Citizens Holding Company (the “Company”) (NASDAQ:CIZN) announced
today results of operations for the three and six months ended June
30, 2023.
(in thousands, except share and per share data)
Net income for the three months ended June 30, 2023 was $300, or
$0.05 per share-basic and diluted, a linked-quarter decrease of
($840), or (73.68%) from net income of $1,140, or $0.20 per
share-basic and diluted. Net income also decreased ($2,241), or
(88.19)% from net income of $2,541, or $0.45 per share-basic and
diluted for the same quarter in 2022.
Net income for the six months ended June 30, 2023 was $1,440, or
$0.26 per share-basic and diluted, a decrease of ($3,137), or
(68.54%) from net income of $4,577, or $0.82 per share-basic and
diluted for the same period in 2022.
“A key contributor to the decline in net income for both the
three and six months ended June 30, 2023, was net interest margin
compression caused by increased funding costs. The Company’s
funding costs for the three and six months ended June 30, 2023,
were 147 bps and 145 bps, respectively, compared to 33 bps for the
three and six months ended June 30, 2022. The funding costs for the
three months ended March 31, 2023 was 136 bps”, as quoted by
Phillip Branch, Chief Financial Officer of the Company.
Second Quarter Highlights
- Total revenues, or interest and non-interest income, for the
three months ended June 30, 2023 totaled $13,422, an increase of
$27, or 0.20% from the prior quarter. The increase in total revenue
is primarily attributed to an increase of $206, or 2.81% in
interest income on loans attributed to rising interest rates.
- Yields on earning assets increased 11 basis points (“bps”) to
371 bps for the three months ended June 30, 2023 compared to 360
bps for the three months ended March 31, 2023 and increased 69 bps
compared to 302 bps for the three months ended June 30, 2022.
- Loans held for investment (“LHFI”) increased $7,494, or 1.32%,
to $574,734 at June 30, 2023, compared to $567,240 at March 31,
2023. Loan demand continues to be moderately positive in the
Company’s operating markets.
- Credit quality continues to remain solid with total
non-performing assets (“NPA”) to loans at 72 bps at June 30, 2023
compared to 84 bps at June 30, 2022. Total non-performing assets
decreased $12, or (0.29%), to $4,165 at June 30, 2023, compared to
$4,177 at March 31, 2023, and decreased $807, or (16.23%), compared
to $4,972 at June 30, 2022.
- Allowance for credit losses (“ACL”) to loans was 1.11% at June
30, 2023 compared to 1.06% in the prior quarter and 0.86% the same
period a year ago.
Chief Executive Officer (“CEO”) Commentary
Stacy Brantley, President and Chief Executive Officer of the
Company, stated, “The Citizens Bank of Philadelphia (the “Bank”),
the wholly-owned subsidiary of the Company, is committed to
disciplined management in the face of this challenging operating
environment. Rapidly rising interest rates and intense competition
for deposits has resulted in an increased cost of funds and
tightening net interest margin (“NIM”). While we expect deposit
costs to continue to rise over the remainder of the year, we also
anticipate loan yields will rise through the combination of new
loan production and renewal of the loan portfolio.
Deposit retention and credit quality have been highpoints in the
first half of 2023. Our strong core deposit base with minimal
uninsured deposits has proven stable over the prior twelve months.
Total deposits have decreased slightly by (1.33%) as of June 30,
2023, over June 30, 2022. Past due loans and NPAs are down (67.11%)
and (16.23%), respectively, over the same period in 2022.
Internal restructurings of loan production and credit
administration during the quarter are aimed at an improved customer
experience. Investments in technology have been made to drive
efficiency and improve delivery channels. Together, these efforts
are focused on building our core banking franchise and delivering
great service to our customers and communities.”
Financial Condition and Results of Operations
Loans and Deposits
Total loans outstanding, net of unearned income, as of June 30,
2023 totaled $574,734 compared to $567,240 at March 31, 2023 and
$589,541 as of June 30, 2022.
Total deposits as of June 30, 2023 were $1,103,072 compared to
$1,115,826 at March 31, 2023 and $1,117,987 as of June 30, 2022.
With the pressure throughout the banking system in regards to
deposits, the Company has not experienced material outflows in
deposits.
Net Interest Income
Net interest income for the three months ended June 30, 2023 was
$7,414, a decrease of $264, or (3.44%), compared to $7,678 for the
three months ended March 31, 2023, and a decrease of $1,349, or
(15.39%), compared to $8,763 for the three months ended June 30,
2022. The NIM was 2.55% for the three months ended June 30, 2023
compared to 2.56% for the three months ended March 31, 2023 and
2.78% for the same period in 2022.
The linked-quarter decrease in net interest income is primarily
a result of the increase in funding cost of $391, or 11.65%,
compared to the three months ended March 31, 2023 and an increase
of $2,948, or 369.85%, when compared to the three months ended June
30, 2022. This increase in funding is partially offset by an
increase in total interest income of $127, or 1.15%, compared to
the prior quarter and an increase of $1,599, or 16.72%, when
compared to the same period in 2022.
