Citizens Holding Company (CIZN) reported strong financial results for the first quarter of 2024, with a significant increase in net income, total revenues, and non-interest income. The company's loans held for investment and total deposits also showed positive growth. CEO Stacy Brantley highlighted strategic transactions aimed at improving net interest income and balance sheet strength. Despite solid performance, the shift from non-interest bearing to interest-bearing deposits poses margin expansion challenges. Credit quality remained robust, with a decrease in non-performing assets. The company's liquidity and capital position are strong, with reliance on wholesale funding. Overall, Citizens Holding Company demonstrated resilience and strategic focus in a challenging banking environment.
Citizens Holding Company (CIZN) ha riportato risultati finanziari solidi per il primo trimestre del 2024, con un significativo aumento del reddito netto, dei ricavi totali e dei proventi non derivanti da interessi. Anche i prestiti detenuti per investimento e i depositi totali hanno mostrato una crescita positiva. L'amministratore delegato Stacy Brantley ha evidenziato transazioni strategiche volte a migliorare i ricavi netti da interessi e la solidità del bilancio. Nonostante le prestazioni solide, il passaggio da depositi senza interessi a depositi con interessi presenta sfide per l'ampliamento del margine. La qualità del credito è rimasta robusta, con una diminuzione delle attività non performanti. La posizione di liquidità e capitale della società è forte, con una dipendenza dal finanziamento all'ingrosso. Nel complesso, Citizens Holding Company ha dimostrato resilienza e focus strategico in un contesto bancario impegnativo.
Citizens Holding Company (CIZN) informó resultados financieros fuertes para el primer trimestre de 2024, con un aumento significativo en la renta neta, los ingresos totales y los ingresos no derivados de intereses. Los préstamos mantenidos para inversión y los depósitos totales también mostraron un crecimiento positivo. La CEO Stacy Brantley destacó transacciones estratégicas dirigidas a mejorar los ingresos netos por intereses y la fortaleza del balance. A pesar del sólido desempeño, el cambio de depósitos no remunerados a depósitos remunerados plantea desafíos para la expansión del margen. La calidad del crédito se mantuvo robusta, con una disminución en los activos no productivos. La posición de liquidez y capital de la empresa es fuerte, con dependencia de la financiación mayorista. En general, Citizens Holding Company demostró resiliencia y enfoque estratégico en un entorno bancario desafiante.
시티즌스 홀딩 컴퍼니(CIZN)는 2024년도 첫 분기에 강력한 재무 결과를 보고했으며, 순수입, 총 수익, 비이자 수익에서 큰 증가를 기록했습니다. 투자용으로 보유한 대출과 총 예금도 긍정적인 성장을 보였습니다. CEO 스테이시 브랜틀리는 순이자 수익과 대차대조표 강화를 목표로 하는 전략적 거래들을 강조했습니다. 견고한 실적에도 불구하고 비이자 예금에서 이자 예금으로의 전환은 마진 확대에 대한 도전을 제시합니다. 신용 품질은 강력함을 유지하며, 부실 자산은 감소했습니다. 회사의 유동성과 자본 위치는 강력하며, 도매 자금에 대한 의존성이 있습니다. 전반적으로 시티즌스 홀딩 컴퍼니는 도전적인 은행 환경에서 회복력과 전략적 초점을 보여주었습니다.
La Citizens Holding Company (CIZN) a rapporté des résultats financiers solides pour le premier trimestre de 2024, avec une augmentation significative du revenu net, des revenus totaux et des revenus non issus des intérêts. Les prêts détenus pour investissement et les dépôts totaux ont également enregistré une croissance positive. La PDG Stacy Brantley a souligné les transactions stratégiques visant à améliorer le revenu net d'intérêts et la solidité du bilan. Malgré une performance solide, le passage des dépôts non rémunérés aux dépôts rémunérés présente des défis pour l'expansion de la marge. La qualité du crédit est restée robuste, avec une diminution des actifs non performants. La position de liquidité et de capital de l'entreprise est forte, avec une dépendance au financement de gros. Dans l'ensemble, la Citizens Holding Company a démontré de la résilience et une concentration stratégique dans un environnement bancaire difficile.
