Citizens Holding Company (the "Company") (OTCQX:CIZN) announced today results of operations for the three and six months ended June 30, 2025.

(in thousands, except share and per share data)

Net income for the three months ended June 30, 2025 was $1,848, or $0.33 per share-basic and diluted, a linked-quarter decrease of ($2), or (0.1%), from a net income of $1,850, or $0.33 per share-basic and diluted, for the three months ended March 30, 2025. Net income increased $861, or 87.2%, from net income of $987, or $0.18, per share-basic and diluted for the same quarter in 2024.

Net income for the six months ended June 30, 2025 was $3,700, or $0.66 per share-basic and diluted, a decrease of ($155), or (4.0%), from net income of $3,855, or $0.69, per share-basic and diluted, for the same period in 2024. See supplemental information for additional disclosures.

Second Quarter Highlights

Total loans held for investment (LHFI), as of June 30, 2025 totaled $817,992 and increase of $14,106, or 1.8%, compared to March 31, 2025, and an increase of $138,769, or 20.4% compared to June 30, 2024.
Net interest margin ("NIM") increased 11 basis points ("bps) to 3.08% for the three months ended June 30, 2025 from 2.97% for the three months ended March 31, 2025.
Credit quality continues to remain solid with total non-performing assets ("NPA") to loans at 82 bps at June 30, 2025 compared to 66 bps at March 31, 2025. Total non-performing assets increased $1,418, or 26.7%, to $6,733 at June 30, 2025, compared to $5,315 at March 31, 2025, and increased $1,628, or 31.9%, compared to $5,105 at June 30, 2024.
Allowance for credit losses ("ACL") to loans was 1.00% at June 30, 2025 compared to 0.95% 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 stated, "We made significant strides in growing organic profitability during the second quarter. Our efforts remain focused on repositioning the balance sheet through the support of our banking and lending teams and growing our presence in each of our markets. Our banking teams have produced loan growth of 1.8% for the quarter and 20.4% growth or $138,769 over the prior twelve months. Deposit growth for the same periods was 2.9% and 8.2% respectively. Focused efforts to generate new non-interest bearing deposits has produced growth of 12.5% or 32,491 over the same period for the prior year. As can be seen in the expansion of our NIM, loan growth and efforts to gather low-cost deposits are making strong contributions to the Company's expanding profitability."

"The Company expanded its NIM by 11 bps over the prior quarter end and by 52 bps over the same period for the prior year. As stated previously, NIM expansion is being driven by loan growth and improvements to the funding mix through expanded non-interest bearing deposit balances. Our pipeline remains solid as we enter the third quarter, and we expect moderate loan growth over the remainder of the year. Our banking team remains focused on growing deposits through strong product offerings, improved technology, and delivering outstanding service to our deposit and treasury clients."

"Credit metrics remain strong with past dues and non-performing loans well within management established targets. The Company increased its ACL as a percentage of LHFI by 5 bps over the prior quarter-end to 1.00%. Provision for credit losses for the quarter was $489 versus $639 for the prior quarter and $298 for the linked prior year quarter. This reflects the Company's commitment to strengthen its balance sheet and fund reserves to accommodate loan growth."

"I am excited to see the efforts of the last 24 months begin to firmly take root and drive expanded profitability. Organic profitability (net of significant one-time gains/(losses)) is up 15.8% over the prior quarter and up 87.2% over the same quarter for the prior year. Organic profitability is up 111.0% for the six months ended June 30, 2025, over the six months ended June 30, 2024. This growth is primarily driven by repositioning of the Bank's balance sheet, increasing loans as a percentage of total assets, while decreasing investment securities simultaneously. Renegotiation of key service contracts and focus on expense control have made significant contributions as well. These maneuvers are in accordance with the strategic plan set in place by executive management and the Board of Directors. As always, we are focused on driving great culture in support of our bankers and communities and recognize this effort as the key to our future success."

Financial Condition and Results of Operations

Loans and Deposits

Total loans outstanding, net of unearned income, as of June 30, 2025 totaled $817,992 compared to $803,886 at March 31, 2025 and $679,223 as of June 30, 2024.

Total deposits as of June 30, 2025 were $1,265,573 compared to $1,230,077 at March 31, 2025 and $1,169,570 as of June 30, 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 $22,844 or 8.5%, to $292,339 compared to the prior quarter of $269,495 and $32,491 or 12.5%, compared to $259,848 for the same period last year.

Net Interest Income

Net interest income for the three months ended June 30, 2025 was $10,697, an increase of $584, or 5.8%, compared to $10,113 for the three months ended March 31, 2025, and an increase of $2,080, or 24.1%, compared to $8,617 for the three months ended June 30 2024. NIM was 3.08% for the three months ended June 30, 2025 compared to 2.97% for the three months ended June 30, 2024 and 2.56% 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 $262, or 1.5%, coupled with a decrease in interest expense of ($321), or (4.4%), compared to the three months ended March 31, 2025. The increase from the same period ended June 30, 2024 is due to both an increase in interest income of $1,043, or 6.3% and a decrease in interest expense of ($1,037), or (12.9%).

Net interest income for the six months ended June 30, 2025 increased $4,402, or 26.9%, to $20,809 from $16,407 for the same period in 2024. The year-to-date NIM was 3.02% as of June 30, 2025 compared to 2.97% at March 31, 2025 and 2.49% for the same period in 2024.

Net interest income for the six months ended June 30, 2025 increased compared to the prior year due to interest income increasing $3,111, or 9.71%. This increase is primarily the result of interest income on loans, including fees, increasing $5,837, or 27.24%, from $21,424 to $27,261 for the same period.

Credit Quality

The Company's NPAs to loans was at 82 bps at June 30, 2025 compared to 66 bps at March 31, 2025. Total non-performing assets increased $1,418, or 26.7%, to $6,733 at June 30, 2025, compared to $5,315 at March 31, 2025, and increased $1,628, or 31.89%, compared to $5,105 at June 30, 2024. The increase in NPAs is directly attributable to 1 large relationship becoming non-accrual during the quarter and not indicative of a broader weakening in the loan portfolio.

Net losses were $97 for the six months ended June 30, 2025. Year-to-date net losses to average loans were 0.00% at June 30, 2025 compared to 0.00% at June 30, 2024.

The provision for credit losses ("PCL") for the three months ended June 30, 2025 was $489 compared to $639 for the linked quarter and $298 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 1.00% both at June 30, 2025 and 2024, and 0.95% at March 31, 2025.

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 June 30, 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 June 30, 2025, March 31, 2025, and June 30, 2024. The Company currently has capacity to borrow $205,000 from the Federal Home Loan Bank of Dallas ("FHLB"), approximately $228,000 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:

	June 30, 2025			March 31, 2025			June 30, 2024
Citizens Holding Company
Tier 1 leverage ratio		7.34	%		7.22	%		7.16	%
Common Equity tier 1 capital ratio		10.77	%		10.69	%		11.70	%
Tier 1 risk-based capital ratio		10.77	%		10.69	%		11.70	%
Total risk-based capital ratio		11.62	%		11.51	%		12.49	%
The Citizens Bank
Tier 1 leverage ratio		8.25	%		8.16	%		8.21	%
Common Equity tier 1 capital ratio		12.01	%		11.99	%		13.29	%
Tier 1 risk-based capital ratio		12.01	%		11.99	%		13.29	%
Total risk-based capital ratio		12.86	%		12.81	%		14.08	%

Noninterest Income

Noninterest income decreased for the three months ended June 30, 2025, by ($342), or (11.7%), compared to the three months ended March 31, 2025, and increased by $58, or 2.3%, compared to the same period in 2024.

The decrease quarter-over-quarter is primarily due to other noninterest income decreasing ($378), or (46.2%), primarily driven by a one-time gain from a bank-owned life insurance payment of $254 during the three months ended March 31, 2025.

Noninterest income decreased for the six months ended June 30, 2025, by ($2,860), or (34.2%), compared to the same period in 2024.

The decrease year-over-year is primarily due to other noninterest income decreasing ($4,316), or (77.4)%, driven by the income received as part of the previously disclosed sale-leaseback transaction.

Noninterest Expense

Noninterest expense increased for the three months ended June 30, 2025, by $316, or 3.11%, compared to the three months ended June 30, 2025 and increased by $905, or 9.46%, compared to the same period in 2024.

Noninterest expense increased for the six months ended June 30, 2024 by $1,381, or 7.17%, compared to the same period in 2024.

The increase year-over-year is primarily due to salaries and employee benefits increasing $801, or 8.15% as the Bank continues to place an emphasis on recruiting and retaining talent in strategic markets.

Dividends

The Company paid aggregate cash dividends in the amount of $226, or $0.04 per share, during the six-month period ended June 30, 2025 compared to $1,803, or $0.32 per share, for the same period in 2024.

Citizens Holding Company Financial Highlights Balance Sheet

	June 30,			June 30,								March 31,
*(in thousands)*		2025			2024								2025
Assets	(Unaudited)			(Unaudited)			Change			% Change		(Audited)			Change			% Change
Cash and due from banks	$	24,350		$	18,572		$	5,778		31.11	%	$	16,561		$	7,789		47.03	%
Interest bearing deposits with other banks		158,483			97,469			61,014		62.60	%		113,838			44,645		39.22	%
Cash and cash equivalents		182,832			116,041			66,792		57.56	%		130,399			52,433		40.21	%
Investment securities held-to-maturity, at amortized cost		361,740			379,347			(17,607	)	-4.64	%		366,229			(4,489	)	-1.23	%
Investment securities available-for-sale, at fair value		174,470			184,988			(10,518	)	-5.69	%		182,791			(8,321	)	-4.55	%
Loans held for investment (LHFI) (1)		817,992			679,223			138,769		20.43	%		803,886			14,106		1.75	%
Less allowance for credit losses (ACL), LHFI (1)		8,180			6,821			1,358		19.92	%		7,620			560		7.35	%
Net LHFI		809,813			672,402			137,410		20.44	%		796,267			13,546		1.70	%
Premises and equipment, net		20,253			20,370			(117	)	-0.58	%		19,962			291		1.46	%
Other real estate owned, net		1,014			1,234			(220	)	-17.84	%		1,186			(173	)	-14.54	%
Accrued interest receivable		5,732			5,487			246		4.48	%		5,522			210		3.81	%
Cash surrender value of life insurance		26,651			26,610			41		0.15	%		26,498			153		0.58	%
Deferred tax assets, net		27,267			27,171			97		0.36	%		26,772			495		1.85	%
Identifiable intangible assets, net		13,167			13,277			(109	)	-0.82	%		13,195			(27	)	-0.21	%
Other assets		17,484			18,032			(548	)	-3.04	%		17,064			421		2.46	%

Total Assets	$	1,640,424		$	1,464,959		$	175,465		11.98	%	$	1,585,884		$	54,540		3.44	%

Liabilities and Shareholders' Equity
Liabilities
Deposits:
Non-interest bearing deposits	$	292,339		$	259,848		$	32,491		12.50	%	$	269,495		$	22,844		8.48	%
Interest bearing deposits		973,234			909,722			63,512		6.98	%		960,582			12,652		1.32	%
Total deposits		1,265,573			1,169,570			96,003		8.21	%		1,230,077			35,496		2.89	%

Securities sold under agreement to repurchase		284,646			205,604			79,042		38.44	%		265,926			18,720		7.04	%
Borrowings on secured line of credit		13,900			18,000			(4,100	)	-22.78	%		14,700			(800	)	-5.44	%
Deferred compensation payable		9,511			9,746			(235	)	-2.41	%		9,529			(18	)	-0.19	%
Other liabilities		15,911			15,205			705		4.64	%		15,065			846		5.62	%
Total liabilities		1,589,541			1,418,125			171,416		12.09	%		1,535,297			54,244		3.53	%

Shareholders' Equity
Common stock, $0.20 par value, 22,500,000 shares authorized, Issued and outstanding: 5,653,753 shares – June 30, 2025; 5,637,061 shares – June 30, 2024; and 5,637,061 shares – March 31, 2025		1,128			1,125			3		0.30	%		1,125			3		0.30	%
Additional paid-in capital		18,759			18,646			112		0.60	%		18,724			34		0.18	%
Accumulated other comprehensive loss, net of tax benefit of $24,448 at June 30, 2025, $24,715 at June 30, 2024; and $23,966 at March 31, 2025		(73,714	)		(74,343	)		629		-0.85	%		(72,235	)		(1,479	)	2.05	%
Retained earnings		104,711			101,406			3,305		3.26	%		102,974			1,737		1.69	%

Total shareholders' equity		50,884			46,834			4,050		8.65	%		50,589			296		0.58	%

Total liabilities and shareholders' equity	$	1,640,424		$	1,464,959		$	175,465		11.98	%	$	1,585,884		$	54,540		3.44	%

Citizens Holding Company Financial Highlights (amounts in thousands, except share and per share data)

	For the Three Months Ended						For the Six Months Ended
	June 30,		March 31,		June 30,		June 30,		June 30
		2025		2025		2024		2025		2024
INTEREST INCOME
Loans, including fees	$	13,865	$	13,396	$	11,160	$	27,261	$	21,424
Investment securities		3,358		3,449		3,014		6,807		6,059
Other interest		482		597		2,488		1,079		4,553
		17,705		17,443		16,662		35,147		32,036

INTEREST EXPENSE
Deposits		4,610		4,341		5,239		8,951		10,500
Other borrowed funds		2,398		2,398		2,806		5,386		5,129
		7,008		7,329		8,045		14,337		15,629

NET INTEREST INCOME		10,697		10,113		8,617		20,809		16,407

PCL		489		639		298		1,128		490

NET INTEREST INCOME AFTER PCL		10,206		9,475		8,319		19,681		15,917

NONINTEREST INCOME
Service charges on deposit accounts		976		1,014		944		1,990		1,901
Other service charges and fees		1,156		1,087		1,281		2,243		2,457
Net (losses) gains on sales of securities		-		-		-		-		(1,574	)
Other noninterest income		448		819		296		1,267		5,576
		2,579		2,921		2,521		5,500		8,360

NONINTEREST EXPENSE
Salaries and employee benefits		5,336		5,286		4,936		10,622		9,821
Occupancy expense		1,655		1,773		2,805		3,428		5,130
Other noninterest expense		3,485		3,101		1,830		6,586		4,304
		10,476		10,160		9,571		20.636		19,255

NET INCOME BEFORE TAXES		2,309		2,236		1,269		4,545		5,022

INCOME TAX EXPENSE (BENEFIT)		460		385		282		845		1,167

NET INCOME (LOSS)	$	1,848	$	1,850	$	987	$	3,700	$	3,855
Earnings (Loss) per share - basic	$	0.33	$	0.33	$	0.18	$	0.66	$	0.69
Earnings (Loss) per share - diluted	$	0.33	$	0.33	$	0.18	$	0.66	$	0.69
Dividends paid	$	0.02	$	0.02	$	0.16	$	0.02	$	0.32
Average shares outstanding - basic		5,627,244		5,612,570		5,609,999		5,621,924		5,609,999
Average shares outstanding - diluted		5,630,639		5,624,012		5,609,999		5,626,279		5,609,999

SELECTED FINANCIAL INFORMATION

	June 30,		March 31,		June 30,
		2025		2025		2024
Dollars in thousands, except per share data	(Unaudited)		(Audited)		(Unaudited)

Per Share Data
Basic Earnings per Common Share	$	0.33	$	0.33	$	0.18
Diluted Earnings per Common Share		0.33		0.33		0.18
Dividends per Common Share		0.02		0.02		0.16
Book Value per Common Share		9.00		8.97		8.31
Book Value per Common Share (ex-OCI)		22.10		21.79		21.50
TBV per Common Share		6.67		6.63		5.95
TBV per Common Share (ex-OCI)		19.71		19.45		19.14
Closing Market Price per Common Share		8.45		8.08		7.85
Closing Price to TBV		126.66%		121.87%		131.87%

Average Diluted Shares Outstanding		5,630,639		5,624,012		5,603,570
End of Period Common Shares Outstanding		5,653,753		5,637,061		5,628,811

Annualized Performance Ratios
Return on Average Assets		0.49%		0.50%		0.26%
Return on Average Equity		14.91%		15.15%		8.78%
Equity/Assets		3.10%		3.19%		3.20%
Equity/Assets (ex-OCI)		7.60%		7.74%		8.27%
Yield on Earning Assets		5.06%		5.05%		4.84%
Cost of Funds		2.48%		2.53%		2.66%
Net Interest Margin		3.08%		2.97%		2.56%

Credit Metrics
Allowance for Loan Losses to Total Loans		1.00%		0.95%		1.00%
Non-performing assets to loans		0.84%		0.66%		0.75%

SUPPLEMENTAL INFORMATION

NET INCOME, CORE

	For the Three Months Ending							For the Six Months Ending
	June 30,		March 31,			June 30,		June 30,			June 30,
		2025		2025			2024		2025			2024

NET INCOME (GAAP)	$	1,848	$	1,850		$	987	$	3,700		$	3,855

Gain on sale-leaseback transaction		-		-			-		-			(4,535	)
Loss on sale of securities		-		-			-		-			1,574
Gain on proceeds from BOLI policy		-		(254	)		-		(254	)		-
Tax effect		-		-			-		-			739
NET INCOME, CORE	$	1,848	$	1,596		$	987	$	3,446		$	1,633

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/20250729674391/en/

Citizens Holding Company, Philadelphia

Phillip R. Branch, 601/519-4016

Phillip.branch@thecitizensbank.bank

Citizens Holding Company Reports Earnings