Net interest income for the six months ended June 30, 2023
decreased $1,958, or (11.48%) to $15,092 from $17,050 for the same
period in 2022. The year-to-date NIM was 2.54% as of June 30, 2023
compared to 2.56% at March 31, 2023 and 2.74% for the same period
in 2022.
Net interest income for the six months ended June 30, 2023
decreased compared to the prior year due to interest expense
increasing $5,535, or 353.88%. This decrease is the direct result
of the aggressive Federal Reserve Bank (“FRB”) interest rate hikes
causing increased deposit competition. This was partially offset as
loans and investment securities repriced also. Total interest
income increased by $3,577, or 19.22% compared to the same period
in 2022. Management expects continued pressure on NIM given the
current interest rate environment.
Credit Quality
The Company’s NPAs decreased by $12, or (0.29%), to $4,165 at
June 30, 2023 compared to $4,177 at March 31, 2023, and decreased
$807, or (16.23%), compared to $4,972 at June 30, 2022. The primary
cause of the decrease from year-over-year was due to the sale of
several other real estate owned (“OREO”) properties in 2023.
Net charge-offs for the quarter were $9 with net recoveries of
$63 for the six months ended June 30, 2023. Year-to-date net
(recoveries)/charge-offs to average net loans were (0.01%) at June
30, 2023 compared to (0.07%) at June 30, 2022.
The provision for credit losses (“PCL”) for the three months
ended June 30, 2023 was $459 compared to $6 for the linked quarter
and $56 compared to June 30, 2022. The PCL was primarily driven by
qualitative factor adjustments due to declining commercial real
estate (“CRE”) valuations on the national scale. The Company has
not observed material deterioration in local CRE valuations. The
ACL to LHFI was 1.11% and 0.86% at June 30, 2023 and 2022,
respectively, and 1.06% at March 31, 2023, representing a level
management considers commensurate with the risk in the loan
portfolio.
Liquidity and Capital
Given the events within the banking industry over the past few
months, investment securities portfolios, interest rate risk,
liquidity and capital have become much more in 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, 2023 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 $4,000 in overnight Federal Funds
borrowings at June 30, 2023 as compared to $-0- at March 31, 2023
and June 30, 2022. The Company currently has capacity to borrow
$190,000 from the Federal Home Loan Bank of Dallas (“FHLB”),
approximately $150,000 to $200,000 in brokered deposit availability
and $50,000 in availability with our correspondent Fed Funds lines.
Additionally, management has applied and been approved to utilize
the Bank Term Funding Program of the FRB or the Company could
provide additional collateral to the FHLB to increase the capacity
there, should those avenues 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, 2023
March 31, 2023
June 30, 2022
Citizens Holding Company
Tier 1 leverage ratio
8.17
%
8.01
%
7.72
%
Common Equity tier 1 capital ratio
8.17
%
8.01
%
7.72
%
Tier 1 risk-based capital ratio
13.50
%
13.57
%
12.71
%
Total risk-based capital ratio
14.28
%
14.33
%
13.32
%
The Citizens Bank
Tier 1 leverage ratio
9.48
%
9.29
%
8.98
%
Common Equity tier 1 capital ratio
9.48
%
9.29
%
8.98
%
Tier 1 risk-based capital ratio
15.53
%
15.75
%
14.80
%
Total risk-based capital ratio
16.30
%
16.50
%
15.40
%
Noninterest Income
Noninterest income decreased for the three months ended June 30,
2023, by $100, or (4.25%) compared to the three months ended March
31, 2023, and decreased by $500 or (18.11%) compared to the same
period in 2022.
The decrease quarter-over-quarter is primarily due to other
noninterest income decreasing $111, or (26.94%), primarily driven
by a one-time $70 loan recovery on a fully written off loan
relationship.
The decrease from the same period in 2022 is primarily driven by
a decrease in secondary market mortgage loan origination directly
attributable to the rise in mortgage rates throughout late 2022
that have remained higher in 2023.
Noninterest Expense
Noninterest expense increased for the three months ended June
30, 2023 by $255, or 2.92%, compared to the three months ended
March 31, 2023 and increased by $564, or 6.69%, compared to the
same period in 2022.
The linked quarter increase is primarily being driven by an
overall rise in costs associated with the implementation of new
technologies and the rising costs of technology-related vendor
contracts as a whole.
The increase from the same six months ended June 30, 2023 period
in 2022 is attributable to an increase in salaries and employee
benefits of $554, or 6.25%. This is being driven by the tight labor
market environment coupled with several strategic hires during the
year.
Other noninterest expense for the six months ended June 30, 2023
period increased by $236, or 5.36%, due to the aforementioned
overall rise in technology-related costs and costs associated with
the Chief Executive Officer transition in January of 2023.
Dividends
The Company paid aggregate cash dividends in the amount of
$2,244 or $0.40 per share, during the six-month period ended June
30, 2023 compared to $2,688, or $0.48 per share, for the same
period in 2022.
The Company made the strategic decision to reduce the dividend
for the second quarter of 2023 with the belief that this decision
was the most prudent allocation of capital given the current
economic environment. At $0.16 per share, the Company’s dividend
yield is approximately 5% which reflects the Company’s continued
commitment to returning shareholder value.
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,
2023
2023
2022
2023
2022
INTEREST INCOME
Loans, including fees
$
7,529
$
7,323
$
6,639
$
14,852
$
13,036
Investment securities
3,334
3,370
2,884
6,704
5,528
Other interest
296
339
37
635
50
11,159
11,032
9,560
22,191
18,614
INTEREST EXPENSE
Deposits
2,450
1,820
528
4,270
1,084
Other borrowed funds
1,294
1,534
269
2,828
480
3,745
3,354
797
7,099
1,564
NET INTEREST INCOME
7,414
7,678
8,763
15,092
17,050
PCL
459
6
56
465
149
NET INTEREST INCOME AFTER PCL
6,955
7,672
8,707
14,627
16,901
NONINTEREST INCOME
Service charges on deposit accounts
890
914
967
1,804
1,912
Other service charges and fees
1,072
1,037
1,094
2,109
2,119
Other noninterest income
301
412
702
713
1,265
2,263
2,363
2,763
4,626
5,296
NONINTEREST EXPENSE
Salaries and employee benefits
4,710
4,695
4,412
9,405
8,851
Occupancy expense
1,856
1,845
1,711
3,701
3,486
Other noninterest expense
2,431
2,201
2,309
4,632
4,396
8,996
8,741
8,432
17,737
16,733
NET INCOME BEFORE TAXES
222
1,294
3,038
1,516
5,464
INCOME TAX EXPENSE
(78
)
154
497
76
887
NET INCOME
$
300
$
1,140
$
2,541
$
1,440
$
4,577
Earnings per share - basic
$
0.05
$
0.20
$
0.45
$
0.26
$
0.82
Earnings per share - diluted
$
0.05
$
0.20
$
0.45
$
0.26
$
0.82
Dividends paid
$
0.16
$
0.24
$
0.24
$
0.40
$
0.48
Average shares outstanding - basic
5,601,213
5,595,320
5,592,782
5,598,299
5,589,958
Average shares outstanding - diluted
5,601,213
5,595,320
5,592,782
5,598,501
5,589,958
For the Period Ended,
June 30,
March 31,
June 30,
2023
2023
2022
Period End Balance Sheet Data:
Total assets
$
1,289,339
$
1,289,469
$
1,299,081
Total earning assets
1,165,419
1,174,575
1,182,127
Loans, net of unearned income
574,734
567,240
589,541
Allowance for credit losses
6,397
6,017
5,046
Securities held-to maturity, at amortized
cost
396,931
402,237
-
Securities available for sale, at fair
value
196,866
201,740
563,796
Total deposits
1,103,072
1,115,826
1,117,987
Securities sold under agreement to
repurchase
109,526
98,532
124,162
Short-term borrowings
4,000
-
-
Long-term debt
18,000
18,000
18,000
Shareholders' equity
40,142
41,124
25,926
Book value per share
7.17
7.35
4.64
Period End Average Balance Sheet Data:
Total assets
1,320,107
1,336,480
1,343,566
Total earning assets
1,196,971
1,218,404
1,242,569
Loans, net of unearned income
574,005
582,169
584,959
Securities held-to-maturity, at amortized
cost
402,341
404,719
-
Securities available for sale, at fair
value
199,737
201,328
628,137
Total deposits
1,114,384
1,114,446
1,130,989
Securities sold under agreement to
repurchase
129,521
142,853
94,915
Short-term borrowings
4,442
8,014
7,791
Long-term debt
18,000
18,000
18,000
Shareholders' equity
39,659
39,693
79,467
Period End Non-performing Assets:
Non-accrual loans
2,996
2,993
3,580
Loans 90+ days past due and accruing
160
5
64
Other real estate owned
1,009
1,179
1,328
As of
June 30,
March 31,
June 30,
2023
2023
2022
Year to Date Credit Performance
Ratios:
Non-performing assets to loans
0.72
%
0.74
%
0.84
%
ACL to loans
1.11
%
1.06
%
0.86
%
ACL to non-performing loans
202.70
%
200.70
%
138.47
%
Net (recoveries)/charge-offs to average
net loans
-0.01
%
-0.01
%
-0.07
%
Year to Date Performance Ratios:
Return on average assets(1)
0.22
%
0.34
%
0.68
%
Return on average equity(1)
7.26
%
11.49
%
11.52
%
Year to Date Net Interest
Margin (tax equivalent)(1)
2.54
%
2.56
%
2.74
%
(1) Annualized
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 twenty-seven banking 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 NASDAQ Global 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.
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/20230727028737/en/
Citizens Holding Company, Philadelphia Phillip R. Branch,
601/656-4692 Phillip.branch@thecitizensbank.bank
Citizens (NASDAQ:CIZN)
Gráfica de Acción Histórica
De Abr 2024 a May 2024
Citizens (NASDAQ:CIZN)
Gráfica de Acción Histórica
De May 2023 a May 2024