CITIZENS FIRST CORP (Form: 10-Q, Received: 08/10/2015 13:49:18)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the Quarterly Period Ended June 30, 2015

o	TRANSITION 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.

1,968,777 shares of Common Stock, no par value, were outstanding at August 10, 2015.

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CITIZENS FIRST CORPORATION

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PART I — FINANCIAL INFORMATION

ITEM 1	FINANCIAL STATEMENTS	3

ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	34

ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	51

ITEM 4	CONTROLS AND PROCEDURES	52

PART II — OTHER INFORMATION

ITEM 6	EXHIBITS	53

SIGNATURES		55

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Part 1. Financial Information

Item 1. Financial Statements

Citizens First Corporation

Consolidated Balance Sheets

	(In Thousands, Except Share Data)
	June 30, 2015		December 31, 2014
	Unaudited
Assets
Cash and due from financial institutions	$	9,438	$	7,962
Federal funds sold	24,100		3,360
Cash and cash equivalents	33,538		11,322
Available-for-sale securities	58,352		58,986
Loans held for sale	80		—
Loans, net of allowance for loan losses of $4,983 and $4,885 at June 30, 2015 and December 31, 2014, respectively	309,132		313,592
Premises and equipment, net	10,649		10,758
Bank owned life insurance (BOLI)	8,084		7,993
Federal Home Loan Bank (FHLB) stock, at cost	2,025		2,025
Accrued interest receivable	1,499		1,527
Deferred income taxes	1,545		1,479
Goodwill	4,097		4,097
Core deposit intangible	300		336
Other real estate owned	212		198
Other assets	588		501
Total Assets	$	430,101	$	412,814
Liabilities
Deposits
Noninterest bearing	$	44,330	$	41,975
Savings, NOW and money market	158,583		148,935
Time	165,882		150,874
Total deposits	368,795		341,784
FHLB advances and other borrowings	16,000		25,500
Subordinated debentures	5,000		5,000
Accrued interest payable	242		231
Other liabilities	2,027		1,851
Total Liabilities	392,064		374,366
Stockholders’ Equity
6.5% cumulative convertible preferred stock; no par value, authorized 250 shares, aggregate liquidation preference of $7,998; issued and outstanding 250 shares at June 30, 2015 and December 31, 2014, respectively	7,659		7,659
Common stock, no par value, authorized 5,000,000 shares; issued and outstanding 1,968,777 shares at June 30, 2015 and December 31, 2014, respectively	25,366		27,072
Retained earnings	4,797		3,373
Accumulated other comprehensive income	215		344
Total stockholders’ equity	38,037		38,448
Total liabilities and stockholders’ equity	$	430,101	$	412,814

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)
	June 30,2015		June 30, 2014
Interest and dividend income
Loans	$	4,108	$	3,879
Taxable securities	154		151
Non-taxable securities	173		167
Federal funds sold and other	34		33
Total interest and dividend income	4,469		4,230
Interest expense
Deposits	580		551
FHLB advances and other	74		126
Subordinated debentures	24		24
Total interest expense	678		701
Net interest income	3,791		3,529
Provision for loan losses	120		150
Net interest income after provision for loan losses	3,671		3,379
Non-interest income
Service charges on deposit accounts	358		296
Other service charges and fees	176		141
Gain on sale of mortgage loans	79		51
Non-deposit brokerage fees	87		75
Lease income	70		74
BOLI income	46		47
Gain on sale of securities available-for-sale (includes $10 in 2015 and $74 in 2014 in accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale-securities)	10		74
Total non-interest income	826		758
Non-interest expenses
Salaries and employee benefits	1,589		1,486
Net occupancy expense	493		479
Advertising and public relations	123		93
Professional fees	187		149
Data processing services	238		248
Franchise shares and deposit tax	145		145
FDIC insurance	63		74
Core deposit intangible amortization	17		82
Postage and office supplies	52		59
Other real estate owned expenses	29		47
Other	310		271
Total non-interest expenses	3,246		3,133
Income before income taxes	1,251		1,004
Income taxes	352		271
Net income	899		733
Dividends on preferred stock	130		127
Net income available for common stockholders	$	769	$	606
Basic earnings per common share	$	0.39	$	0.31
Diluted earnings per common share	$	0.35	$	0.29

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation

Unaudited Consolidated Statements of Income

	Six months ended
	(In Thousands, Except Per Share Data)
	June 30, 2015		June 30, 2014
Interest and dividend income
Loans	$	8,058	$	7,722
Taxable securities	306		292
Non-taxable securities	349		332
Federal funds sold and other	62		65
Total interest and dividend income	8,775		8,411
Interest expense
Deposits	1,129		1,094
FHLB advances and other	145		243
Subordinated debentures	48		47
Total interest expense	1,322		1,384
Net interest income	7,453		7,027
Provision for loan losses	200		275
Net interest income after provision for loan losses	7,253		6,752
Non-interest income
Service charges on deposit accounts	675		557
Other service charges and fees	311		294
Gain on sale of mortgage loans	110		75
Non-deposit brokerage fees	179		144
Lease income	143		149
BOLI income	91		94
Gain on sale of securities available-for-sale (includes $10 in 2015 and $74 in 2014 accumulated other comprehensive income reclassifications for unrealized net gains on available-for-sale-securities) comprehensive income reclassifications for unrealized net gains on available-for- sale securities)	10		74
Total non-interest income	1,519		1,387
Non-interest expenses
Salaries and employee benefits	3,237		3,013
Net occupancy expense	1,021		961
Advertising and public relations	175		176
Professional fees	351		302
Data processing services	477		481
Franchise shares and deposit tax	291		291
FDIC insurance	122		151
Core deposit intangible amortization	35		166
Postage and office supplies	92		110
Other real estate owned expenses	36		57
Other	612		487
Total non-interest expenses	6,449		6,195
Income before income taxes	2,323		1,944
Income taxes	642		520
Net income	1,681		1,424
Dividends and accretion on preferred stock	258		259
Net income available for common stockholders	$	1,423	$	1,165
Basic earnings per common share	$	0.72	$	0.59
Diluted earnings per common share	$	0.64	$	0.56

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)
	June 30, 2015			June 30,2014
Comprehensive income (loss), net of tax
Net income	$	899		$	733
Other comprehensive income (loss)
Reclassification adjustment for gains included in net income, net of taxes	(7		)	(49		)
Change in unrealized gain (loss) on available for sale securities, net of taxes	(371		)	331
Total other comprehensive income (loss)	(378		)	282
Comprehensive income	$	521		$	1,015

	Six months ended
	(In Thousands, Except Per Share Data)
	June 30, 2015			June 30, 2014

Comprehensive income (loss), net of tax
Net income	$	1,681		$	1,424
Other comprehensive income (loss)
Reclassification adjustment for gains included in net income, net of taxes	(7		)	(49		)
Change in unrealized gain (loss) on available for sale securities, net of taxes	(122		)	604
Total other comprehensive income (loss)	(129		)	555
Comprehensive income	$	1,552		$	1,979

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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 (Loss)			Total
Balance, January 1, 2015	$	7,659	$	27,072		$	3,373		$	344		$	38,448
Net income						1,681						1,681
Change in accumulated other comprehensive income									(129		)	(129		)
Dividend declared and paid on preferred stock						(258		)				(258		)
Repurchase of TARP Warrants			(1,706		)							(1,706		)
Balance, June 30, 2015	$	7,659	$	25,366		$	4,797		$	215		$	38,037

	Preferred Stock			Common Stock		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total
Balance, January 1, 2014	$	10,925		$	27,072	$	653		$	(303	)	$	38,347
Net income						1,424						1,424
Redemption of Series A preferred stock	(3,266		)									(3,266		)
Change in accumulated other comprehensive loss									555			555
Dividend declared and paid on preferred stock						(259		)				(259		)
Balance, June 30, 2014	$	7,659		$	27,072	$	1,818		$	252		$	36,801

See Notes to Unaudited Consolidated Financial Statements

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Citizens First Corporation

Unaudited Consolidated Statements of Cash Flows

	Six months ended
	(In Thousands)
	June 30, 2015			June 30, 2014
Operating Activities
Net income	$	1,681		$	1,424
Items not requiring (providing) cash:
Depreciation and amortization	276			277
Provision for loan losses	200			275
Amortization of premiums and discounts on securities	170			138
Amortization of core deposit intangible	35			166
Deferred income taxes	—			796
BOLI income	(91		)	(94		)
Proceeds from sale of mortgage loans	5,225			2,956
Origination of mortgage loans held for sale	(5,195		)	(3,167		)
Gains on sales of available-for-sale securities	(10		)	(74		)
Gains on sales of mortgage loans	(110		)	(75		)
Write-downs and losses on sale of other real estate owned	35			35
Gain on sale premises and equipment	(8		)	(11		)
Changes in:
Accrued interest receivable	28			18
Other assets	(86		)	(304		)
Accrued interest payable and other liabilities	187			23
Net cash provided by operating activities	2,337			2,383
Investing Activities
Loan originations and payments, net	4,149			(16,462		)
Purchase of premises and equipment	(158		)	(115		)
Proceeds from maturities of available-for-sale securities	3,468			3,252
Proceeds from sales of available-for-sale securities	1,010			5,888
Proceeds from sales of other real estate owned	62			300
Purchase of available-for-sale securities	(4,199		)	(12,135		)
Proceeds from sales of premises and equipment	—			23
Net cash provided by (used in) investing activities	4,332			(19,249		)
Financing Activities
Net change in demand deposits, money market, NOW and savings accounts	12,003			696
Net change in time deposits	15,008			2,163
Repayment of FHLB advances	(11,000		)	—
Repayment of TARP preferred stock	—			(3,266		)
Repurchase of TARP warrants	(1,706		)	—
Proceeds from other borrowings	1,500			3,300
Dividends paid on preferred stock	(258		)	(259		)
Net cash provided by financing activities	15,547			2,634
Increase in Cash and Cash Equivalents	22,216			(14,232		)
Cash and Cash Equivalents, Beginning of Year	11,322			37,062
Cash and Cash Equivalents, End of Quarter	$	33,538		$	22,830
Supplemental Cash Flows Information
Interest paid	$	1,311		$	1,389
Income taxes paid	$	525		$	10
Loans transferred to other real estate owned	$	111		$	100

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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 consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2014 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, 2014 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, 2017, including interim periods within that reporting period. 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 June 30, 2015 and December 31, 2014 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income(loss):

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	(Dollars in Thousands)
			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
June 30, 2015

U. S. government agencies and government sponsored entities	$	2,998	$	—	$	(24	)	$	2,974
Agency mortgage-backed securities:
residential	27,408		357		(63		)	27,702
State and municipal	24,742		606		(130		)	25,218
Trust preferred security	1,878		—		(428		)	1,450
Corporate bonds	1,000		8		—			1,008
Total Available-for-Sale Securities	$	58,026	$	971	$	(645	)	$	58,352
December 31, 2014

U. S. government agencies and government sponsored entities	$	2,999	$	—	$	(51	)	$	2,948
Agency mortgage-backed securities:
residential	27,241		309		(31		)	27,519
State and municipal	25,350		793		(104		)	26,039
Trust preferred security	1,876		—		(396		)	1,480
Corporate bonds	1,000		—		—			1000
Total Available-for-Sale Securities	$	58,466	$	1,102	$	(582	)	$	58,986

The amortized cost and fair value of investment securities at June 30, 2015 by contractual maturity were as follows. Securities not due at a single maturity date, primarily mortgage-backed securities, are shown separately.

	June 30, 2015
	(Dollars in Thousands)
	Available-For-Sale
	Amortized Cost		Fair Value
Due in one year or less	$	580	$	588
Due from one to five years	12,357		12,488
Due from five to ten years	10,600		10,785
Due after ten years	7,081		6,789
Agency mortgage-backed: residential	27,408		27,702
Total	$	58,026	$	58,352

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The following table summarizes the investment securities with unrealized losses by portfolio segment at June 30, 2015 and December 31, 2014, 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			Unrealized					Unrealized					Unrealized
Securities	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses

June 30, 2015:
U.S. government agencies and government sponsored entities	$	995	$	(3	)	$	1,979	$	(21	)	$	2,974	$	(24	)
Agency mortgage-backed:
residential	3,153		(21		)	1,553		(42		)	4,706		(63		)
State and municipal	7,002		(76		)	578		(54		)	7,580		(130		)
Trust preferred security	—		—			1,450		(428		)	1,450		(428		)
Total temporarily impaired	$	11,150	$	(100	)	$	5,560	$	(545	)	$	16,710	$	(645	)

	(Dollars in Thousands)
	Less than 12 Months					12 Months or More					Total
Description of			Unrealized					Unrealized					Unrealized
Securities	Fair Value		Losses			Fair Value		Losses			Fair Value		Losses
December 31, 2014:
U.S. government agencies and government sponsored entities	$	992	$	(8	)	$	1,955	$	(43	)	$	2,947	$	(51	)
Agency mortgage-backed:
residential	1,134		(2		)	1,678		(29		)	2,812		(31		)
State and municipal	4,891		(24		)	2,530		(80		)	7,421		(104		)
Trust preferred security	—		—			1,480		(396		)	1,480		(396		)
Total temporarily impaired	$	7,017	$	(34	)	$	7,643	$	(548	)	$	14,660	$	(582	)

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

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(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 79% 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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Note 4 - Loans and Allowance for Loan Losses

Categories of loans include:

	(Dollars in Thousands)
	June 30, 2015			December 31, 2014
Commercial	$	43,796		$	43,439
Commercial real estate:
Construction	21,206			18,064
Other	169,572			174,032
Residential real estate	75,151			78,270
Consumer:
Auto	1,428			1,820
Other	2,962			2,852
Total Loans	314,115			318,477
Less Allowance for loan losses	(4,983		)	(4,885		)
Net loans	$	309,132		$	313,592

The following table sets forth an analysis of our allowance for loan losses for the three months ending June 30, 2015 and 2014.

	(Dollars in Thousands)
June 30, 2015	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	1,035		$	3,206	$	519		$	41		$	146		$	4,947
Provision for loan losses	(233		)	398		(43		)	8			(10		)	120
Loans charged-off	(75		)	—		(32		)	(16		)	—			(123		)
Recoveries	30			1		3			5			—			39

Total ending allowance balance	$	757		$	3,605	$	447		$	38		$	136		$	4,983

	(Dollars in Thousands)
June 30, 2014	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated		Total
Allowance for loan losses:
Beginning balance	$	937		$	3,013	$	699		$	71		$	107	$	4,827
Provision for loan losses	(77		)	165		15			5			42		150
Loans charged-off	—			—		(71		)	(10		)	—		(81		)
Recoveries	42			11		3			1			—		57

Total ending allowance balance	$	902		$	3,189	$	646		$	67		$	149	$	4,953

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The following table sets forth an analysis of our allowance for loan losses for the six months ending June 30, 2015 and 2014.

	(Dollars in Thousands)
June 30, 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	(248		)	533			(86		)	6			(5		)	200
Loans charged-off	(75		)	(17		)	(56		)	(19		)	—			(167		)
Recoveries	51			1			7			6			—			65

Total ending allowance balance	$	757		$	3,605		$	447		$	38		$	136		$	4,983

	(Dollars in Thousands)
June 30, 2014	Commercial			Commercial Real Estate		Residential Real Estate			Consumer			Unallocated			Total
Allowance for loan losses:
Beginning balance	$	1,420		$	2,079	$	703		$	86		$	365		$	4,653
Provision for loan losses	(577		)	1,052		24			(8		)	(216		)	275
Loans charged-off	—			—		(90		)	(13		)	—			(103		)
Recoveries	59			58		9			2			—			128

Total ending allowance balance	$	902		$	3,189	$	646		$	67		$	149		$	4,953

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 June 30, 2015 and December 31, 2014, which includes net deferred loan fees. As of June 30, 2015 and December 31, 2014, accrued interest receivable of $1.2 million and $1.2 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)
June 30, 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	$	119	$	382	$	—	$	—	$	—	$	501
Collectively evaluated	638		3,223		447		38		136		4,482
Total ending allowance balance	$	757	$	3,605	$	447	$	38	$	136	$	4,983
Loans:
Individually evaluated for impairment	$	1,814	$	2,235	$	1,010	$	10	$	—	$	5,069
Collectively evaluated	41,982		188,543		74,141		4,380		—		309,046
Total ending loans balance	$	43,796	$	190,778	$	75,151	$	4,390	$	—	$	314,115

	(Dollars in Thousands)
December 31, 2014	Commercial		Commercial Real Estate		Residential Real Estate		Consumer		Unallocated		Total
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	342	$	220	$	7	$	10	$	—	$	579
Collectively evaluated	687		2,868		575		35		141		4,306
Total ending allowance balance	$	1,029	$	3,088	$	582	$	45	$	141	$	4,885
Loans:
Individually evaluated for impairment	$	2,696	$	1,057	$	1,098	$	22	$	—	$	4,873
Collectively evaluated	40,743		191,039		77,172		4,650		—		313,604
Total ending loans balance	$	43,439	$	192,096	$	78,270	$	4,672	$	—	$	318,477

The following table presents information related to impaired loans by class of loans as of June 30, 2015 and December 31, 2014. 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.

