Citizens Holding Company Reports Earnings
- Net income for Q3 2023 increased by 302.33% compared to Q2 2023
- Total revenues increased by 19.27% due to rising interest rates
- Loans held for investment increased by 2.18%
- NPAs decreased by 4.13%
- Net income for Q3 2023 decreased by 53.22% compared to Q3 2022
- Net income for nine months ended September 30, 2023 decreased by 63.02% compared to same period in 2022
- Net interest margin decreased by 5 bps to 2.49%
(in thousands, except share and per share data)
Net income for the three months ended September 30, 2023 was
Net income for the nine months ended September 30, 2023 was
Third Quarter Highlights
-
Total revenues, or interest and non-interest income, for the three months ended September 30, 2023 totaled
, an increase of$16,008 , or$2,586 19.27% from the prior quarter. The increase in total revenue is primarily attributed to an increase of , or$1,660 14.88% in interest income attributed to rising interest rates. - Yields on earning assets increased 37 basis point (“bps”) to 408 bps for the three months ended September 30, 2023 compared to 371 bps for the three months ended June 30, 2023 and increased 85 bps compared to 323 bps for the three months ended September 30, 2022.
-
Loans held for investment (“LHFI”) increased
, or$12,504 2.18% , to at September 30, 2023, compared to$587,238 at June 30, 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.$574,734 -
Credit quality continues to remain solid with total non-performing assets (“NPA”) to loans at 68 bps at September 30, 2023 compared to 77 bps at September 30, 2022. Total non-performing assets decreased (
), or ($172 4.13% ), to at September 30, 2023, compared to$3,993 at June 30, 2023, and decreased ($4,165 ), or ($436 9.84% ), compared to at September 30, 2022.$4,429 -
Allowance for credit losses (“ACL”) to loans was
1.09% at September 30, 2023 compared to1.11% in the prior quarter and0.88% 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
“We executed a swap of
“Deposit growth was strong for the three months ended September 30, 2023 with total deposits up
“Management will continue to weigh opportunities to reposition the balance sheet, improve liquidity, and hedge against rising rates in the short term.”
Financial Condition and Results of Operations
Loans and Deposits
Total loans outstanding, net of unearned income, as of September 30, 2023 totaled
Total deposits as of September 30, 2023 were
Net Interest Income
Net interest income for the three months ended September 30, 2023 was
The linked-quarter increase in net interest income is primarily a result of the increase in loan interest income of
Net interest income for the nine months ended September 30, 2023 decreased (
Net interest income for the nine months ended September 30, 2023 decreased compared to the prior year due to interest expense increasing
Credit Quality
The Company’s NPAs decreased by (
Net recoveries were
The provision for credit losses (“PCL”) for the three months ended September 30, 2023 was
Liquidity and Capital
Given the events within the banking industry over the past few months, 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 September 30, 2023 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, 2023 |
|
June 30, 2023 |
|
September 30, 2022 |
||||
Citizens Holding Company |
|||||||||
Tier 1 leverage ratio |
7.83 |
% |
8.17 |
% |
7.84 |
% |
|||
Common Equity tier 1 capital ratio |
7.83 |
% |
8.17 |
% |
7.84 |
% |
|||
Tier 1 risk-based capital ratio |
13.17 |
% |
13.50 |
% |
13.10 |
% |
|||
Total risk-based capital ratio |
13.97 |
% |
14.28 |
% |
13.72 |
% |
|||
The Citizens Bank |
|
|
|
||||||
Tier 1 leverage ratio |
9.08 |
% |
9.48 |
% |
9.11 |
% |
|||
Common Equity tier 1 capital ratio |
9.08 |
% |
9.48 |
% |
9.11 |
% |
|||
Tier 1 risk-based capital ratio |
15.16 |
% |
15.53 |
% |
15.22 |
% |
|||
Total risk-based capital ratio |
15.95 |
% |
16.30 |
% |
15.84 |
% |
|||
Noninterest Income
Noninterest income increased for the three months ended September 30, 2023, by
The increase quarter-over-quarter is primarily due to other noninterest income increasing
Noninterest Expense
Noninterest expense increased for the three months ended September 30, 2023 by
The year-over-year and linked quarter increases are primarily being driven by two one-time events, including a gain on the sale of three loans of
Dividends
The Company paid aggregate cash dividends in the amount of
At
Citizens Holding Company
|
|||||||
For the Three Months Ended |
For the Nine Months Ended |
||||||
September 30, |
June 30, |
September 30, |
September 30, |
September 30, |
|||
2023 |
2023 |
2022 |
2023 |
