Citizens Holding Company Reports Earnings

Citizens Holding Company (NASDAQ:CIZN) announced today results of operations for the three months ended March 31, 2011.

Net income for the three months ended March 31, 2011 was $1.955 million, or $0.40 per share-basic and diluted, down from $1.976 million, or $0.41 per share-basic and diluted for the same quarter in 2010. Net interest income for the first quarter of 2011, after the provision for loan losses for the quarter, was $7.334 million, approximately 5.7% higher than the same period in 2010, due mainly to a decrease in the provision for loan losses. The provision for loan losses for the three months ended March 31, 2011 was $244 thousand compared to $625 thousand for the same period in 2010. 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. The net interest margin increased to 4.25% in the first quarter of 2011 from 4.18% in the same period in 2010 primarily because of the decrease in yields on earning assets was less than the decline in rates paid on interest bearing deposits.

Non-interest income decreased in the first quarter of 2011 by $49 thousand, or 3.0%, while non-interest expenses increased $367 thousand, or 6.1%, compared to the same period in 2010. The decrease in non-interest income was due primarily to a decrease in fees received on deposits and other service charges and fees. Non-interest expenses increased mainly due to a $122 thousand increase in equipment expenses in 2011, and an increase in salaries and benefits of $119 thousand.

Total assets as of March 31, 2011 increased to $832.143 million, up $13.910 million, or 1.7%, when compared to December 31, 2010. Deposits increased by $9.301 million, or 1.7%, and loans, net of unearned income decreased by $8.267 million, or 2.0%, when compared to December 31, 2010. The decrease in loans, net of unearned, was due to declining loan demand. Non-performing assets decreased by $1.105 million to $13.848 million at March 31, 2011 compared to December 31, 2010, because of a decrease in non-accrual loans and loans 90 days or more past due and still accruing interest offset by an increase in other real estate.