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	(Dollars in Thousands)						(Dollars in Thousands)
	June 30, 2015						December 31, 2014
	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	$	867	$	867	$	—	$	1,129	$	1,129	$	—
Commercial real estate:
Construction	—		—		—		—		—		—
Other	154		154		—		—		—		—
Residential real estate	1,004		1,004		—		1,026		1,026		—
Consumer:							—
Auto	—		—		—		—		—		—
Other	—		—		—		—		—		—
Subtotal	$	2,025	$	2,025	$	—	$	2,155	$	2,155	$	—

With an allowance recorded:
Commercial	$	947	$	947	$	119	$	1,567	$	1,567	$	342
Commercial real estate:
Construction	—		—		—		—		—		—
Other	2,081		2,081		382		1,057		1,057		220
Residential real estate	6		6		—		72		72		7
Consumer:
Auto	—		—		—		10		10		10
Other	10		10		—		12		12		—
Subtotal	$	3,044	$	3,044	$	501	$	2,718	$	2,718	$	579
Total	$	5,069	$	5,069	$	501	$	4,873	$	4,873	$	579

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Information on impaired loans for the three months ending June 30, 2015 and 2014 is as follows:

	(Dollars in Thousands)						(Dollars in Thousands)
	June 30, 2015						June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized

Commercial	$	1,893	$	24	$	22	$	2,710	$	37	$	26
Commercial real estate:
Construction	—		—		—		—		—		—
Other	1,916		17		13		1,547		20		15
Residential real estate	1,014		12		9		1,305		16		11
Consumer:
Auto	—		—		—		18		—		—
Other	11		—		—		13		—		—

Total	$	4,834	$	53	$	44	$	5,593	$	73	$	52

Information on impaired loans for the six months ending June 30, 2015 and 2014 is as follows:

	(Dollars in Thousands)						(Dollars in Thousands)
	June 30, 2015						June 30, 2014
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized

Commercial	$	1,972	$	49	$	45	$	2,851	$	68	$	53
Commercial real estate:
Construction	—		—		—		—		—		—
Other	1,922		31		32		1,791		40		29
Residential real estate	1,019		25		18		1,322		31		20
Consumer:
Auto	—		—		—		19		1		—
Other	11		—		—		14		—		—

Total	$	4,924	$	105	$	95	$	5,997	$	140	$	102

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The recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of June 30, 2015 and December 31, 2014 are summarized below:

	(Dollars in Thousands)				(Dollars in Thousands)
	June 30,2015				December 31, 2014
	Loans Past Due Over 90 Days and Still Accruing		Nonaccrual		Loans Past Due Over 90 Days and Still Accruing		Nonaccrual

Commercial	$	—	$	157	$	—	$	748
Commercial real estate:
Construction	—		—		—		—
Other	—		592		—		45
Residential real estate	—		289		—		364
Consumer:
Auto	—		—		—		10
Other	—		—		—		—

Total	$	—	$	1,038	$	—	$	1,167

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 June 30, 2015 and December 31, 2014 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
June 30, 2015
Commercial	$	13	$	79	$	—	$	92	$	43,704	$	43,796
Commercial real estate:
Construction	—		—		—		—		21,206		21,206
Other	39		399		154		592		168,980		169,572
Residential real estate	79		70		227		376		74,775		75,151
Consumer:
Auto	—		—		—		—		1,428		1,428
Other	—		—		—		—		2,962		2,962

Subtotal	$	131	$	548	$	381	$	1,060	$	313,055	$	314,115

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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
December 31, 2014
Commercial	$	—	$	—	$	645	$	645	$	42,794	$	43,439
Commercial real estate:
Construction	—		—		—		—		18,064		18,064
Other	—		—		45		45		173,987		174,032
Residential real estate	31		—		362		393		77,877		78,270
Consumer:
Auto	—		—		—		—		1,820		1,820
Other	—		—		—		—		2,852		2,852

Subtotal	$	31	$	—	$	1,052	$	1,083	$	317,394	$	318,477

Troubled Debt Restructurings:

The Company reported total troubled debt restructurings of $4.1 million and $4.4 million as of June 30, 2015 and December 31, 2014, 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 14 troubled debt restructurings reported at quarter end, 13 loans totaling $4.0 million were accruing and 1 loan totaling $67,000 was on nonaccrual status.

The following table presents loans by class modified as troubled debt restructurings that occurred during the quarter ending June 30, 2015 and 2014:

		(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
	June 30, 2015					June 30, 2014
Troubled Debt Restructurings:
Commercial real estate:
Other	2	$	1,547	$	1,547	1	$	924	$	924

Total	2	$	1,547	$	1,547	1	$	924	$	924

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The following table presents loans by class modified as trouble debt restructurings that occurred year to date as of June 30, 2015 and 2014.

		(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
	June 30, 2015					June 30, 2014
Troubled Debt Restructurings:
Commercial real estate:
Other	2	$	1,547	$	1,547	1	$	924	$	924
Residential real estate	—	—		—		1	15		15

Total	2	$	1,547	$	1,547	2	$	939	$	939

Specific allocations of $243,000 and $547,000 were reported for troubled debt restructurings as of June 30, 2015 and December 31, 2014. Specific allocations of $337,000 were reported for the troubled debt restructurings as of June 30, 2014. No payment defaults were reported for troubled debt restructurings during the six months ending June 30, 2015 or June 30, 2014. No charge offs were taken on troubled debt restructurings during the three months ending June 30, 2015 or June 30, 2014.

The terms of certain other loans were modified during the six months ending June 30, 2015 and 2014 that did not meet the definition of a troubled debt restructuring. These loans modified during the three months ending June 30, 2015 have a total recorded investment of $12.3 million as of June 30, 2015. The loans modified during the six months ending June 30, 2014 have a total recorded investment of $13.9 million as of June 30, 2014. 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

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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:

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	Pass		Special Mention		Substandard		Doubtful		Total
June 30, 2015
Commercial	$	41,436	$	478	$	1,882	$	—	$	43,796
Commercial real estate:
Construction	21,206		—		—		—		21,206
Other	160,104		4,015		5,453		—		169,572
Residential real estate	73,902		575		674		—		75,151
Consumer:
Auto	1,428		—		—		—		1,428
Other	2,953		—		9		—		2,962

Total	$	301,029	$	5,068	$	8,018	$	—	$	314,115

	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2014
Commercial	$	39,926	$	547	$	2,966	$	—	$	43,439
Commercial real estate:
Construction	18,064		—		—		—		18,064
Other	166,969		2,875		4,188		—		174,032
Residential real estate	76,756		772		742		—		78,270
Consumer:
Auto	1,820		—		—		—		1,820
Other	2,842		—		10		—		2,852

Total	$	306,377	$	4,194	$	7,906	$	—	$	318,477

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 fair value of this security is obtained directly from the broker which originally handled the security issue. The value is determined based on trades of similar securities with similar coupons.

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

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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 on a recurring basis:

	Fair Value Measurements at:
	(Dollars in Thousands)						(Dollars in Thousands)
	June 30, 2015						December 31, 2014
	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			$	2,974					$	2,948
Agency mortgage-backed securites-residential			27,702						27,519
State and municipal			25,218						26,039
Trust preferred security					1,450						1,480
Corporate bonds			1,008						1,000
Total investment securities	$	—	$	56,902	$	1,450	$	—	$	57,506	$	1,480

Assets measured on a non-recurring basis:

	Fair Value Measurement
	(Dollars in Thousands)
	June 30, 2015		December 31, 2014
	Significant Unobservable Inputs (Level 3)		Significant Unobservable Inputs (Level 3)
Impaired loans:
Commercial	$	65	$	423
Commercial RE	260		29
Residential	—		59

Other real estate owned:
Commercial RE	$	140	$	198
Residential	72		—

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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 $585,000 at June 30, 2015 with a valuation allowance of $260,000. Impaired loans which were measured for impairment using the fair value of collateral for collateral-dependent loans had a principal balance of $841,000 at December 31, 2014, with a valuation allowance of $330,000. An increase in the provision for loan losses of $233,000 and $22,000 was recognized for the six months ended June 30, 2015 and 2014, 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 $212,000 at June 30, 2015 and $198,000 at December 31, 2014. Total writedowns of other real estate owned were $13,000 and $16,000 in the quarters ending June 30, 2015 and 2014, respectively. Total writedowns of other real estate owned were $23,000 and $33,000 in the six months ending June 30, 2015 and 2014, 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 June 30, 2015.

	June 30, 2015		Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial	$	65	Market Approach	Discounts to allow for market value of assets	(50.00)%
Commercial RE	260		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(50.00)%
Other real estate owned:
Commercial RE	140		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-40% (33.13)%
Residential RE	72		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(61.54)%

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, 2014.

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	December 31, 2014		Valuation Techniques	Unobservable Inputs (Dollars in thousands)	Range (Weighted Avg)
Impaired loans:
Commercial	$	423	Market Approach	Discounts to allow for market value of assets	50%-70% (67.35)%
Commercial RE	29		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(20.00)%
Residential	59		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	(10.00)%
Other real estate owned:
Commercial RE	198		Sales Comparison	Adjustments for limited use nature of certain properties, age of appraisal, location, and/or condition	8%-55% (38.29)%

Carrying amount and estimated fair values of financial instruments, not previously presented, were as follows:

			Fair Value Measurements at
			June 30, 2015
	Carrying Amount		Level 1		Level 2		Level 3	Total
Financial Assets
Cash and cash equivalents	$	33,538	$	33,290	$	248		$	33,538
Loans, net of allowance	308,807						310,874	310,874
Loans held for sale	80				82			82
Accrued interest receivable	1,499				320		1,179	1,499
Federal Home Loan Bank stock	2,025							N/A

Financial Liabilities
Demand and savings deposits	$	202,913	$	157,817				$	157,817
Time deposits	165,882				166,225			166,225
FHLB advances	13,000				12,872			12,872
Other borrowings	3,000				3,000			3,000
Subordinate debentures	5,000						2,836	2,836
Accrued interest payable	242		10		232			242

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			Fair Value Measurements at
			December 31, 2014
	Carrying Amount		Level 1		Level 2	Level 3	Total
Financial Assets
Cash and cash equivalents	$	11,322	$	11,322			$	11,322
Loans, net of allowance	313,081					316,075	316,075
Accrued interest recievable	1,527				323	1,204	1,527
Federal Home Loan Bank stock	2,025						N/A

Financial Liabilities
Demand and savings deposits	$	190,910	$	156,790			$	156,790
Time deposits	150,874				151,504		151,504
FHLB advances	24,000				23,835		23,835
Other borrowings	1,500				1,500		1,500
Subordinate debentures	5,000					2,395	2,395
Accrued interest payable	231		9		222		231

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

(c) 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.

(d) 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 money market accounts and 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

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offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

(e) 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.

(f) 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 June 30, 2015 and 2014.

	Quarter ended June 30, 2015						Quarter ended June 30, 2014
				Weighted						Weighted
				Average	Per Share					Average	Per Share
	Income			Shares	Amount		Income			Shares	Amount
Basic earnings per share:
Net income	$	899					$	733
Less: Dividends on preferred stock during the quarter	(130		)				(127		)

Net income available to common shareholders	$	769		1,968,777	$	0.39	$	606		1,968,777	$	0.31

Effect of dilutive securities
Convertible preferred stock	130			568,890
Warrants				24,462						130,338

Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	899		2,562,129	$	0.35	$	606		2,099,115	$	0.29

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	Six months ended June 30, 2015						Six months ended June 30, 2014
				Weighted						Weighted
				Average	Per Share					Average	Per Share
	Income			Shares	Amount		Income			Shares	Amount
Basic earnings per share:
Net income	$	1,681					$	1,424
Less: Dividends on preferred stock during the quarter	(258		)				(259		)

Net income available to common shareholders	$	1,423		1,968,777	$	0.72	$	1,165		1,968,777	$	0.59

Effect of dilutive securities
Convertible preferred stock	258			568,890
Warrants				85,759						125,995

Diluted earnings per share
Net income available to common stockholders and assumed conversions	$	1,681		2,623,426	$	0.64	$	1,165		2,094,772	$	0.56

Stock options for 29,276 and 72,931 shares of common stock were not considered in computing diluted earnings per common share for June 30, 2015 and 2014, respectively, because they are anti-dilutive. Convertible preferred shares assuming full conversion totaled 568,890 shares as of June 30, 2015. On April 15, 2015, the Company repurchased the 254,218 warrants issued in 2008 to the US Treasury as part of its participation in the US Treasury’s Capital Purchase Program. The repurchase price of the warrants was $1.7 million. Common stock warrants totaled 0 and 254,218 as of June 30, 2015 and 2014, respectively.

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 June 30, 2015 and December 31, 2014, the Company and Citizens First Bank, Inc. met all capital adequacy requirements to which it is 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

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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 2015, 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. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules.

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

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	(Dollars in Thousands)
									To Be Well Capitalized
					For Capital Adequacy				Under Prompt Corrective
	Actual				Purposes				Action Provisions
June 30, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	42,949	12.71	%	$	27,039	8.0	%	N/A		N/A
Citizens First Bank, Inc.	45,733		13.54	%	27,027		8.0	%	$	33,784	10.0	%

Tier I Capital (to Risk-Weighted Assets)
Consolidated	38,715		11.45	%	20,279		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,501		12.28	%	20,270		6.0	%	27,027		8.0	%

Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	26,056		7.71	%	15,209		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,501		12.28	%	15,203		4.5	%	21,959		6.5	%

Tier I Leverage Capital to average assets
Consolidated	38,715		9.01	%	17,196		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,501		9.73	%	17,060		4.0	%	21,325		5.0	%

	(Dollars in Thousands)
									To Be Well Capitalized
					For Capital Adequacy				Under Prompt Corrective
	Actual				Purposes				Action Provisions
December 31, 2014	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	42,879	12.74	%	$	26,929	8.0	%	N/A		N/A
Citizens First Bank, Inc.	44,056		13.09	%	26,929		8.0	%	$	33,661	10.0	%

Tier I Capital (to Risk-Weighted Assets)
Consolidated	38,671		11.49	%	13,465		4.0	%	N/A		N/A
Citizens First Bank, Inc.	39,837		11.83	%	13,465		4.0	%	20,197		6.0	%

Tier I Leverage Capital to average assets
Consolidated	38,671		9.42	%	16,415		4.0	%	N/A		N/A
Citizens First Bank, Inc.	39,837		9.78	%	16,294		4.0	%	20,368		5.0	%

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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.

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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 2014 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 June 30, 2015, we reported net income of $899,000, or $0.35 per diluted common share, compared to net income of $733,000, or $0.29 per diluted common share in the second quarter of 2014, an increase of $166,000. The increase in net income is primarily attributable to an improvement in net interest income of $262,000 as the volume of earning assets increased from the prior year.

For the six months ended June 30, 2015, the Company reported net income of $1.68 million, or $0.64 per diluted common share. This represents an increase of $257,000, or

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$0.08 per share, from the net income of $1.42 million in the previous year. The increase in net income is primarily attributable to an increase in net interest income of $426,000 partially offset by an increase in non-interest expense of $254,000.

Our annualized return on average assets, defined as net income divided by average assets, was 0.79% for the six months ended June 30, 2015, compared to 0.69% in June 30, 2014. Our annualized return on average equity, defined as net income divided by average equity, was 8.78% for the six months ending June 30, 2015, compared to 7.90% for the six months ending June 30, 2014.

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 June 30, 2015 increased $262,000, or 7.4%, compared to June 30, 2014. The increase in net interest income was a result of an increase in the volume of average earning assets over the previous year.

For the six months ended June 30, 2015, net interest income was $7.5 million, an increase of $426,000, or 6.1%, from net interest income of $7.0 million for the comparable period in 2014. Net interest income increased as a result of an increase in interest income of $364,000 plus lower interest expense on deposits and borrowings of $62,000.

The net interest margin for the six months ended June 30, 2015 was 3.84%, compared to 3.77% in 2014. The increase of 7 basis points is attributable primarily to the decrease in the cost of average interest-bearing liabilities.

The following tables set forth for the quarter and six months ended June 30, 2015 and 2014, 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 June 30,

	2015						2014
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate

Earning assets:
Federal funds sold	$	23,670	$	12	0.20	%	$	26,794	$	13	0.19	%
Available-for-sale securities (1)
Taxable	34,530		154		1.79	%	34,867		151		1.74	%
Nontaxable	23,830		261		4.39	%	20,281		252		4.98	%
Federal Home Loan Bank stock	2,025		20		3.96	%	2,025		20		3.96	%
Loans receivable (2)	319,758		4,108		5.15	%	303,489		3,879		5.13	%
Total interest earning assets	403,813		4,555		4.52	%	387,456		4,315		4.47	%
Non-interest earning assets	30,190						32,174
Total Assets	$	434,003					$	419,630

Interest-bearing liabilities:
NOW accounts	$	113,224	$	102	0.36	%	$	105,134	$	108	0.41	%
Money market accounts	27,208		28		0.41	%	23,212		20		0.35	%
Savings accounts	20,530		10		0.20	%	17,931		10		0.22	%
Time deposits	166,048		440		1.06	%	163,543		413		1.01	%
Total interest-bearing deposits	327,010		580		0.71	%	309,820		551		0.71	%
Borrowings	18,022		74		1.65	%	25,300		126		2.00	%
Subordinated debentures	5,000		24		1.93	%	5,000		24		1.93	%
Total interest-bearing liabilities	350,032		678		0.78	%	340,120		701		0.83	%
Non-interest bearing deposits	43,810						41,123
Other liabilities	1,981						1,886
Total liabilities	395,823						383,129
Stockholders’ equity	38,180						36,501
Total Liabilities and Stockholders’ Equity	$	434,003					$	419,630
Net interest income			$	3,877					$	3,614

Net interest spread (1)					3.75	%					3.64	%
Net interest margin (1) (3)					3.85	%					3.74	%
Return on average assets ratio					0.83	%					0.70	%
Return on average equity ratio					9.44	%					8.05	%
Average equity to assets ratio					8.80	%					8.70	%

(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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Average Consolidated Balance Sheets and Net Interest Analysis (Dollars in thousands)

Six months ended June 30,

	2015						2014
	Average Balance		Income/ Expense		Average Rate		Average Balance		Income/ Expense		Average Rate
Earning assets:
Federal funds sold	$	19,927	$	21	0.21	%	$	25,279	$	25	0.20	%
Available-for-sale securities (1)
Taxable	34,516		306		1.79	%	33,634		292		1.75	%
Nontaxable	24,025		526		4.42	%	20,085		500		5.02	%
Federal Home Loan Bank stock	2,025		41		4.08	%	2,025		40		3.98	%
Loans receivable (2)	320,390		8,058		5.07	%	303,464		7,722		5.13	%
Total interest earning assets	400,883		8,952		4.50	%	384,487		8,579		4.50	%
Non-interest earning assets	30,239						32,386
Total Assets	$	431,122					$	416,873

Interest-bearing liabilities:
NOW accounts	$	111,869	$	198	0.36	%	$	105,288	$	218	0.42	%
Money market accounts	25,898		50		0.39	%	23,559		40		0.34	%
Savings accounts	19,955		19		0.19	%	17,339		20		0.23	%
Time deposits	164,091		862		1.06	%	161,356		816		1.02	%
Total interest-bearing deposits	321,813		1,129		0.71	%	307,542		1,094		0.72	%
Borrowings	19,983		145		1.46	%	25,045		243		1.96	%
Subordinated debentures	5,000		48		1.94	%	5,000		47		1.90	%
Total interest-bearing liabilities	346,796		1,322		0.77	%	337,587		1,384		0.83	%
Non-interest bearing deposits	43,746						40,987
Other liabilities	1,978						1,941
Total liabilities	392,520						380,515
Stockholders’ equity	38,602						36,358
Total Liabilities and Stockholders’ Equity	$	431,122					$	416,873
Net interest income			$	7,630					$	7,195

Net interest spread (1)					3.73	%					3.67	%
Net interest margin (1) (3)					3.84	%					3.77	%
Return on average assets ratio					0.79	%					0.69	%
Return on average equity ratio					8.78	%					7.90	%
Average equity to assets ratio					8.95	%					8.72	%

(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 six months ended June 30, 2015 and 2014. 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)
	Six Months Ended June 30, 2015 Vs. 2014
	Increase (Decrease) Due to
	Rate		Volume		Net
Interest-earning assets:
Federal funds sold	1		(5	)	(4	)
Available-for-sale securities
Taxable	6		8		14
Nontaxable (1)	(72	)	98		26
Federal Home Loan Bank stock	1		—		1
Loans, net	(95	)	431		336
Total Net Change in income on interest-earning assets	(159	)	532		373

Interest-bearing liabilities:
NOW accounts	(34	)	14		(20	)
Money market accounts	6		4		10
Savings accounts	(4	)	3		(1	)
Time deposits	32		14		46

FHLB and other borrowings	(49	)	(49	)	(98	)
Subordinated debentures	1		—		1
Total Net Change in expense on interest-earning liabilities	(48	)	(14	)	(62	)
Net change in net interest income	(111	)	546		435
Percentage change	-25.52	%	125.52	%	100.0	%

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

Provision for Loan Losses

A provision for loan losses of $120,000 was recorded for the second quarter of 2015, compared to $150,000 in the second quarter of 2014. The allowance for loan losses to total loans was 1.59% of total loans at June 30, 2015 and June 30, 2014, respectively.

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Net charge-offs were $85,000 for the second quarter of 2015 compared to $24,000 in the second quarter of 2014.

Provision expense for the six months ended June 30, 2015 decreased $75,000, from $275,000 to $200,000. Net charge-offs (recoveries) were $102,000 for the six months ended June 30, 2015 compared to ($25,000) for the six months ended June 30, 2014.

Non-Interest Income

Non-interest income for the three months ended June 30, 2015 increased $68,000, or 9.0%, compared to the three months ended June 30, 2014, primarily due to an increase in service charges on deposit accounts due to the introduction of a new consumer deposit transaction account.

Non-interest income for the six months ended June 30, 2015 increased $132,000, or 9.5%, compared to the six months ended June 30, 2014, primarily due to an increase in service charges on deposit accounts, gain on sale of mortgage loans and non-deposit brokerage fees.

Non-Interest Expense

Non-interest expense for the three months ended June 30, 2015 increased $113,000, or 3.6%, compared to the three months ended June 30, 2014, due to an increase in personnel expenses, primarily as a result of normal salary adjustments.

Non-interest expense for the six months ended June 30, 2015 increased $254,000, or 4.1%, compared to the six months ended June 30, 2014, primarily due to an increase in personnel expenses, occupancy expense and other operating expenses.

Income Taxes

Income tax expense was calculated using our expected effective rate for 2015 and 2014. 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 2015 and 2014. The effective tax rate for the second quarter of 2015 was 28.1% compared to a 27.0% effective tax rate for the second quarter of 2014. The effective tax rate year-to-date was 27.6% compared to 26.7% for 2014. 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.

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Balance Sheet Review

Overview

Total assets at June 30, 2015 were $430.1 million, an increase of $17.3 million, or 4.2%, from $412.8 million at December 31, 2014. Average assets during the second quarter were $434.0 million, an increase of 3.4%, or $14.4 million, from $419.6 million in the second quarter of 2014. Average interest earning assets increased 6.7%, or $25.3 million, from $387.5 million in the second quarter of 2014 to $403.8 million in the second quarter of 2015.

Loans

Loans decreased $4.4 million, or 1.4%, from $318.5 million at December 31, 2014 to $314.1 million at June 30, 2015. Total loans averaged $319.8 million the second quarter of 2015, compared to $303.5 million the second quarter of 2014, an increase of $16.3 million, or 5.4%. We experienced a slight increase in commercial loans that was offset by decreases in the other loan portfolios during the first six months of the year compared to December 31, 2014. The following table presents a summary of the loan portfolio by category:

	(Dollars in Thousands)
	June 30, 2015				December 31, 2014
			% of Total Loans				% of Total Loans
Commercial and agricultural	$	43,796	13.94	%	$	43,439	13.64	%
Commercial real estate	190,778		60.74	%	192,096		60.32	%
Residential real estate	75,151		23.92	%	78,270		24.57	%
Consumer	4,390		1.40	%	4,672		1.47	%
	$	314,115	100	%	$	318,477	100	%

The majority of our loans are to customers located in south central Kentucky and central Tennessee. As of June 30, 2015, our twenty largest credit relationships consisted of loans and loan commitments ranging from $3.7 million to $7.7 million. The aggregate amount of these credit relationships was $92.5 million. As of December 31, 2014, our twenty largest credit relationships consisted of loans and loan commitments ranging from $3.9 million to $7.8 million. The aggregate amount of these credit relationships was $95.4 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 June 30, 2015 and December 31, 2014.

As of June 30, 2015, we had $21.1 million of participations in loans purchased from, and $18.2 million of participations in loans sold to, other banks. As of December 31, 2014, we had $18.1 million of participations in loans purchased from, and $19.9 million of participations in loans sold to, other banks.

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The following table sets forth the maturity distribution of the loan portfolio as of June 30, 2015. Maturities are based on contractual terms. Our policy is to specifically review and approve all loans renewed; loans are not automatically rolled over.

	(Dollars in Thousands)
Loan Maturities	Within One Year		After One but Within Five Years		After Five Years		Total
as of June 30, 2015
Commercial and agricultural	$	19,949	$	15,834	$	8,013	$	43,796
Commercial real estate	34,513		111,042		45,223		190,778
Residential real estate	8,093		31,075		35,983		75,151
Consumer	1,121		3,229		40		4,390
Total	$	63,676	$	161,180	$	89,259	$	314,115

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)
	June 30, 2015				December 31, 2014
	Amount		% of Loans in Each Category to Toal Loans		Amount		% of Loans in Each Category to Toal Loans
Residential real estate loans	$	447	23.92	%	$	582	24.57	%
Consumer and other loans	38		1.40	%	45		1.47	%
Commercial and agricultural	757		13.94	%	1,029		13.64	%
Commercial real estate	3,605		60.74	%	3,088		60.32	%
Unallocated	136		0.00	%	141		0.00	%
Total allowance for loan losses	$	4,983	100.00	%	$	4,885	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

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conditions and actual collection and charge-off experience. The unallocated portion of the allowance decreased from $141,000 at December 31, 2014 to $136,000 at June 30, 2015.

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

	(Dollars in Thousands)
	June 30,			December 31,
	2015			2014
Non-accrual loans	$	971		$	446
Loans 90+ days past due/accruing	—			—
Restructured loans on non-accrual	67			721
Total non-performing loans	1,038			1,167
Other real estate owned	212			198
Total non-performing assets	$	1,250		$	1,365

Non-performing loans to total loans	0.33		%	0.37		%
Non-performing assets to total assets	0.29		%	0.33		%
Net-charge-offs YTD	102			43
Net charge-offs YTD to average YTD total loans, annualized	0.06		%	0.01		%
Allowance for loan losses to non-performing loans	480.06		%	418.60		%
Allowance for loan losses to total loans	1.59		%	1.53		%

Non-performing assets totaled $1.3 million at June 30 2015, compared to $1.4 million at December 31, 2014, a decrease of $115,000. Payoffs and paydowns of $885,000 included the charge off of $70,000 in principal, with decreases offset by the addition of $518,000 in commercial loans, $154,000 in commercial real estate loans, and $99,000 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,

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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.

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.

The following table presents impaired loans and the related allowance for loan losses attributable to loans evaluated for impairment by portfolio segment for the periods indicated:

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	(Dollars in Thousands)
	June 30, 2015				December 31, 2014
	Loans		Allowance for Loan Losses		Loans		Allowance for Loan Losses

Residential real estate loans	$	1,010	$	—	$	1,098	$	7
Consumer and other loans	10		—		22		10
Commercial and agricultural	1,814		119		2,696		342
Commercial real estate	2,235		382		1,057		220
Impaired loans	5,069		501		4,873		579
Loans collectively evaluated for impairment	309,046		4,482		313,604		4,306
Total	$	314,115	$	4,983	$	318,477	$	4,885

The $196,000 increase in impaired loans during the six months ending June 30, 2015 is primarily attributed to three commercial real estate loans totaling $592,000, two residential real estate loans totaling $99,000, and a $79,000 commercial loan that were evaluated for impairment as of June 30, 2015, that were offset by the transfer of $80,000 from a residential real estate loan to OREO and subsequent charge off of a $15,000 deficiency balance on the loan, as well as paydowns, payoffs, and charge-offs through the regular collection and resolution of loans previously evaluated for impairment. The allowance for loan losses was impacted by the changes in the composition of the loans individually evaluated for impairment, the changes in the underlying collateral values and current values of future cash flows used in the evaluation of these loans. Changes in the composition and balances of the various segments of the loan portfolio, as well as the assessment of the qualitative factors inherent in the loan portfolio resulted in a $176,000 increase in the allowance attributable to loans collectively evaluated for impairment from December 31, 2014 to June 30, 2015.

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, a trust preferred security and a certificate of deposit. 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 $58.5 million for the first six months of 2015, compared to $53.7 million for 2014.

The tables below presents the maturities and yield characteristics of securities as of June 30, 2015 and December 31, 2014. 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.

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	(Dollars in Thousands)
June 30, 2015	One Year or Less			Over One Year Through Five Years			Over Five Years Through Ten Years			Over Ten Years			Total Maturities			Fair Value
U.S. Government agencies	$	—		$	2,998		—			$	—		$	2,998		$	2,974
Agency mortgage-backed securities: (1)	291			23,199			3,918			—			27,408			27,702
Municipal securities	580			9,359			9,600			5,203			24,742			25,218
Trust preferred security	—			—			—			1,878			1,878			1,450
Corporate bond	—			—			1,000			—			1,000			1,008
Total available-for-sale securities	$	871		$	35,556		$	14,518		$	7,081		$	58,026		$	58,352

Percent of total	1.50		%	61.28		%	25.02		%	12.20		%	100.00		%
Weighted average yield(2)	4.92		%	2.43		%	3.47		%	4.26		%	2.95		%

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

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

	(Dollars in Thousands)
December 31, 2014	One Year or Less			Over One Year Through Five Years			Over Five Years Through Ten Years			Over Ten Years			Total Maturities			Fair Value
U.S. Government agencies	$	—		$	1,999		$	1,000		$	—		$	2,999		$	2,948
Agency mortgage-backed securities: (1)	4			24,231			3,006			—			27,241			27,519
Municipal securities	535			7,802			11,466			5,547			25,350			26,039
Trust preferred security	—			—			—			1,876			1,876			1,480
Corporate bond	—			—			1,000			—			1,000			1,000
Total available-for-sale securities	$	539		$	34,032		$	16,472		$	7,423		$	58,466		$	58,986

Percent of total	0.92		%	58.21		%	28.17		%	12.70		%	100.00		%
Weighted average yield(2)	5.27		%	2.40		%	3.44		%	4.31		%	2.96		%

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.