Die Citizens Holding Company (CIZN) berichtete starke Finanzergebnisse für das erste Quartal 2024, mit einem signifikanten Anstieg beim Nettoeinkommen, den Gesamterlösen und den nicht-zinsabhängigen Einnahmen. Auch die zum Investition gehaltenen Kredite und die Gesamteinlagen verzeichneten ein positives Wachstum. CEO Stacy Brantley hob strategische Transaktionen hervor, die darauf abzielen, das Nettozinseneinkommen und die Bilanzstärke zu verbessern. Trotz solider Leistung stellt der Wechsel von nicht verzinslichen zu verzinslichen Einlagen Herausforderungen bei der Margenausweitung dar. Die Kreditqualität blieb robust, mit einem Rückgang der notleidenden Vermögenswerte. Die Liquiditäts- und Kapitalposition des Unternehmens ist stark, mit einer Abhängigkeit von der Großhandelsfinanzierung. Insgesamt zeigte die Citizens Holding Company Widerstandsfähigkeit und strategischen Fokus in einem herausfordernden Bankenumfeld.
Positive
Strong financial results for Q1 2024 with a significant increase in net income, total revenues, and non-interest income.
Positive growth in loans held for investment (LHFI) and total deposits.
CEO highlighted strategic transactions to improve net interest income and balance sheet strength.
Shift from non-interest bearing to interest-bearing deposits poses margin expansion challenges.
Credit quality remained robust, with a decrease in non-performing assets.
Strong liquidity and capital position with reliance on wholesale funding.
Negative
None.
PHILADELPHIA, Miss.--(BUSINESS WIRE)--
Citizens Holding Company (the “Company”) (OTCQX:CIZN) announced today results of operations for the three months ended March 31, 2024.
(in thousands, except share and per share data)
Net income for the three months ended March 31, 2024 was $2,868, or $0.51 per share-basic and diluted, a linked-quarter increase of $3,662, or 461.21%, from a net loss of ($794), or ($0.14), per share-basic and diluted, for the three months ended December 31, 2023. Net income also increased $1,728, or 151.58%, from net income of $1,140, or $0.20, per share-basic and diluted for the same quarter in 2023.
Fourth Quarter Highlights
Total revenues, or interest and non-interest income, for the three months ended March 31, 2024 totaled $21,213, an increase of $6,020, or 39.62%, from the prior quarter. The increase in total revenue is primarily attributed to an increase of $4,920, or 535.36%, in non-interest income attributed to a one-time gain on a sale-leaseback transaction of $4,535.
Yields on earning assets increased 19 basis point (“bps”) to 461 bps for the three months ended March 31, 2024 compared to 442 bps for the three months ended December 31, 2023 and increased 101 bps compared to 360 bps for the three months ended March 31, 2023.
Loans held for investment (“LHFI”) increased $25,388, or 3.95%, to $667,416 at March 31, 2023, compared to $642,028 at December 31, 2023. With the Company’s strong on-balance sheet liquidity, the Company is in an opportune position, relative to the banking industry, to continue to fund loan demand.
Credit quality continues to remain solid with total non-performing assets (“NPA”) to loans at 54 bps at March 31, 2024 compared to 60 bps at December 31, 2023. Total non-performing assets decreased ($264), or (6.91%), to $3,562 at March 31, 2024, compared to $3,826 at December 31, 2023, and decreased ($615), or (14.73%), compared to $4,177 at March 31, 2023.
Allowance for credit losses (“ACL”) to loans was 1.00% at March 31, 2023 compared to 1.02% in the prior quarter and 1.06% the same period a year ago.
Chief Executive Officer (“CEO”) Commentary
Stacy Brantley, President and Chief Executive Officer of the Company, stated, “The Citizens Bank of Philadelphia (the `Bank'), the wholly owned subsidiary of the Company, continued to execute its strategic balance sheet realignment completing two key transactions during the quarter. The bank sold three branches in a sale leaseback transaction generating a pre-tax gain of $4,535. Additionally, the bank realized a pre-tax loss of $1,574 on the sale of bonds reinvesting the proceeds in higher yielding assets. These transactions are targeted at improving net interest income on a go-forward basis and at buffering the bank’s balance sheet in this volatile rate environment.”
“The Company’s realized solid loan growth of $25,271 in the quarter representing a 3.98% increase in LHFI over the prior quarter end and a 17.73% increase over the prior year quarter ended March 31, 2023. Credit metrics remain strong with past dues and non-performers at historically low levels. Total deposits increased 3.46% over the prior quarter-end and 8.49% over the quarter ended March 31, 2023. While deposit growth was solid, the shift from non-interest bearing to interest bearing deposits as clients more actively manage their funds creates headwinds to margin expansion.”
