Citizens Holding Company (the "Company") (OTCQX:CIZN) announced today results of operations for the three months ended March 31, 2025.

(in thousands, except share and per share data)

Net income for the three months ended March 31, 2025 was $1,850, or $0.33 per share-basic and diluted, a linked-quarter increase of $532, or 40.3%, from a net income of $1,318, or $0.23 per share-basic and diluted, for the three months ended December 31, 2024. Net income decreased ($1,018), or 35.5%, from net income of $2,868, or $0.51, per share-basic and diluted for the same quarter in 2024. The decrease was related to a one-time gain from a sale-leaseback transaction of $4,535 partially offset by a loss on the sale of securities of $1,574. Excluding the one-time, non-core transactions, core net income increased $1,204, or 186.4%, to $1,850 from $646 compared to the same quarter in 2024. See net income, core reconciliation at the end of the release.

First Quarter Highlights

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Total revenues, or interest and non-interest income, for the three months ended March 31, 2025 totaled $20,364, an increase of $826, or 4.2%, from the prior quarter. The increase in total revenue is primarily attributed to an increase of $436, or 2.6%, in interest income attributed to strong loan growth during the quarter.

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Yields on earning assets increased 4 basis point ("bps") to 505 bps for the three months ended March 31, 2025 compared to 501 bps for the three months ended December 31, 2024 and increased 44 bps compared to 461 bps for the three months ended March 31, 2024. The increase is primarily attributable to a continued focus on repositioning the balance sheet into loans from lower-yielding securities. Loan yields have increased to 6.94% for the three months ended March 31, 2025, an increase of 43 bps, or 6.6%, from the same quarter a year ago.

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Loans held for investment ("LHFI") increased $37,757, or 4.9%, to $803,886 at March 31, 2025, compared to $766,129 at December 31, 2024. With the Company's strong on-balance sheet liquidity, the Company is in an opportune position to continue to fund high-quality loan demand.

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Credit quality continues to remain solid with total non-performing assets ("NPA") to loans at 66 bps at March 31, 2025 compared to 63 bps at December 31, 2024. Total non-performing assets increased $506, or 10.5%, to $5,315 at March 31, 2025, compared to $4,809 at December 31, 2024, and increased $1,753, or 49.2%, compared to $3,562 at March 31, 2024.

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Allowance for credit losses ("ACL") to loans was 0.95% at March 31, 2025 compared to 0.91% in the prior quarter and 1.00% the same period a year ago.

Chief Executive Officer ("CEO") Commentary

Stacy Brantley, President and Chief Executive Officer of Citizens Holding Company, "the Company", stated, "I am proud to announce earnings for the first quarter and highlight the tremendous progress made in our effort to reposition the balance sheet and grow profitability. This progress is driven by our team's tireless execution in the buildout of key infrastructure to facilitate business development and manage growth. As a result, the Company produced strong net income growth over the prior quarter ended December 31, 2024, and over the prior-year quarter ended March 31, 2024. Respectively, organic profitability grew by 40.3% and 184.6% over the two referenced prior quarters."

"The Company expanded its net interest margin ("NIM") by 20bp over the prior quarter end and by 57bp over the same period for the prior year. Strong loan growth and disciplined management of funding costs have been the primary drivers of NIM expansion. Although we expect loan growth to slow slightly, the current pipeline remains solid and should help further expand the NIM over the next few quarters. Loan growth was $37,757M or 4.9% for the quarter and $136,470M or 20.5% over the same period for the prior year. Our strong loan growth has been fueled by the addition of solid banking talent across our footprint as well as renewed support, strengthened infrastructure, and expanded product offerings. Further aiding NIM expansion, non-interest bearing deposit balances grew during the quarter. Deposit gathering and cost of funds management remains a primary focus for the Company."

"Credit metrics remain strong with past dues and non-performers well within management established targets. The Company increased its ACL as a percentage of LHFI by 4bp over the prior quarter-end to 0.95%. Provision for credit losses for the quarter was $639M versus $343M for the prior quarter and $192M for the linked prior year quarter. This reflects the Company's commitment to further strengthen its balance sheet and properly fund reserves to accommodate loan growth."

"The Company achieved solid organic growth and significantly improved profitability over the prior quarter and linked prior quarter-end. Total assets were up $114,2047M or 7.76% over the linked prior-year quarter. This growth is a result of our team working diligently to execute the strategic plan set in place by executive management and the Board of Directors. We remain focused first on our people and culture as well as service to our communities. Our team will continue to block and tackle pursuing excellence in customer service, responsible loan growth, low-cost deposits and seeking operational efficiencies and savings."

Financial Condition and Results of Operations

Loans and Deposits

Total loans outstanding, net of unearned income, as of March 31, 2024 totaled $803,886 compared to $766,129 at December 31, 2024 and $667,416 as of March 31, 2024.

Total deposits as of March 31, 2025 were $1,230,077 compared to $1,071,351 at December 31, 2024 and $1,210,600 as of March 31, 2024. The Company continues to focus on core deposit growth to not only fund future loan growth but to also minimize cost of funds. During the quarter, non-interest bearing deposits grew $11,503, or 4.5%, to $269,495 compared to the prior quarter of $257,992.

Net Interest Income

Net interest income for the three months ended March 31, 2024 was $10,113, an increase of $837, or 9.02%, compared to $9,276 for the three months ended December 31, 2024, and an increase of $2,323, or 29.8 %, compared to $7,790 for the three months ended March 31, 2024. The NIM was 2.97% for the three months ended March 31, 2025 compared to 2.77% for the three months ended December 31, 2024 and 2.40% for the same period in 2024.

The linked-quarter increase in net interest income is primarily a result of the increase in interest income of $436, or 2.6%, coupled with a decrease in interest expense of $402, or 5.2%, compared to the three months ended December 31, 2024. The increase from the same period ended March 31, 2024 is due to an increase in interest income of $2,069, or 13.5%. This increase is the direct result of increased loan production coupled with an increase lower cost deposits and the Company's time deposit portfolio repricing lower.

Credit Quality

The Company's NPAs to loans was at 66 bps at March 31, 2025 compared to 63 bps at December 31, 2024. Total non-performing assets increased $506, or 10.5%, to $5,315 at March 31, 2025, compared to $4,809 at December 31, 2024, and increased $1,753, or 49.2%, compared to $3,562 at March 31, 2024. The increase in NPAs is directly attributable to 2 large relationships and not indicative of a broader weakening in the loan portfolio.

Net losses were $17 for the three months ended March 31, 2025. Year-to-date net losses to average loans were 0.00% at March 31, 2025 compared to 0.00% at March 31, 2024.

The provision for credit losses ("PCL") for the three months ended March 31, 2025 was $639 compared to $343 for the linked quarter and $192 for the same period a year ago. The PCL was primarily driven by loan growth coupled with qualitative factor adjustments due to the current economic uncertainty. 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 0.95% and 1.00% at March 31, 2025 and 2024, respectively, and 0.91% at December 31, 2024.

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, 2025 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, 2025, December 31, 2024 and March 31, 2024. The Company currently has capacity to borrow $188,000 from the Federal Home Loan Bank of Dallas ("FHLB"), approximately $200,000 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, 2025			December 31, 2024			March 31, 2024
Citizens Holding Company
Tier 1 leverage ratio		7.22	%		7.33	%		7.31	%
Common Equity tier 1 capital ratio		10.69	%		10.86	%		11.87	%
Tier 1 risk-based capital ratio		10.69	%		10.86	%		11.87	%
Total risk-based capital ratio		11.51	%		11.63	%		12.65	%
The Citizens Bank
Tier 1 leverage ratio		8.16	%		8.33	%		8.37	%
Common Equity tier 1 capital ratio		11.99	%		12.25	%		13.48	%
Tier 1 risk-based capital ratio		11.99	%		12.25	%		13.48	%
Total risk-based capital ratio		12.81	%		13.00	%		14.25	%

Noninterest Income

Noninterest income increased for the three months ended March 31, 2025, by $390 , or 15.4%, compared to the three months ended December 31, 2024, and decreased by ($2,918), or (50.0%), compared to the same period in 2024.

The increase quarter-over-quarter is primarily due to other noninterest income increasing $437, or 114.5%, primarily driven by a one-time gain from a bank-owned life insurance payment of $253 compared to the prior quarter. The decrease from the same period in 2024 was related to a one-time gain from a sale-leaseback transaction of $4,535 partially offset by a loss on the sale of securities of $1,574.

Noninterest Expense

Noninterest expense increased for the three months ended March 31, 2024 by $337, or 3.4%, compared to the three months ended December 31, 2024 and increased by $476, or 4.9%, compared to the same period in 2024.

The increase year-over-year is primarily due to an increase in salaries and employee benefits expense of $401, or 3.1%, as the Company continues to focus on hiring production talent (and related support staff) in strategic markets.

Dividends

The Company paid aggregate cash dividends in the amount of $113, or $0.02 per share, during the three-month period ended March 31, 2025 compared to $901, or $0.16 per share, for the same period in 2024.

The Company made a strategic decision to curtail the dividend in an effort to maximize capital retention as the Company looks to execute its strategic plan with a focus on high-profitable growth.

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,
	2025		2024		2024
INTEREST INCOME
Loans, including fees	$	13,396	$	12,767	$	10,264
Investment securities		3,449		3,527		3,045
Other interest		597		713		2,065
		17,443		17,007		15,374

INTEREST EXPENSE
Deposits		4,341		4,425		5,261
Other borrowed funds		2,988		3,306		2,323
		7,329		7,731		7,584

NET INTEREST INCOME		10,113		9,276		7,790

PCL		639		343		192


NET INTEREST INCOME AFTER PCL		9,475		8,933		7,598

NONINTEREST INCOME
Service charges on deposit accounts		1,014		1,023		957
Other service charges and fees		1,087		1,126		1,176
Net (losses) gains on sales of securities		-		-		(1,574	)
Other noninterest income		819		382		5,280
		2,921		2,531		5,839

NONINTEREST EXPENSE
Salaries and employee benefits		5,286		5,129		4,885
Occupancy expense		1,773		1,698		2,325
Other noninterest expense		3,101		2,996		2,474
		10,160		9,823		9,684

NET INCOME BEFORE TAXES		2,236		1,641		3,753

INCOME TAX EXPENSE (BENEFIT)		385		323		885

NET INCOME (LOSS)	$	1,850	$	1,318	$	2,868

Earnings (Loss) per share - basic	$	0.33	$	0.23	$	0.51

Earnings (Loss) per share - diluted	$	0.33	$	0.23	$	0.51

Dividends paid	$	0.02	$	0.16	$	0.16

Average shares outstanding - basic		5,612,570		5,612,570		5,603,570

Average shares outstanding - diluted		5,624,012		5,615,034		5,603,570

SELECTED FINANCIAL INFORMATION

	March 31,			December 31,			March 31,
		2025			2024			2024
Dollars in thousands, except per share data	(Unaudited)			(Audited)			(Unaudited)

Per Share Data
Basic Earnings per Common Share	$	0.33		$	0.23		$	0.51
Diluted Earnings per Common Share		0.33			0.23			0.51
Dividends per Common Share		0.02			0.16			0.16
Book Value per Common Share		8.97			8.11			8.54
Book Value per Common Share (ex-OCI)		21.79			21.48			21.51
TBV per Common Share		6.63			5.75			6.19
TBV per Common Share (ex-OCI)		19.45			19.12			19.16

Average Diluted Shares Outstanding		5,624,012			5,615,034			5,603,570
End of Period Common Shares Outstanding		5,637,061			5,637,061			5,628,811

Annualized Performance Ratios
Return on Average Assets		0.50	%		0.36	%		0.78	%
Return on Average Equity		15.15	%		10.62	%		18.79	%
Equity/Assets		3.19	%		3.27	%		3.10	%
Equity/Assets (ex-OCI)		7.74	%		8.22	%		8.23	%
Yield on Earning Assets		5.05	%		5.01	%		4.61	%
Cost of Funds		2.53	%		2.72	%		2.66	%
Net Interest Margin		2.97	%		2.77	%		2.40	%

Credit Metrics
Allowance for Loan Losses to Total Loans		0.95	%		0.91	%		1.00	%
Non-performing assets to loans		0.67	%		0.63	%		0.54	%

SUPPLEMENTAL INFORMATION

NET INCOME, CORE

	March 31,		December 31,		March 31,
	2025		2024		2024

NET INCOME (GAAP)	$	1,850	$	1,318	$	2,868

Gain on sale-leaseback transaction		-		-		(4,535	)
Loss on sale of securities		-		-		1,574
Tax effect		-		-		739

NET INCOME, CORE	$	1,850	$	1,318	$	646

Citizens Holding Company is a one-bank holding company and the parent company of the Bank, both headquartered in Philadelphia, Mississippi. The Bank currently has locations in fourteen counties throughout the state of Mississippi. In addition to full service commercial banking, the Company offers mortgage loans, title insurance services through third party partnerships and a full range of Internet banking services including online banking, bill pay and cash management services for businesses. Internet services are available at the Bank web site, www.thecitizensbankphila.com. Citizens Holding Company stock is listed on the OTCQX Best Market and is traded under the symbol CIZN. The Company's transfer agent is American Stock Transfer & Trust Company. Investor relations information may be obtained at the corporate website, https://www.thecitizensbankphila.com/investor-relations.

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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250418604956/en/

Citizens Holding Company, Philadelphia

Phillip R. Branch, 601/519-4016

Phillip.branch@thecitizensbank.bank

Citizens Holding Company Reports Earnings