2022 |
|||
INTEREST INCOME |
|||||||
Loans, including fees |
|
|
|
|
|
|
|
Investment securities |
3,275 |
3,334 |
|
3,187 |
|
9,978 |
8,715 |
Other interest |
1,041 |
296 |
|
80 |
|
1,676 |
130 |
12,819 |
11,159 |
|
10,122 |
|
35,010 |
28,736 |
|
INTEREST EXPENSE |
|||||||
Deposits |
3,481 |
2,450 |
|
496 |
|
7,751 |
1,580 |
Other borrowed funds |
1,906 |
1,294 |
|
577 |
|
4,735 |
1,057 |
5,387 |
3,745 |
|
1,073 |
|
12,486 |
2,637 |
|
NET INTEREST INCOME |
7,432 |
7,414 |
|
9,049 |
|
22,524 |
26,099 |
PROVISION FOR (REVERSAL OF) CREDIT LOSSES |
97 |
459 |
|
(53 |
) |
562 |
96 |
NET INTEREST INCOME AFTER PCL |
7,335 |
6,955 |
|
9,102 |
|
21,962 |
26,003 |
NONINTEREST INCOME |
|||||||
Service charges on deposit accounts |
994 |
890 |
|
1,019 |
|
2,798 |
2,931 |
Other service charges and fees |
1,106 |
1,072 |
|
1,111 |
|
3,214 |
3,230 |
Other noninterest income |
1,089 |
301 |
|
747 |
|
1,802 |
2,012 |
3,189 |
2,263 |
|
2,877 |
|
7,814 |
8,173 |
|
NONINTEREST EXPENSE |
|||||||
Salaries and employee benefits |
4,656 |
4,710 |
|
4,506 |
|
14,060 |
13,357 |
Occupancy expense |
1,935 |
1,856 |
|
1,968 |
|
5,636 |
5,454 |
Other noninterest expense |
2,479 |
2,431 |
|
2,462 |
|
7,110 |
6,858 |
9,070 |
8,996 |
|
8,936 |
|
26,806 |
25,669 |
|
NET INCOME BEFORE TAXES |
1,454 |
222 |
|
3,043 |
|
2,970 |
8,507 |
INCOME TAX EXPENSE |
247 |
(78 |
) |
463 |
|
323 |
1,350 |
NET INCOME |
|
|
|
|
|
|
|
Earnings per share - basic |
|
|
|
|
|
|
|
Earnings per share - diluted |
|
|
|
|
|
|
|
Dividends paid |
|
|
|
|
|
|
|
Average shares outstanding - basic |
5,603,570 |
5,601,213 |
|
5,595,320 |
|
5,600,082 |
5,591,771 |
Average shares outstanding - diluted |
5,603,570 |
5,601,213 |
|
5,595,320 |
|
5,600,090 |
5,591,771 |
For the Period Ended, |
||||||
September 30, |
June 30, |
September 30, |
||||
2023 |
2023 |
2022 |
||||
Period End Balance Sheet Data: |
||||||
Total assets |
|
|
|
|
|
|
Total earning assets |
1,295,965 |
|
1,165,419 |
|
1,213,892 |
|
Loans, net of unearned income |
587,238 |
|
574,734 |
|
578,665 |
|
Allowance for credit losses |
6,390 |
|
6,397 |
|
5,068 |
|
Securities held-to maturity, at amortized cost |
392,133 |
|
396,931 |
|
411,859 |
|
Securities available for sale, at fair value |
183,535 |
|
196,866 |
|
198,547 |
|
Total deposits |
1,194,698 |
|
1,103,072 |
|
1,134,936 |
|
Securities sold under agreement to repurchase |
151,089 |
|
109,526 |
|
129,919 |
|
Short-term borrowings |
- |
|
4,000 |
|
- |
|
Long-term debt |
18,000 |
|
18,000 |
|
18,000 |
|
Shareholders' equity |
34,345 |
|
40,142 |
|
32,637 |
|
Book value per share |
6.13 |
|
7.17 |
|
5.83 |
|
Period End Average Balance Sheet Data: |
||||||
Total assets |
1,334,768 |
|
1,320,107 |
|
1,348,574 |
|
Total earning assets |
1,217,244 |
|
1,196,971 |
|
1,247,117 |
|
Loans, net of unearned income |
577,198 |
|
574,005 |
|
584,450 |
|
Securities held-to-maturity, at amortized cost |
399,849 |
|
402,341 |
|
45,478 |
|
Securities available for sale, at fair value |
197,485 |
|
199,737 |
|
591,678 |
|
Total deposits |
1,125,960 |
|
1,114,384 |
|
1,126,703 |
|
Securities sold under agreement to repurchase |
133,089 |
|
129,521 |
|
103,616 |
|
Short-term borrowings |
3,698 |
|
4,442 |
|
9,107 |
|
Long-term debt |
18,000 |
|
18,000 |
|
18,000 |
|
Shareholders' equity |
39,623 |
|
39,659 |
|
78,710 |
|
Period End Non-performing Assets: |
||||||
Non-accrual loans |
3,009 |
|
2,996 |
|
3,087 |
|
Loans 90+ days past due and accruing |
10 |
|
160 |
|
14 |
|
Other real estate owned |
974 |
|
1,009 |
|
1,328 |
|
As of |
||||||
September 30, |
June 30, |
September 30, |
||||
2023 |
2023 |
2022 |
||||
Year to Date Credit Performance Ratios: |
||||||
Non-performing assets to loans |
0.68 |
% |
0.72 |
% |
0.77 |
% |
ACL to loans |
1.09 |
% |
1.11 |
% |
0.88 |
% |
ACL to non-performing loans |
211.65 |
% |
202.70 |
% |
163.43 |
% |
Net (recoveries)/charge-offs to average net loans |
-0.03 |
% |
-0.01 |
% |
-0.08 |
% |
Year to Date Performance Ratios: |
||||||
Return on average assets(1) |
0.26 |
% |
0.22 |
% |
0.71 |
% |
Return on average equity(1) |
8.91 |
% |
7.26 |
% |
12.12 |
% |
Year to Date Net Interest |
||||||
Margin (tax equivalent)(1) |
2.49 |
% |
2.54 |
% |
2.79 |
% |
(1) Annualized |
||||||
Citizens Holding Company is a one-bank holding company and the parent company of the Bank, both headquartered in
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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20231027779650/en/
Citizens Holding Company,
Phillip R. Branch, 601/656-4692
Phillip.branch@thecitizensbank.bank
Source: Citizens Holding Company
FAQ
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