	1,000	1,000
Gross Unrealized Losses	(15)	(13)
Fair Value	$ 985	$ 987

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Available-For-Sale Securities - Amortized Cost and Fair Value of Investment Securities by Contractual Maturity (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Amortized Cost
Due in one year or less	$ 569
Due from one to five years	13,643
Due from five to ten years	10,696
Due after ten years	4,858
Agency mortgage-backed: residential	31,485
Total	61,251
Fair Value
Due in one year or less	570
Due from one to five years	13,804
Due from five to ten years	11,002
Due after ten years	4,413
Agency mortgage-backed: residential	31,882
Fair Value	$ 61,671	$ 60,200

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Available-For-Sale Securities - Investment Securities with Unrealized Losses by Investment Category (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)
Investment holdings
Fair Value, Less than 12 Months	$ 7,019	$ 11,793
Unrealized Losses, Less than 12 Months	(40)	(57)
Fair Value, 12 Months or More	2,595	4,424
Unrealized Losses, 12 Months or More	(597)	(585)
Fair Value, Total	9,614	16,217
Unrealized Losses, Total	$ (637)	(642)
Number of adverse conditions identified, related to repayment of securities that are not rated | item	0
Unrealized losses, 12 months or more (as a percent)	97.00%
Impairment charge on available for sale securities	$ 0
Loss of principal anticipated	0
Loss of interest anticipated	0
U. S. government agencies and government sponsored entities
Investment holdings
Fair Value, 12 Months or More	995	992
Unrealized Losses, 12 Months or More	(4)	(7)
Fair Value, Total	995	992
Unrealized Losses, Total	(4)	(7)
Agency mortgage-backed securities-residential
Investment holdings
Fair Value, Less than 12 Months	4,639	7,009
Unrealized Losses, Less than 12 Months	(16)	(25)
Fair Value, 12 Months or More		1,475
Unrealized Losses, 12 Months or More		(23)
Fair Value, Total	4,639	8,484
Unrealized Losses, Total	(16)	(48)
State and municipal
Investment holdings
Fair Value, Less than 12 Months	1,395	3,797
Unrealized Losses, Less than 12 Months	(9)	(19)
Fair Value, 12 Months or More	300	617
Unrealized Losses, 12 Months or More	(12)	(15)
Fair Value, Total	1,695	4,414
Unrealized Losses, Total	(21)	(34)
Trust preferred security
Investment holdings
Fair Value, 12 Months or More	1,300	1,340
Unrealized Losses, 12 Months or More	(581)	(540)
Fair Value, Total	1,300	1,340
Unrealized Losses, Total	(581)	(540)
Corporate bonds
Investment holdings
Fair Value, Less than 12 Months	985	987
Unrealized Losses, Less than 12 Months	(15)	(13)
Fair Value, Total	985	987
Unrealized Losses, Total	$ (15)	$ (13)

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Loans and Allowance for Loan Losses - Loans By Category (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015	Mar. 31, 2015	Dec. 31, 2014
Categories of loans
Total loans	$ 330,275	$ 330,782
Less Allowance for loan losses	(5,044)	(4,916)	$ (4,947)	$ (4,885)
Net Loans	325,231	325,866
Commercial
Categories of loans
Total loans	55,682	53,516
Less Allowance for loan losses	(745)	(812)	(1,035)	(1,029)
Construction
Categories of loans
Total loans	20,897	24,167
Commercial Real Estate - Other
Categories of loans
Total loans	170,286	169,290
Residential Real Estate
Categories of loans
Total loans	79,566	79,680
Less Allowance for loan losses	(602)	(524)	$ (519)	$ (582)
Auto
Categories of loans
Total loans	1,334	1,425
Consumer - Other
Categories of loans
Total loans	$ 2,510	$ 2,704

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Loans and Allowance for Loan Losses - Allowance Roll-forward and Loans by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Mar. 31, 2016	Dec. 31, 2015
Allowance for loan losses:
Beginning Balance	$ 4,916	$ 4,885
Provision for loan losses		80
Loans charged-off	(8)	(44)
Recoveries	136	26
Total ending allowance balance	5,044	4,947
Accrued interest receivable			$ 1,463	$ 1,680
Allowance for loan losses, Ending allowance balance attributable to loans:
Individually evaluated for impairment			326	433
Collectively evaluated			4,718	4,483
Total ending allowance balance	4,916	4,885	5,044	4,916
Loans:
Individually evaluated for impairment			3,042	3,027
Collectively evaluated			327,233	327,755
Loans and Leases Receivable, Gross, Total			330,275	330,782
Commercial
Allowance for loan losses:
Beginning Balance	812	1,029
Provision for loan losses	(174)	(15)
Recoveries	107	21
Total ending allowance balance	745	1,035
Allowance for loan losses, Ending allowance balance attributable to loans:
Individually evaluated for impairment			36	36
Collectively evaluated			709	776
Total ending allowance balance	812	1,029	745	812
Loans:
Individually evaluated for impairment			138	145
Collectively evaluated			55,544	53,371
Loans and Leases Receivable, Gross, Total			55,682	53,516
Commercial Real Estate
Allowance for loan losses:
Beginning Balance	3,431	3,088
Provision for loan losses	129	135
Loans charged-off		(17)
Recoveries	25
Total ending allowance balance	3,585	3,206
Allowance for loan losses, Ending allowance balance attributable to loans:
Individually evaluated for impairment			249	377
Collectively evaluated			3,336	3,054
Total ending allowance balance	3,431	3,088	3,585	3,431
Loans:
Individually evaluated for impairment			2,027	2,066
Collectively evaluated			189,156	191,391
Loans and Leases Receivable, Gross, Total			191,183	193,457
Residential Real Estate
Allowance for loan losses:
Beginning Balance	524	582
Provision for loan losses	82	(43)
Loans charged-off	(8)	(24)
Recoveries	4	4
Total ending allowance balance	602	519
Allowance for loan losses, Ending allowance balance attributable to loans:
Individually evaluated for impairment			41	20
Collectively evaluated			561	504
Total ending allowance balance	524	582	602	524
Loans:
Individually evaluated for impairment			854	807
Collectively evaluated			78,712	78,873
Loans and Leases Receivable, Gross, Total			79,566	79,680
Consumer
Allowance for loan losses:
Beginning Balance	28	45
Provision for loan losses	(4)	(2)
Loans charged-off		(3)
Recoveries		1
Total ending allowance balance	24	41
Allowance for loan losses, Ending allowance balance attributable to loans:
Collectively evaluated			24	28
Total ending allowance balance	28	45	24	28
Loans:
Individually evaluated for impairment			23	9
Collectively evaluated			3,821	4,120
Loans and Leases Receivable, Gross, Total			3,844	4,129
Unallocated
Allowance for loan losses:
Beginning Balance	121	141
Provision for loan losses	(33)	5
Total ending allowance balance	88	146
Allowance for loan losses, Ending allowance balance attributable to loans:
Collectively evaluated			88	121
Total ending allowance balance	$ 121	$ 141	88	121
Loans Receivable
Allowance for loan losses:
Accrued interest receivable			$ 1,100	$ 1,300

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Loans and Allowance for Loan Losses - Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Unpaid Principal Balance
With no related allowance recorded	$ 1,495		$ 1,404
With an allowance recorded	1,547		1,623
Total	3,042		3,027
Recorded Investment
With no related allowance recorded	1,495		1,404
With an allowance recorded	1,547		1,623
Total	3,042		3,027
Allowance for Loan Losses Allocated
Total	326		433
Average Recorded Investment
Total	3,061	$ 4,856
Interest Income Recognized
Total	38	60
Cash Basis Interest Recognized
Total	32	45
Commercial
Unpaid Principal Balance
With no related allowance recorded	59		61
With an allowance recorded	79		84
Recorded Investment
With no related allowance recorded	59		61
With an allowance recorded	79		84
Allowance for Loan Losses Allocated
Total	36		36
Average Recorded Investment
Total	141	2,616
Interest Income Recognized
Total	3	34
Cash Basis Interest Recognized
Total	3	24
Commercial Real Estate - Other
Unpaid Principal Balance
With no related allowance recorded	651		643
With an allowance recorded	1,376		1,423
Recorded Investment
With no related allowance recorded	651		643
With an allowance recorded	1,376		1,423
Allowance for Loan Losses Allocated
Total	249		377
Average Recorded Investment
Total	2,047	1,199
Interest Income Recognized
Total	26	14
Cash Basis Interest Recognized
Total	21	13
Residential Real Estate
Unpaid Principal Balance
With no related allowance recorded	762		700
With an allowance recorded	92		107
Recorded Investment
With no related allowance recorded	762		700
With an allowance recorded	92		107
Allowance for Loan Losses Allocated
Total	41		20
Average Recorded Investment
Total	857	1,023
Interest Income Recognized
Total	9	12
Cash Basis Interest Recognized
Total	8	8
Auto
Average Recorded Investment
Total		7
Consumer - Other
Unpaid Principal Balance
With no related allowance recorded	23
Recorded Investment
With no related allowance recorded	23
With an allowance recorded			$ 9
Average Recorded Investment
Total	$ 16	$ 11

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Loans and Allowance for Loan Losses - Investment in Nonaccrual Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Recorded investment in nonaccrual and loans past due over 90 days
Nonaccrual	$ 590	$ 537
Commercial Real Estate - Other
Recorded investment in nonaccrual and loans past due over 90 days
Nonaccrual	439	439
Residential Real Estate
Recorded investment in nonaccrual and loans past due over 90 days
Nonaccrual	$ 151	$ 98

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Loans and Allowance for Loan Losses - Aging of Past Due Loans (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Aging of the recorded investment in past due loans
30-59 Days Past Due	$ 127	$ 508
60-89 Days Past Due	52
Over 90 Days Past Due	541	537
Total Past Due	720	1,045
Current	329,555	329,737
Loans and Leases Receivable, Gross, Total	330,275	330,782
Commercial
Aging of the recorded investment in past due loans
Current	55,682	53,516
Loans and Leases Receivable, Gross, Total	55,682	53,516
Construction
Aging of the recorded investment in past due loans
Current	20,897	24,167
Loans and Leases Receivable, Gross, Total	20,897	24,167
Commercial Real Estate - Other
Aging of the recorded investment in past due loans
30-59 Days Past Due	127	178
Over 90 Days Past Due	439	439
Total Past Due	566	617
Current	169,720	168,673
Loans and Leases Receivable, Gross, Total	170,286	169,290
Residential Real Estate
Aging of the recorded investment in past due loans
30-59 Days Past Due		329
60-89 Days Past Due	52
Over 90 Days Past Due	102	98
Total Past Due	154	427
Current	79,412	79,253
Loans and Leases Receivable, Gross, Total	79,566	79,680
Auto
Aging of the recorded investment in past due loans
30-59 Days Past Due		1
Total Past Due		1
Current	1,334	1,424
Loans and Leases Receivable, Gross, Total	1,334	1,425
Consumer - Other
Aging of the recorded investment in past due loans
Current	2,510	2,704
Loans and Leases Receivable, Gross, Total	$ 2,510	$ 2,704

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Loans and Allowance for Loan Losses - Troubled Debt Restructurings (Details)	3 Months Ended		15 Months Ended
	Mar. 31, 2016 USD ($) item	Mar. 31, 2015 USD ($) item	Mar. 31, 2016 USD ($) item
Troubled Debt Restructurings
Total troubled debt restructurings	$ 2,500,000		$ 2,500,000
Commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings	$ 0		$ 0
Number of loans reported as troubled debt restructurings | item	12		12
Number of Loans | item	1
Pre-Modification Outstanding Recorded Investment	$ 14,000		$ 14,000
Post-Modification Outstanding Recorded Investment	14,000		14,000
Specific allocations reported for the troubled debt restructurings	$ 234,000	$ 591,000	234,000
Number of payment defaults reported for troubled debt restructurings | item	0	0
Total recorded investment for loans modified (other than through troubled debt restructuring)	$ 12,000,000	$ 9,500,000	$ 12,000,000
Number of reported charge-offs for troubled debt restructurings | item			0
Consumer
Troubled Debt Restructurings
Number of Loans | item	1
Pre-Modification Outstanding Recorded Investment	$ 14,000		$ 14,000
Post-Modification Outstanding Recorded Investment	$ 14,000		$ 14,000

