Citizens Holding Company Reports Earnings
(in thousands, except share and per share data)
Net income for the three months ended
Net income for the six months ended
Second Quarter Highlights
-
Total net loans held for investment (LHFI), as of
June 30, 2024 totaled$672,402 , an increase of$11,655 , or 1.76%, compared toMarch 31, 2024 , and an increase of 104,065, or 18.31%, compared toJune 30, 2023 . -
Net interest margin increased 16 basis points (“bps”) to 256 bps for the three months ended
June 30, 2024 from 240 bps for the three months endedMarch 31, 2024 . -
Total revenues, or interest and non-interest income, for the six months ended
June 30, 2023 totaled$40,395 , an increase of$13,578 , or 50.63%, from the same period in 2023. The increase in total revenue is primarily attributed to an increase of$9,845 , or 44.36% in interest income attributed to loan growth and rising interest rates. -
Book value (“BV”) and tangible book value (“TBV”) at
June 30, 2024 increased$0.19 , or 2.30%, and$0.20 , or 3.46%, respectively fromMarch 31, 2024 , and increased$1.16 , or 16.23% and$1.19 , or 25.00%, respectively fromJune 30, 2023 .
Chief Executive Officer (“CEO”) Commentary
“Margin expansion continues to be driven by The Company’s solid loan growth and repositioning of the balance sheet. The Bank realized loan growth in the second quarter of 1.76% and 18.31% over the prior year quarter ended
“Additionally, we invested in AFS securities and executed a swap of
Financial Condition and Results of Operations
Loans and Deposits
Total LHFI as of
Total deposits as of
Net Interest Income
Net interest income for the three months ended
The linked-quarter increase in net interest income is primarily a result of the increase in interest income of
Net interest income for the six months ended
Net interest income for the six months ended
Credit Quality
The Company’s NPAs increased by
Net losses (recoveries) were
The provision for credit losses (“PCL”) for the three months ended
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
The Company currently has limited reliance on the wholesale funding market. The Company had
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:
|
|
2024 |
|
2024 |
|
2023 |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
7.16 |
% |
|
|
7.31 |
% |
|
|
8.17 |
% |
Common Equity tier 1 capital ratio |
|
|
7.16 |
% |
|
|
7.31 |
% |
|
|
8.17 |
% |
Tier 1 risk-based capital ratio |
|
|
11.70 |
% |
|
|
11.87 |
% |
|
|
13.40 |
% |
Total risk-based capital ratio |
|
|
12.49 |
% |
|
|
12.65 |
% |
|
|
14.28 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Tier 1 leverage ratio |
|
|
8.21 |
% |
|
|
8.37 |
% |
|
|
9.48 |
% |
Common Equity tier 1 capital ratio |
|
|
8.21 |
% |
|
|
8.37 |
% |
|
|
9.48 |
% |
Tier 1 risk-based capital ratio |
|
|
13.29 |
% |
|
|
13.48 |
% |
|
|
15.53 |
% |
Total risk-based capital ratio |
|
|
14.08 |
% |
|
|
14.25 |
% |
|
|
16.30 |
% |
Noninterest Income
Noninterest income decreased for the three months ended
