Citizens Holding Company (the “Company”) (NASDAQ:CIZN) announced
today results of operations for the three and twelve months ended
December 31, 2020.
(in thousands, except share and per share data)
Net income for the three months ended December 31, 2020 was
$2,226, or $0.40 per share-basic and diluted, an increase of $255,
or 12.94% from net income of $1,971, or $0.35 per share-basic and
diluted for the same quarter in 2019.
Net income for the twelve months ended December 31, 2020 was
$6,931, or $1.24 per share-basic and diluted, an increase of
$1,029, or 17.43% from net income of $5,902, or $1.17 per
share-basic and diluted for the same period in 2019. The majority
of the increase for the three- and twelve-month periods relate to
an increase in net interest income partially offset by additional
provision for loan losses and non-interest expense.
The Company continues to be proactive in dealing with 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.
Fourth Quarter Highlights
- Total revenues, or interest and noninterest income, for the
three months ended December 31, 2020 totaled $13,118, a decrease of
$98 or (0.74%), compared to the three months ended September 30,
2020, and an increase of $113, or 0.87%, compared to the three
months ended December 31, 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. At December 31, 2020, the balance of PPP loans was $29,523
and the Company had recognized $1,172 in PPP fee income for the
twelve months ended December 31, 2020.
- Total loans decreased $3,378, or (0.52%), to $652,256 at
December 31, 2020, compared to $655,634 at September 30, 2020, and
increased $75,189, or 13.03%, compared to $577,067 at December 31,
2019. Excluding PPP loans with a total balance of $29,523 at
December 31, 2020, total loans increased $45,666, or 7.91%,
compared to December 31, 2019.
- Total deposits increased $196,193, or 21.82%, to $1,095,189 at
December 31, 2020, compared to $898,996 at December 31, 2019. Total
noninterest-bearing deposits increased $85,627, or 44.97%, to
$276,033 at December 31, 2020, compared to $190,406 at December 31,
2019.
- The Bank recorded $302 in provision for loan losses for the
three months ended December 31, 2020, compared to $247 and $101 for
the quarters ended September 30, 2020 and December 31, 2019,
respectively. The increases in the provision for loan losses in
each quarter of 2020 compared to the same quarters in 2019 are
primarily a result of the stable loan growth during the year along
with qualitative adjustments for uncertainty of market conditions
brought about by the COVID-19 pandemic.
- Overall cost of funds decreased 4 basis points (“bps”) to 63
bps for the three months ended December 31, 2020 compared to 67 bps
for the three months ended September 30, 2020 and decreased 61 bps
compared to 124 bps for the three months ended December 31,
2019.
- Net interest margin decreased 17 bps to 2.64% for the three
months ended December 31, 2020 compared to 2.81% for the three
months ended September 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 12.50% and 12.20%, respectively, at
December 31, 2020, compared to 13.01% and 12.71%, respectively, at
September 30, 2020.
Net Interest Income
Net interest income for the three months ended December 31, 2020
was $8,493, approximately 16.26% higher than the same period in
2019. The net interest margin (“NIM”) was 2.64% for the three
months ended December 31, 2020 compared to 2.81% for the three
months ended September 30, 2020 and 2.79% for the same period in
2019.
Net interest income for the twelve months ended December 31,
2020 increased 29.23% to $33,134 from $25,639 for the same period
in 2019. NIM for the twelve months ended December 31, 2020,
decreased to 2.72% from 2.77% in the same period in 2019.
Continued low interest rates decreased the yield on the loans
held for investment as well as the securities portfolio but were
partially offset by lower costs on interest-bearing deposits along
with the increased volume of loans, excluding PPP loans which earn
1% interest, thus further compressing our margin.
Credit Quality
The provision for loan losses for the three months ended
December 31, 2020 was $302 compared to a provision for loan losses
of $101 for the same period in 2019. The increase in the provision
reflects management’s estimate of inherent losses in the loan
portfolio including, but not limited to, the government shutdown of
the local and national economy in March of 2020 due to the COVID-19
pandemic, the continued uncertainty surrounding the pandemic for
the Company and our customers, increased risks related to certain
industry sectors such as restaurants, hotels and retail businesses
and an overall increase in the loan portfolio when compared to the
same quarter in 2019.
The Company’s non-performing assets decreased $2,416, or
(17.17%), to $11,655 at December 31, 2020 compared to September 30,
2020 and decreased $4,147, or (26.24%), from $15,802 at December
31, 2019.
Year-to-date net charge-offs totaled $505 or 0.08% of average
loans at December 31, 2020 compared to 0.07% and 0.03% at September
30, 2020 and December 31, 2019, respectively.
The Company continues to maintain strong credit quality, but
this may be impacted in the future by factors related to the
pandemic that are still uncertain. The overarching theme continues
to be uncertainty, but management believes the Company has taken
the steps necessary to be prepared for the continued
uncertainty.
Noninterest Income
Non-interest income increased for the three months ended
December 31, 2020, by $335, or 12.70% compared to the three months
ended September 30, 2020 and decreased by $150 or (4.80%) compared
to the same period in 2019.
Non-interest income increased by $712, or 7.30%, for the twelve
months ended December 31, 2020 when compared to the same period in
2019.
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 to
lower the Company’s prepayment risk within the Company’s mortgage
backed securities portfolio;
- Partially offset by a decrease in overdraft income due to the
savings trend related to the COVID-19 pandemic.
Noninterest Expense
Non-interest expense decreased for the three months ended
December 31, 2020 by $291, or (3.36%) compared to the three months
ended September 30, 2020 and increased by $634 or 8.20% compared to
the same period in 2019.
Non-interest expense increased by $5,868, or 21.29%, for the
twelve months ended December 31, 2020 when compared to the same
period in 2019.
The increase in non-interest expense is mainly attributable to
an increase in non-recurring COVID-19 safety measures such as: PPE,
laptops, and branch safety measures. In addition, the COVID-19
expenses were also coupled with an increase in regulatory related
expenses and core service contracts after the merger conversion in
the second quarter of 2020.
Dividends
The Company paid aggregate cash dividends in the amount of
$5,363, or $0.96 per share, during the twelve-month period ended
December 31, 2020 compared to $4,874, or $0.96 per share, for the
same period in 2019.
Citizens Holding Company (the “Company”) is a one-bank holding
company and the parent company of The Citizens Bank of Philadelphia
(the “Bank”), 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 Holding Company 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 Holding Company 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) 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 the United States economy (including, without
limitation, the CARES Act), and the resulting effect of all of such
items on our operations, liquidity and capital position, and on the
financial condition of our borrowers and other customers; 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.
For the Three Months Ended
For the Twelve Months Ended
December 31,
September 30,
December 31,
December 31,
December 31,
2020
2020
2019
2020
2019
INTEREST INCOME
Loans, including fees
$
8,024
$
7,805
$
7,433
$
30,941
$
24,652
Investment securities
2,111
2,766
2,073
9,338
9,801
Other interest
11
8
377
282
908
10,146
10,579
9,883
40,561
35,361
INTEREST EXPENSE
Deposits
1,469
1,506
2,151
6,556
7,719
Other borrowed funds
184
167
427
871
2,003
1,653
1,673
2,578
7,427
9,722
NET INTEREST INCOME
8,493
8,906
7,305
33,134
25,639
PROVISION FOR LOAN LOSSES
302
247
101
1,485
573
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES
8,191
8,659
7,204
31,649
25,066
NON-INTEREST INCOME
Service charges on deposit accounts
864
771
1,144
3,352
4,413
Other service charges and fees
931
1,031
812
3,606
3,129
Other non-interest income
1,177
835
1,166
3,502
2,206
2,972
2,637
3,122
10,460
9,748
NON-INTEREST EXPENSE
Salaries and employee benefits
4,345
4,389
4,358
17,476
14,883
Occupancy expense
1,804
1,861
1,125
7,360
5,245
Other non-interest expense
2,213
2,403
2,245
8,590
7,430
8,362
8,653
7,728
33,426
27,558
NET INCOME BEFORE TAXES
2,801
2,643
2,598
8,683
7,256
INCOME TAX EXPENSE
575
560
627
1,752
1,354
NET INCOME
$
2,226
$
2,083
$
1,971
$
6,931
$
5,902
Earnings per share - basic
$
0.40
$
0.37
$
0.35
$
1.24
$
1.17
Earnings per share - diluted
$
0.40
$
0.37
$
0.35
$
1.24
$
1.17
Dividends paid
$
0.24
$
0.24
$
0.24
$
0.96
$
0.96
Average shares outstanding - basic
5,578,820
5,578,281
5,558,891
5,574,330
5,063,736
Average shares outstanding - diluted
5,580,726
5,580,728
5,561,351
5,576,894
5,066,103
For the Period Ended,
December 31,
September 30,
December 31,
2020
2020
2019
Period End Balance Sheet Data:
Total assets
$
1,450,692
$
1,374,217
$
1,195,434
Total earning assets
1,357,974
1,284,602
1,105,163
Loans, net of unearned income
652,256
655,634
577,067
Allowance for loan losses
4,735
4,494
3,755
Total deposits
1,095,189
1,049,157
898,996
Securities sold under agreement to
repurchase
196,272
176,978
170,410
Short-term borrowings
25,000
15,000
-
Shareholders' equity
119,548
117,498
112,800
Book value per share
21.43
21.03
20.22
Period End Average Balance Sheet Data:
Total assets
1,336,513
1,308,298
1,164,570
Total earning assets
1,243,566
1,215,916
1,068,683
Loans, net of unearned income
622,805
613,674
561,483
Total deposits
1,013,258
995,403
929,598
Securities sold under agreement to
repurchase
181,699
175,267
124,344
Short-term borrowings
10,318
6,168
2,096
Shareholders' equity
117,775
117,539
96,295
Period End Non-performing Assets:
Non-accrual loans
8,568
10,412
11,993
Loans 90+ days past due and accruing
14
246
257
Other real estate owned
3,073
3,413
3,552
As of
December 31,
September 30,
December 31,
2020
2020
2019
Year to Date Net charge-offs as a
percentage of average net loans
0.08
%
0.07
%
0.03
%
Year to Date Performance Ratios:
Return on average assets(1)
0.52
%
0.41
%
0.51
%
Return on average equity(1)
5.89
%
4.52
%
6.13
%
Year to Date Net Interest
Margin (tax equivalent)(1)
2.72
%
2.74
%
2.77
%
(1) Annualized
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210126005774/en/
Citizens Holding Company, Philadelphia Phillip R. Branch,
601/656-4692 Phillip.branch@thecitizensbank.bank
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