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Citizens Holding Company (“Company”) (NASDAQ:citizenship) Today announced the operating results for the three and six months ending June 30, 2021.
(In thousands, except stock and per share data)
Net income for the three months ended June 30, 2021 was US$1,907, or US$0.34 per share after basic dilution, an increase of US$445 or 30.44 from the net income of US$1,462 or US$0.26 per share for the same quarter of 2021. % 2020.
Net income for the six months ended June 30, 2021 was US$3,804, or US$0.68 per share, which is an increase of US$1,182 or US$1,182 from the net income of US$2,622 per share or US$0.47 per share for the same period in 2016. 45.08% 2020.
Highlights of the second quarter
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Affected by the epidemic, the company’s wholly-owned subsidiary Citizens Bank (“Bank”) experienced unprecedented growth in deposits amidst government stimulus measures and increased customer savings in response to the uncertainty of the epidemic. This led to an increase in the company’s total assets by approx. From March 31, 2020 to March 31, 2021, it was USD 332,000, which significantly exceeded the increase in capital. In response to this surge, the company took two necessary measures for the quarter ending June 30, 2021 to ensure that banks maintain appropriate capital levels. First, the company obtained a credit line of US$20,000, of which US$18,000 was injected into the bank. Second, the company will strategically reprice and/or reduce higher interest-bearing deposits by liquidating underperforming securities to shrink the bank’s balance sheet and increase profitability. The impact of these efforts has increased the bank’s primary leverage ratio from 6.76% on March 31, 2021 to 8.25% on June 30, 2021.
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Total income or interest and non-interest income for the three months ended June 30, 2021 totaled US$12,805, an increase of US$494 or 4.01% and an increase of US$208 compared to the three months ended March 31, 2021 Or 1.65%, compared with the same quarter in 2020. Total revenue increased from US$24,687 year-on-year by US$429, or 1.74%, to US$25,116. The increase in revenue mainly reflects the proceeds from the sale of investments to reduce the risk of prepayment in the company’s mortgage-backed securities portfolio.
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Compared with the USD 639,174 on March 31, 2021, the total loan amount on June 30, 2021 decreased by USD 5,132 (0.80%) to USD 634,042, which was a decrease from USD 636,196 (excluding PPP 20) on June 30 $2,154 (0.34%). For loans with a total balance of US$21,642 on June 30, 2021, and a total balance of US$23,649 on March 31, 2021, compared with June 30, the total loan decreased slightly by US$3,125, or (0.49%), a year-on-year increase USD 25,025, or 3.93%, excluding the PPP loan of USD 48,821 in 2020. Despite the overall month-on-month decline, construction and development loans increased by US$15,970 or 28.61%, mainly due to the economy starting to recover from the effects of the pandemic.
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Compared with the 53 basis points for the three months ended March 31, 2021, the overall cost of capital for the three months ended June 30, 2021 decreased by 3 basis points (“basis points”) to 50 basis points, which is less than 3 basis points. This is a decrease of 24 basis points from 74 basis points in the month as of June 30, 2020. The decrease in the cost of funds was due to management’s continued efforts to reprice higher interest-bearing deposits.
Net interest income
Net interest income for the three months ended June 30, 2021 was US$8,494, which was an increase of US$861 or 11.28% from US$7,633 for the three months ended March 31, 2021, and was an increase of US$861 or 11.28% from the period ended March 31, 2021 USD 8,350 for three months increased by USD 144 or 1.72% for the three months ended June 30, 2020. The net interest margin (“NIM”) for the three months ended June 30, 2021 increased by 25 basis points to 2.57% from 2.32% on March 31, 2021.
Net interest income for the six months ended June 31, 2021 increased by US$392 or 2.49% to US$16,127 from US$15,735 in the same period in 2020. The net interest margin (“NIM”) as of June 30, 2021 was 2.45%, compared to 2.32 as of March 31, 2021 and 2.74% for the same period in 2020.
The increase in NIM is the result of management’s strategic redistribution of securities portfolios into securities that are unlikely to be prepaid, such as higher-yielding municipal investments. Management also continued to reprice higher interest-bearing deposits to help offset margin compression.
Credit quality
The loan loss reserve for the six months ended June 30, 2021 was US$319, a decrease of US$617 year-on-year, compared to US$936 in the same period last year. The reduction in provision reflects management’s estimation of the inherent loss of the loan portfolio, which is based on the continued distribution of vaccines at the local and national levels, the steady decline in unemployment, and the overall decrease in the loan portfolio compared to the previous quarter.
The company’s non-performing assets decreased from US$11,722 on March 31, 2021 to US$8,851 on June 30, 2021, or US$2,871 or (24.49%), which was a decrease of US$6,051 or ( 40.61%). Reflects the foreclosure and write-off of a non-accruing impaired loan that has been fully retained in the reserve. The increase in other owned real estate (“OREO”) was subsequently offset by the sale of an OREO property for $1,410 and a write-down of $375 for the three months ended June 30, 2021.
The year-to-date net write-offs totaled $702, representing 0.11% of the average loan as of June 30, 2021, and 0.07% as of June 30, 2020.