The decrease quarter-over-quarter is primarily due to other noninterest income decreasing (
Noninterest income increased for the six months ended
The increase year-over-year is primarily due to other noninterest income increasing
Noninterest Expense
Noninterest expense decreased for the three months ended
Noninterest expense increased for the six months ended
The increase year-over-year is primarily due to 2 factors, (1) an increase in salaries and employee benefits as a result of several strategic production hires in key markets and (2) an increase in occupancy expense of
Dividends
The Company paid aggregate cash dividends in the amount of
At
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For the Three Months Ended |
For the Six Months Ended |
||||||||||||||
|
|
|
|
|
|||||||||||
2024 |
2024 |
2023 |
2024 |
2023 |
|||||||||||
INTEREST INCOME | |||||||||||||||
Loans, including fees |
$ |
11,160 |
$ |
10,264 |
|
$ |
7,529 |
|
$ |
21,424 |
|
$ |
14,852 |
||
Investment securities |
|
3,014 |
|
3,045 |
|
|
3,334 |
|
$ |
6,059 |
|
|
6,704 |
||
Other interest |
|
2,488 |
|
2,065 |
|
|
296 |
|
$ |
4,553 |
|
|
635 |
||
|
16,662 |
|
15,374 |
|
|
11,159 |
|
|
32,036 |
|
|
22,191 |
|||
INTEREST EXPENSE | |||||||||||||||
Deposits |
|
5,239 |
|
5,261 |
|
|
2,450 |
|
|
10,500 |
|
|
4,270 |
||
Other borrowed funds |
|
2,806 |
|
2,323 |
|
|
1,294 |
|
|
5,129 |
|
|
2,828 |
||
|
8,045 |
|
7,584 |
|
|
3,744 |
|
|
15,629 |
|
|
7,098 |
|||
NET INTEREST INCOME |
|
8,617 |
|
7,790 |
|
|
7,415 |
|
|
16,407 |
|
|
15,093 |
||
PCL |
|
298 |
|
192 |
|
|
459 |
|
|
490 |
|
|
465 |
||
NET INTEREST INCOME AFTER PCL |
|
8,319 |
|
7,598 |
|
|
6,956 |
|
|
15,917 |
|
|
14,628 |
||
NONINTEREST INCOME | |||||||||||||||
Service charges on deposit accounts |
|
944 |
|
957 |
|
|
890 |
|
|
1,901 |
|
|
1,804 |
||
Other service charges and fees |
|
1,281 |
|
1,176 |
|
|
1,072 |
|
|
2,457 |
|
|
2,109 |
||
Net (losses) gains on sales of securities |
|
- |
|
(1,574 |
) |
|
- |
|
|
(1,574 |
) |
|
- |
||
Other noninterest income |
|
296 |
|
5,280 |
|
|
301 |
|
|
5,576 |
|
|
713 |
||
|
2,521 |
|
5,839 |
|
|
2,263 |
|
|
8,360 |
|
|
4,626 |
|||
NONINTEREST EXPENSE | |||||||||||||||
Salaries and employee benefits |
|
4,936 |
|
4,885 |
|
|
4,710 |
|
|
9,821 |
|
|
9,405 |
||
Occupancy expense |
|
2,805 |
|
2,325 |
|
|
1,856 |
|
|
5,130 |
|
|
3,701 |
||
Other noninterest expense |
|
1,830 |
|
2,474 |
|
|
2,431 |
|
|
4,304 |
|
|
4,632 |
||
|
9,571 |
|
9,684 |
|
|
8,997 |
|
|
19,255 |
|
|
17,738 |
|||
NET INCOME BEFORE TAXES |
|
1,269 |
|
3,753 |
|
|
222 |
|
|
5,022 |
|
|
1,516 |
||
INCOME TAX EXPENSE (BENEFIT) |
|
282 |
|
885 |
|
|
(78 |
) |
|
1,167 |
|
|
76 |
||
NET INCOME |
$ |
987 |
$ |
2,868 |
|
$ |
300 |
|
$ |
3,855 |
|
$ |
1,440 |
||
Earnings per share - basic |
$ |
0.18 |
$ |
0.51 |
|
$ |
0.05 |
|
$ |
0.69 |
|
$ |
0.26 |
||
Earnings per share - diluted |
$ |
0.18 |
$ |
0.51 |
|
$ |
0.05 |
|
$ |
0.69 |
|
$ |
0.26 |
||
Dividends paid |
$ |
0.16 |
$ |
0.16 |
|
$ |
0.16 |
|
$ |
0.32 |
|
$ |
0.40 |
||
