Citizens Holding records steep increase in net income

PHILADELPHIA — Citizens Holding Company (NASDAQ: CIZN) has released results of operations for the three and six months ended June 30, 2014.

Net income for the three months ended June 30, 2014, was $2.093 million, or $0.43 per share-basic and diluted, up from $1.604 million, or $0.33 per share-basic and diluted for the same quarter in 2013. Net interest income for the second quarter of 2014, after the provision for loan losses for the quarter, was $6.980 million, approximately 12.0 percent higher than the same period in 2013, due to a decrease in interest expense. The provision for loan losses for the three months ended June 30, 2014, was $212,000 compared to $574,000 for the same period in 2013. The decrease 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 3.68 percent in the second quarter of 2014 from 3.48 percent 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 second quarter of 2014 by $555,000, or 28.8 percent, while non-interest expenses increased $900,000, or 14.6 percent, compared to the same period in 2013. The increase in non-interest income was due primarily to death benefits from bank owned life insurance policies that were accrued as a result of the death of an insured bank officer. Non-interest expenses increased due to a $1.013 million increase in other operating expense partially offset by a $30,000 decrease in occupancy expense and a $83,000 decrease in salaries and benefits. The increase in other operating expense was due mainly as a result of write-downs on other real estate and an increase in automated teller machine costs.

Net income for the six months ended June 30, 2014, increased 28.9 percent to $3.890 million, or $0.80 per share-basic and diluted, from $3.018 million, or $.62 per share-basic and diluted, for the six months ended June 30, 2013. Net interest income for the six months ended June 30, 2014, after the provision for loan losses, increased 8.0 percent to $13.836 million from $12.812 million for the same period in 2013. Net interest margin for the six months ended June 30, 2014, increased to 3.67 percent in 2014 from 3.50 percent in the same period in 2013. The provision for loan losses for the six months ended June 30, 2014 was $573,000 compared to the provision of $749,000 in 2013. The decrease in the provision reflects management’s assessment of inherent losses in the loan portfolio including the impact caused by current local and national economic conditions.

Non-interest income increased by $657,000, or 18.2 percent, and non-interest expense increased by $711,000, or 5.6 percent, for the six months ended June 30, 2014, when compared to the same period in 2013. The increase in non-interest income was due primarily to death benefits from bank owned life insurance policies that were accrued as a result of the death of an insured bank officer. Non-interest expense increased primarily due to an increase in other operating expenses of $915,000 partially offset by a decrease in salaries and benefits in the amount of $34,000 and occupancy expenses in the amount of $170,000. The increase in other operating expense was due mainly as a result of write-downs on other real estate and an increase in automated teller machine costs.

Total assets as of June 30, 2014, increased to $887.807 million, up $14.738 million, or 1.7 percent, when compared to Dec. 31, 2013. Deposits increased by $36.817 million, or 5.6 percent, and loans, net of unearned income, decreased by $2.439 million, or 0.6 percent, when compared to Dec. 31, 2013. The decrease in loans, net of unearned income, was due to repayments in excess of new loans. Non-performing assets decreased by $1.262 million to $18.612 million at June 30, 2014, as compared to Dec. 31, 2013, because of decreases in loans 90 days or more past due and still accruing interest and other real estate owned offset by an increase in non-accrual loans.

During the first half of 2014, the company paid dividends totaling $0.44 per share.

 

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