PHILADELPHIA, Miss.--(BUSINESS WIRE)--Citizens Holding Company (the “Company”), inclusive of its wholly-owned subsidiary, The Citizens Bank (the “Bank”), (OTCQX:CIZN) announced today results of operations for the three and nine months ended September 30, 2026.

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(in thousands, except share and per share data)

Net income for the three months ended September 30, 2026, was $4,322, or $0.76 per basic and diluted share, a linked-quarter increase of $1,127, or 35.3%, from net income of $3,195, or $0.56 per basic and diluted share, for the three months ended June 30, 2026. Net income increased $1,965, or 83.4%, from net income of $2,357, or $0.42 per basic and diluted share for the same quarter in 2025. Excluding the after-tax impact of non-core items, including the third-quarter sale-leaseback gain, core net income increased $65, or 3.1%, to $2,184 from $2,119 at June 30, 2026, and increased $127, or 6.2%, from $2,057 at September 30, 2025.

See the core net income reconciliation at the end of the release.

Net income for the nine months ended September 30, 2026, was $9,403, or $1.65 per basic and diluted share, an increase of $3,346, or 55.3%, from net income of $6,057, or $1.08 per basic and diluted share, for the same period in 2025. See supplemental information for additional disclosures.

Third Quarter Highlights

• Net interest margin (“NIM”) on a fully taxable-equivalent basis, decreased 2 basis points (“bps”) to 3.35% for the three months ended September 30, 2026, from 3.37% for the three months ended June 30, 2026, and increased 23 bps from 3.13% for the three months ended September 30, 2025.
• The Company sold three branches during the quarter in sale-leaseback transactions generating a pre-tax gain of $2,849. The transactions supported the Company’s continued capital-building efforts. The Bank’s Tier 1 leverage ratio increased 9 basis points to 9.20% from 9.11% in the prior quarter and 90 basis points from 8.30% for the same period a year ago.
• Credit quality remained stable with total non-performing assets (“NPA”) to loans unchanged at 0.64% at September 30, 2026 and June 30, 2026. Total non-performing assets increased $166, or 2.9%, to $5,909 at September 30, 2026, compared to $5,743 at June 30, 2026, and decreased $1,154, or 16.3%, compared to $7,063 at September 30, 2025.
• Allowance for credit losses (“ACL”) to loans was 1.00% at September 30, 2026 compared to 1.06% in the prior quarter and 1.04% the same period a year ago.
• Tangible book value (“TBV”) per common share was $9.92 at September 30, 2026, a decrease of $0.03 from $9.95 at June 30, 2026, and an increase of $1.96 from $7.96 at September 30, 2025. Earnings growth predominantly drove the year-over-year increase in TBV per common share.

Chief Executive Officer (“CEO”) Commentary

Stacy Brantley, President and Chief Executive Officer of Citizens Holding Company (the “Company”) and The Citizens Bank of Philadelphia (the “Bank”) stated, “Our banking teams drove net interest income expansion of $233 over the prior quarter and by $918 over the same period prior year representing increases of 2.00%, and 8.4%, respectively. These results have been achieved primarily through loan growth, disciplined pricing, and focus on generating new low-cost deposits. Lending teams have built strong loan pipelines entering the fourth quarter and we expect solid loan growth over the remainder of the year even in the face of several expected commercial loan prepayments.”

“Credit quality metrics remain sound. As referenced below, charges-offs related to two asset-based lines in our C&I portfolio have facilitated higher provision charges throughout the year. We consider asset quality issues to be contained to these two lines and not indicative of larger issues. Estimated losses have been realized and charged to our reserves appropriately.”

“As we enter the fourth quarter and begin to look forward into 2027, the Company will expand efforts and dedicate resources to grow our treasury and mortgage lending teams. We have been fortunate to add seasoned leadership tasked with building out these two key business lines since we last reported earnings. Our focus entering the fourth quarter is squarely placed on finishing strong, laying groundwork for a record 2027, and growing your investment.”

Financial Condition and Results of Operations

Loans and Deposits

Total loans outstanding, net of unearned income, at September 30, 2026, totaled $916,170, an increase of $23,381, or 2.6%, compared to $892,788 at June 30, 2026, and an increase of $85,954, or 10.4%, from $830,216 at September 30, 2025.

Total deposits as of September 30, 2026, were $1,411,954, an increase of $94,250, or 7.2%, compared to $1,317,704 at June 30, 2026, and an increase of $229,361, or 19.4%, compared to $1,182,593 at September 30, 2025. The Company continues to focus on core deposit growth to not only fund future loan growth but to also minimize cost of funds.

Noninterest-bearing deposits decreased $1,855, or 0.6%, to $299,967 at September 30, 2026, from $301,822 at June 30, 2026, and increased $15,266, or 5.4%, from $284,701 at September 30, 2025.

