Citizens Holding Company Reports Earnings
(in thousands, except share and per share data)
Net income for the three months ended September 30, 2024 was
Net income for the nine months ended September 30, 2024 was
Third Quarter Highlights
-
Total loans held for investment (LHFI), as of September 30, 2024 totaled
, an increase of$711,544 , or$32,321 4.76% , compared to June 30, 2024, and an increase of 124,306 or21.17% , compared to September 30, 2023. - Net interest margin increased 12 basis points (“bps”) to 252 bps for the three months ended September 30, 2024 from 240 bps for the three months ended September 30, 2023.
-
Total revenues, or interest and non-interest income, for the nine months ended September 30, 2024 totaled
, an increase of$58,946 , or$16,122 37.65% , from the same period in 2023. The increase in total revenue is primarily attributed to an increase of , or$14,432 41.22% , in interest income attributed primarily to loan growth. -
Book value (“BV”) and tangible book value (“TBV”) at September 30, 2024 increased
, or$0.65 7.86% , and , or$0.66 11.06% , respectively from June 30, 2024, and increased , or$2.85 46.55% and , or$2.87 76.94% , respectively from September 30, 2023. -
The Company executed a sale of a portion of it’s available-for-sale securities portfolio during the third quarter of 2024, and as a result the Company recognized a pre-tax loss of (
) and generated approximately$988 in proceeds. Concurrently, with the loss trade, the Company purchased approximately$28,000 in floating rate securities at a weighted-average yield of$26,000 6.40% , or approximately 100 bps spread to overnight fed funds. The net impact of these 2 transactions was a pre-tax income increase of approximately annually, or a 1.16 year earn-back, at the time of the transactions.$850
Chief Executive Officer (“CEO”) Commentary
Stacy Brantley, President and Chief Executive Officer, stated, “The Company’s dedicated team of bankers further demonstrated its ability to execute our strategic plan. This can be evidenced by strong loan growth and repositioning of the securities portfolio during the quarter. Loan growth totaling
“Margin expansion stalled during the quarter, decreasing slightly to
“As we look to the future, we are excited to further leverage investments made in technology and continue seeking opportunities to improve efficiency. Key additions to our banking team have positioned the company for solid growth and improved profitability.”
Financial Condition and Results of Operations
Loans and Deposits
Total gross LHFI as of September 30, 2024 was
Total deposits as of September 30, 2024 were
Net Interest Income
Net interest income for the three months ended September 30, 2024 was
The linked-quarter increase in net interest income is primarily a result of the increase in interest income of
Net interest income for the nine months ended September 30, 2024 increased
Net interest income for the nine months ended September 30, 2024 increased compared to the prior year due to interest income increasing
Credit Quality
The Company’s non-performing assets (“NPAs”) increased by
Net losses (recoveries) were
The provision for credit losses (“PCL”) for the three months ended September 30, 2024 was
Liquidity and Capital
Given the events within the banking industry during 2023, investment securities portfolios, interest rate risk, liquidity and capital continue to be 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 September 30, 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
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:
|
|
September 30, 2024 |
|
|
June 30, 2024 |
|
|
September 30, 2023 |
|
|||
Citizens Holding Company |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
7.21 |
% |
|
|
7.16 |
% |
|
|
7.83 |
% |
Common Equity tier 1 capital ratio |
|
|
7.21 |
% |
|
|
7.16 |
% |
|
|
7.83 |
% |
Tier 1 risk-based capital ratio |
|
|
11.39 |
% |
|
|
11.70 |
% |
|
|
13.17 |
% |
Total risk-based capital ratio |
|
|
12.18 |
% |
|
|
12.49 |
% |
|
|
13.97 |
% |
The Citizens Bank |
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
8.24 |
% |
|
|
8.21 |
% |
|
|
9.08 |
% |
Common Equity tier 1 capital ratio |
|
|
8.24 |
% |
|
|
8.21 |
% |
|
|
9.08 |
% |
Tier 1 risk-based capital ratio |
|
|
12.91 |
% |
|
|
13.29 |
% |
|
|
15.16 |
% |
Total risk-based capital ratio |
|
|
13.69 |
% |
|
|
14.08 |
% |
|
|
15.95 |
% |
Noninterest Income
Noninterest income decreased for the three months ended September 30, 2024, by (
The decrease quarter-over-quarter is primarily due to net losses on sales of securities of (
Noninterest income increased for the nine months ended September 30, 2024, by
The increase year-over-year is primarily driven by a sale-leaseback transaction in the first quarter of 2024 resulting in a gain of
Noninterest Expense
Noninterest expense increased for the three months ended September 30, 2024 by
Noninterest expense increased for the nine months ended September 30, 2024 by
The increase year-over-year is primarily due to 2 factors, (1) an increase in salaries and employee benefits as a result of strategic production hires in key markets and (2) an increase in occupancy expense of
Dividends
The Company paid aggregate cash dividends in the amount of
At
Citizens Holding Company |
||||||||||||
Financial Highlights |
||||||||||||
(amounts in thousands, except share and per share data) |
||||||||||||
For the Three Months Ended |
For the Nine Months Ended |
|||||||||||
September 30, |
June 30 |
September 30 |
September 30, |
September 30, |
||||||||
|
2024 |
|
|
2024 |
|
2023 |
|
2024 |
|
|
2023 |
|
INTEREST INCOME | ||||||||||||
Loans, including fees | $ |
12,090 |
|
$ |
11,160 |
$ |
8,503 |
$ |
33,697 |
|
$ |
23,356 |
Investment securities |
|
3,439 |
|
|
3,014 |
|
3,275 |
|
9,498 |
|
|
9,978 |
Other interest |
|
1,694 |
|
|
2,488 |
|
1,041 |
|
6,247 |
|
|
1,676 |
|
17,223 |
|
|
16,662 |
|
12,819 |
|
49,442 |
|
|
35,010 |
|
INTEREST EXPENSE | ||||||||||||