Average shares outstanding - basic |
|
5,609,999 |
|
5,603,570 |
|
|
5,601,213 |
|
|
5,609,999 |
|
|
5,598,299 |
||
Average shares outstanding - diluted |
|
5,609,999 |
|
5,603,570 |
|
|
5,601,213 |
|
|
5,609,999 |
|
|
5,598,501 |
|
|
|
|
|
|
|
||||||||||||||
2024 |
2024 |
|
|
2023 |
|
|
||||||||||||||
Assets |
(Unaudited) |
(Unaudited) |
Change |
% Change |
(Unaudited) |
Change |
% Change |
|||||||||||||
Cash and due from banks |
$ |
18,572 |
|
$ |
16,868 |
|
$ |
1,704 |
|
10.10 |
% |
$ |
17,086 |
|
$ |
1,486 |
|
8.70 |
% |
|
Interest bearing deposits with other banks |
|
97,469 |
|
|
145,924 |
|
|
(48,455 |
) |
-33.21 |
% |
|
862 |
|
|
96,607 |
|
11207.29 |
% |
|
Cash and cash equivalents |
|
116,041 |
|
|
162,792 |
|
|
(46,751 |
) |
-28.72 |
% |
|
17,948 |
|
|
98,093 |
|
546.54 |
% |
|
Investment securities held-to-maturity, at amortized cost |
|
379,347 |
|
|
384,015 |
|
|
(4,668 |
) |
-1.22 |
% |
|
396,931 |
|
|
(17,584 |
) |
-4.43 |
% |
|
Investment securities available-for-sale, at fair value |
|
184,988 |
|
|
152,553 |
|
|
32,435 |
|
21.26 |
% |
|
196,866 |
|
|
(11,878 |
) |
-6.03 |
% |
|
Loans held for investment (LHFI) (1) |
|
679,223 |
|
|
667,416 |
|
|
11,808 |
|
1.77 |
% |
|
574,734 |
|
|
104,489 |
|
18.18 |
% |
|
Less allowance for credit losses (ACL), LHFI (1) |
|
6,821 |
|
|
6,668 |
|
|
153 |
|
2.29 |
% |
|
6,397 |
|
|
424 |
|
6.63 |
% |
|
Net LHFI |
|
672,402 |
|
|
660,748 |
|
|
11,655 |
|
1.76 |
% |
|
568,337 |
|
|
104,065 |
|
18.31 |
% |
|
Premises and equipment, net |
|
20,370 |
|
|
20,530 |
|
|
(160 |
) |
-0.78 |
% |
|
27,381 |
|
|
(7,011 |
) |
-25.61 |
% |
|
Other real estate owned, net |
|
1,234 |
|
|
1,234 |
|
|
- |
|
0.00 |
% |
|
1,009 |
|
|
225 |
|
22.26 |
% |
|
Accrued interest receivable |
|
5,487 |
|
|
4,784 |
|
|
703 |
|
14.70 |
% |
|
4,766 |
|
|
721 |
|
15.12 |
% |
|
Cash surrender value of life insurance |
|
26,610 |
|
|
26,438 |
|
|
172 |
|
0.65 |
% |
|
26,062 |
|
|
548 |
|
2.10 |
% |
|
Deferred tax assets, net |
|
27,171 |
|
|
27,533 |
|
|
(363 |
) |
-1.32 |
% |
|
29,346 |
|
|
(2,175 |
) |
-7.41 |
% |
|
Identifiable intangible assets, net |
|
13,277 |
|
|
13,304 |
|
|
(27 |
) |
-0.21 |
% |
|
13,386 |
|
|
(109 |
) |
-0.82 |
% |
|
Other assets |
|
18,032 |
|
|
19,592 |
|
|
(1,560 |
) |
-7.96 |
% |
|
7,307 |
|
|
10,725 |
|
146.78 |
% |
|
Total Assets |
$ |
1,464,959 |
|
$ |
1,473,523 |
|
$ |
(8,564 |
) |
-0.58 |
% |
$ |
1,289,339 |
|
$ |
175,620 |
|
13.62 |
% |
|
Liabilities and Shareholders' Equity | ||||||||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits: | ||||||||||||||||||||
Non-interest bearing deposits |
$ |
259,848 |
|
$ |
263,006 |
|
$ |
(3,159 |
) |
-1.20 |
% |
$ |
281,812 |
|
$ |
(21,964 |
) |
-7.79 |
% |
|
Interest bearing deposits |
|
909,722 |
|
|
947,594 |
|
|
(37,871 |
) |
-4.00 |
% |
|
821,260 |
|
|
88,462 |
|
10.77 |
% |
|
Total deposits |
|
1,169,570 |
|
|
1,210,600 |
|
|
(41,030 |
) |
-3.39 |
% |
|
1,103,072 |
|
|
66,498 |
|
6.03 |
% |
|
Securities sold under agreement to repurchase |
|
205,604 |
