Citizens Holding Company Reports Earnings

Citizens Holding Company (NASDAQ:CIZN) announced today results of operations for the three months ended March 31, 2014.

Net income for the three months ended March 31, 2014 was $1.797 million, or $0.37 per share-basic and diluted, up from $1.414 million, or $0.29 per share-basic and diluted for the same quarter in 2013. Net interest income for the first quarter of 2014, after the provision for loan losses for the quarter, was $6.856 million, approximately 4.2% higher than the same period in 2013, due to a decrease in interest expense. The provision for loan losses for the three months ended March 31, 2014 was $361 thousand compared to $175 thousand for the same period in 2013. The increase 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 3.65% in the first quarter of 2014 from 3.52% in the same period in 2013 primarily because of the decrease in rates paid on interest bearing deposits and a shift from short term interest bearing cash assets into longer term investments at higher yields.

Non-interest income increased in the first quarter of 2014 by $102 thousand, or 6.1%, while non-interest expenses decreased $189 thousand, or 2.9%, compared to the same period in 2013. The increase in non-interest income was due primarily to an increase in other income, an increase in service charges on deposit accounts and other service charges and fees. Non-interest expenses decreased due to a $98 thousand decrease in other operating expense and a $139 thousand decrease in occupancy expense partially offset by a $50 thousand increase in salaries and benefits. The decrease in other operating expense was due mainly as a result of lower loan collection expenses.

Total assets as of March 31, 2014 increased to $881.620 million, up $8.551 million, or 1.0%, when compared to December 31, 2013. Deposits increased by $32.435 million, or 5.0%, and loans, net of unearned income, decreased by $2.349 million, or 0.6%, when compared to December 31, 2013. The decrease in loans, net of unearned income, was due to repayments in excess of new loans. Non-performing assets decreased by $864 thousand to $19.010 million at March 31, 2014 as compared to December 31, 2013, because of an increase in non-accrual loans offset by decreases in loans 90 days or more past due and still accruing interest and other real estate owned.

During the first quarter of 2014, the Company paid dividends totaling $0.22 per share.

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. 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 services are available at the Bank’s web site, 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

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) changes in the legislative and regulatory environment that negatively impact the Company and Bank through increased operating expenses; (c) increased competition from other financial institutions; (d) the impact of technological advances; (e) expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board in response to changing economic conditions; (f) changes in asset quality and loan demand; (g) expectations about overall economic strength and the performance of the economics in the Company’s market area; and (h) 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.
Citizens Holding Company
Financial Highlights
(amounts in thousands, except share and per share data)
Three Months
Ending March 31,
2014   2013
Interest income and fees $7,946 $7,988
Interest expense 729     1,232  
Net interest income 7,217 6,756
Provision for loan losses 361     175  

Net interest income after provision for loan losses
6,856 6,581
Non-interest income 1,783 1,681
Non-interest expense 6,369     6,558  
Net income before taxes 2,270 1,704
Income taxes 473     290  
Net income $1,797     $1,414  
Earnings per share - basic $0.37     $0.29  
Earnings per share - diluted $0.37     $0.29  
Dividends Paid $0.22     $0.22  
Average shares outstanding-basic 4,870,114 4,866,933
Average shares outstanding-diluted 4,870,564 4,872,362
As of As of
March 31, December 31,
2014   2013
Period End Balance Sheet Data:
Total assets $881,620 $873,069
Total earning assets 790,849 784,592
Loans, net of unearned income 389,834 392,183
Allowance for loan losses 8,362 8,077
Total deposits 687,065 654,630
Long-term borrowings 23,500 33,626
Shareholders' equity 72,970 66,266
Book value per share $14.96 $13.61
Period End Average Balance Sheet Data:
Total assets $878,888 $882,285
Total earning assets 790,695 801,549
Loans, net of unearned income 390,898 371,200
Total deposits 668,877 650,931
Long-term borrowings 23,500 58,192
Shareholders' equity 68,585 79,458
Period End Non-performing Assets:
Non-accrual loans 14,855 13,592
Loans 90+ days past due and accruing 102 2,085
Other real estate owned 4,053 4,197
As of As of
March 31, December 31,
2014   2013

Period End Net charge-offs as a percentage of average net loans
0.02 % 0.29 %
Period End Performance Ratios:
Return on average assets(1) 0.82 % 0.81 %
Return on average equity(1) 10.48 % 9.00 %

Period Ending Net Interest

Margin (tax equivalent)(1)
3.65 % 3.59 %
(1) Annualized

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