Deposits |
|
5,214 |
|
|
5,239 |
|
3,481 |
|
15,714 |
|
|
7,751 |
Other borrowed funds |
|
3,252 |
|
|
2,806 |
|
1,906 |
|
8,381 |
|
|
4,735 |
|
8,466 |
|
|
8,045 |
|
5,387 |
|
24,095 |
|
|
12,486 |
|
NET INTEREST INCOME |
|
8,757 |
|
|
8,617 |
|
7,432 |
|
25,347 |
|
|
22,524 |
PCL |
|
- |
|
|
298 |
|
97 |
|
490 |
|
|
562 |
NET INTEREST INCOME AFTER PCL |
|
8,757 |
|
|
8,319 |
|
7,335 |
|
24,857 |
|
|
21,962 |
NONINTEREST INCOME | ||||||||||||
Service charges on deposit accounts |
|
1,040 |
|
|
944 |
|
994 |
|
2,941 |
|
|
2,798 |
Other service charges and fees |
|
978 |
|
|
1,281 |
|
1,106 |
|
3,252 |
|
|
3,214 |
Net losses on sales of securities |
|
(988 |
) |
|
- |
|
- |
|
(2,562 |
) |
|
- |
Gain on disposition of asset |
|
- |
|
|
- |
|
- |
|
4,535 |
|
|
- |
Other noninterest income |
|
297 |
|
|
296 |
|
1,089 |
|
1,338 |
|
|
1,802 |
|
1,327 |
|
|
2,521 |
|
3,189 |
|
9,504 |
|
|
7,814 |
|
NONINTEREST EXPENSE | ||||||||||||
Salaries and employee benefits |
|
5,042 |
|
|
4,936 |
|
4,656 |
|
14,863 |
|
|
14,060 |
Occupancy expense |
|
1,857 |
|
|
2,805 |
|
1,935 |
|
6,987 |
|
|
5,636 |
Other noninterest expense |
|
2,937 |
|
|
1,830 |
|
2,479 |
|
7,241 |
|
|
7,110 |
|
9,836 |
|
|
9,571 |
|
9,070 |
|
29,091 |
|
|
26,806 |
|
NET INCOME BEFORE TAXES |
|
248 |
|
|
1,269 |
|
1,454 |
|
5,270 |
|
|
2,970 |
INCOME TAX EXPENSE (BENEFIT) |
|
(70 |
) |
|
282 |
|
247 |
|
1,097 |
|
|
323 |
NET INCOME | $ |
318 |
|
$ |
987 |
$ |
1,207 |
$ |
4,173 |
|
$ |
2,647 |
Earnings per share - basic | $ |
0.06 |
|
$ |
0.18 |
$ |
0.22 |
$ |
0.74 |
|
$ |
0.47 |
Earnings per share - diluted | $ |
0.06 |
|
$ |
0.18 |
$ |
0.22 |
$ |
0.74 |
|
$ |
0.47 |
Dividends paid | $ |
0.16 |
|
$ |
0.16 |
$ |
0.16 |
$ |
0.48 |
|
$ |
0.56 |
Average shares outstanding - basic |
|
5,612,570 |
|
|
5,609,999 |
|
5,603,570 |
|
5,608,746 |
|
|
5,600,082 |
Average shares outstanding - diluted |
|
5,612,570 |
|
|
5,609,999 |
|
5,603,570 |
|
5,609,099 |
|
|
5,600,090 |
September 30, |
June 30, |
|
|
September 30, |
|
|
|||||||||||||||
2024 |
2024 |
|
|
2023 |
|
|
|||||||||||||||
Assets | (Unaudited) |
(Unaudited) |
Change |
% Change |
(Unaudited) |
Change |
% Change |
||||||||||||||
Cash and due from banks | $ |
18,336 |
|
$ |
18,572 |
|
$ |
(236 |
) |
-1.27 |
% |
$ |
14,061 |
|
$ |
4,275 |
|
30.40 |
% |
||
Interest bearing deposits with other banks |
|
86,722 |
|
|
97,469 |
|
|
(10,747 |
) |
-11.03 |
% |
|
130,320 |
|
|
(43,598 |
) |
-33.45 |
% |
||
Cash and cash equivalents |
|
105,058 |
|
|
116,041 |
|
|
(10,983 |
) |
-9.46 |
% |
|
144,381 |
|
|
(39,323 |
) |
-27.24 |
% |
||
Investment securities held-to-maturity, at amortized cost |
|
374,633 |
|
|
379,347 |
|
|
(4,714 |
) |
-1.24 |
% |
|
392,133 |
|
|
(17,500 |
) |
-4.46 |
% |
||
Investment securities available-for-sale, at fair value |
|
180,750 |
|
|
184,988 |
|
|
(4,238 |
) |
-2.29 |
% |
|
183,535 |
|
|
(2,785 |
) |
-1.52 |
% |
||
Loans held for investment (LHFI) (1) |
|
711,544 |
|
|
679,223 |
|
|
32,321 |
|
4.76 |
% |
|
587,238 |