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Deposits

Our primary funding source for lending and investment activities results from customer deposits and a deposit listing service. Deposits at June 30, 2015 were $368.8 million, an increase of $27.0 million, or 7.9%, compared to $341.8 million at December 31, 2014. Total deposits averaged $370.8 million the second quarter of 2015, an increase of $19.9 million, or 5.7%, compared to $350.9 million during the second quarter of 2014. 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 meet or exceed the FDIC insurance limit of $250,000 were $11.0 million and $8.1 million at June 30, 2015 and December 31, 2014, respectively. Time deposits of $100,000 or more totaled $79.4 million at June 30, 2015, compared to $63.4 million at December 31, 2014. Interest expense on time deposits of $100,000 or more was $410,000 for the six months ended June 30, 2015, compared to $330,000 for the six months ended June 30, 2014. 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 June 30, 2015.

	(Dollars in Thousands)
	June 30, 2015
Three months or less	$	21,633
Over three through six months	28,477
Over six through twelve months	59,234
Over one year through three years	48,258
Over three years through five years	8,276
Over five years	4
Total	$	165,882

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 commercial real estate. Total advances as of June 30, 2015 were $13.0 million compared to $24.0 million at December 31, 2014. Rates vary based on the term to repayment, and are summarized below as of June 30, 2015:

				(Dollars in Thousands)
Type	Maturity	Rate		Amount
Fixed	December 2, 2015	1.14	%	5,000
Fixed	May 25, 2016	0.99	%	3,000
Fixed	June 3, 2016	0.68	%	2,000
Fixed	May 24, 2019	1.72	%	3,000
				$	13,000

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At June 30, 2015, we had available collateral to borrow an additional $63.5 million from the FHLB compared to $40.6 million at December 31, 2014.

Other Borrowings. In 2014, 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 1, 2015, 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 June 30, 2015 the line was fully drawn at $3.0 million compared to a balance of $1.5 million at December 31, 2014.

At June 30, 2015, we had established Federal Funds lines of credit totaling $18.8 million with three correspondent banks. No amounts were drawn as of June 30, 2015 or December 31, 2014.

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 June 30, 2015 was 1.92%. 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 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.

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Capital

Stockholders’ equity decreased $411,000, or 1.1%, from December 31, 2014 to June 30, 2015. On April 15, 2015, the Company repurchased the 254,218 warrants issued in 2008 to the US Treasury as part of its participation in the US Treasury’s Capital Purchase Program. The repurchase price of the warrants was $1.7 million, which offset the increase in stockholders’ equity due to net income less preferred dividends of $1.4 million. The book value per common share declined to $15.43 as of June 30, 2015 compared to $15.64 at December 31, 2014 due to the warrants redemption. No common dividends have been paid during 2015.

We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary, actions by regulators that, if undertaken, could have a material effect on our financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities and certain off-balance sheet items as calculated under the regulatory accounting practices. Our capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

In July 2013, the Federal Reserve Board and the FDIC approved final rules that substantially amend the regulatory capital rules applicable to the Company and the Bank. The final rules implement the regulatory capital reforms of the Basel Committee on Banking Supervision, commonly called Basel III, and changes required by the Dodd-Frank Act.

Under these rules, the leverage and risk-based capital ratios of bank holding companies may not be lower than the leverage and risk-based capital ratios for insured depository institutions. The final rules implementing the Basel III regulatory capital reforms became effective as to the Company and the Bank on January 1, 2015, and include new minimum risk-based capital and leverage ratios. Moreover, these rules refine the definition of what constitutes “capital” for purposes of calculating those ratios, including the definitions of Tier 1 capital and Tier 2 capital. The new minimum capital level requirements applicable to bank holding companies and banks subject to the rules are: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 risk-based capital ratio of 6% (increased from 4%); (iii) a total risk-based capital ratio of 8% (unchanged from current rules); (iv) a Tier 1 leverage ratio of 4% for all institutions. The rules also establish a “capital conservation buffer” of 2.5% (to be phased in over three years) above the new regulatory minimum risk-based capital ratios, and result in the following minimum ratios once the capital conservation buffer is fully phased in: (i) a common equity Tier 1 risk-based capital ratio of 7%, (ii) a Tier 1 risk-based capital ratio of 8.5%, and (iii) a total risk-based capital ratio of 10.5%. The capital conservation buffer

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requirement is to be phased in beginning in January 2016 at 0.625% of risk-weighted assets and would increase each year until fully implemented in January 2019. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if capital levels fall below minimum plus the buffer amounts.

As a component of new BASEL III capital regulations, Citizens First Bank chose to “opt-out” of including accumulated other comprehensive income (AOCI) in regulatory capital with the filing of the March 31, 2015 Call Report.

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

	(Dollars in Thousands)
					For Capital Adequacy				To Be Well Capitalized Under Prompt Corrective
	Actual				Purposes				Action Provisions
June 30, 2015	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	42,949	12.71	%	$	27,039	8.0	%	N/A		N/A
Citizens First Bank, Inc.	45,733		13.54	%	27,027		8.0	%	$	33,784	10.0	%

Tier I Capital (to Risk-Weighted Assets)
Consolidated	38,715		11.45	%	20,279		6.0	%	N/A		N/A
Citizens First Bank, Inc.	41,501		12.28	%	20,270		6.0	%	27,027		8.0	%

Common Equity Tier I Capital (to Risk-Weighted Assets)
Consolidated	26,056		7.71	%	15,209		4.5	%	N/A		N/A
Citizens First Bank, Inc.	41,501		12.28	%	15,203		4.5	%	21,959		6.5	%

Tier I Leverage Capital to average assets
Consolidated	38,715		9.01	%	17,196		4.0	%	N/A		N/A
Citizens First Bank, Inc.	41,501		9.73	%	17,060		4.0	%	21,325		5.0	%

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	(Dollars in Thousands)
									To Be Well Capitalized
					For Capital Adequacy				Under Prompt Corrective
	Actual				Purposes				Action Provisions
December 31, 2014	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital (to Risk-Weighted Assets)
Consolidated	$	42,879	12.74	%	$	26,929	8.0	%	N/A		N/A
Citizens First Bank, Inc.	44,056		13.09	%	26,929		8.0	%	$	33,661	10.0	%

Tier I Capital (to Risk-Weighted Assets)
Consolidated	38,671		11.49	%	13,465		4.0	%	N/A		N/A
Citizens First Bank, Inc.	39,837		11.83	%	13,465		4.0	%	20,197		6.0	%

Tier I Leverage Capital to average assets
Consolidated	38,671		9.42	%	16,415		4.0	%	N/A		N/A
Citizens First Bank, Inc.	39,837		9.78	%	16,294		4.0	%	20,368		5.0	%

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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 June 30, 2015, 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 9.58% 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 2.34%. 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: July 2015 - June 2016

Projected Interest Rate Change	Estimated Value	Net Interest Income $ Change From Base	% Change From Base
+400	18,066,701	3,283,550	22.21	%
+300	17,134,444	2,351,292	15.91	%
+200	16,199,800	1,416,649	9.58	%
Base	14,783,152	0	0.00	%
-200	14,437,089	-346,063	-2.34	%

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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.

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PART II-OTHER INFORMATION

Item 6. Exhibits

EXHIBIT INDEX

3.1	Restated Articles of Incorporation of Citizens First Corporation, as amended (incorporated by reference to Exhibit 3.1 of the Company’s Registration Statement on Form SB-2 (No. 333-103238)).

3.2	Articles of Amendment to Amended and Restated Articles of Incorporation of Citizens First Corporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K dated June 5, 2007).

3.3	Articles of Amendment to Amended and Restated Articles of Incorporation of Citizens First Corporation (incorporated by reference to Exhibit 3.1 of the Registrant’s Form 8-K filed December 23, 2008).

3.4	Amended and Restated Bylaws of Citizens First Corporation (incorporated by reference to Exhibit 3 of the Registrant’s Current Report on Form 8-K filed April 17, 2014).

4.1	Restated Articles of Incorporation of Citizens First Corporation, as amended (see Exhibit 3.1).

4.2	Articles of Amendment to Amended and Restated Articles of Incorporation of Citizens First Corporation (see Exhibits 3.2 and 3.3).

4.3	Amended and Restated Bylaws of Citizens First Corporation (see Exhibit 3.4).

4.4	Copy 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).

4.5	Warrant to Purchase Common Stock (incorporated by reference to Exhibit 4.1 of the Registrant’s Current Report on Form 8-K filed December 23, 2008).

10	Citizens First Corporation 2015 Incentive Compensation Plan dated May 20, 2015.

10.1	Form of Citizens First Corporation 2015 Incentive Compensation Plan Performance Units Award Agreement.

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

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

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

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

101	Interactive data files: (i) Consolidated Balance Sheets at June 30, 2015 and December 31, 2014, (ii) the Consolidated Statements of Income for the six months ended June 30, 2015 and June 30, 2014, (iii) the Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2015 and June 30, 2014, (iv) Consolidated Statements of Cash Flows for the six month periods ended June 30, 2015 and 2014, 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 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.

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SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CITIZENS FIRST CORPORATION


Date: August 10, 2015	/s/M. Todd Kanipe
	M. Todd Kanipe
	President and Chief Executive Officer


Date: August 10, 2015	/s/ J. Steven Marcum
	J. Steven Marcum
	Executive Vice President and Chief Financial Officer

Exhibit 10

CITIZENS FIRST CORPORATION

2015 INCENTIVE COMPENSATION PLAN

ARTICLE I.

PURPOSE AND DURATION

Section 1.01. Establishment of the Plan. Citizens First Corporation, a Kentucky corporation, hereby establishes an equity-based incentive compensation plan, to be known as the Citizens First Corporation 2015 Incentive Compensation Plan (“Plan”). The Plan was adopted by the Company’s Board on December 18, 2014, contingent on shareholder approval, and it became effective upon the shareholders’ approval of the Plan on May 20, 2015.

Section 1.02. Purposes of the Plan. The purposes of the Plan are to further the growth and financial success of the Company and its Affiliates by aligning the interests of Participants more closely with the interests of the Company’s shareholders; to provide Participants with an additional incentive to excel in performing services for the Company and its Affiliates, and to promote teamwork among Participants. The Plan is further intended to provide flexibility to the Company and its Affiliates in attracting, motivating, and retaining key employees. To achieve these objectives, the Plan provides for the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares and Shares.

ARTICLE II.

DEFINITIONS AND RULES OF INTERPRETATION

Section 2.01. Definitions . For purposes of the Plan, the following words and phrases shall have the following meanings, unless a different meaning is plainly required by the context:

(a) “Act” or “ 1934 Act ” means the Securities Exchange Act of 1934, as amended from time to time.

(b) “Affiliate” means any corporation or any other entity (including, but not limited to, a partnership, limited liability company, joint venture, or Subsidiary) controlling, controlled by, or under common control with the Company.

(c) “Affiliated SAR” means an SAR that is granted in connection with a related Option and is deemed to be exercised at the same time as the related Option is exercised.

(d) “ Aggregate Share Limit ” has the meaning specified in Section 4.01(a).

(e) “Award” means, individually or collectively, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Service-Based Restricted Stock, Performance-Based Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares or Shares.

(f) “Award Agreement” means the written agreement that sets forth the terms and conditions applicable to an Award.

(g) “Board” or “Board of Directors” means the Company’s Board of Directors, as constituted from time to time.

(h) “Cashless Exercise” means, if there is a public market for the Shares, the payment of the Exercise Price for Options (i) through a same day sale commitment from the Participant and a FINRA member firm, whereby the Participant irrevocably elects to exercise the Option and to sell a portion of the Shares so purchased to pay the Exercise Price, and whereby the FINRA member firm irrevocably commits upon receipt of such stock to forward the Exercise Price directly to the Company, or (ii) through a margin commitment from the Participant and a FINRA member firm whereby the Participant irrevocably elects to exercise the Option and to pledge the Shares so purchased to the FINRA member firm in a margin account as security for a loan from the FINRA member firm in the amount of the Exercise Price and whereby the FINRA member firm irrevocably commits upon receipt of such Shares to forward the Exercise Price directly to the Company.

(i) “Cause” means, for purposes of determining whether and when a Participant has incurred a Termination of Service for Cause, (i) any act or failure to act that permits the Company or an Affiliate to terminate the written agreement or arrangement between the Participant and the Company or Affiliate for “cause,” as defined in such agreement or arrangement or, (ii) if there is no such agreement or arrangement, or the agreement or arrangement does not define the term “cause,” any act or failure to act deemed to constitute “cause” under the Company’s established and applied practices, policies, or guidelines applicable to the Participant.

(j) “Change in Control” has the meaning specified in Article XV.

(k) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

(l) “Committee” means the Compensation Committee of the Board or such other committee appointed by the Board pursuant to Section 3.01 to administer the Plan.

(m) “Company” means Citizens First Corporation, a Kentucky corporation, and any successor thereto.

(n) “Covered Employee” means an Employee who is a “covered employee” as defined in Code Section 162(m)(3).

(o) “Director” means any individual who is a member of the Board of Directors.

(p) “Effective Date” means May 20, 2015, which is the date on which the Company’s shareholders initially approved the Plan.

(q) “Employee” means an officer or key employee of the Company or an Affiliate.

(r) “Exercise Price” means the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option.

(s) “Fair Market Value” means, with respect to a Share as of a particular date, the per share closing price for the Shares on such date, as reported by the principal exchange or market over which the Shares are then listed or regularly traded. If Shares are not traded over the applicable exchange or market on the date as of which the determination of Fair Market Value is made, “Fair Market Value” means the per share closing price for the Shares on the most recent preceding date on which the Shares were traded over such exchange or market. If the Shares are not traded on national securities exchange or market, the “Fair Market Value” of a Share shall be determined by the Committee in a reasonable manner pursuant to a reasonable valuation method. Notwithstanding anything to the contrary in the foregoing, as of any date, the “Fair Market Value” of a Share shall be determined in a manner consistent with avoiding adverse tax consequences under Code Section 409A and, with respect to an Incentive Stock Option, in the manner required by Code Section 422.

(t) “FINRA” means the Financial Industry Regulatory Authority.

(u) “Fiscal Year” means the annual accounting period of the Company.

(v) “Freestanding SAR” means an SAR that is granted independently of any Option.

(w) “Grant Date” means the date specified by the Committee or the Board on which a grant of an Award under this Plan will become effective, which date will not be earlier than the date on which the Committee or the Board takes action with respect thereto.

(x) “Incentive Stock Option” means an option to purchase Shares that is granted pursuant to the Plan, is designated as an “incentive stock option,” and satisfies the requirements of Code Section 422.

(y) “Nonqualified Stock Option” means an option to purchase Shares that is granted pursuant to the Plan and is not an Incentive Stock Option.

(z) “Option” means an Incentive Stock Option or a Nonqualified Stock Option.

(aa) “Option Period” means the period during which an Option is exercisable in accordance with the applicable Award Agreement and Article VI.

(bb) “Participant” means an Employee to whom an Award has been granted.

(cc) “Performance Award” means, with respect to a Participant for a Performance Period, an Award under which the amount payable to the Participant (if any) is contingent on the achievement of pre-established Performance Targets during the Performance Period.

(dd) “Performance-Based Compensation” means compensation described in Code Section 162(m)(4)(C) that is excluded from “applicable employee remuneration” under Code Section 162(m).

(ee) “Performance-Based Restricted Stock” means Restricted Stock that is subject to forfeiture unless specified Performance Targets are satisfied during the Performance Period.

(ff) “Performance Measures” means, with respect to a Performance Award, the objective factors used to determine the amount (if any) payable pursuant to the Award. “Performance Measures” shall be based on any of the factors listed below, alone or in combination, as determined by the Committee. Such factors may be applied (i) on a corporate-wide or business-unit basis, (ii) including or excluding one or

more Subsidiaries, (iii) in comparison with plan, budget or prior performance, and/or (iv) on an absolute basis or in comparison with peer-group performance. The factors that may be used as Performance Measures are: (1) interest income; (2) net interest income; (3) interest expense; (4) net interest margin; (5) non-interest income; (6) fee income; (7) revenues; (8) securities gains or losses; (9) other income; (10) deposits; (11) deposit growth; (12) deposit market share; (13) non-interest expense; (14) total expenses; (15) efficiency ratio; (16) credit quality; (17) non-performing assets; (18) net charge offs; (19) provision expense; (20) operating income; (21) net income; (22) earnings per share; (23) return on assets; (24) return on equity; (25) regulatory capital ratios; (26) stock price; (27) dividends; (28) total shareholder return; (29) productivity; (30) customer satisfaction; (31) employee diversity goals or employee turnover; (32) specified objective social goals; and (33) goals relating to acquisitions. Performance Measures may differ from Participant to Participant and from Award to Award.

