Citizens Holding Company

Press Release

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July 23, 2019 at 4:15 PM EDT

Citizens Holding Company Reports Earnings

PHILADELPHIA, Miss.--(BUSINESS WIRE)--Jul. 23, 2019-- Citizens Holding Company (NASDAQ:CIZN) announced today results of operations for the three and six months ended June 30, 2019.

As previously announced during the second quarter of 2019, Citizens Holding Company (“Citizens” or “Company”), the parent company of The Citizens Bank of Philadelphia (“Citizens Bank” or “Bank”) announced the signing of a definitive merger agreement to acquire Charter Bank (“Charter”). Upon completion of the merger, Charter will merge into Citizens Bank. Subject to the terms of the merger agreement, Charter shareholders will receive 0.39417 shares of Citizens’ common stock and $3.615 in cash for each outstanding share of Charter common stock, which equates to an aggregate deal value of $20.0 million based on the closing price on May 20, 2019 of $20.90. The merger is expected to close in the fourth quarter of 2019, pending customary closing conditions, including receipt of required regulatory approvals and the approval by the shareholders of Charter.

Net income for the three months ended June 30, 2019 was $1.371 million, or $0.28 per share-basic and diluted, a decrease of $318 thousand from a net income of $1.689 million, or $0.35 per share-basic and diluted for the same quarter in 2018. The majority of the decrease relates to an increase in the interest paid on interest bearing liabilities partially offset by an increase in interest income, non-interest income and a decrease in non-interest expense.

Net interest income for the second quarter of 2019, after the provision for loan losses, was $5.941 million, approximately 13.4% lower than the same period in 2018. The provision for loan losses for the three months ended June 30, 2019 was $265 thousand compared to a provision for loan losses of $89 thousand for the same period in 2018. The increase in the provision reflects management’s estimate of inherent losses in the loan portfolio including the impact of current local and national economic conditions and an increase in total loans outstanding. The net interest margin was 2.65% for the second quarter of 2019 compared to 3.14% for the same period in 2018. This decrease was due to an increase in interest rates paid on interest bearing liabilities partially offset by an increase in yields on interest bearing assets.

Non-interest income decreased in the second quarter of 2019 by $6 thousand, or 0.3%, while non-interest expenses decreased $624 thousand, or 9.0%, compared to the same period in 2018. The decrease in non-interest income was mainly the result of losses from security sales due to strategic investment decisions and a decrease in mortgage loan origination income from long-term mortgages originated for sale in the secondary market partially offset by an increase in other income. Non-interest expense decreased due to a reduction in salaries and employee benefits, occupancy expense and other non-interest expenses. The decrease in other non-interest expense was due mainly to a refund of excess prepaid postage and cost containment throughout the Company partially offset by an increase in one-time legal and consulting fees related to the acquisition of Charter.

Net income for the six months ended June 30, 2019 decreased 24.9% to $2.598 million, or $0.53 per share-basic and diluted, from $3.461 million, or $0.71 per share-basic and diluted, for the six months ended June 30, 2018.

Net interest income for the six months ended June 30, 2019, after the provision for loan losses, decreased 14.0% to $11.956 million from $13.905 million for the same period in 2018. Net interest margin for the six months ended June 30, 2019, decreased to 2.69% in 2019 from 3.12% in the same period in 2018. The provision for loan losses for the six months ended June 30, 2019 was $460 thousand compared to a recovery of loan losses of $148 thousand in 2018. The increase in the provision for loan losses was discussed previously.

Non-interest income decreased by $59 thousand, or 1.4%, and non-interest expense decreased by $1.032 million, or 7.4%, for the six months ended June 30, 2019 when compared to the same period in 2018. The decrease in other non-interest income and other non-interest expense was discussed previously.

Total assets as of June 30, 2019 increased to $1.034 billion, up $75.401 million, or 7.9%, when compared to $958.630 million at December 31, 2018. Deposits increased by $38.637 million, or 5.1%, and loans, net of unearned income, increased by $36.459 million, or 8.5%, when compared to December 31, 2018. The increase in loans, net of unearned income, was due to new loan demand in excess of loan paydowns. Non-performing assets increased by $1.232 million to $14.584 million at June 30, 2019 as compared to $13.352 million at December 31, 2018, due to an increase in non-accrual loans partially offset by a decrease in loans 90 days or more past due and still accruing interest and other real estate owned.

During the six months ended June 30, 2019, the Company paid dividends totaling $0.48 per share.

Citizens and its wholly-owned subsidiary, Citizens Bank, are both headquartered in Philadelphia, Mississippi. The Bank currently has twenty-four banking locations in fourteen counties in East Central and South Mississippi and a Loan Production Office in Oxford, Mississippi to offer loan services to north Mississippi. In addition to full service commercial banking, the Bank offers mortgage loans, title insurance services through its subsidiary, Title Services, LLC, and a full range of Internet banking services including online banking, bill pay and cash management services for businesses. Internet banking services are available at the Bank’s website, www.thecitizensbankphila.com. Citizens stock is listed on the NASDAQ Global Market and is traded under the symbol CIZN. The Company’s transfer agent is American Stock Transfer & Trust Company. Information about Citizens may be obtained by accessing its corporate website at www.citizensholdingcompany.com.