“The Company’s net interest margin expanded slightly during the quarter, up 5 bps over the prior quarter ended December 31, 2023. “We are encouraged by margin expansion, although slight, in the first quarter. We anticipate continued margin expansion in the subsequent quarter as our strategic transactions become fully baked in and loan growth realized late in the first quarter more fully impacts quarterly earnings.”
“We will continue to evaluate our balance sheet and look for strategic opportunities to improve performance. Our strong on-balance sheet liquidity has us well positioned for growth as we seek to increase long-term value for our shareholders.”
Financial Condition and Results of Operations
Loans and Deposits
Total loans outstanding, net of unearned income, as of March 31, 2024 totaled $667,416 compared to $642,028 at December 31, 2023 and $567,240 as of March 31, 2023.
Total deposits as of March 31, 2024 were $1,210,600 compared to $1,170,077 at December 31, 2023 and $1,115,826 as of March 31, 2023. With the pressure throughout the banking system in regards to deposits, the Company has not experienced material outflows in deposits, but continues to see a shift from noninterest bearing deposits to interest bearing deposits.
Net Interest Income
Net interest income for the three months ended March 31, 2024 was $7,790, an increase of 436, or 5.93%, compared to $7,354 for the three months ended December 31, 2023, and an increase of $112, or 1.46%, compared to $7,678 for the three months ended March 31, 2023. The net interest margin (“NIM”) was 2.40% for the three months ended March 31, 2024 compared to 2.35% for the three months ended December 31, 2023 and 2.56% for the same period in 2023. Management expects continued pressure on NIM given the current interest rate environment, however, the Company saw an uptick in NIM for the three months ended March 31, 2024.
The linked-quarter increase in net interest income is primarily a result of the increase in interest income of $1,100, or 7.71%, partially offset by an increase in interest expense of $664, or 9.60%, compared to the three months ended December 31, 2023. The increase from the same period ended March 31, 2023 is due to an increase in interest income of $4,342, or 39.36%. This increase in interest income is partially offset by an increase in total interest expense of $4,230, or 126.11%, when compared to the same period in 2023. This increase is the direct result of increased loan production partially offset by increased deposit competition primarily caused by higher short-term rates.
Credit Quality
The Company’s NPAs decreased by ($264), or (6.91%), to $3,562 at March 31, 2024 compared to $3,826 at December 31, 2023, and decreased ($615), or (14.73%), compared to $4,177 at March 31, 2023. The primary cause of the decrease year-over-year was due the decrease in non-accrual loans of ($665), or (22.22%).
Net recoveries were $2 for the three months ended March 31, 2024. Year-to-date net recoveries to average loans were 0.00% at March 31, 2024 compared to (0.01%) at March 31, 2023.
The provision for credit losses (“PCL”) for the three months ended March 31, 2024 was $192 compared to $107 for the linked quarter and $6 for the same period a year ago. The PCL was primarily driven by loan growth partially offset by favorable qualitative factor adjustments due to better than expected GDP growth and strong unemployment. Additionally, the Company has not observed material deterioration in local CRE valuations that some of the larger central business districts have experienced. The ACL to LHFI was 1.00% and 1.06% at March 31, 2024 and 2023, respectively, and 1.02% at December 31, 2023, representing a level management considers commensurate with the risk in the loan portfolio.
Liquidity and Capital
Given the events within the banking industry during 2023, investment securities portfolios, interest rate risk, liquidity and capital have become much more of a focus for the Company’s management team and Board, regulators and investors. As a result of this, the Company is providing additional information on our liquidity and capital position as of March 31, 2024 to disclose the more traditional and stable nature of the Company’s banking model.
The Company currently has limited reliance on the wholesale funding market. The Company had $-0- in overnight Federal Funds borrowings at March 31, 2024, December 31, 2023, and $1,725 at March 31, 2023. The Company currently has capacity to borrow $197,000 from the Federal Home Loan Bank of Dallas (“FHLB”), approximately $150,000 in brokered deposit availability and $50,000 in availability with our correspondent Fed Funds lines. Additionally, the Company could provide additional collateral to the FHLB to increase the capacity there, should that avenue be needed.