Non-interest income
Non-interest income for the three months ended June 30, 2021 decreased by US$243 or (7.52%) compared to the three months ended March 31, 2021, and increased by US$519 or 21.01% compared to the same period in 2020 .
Compared with the same period in 2020, non-interest income for the six months ended June 30, 2021 increased by $1,370, or 28.24%.
The year-on-year growth of non-interest income was mainly affected by the following factors:
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Due to the decline in long-term mortgage interest rates, income from mortgage issuance increased. For the six months ended June 30, 2021, mortgage origination income increased by US$189, or 35.73%, compared with the same period in 2020;
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Increase the proceeds from the sale of investment securities to reduce the risk of early repayment in the company’s mortgage-backed securities portfolio;
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Compared with the same period in 2020, the exchange fee on June 30, 2021 (included in the other service charges and fees in the financial summary below) has increased by US$405 or 27.65%.
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Due to the COVID-19 pandemic and government stimulus measures, savings have increased, and overdraft income has been partially offset.
Non-interest expense
Non-interest expenses for the three months ended June 30, 2021 increased by US$514 or 6.07% compared to the three months ended March 31, 2021, and increased by US$638 or 7.65% compared to the same period in 2020.
Compared with the same period in 2020, non-interest expenses for the six months ended June 30, 2021 increased by US$1,039, or 6.33%.
The increase in non-interest expenses was mainly due to the increase in regulatory-related expenses, the write-down of other real estate owned, and continued investment in customer-facing and in-house technology.
Dividends
During the six-month period ending June 30, 2021, the total cash dividend paid by the company was US$2,684 or US$0.48 per share, compared to US$2,681 or US$0.48 per share for the same period in 2020.
Citizens Holding Company (“Company”) is a single bank holding company and the parent company of Philadelphia Citizens Bank (“Bank”), both of which are headquartered in Philadelphia, Mississippi. The bank currently has 24 bank branches in 14 counties in eastern and southern Mississippi, and has a loan production office in Oxford, Mississippi, to provide loan services for northern Mississippi. In addition to full-service commercial banking, the bank also provides mortgage loans, title insurance services and a full range of online banking services through its subsidiary Title Services, LLC, including online banking, bill payment and cash management services for enterprises . Our website provides online banking services, www.thecitizensbankphila.com. Citizens Holding Company shares are listed on the Nasdaq Global Market under the symbol CIZN. The company’s transfer agent is the American Stock Transfer Trust Company.Information about Citizens Holding Company can be obtained by visiting its company website www.citizensholdingcompany.com.
This press release includes “forward-looking statements” referred to in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements in this press release regarding the company’s financial status, operating results, business strategies, plans, goals and expectations for future operations, except statements of historical facts, are forward-looking statements. The company cannot guarantee that the assumptions underlying such forward-looking statements will prove to be correct. Forward-looking statements are only effective from the date they are made. The company assumes no responsibility for updating 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 business operations, performance, development and performance of the company and the bank include but are not limited to the following: (a) The risk of adverse changes in the overall banking business conditions and the specific markets in which the company operates; (b) The impact of COVID-19 on our business, including the impact of actions taken by government authorities to try to contain the virus or address the impact of the virus on the U.S. economy (including but not limited to the CARES Act), and all such projects The impact on our operations, liquidity and capital status, as well as the financial status of our borrowers and other customers; our ability to mitigate risk exposure; (c) changes in the legislative and regulatory environment, which have a negative impact on the company and banks by increasing operating expenses Impact; (d) Increased competition from other financial institutions; (e) The impact of technological progress; (f) Anticipation of changes in interest rates, including possible actions by the Federal Reserve Board in response to changing economic conditions; (g) Changes in asset quality and loan demand; (h) Expectations on the overall economic strength and economic performance of the company’s market area; (i) Other risks detailed in the company’s documents submitted to the US Securities and Exchange Commission from time to time. If one or more of these risks become reality, or any such basic assumptions prove to be significantly different, the actual results may be significantly different from the expected, estimated, predicted or expected results.
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Citizen holding company
Financial Summary
(In thousands, except for stock and per share data) |
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End of three months |
The end of six months |
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June 30, |
March 31, |
June 30, |
June 30, |
June 30, |
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2021 |
2021 |
2020 year |
2021 |
2020 year |
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Interest income |
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Loan, including fees |
$ |
7,917 |
$ |
8,131 |
$ |
7,632 |
$ |
16,048 |
$ |
15,112 |
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|
Investment securities |
|
1,889 |
|
933 |
|
2,464 |
|
2,822 |
|
4,461 |
|||||
|
Other interests |
|
10 |
|
15 |
|
31 |
|
25 |
|
263 |
|||||
|
|
9,816 |
|
9,079 |
|
10,127 |
|
18,895 |
|
19,836 |
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|
|
|
|
|
|
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Interest expense |
|
|
|
|
|
||||||||||
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deposit |
|
1,186 |
|
1,266 |
|
1,612 |
|
2,452 |
|
3,581 |
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Other borrowed funds |
|
136 |
|
180 |
|
165 |
|
316 |
|
520 |
|||||
|
|
1,322 |
|
1,446 |
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