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements other than statements of historical facts included in this release regarding the Company’s financial position, results of operations, business strategies, plans, objectives and expectations for future operations, are forward looking statements. The Company can give no assurances that the assumptions upon which such forward-looking statements are based will prove to have been correct. Forward-looking statements speak only as of the date they are made. The Company does not undertake a duty to update forward-looking statements to reflect circumstances or events that occur after the date the forward-looking statements are made. Such forward-looking statements are subject to certain risks, uncertainties and assumptions. The risks and uncertainties that may affect the operation, performance, development and results of the Company’s and the Bank’s business include, but are not limited to, the following: (a) the risk of adverse changes in business conditions in the banking industry generally and in the specific markets in which the Company operates; (b) changes in the legislative and regulatory environment that negatively impact the Company and Bank through increased operating expenses; (c) increased competition from other financial institutions; (d) the impact of technological advances; (e) expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions; (f) changes in asset quality and loan demand; (g) expectations about overall economic strength and the performance of the economics in the Company’s market area; and (h) other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission. Should one or more of these risks materialize or should any such underlying assumptions prove to be significantly different, actual results may vary significantly from those anticipated, estimated, projected or expected.

 
 
 

Citizens Holding Company
Financial Highlights
(amounts in thousands, except share and per share data)

 

 

For the Three Months Ending

For the Six Months Ending

 

June 30,

March 31,

June 30,

June 30,

June 30,

 

2019

2019

2018

2019

2018

INTEREST INCOME

Loans, including fees

$5,830

$5,450

$4,984

$11,280

$9,701

Investment securities

2,738

2,699

2,734

5,437

5,557

Other interest

82

235

60

317

120

8,650

8,384

7,778

17,034

15,378

 

INTEREST EXPENSE

Deposits

1,916

1,729

516

3,645

1,017

Other borrowed funds

528

445

310

973

604

2,444

2,174

826

4,618

1,621

 

NET INTEREST INCOME

6,206

6,210

6,952

12,416

13,757

 

PROVISION FOR (REVERSAL OF) LOAN LOSSES

265

195

89

460

(148)

 

 

 

 

 

NET INTEREST INCOME AFTER PROVISION FOR (REVERSAL OF) LOAN LOSSES

5,941

6,015

6,863

11,956

13,905

 

NON-INTEREST INCOME

Service charges on deposit accounts

1,046

1,097

1,067

2,143

2,211

Other service charges and fees

769

684

718

1,453

1,386

Other non-interest income

257

266

293

523

581

2,072

2,047

2,078

4,119

4,178

 

NON-INTEREST EXPENSE

Salaries and employee benefits

3,469

3,547

3,675

7,016

7,343

Occupancy expense

1,409

1,423

1,362

2,832

2,887

Other non-interest expense

1,444

1,670

1,909

3,114

3,764

6,322

6,640

6,946

12,962

13,994

 

NET INCOME BEFORE TAXES

1,691

1,422

1,995

3,113

4,089

 

INCOME TAX EXPENSE

320

195

306

515

628

 

NET INCOME

$1,371

$1,227

$1,689

$2,598

$3,461

 

Earnings per share - basic

$0.28

$0.25

$0.35

$0.53

$0.71

 

Earnings per share - diluted

$0.28

$0.25

$0.35

$0.53

$0.71

 

Dividends Paid

$0.24

$0.24

$0.24

$0.48

$0.48

 

Average shares outstanding - basic

4,897,970

4,892,530

4,889,772

4,895,265

4,886,258

 

Average shares outstanding - diluted

4,900,891

4,895,128

4,894,792

4,897,962

4,893,987

 
 
 

For the Period Ended,

June 30,

March 31,

December 31,

2019

2019

2018

Period End Balance Sheet Data:

Total assets

$1,034,031

$1,057,392

$958,630

Total earning assets

953,317

984,794

885,416

Loans, net of unearned income

465,736

447,470

429,277

Allowance for loan losses

3,821

3,560

3,372

Total deposits

794,859

840,160

756,222

Short-term borrowings

12,000

-

-

Long-term borrowings

10

11

15

Shareholders' equity

 

 

96,136

90,579

83,866

Book value per share

$19.57

$18.47

$17.09

 

 

 

Period End Average Balance Sheet Data:

Total assets

$1,019,184

$1,006,484

$971,893

Total earning assets

943,158

929,677

894,099

Loans, net of unearned income

445,985

435,033

418,136

Total deposits

809,954

803,278

760,992

Short-term borrowings

1,662

-

20,986

Long-term borrowings

12

13

512

Shareholders' equity

87,995

86,136

83,907

 

 

 

Period End Non-performing Assets:

Non-accrual loans

$11,157

$10,018

$9,839

Loans 90+ days past due and accruing

44

20

73

Other real estate owned

3,383

3,440

3,440

 

 

 

 
 

As of

June 30,

March 31,

December 31,

2019

2019

2018

 

Year to Date Net charge-offs as a percentage of average net loans

0.00%

0.00%

0.00%

 

Year to Date Performance Ratios:

Return on average assets(1)

0.51%

0.49%

0.69%

Return on average equity(1)

5.90%

5.70%

7.95%

 

Year to Date Net Interest Margin (tax equivalent)(1)

2.69%

2.74%

3.05%

 

 (1) Annualized

 

 

 

Source: Citizens Holding Company

Citizens Holding Company, Philadelphia
Robert T. Smith, 601/656-4692
rsmith@tcbphila.com