Press Release

Citizens Holding Company Reports Earnings
(in thousands, except share and per share data)
Net income for the three months ended
Net income for the nine months ended
In light of the ongoing events surrounding the COVID-19 pandemic, the Company is continually assessing the effects of the pandemic to its employees, customers and communities. While the ultimate impact of the crisis cannot be accurately predicted at this point, the Company is well-capitalized and has the financial stability to continue to serve its customers and communities during this unprecedented time.
Third Quarter Highlights
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Total revenues, or interest and noninterest income, for the three months ended
September 30, 2020 totaled$13,216 , an increase of$619 or 4.9%, compared to the three months endedJune 30, 2020 , and an increase of$2,265 , or 20.7%, compared to the three months endedSeptember 30, 2019 . -
Beginning in the second quarter of 2020, the Bank participated as a lender in the Small Business Administration’s (“SBA”) and
U.S. Department of Treasury’s Paycheck Protection Program (“PPP”) as established by the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”). The PPP loans are generally 100% guaranteed by the SBA. AtSeptember 30, 2020 , the balance of PPP loans was$48,830 and the Company had recognized$578 in PPP fee income for the nine months endedSeptember 30, 2020 . -
Total loans increased
$19,438 , or 3.1%, to$655,634 atSeptember 30, 2020 , compared to$636,196 atJune 30, 2020 , and increased$78,567 , or 13.6%, compared to$577,067 atDecember 31, 2019 . Excluding PPP loans with a total balance of$48,830 atSeptember 30, 2020 , total loans increased$29,737 , or 5.2%, compared toDecember 31, 2019 . -
In response to the COVID-19 pandemic, in the first quarter of 2020, the Bank instituted a 90-day loan deferral program for affected customers and continues to offer assistance to those experiencing financial hardships as a result of the pandemic. At
June 30, 2020 , the Company had$157,948 , or 259 loans, on the deferral program. As ofOctober 15, 2020 , the balance of loans remaining on the 90-day deferral plan was$33,601 , or 16 loans. -
Total deposits increased
$150,161 , or 16.7%, to$1,049,157 atSeptember 30, 2020 , compared to$898,996 atDecember 31, 2019 . Total noninterest-bearing deposits increased$63,356 , or 33.3%, to$253,762 atSeptember 30, 2020 , compared to$190,406 atDecember 30, 2019 . -
The Bank recorded
$247 in provision for loan losses for the quarter endedSeptember 30, 2020 , compared to$622 and$12 for the quarters endedJune 30, 2020 andSeptember 30, 2019 , respectively. The increases in the provision for loan losses in each of the first three quarters of 2020 compared to the same quarters in 2019 are primarily a result of the uncertainty of market conditions brought about by the COVID-19 pandemic. -
Overall cost of funds decreased 18 basis points (“bps”) to 67 bps for the quarter ended
September 30, 2020 compared to 85 bps for the quarter endedJune 30, 2020 , and decreased 58 bps compared to 125 bps for the quarter endedSeptember 30, 2019 . -
Net interest margin increased 5 bps to 2.81% for the quarter ended
September 30, 2020 compared to 2.76% for the quarterJune 30, 2020 . -
The Company and Bank remain well capitalized with all capital ratios above the regulatory requirements. The Tier 1 capital ratio for the Company and Bank was 13.01% and 12.71%, respectively, atSeptember 30, 2020 , compared to 13.50% and 13.20%, respectively, atJune 30, 2020 .
Net Interest Income
Net interest income for the third quarter of 2020 was
Net interest income for the nine months ended
While most banks are seeing margin compression, we are experiencing an uptick in margin due to the following factors:
- Increase in the volume of loans, excluding PPP loans;
- Increase in the volume of investment securities;
- Decrease in the cost of funds.
Credit Quality
The provision for loan losses for the three months ended
The Company’s non-performing assets decreased
Year-to-date net charge-offs totaled
The Company continues to maintain strong credit quality, but these numbers could change materially, up or down, should the economic recovery from the COVID-19 pandemic last longer than expected or more government stimulus is approved. The overarching theme continues to be uncertainty, but management believes the Company is taking the steps necessary to prepare for the continued uncertainty.
Noninterest Income
Non-interest income increased in the third quarter of 2020 by
Non-interest income increased by
The increase in non-interest income was primarily due to the following factors:
- Increase in mortgage loan origination income due to a decrease in long-term mortgage rates;
- Increase in gains from the sale of investment securities;
- Partially offset by a decrease in overdraft income due to the savings trend related to the COVID-19 pandemic.