The Company and the Bank, remain in a strong capital position and well-capitalized. A comparison of the various regulatory ratios for the Company and the Bank are noted below:
March 31,
2024
December 31,
2023
March 31,
2023
Citizens Holding Company
Tier 1 leverage ratio
7.31
%
7.43
%
8.01
%
Common Equity tier 1 capital ratio
7.31
%
7.43
%
8.01
%
Tier 1 risk-based capital ratio
11.87
%
11.95
%
13.70
%
Total risk-based capital ratio
12.65
%
12.70
%
14.46
%
The Citizens Bank
Tier 1 leverage ratio
8.37
%
8.64
%
9.29
%
Common Equity tier 1 capital ratio
8.37
%
8.64
%
9.29
%
Tier 1 risk-based capital ratio
13.48
%
13.78
%
15.75
%
Total risk-based capital ratio
14.25
%
14.52
%
16.50
%
Noninterest Income
Noninterest income increased for the three months ended March 31, 2024, by $4,920, or 535.36%, compared to the three months ended December 31, 2023, and increased by $3,476, or 147.10%, compared to the same period in 2023.
The increase quarter-over-quarter is primarily due to other noninterest income increasing $4,600, or 676.47%, primarily driven by a one-time gain on the sale-leaseback transaction of three locations of $4,535 in the current quarter.
Noninterest Expense
Noninterest expense increased for the three months ended March 31, 2024 by $327, or 3.49%, compared to the three months ended December 31, 2023 and increased by $943, or 10.79%, compared to the same period in 2023.
The increase year-over-year is primarily due to an increase in occupancy expense of $480, or 26.02%.
Dividends
The Company paid aggregate cash dividends in the amount of $901, or $0.16 per share, during the three-month period ended March 31, 2024 compared to $1,346, or $0.24 per share, for the same period in 2023.
At $0.16 per share, the Company’s current quarterly dividend yield is approximately 8% which reflects the Company’s continued commitment to returning shareholder value.
Citizens Holding Company
Financial Highlights
(amounts in thousands, except share and per share data)
For the Three Months Ended
March 31,
December 31,
March 31,
2024
2023
2023
INTEREST INCOME
Loans, including fees
$
10,264
$
9,422
$
7,323
Investment securities
3,045
3,163
3,370
Other interest
2,065
1,689
339
15,374
14,274
11,032
INTEREST EXPENSE
Deposits
5,261
4,503
1,820
Other borrowed funds
2,323
2,417
1,534
7,584
6,920
3,354
NET INTEREST INCOME
7,790
7,354
7,678
PCL
192
107
6
NET INTEREST INCOME AFTER PCL
7,598
7,247
7,672
NONINTEREST INCOME
Service charges on deposit accounts
957
990
914
Other service charges and fees
1,176
1,234
1,037
Net (losses) gains on sales of securities
(1,574
)
(1,986
)
-
Other noninterest income
5,280
680
412
5,839
919
2,363
NONINTEREST EXPENSE
Salaries and employee benefits
4,885
4,522
4,695
Occupancy expense
2,325
2,199
1,845
Other noninterest expense
2,474
2,635
2,201
9,684
9,357
8,741
NET INCOME BEFORE TAXES
3,753
(1,190
)
1,294
INCOME TAX EXPENSE (BENEFIT)
885
(397
)
154
NET INCOME (LOSS)
$
2,868
$
(794
)
$
1,140
Earnings (Loss) per share - basic
$
0.51
$
(0.14
)
$
0.20
Earnings (Loss) per share - diluted
$
0.51
$
(0.14
)
$
0.20
Dividends paid
$
0.16
$
0.16
$
0.24
Average shares outstanding - basic
5,603,570
5,603,570
5,595,320
Average shares outstanding - diluted
5,603,570
5,603,570
5,595,320
March 31,
FAQ
What were Citizens Holding Company's (CIZN) net income and earnings per share for the first quarter of 2024?
Citizens Holding Company reported a net income of $2,868 and earnings per share of $0.51 for the first quarter of 2024.
How did total revenues for Citizens Holding Company (CIZN) change in the first quarter of 2024 compared to the previous quarter?
Total revenues for Citizens Holding Company in the first quarter of 2024 increased by $6,020, or 39.62%, from the previous quarter.
What was the percentage increase in loans held for investment (LHFI) for Citizens Holding Company (CIZN) in the first quarter of 2024?
Loans held for investment (LHFI) for Citizens Holding Company increased by 3.95% in the first quarter of 2024.
How did Citizens Holding Company's (CIZN) credit quality metrics change in the first quarter of 2024?
Citizens Holding Company's credit quality metrics improved in the first quarter of 2024, with a decrease in non-performing assets.
What is the current quarterly dividend yield for Citizens Holding Company (CIZN)?
Citizens Holding Company's current quarterly dividend yield is approximately 8%.
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