CIZN Citizens Holding Company

Citizens Holding Company (NASDAQ:CIZN) announced today results of operations for the three and nine months ended September 30, 2019.

Effective October 1, 2019, the Company completed its acquisition by merger of Charter Bank (“Charter”), in a transaction valued at approximately $19.7 million. The Company issued 666,099 shares of common stock and paid approximately $6.1 million in cash to Charter shareholders, excluding cash paid for fractional shares. At closing, Charter merged with and into the Company, with the Company the surviving corporation in the merger, immediately thereafter, Charter merged with and into the Bank, with the Bank the surviving corporation in the merger. Founded in 2008, Charter has multiple locations throughout the Mississippi Gulf Coast. As of September 30, 2019, Charter had approximately $141.1 million in total assets, approximately $104.2 million in gross loans and $127.6 million in total deposits.

Net income for the three months ended September 30, 2019 was $1.333 million, or $0.27 per share-basic and diluted, a decrease of $163 thousand from a net income of $1.497 million, or $0.31 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 and non-interest income.

Net interest income for the third quarter of 2019, after the provision for loan losses, was $5.906 million, approximately 8.1% lower than the same period in 2018. The provision for loan losses for the three months ended September 30, 2019 was $12 thousand compared to a provision for loan losses of $289 thousand for the same period in 2018. The decrease 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 minimal historical loan losses in recent years. The net interest margin was 2.59% for the third quarter of 2019 compared to 2.95% 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 increased in the third quarter of 2019 by $286 thousand, or 12.9%, while non-interest expenses decreased $27 thousand, or 0.4%, compared to the same period in 2018. The increase in non-interest income was mainly the result of gains from security sales due to strategic investment decisions partially offset by a decrease in mortgage loan origination income from long-term mortgages originated for sale in the secondary market. 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 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 nine months ended September 30, 2019 decreased 20.7% to $3.931 million, or $0.80 per share-basic and diluted, from $4.957 million, or $1.01 per share-basic and diluted, for the nine months ended September 30, 2018.

Net interest income for the nine months ended September 30, 2019, after the provision for loan losses, decreased 12.2% to $17.862 million from $20.335 million for the same period in 2018. Net interest margin for the nine months ended September 30, 2019, decreased to 2.62% in 2019 from 3.10% in the same period in 2018. The provision for loan losses for the nine months ended September 30, 2019 was $472 thousand compared to $148 thousand in 2018.

Non-interest income increased by $227 thousand, or 3.5%, and non-interest expense decreased by $1.059 million, or 5.1%, for the nine months ended September 30, 2019 when compared to the same period in 2018. The increase in other non-interest income was discussed previously. The decrease in other non-interest expense was mainly due to a refund of excess prepaid postage and continued cost containment focus throughout the Company.

Total assets as of September 30, 2019 increased to $1.050 billion, up $90.973 million, or 9.5%, when compared to $958.630 million at December 31, 2018. Deposits increased by $38.092 million, or 5.0%, and loans, net of unearned income, increased by $44.221 million, or 10.3%, 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 $2.610 million to $15.962 million at September 30, 2019 as compared to $13.352 million at December 31, 2018, due to an increase in non-accrual loans and loans 90 days or more past due and still accruing partially offset by a decrease in other real estate owned.

During the nine months ended September 30, 2019, the Company paid dividends totaling $0.72 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 Nine Months Ending

 

September 30,

 

June 30,

 

September 30,

 

September 30,

 

September 30,

 

2019

 

2019

 

2018

 

2019

 

2018

INTEREST INCOME

         

Loans, including fees

 

$5,940

 

$5,830

 

$5,166

 

$17,220

 

$14,867

Investment securities

 

2,291

 

2,738

 

2,697

 

7,728

 

8,254

Other interest

 

213

 

82

 

24

 

530

 

145

 

8,444

 

8,650

 

7,887

 

25,478

 

23,266

           

INTEREST EXPENSE

         

Deposits

 

1,923

 

1,916

 

710

 

5,568

 

1,727

Other borrowed funds

 

603

 

528

 

458

 

1,576

 

1,063

 

2,526

 

2,444

 

1,168

 

7,144

 

2,790

           

NET INTEREST INCOME

 

5,918

 

6,206

 

6,719

 

18,334

 

20,476

           

PROVISION FOR LOAN LOSSES

 

12

 

265

 

289

 

472

 

141

           

NET INTEREST INCOME AFTER

         

 PROVISION FOR LOAN LOSSES

 

5,906

 

5,941

 

6,430

 

17,862

 

20,335

           

NON-INTEREST INCOME

         

Service charges on deposit accounts

 

1,126

 

1,046

 

1,171

 

3,269

 

3,382

Other service charges and fees

 

864

 

769

 

762

 

2,317

 

2,147

Other non-interest income

 

517

 

257

 

288

 

1,040

 

870

 

2,507

 

2,072

 

2,221

 

6,626

 

6,399

           

NON-INTEREST EXPENSE

         

Salaries and employee benefits

 

3,509

 

3,469

 

3,668

 

10,525

 

11,011

Occupancy expense

 

1,288

 

1,409

 

1,486

 

4,120

 

4,373

Other non-interest expense

 

2,071

 

1,444

 

1,740

 

5,185

 

5,505

 

6,868

 

6,322

 

6,894

 

19,830

 

20,889

           

NET INCOME BEFORE TAXES

 

1,545

 

1,691

 

1,757

 

4,658

 

5,845

           

INCOME TAX EXPENSE

 

212

 

320

 

260

 

727

 

888

           

     NET INCOME

 

$1,333

 

$1,371

 

$1,497

 

$3,931

 

$4,957

           

Earnings per share - basic

 

$0.27

 

$0.28

 

$0.31

 

$0.80

 

$1.01

           

Earnings per share - diluted

 

$0.27

 

$0.28

 

$0.31

 

$0.80

 

$1.01

           

Dividends Paid

 

$0.24

 

$0.24

 

$0.24

 

$0.72

 

$0.72

           

Average shares outstanding - basic

 

4,900,030

 

4,897,970

 

4,899,520

 

4,896,871

 

4,888,372

           

Average shares outstanding - diluted

 

4,901,495

 

4,900,891

 

4,904,613

 

4,899,192

 

4,897,958

                             

For the Period Ended,

     

September 30,

 

June 30,

 

December 31,

     

2019

 

2019

 

2018

Period End Balance Sheet Data:

         

     Total assets

     

$1,049,603

 

$1,034,031

 

$958,630

     Total earning assets

     

971,289

 

953,317

 

885,416

     Loans, net of unearned income

     

473,498

 

465,736

 

429,277

     Allowance for loan losses

     

3,806

 

3,821

 

3,372

     Total deposits

     

794,314

 

794,859

 

756,222

     Short-term borrowings

     

  -

 

12,000

 

                       -

     Long-term borrowings

     

 8

 

10

 

15

     Shareholders' equity

     

98,999

 

96,136

 

83,866

     Book value per share

     

$20.15

 

$19.57

 

$17.09

           

Period End Average Balance Sheet Data:

         

     Total assets

     

$1,026,700

 

$1,019,184

 

$971,893

     Total earning assets

     

951,520

 

943,158

 

894,099

     Loans, net of unearned income

     

453,503

 

445,985

 

418,136

     Total deposits

     

807,230

 

809,954

 

760,992

     Short-term borrowings

     

1,983

 

1,662

 

20,986

     Long-term borrowings

     

 11

 

 12

 

512

     Shareholders' equity

     

90,885

 

87,995

 

83,907

           

Period End Non-performing Assets:

         

     Non-accrual loans

     

$12,359

 

$11,157

 

$9,839

     Loans 90+ days past due and accruing

     

220

 

44

 

73

     Other real estate owned

     

3,383

 

3,383

 

3,440

           

 

 

 

 

 

 

 

 

 

 

 

     

 

 

As of

 

 

     

September 30,

 

June 30,

 

December 31,

     

2019

 

2019

 

2018

Year to Date Net charge-offs as a

         

     percentage of average net loans

     

0.01%

 

0.00%

 

0.00%

           

Year to Date Performance Ratios:

         

     Return on average assets(1)

     

0.51%

 

0.51%

 

0.69%

     Return on average equity(1)

     

5.77%

 

5.90%

 

7.95%

           

Year to Date Net Interest

         

     Margin (tax equivalent)(1)

     

2.62%

 

2.69%

 

3.05%

           

(1) Annualized

         

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191024005164/en/

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