|
|
173,254 |
|
|
32,349 |
|
18.67 |
% |
|
109,526 |
|
|
96,078 |
|
87.72 |
% |
|
Short-term borrowings |
|
- |
|
|
- |
|
|
- |
|
0.00 |
% |
|
4,000 |
|
|
(4,000 |
) |
0.00 |
% |
|
Borrowings on secured line of credit |
|
18,000 |
|
|
18,000 |
|
|
- |
|
0.00 |
% |
|
18,000 |
|
|
- |
|
0.00 |
% |
|
Deferred compensation payable |
|
9,746 |
|
|
9,841 |
|
|
(95 |
) |
-0.97 |
% |
|
10,104 |
|
|
(358 |
) |
-3.55 |
% |
|
Other liabilities |
|
15,205 |
|
|
16,135 |
|
|
(930 |
) |
-5.76 |
% |
|
4,496 |
|
|
10,709 |
|
238.19 |
% |
|
Total liabilities |
|
1,418,125 |
|
|
1,427,830 |
|
|
(9,706 |
) |
-0.68 |
% |
|
1,249,198 |
|
|
168,927 |
|
13.52 |
% |
|
Shareholders' Equity | ||||||||||||||||||||
Common stock, |
|
1,125 |
|
|
1,123 |
|
|
- |
|
0.00 |
% |
|
1,123 |
|
|
2 |
|
0.17 |
% |
|
Additional paid-in capital |
|
18,646 |
|
|
18,618 |
|
|
28 |
|
0.15 |
% |
|
18,519 |
|
|
127 |
|
0.69 |
% |
|
Accumulated other comprehensive loss, net of tax benefit of |
|
(74,343 |
) |
|
(75,369 |
) |
|
1,026 |
|
-1.36 |
% |
|
(80,238 |
) |
|
5,895 |
|
-7.35 |
% |
|
Retained earnings |
|
101,406 |
|
|
101,321 |
|
|
85 |
|
0.08 |
% |
|
100,737 |
|
|
669 |
|
0.66 |
% |
|
Total shareholders' equity |
|
46,834 |
|
|
45,693 |
|
|
1,141 |
|
2.50 |
% |
|
40,141 |
|
|
6,693 |
|
16.67 |
% |
|
|
- |
|
||||||||||||||||||
Total liabilities and shareholders' equity |
$ |
1,464,959 |
|
$ |
1,473,523 |
|
$ |
(8,564 |
) |
-0.58 |
% |
$ |
1,289,339 |
|
$ |
175,620 |
|
13.62 |
% |
|
|
|
|||||||
|
2024 |
|
|
2024 |
|
|
2023 |
|
|
Dollars in thousands, except per share data | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Per Share Data | |||||||||
Basic Earnings per Common Share |
$ |
0.18 |
|
$ |
0.51 |
|
$ |
0.05 |
|
Diluted Earnings per Common Share |
|
0.18 |
|
|
0.51 |
|
|
0.05 |
|
Dividends per Common Share |
|
0.16 |
|
|
0.16 |
|
|
0.16 |
|
BV per Common Share |
|
8.31 |
|
|
8.12 |
|
|
7.15 |
|
BV per Common Share (ex OCI) |
|
21.50 |
|
|
21.51 |
|
|
21.43 |
|
TBV per Common Share |
|
5.95 |
|
|
5.75 |
|
|
4.76 |
|
TBV per Common Share (ex OCI) |
|
19.14 |
|
|
19.14 |
|
|
19.05 |
|
Average Diluted Shares Outstanding |
|
5,609,999 |
|
|
5,603,570 |
|
|
5,601,213 |
|
End of Period Common Shares Outstanding |
|
5,637,061 |
|
|
5,628,811 |
|
|
5,616,438 |
|
Annualized Performance Ratios | |||||||||
Return on Average Assets |
|
0.26 |
% |
|
0.78 |
% |
|
0.22 |
% |
Return on Average Equity |
|
8.78 |
% |
|
18.79 |
% |
|
7.26 |
% |
Equity/Assets |
|
3.20 |
% |
|
3.10 |
% |
|
3.10 |
% |
Yield on Earning Assets |
|
4.84 |
% |
|
4.61 |
% |
|
3.71 |
% |
Cost of Funds |
|
2.75 |
% |
|
2.66 |
% |
|
1.47 |
% |
Net Interest Margin |
|
2.56 |
% |
|
2.40 |
% |
|
2.55 |
% |
Credit Metrics | |||||||||
Allowance for Loan Losses to Total Loans |
|
1.00 |
% |
|
1.00 |
% |
|
1.11 |
% |
Non-performing assets to loans |
|
0.76 |
% |
|
0.54 |
% |
|
0.62 |
% |
SELECTED FINANCIAL INFORMATION
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20240719200795/en/
Phillip.branch@thecitizensbank.bank
Source: