Market Overview

Citizens Holding Company Reports Earnings

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Citizens Holding Company (NASDAQ:CIZN) announced today results of
operations for the three and nine months ended September 30, 2017.

Net income for the three months ended September 30, 2017 was $1.608
million, or $0.33 per share-basic and diluted, down from $1.752 million,
or $0.36 per share-basic and diluted for the same quarter in 2016. Net
interest income for the third quarter of 2017, after the provision for
loan losses, was $6.793 million, approximately 2.4% higher than the same
period in 2016. The provision for loan losses for the three months ended
September 30, 2017 was negative $74 thousand compared to $183 thousand
for the same period in 2016. 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 and a
decrease in total loans outstanding. The net interest margin decreased
to 2.98% in the third quarter of 2017 from 3.10% in the same period in
2016. This was due primarily to the decrease in yields on earning assets
coupled with a small increase in rates paid on interest bearing deposits.

Non-interest income increased in the third quarter of 2017 by $48
thousand, or 2.3%, while non-interest expenses increased $330 thousand,
or 5.0%, compared to the same period in 2016. The increase in
non-interest income was mainly the result of an increase in service
charges on checking accounts and other service charges and fees.
Non-interest expense increased due to an increase in salary and benefit
expense of $285 thousand, occupancy expense of $6 thousand and a $39
thousand increase in other operating expenses. The increase in other
non-interest expense was due mainly to office supply costs for the
quarter.

Net income for the nine months ended September 30, 2017 decreased 4.5%
to $4.828 million, or $0.99 per share-basic and diluted, from $5.057
million, or $1.04 per share-basic and diluted, for the nine months ended
September 30, 2016. Net interest income for the nine months ended
September 30, 2017, after the provision for loan losses, increased 1.2%
to $20.648 million from $20.404 million for the same period in 2016. Net
interest margin for the nine months ended September 30, 2017, decreased
to 3.03% in 2017 from 3.11% in the same period in 2016. The provision
for loan losses for the nine months ended September 30, 2017 was a
negative $255 thousand compared to $97 thousand in 2016. 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 and a decrease in loans outstanding.

Non-interest income increased by $381 thousand, or 6.6%, and
non-interest expense increased by $1.05 million, or 5.3%, for the nine
months ended September 30, 2017 when compared to the same period in
2016. The increase in non-interest income was the result of increases in
service charges on deposit accounts and other service charges and fees.
Non-interest expense increased primarily due to an increase in salary
and benefits costs.

Total assets as of September 30, 2017 increased to $1.026 billion, up
$910 thousand, or 0.1%, when compared to December 31, 2016. Deposits
decreased by $5.387 million, or 0.7%, and loans, net of unearned income,
decreased by $972 million, or 0.2%, when compared to December 31, 2016.
The decrease in loans, net of unearned income, was due to payments on
loans in excess of current loan demand. Non-performing assets decreased
by $1.223 million to $12.305 million at September 30, 2017 as compared
to $13.528 million at December 31, 2016, due in large part to decreases
in other real estate owned and in non-accrual loans partially offset by
a slight increase in loans 90 days or more past due and still accruing
interest.

During the nine months of 2017, the Company paid dividends totaling
$0.72 per share.

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. In the fourth quarter of 2016, the Bank
added 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 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)
changes in the legislative and regulatory environment that negatively
impact the Company and Bank through increased operating expenses; (c)
increased competition from other financial institutions; (d) the impact
of technological advances; (e) expectations about the movement of
interest rates, including actions that may be taken by the Federal
Reserve Board in response to changing economic conditions; (f) changes
in asset quality and loan demand; (g) expectations about overall
economic strength and the performance of the economics in the Company's
market area; and (h) 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 Ending For the Nine Months Ending
September 30,   June 30,   September 30, September 30,   September 30,
2017   2017   2016     2017   2016
 
INTEREST INCOME
Loans, including fees $4,585 $4,864 $4,825 $14,017 $14,344
Investment Securities 2,893 2,919 2,720 8,644 8,287
Other Interest 66   59   29       194     148  
7,544 7,842 7,574 22,855 22,779
 
INTEREST EXPENSE
Deposits 472 486 448 1,435 1,367
Other borrowed funds 353   344   306       1,027     911  
825 830 754 2,462 2,278
 
NET INTEREST INCOME 6,719 7,012 6,820 20,393 20,501
 
PROVISION FOR LOAN LOSSES -74   -30   183       -255     97  
 

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES

6,793 7,042 6,637 20,648 20,404
 
NON-INTEREST INCOME
Service charges on deposit accounts 1,116 1,019 1,010 3,177 2,795
Other service charges and fees 703 673 658 1,993 1,852
Other non-interest income 308   431   411       1,014     1,156  
2,127 2,123 2,079 6,184 5,803
 
NON-INTEREST EXPENSE
Salaries and employee benefits 3,745 3,745 3,460 11,154 10,341
Occupancy expense 1,336 1,339 1,330 3,985 3,867
Other non-interest expense 1,806   1,827   1,767       5,768     5,649  
6,887 6,911 6,557 20,907 19,857
 
NET INCOME BEFORE TAXES 2,033 2,254 2,159 5,925 6,350
 
INCOME TAXES 425   471   407       1,097     1,293  
 
NET INCOME $1,608   $1,783   $1,752       $4,828     $5,057  
 
Earnings per share - basic $0.33   $0.37   $0.36       $0.99     $1.04  
 
Earnings per share - diluted $0.33   $0.36   $0.36       $0.99     $1.04  
 
Dividends Paid $0.24   $0.24   $0.24       $0.72     $0.72  
 
Average shares outstanding-basic 4,882,705 4,883,679 4,869,079 4,877,338 4,864,924
 
Average shares outstanding-diluted 4,893,148 4,897,893 4,877,693 4,894,750 4,873,240
 
 
 
 
For the Period Ended,
September 30, June 30, December 31,
2017     2017   2016
Period End Balance Sheet Data:
Total assets $1,026,124 $1,017,564 $1,025,214
Total earning assets 939,295 930,708 935,957
Loans, net of unearned income 393,079 389,410 394,051
Allowance for loan losses 3,404 3,506 3,093
Total deposits 754,768 779,926 760,155
Long-term borrowings 20,000 20,000 20,000
Shareholders' equity 91,942 92,795 85,059
Book value per share $18.86 $19.03 $17.42
 
Period End Average Balance Sheet Data:
Total assets $1,009,781 $1,008,111 $996,266
Total earning assets 926,107 924,144 928,861
Loans, net of unearned income 393,796 394,855 409,367
Total deposits 767,634 768,494 766,264
Long-term borrowings 20,000 20,928 20,000
Shareholders' equity 89,693 88,159 91,766
 
Period End Non-performing Assets:
Non-accrual loans $7,833 $7,724 $8,879
Loans 90+ days past due and accruing 298 128 206
Other real estate owned 4,174 4,174 4,443
 
As of
September 30, June 30, December 31,
2017     2017   2016
 

Year to Date Net charge-offs as a percentage of average net loans

0.06 % 0.05 % 0.61 %
 
Year to Date Performance Ratios:
Return on average assets(1) 0.64 % 0.64 % 0.68 %
Return on average equity(1) 7.18 % 7.31 % 7.34 %
 

Year to Date Net Interest Margin (tax equivalent)(1)

3.03 % 3.06 % 3.07 %
 
(1) Annualized

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