Noninterest Expense
Non-interest expense increased in the third quarter of 2020 by
Non-interest expense increased by
The increase in non-interest expense is mainly attributable to residual operational cost increases from the merger with
Dividends
The Company paid aggregate cash dividends in the amount of
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) the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on
Financial Highlights (amounts in thousands, except share and per share data) |
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For the Three Months Ending |
For the Nine Months Ending |
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|
|
|
|
|
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2020 |
2020 |
2019 |
2020 |
2019 |
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INTEREST INCOME |
|||||||||
Loans, including fees |
|
|
|
|
|
||||
Investment securities |
2,766 |
2,464 |
2,291 |
7,227 |
7,728 |
||||
Other interest |
8 |
31 |
213 |
271 |
530 |
||||
10,579 |
10,127 |
8,444 |
30,415 |
25,478 |
|||||
INTEREST EXPENSE |
|||||||||
Deposits |
1,506 |
1,612 |
1,923 |
5,087 |
5,568 |
||||
Other borrowed funds |
167 |
165 |
603 |
687 |
1,576 |
||||
1,673 |
1,777 |
2,526 |
5,774 |
7,144 |
|||||
NET INTEREST INCOME |
8,906 |
8,350 |
5,918 |
24,641 |
18,334 |
||||
PROVISION FOR LOAN LOSSES |
247 |
622 |
12 |
1,183 |
472 |
||||
NET INTEREST INCOME AFTER |
|||||||||
PROVISION FOR LOAN LOSSES |
8,659 |
7,728 |
5,906 |
23,458 |
17,862 |
||||
NON-INTEREST INCOME |
|||||||||
Service charges on deposit accounts |
771 |
668 |
1,126 |
2,488 |
3,269 |
||||
Other service charges and fees |
1,031 |
871 |
864 |
2,675 |
2,317 |
||||
Other non-interest income |
835 |
931 |
517 |
2,325 |
1,040 |
||||
2,637 |
2,470 |
2,507 |
7,488 |
6,626 |
|||||
NON-INTEREST EXPENSE |
|||||||||
Salaries and employee benefits |
4,389 |
4,307 |
3,509 |
13,131 |
10,525 |
||||
Occupancy expense |
1,861 |
2,036 |
1,288 |
5,556 |
4,120 |
||||
Other non-interest expense |
2,403 |
2,001 |
2,071 |
6,377 |
5,185 |
||||
8,653 |
8,344 |
6,868 |
25,064 |
19,830 |
|||||
NET INCOME BEFORE TAXES |
2,643 |
1,854 |
1,545 |
5,882 |
4,658 |
||||
INCOME TAX EXPENSE |
560 |
392 |
212 |
1,177 |
727 |
||||
NET INCOME |
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|
|
|
|
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Earnings per share - basic |
|
|
|
|
|
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Earnings per share - diluted |
|
|
|
|
|
||||
Dividends Paid |
|
|
|
|
|
||||
Average shares outstanding - basic |
5,578,281 |
5,580,340 |
4,900,030 |
5,574,060 |
4,896,871 |
||||
Average shares outstanding - diluted |
5,580,728 |
5,583,789 |
4,901,495 |
5,576,884 |
4,899,192 |
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For the Period Ended, |
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|
|
|
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2020 |
2020 |
2019 |
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Period End Balance Sheet Data: |
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Total assets |
|
|
|
||||||
Total earning assets |
1,284,602 |
1,308,683 |
1,105,163 |
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Gross loans |
655,634 |
636,196 |
577,067 |
||||||
Allowance for loan losses |
4,494 |
4,257 |
3,755 |
||||||
Total deposits |
1,049,157 |
1,075,348 |
898,996 |
||||||
Short-term borrowings |
15,000 |
- |
- |
||||||
Long-term borrowings |
- |
- |
7 |
||||||
Shareholders' equity |
117,498 |
119,369 |
112,800 |
||||||
Book value per share |
|
|
|
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Period End Average Balance Sheet Data: |
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Total assets |
|
|
|
||||||
Total earning assets |
1,215,916 |
1,173,734 |
1,068,683 |
||||||
Gross loans |
613,674 |
596,555 |
561,483 |
||||||
Total deposits |
995,403 |
964,224 |
929,598 |
||||||
Short-term borrowings |
7,377 |
28 |
2,096 |
||||||
Long-term borrowings |
2 |
4 |
10 |
||||||
Shareholders' equity |
117,539 |
116,096 |
96,295 |
||||||
Period End Non-performing Assets: |
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Non-accrual loans |
|
|
|
||||||
Loans 90+ days past due and accruing |
246 |
301 |
257 |
||||||
Other real estate owned |
3,413 |
4,358 |
3,552 |
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As of |
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|
|
|
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2020 |
2020 |
2019 |
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Year to Date Net charge-offs as a |
|||||||||
percentage of average net loans |
0.07% |
0.07% |
0.03% |
||||||
Year to Date Performance Ratios: |
|||||||||
Return on average assets(1) |
0.50% |
0.41% |
0.51% |
||||||
Return on average equity(1) |
5.40% |
4.52% |
6.13% |
||||||
Year to Date Net Interest |
|||||||||
Margin (tax equivalent)(1) |
2.76% |
2.74% |
2.77% |
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(1) Annualized |
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View source version on businesswire.com: https://www.businesswire.com/news/home/20201026005214/en/
Phillip.branch@thecitizensbank.bank
Source: