8-K
CITIZENS HOLDING CO /MS/ (CIZN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d)
of the Securities Exchange Act of 1934
April 23, 2021
Date of Report (Date of earliest event reported)
CITIZENS HOLDING COMPANY
(Exact name of the registrant as specified in its charter)
| Mississippi | 001-15375 | 64-0666512 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission<br>File Number) | (IRS Employer<br>Identification No.) |
| 521 Main Street, Philadelphia, Mississippi | 39350 | |
| --- | --- | |
| (Address of principal executive office) | (Zip Code) |
(601) 656-4692
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425). |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12). |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)). |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)). |
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Securities registered pursuant to Section 12(b) of the Act:
| Title of Each Class | Trading<br>Symbol(s) | Name of Each Exchange<br>on Which Registered |
|---|---|---|
| Common Stock, $0.20 par value | CIZN | NASDAQ Global Market |
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| Item 2.02. | Results of Operation and Financial Condition. |
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On April 23, 2021, Citizens Holding Company (the “Company”) issued a press release that announced the earnings for the Company for the first quarter of 2021. This press release, including accompanying financial highlights, is furnished as Exhibit 99.1 to this Form 8-K.
| Item 7.01. | Regulation FD Disclosure. |
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On April 23, 2021, the Company issued a press release that announced the earnings for the Company for the first quarter of 2021. This press release, including accompanying financial highlights, is furnished as Exhibit 99.1 to this Form 8-K.
| Item 9.01. | Financial Statements and Exhibits. |
|---|---|
| (d) | Exhibits |
| --- | --- |
| Exhibit 99.1 | Press Release dated April 23, 2021, including financial highlights |
| --- | --- |
| Exhibit 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CITIZENS HOLDING COMPANY | ||
|---|---|---|
| BY: | /s/ Phillip R. Branch | |
| Phillip R. Branch | ||
| Treasurer and Chief Financial Officer |
DATE: April 27, 2021
EX-99.1
EXHIBIT 99.1 CITIZENS HOLDING COMPANY REPORTS EARNINGS
PHILADELPHIA, Miss.—(BUSINESS WIRE)—April 23, 2021—Citizens Holding Company (the “Company”) (NASDAQ:CIZN) announced today results of operations for the three months ended March 31, 2021.
(in thousands, except share and per share data)
Net income for the three months ended March 31, 2021 was $1,897, or $0.34 per share-basic and diluted, an increase of $737, or 63.53% from net income of $1,160, or $0.21 per share-basic and diluted for the same quarter in 2020.
First Quarter Highlights
| • | Total revenues, or interest and non-interest income, for the three months<br>ended March 31, 2021 totaled $12,311, an increase of $221 or 1.83%, compared to the same quarter in 2020. |
|---|---|
| • | Total loans decreased $13,082, or (2.01%), to $639,174 at March 31, 2021, compared to $652,256 at<br>December 31, 2020, and increased $62,195, or 10.78%, compared to $576,979 at March 31, 2020. Excluding PPP loans with a total balance of $23,649 at March 31, 2021, total loans decreased $7,208, or (1.11%), compared to $622,733 at<br>December 31, 2020, and increased $38,546, or 6.68%, compared to March 31, 2020. Despite the overall decrease in total loans from December 31, 2020 to March 31, 2021, construction and development loans increased by $6,985 or<br>14.30%. |
| --- | --- |
| • | Total non-interest income increased $260, or 8.75%, to $3,232 at<br>March 31, 2021, compared to $2,972 at December 31, 2020 and increased $851, or 35.74%, compared to $2,381 at March 31, 2020. |
| --- | --- |
| • | Overall cost of funds decreased 10 basis points (“bps”) to 53 bps for the three months ended<br>March 31, 2021 compared to 63 bps for the three months ended December 31, 2020 and decreased 52 bps compared to 105 bps for the three months ended March 31, 2020. |
| --- | --- |
Net Interest Income
Net interest income for the three months ended March 31, 2021 was $7,633, a decrease of $860, or (10.13%) compared to $8,493 for the three months ended December 31, 2020, and an increase of $248, or 3.36%, compared to $7,385 for the three months ended March 31, 2020. The net interest margin (“NIM”) was 2.32% for the three months ended March 31, 2021 compared to 2.64% for the three months ended December 31, 2020 and 2.72% for the same period in 2020.
Continued low interest rates decreased the yield on the loans held for investment as well as the securities portfolio but were partially offset by lower costs on interest-bearing deposits. With mortgage rates at historical lows prepayments on mortgage-backed securities continues to decrease the yield on securities along with the NIM.
Credit Quality
The provision for loan losses for the three months ended March 31, 2021 was $87, down compared to $302 from the prior quarter, and down compared to $314 year-over-year. The decrease in the provision reflects management’s estimate of inherent losses in the loan portfolio, which is based on the overall improvement of the economy as a result of the vaccine distribution at the local and national level, the steady decline in the unemployment rate, and the overall decrease in the loan portfolio when compared to the prior quarter.
The Company’s non-performing assets increased slightly by $67, or 0.57%, to $11,722 at March 31, 2021 compared to $11,655 December 31, 2020 and decreased $3,876 or (24.85%), from $15,598 at March 31, 2020.
Year-to-date net charge-offs totaled $50, or 0.01% of average loans at March 31, 2021 compared to 0.04% at March 31, 2020.
Noninterest Income
Non-interest income increased for the three months ended March 31, 2021, by $260, or 8.75% compared to the three months ended December 31, 2020 and increased by $851 or 35.74% compared to the same period in 2020.
The increase in non-interest income was primarily due to the following factors:
| • | Increase in mortgage loan origination income due to a decrease in long-term mortgage rates. Mortgage loan<br>origination income increased $143, or 56.70% for the three months ended March 31, 2021 compared to the same quarter in 2020; |
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| • | Increase in gains from the sale of investment securities to lower the Company’s prepayment risk within the<br>Company’s mortgage-backed securities portfolio; |
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| • | Interchange fees increased $206 or 30.16%, at March 31, 2021 compared to the same quarter in 2020.<br> |
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| • | Partially offset by a decrease in overdraft income due to the continued savings trend related to the COVID-19 pandemic and stimulus. |
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Noninterest Expense
Non-interest expense increased for the three months ended March 31, 2021 by $106, or 1.27% compared to the three months ended December 31, 2020 and increased by $401 or 4.97% compared to the same period in 2020.
The increase in non-interest expense is mainly attributable to an increase in regulatory related expenses along with continued investment in customer facing and internal technology.
Dividends
The Company paid aggregate cash dividends in the amount of $1,341, or $0.24 per share, during the three-month period ended March 31, 2021 compared to $1,339, or $0.24 per share, for the same period in 2020.
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 and a Loan Production Office in Oxford, Mississippi to offer loan services to north 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 banking services are available at the Bank’s website, 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. Information about Citizens Holding Company may be obtained by accessing its corporate website at www.citizensholdingcompany.com.
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) the impact of COVID-19 on our business, including the impact of the actions taken by governmental authorities to try and contain the virus or address the impact of the virus on the United States economy (including, without limitation, the CARES Act), and the resulting effect of all of such items on our operations, liquidity and capital position, and on the financial condition of our borrowers and other customers; 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.
Citizens Holding Company
Financial Highlights
(amounts in thousands, except share and per share data)
| For the Three Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| March 31, | December 31, | March 31, | |||||||
| 2021 | 2020 | 2020 | |||||||
| INTEREST INCOME | |||||||||
| Loans, including fees | $ | 8,131 | $ | 8,024 | $ | 7,480 | |||
| Investment securities | 933 | 2,111 | 1,997 | ||||||
| Other interest | 15 | 11 | 232 | ||||||
| 9,079 | 10,146 | 9,709 | |||||||
| INTEREST EXPENSE | |||||||||
| Deposits | 1,266 | 1,469 | 1,969 | ||||||
| Other borrowed funds | 180 | 184 | 355 | ||||||
| 1,446 | 1,653 | 2,324 | |||||||
| NET INTEREST INCOME | 7,633 | 8,493 | 7,385 | ||||||
| PROVISION FOR LOAN LOSSES | 87 | 302 | 314 | ||||||
| NET INTEREST INCOME AFTER | |||||||||
| PROVISION FOR LOAN LOSSES | 7,546 | 8,191 | 7,071 | ||||||
| NON-INTEREST INCOME | |||||||||
| Service charges on deposit accounts | 814 | 864 | 1,049 | ||||||
| Other service charges and fees | 975 | 931 | 773 | ||||||
| Other non-interest income | 1,443 | 1,177 | 559 | ||||||
| 3,232 | 2,972 | 2,381 | |||||||
| NON-INTEREST EXPENSE | |||||||||
| Salaries and employee benefits | 4,568 | 4,345 | 4,435 | ||||||
| Occupancy expense | 1,817 | 1,804 | 1,659 | ||||||
| Other non-interest expense | 2,083 | 2,213 | 1,973 | ||||||
| 8,468 | 8,362 | 8,067 | |||||||
| NET INCOME BEFORE TAXES | 2,310 | 2,801 | 1,385 | ||||||
| INCOME TAX EXPENSE | 413 | 575 | 225 | ||||||
| NET INCOME | $ | 1,897 | $ | 2,226 | $ | 1,160 | |||
| Earnings per share - basic | $ | 0.34 | $ | 0.40 | $ | 0.21 | |||
| Earnings per share - diluted | $ | 0.34 | $ | 0.40 | $ | 0.21 | |||
| Dividends paid | $ | 0.24 | $ | 0.24 | $ | 0.24 | |||
| Average shares outstanding - basic | 5,578,820 | 5,578,820 | 5,579,381 | ||||||
| Average shares outstanding - diluted | 5,579,814 | 5,580,726 | 5,581,411 | ||||||
| For the Period Ended, | |||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| March 31, | December 31, | March 31, | |||||||
| 2021 | 2020 | 2020 | |||||||
| Period End Balance Sheet Data: | |||||||||
| Total assets | $ | 1,548,347 | $ | 1,450,692 | $ | 1,216,111 | |||
| Total earning assets | 1,440,234 | 1,357,974 | 1,124,693 | ||||||
| Loans, net of unearned income | 639,174 | 652,256 | 576,979 | ||||||
| Allowance for loan losses | 4,772 | 4,735 | 3,816 | ||||||
| Total deposits | 1,229,621 | 1,095,189 | 925,888 | ||||||
| Securities sold under agreement to repurchase | 197,709 | 196,272 | 159,442 | ||||||
| Short-term borrowings | — | 25,000 | — | ||||||
| Shareholders’ equity | 106,480 | 119,548 | 118,743 | ||||||
| Book value per share | 19.09 | 21.43 | 21.28 | ||||||
| Period End Average Balance Sheet Data: | |||||||||
| Total assets | 1,490,670 | 1,336,513 | 1,202,483 | ||||||
| Total earning assets | 1,382,055 | 1,243,566 | 1,109,562 | ||||||
| Loans, net of unearned income | 653,154 | 622,805 | 576,978 | ||||||
| Total deposits | 1,145,985 | 1,013,258 | 918,571 | ||||||
| Securities sold under agreement to repurchase | 205,292 | 181,699 | 158,424 | ||||||
| Short-term borrowings | 7,556 | 10,318 | 56 | ||||||
| Shareholders’ equity | 117,612 | 117,775 | 112,945 | ||||||
| Period End Non-performing Assets: | |||||||||
| Non-accrual loans | 6,789 | 8,568 | 11,941 | ||||||
| Loans 90+ days past due and accruing | 49 | 14 | 14 | ||||||
| Other real estate owned | 4,884 | 3,073 | 3,643 | ||||||
| As of | |||||||||
| March 31, | December 31, | March 31, | |||||||
| 2021 | 2020 | 2020 | |||||||
| Year to Date Net charge-offs as a percentage of average net loans | 0.01 | % | 0.08 | % | 0.04 | % | |||
| Year to Date Performance Ratios: | |||||||||
| Return on average assets^(1)^ | 0.51 | % | 0.52 | % | 0.39 | % | |||
| Return on average equity^(1)^ | 6.45 | % | 5.89 | % | 4.11 | % | |||
| Year to Date Net Interest | |||||||||
| Margin (tax equivalent)^(1)^ | 2.32 | % | 2.72 | % | 2.72 | % | |||
| ^(1)^ | Annualized | ||||||||
| --- | --- |
Contact:
Citizens Holding Company, Philadelphia
Phillip R. Branch, 601/656-4692
Phillip.branch@thecitizensbank.bank