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Loans and Allowance for Loan Losses - Credit Quality Indicators (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Credit Quality Indicators
Minimum outstanding balance of loans to be reviewed on a monthly basis	$ 25
Total loans	330,275	$ 330,782
Commercial
Credit Quality Indicators
Total loans	55,682	53,516
Construction
Credit Quality Indicators
Total loans	20,897	24,167
Commercial Real Estate - Other
Credit Quality Indicators
Total loans	170,286	169,290
Residential Real Estate
Credit Quality Indicators
Total loans	79,566	79,680
Auto
Credit Quality Indicators
Total loans	1,334	1,425
Consumer - Other
Credit Quality Indicators
Total loans	2,510	2,704
Pass
Credit Quality Indicators
Total loans	320,105	320,467
Pass | Commercial
Credit Quality Indicators
Total loans	55,511	53,316
Pass | Construction
Credit Quality Indicators
Total loans	20,897	24,167
Pass | Commercial Real Estate - Other
Credit Quality Indicators
Total loans	160,921	159,829
Pass | Residential Real Estate
Credit Quality Indicators
Total loans	78,940	79,033
Pass | Auto
Credit Quality Indicators
Total loans	1,334	1,425
Pass | Consumer - Other
Credit Quality Indicators
Total loans	2,502	2,697
Special Mention
Credit Quality Indicators
Total loans	5,725	5,753
Special Mention | Commercial Real Estate - Other
Credit Quality Indicators
Total loans	5,725	5,753
Substandard
Credit Quality Indicators
Total loans	4,445	4,562
Substandard | Commercial
Credit Quality Indicators
Total loans	171	200
Substandard | Commercial Real Estate - Other
Credit Quality Indicators
Total loans	3,640	3,708
Substandard | Residential Real Estate
Credit Quality Indicators
Total loans	626	647
Substandard | Consumer - Other
Credit Quality Indicators
Total loans	$ 8	$ 7

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Fair Value Measurements - Assets Measured on a Recurring and Nonrecurring Basis(Details) - USD ($)	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015	Dec. 31, 2015
Assets:
Securities available-for-sale	$ 61,671,000		$ 60,200,000
Unrealized Losses, Less than 12 Months	(40,000)		(57,000)
Impaired loans	3,042,000		3,027,000
Other real estate owned	100,000		100,000
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Principal balance of impaired loans	484,000		537,000
Valuation allowance	91,000		198,000
Decreases in the provision for loan losses	64,000	$ 28,000
Other real estate owned, net carrying value	100,000		100,000
Write-downs of other real estate owned	0	$ 10,000
U. S. government agencies and government sponsored entities
Assets:
Securities available-for-sale	2,995,000		2,994,000
Agency mortgage-backed securities-residential
Assets:
Securities available-for-sale	31,882,000		29,657,000
Unrealized Losses, Less than 12 Months	(16,000)		(25,000)
State and municipal
Assets:
Securities available-for-sale	24,509,000		25,222,000
Unrealized Losses, Less than 12 Months	(9,000)		(19,000)
Trust preferred security
Assets:
Securities available-for-sale	1,300,000		1,340,000
Corporate bonds
Assets:
Securities available-for-sale	985,000		987,000
Unrealized Losses, Less than 12 Months	(15,000)		(13,000)
Recurring basis | Level 2
Assets:
Securities available-for-sale	60,371,000		58,860,000
Recurring basis | Level 2 | U. S. government agencies and government sponsored entities
Assets:
Securities available-for-sale	2,995,000		2,994,000
Recurring basis | Level 2 | Agency mortgage-backed securities-residential
Assets:
Securities available-for-sale	31,882,000		29,657,000
Recurring basis | Level 2 | State and municipal
Assets:
Securities available-for-sale	24,509,000		25,222,000
Recurring basis | Level 2 | Corporate bonds
Assets:
Securities available-for-sale	985,000		987,000
Recurring basis | Level 3
Assets:
Securities available-for-sale	1,300,000		1,340,000
Recurring basis | Level 3 | Trust preferred security
Assets:
Securities available-for-sale	1,300,000		$ 1,340,000
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Recurring Level 3 assets, beginning of period balance	1,340,000
Losses for the period included in other comprehensive income	(40,000)
Recurring Level 3 assets, end of period balance	$ 1,300,000

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Fair Value Measurements - Quantitative and Qualitative Information of Level 3 Fair Value Measurements (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015
Valuation techniques
Impaired loans	$ 3,042	$ 3,027
Other real estate owned	100	100
Sales Comparison | Commercial RE
Valuation techniques
Impaired loans	$ 347	$ 260
Sales Comparison | Commercial RE | Weighted Average
Valuation techniques
Range (as a percent)	0.00%	50.00%
Sales Comparison | Residential real estate properties
Valuation techniques
Impaired loans	$ 46
Sales Comparison | Residential real estate properties | Minimum
Valuation techniques
Range (as a percent)	12.00%
Sales Comparison | Residential real estate properties | Maximum
Valuation techniques
Range (as a percent)	50.00%
Sales Comparison | Residential real estate properties | Weighted Average
Valuation techniques
Range (as a percent)	31.73%
Sales Comparison | Residential Real Estate
Valuation techniques
Impaired loans		$ 79
Sales Comparison | Residential Real Estate | Minimum
Valuation techniques
Range (as a percent)		20.00%
Sales Comparison | Residential Real Estate | Maximum
Valuation techniques
Range (as a percent)		60.00%
Sales Comparison | Residential Real Estate | Weighted Average
Valuation techniques
Range (as a percent)		30.00%
Sales Comparison | Other real estate owned: Commercial RE
Valuation techniques
Other real estate owned	$ 100	$ 100
Sales Comparison | Other real estate owned: Commercial RE | Minimum
Valuation techniques
Range (as a percent)	8.00%	8.00%
Sales Comparison | Other real estate owned: Commercial RE | Maximum
Valuation techniques
Range (as a percent)	40.00%	40.00%
Sales Comparison | Other real estate owned: Commercial RE | Weighted Average
Valuation techniques
Range (as a percent)	33.65%	33.65%

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Fair Value Measurments - Carrying Amount and Estimated Fair Values (Details) - USD ($) $ in Thousands	Mar. 31, 2016	Dec. 31, 2015
Financial Assets
Interest-bearing deposits in other financial institutions	$ 2,728	$ 2,728
Loans, net of allowance	325,231	325,866
Accrued interest receivable	1,463	1,680
Federal Home Loan Bank stock	2,025	2,025
Financial Liabilities
Subordinated debentures	5,000	5,000
Accrued interest payable	220	213
Level 1
Financial Assets
Cash and cash equivalents	16,735	15,255
Interest-bearing deposits in other financial institutions	2,749	2,728
Financial Liabilities
Demand and savings deposits	222,705	216,857
Accrued interest payable	11	9
Level 2
Financial Assets
Loans held for sale	380
Accrued interest receivable	327	337
Financial Liabilities
Time deposits	140,699	153,801
FHLB advances	22,979	12,902
Other Borrowings	1,000	2,000
Accrued interest payable	180	177
Level 3
Financial Assets
Loans, net of allowance	326,305	326,886
Accrued interest receivable	1,136	1,343
Financial Liabilities
Subordinated debentures	2,434	2,434
Accrued interest payable	29	27
Carrying Amount
Financial Assets
Cash and cash equivalents	16,735	15,255
Interest-bearing deposits in other financial institutions	2,728	2,728
Loans, net of allowance	325,231	325,866
Loans held for sale	373
Accrued interest receivable	1,463	1,680
Federal Home Loan Bank stock	2,025	2,025
Financial Liabilities
Demand and savings deposits	222,705	216,857
Time deposits	140,475	153,531
FHLB advances	23,000	13,000
Other Borrowings	1,000	2,000
Subordinated debentures	5,000	5,000
Accrued interest payable	220	213
Total
Financial Assets
Cash and cash equivalents	16,735	15,255
Interest-bearing deposits in other financial institutions	2,749	2,728
Loans, net of allowance	326,305	326,886
Loans held for sale	380
Accrued interest receivable	1,463	1,680
Financial Liabilities
Demand and savings deposits	222,705	216,857
Time deposits	140,699	153,801
FHLB advances	22,979	12,902
Other Borrowings	1,000	2,000
Subordinated debentures	2,434	2,434
Accrued interest payable	$ 220	$ 213

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Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2016	Mar. 31, 2015
Basic earnings per share:
Net income	$ 905	$ 782
Less: Dividends on preferred stock during the quarter	(124)	(128)
Net income available for common stockholders	781	654
Net income available to common stockholders and assumed conversions	$ 905	$ 782
Weighted Average Shares, basic
Weighted Average Shares, basic	1,993,577	1,968,777
Effect of dilutive securities
Convertible preferred stock (in shares)	543,950	568,890
Income	$ 124	$ 128
Warrants (in shares)		147,249
Weighted Average Shares, diluted
Weighted Average Shares, diluted	2,538,787	2,684,916
Per Share Amount
Basic earnings per common share (in dollars per share)	$ 0.39	$ 0.33
Diluted earnings per common share (in dollars per share)	$ 0.36	$ 0.29
Stock options not considered in computing diluted earnings per common share (in shares)	4,505	29,276
Stock Options
Effect of dilutive securities
Performance share units (in shares)	95
Performance share units
Effect of dilutive securities
Performance share units (in shares)	1,165

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Regulatory Capital Matters (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2016 USD ($) item	Dec. 31, 2015 USD ($)
Regulatory capital matters
Number of classifications for prompt corrective action regulations | item	5
Phase Out Period	4 years
Total Capital (to Risk-Weighted Assets)
Actual, Amount	$ 45,531	$ 44,762
For Capital Adequacy Purposes, Amount	$ 28,290	$ 28,463
Total Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	12.88%	12.58%
For Capital Adequacy Purposes, Ratio (as a percent)	8.00%	8.00%
Tier I Capital (to Risk-Weighted Assets)
Actual, Amount	$ 41,102	$ 40,310
For Capital Adequacy Purposes, Amount	$ 21,218	$ 21,348
Tier I Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	11.62%	11.33%
For Capital Adequacy Purposes, Ratio (as a percent)	6.00%	6.00%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Actual Amount	$ 28,798	$ 27,650
For Capital Adequacy Purposes, Amount	$ 15,913	$ 16,011
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	8.14%	7.77%
For Capital Adequacy Purposes, Ratio (as a percent)	4.50%	4.50%
Tier I Leverage Capital to Average Assets
Actual, Amount	$ 41,102	$ 39,365
For Capital Adequacy Purposes, Amount	$ 17,183	$ 13,961
Tier I Capital (to Average Assets)
Actual, Ratio (as a percent)	9.57%	9.46%
For Capital Adequacy Purposes, Ratio (as a percent)	4.00%	4.00%
Citizens First Bank, Inc.
Total Capital (to Risk-Weighted Assets)
Actual, Amount	$ 46,290	$ 46,353
For Capital Adequacy Purposes, Amount	28,280	28,459
To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 35,350	$ 35,573
Total Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	13.09%	13.03%
For Capital Adequacy Purposes, Ratio (as a percent)	8.00%	8.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent)	10.00%	10.00%
Tier I Capital (to Risk-Weighted Assets)
Actual, Amount	$ 41,864	$ 41,901
For Capital Adequacy Purposes, Amount	21,210	21,344
To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 28,280	$ 28,459
Tier I Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	11.84%	11.78%
For Capital Adequacy Purposes, Ratio (as a percent)	6.00%	6.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent)	8.00%	8.00%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Actual Amount	$ 41,864	$ 41,901
For Capital Adequacy Purposes, Amount	15,908	16,008
To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 22,978	$ 23,123
Common Equity Tier 1 Capital (to Risk-Weighted Assets)
Actual, Ratio (as a percent)	11.84%	11.78%
For Capital Adequacy Purposes, Ratio (as a percent)	4.50%	4.50%
To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent)	6.50%	6.50%
Tier I Leverage Capital to Average Assets
Actual, Amount	$ 41,864	$ 41,901
For Capital Adequacy Purposes, Amount	17,160	17,043
To Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 21,451	$ 21,304
Tier I Capital (to Average Assets)
Actual, Ratio (as a percent)	9.76%	9.83%
For Capital Adequacy Purposes, Ratio (as a percent)	4.00%	4.00%
To Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio (as a percent)	5.00%	5.00%

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Preferred Stock (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2016	Dec. 31, 2015	Dec. 31, 2004
Preferred stock
Stock issued (in shares)	237	250
Cumulative dividends (as a percent)	6.50%	6.50%
6.5% Cumulative convertible preferred stock
Preferred stock
Stock issued (in shares)			250
Stated value (in dollars per share)			$ 31,992
Purchase price of stock issued			$ 7,998,000
Sales price of stock issued			$ 31,992
Cumulative dividends (as a percent)			6.50%
Conversion price (in dollars per share)	$ 14.06		$ 15.50
Period after the date of issuance preferred stock can be converted			3 years
Convertible preferred stock converted to common shares	13
Common Stock
Preferred stock
Preferred shares converted to common shares	29,575