(gg) “Performance Period” means the period of time during which Performance Targets must be achieved with respect to an Award, as established by the Committee.

(hh) “Performance Share” means an Award granted to a Participant pursuant to Section 10.01, the initial value of which is equal to the Fair Market Value of a Share on the Grant Date.

(ii) “Performance Targets” means, with respect to a Performance Award for a Performance Period, the objective performance under the Performance Measures for that Performance Period that will result in payments under the Performance Award. Performance Targets may differ from Participant to Participant and Award to Award.

(jj) “Performance Unit” means an Award granted to a Participant pursuant to Section 10.01, the initial value of which is established by the Committee on or before the Grant Date.

(kk) “Period of Restriction” means the period during which a Share of Restricted Stock is subject to restrictions and a substantial risk of forfeiture.

(ll) “Plan” means the Citizens First Corporation 2015 Incentive Compensation Plan, as set out in this instrument and as hereafter amended from time to time.

(mm) “Restricted Stock” means an Award granted to a Participant pursuant to Section 8.01.

(nn) “ Restricted Stock Unit ” means an Award granted to a Participant pursuant to Section 9.01 and represents the right of the Participant to receive Shares or cash at the end of the specified period.

(oo) “Retirement” means, with respect to a Participant, Termination of Service after having (i) completed at least five years of service with the Company and (ii) reached age fifty-five (55). For purposes of the preceding sentence, service with an Affiliate shall be considered service with the Company.

(pp) “Rule 16b-3” means Rule 16b-3 under the 1934 Act and any future rule or regulation amending, supplementing, or superseding such rule.

(qq) “Section 16 Person” means a person subject to potential liability under Section 16(b) of the 1934 Act with respect to transactions that involve equity securities of the Company.

(rr) “Service-Based Restricted Stock” means Restricted Stock with restrictions based only on the Participant’s continued service to the Company and/or an Affiliate.

(ss) “Shares” means the whole shares of issued and outstanding regular voting common stock, no par value, of the Company, whether presently or hereafter issued and outstanding, and any other stock or securities resulting from adjustment thereof as provided in 4.04, or the stock of any successor to the Company that is so designated for the purposes of the Plan.

(tt) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection or tandem with a related Option, that is designated as an SAR pursuant to Section 7.01.

(uu) “Subsidiary” means any corporation (including, without limitation, any bank, savings association, financial institution, or financial services company) in an unbroken chain of corporations beginning with the Company, if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in the chain.

(vv) “Tandem SAR” means an SAR that is granted in tandem with a related Option, the exercise of which requires forfeiture of the right to exercise the related Option with respect to an equal number of Shares and that is forfeited to the extent that the related Option is exercised.

(ww) “Termination of Service,” “ Terminates Service, ” or any variation thereof means a separation from service within the meaning of Code Section 409A(a)(2)(A)(i).

Section 2.02. Rules of Interpretation . The following rules shall govern in interpreting the Plan:

(a) Except to the extent preempted by United States federal law or as otherwise expressly provided herein, the Plan and all Award Agreements shall be interpreted in accordance with and governed by the internal laws of the Commonwealth of Kentucky without giving effect to any choice or conflict of law provisions, principles, or rules.

(b) The Plan and all Awards are intended to be exempt from or comply with the requirements of Code Section 409A and all other applicable laws, and this Plan shall be so interpreted and administered. In addition to the general amendment rights of the Company with respect to the Plan, the Company specifically retains the unilateral right (but not the obligation) to make, prospectively or retroactively, any amendment to this Plan and any Award Agreement or any related document as it deems necessary or desirable to more fully address issues in connection with compliance with (or exemption from) Code Section 409A. In no event, however, shall this section or any other provisions of this Plan be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments under, this Plan. Except as may be expressly provided in another agreement to which the Company is bound, the Company and its Affiliates shall have no responsibility for tax or legal consequences to any Participant (or beneficiary) resulting from the terms or operation of this Plan.

(c) Any reference herein to a provision of law, regulation, or rule shall be deemed to include a reference to the successor of such law, regulation, or rule.

(d) To the extent consistent with the context, any masculine term shall include the feminine, and vice versa, and the singular shall include the plural, and vice versa.

(e) If any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity of that provision shall not affect the remaining parts of the Plan, and the Plan shall be interpreted and enforced as if the illegal or invalid provision had never been included herein.

(f) The grant of Awards and issuance of Shares hereunder shall be subject to all applicable statutes, laws, rules, and regulations and to such approvals and requirements as may be required from time to time by any governmental authority or securities exchange or market on which the Shares are then listed or traded.

(g) The descriptive headings and sections of the Plan are provided for convenience of reference only and shall not serve as a basis for interpretation of the Plan.

ARTICLE III.

ADMINISTRATION

Section 3.01. The Committee. The Committee shall administer the Plan and, subject to the provisions of the Plan and applicable law, may exercise its discretion in performing its administrative duties. The Committee shall consist of not fewer than three (3) Directors, and Committee action shall require the affirmative vote of a majority of its members. The members of the Committee shall be appointed by, and shall serve at the pleasure of, the Board of Directors. The Committee shall be composed solely of Directors who are both (i) non-employee directors under Rule 16b-3 and (ii) outside directors under Code Section 162(m)(3)(C)(ii).

Section 3.02. Authority of the Committee. Except as limited by law or by the Articles of Incorporation or By-Laws of the Company, and subject to the provisions of the Plan, the Committee shall have full power and discretion to (a) select the Employees who shall participate in the Plan; (b) determine the sizes and types of Awards; (c) determine the terms and conditions of Awards in a manner consistent with the Plan; (d) construe and interpret the Plan, all Award Agreements, and any other agreements or instruments entered into under the Plan; (e) establish, amend, or waive rules and regulations for the Plan’s administration; and (f) amend the terms and conditions of any outstanding Award and applicable Award Agreement to the extent that such terms and conditions are within the discretion of the Committee, subject to the provisions of this Plan and any applicable law. Further, the Committee shall make all other determinations that may be necessary or advisable for the administration of the Plan. Each Award shall be evidenced by a written Award Agreement between the Company and the Participant and shall contain such terms and conditions established by the Committee consistent with the provisions of the Plan. Notwithstanding the preceding provisions, the Committee shall not have any authority to take any action with respect to an Award intended to constitute Performance-Based Compensation that would disqualify it from being such. Except as limited by applicable law or the Plan, the Committee may use its discretion to the maximum extent that it deems appropriate in administering the Plan.

Section 3.03. Delegation by the Committee. The Committee may delegate all or any part of its authority and powers under this Plan to one or more Directors or officers of the Company; provided, however, the Committee may not delegate its authority and powers (i) with respect to grants to Section 16 Persons, (ii) in a way that would jeopardize the Plan’s satisfaction of Rule 16b-3, or (iii) with respect to grants intended to constitute Performance-Based Compensation.

Section 3.04. Decisions Binding. All determinations and decisions made by the Committee, the Board, or any delegate of the Committee pursuant to this Article shall be final, conclusive, and binding on all persons, including the Company and Participants.

ARTICLE IV.

SHARES SUBJECT TO THIS PLAN

Section 4.01. Number of Shares .

(a) Subject to adjustment as provided in Section 4.04 and any limitations specified elsewhere in the Plan, the maximum number of Shares cumulatively available for issuance under the Plan pursuant to (i) the exercise of Options, (ii) the grant of Affiliated, Freestanding, and Tandem SARs, (iii) the grant of Restricted Stock, (iv) the payment of Performance Units and Performance Shares, and/or (v) the grant of Shares shall not exceed 100,000 Shares, plus any Shares covered by an award under this Plan that are forfeited or remain unpurchased or undistributed upon termination or expiration of the award (the “Aggregate Share Limit”).

(b) Shares covered by an Award granted under the Plan shall not be counted as used unless and until they are actually issued and delivered to a Participant and, therefore, the Aggregate Share Limit as of a given date shall not be reduced by any Shares relating to prior awards that have expired or have been forfeited or cancelled. If the Company pays the benefit provided by any Award granted under the Plan to the respective Participant in cash, any Shares that were covered by such Award will be available for issue or transfer hereunder. Notwithstanding anything to the contrary contained herein:

(i) if Shares are tendered or otherwise used in payment of the Exercise Price of an Option, the total number of Shares covered by the Option being exercised shall count against the Aggregate Share Limit;

(ii) any Shares withheld by the Company to satisfy a tax withholding obligation shall count against the Aggregate Share Limit;

(iii) the number of Shares covered by a SAR, to the extent that it is exercised and settled in Shares, and whether or not Shares are actually issued to the Participant upon exercise of the SAR, shall be considered issued or transferred pursuant to the Plan and shall count against the Aggregate Share Limit; and

(iv) in the event that the Company repurchases Shares with proceeds from the exercise of an Option, those Shares will not be added to the Aggregate Share Limit.

If, under the Plan, a Participant has elected to give up the right to receive compensation in exchange for Shares based on their Fair Market Value, such Shares will not count against the Aggregate Share Limit.

(c) Shares issued under the Plan may be authorized but unissued Shares, treasury Shares, reacquired Shares (including Shares purchased in the open market), or any combination thereof, as the Committee may from time to time determine. Shares covered by an Award that are forfeited or that remain unpurchased or undistributed upon termination or expiration of the Award may be made the subject of further Awards to the same or other Participants.

(d) The total number of Shares actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 100,000 Shares.

Section 4.02. Restrictions on Shares . Shares issued upon exercise of an Award shall be subject to the terms and conditions specified herein and to such other terms, conditions, and restrictions as the Committee may determine or provide in the Award Agreement. The Company shall not be required to issue or deliver any certificates for Shares, cash, or other property before (i) the listing of such Shares on any stock exchange (or other public market) on which the Shares may then be listed (or regularly traded) and (ii) the completion of any registration or qualification of such shares under federal, state, local, or other law, or any ruling or regulation of any government body that the Committee determines to be necessary or advisable. The Company may cause any certificate for Shares to be delivered hereunder to be properly marked with a legend or other notation reflecting the limitations on transfer of such Shares as provided in the Plan or as the Committee may otherwise require. Participants, or any other persons entitled to benefits under the Plan, must furnish to the Committee such documents, evidence, data, or other information as the Committee considers necessary or desirable for the purpose of administering the Plan. The benefits under the Plan for each Participant and other person entitled to benefits hereunder are to be provided on the condition that such Participant or other person furnish full, true, and complete data, evidence, or other information, and that he or she promptly sign any document reasonably requested by the Committee. No fractional Shares shall be issued under the Plan; rather, fractional shares shall be aggregated and then rounded to the next lower whole Share.

Section 4.03. Shareholder Rights . Except with respect to Restricted Stock as provided in Article VIII, no person shall have any rights of a shareholder (including, but not limited to, voting and dividend rights) as to Shares subject to an Award until, after proper exercise or vesting of the Award or other action as may be required by the Committee, such Shares shall have been recorded on the Company’s official shareholder records (or the records of its transfer agents or registrars) as having been issued and transferred to the Participant. Upon exercise of the Award or any portion thereof, the Company shall have a reasonable period in which to issue and transfer the Shares to the Participant, and the Participant shall not be treated as a shareholder for any purpose before such issuance and transfer. No payment or adjustment shall be made for cash dividends or other rights for which the record date is prior to the date on which such Shares are recorded as issued and transferred in the Company’s official shareholder records (or the records of its transfer agents or registrars), except as provided herein or in an Award Agreement.

Section 4.04. Changes in Stock Subject to the Plan . In the event of any change in the Shares by virtue of a stock dividend, stock split or consolidation, reorganization, merger, spinoff, or similar transaction, the Committee shall, as it deems appropriate, adjust (i) the aggregate number and kind of Shares available for Awards, (ii) the number and kind of Shares subject to an Award, (iii) the number of Shares available for certain Awards under the limits set forth in Article XII of this Plan and (iv) the terms of the Award to prevent the dilution of Shares or the diminution of the Awards. Moreover, in the event of any such transaction or event or in the event of a Change in Control, the Committee, in its discretion, may provide in substitution for any or all outstanding Awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and may require in connection therewith the surrender of all Awards so replaced in a manner that complies with Code Section 409A. In addition, for each Option or SAR with an Exercise Price greater than the consideration offered in connection with any such transaction or event or a Change in Control, the Committee may in its sole discretion elect to cancel such Option or SAR without any payment to the person holding such Option or SAR. The Committee’s determination pursuant to this Section shall be final and conclusive, provided, however, no adjustment pursuant to this Section shall (i) be made to the

extent that the adjustment would cause an Award to violate the requirements under Code Section 409A or (ii) change the One Hundred Thousand Dollar ($100,000) limit on Incentive Stock Options first exercisable during a year, as set out in Section 6.01.

ARTICLE V.

ELIGIBILITY

Except as herein provided, individuals who are Employees shall be eligible to participate in the Plan and be granted Awards. The Committee may, from time to time and in its sole discretion, select the Employees to be granted Awards and determine the terms and conditions with respect thereto each Award. In making any such selection and in determining the form of an Award, the Committee may give consideration to the functions and responsibilities of the Employee and the Employee’s contributions to the Company or its Affiliates, the value of the Employee’s services (past, present, and future) to the Company or its Affiliates, and such other factors as it deems relevant.

ARTICLE VI.

STOCK OPTIONS

Section 6.01. Grant of Options. Subject to the terms and provisions of the Plan, the Committee may grant Options to any Employee in such amounts as the Committee may determine. The Committee may grant Incentive Stock Options, Nonqualified Stock Options, or any combination thereof. The Committee shall determine the number of Shares subject to each Option, subject to the express limitations of the Plan, including Article XII. Furthermore, no Participant may be granted Incentive Stock Options under this Plan (when combined with incentive stock options granted under any other plan of the Company or an Affiliate) that would result in Shares with an aggregate Fair Market Value (determined as of the Grant Date(s)) of more than One Hundred Thousand Dollars ($100,000) first becoming exercisable in any one calendar year. To the extent that a purported Incentive Stock Option would violate the limitation specified in the preceding sentence, the Option shall be deemed a Nonqualified Stock Option.

Section 6.02. Option Award Agreement. Each Option shall be evidenced by an Option Award Agreement that shall specify the Exercise Price, the number of Shares to which the Option pertains, the Option Period, any conditions to exercise of the Option, and such other terms and conditions as the Committee shall determine. The Option Award Agreement also shall specify whether the Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option. All grants of Options intended to constitute Incentive Stock Options and related Award Agreements shall comply with the requirements of Code Section 422.

Section 6.03. Exercise Price. Subject to the provisions of this Section, the Committee shall determine the Exercise Price under each Option.

(a) Nonqualified Stock Options. The per-Share Exercise Price under a Nonqualified Stock Option shall be not less than one hundred percent (100%) of Fair Market Value of a Share on the Grant Date.

(b) Incentive Stock Options. The per-Share Exercise Price under an Incentive Stock Option shall be not less than one hundred percent (100%) of Fair Market Value of a Share on the Grant Date; provided, however, if, on the Grant Date, the Participant (together with persons whose stock ownership is attributed to the Participant pursuant to Code Section 424(d)) owns securities possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its

Subsidiaries, the per-Share Exercise Price shall be not less than one hundred ten percent (110%) of the Fair Market Value of a Share on the Grant Date.

(c) Substitute Options. Notwithstanding the provisions of Subsections (a) and (b), if the Company or an Affiliate consummates a transaction described in Code Section 424(a) (e.g., the acquisition of property or stock from an unrelated corporation), individuals who become Employees on account of such transaction may be granted Options in substitution for options granted by such former employer or recipient of services. If such substitute Options are granted, the Committee, in its sole discretion and consistent with Code Section 424(a) and the requirements of Code Section 409A, may determine that such substitute Options shall have an Exercise Price less than one hundred (100%) of the Fair Market Value of the Shares to which the Options relate determined as of the Grant Dates. In carrying out the provisions of this Section, the Committee shall apply the principles contained in Section 4.04.

Section 6.04. Duration of Options. The Option Period with respect to each Option shall commence and expire at such times as the Committee shall provide in the Award Agreement, provided that:

(a) Options shall not be exercisable more than ten years after their respective Grant Dates;

(b) Incentive Stock Options granted to an Employee who possesses more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Subsidiary, taking into account the attribution rules of Code Section 422(d), shall not be exercisable later than five years after their respective Grant Date(s); and

(c) Subject to the limits of this Article, the Committee may, in its sole discretion, after an Option is granted, extend the option term, provided that such extension is not an extension for purposes of Code Section 409A and the guidance thereunder or, in the case of an Incentive Stock Option, a modification, extension, or renewal for purposes of Code Section 424(h).

Section 6.05. Exercisability of Options. All Options granted under this Plan shall be exercisable at such times, under such terms, and subject to such restrictions and conditions as the Committee shall determine and specify in the applicable Award Agreement. An Award Agreement for an Option may provide that such Option becomes exercisable in the event of the Participant’s death, disability or retirement or in connection with a Change in Control.

Section 6.06. Method of Exercise. Subject to the provisions of this Article and the applicable Award Agreement, a Participant may exercise an Option, in whole or in part, at any time during the applicable Option Period by giving written notice to the Company of exercise on a form provided by the Committee (if available). Such notice shall specify the number of Shares subject to the Option to be purchased and shall be accompanied by payment in full of the total Exercise Price by cash or check or such other form of payment as the Company may accept. If permitted by the Committee or the applicable the Award Agreement, payment in full or in part may also be made by:

(a) subject to any conditions or limitations established by the Committee, delivering Shares already owned by the Participant and having a total Fair Market Value on the date of such delivery equal to the total Exercise Price;

(b) to the extent permitted by law, the delivery of cash by a broker-dealer pursuant to a Cashless Exercise;

(c) subject to any conditions or limitations established by the Committee, the Company’s withholding of Shares from the Option having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price pursuant to a net exercise arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the shares so withheld will not be treated as issued and acquired by the Company upon such exercise);

(d) a combination of the foregoing; or

(e) to the extent permitted by law, in any other manner then permitted by the Committee.

No Shares shall be issued until full payment therefor has been made. A Participant shall have all of the rights of a shareholder of the Company holding the class of Shares subject to such Option (including, if applicable, the right to vote the shares and the right to receive dividends) when the Participant has given written notice of exercise, has paid the total Exercise Price, and such Shares have been recorded on the Company’s official shareholder records (or the records of its transfer agents or registrars) as having been issued and transferred to the Participant.

Section 6.07. Restrictions on Share Transferability. In addition to the restrictions imposed by Section 16.09 of the Plan, the Committee may impose such restrictions on any Shares acquired pursuant to the exercise of an Option as it may deem advisable or appropriate, including, but not limited to, restrictions related to applicable federal and state securities laws and the requirements of any national securities exchange or market on which Shares are then listed or regularly traded.

Section 6.08. Prohibition on Repricing of Stock Options . Except as permitted under Section 4.04 of the Plan, the terms of any outstanding Option may not be amended without shareholder approval to reduce the Exercise Price of such outstanding Option or to cancel such outstanding Option in exchange for cash, other Awards, or an Option or SAR with an exercise price that is less than the Exercise Price of the original Option.

ARTICLE VII.

STOCK APPRECIATION RIGHTS

Section 7.01. Grant of SARs. Subject to the terms and conditions of the Plan, the Committee, at any time and from time to time, may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof to any Employee in such amounts as the Committee, in its sole discretion, shall determine. The Committee, subject to the provisions of this Plan, shall have complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, the Exercise Price of a Freestanding SAR shall be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date, and the Exercise Price of a Tandem SAR or an Affiliated SAR shall be equal to the Exercise Price of the Option to which such SAR relates. The number of Shares to which an SAR relates as well as the Exercise Price for an SAR shall be subject to adjustment pursuant to Section 4.04.

Section 7.02. Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. The following requirements shall apply to all Tandem SARs: (i) the Tandem SAR shall expire not later than the date on which the related Option expires; (ii) the value of the payout with

respect to the Tandem SAR shall be no more than one hundred percent (100%) of the difference between the Exercise Price of the underlying Option and one hundred percent (100%) of the Fair Market Value of the Shares subject to the related Option at the time the Tandem SAR is exercised; and (iii) the Tandem SAR shall be exercisable only when the Fair Market Value of the Shares subject to the Option to which the Tandem SAR relates exceeds the Exercise Price of such Option.

Section 7.03. Exercise of Affiliated SARs. An Affiliated SAR shall be deemed to be exercised upon the exercise of the Option to which the Affiliated SAR relates. Such deemed exercise of an Affiliated SAR shall not reduce the number of Shares subject to the related Option.

Section 7.04. Exercise of Freestanding SARs. Freestanding SARs shall be exercisable on such terms and conditions as the Committee, in its sole discretion, shall specify in the applicable Award Agreement. An Award Agreement for a Freestanding SAR may provide that such Freestanding SAR becomes exercisable in the event of the Participant’s death, disability or retirement or in connection with a Change in Control.

Section 7.05. SAR Award Agreement. Each SAR shall be evidenced by an Award Agreement that specifies the exercise price, the expiration date of the SAR, the number of SARs, any conditions on the exercise of the SAR, and such other terms and conditions as the Committee, in its sole discretion, shall determine. The Award Agreement shall also specify whether the SAR is an Affiliated SAR, Freestanding SAR, Tandem SAR, or a combination thereof.

Section 7.06. Expiration of SARs. Each SAR granted under this Plan shall expire upon the date determined by the Committee, in its sole discretion, as set forth in the applicable Award Agreement. Notwithstanding the foregoing, the terms and provisions of Section 6.04 also shall apply to Affiliated and Tandem SARs.

Section 7.07. Payment of SAR Amount. Upon exercise of an SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying:

(a) the positive difference between the Fair Market Value of a Share on the date of exercise and the Exercise Price; by

(b) the number of Shares with respect to which the SAR is exercised.

At the sole discretion of the Committee, such payment may be in cash, in Shares that have a Fair Market Value equal to the cash payment calculated under this Section, or in a combination of cash and Shares.

Section 7.08. Termination of SAR. An Affiliated SAR or Tandem SAR shall terminate at such time as the Option to which such SAR relates terminates. A Freestanding SAR shall terminate at the time provided in the applicable Award Agreement, and under no circumstances more than 10 years from the Grant Date.

Section 7.09. Prohibition on Repricing SARs . Except as permitted under Section 4.04 of the Plan, the terms of any outstanding SAR may not be amended without shareholder approval to reduce the Exercise Price of such outstanding SAR or to cancel such outstanding SAR in exchange for cash, other Awards, or an Option or SAR with an exercise price that is less than the Exercise Price of the original SAR.

ARTICLE VIII.

RESTRICTED STOCK

Section 8.01. Grants of Restricted Stock. Subject to the terms and provisions of the Plan, including Article XII, the Committee, at any time and from time to time, may grant Shares of Restricted Stock to any Employee in such amounts as the Committee, in its sole discretion, shall determine.

Section 8.02. Restricted Stock Award Agreement. Each Award of Restricted Stock shall be evidenced by an Award Agreement, which shall specify the Period of Restriction, the number of Shares granted, and the terms and conditions of the Award. The Committee may, in its discretion, set Performance Targets in an Award Agreement for Restricted Stock that must be satisfied for the restrictions on some or all of the Shares to be released at the end of the Period of Restriction.

Section 8.03. Restrictions on Transferability. Except as provided in Section 16.09 or this Article, Shares of Restricted Stock may not be sold, transferred, assigned, margined, encumbered, gifted, bequeathed, alienated, hypothecated, pledged, or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, until the end of the applicable Period of Restriction.

Section 8.04. Other Restrictions. The Committee, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate in accordance with this Article.

(a) General Restrictions. The Committee may impose restrictions on Restricted Stock based upon any one or more of the following criteria: (i) the achievement of specific Performance Targets; (ii) vesting based on period of service with the Company and any of its Subsidiaries;; (iii) applicable federal or state securities laws; or (iv) any other basis determined by the Committee, in its sole discretion.

(b) Section 162(m) Performance Restrictions. Notwithstanding any other provision of this Section to the contrary, for purposes of qualifying grants of Restricted Stock as Performance-Based Compensation, if applicable, the Committee shall establish restrictions based upon the achievement of pre-established Performance Targets. If the Committee intends for any Share of Restricted Stock to qualify as Performance-Based Compensation, the specific Performance Targets that must be satisfied for the Period of Restriction to lapse or terminate shall be established by the Committee on or before the latest date permissible to enable the Restricted Stock to so qualify. In granting Restricted Stock that is intended to qualify as Performance-Based Compensation, the Committee shall follow any procedures that it determines to be necessary, advisable, or appropriate to ensure such qualification.

(c) Legend on Certificates. The Committee, in its sole discretion, may require the placement of a legend on certificates representing Shares of Restricted Stock to give appropriate notice of such restrictions. For example, the Committee may determine that some or all certificates representing Shares of Restricted Stock shall bear the following legend:

THE SALE, PLEDGE, OR OTHER TRANSFER OF THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY, OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER UNDER FEDERAL AND STATE SECURITIES LAWS AND UNDER THE CITIZENS FIRST CORPORATION 2015 INCENTIVE COMPENSATION PLAN, AS SET FORTH IN AN AWARD AGREEMENT EXECUTED THEREUNDER. A COPY OF SUCH PLAN AND SUCH AWARD AGREEMENT MAY BE OBTAINED FROM THE CORPORATE SECRETARY OF CITIZENS FIRST CORPORATION.

Section 8.05. Removal of Restrictions. Except as otherwise provided in this Article, as soon as practicable after the applicable Period of Restriction lapses, Shares of Restricted Stock covered by an Award shall be subject to release to the Participant. For Awards of Restricted Stock for which the restrictions are based on the achievement of Performance Targets, the number of Shares to be released shall be determined as a function of the extent to which the applicable Performance Targets have been achieved and to the extent that the Shares are not earned, they shall be forfeited. Notwithstanding any provision in the Plan to the contrary, to the extent permitted under Code Section 409A and Code Section 162(m) and the regulations thereunder without resulting in adverse tax consequences, any Award Agreement for Restricted Stock may provide for the earlier termination of restrictions on such Restricted Stock in the event of the Participant’s death, disability or retirement or in connection with a Change in Control.

Section 8.06. Dividends . Any grant of Shares of Restricted Stock may require that any or all dividends or other distributions paid thereon during the applicable Period of Restriction be either paid currently or automatically deferred and reinvested in additional Shares of Restricted Stock, which may be subject to the same restrictions as the underlying Award; provided, however, that dividends or other distributions on Shares of Restricted Stock with restrictions that lapse as a result of the achievement of Performance Targets will be deferred until and paid contingent upon the achievement of the applicable Performance Targets.

Section 8.07. Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the applicable Award Agreement provides otherwise.

Section 8.08. Return of Restricted Stock to Company. On the date set forth in the applicable Award Agreement, the Restricted Stock for which restrictions have not lapsed by the last day of the Period of Restriction shall revert to the Company and thereafter shall be available for the grant of new Awards.

ARTICLE IX.

RESTRICTED STOCK UNITS

Section 9.01. Grants of Restricted Stock Units. Subject to the terms and provisions of the Plan, including Article XII, the Committee, at any time and from time to time, may grant Restricted Stock Units to any Employee in such amounts as the Committee, in its sole discretion, shall determine.

Section 9.02. Restricted Stock Unit Award Agreement. Each Award of Restricted Stock Units shall be evidenced by an Award Agreement, which shall specify the Period of Restriction, the number of Restricted Stock Units (including the number of Shares or cash to be delivered or paid upon the lapse of restrictions), and the terms and conditions of the Award. The Committee may, in its discretion, set Performance Targets in an Award Agreement for Restricted Stock Units that must be satisfied for the restrictions on some or all of the Shares to be delivered or cash to be paid at the end of the Period of Restriction.

Section 9.03. Restrictions on Transferability. Except as provided in Section 16.09 or this Article, Restricted Stock Units may not be sold, transferred, assigned, margined, encumbered, gifted, bequeathed, alienated, hypothecated, pledged, or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise.

Section 9.04. Other Restrictions . The Committee, in its sole discretion, may impose such other restrictions on Restricted Stock Units as it may deem advisable or appropriate in accordance with this Article.

(a) General Restrictions. The Committee may impose restrictions on Restricted Stock Units based upon any one or more of the following criteria: (i) the achievement of specific Performance Targets; (ii) vesting based on period of service with the Company and any of its Subsidiaries; (iii) applicable federal or state securities laws; or (iv) any other basis determined by the Committee, in its sole discretion.

(b) Section 162(m) Performance Restrictions. Notwithstanding any other provision of this Section to the contrary, for purposes of qualifying grants of Restricted Stock Units as Performance-Based Compensation, if applicable, the Committee shall establish restrictions based upon the achievement of pre-established Performance Targets. If the Committee intends for any Restricted Stock Unit to qualify as Performance-Based Compensation, the specific Performance Targets that must be satisfied for the Period of Restriction to lapse or terminate shall be established by the Committee on or before the latest date permissible to enable the Restricted Stock Unit to so qualify. In granting Restricted Stock Units that are intended to qualify as Performance-Based Compensation, the Committee shall follow any procedures that it determines to be necessary, advisable, or appropriate to ensure such qualification.

Section 9.05. Removal of Restrictions. Except as otherwise provided in this Article, as soon as practicable after the applicable Period of Restriction lapses, Restricted Stock Units covered by an Award shall be subject to release to the Participant. For Awards of Restricted Stock Units for which the restrictions are based on the achievement of Performance Targets, the number of Shares to be delivered (or cash to be paid) shall be determined as a function of the extent to which the applicable Performance Targets have been achieved and to the extent that the Restricted Stock Units are not earned, they shall be forfeited. Notwithstanding any provision in the Plan to the contrary, to the extent permitted under Code Section 409A and Code Section 162(m) and the regulations thereunder without resulting in adverse tax consequences, any Award Agreement for Restricted Stock Units may provide for the earlier termination of restrictions on such Restricted Stock Units in the event of the Participant’s death, disability or retirement or in connection with a Change in Control.

Section 9.06. Dividends Equivalents . The Committee may, at the Grant Date of Restricted Stock Units, provide for the payment of dividend equivalents to the Participant either in cash or in additional Shares on current, deferred or contingent basis; provided, however, that dividends or other distributions on Restricted Stock Units with restrictions that lapse as a result of the achievement of Performance Targets will be deferred until and paid contingent upon the achievement of the applicable Performance Targets.

Section 9.07. Ownership. During the Period of Restriction, the Participant will have no rights of ownership in the Shares subject to the Restricted Stock Units and shall have no right to vote such Shares.

Section 9.08. Cancellation of Restricted Stock Units. On the date set forth in the applicable Award Agreement, all Restricted Stock Units that have not been earned or vested shall be forfeited and thereafter the Shares subject to such forfeited Restricted Stock Units shall be available for the grant of new Awards.

ARTICLE X.

PERFORMANCE UNITS AND PERFORMANCE SHARES

Section 10.01. Grant of Performance Units/Shares. Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Performance Units and/or Performance Shares to any Employee in such amounts as the Committee, in its sole discretion, shall determine. The Committee shall have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant, subject to the express limitations of the Plan, including Article XII.

Section 10.02. Value of Performance Units/Shares. Each Performance Unit shall have an initial value that is established by the Committee on or before the Grant Date. Each Performance Share shall have an initial value equal to the Fair Market Value of a Share on the Grant Date.

Section 10.03. Performance Objectives and Other Terms. The Committee shall set performance objectives in its sole discretion which, depending on the extent to which they are met, will determine the number or value of Performance Units or Performance Shares, or both, that will be paid to the Participant. Each Award of Performance Units or Performance Shares shall be evidenced by an Award Agreement that shall specify the number of Performance Units or Performance Shares, the Performance Period, the performance objectives, and such other terms and conditions as the Committee, in its sole discretion, shall determine.

(a) General Performance Objectives. The Committee may set performance objectives based upon (i) the achievement of Performance Targets, (ii) applicable Federal or state securities laws, or (iii) any other basis determined by the Committee in its sole discretion.

(b) Section 162(m) Performance Objectives. Notwithstanding any other provision of this Section to the contrary, for purposes of qualifying grants of Performance Units or Performance Shares to Covered Employees as Performance-Based Compensation, if applicable, the Committee shall establish the specific Performance Targets applicable to Performance Units or Performance Shares. If the Committee intends for any Performance Unit or Performance Share to qualify as Performance-Based Compensation, the Performance Targets for any such Award shall be set by the Committee on or before the latest date permissible to enable the Performance Unit or Performance Share, as the case may be, to so qualify. In granting Performance Units or Performance Shares to Covered Employees that are intended to qualify as Performance-Based Compensation, the Committee shall follow any procedures that it determines to be necessary, advisable, or appropriate to ensure such qualification.

Section 10.04. Earning of Performance Units/Shares. After the applicable Period of Restriction has ended, the holder of Performance Units or Performance Shares shall be entitled to receive those Performance Units or Performance Shares, as the case may be, earned by the Participant over the Performance Period, to be determined as a function of the extent to which the applicable Performance Targets have been achieved. Notwithstanding any provision in the Plan to the contrary, to the extent permitted under Code Section 409A and Code Section 162(m) and the regulations thereunder without resulting in adverse tax consequences, any Award Agreement for Performance Shares or Performance Units may provide for the earlier lapse of restrictions or other modifications in the event of the Participant’s death, disability or retirement or in connection with a Change in Control.

Section 10.05. Form and Timing of Payment of Performance Units/Shares. Each Award Agreement for Performance Shares or Performance Units will specify the time and manner of payment for any such Performance Shares or Performance Units that have been earned. The Committee, in its sole discretion, may pay earned Performance Units or Performance Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Performance Units or

Performance Shares, as the case may be, determined as of the last day of the applicable Performance Period), or a combination thereof.

Section 10.06. Dividend Equivalents . The Committee may, at the Grant Date of Performance Shares, provide for the payment of dividend equivalents to the Participant either in cash or in additional Shares on a contingent basis, subject in all cases to deferral and payment on a contingent basis based on the Participant’s earning of the Performance Shares with respect to which such dividend equivalents are paid.

Section 10.07. Cancellation of Performance Units/Shares. On the date set forth in the applicable Award Agreement, all Performance Units or Performance Shares that have not been earned or vested shall be forfeited and thereafter shall be available for the grant of new Awards.

ARTICLE XI.

SHARE GRANTS

Subject to the provisions of the Plan, including Article XII, the Committee may make an Award of Shares to any Employee in such amount as the Committee, in its sole discretion, may determine. A grant pursuant to this Section may be evidenced by an Award Agreement or such other document as the Committee, in its sole discretion, determines to be appropriate; provided, however, the Shares shall be freely transferable, and the Committee shall not impose Performance Targets, a Period of Restriction, or any other conditions, restrictions, or risks of forfeiture on the Award. Awards of shares pursuant to this Section shall be subject to the withholding requirements of Article XIV.

ARTICLE XII.

LIMITS ON AWARDS

Notwithstanding any other provision of this Plan to the contrary, the Committee may not grant Awards of Options, SARs, Shares of Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or any grant of Shares pursuant to Article XI that are intended to qualify as Performance-Based Compensation under Code Section 162(m) to any Participant under this Plan during any three-year calendar year period that would result in more than 100,000 Shares being issued to such Participant. The limitations of this Section shall be subject to adjustment as provided in Section 4.04.

ARTICLE XIII.

AMENDMENT, TERMINATION, AND DURATION

Section 13.01. Amendment, Suspension, or Termination .

(a) The Board may supplement, amend, alter, or discontinue the Plan in its sole discretion at any time and from time to time, but no supplement, amendment, alteration, or discontinuation shall be made which would impair the rights of a Participant under an Award theretofore granted without the Participant’s consent, except that any supplement, amendment, alteration, or discontinuation may be made to (i) avoid a material charge or expense to the Company or an Affiliate, (ii) cause this Plan to comply with applicable law, or (iii) permit the Company or an Affiliate to claim a tax deduction under applicable law. In addition, subject to the provisions of this Section, the Board of Directors, in its sole discretion at any time and from time to time, may supplement, amend, alter, or discontinue this Plan without the approval of the Company’s shareholders so long as any such amendment or alteration does not (i) expand the types of awards eligible for grants or materially increase benefits accruing to Participants under the Plan; (ii) materially increase the number of Shares subject to the Plan (other than pursuant to Section 4.04); (iii) materially increase the maximum number of Options, SARs, Shares of Restricted Stock, Restricted Stock Units, Performance Units, Performance Shares, or Shares that the Committee may award to an individual Participant under the Plan (other than pursuant to Section 4.04); (iv) materially expand the classes of persons eligible or modify the requirements for participation in the Plan; (v) delete or materially limit Sections 6.08 and 7.09 of the Plan (prohibiting the repricing of Options or SARs); or (vi) otherwise require approval by the shareholders of the Company in order to comply with applicable law, the terms of a written agreement or the rules of the principal national securities exchange upon which the Shares are traded or quoted. The Committee may supplement, amend, alter, or discontinue the terms of any Award theretofore granted, prospectively or retroactively, on the same conditions and limitations (and exceptions to limitations) as apply to the Board under the foregoing provisions of this Section, subject to any approval or limitations the Board may impose.

(b) If permitted by Code Section 409A and Code Section 162(m), and the regulations thereunder, without resulting in any adverse tax consequences, but subject to Section 13.01(c), in case of termination of employment by reason of death, disability or retirement of a Participant, or in the case of a Change in Control, an unforeseeable emergency or other special circumstances, the Committee may, in its sole discretion, accelerate the exercisability of an Option or SAR, accelerate the time at which any restrictions shall lapse or remove any restrictions with respect to Shares of Restricted Stock and Restricted Stock Units, and reduce or waive any Performance Targets or related business criteria applicable to Performance Shares or Performance Units.

(c) Subject to Sections 6.08 and 7.09 of the Plan (prohibiting the repricing of Options or SARs), the Committee may amend the terms of any Award granted under this Plan prospectively or retroactively, except in the case of an Award intended to qualify as Performance-Based Compensation (other than in connection with the Participant’s death or disability, or a Change in Control) where such action would result in the loss of the otherwise available exemption of the award under Section 162(m) of the Code. In such case, the Committee will not make any modification of the Performance Targets or the level or levels of achievement with respect to such Award. Except as provided in Section 4.04 of the Plan, no amendment of an Award shall impair the rights of the Participant without his or her consent.

Section 13.02. Duration of The Plan and Shareholder Approval . The Plan shall become effective on the Effective Date and shall terminate automatically ten years thereafter, unless terminated pursuant to

its terms before that time. Notwithstanding the preceding sentence, termination of the Plan shall not affect any Award granted before the date of termination, unless expressly provided in the applicable Award Agreement or a duly adopted Plan amendment.

ARTICLE XIV.

TAX WITHHOLDING

Section 14.01. Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to the payment or exercise of an Award, the Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy all federal, state, and local income and employment taxes required to be withheld with respect to the payment or exercise of such Award.

Section 14.02. Withholding Arrangements. The Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part, by (i) electing to have the Company withhold otherwise deliverable Shares (except in the case of exercises of Incentive Stock Options), or (i) delivering to the Company Shares then owned by the Participant having a Fair Market Value equal to the amount required to be withheld; provided, however, that any shares delivered to the Company shall satisfy the ownership requirements specified in Section 6.06(a). In no event will the Fair Market Value of the Shares withheld and delivered to satisfy applicable withholding taxes in connection with the benefit provided under the Plan exceed the minimum amount of taxes required to be withheld. The Fair Market Value of the Shares to be withheld or delivered shall be determined as of the date that the taxes are required to be withheld.

ARTICLE XV.

CHANGE IN CONTROL

For purposes of the Plan, a “Change in Control” shall mean that the conditions or events set forth in any one or more of the following subsections shall have occurred:

(a) the acquisition by any person (within the meaning of Section 13(d) of the Exchange Act), other than the Company, a subsidiary, and any employee benefit plan of the Company or a subsidiary, of twenty-five percent (25%) or more of the combined voting power entitled to vote generally in the election of the directors of the Company’s then outstanding voting securities;

(b) the persons who were serving as the members of the Board of Directors immediately prior to the commencement of a proxy contest relating to the election of directors or a tender or exchange offer for voting securities of the Company (“Incumbent Directors”) shall cease to constitute at least a majority of the Board of Directors (or the board of directors of any successor to the Company) at any time within one year of the election of directors as a result of such contest or the purchase or exchange of voting securities of the Company pursuant to such offer, provided that any director elected to the Board of Directors, or nominated for election, by a majority of the Incumbent Directors then still in office and whose nomination or election was not made at the request or direction of the person(s) initiating such contest or making such offer shall be deemed to be an Incumbent Director for purposes of this Subsection (b);

(c) consummation of a merger, reorganization, or consolidation of the Company, as a result of which persons who were shareholders of the Company immediately prior to such merger, reorganization, or consolidation do not, immediately thereafter, own, directly or indirectly and in substantially the same

proportions as their ownership of the stock of the Company immediately prior to the merger, reorganization, or consolidation, more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of (i) the merged, reorganized, or consolidated company or (ii) an entity that, directly or indirectly, owns more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the company described in clause (i);

(d) a sale, transfer, or other disposition of all or substantially all of the assets of the Company, which is consummated and immediately following which the persons who were shareholders of the Company immediately prior to such sale, transfer, or disposition, do not own, directly or indirectly and in substantially the same proportions as their ownership of the stock of the Company immediately prior to the sale, transfer, or disposition, more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of (i) the entity or entities to which such assets are sold or transferred or (ii) an entity that, directly or indirectly, owns more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the entities described in clause (i); or

(e) the shareholders of the Company approve a liquidation of the Company.

ARTICLE XVI.

MISCELLANEOUS

Section 16.01. Mistake of Fact. Any mistake of fact or misstatement of facts shall be corrected when it becomes known by a proper adjustment to an Award or Award Agreement.

Section 16.02. Evidence . Evidence required of anyone under the Plan may be by certificate, affidavit, document, or other information which the person relying thereon considers pertinent and reliable, and signed, made, or presented by the proper party or parties.

Section 16.03. Notices . Any notice or document required to be given to or filed with the Committee will be properly given or filed if hand delivered (and a delivery receipt is received) or mailed by certified mail, return receipt requested, postage paid, to the Committee at 1065 Ashley Street, Suite 150, Bowling Green, Kentucky 42103.

Section 16.04. No Effect on Employment or Service. Neither the Plan, the grant of an Award, or the execution of an Award Agreement shall confer upon any Participant any right to continued employment by the Company or an Affiliate or interfere with or limit in any way the right of the Company or an Affiliate to terminate any Participant’s employment or service at any time, with or without Cause. Employment with the Company and its Affiliates is on an at-will basis only, unless otherwise provided by a written employment or severance agreement, if any, between the Participant and the Company or Affiliate, as the case may be. If there is any conflict between the provisions of the Plan and an employment or severance agreement between a Participant and the Company or an Affiliate, the provisions of such employment or severance agreement shall control, including, but not limited to, the vesting and forfeiture of any Awards.

Section 16.05. No Company Obligation. Unless required by applicable law, the Company, an Affiliate, the Board of Directors, and the Committee shall not have any duty or obligation to disclose material information to a record or beneficial holder of Shares or an Award, and such holder shall have no

right to be advised of any material information regarding the Company or any Affiliate at any time prior to, upon, or in connection with the receipt, exercise, or distribution of an Award.

Section 16.06. Participation. No Employee shall have the right to be selected to receive an Award, or, having been selected, to be selected to receive a future Award. Participation in the Plan will not give any Participant any right or claim to any benefit under the Plan, unless such right or claim has accrued under the express terms of the Plan.

Section 16.07. Liability and Indemnification. No member of the Board, the Committee, or any officer or employee of the Company or any Affiliate shall be personally liable for any action, failure to act, decision, or determination made in good faith in connection with the Plan. By participating in the Plan, each Participant agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers, and employees) and the Committee from and against any tax liability, including, but not limited to, interest and penalties, incurred by the Participant in connection with his receipt of Awards under the Plan and the payment and exercise thereof. Each person who is or shall have been a member of the Committee or the Board or served as an officer of the Company or any of its Subsidiaries shall be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense (including, but not limited to, attorneys’ fees) that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award Agreement, and (ii) any and all amounts paid by him or her in settlement thereof, with the Company’s prior written approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her; provided, however, that he or she shall give the Company an opportunity, at the Company’s expense, to handle and defend such claim, action, suit, or proceeding before he or she undertakes to handle and defend the same on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or By-Laws, by contract, as a matter of law or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.

Section 16.08. Successors . All obligations of the Company hereunder with respect to Awards shall be binding on any successor to the Company, whether or not the existence of such successor is the result of a Change in Control of the Company. The Company shall not, and shall not permit its Affiliates to, recommend, facilitate, or agree or consent to a transaction or series of transactions that would result in a Change in Control of the Company unless and until the person or persons or entity or entities acquiring control of the Company as a result of such Change in Control agree(s) to be bound by the terms of the Plan insofar as it pertains to Awards theretofore granted and agrees to assume and perform the obligations of the Company hereunder.

Section 16.09. Nontransferability of Awards. Except as provided in Subsection (a) or (b), no Award can be sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged, or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, other than by will or by the laws of descent and distribution. In addition, no Award shall be subject to execution, attachment, or similar process. In no event may any Award be transferred for value. Any attempted or purported transfer of an Award in contravention of the Plan or an Award Agreement shall be null and void ab initio and of no force or effect whatsoever. All rights with respect to an Award granted to a Participant shall be exercisable during his or her lifetime only by the Participant.

(a) Limited Transfers of Nonqualified Stock Options. Notwithstanding the foregoing, the Committee may, in its sole discretion, permit the transfer of Nonqualified Stock Options by a Participant to: (i) the Participant’s spouse, any children or lineal descendants of the Participant or the Participant’s spouse, or the spouse(s) of any such children or lineal descendants (Immediate Family Members), (ii) a trust or trusts for the exclusive benefit of Immediate Family Members, or (iii) a partnership or limited liability company in which the Participant and/or the Immediate Family Members are the only equity owners, (collectively, Eligible Transferees); provided, however, that, if the Committee permits the transfer of Nonqualified Stock Options granted to the Participant, the Committee may subsequently, in its sole discretion, amend, modify, revoke, or restrict, without the prior consent, authorization, or agreement of the Eligible Transferee, the ability of the Participant to transfer Nonqualified Stock Options that have not been already transferred to an Eligible Transferee. An Option that is transferred to an Immediate Family Member shall not be transferable by such Immediate Family Member, except for any transfer by such Immediate Family Member’s will or by the laws of descent and distribution upon the death of such Immediate Family Member. Incentive Stock Options granted shall not be transferable pursuant to this Subsection.

(b) Exercise by Eligible Transferees. If the Committee, in its sole discretion, permits the transfer of Nonqualified Stock Options by a Participant to an Eligible Transferee under Subsection (a), the Options transferred to the Eligible Transferee must be exercised by such Eligible Transferee and, in the event of the death of such Eligible Transferee, by such Eligible Transferee’s executor or administrator only in the same manner, to the same extent, and under the same circumstances (including, but not limited to, the time period within which the Options must be exercised) as the Participant could have exercised such Options. The Participant, or in the event of his or her death, the Participant’s estate, shall remain liable for all federal, state, local, and other taxes applicable upon the exercise of a Nonqualified Stock Option by an Eligible Transferee.

Section 16.10. No Rights as Shareholder. Except as expressly provided in Article VIII, no Participant (or any Beneficiary) shall have any of the rights or privileges of a shareholder of the Company with respect to any Shares issuable pursuant to an Award (or the exercise thereof), unless and until certificates representing such Shares shall have been recorded on the Company’s official shareholder records (or the records of its transfer agents or registrars) as having been issued and transferred to the Participant (or his or her Beneficiary).

Section 16.11. Funding . Benefits payable under this Plan to any person shall be paid by the Company from its general assets. Shares to be distributed hereunder shall be issued directly by the Company from its authorized but unissued Shares or acquired by the Company on the open market, or a combination thereof. Neither the Company nor any of its Affiliates shall be required to segregate on their books or otherwise establish any funding procedure for any amount to be used for the payment of benefits under this Plan. The Company or any of its Affiliates may, however, in their sole discretion, set funds aside in investments to meet any anticipated obligations under this Plan. Any such action or set-aside shall not be deemed to create a trust of any kind between the Company or any of its Affiliates and any Participant or other person entitled to benefits under the Plan or to constitute the funding of any Plan benefits. Consequently, any person entitled to a payment under the Plan will have no rights greater than the rights of any other unsecured general creditor of the Company or its Affiliates.

Section 16.12. Compliance with Code Section 409A .

(a) To the extent applicable, it is intended that the Plan and any grants made hereunder comply with (or be exempt from) the provisions of Code Section 409A, so that the income inclusion provisions of

Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Code Section 409A will also include any regulations or any other formal guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

(b) Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Code Section 409A) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment, or garnishment. Except as permitted under Code Section 409A, any deferred compensation (within the meaning of Code Section 409A) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owing by a Participant to the Company or any of its Subsidiaries.

(c) If, at the time of a Participant’s separation from service (within the meaning of Code Section 409A), (i) the Participant is a specified employee (within the meaning of Code Section 409A and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Code Section 409A) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Code Section 409A in order to avoid taxes or penalties under Code Section 409A, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the tenth business day of the seventh month after such separation from service.

(d) Notwithstanding any provision of the Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Code Section 409A, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Code Section 409A. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Code Section 409A), and neither the Company nor any of its affiliates will have any obligation to provide the Participant with any tax gross-up or indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.

Section 16.13. Recoupment . The Plan will be administered in compliance with Section 10D of the Act, any applicable rules or regulations promulgated by the Securities and Exchange Commission or any national securities exchange or national securities association on which the Shares may be traded, and any Company policy adopted pursuant to such law, rules, or regulations. In its discretion, moreover, the Committee may require repayment to the Company of all or any portion of any Award if the amount of the Award was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement of the Company’s financial statements, the Participant engaged in misconduct that caused or contributed to the need for the restatement of the financial statements, and the amount payable to the Participant would have been lower than the amount actually paid to the Participant had the financial results been properly reported. This Section 16.13 will not be the Company’s exclusive remedy with respect to such matters.

Section 16.14. Use of Proceeds. The proceeds received by the Company from the sale of Shares pursuant to the Plan will be used for general corporate purposes.

	CITIZENS FIRST CORPORATION

	By:	/s/Todd Kanipe
		Todd Kanipe, President and
		Chief Executive Officer

Exhibit 10.1

CITIZENS FIRST CORPORATION

2015 INCENTIVE COMPENSATION PLAN

PERFORMANCE UNITS AWARD AGREEMENT

This Award Agreement (“Agreement”) is entered into as of , (“Grant Date”), by and between Citizens First Corporation, a Kentucky corporation (“Company”), and an officer or employee of the Company or one of its Affiliates (“Participant”).

Background

A. The Company adopted the Citizens First Corporation 2015 Incentive Compensation Plan (“Plan”) to further the growth and financial success of the Company and its Affiliates by aligning the interests of participating officers and key employees (“participants”) more closely with those of the Company’s shareholders, providing participants with an additional incentive for excellent individual performance, and promoting teamwork among participants.

B. The Company believes that the goals of the Plan can be achieved by granting Performance Units to eligible officers and other key employees.

C. The Compensation Committee of the Board has determined that a grant of Performance Units to the Participant, as provided in this Award Agreement, is in the best interests of the Company and its Affiliates and furthers the purposes of the Plan.

D. The Participant wishes to accept the Company’s grant of Performance Units, subject to the terms and conditions of this Award Agreement and the Plan.

Agreement

In consideration of the premises and the mutual covenants herein contained, the Company and the Participant agree as follows:

1. Defined Terms . For purposes of this Agreement, if the first letter of a word (or each word in a term) is capitalized, the term shall have the meaning provided in this Agreement, or if such term is not defined by this Agreement, the meaning specified in the Plan.

(a) “Appendix A” means Appendix A to this Agreement, which is hereby incorporated herein and made a part hereof. Appendix A describes the performance factors and goals with respect to the Performance Units.

(b) “Superior Performance” means the Performance Goal achievement required for the maximum permissible distribution with respect to a Performance Unit, as set out in Appendix A.

(c) “Threshold Performance” means the Threshold Performance Goal achievement required for any distribution to be made with respect to a Performance Unit, as set out in Appendix A.

(d) “Performance Goal” means a financial target on which the distribution with respect to a Performance Unit is based, as set out in Appendix A.

(e) “Performance Period” means the Performance Period specified in Appendix A.

(f) “Performance Unit” means a contingent right awarded pursuant to this Agreement for distribution of a Share upon attainment of the Performance Goals as set forth in Appendix A.

(g) “Section” refers to a Section of this Agreement.

(i) “Share Distribution” means, with respect to a Performance Unit, the total number of Shares to be distributed to the Participant.

(j) “Target Performance” means the Performance Goal achievement required for the targeted distribution with respect to an Performance Unit, as set out in Appendix A. If Target Performance is achieved but not exceeded for all Performance Goals, the Share Distribution with respect to a Performance Unit is one share of the Company’s voting common stock (“Share”).

2. Incorporation of Plan Terms. All provisions of the Plan, including definitions (to the extent that a different definition is not provided in this Agreement), are incorporated herein and expressly made a part of this Agreement by reference. The Participant hereby acknowledges that he or she has received a copy of the Plan.

3. Award of Performance Units . The Committee has awarded the Participant Performance Units, effective as of the Grant Date, subject to the terms and conditions of the Plan and this Agreement.

4. Contingent Distribution on Account of Performance Units.

(a) Except as provided in Section 5, no distribution shall be made with respect to any Performance Unit, unless (i) the respective Threshold Performance is achieved or exceeded in accordance with the Performance Goal set out in Appendix A, and (ii) the Participant (A) is continually employed by the Company and/or an Affiliate at all times from the award of the Performance Units until the date on which Shares are distributed pursuant to Subsection (c) below; provided, however, the Committee may, in its discretion, waive the continuous employment requirement in this clause (ii), or (B) Terminates Service during the Performance Period on account of the Participant’s death, Disability, or Retirement.

(b) All distributions on account of a Performance Unit shall be made in the form of Shares. The Share Distribution with respect to a Performance Unit, if any, is dependent on the Company’s achievement of the Performance Goals, as specified in Appendix A. By way of example, if Target Performance for the Performance Period is achieved but not exceeded with

respect to each Performance Goal, the Share Distribution shall consist of one share of the Company’s voting common stock (“Share”). The number of Shares distributed on account of a Performance Unit shall be reduced by applicable tax withholding as provided in Section 9. If, after reduction for tax withholding, the Participant is entitled to a fractional Share, the net number of Shares distributed to the Participant shall be rounded down to the next whole number of Shares.

(c) Except as expressly provided in Section 5, the Company shall distribute the Share Distribution, reduced to reflect tax withholding, on the date the Company files its Form 10-K with the U.S. Securities and Exchange Commission in the calendar year following the year in which the Performance Period ends.

(d) Notwithstanding any other provision of this Agreement, the Committee may, in its sole discretion, reduce the number of Shares that may be distributed as determined pursuant to the Share Distribution calculation set forth above. The preceding sentence shall not apply to a distribution made pursuant to Section 5.

(e) If a Participant Terminates Service during the Performance Period on account of Participant’s Disability or Retirement, Participant’s Performance Units shall remain outstanding as if Participant had not Terminated Service, and payments with respect to such Performance Units shall be made at the same time and subject to the same performance requirements as payments that are made to Participants who did not incur a Termination of Service during the applicable Performance Period.

(f) If a Participant Terminates Service due to death during the Performance Period, the performance requirements with respect to the Participant’s Performance Units shall lapse, and the Participant’s Beneficiary shall, on the date of such Termination of Service, be fully entitled to payment under such Performance Units as if targeted performance had been achieved and the Performance Period ended on the date of the Participant’s death, and such payments shall be made within sixty (60) days after the Participant’s death.

5. Change in Control . If a Change in Control occurs during the Performance Period, and the Participant has been continually employed by the Company and/or an Affiliate from the Grant Date until the day preceding the Change in Control date, the Company shall distribute to the Participant on the Change in Control date or within thirty (30) days thereafter the number of Shares actually earned through the date of the Change in Control (pro-rated for the portion of the Performance Period served through the date of the Change in Control), that would have been paid to the Participant pursuant to Section 4, if (i) the Participant had satisfied the employment requirement of Subsection 4(a), and (ii) the Performance Period ended on the Change in Control date with earned Performance Units to be calculated based on actual Company performance relative to the Performance Goals as of the Change in Control date. The Committee, in its sole discretion, may elect for the Company to pay the Participant, in lieu of distributing Shares, the cash equivalent of the Shares to be distributed to the Participant pursuant to this Section. Upon such cash payment or distribution of Shares, the Company’s obligations with respect to the Performance Units shall end.

6. Performance Goals . The applicable Performance Goals, the weight given to each Performance Goal, and the Threshold Performance, Target Performance, and Superior Performance are set out in Appendix A.

7. Participant’s Representations . The Participant agrees, upon request by the Company and before the distribution of Shares with respect to the Performance Units, to provide written investment representations as reasonably requested by the Company.

8. Income and Employment Tax Withholding . All required federal, state, city, and local income and employment taxes that arise on account of the Performance Units shall be satisfied through the withholding of Shares otherwise distributable pursuant to this Agreement.

9. Nontransferability . The Participant’s interest in the Performance Units or any distribution with respect to such units may not be (i) sold, transferred, assigned, margined, encumbered, bequeathed, gifted, alienated, hypothecated, pledged, or otherwise disposed of, whether by operation of law, whether voluntarily or involuntarily or otherwise, other than by will or by the laws of descent and distribution, or (ii) subject to execution, attachment, or similar process. Any attempted or purported transfer in contravention of this Section shall be null and void ab initio and of no force or effect whatsoever.

10. Indemnity . The Participant hereby agrees to indemnify and hold harmless the Company and its Affiliates (and their respective directors, officers and employees), and the Committee, from and against any and all losses, claims, damages, liabilities and expenses based upon or arising out of the incorrectness or alleged incorrectness of any representation made by Participant to the Company or any failure on the part of the Participant to perform any agreements contained herein. The Participant hereby further agrees to release and hold harmless the Company and its Affiliates (and their respective directors, officers and employees) from and against any tax liability, including without limitation, interest and penalties, incurred by the Participant in connection with his or her participation in the Plan.

11. Changes in Shares . In the event of any change in the Shares, as described in Section 4.04 of the Plan, the Committee, consistent with the principles set out in such Section, will make appropriate adjustment or substitution in the number of Performance Units, so that the contingent economic value of a Performance Units remains substantially the same. The Committee’s determination in this respect will be final and binding upon all parties.

12. Effect of Headings . The descriptive headings used in this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

13. Controlling Laws . Except to the extent superseded by the laws of the United States, the laws of the Commonwealth of Kentucky, without reference to the choice of law principles thereof, shall be controlling in all matters relating to this Agreement.

14. Counterparts . This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which collectively will constitute one and the same instrument.

15. Recoupment/Clawback. Any grant of Performance Units under this Agreement or any other award granted or paid to the Participant under the Plan, whether in the form of stock options, stock appreciation rights, restricted stock, performance units, performance units or stock, is subject to recoupment or “clawback” by the Company in accordance with applicable law. This Section, “Recoupment/Clawback,” shall survive termination of this Agreement.

IN WITNESS WHEREOF, the Company, by its officer thereunder duly authorized, and the Participant, have caused this Performance Unit Award Agreement to be executed as of the day and year first above written.

PARTICIPANT

Accepted By:

Printed Name:

Date: , 2015

CITIZENS FIRST CORPORATION

By:

Title:

APPENDIX A TO 2015 PERFORMANCE UNITS AWARD AGREEMENT

Grant Date: ,

Performance Units Awarded:

Performance Period: January 1, 2015 through December 31, 2017

Factors for Determining Amount Payable Pursuant to Performance Award

The number of Shares payable on account of a Performance Unit (before tax withholding) will be based on the results of the following performance factors (“Performance Factors”) during the Performance Period:

Return on Average Assets (ROA)

Non-Performing Assets to Total Assets Ratio (NPAs)

Net Charge-Offs to Average Total Loans Ratio (NCOs)

Definitions Related to Performance Factors

Return on Average Assets (ROA) : Return on Average Assets is defined as GAAP ROA, as reported in the Company’s Form 10-K for the fiscal year excluding, however, extraordinary items and non-recurring charges, both as determined under GAAP.

Non-Performing Assets to Total Assets Ratio : As reported in the Company’s Form 10-K for the fiscal year.

Net Charge-Offs to Average Total Loans Ratio : As reported in the Company’s Form 10-K for the fiscal year.

Performance Weighting Fraction

“Performance Weighting Fraction” means the relative importance of each performance measure in evaluating performance and determining the number of Shares to be distributed (before tax withholding) with respect to each Performance Unit. The following weights have been assigned to the Performance Factors:

Return on Average Assets 70%

Non-Performing Assets to Total Assets Ratio 15%

Net Charge-Offs to Average Total Loans 15%

Calculation of Performance

For each Performance Factor, the performance level will be determined at the end of the Performance Period. The performance level will then be multiplied by the Performance Weighting Fraction, resulting in the Company’s Performance Level. The table below shows the percentage of Shares to be issued with respect to each Performance Unit (before tax withholding) at various performance levels:

PERFORMANCE BASED UNITS

Performance Period - 2015 to 2017

Performance Range Schedule - ROA

Performance Weight

Performance Range	ROA		Percent of Incentive Earned
SUPERIOR	0.98	%	150	%
	0.93	%	125	%
TARGET	0.88	%	100	%
	0.86	%	80	%
	0.84	%	60	%
	0.82	%	40	%
	0.80	%	20	%
THRESHOLD	0.78	%	0	%

Performance Range Schedule - NPAs

Performance Weight

Performance Range	NPAs		Percent of Incentive Earned
SUPERIOR	0.50	%	150	%
	0.75	%	125	%
TARGET	1.00	%	100	%
	1.10	%	80	%
	1.20	%	60	%
	1.30	%	40	%
	1.40	%	20	%
THRESHOLD	1.50	%	0	%

Performance Range Schedule - NCOs

Performance Weight

Performance Range	NCOs		Percent of Incentive Earned
SUPERIOR	0.05	%	150	%
	0.075	%	125	%
TARGET	0.10	%	100	%
	0.15	%	50	%
THRESHOLD	0.20	%	0	%

Example: The following example shows the Share Distribution on account of 2,000 Performance Units, based on an ending period ROA of 1.10%, NPAs of 1.15% and NCOs of 0.20%.

	ROA
Actual Results	1.10	%
Performance Level (a)	100	%
Factor Weight (b)	70	%
Shares Issued With Respect to the Performance Units (before Withholding)	1,400

	NPA
Actual Results	1.15	%
Performance Level (a)	40	%
Factor Weight (b)	15	%
Shares Issued With Respect to the Performance Units (before Withholding)	120

	NCO
Actual Results	0.20	%
Performance Level (a)	100	%
Factor Weight (b)	15	%
Shares Issued With Respect to the Performance Units (before Withholding)	300

Timing of Award Determination and Distribution

Once performance results for the Company are known and approved by the auditors, the Compensation Committee will review and approve the final performance results for the Performance Factor. The Compensation Committee reserves the right to use negative discretion to reduce the amount of any payment. The Shares will be distributed in accordance with the timing set forth in Section 4(c) of this Agreement.

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

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: August 10, 2015

/s/M. Todd Kanipe
M. Todd Kanipe
President and Chief Executive Officer

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;

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

(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: August 10, 2015

/s/J. Steven Marcum
J. Steven Marcum
Executive Vice President and Chief Financial Officer

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 June 30, 2015, 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: August 10, 2015

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.

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 June 30, 2015, 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: August 10, 2015