Citizens Holding Company Earnings Increase

Citizens Holding Company (NASDAQ:CIZN) announced today results of operations for the three and six months ended June 30, 2011.

Net income for the three months ended June 30, 2011 was $1.854 million, or $0.38 per share-basic and diluted, up from $1.696 million, or $0.35 per share-basic and diluted for the same quarter in 2010. Net interest income for the second quarter of 2011, after the provision for loan losses for the quarter, was $7.079 million, approximately 8.6% higher than the same period in 2010, due mainly to a decrease in interest expense and a decrease in the provision for loan losses. The provision for loan losses for the three months ended June 30, 2011 was $683 thousand compared to $695 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 4.29% in the second quarter of 2011 from 3.97% 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 second quarter of 2011 by $246 thousand, or 13.9%, while non-interest expenses increased $81 thousand, or 1.3%, 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.

Net income for the six months ended June 30, 2011 increased 3.7% to $3.809 million, or $0.79 per share-basic and diluted, from $3.672 million, or $0.76 per share-basic and $0.75 per share-diluted, for the six months ended June 30, 2010. Net interest income for the six months ended June 30, 2011, after the provision for loan losses, increased 7.1% to $14.413 million from $13.456 million for the same period in 2010. Net interest margin increased to 4.28% in 2011 from 4.08% in 2010. The provision for loan losses for the six months ended June 30, 2011 was $927 thousand compared to the provision of $1.320 million in 2010. The decrease in the provision reflects management’s assessment of inherent losses in the loan portfolio including the impact caused by current local and national economic conditions.