|
|
124,306 |
|
21.17 |
% |
||
Less allowance for credit losses (ACL), LHFI (1) |
|
6,853 |
|
|
6,821 |
|
|
32 |
|
0.47 |
% |
|
6,390 |
|
|
463 |
|
7.24 |
% |
||
Net LHFI |
|
704,691 |
|
|
672,402 |
|
|
32,289 |
|
4.80 |
% |
|
580,848 |
|
|
123,843 |
|
21.32 |
% |
||
Premises and equipment, net |
|
20,217 |
|
|
20,370 |
|
|
(153 |
) |
-0.75 |
% |
|
27,353 |
|
|
(7,136 |
) |
-26.09 |
% |
||
Other real estate owned, net |
|
967 |
|
|
1,234 |
|
|
(267 |
) |
-21.64 |
% |
|
974 |
|
|
(7 |
) |
-0.75 |
% |
||
Accrued interest receivable |
|
4,902 |
|
|
5,487 |
|
|
(585 |
) |
-10.66 |
% |
|
4,712 |
|
|
190 |
|
4.03 |
% |
||
Cash surrender value of life insurance |
|
26,753 |
|
|
26,610 |
|
|
142 |
|
0.53 |
% |
|
26,191 |
|
|
562 |
|
2.14 |
% |
||
Deferred tax assets, net |
|
25,832 |
|
|
27,171 |
|
|
(1,339 |
) |
-4.93 |
% |
|
31,417 |
|
|
(5,585 |
) |
-17.78 |
% |
||
Identifiable intangible assets, net |
|
13,249 |
|
|
13,277 |
|
|
(27 |
) |
-0.21 |
% |
|
13,359 |
|
|
(110 |
) |
-0.82 |
% |
||
Other assets |
|
18,746 |
|
|
18,032 |
|
|
714 |
|
3.96 |
% |
|
9,107 |
|
|
9,639 |
|
105.84 |
% |
||
Total Assets | $ |
1,475,798 |
|
$ |
1,464,959 |
|
$ |
10,840 |
|
0.74 |
% |
$ |
1,414,010 |
|
$ |
61,788 |
|
4.37 |
% |
||
Liabilities and Shareholders' Equity | |||||||||||||||||||||
Liabilities | |||||||||||||||||||||
Deposits: | |||||||||||||||||||||
Non-interest bearing deposits | $ |
252,309 |
|
$ |
259,848 |
|
$ |
(7,539 |
) |
-2.90 |
% |
$ |
277,949 |
|
$ |
(25,640 |
) |
-9.22 |
% |
||
Interest bearing deposits |
|
840,429 |
|
|
909,722 |
|
|
(69,293 |
) |
-7.62 |
% |
|
916,748 |
|
|
(76,319 |
) |
-8.32 |
% |
||
Total deposits |
|
1,092,738 |
|
|
1,169,570 |
|
|
(76,832 |
) |
-6.57 |
% |
|
1,194,697 |
|
|
(101,959 |
) |
-8.53 |
% |
||
Securities sold under agreement to repurchase |
|
290,841 |
|
|
205,604 |
|
|
85,237 |
|
41.46 |
% |
|
151,089 |
|
|
139,752 |
|
92.50 |
% |
||
Short-term borrowings |
|
- |
|
|
- |
|
|
- |
|
0.00 |
% |
|
- |
|
|
- |
|
0.00 |
% |
||
Borrowings on secured line of credit |
|
15,500 |
|
|
18,000 |
|
|
(2,500 |
) |
-13.89 |
% |
|
18,000 |
|
|
(2,500 |
) |
-13.89 |
% |
||
Deferred compensation payable |
|
9,655 |
|
|
9,746 |
|
|
(91 |
) |
-0.93 |
% |
|
10,120 |
|
|
(465 |
) |
-4.60 |
% |
||
Other liabilities |
|
16,547 |
|
|
15,205 |
|
|
1,342 |
|
8.83 |
% |
|
5,759 |
|
|
10,788 |
|
187.32 |
% |
||
Total liabilities |
|
1,425,281 |
|
|
1,418,125 |
|
|
7,156 |
|
0.50 |
% |
|
1,379,665 |
|
|
45,616 |
|
3.31 |
% |
||
Shareholders' Equity | |||||||||||||||||||||
Common stock, |
|||||||||||||||||||||
Issued and outstanding: 5,637,061 shares - September 30, 2024; | |||||||||||||||||||||
5,616,438 shares - December 31, 2023 |
|
1,125 |
|
|
1,125 |
|
|
- |
|
0.00 |
% |
|
1,123 |
|
|
2 |
|
0.17 |
% |
||
Additional paid-in capital |
|
18,672 |
|
|
18,646 |
|
|
26 |
|
0.14 |
% |
|
18,554 |
|
|
118 |
|
0.64 |
% |
||
Accumulated other comprehensive loss, net of tax | |||||||||||||||||||||
benefit of |
|||||||||||||||||||||
|
(70,102 |
) |
|
(74,343 |
) |
|
4,241 |
|
-5.70 |
% |
|
(86,377 |
) |
|
16,275 |
|
-18.84 |
% |
|||
Retained earnings |
|
100,822 |
|
|
101,406 |
|
|
(584 |
) |
-0.58 |
% |
|
101,045 |
|
|
(223 |
) |
-0.22 |
% |
||
Total shareholders' equity |
|
50,517 |
|
|
46,834 |
|
|
3,683 |
|
7.86 |
% |
|
34,345 |
|
|
16,172 |
|
47.09 |
% |
||
|
- |
|
|||||||||||||||||||
Total liabilities and shareholders' equity | $ |
1,475,798 |
|
$ |
1,464,959 |
|
$ |
10,840 |
|
0.74 |
% |
$ |
1,414,010 |
|
$ |
61,788 |
|
4.37 |
% |
||
SELECTED FINANCIAL INFORMATION
September 30, |
June 30, |
September 30, |
||||||||
2024 |
2024 |
2023 |
||||||||
Dollars in thousands, except per share data | (Unaudited) |
(Unaudited) |
(Unaudited) |
|||||||
Per Share Data | ||||||||||
Basic Earnings per Common Share | $ |
0.06 |
|
$ |
0.18 |
|
$ |
0.22 |
|
|
Diluted Earnings per Common Share |
|
0.06 |
|
|
0.18 |
|
|
0.22 |
|
|
Dividends per Common Share |
|
0.16 |
|
|
0.16 |
|
|
0.16 |
|
|
BV per Common Share |
|
8.96 |
|
|
8.31 |
|
|
6.12 |
|
|
BV per Common Share (ex OCI) |
|
21.40 |
|
|
21.50 |
|
|
21.49 |
|
|
TBV per Common Share |
|
6.61 |
|
|
5.95 |
|
|
3.74 |
|
|
TBV per Common Share (ex OCI) |
|
19.05 |
|
|
19.14 |
|
|
19.12 |
|
|
Average Diluted Shares Outstanding |
|
5,612,570 |
|
|
5,609,999 |
|
|
5,603,570 |
|
|
End of Period Common Shares Outstanding |
|
5,637,061 |
|
|
5,637,061 |
|
|
5,616,438 |
|
|
Annualized Performance Ratios | ||||||||||
Return on Average Assets |
|
0.09 |
% |
|
0.26 |
% |
|
0.26 |
% |
|
Return on Average Equity |
|
2.66 |
% |
|
8.78 |
% |
|
8.91 |
% |
|
Equity/Assets |
|
3.42 |
% |
|
3.20 |
% |
|
3.20 |
% |
|
Yield on Earning Assets |
|
4.95 |
% |
|
4.84 |
% |
|
4.08 |
% |
|
Cost of Funds |
|
2.94 |
% |
|
2.75 |
% |
|
2.10 |
% |
|
Net Interest Margin |
|
2.52 |
% |
|
2.56 |
% |
|
2.40 |
% |
|
Credit Metrics | ||||||||||
Allowance for Loan Losses to Total Loans |
|
0.96 |
% |
|
1.00 |
% |
|
1.09 |
% |
|
Non-performing assets to loans |
|
0.73 |
% |
|
0.76 |
% |
|
0.59 |
% |
Citizens Holding Company is a one-bank holding company and the parent company of the Bank, both headquartered in
Cautionary Note Regarding Forward-Looking Statements
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) our ability to mitigate our risk exposures; (c) changes in the legislative and regulatory environment that negatively impact the Company and Bank through increased operating expenses; (d) increased competition from other financial institutions; (e) the impact of technological advances; (f) expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions; (g) changes in asset quality and loan demand; (h) expectations about overall economic strength and the performance of the economics in the Company’s market area; and (i) 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.
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Citizens Holding Company,
Phillip R. Branch, 601/519-4016
Phillip.branch@thecitizensbank.bank
Source: -Citizens Holding Company