Net Interest Income

Net interest income for the three months ended September 30, 2026, was $11,870, an increase of $233, or 2.0%, compared to $11,637 for the three months ended June 30, 2026, and an increase of $918, or 8.4%, compared to $10,952 for the three months ended September 30, 2025. Net interest margin on a fully taxable-equivalent basis was 3.35% for the three months ended September 30, 2026, compared to 3.37% for the three months ended June 30, 2026, and 3.13% for the same period in 2025.

The linked-quarter increase in net interest income was primarily attributable to a $444, or 2.5%, increase in interest income, partially offset by a $211, or 3.4%, increase in interest expense.

Net interest income for the nine months ended September 30, 2026 increased $2,832, or 8.9%, to $34,799 from $31,967 for the same period in 2025. The year-to-date net interest margin on a fully taxable-equivalent basis was 3.35% as of September 30, 2026, compared to 3.08% for the same period in 2025.

Net interest income for the nine months ended September 30, 2026, increased compared to the prior year due to total interest income increasing $467, or 0.9% and total interest expense decreasing $2,365, or 11.1%. During 2026, the Bank significantly reduced its reliance on wholesale funding, including repurchase agreements. Interest expense on other borrowed funds decreased $5,408, or 71.4%, to $2,168 for the nine months ended September 30, 2026, from $7,576 for the same period in 2025.

Credit Quality

The Company’s non-performing assets to loans ratio was unchanged during the quarter at 64 bps at September 30, 2026, compared to 64 bps at June 30, 2026. Total non-performing assets increased $166, or 2.9%, to $5,909 at September 30, 2026, compared to $5,743 at June 30, 2026, and decreased $1,154, or 16.3%, compared to $7,063 at September 30, 2025.

Net charge-offs during the year are primarily attributable to two commercial and industrial loan (“C&I”) relationships and were not indicative of broad-based deterioration in the loan portfolio. Net charge-offs totaled $1,088 and $2,321 for the three and nine months ended September 30, 2026, respectively. Year-to-date net charge-offs to average loans were 0.27% at September 30, 2026, compared with 0.02% at September 30, 2025.

The provision for credit losses (“PCL”) for the three months ended September 30, 2026, was $840, representing an increase of $189, or 29.0%, from the prior quarter and an increase of $289, or 52.4%, from the same period a year ago. PCL increased $1,115, or 66.4%, to $2,794 for the nine months ended September 30, 2026 as compared to the same period in 2025. The allowance for credit losses (“ACL”) to loans held for investment (“LHFI”) decreased 6 basis points to 1.00% at September 30, 2026, from 1.06% at June 30, 2026, and decreased 4 basis points from 1.04% at September 30, 2025.

The decrease in the ACL during the year was primarily attributable to charge-offs associated with the aforementioned C&I relationships. These charge-offs were concentrated in those relationships and were not indicative of broad-based deterioration in the loan portfolio.

Liquidity and Capital

The Company manages a variety of liquidity metrics with the most pertinent metric being on-balance sheet (“OBS”) liquidity. The Company maintained a strong liquidity position with OBS liquidity of 12.0% at September 30, 2026.

In addition to OBS liquidity, the Company has access to a range of off-balance sheet funding sources to address potential liquidity needs. Total available capacity from wholesale funding sources was approximately $1,373,000 at September 30, 2026, consisting of the following:

• $266,000 from the Federal Home Loan Bank of Dallas (“FHLB”)
• Approximately $271,000 in brokered deposit availability
• $786,000 of off-balance sheet deposits held in the IntraFi Network’s ICS deposit program
• $50,000 in availability with our correspondent Fed Funds lines

In addition, the Company has the ability to pledge additional collateral to the FHLB to further increase borrowing capacity, if needed. The Company and the Bank continue to maintain a strong capital position and remain well-capitalized. A comparison of key regulatory capital ratios for the Company and the Bank is provided below.

Noninterest Income

Noninterest income increased $1,543, or 35.0%, for the three months ended September 30, 2026, compared to the three months ended June 30, 2026, and increased $2,981, or 100.3%, compared to the same period in 2025.

The linked-quarter increase was primarily driven by a $2,849 pre-tax gain related to sale-leaseback transactions of three branches completed during the quarter. The branches were sold to further enhance regulatory capital ratios.

Noninterest income increased for the nine months ended September 30, 2026, by $4,892, or 57.3%, to $13,425 from $8,533 for the nine months ended September 30, 2025.

The year-over-year increase was primarily attributable to $4,357 of pre-tax gains from sale-leaseback transactions completed during the second and third quarters of 2026 and $507 of tax-exempt life insurance proceeds.

Noninterest Expense

Noninterest expense increased $151, or 1.3%, for the three months ended September 30, 2026, compared to the three months ended June 30, 2026, and increased $1,006, or 9.4%, compared to the same period in 2025. The linked-quarter increase was primarily attributable to an increase of $178, or 3.1% in salary and employee benefits.

For the nine months ended September 30, 2026, noninterest expense increased $2,525, or 8.0%, to $34,143, compared to $31,618 for the same period in 2025. The year-over-year increase was primarily driven by higher salaries and employee benefits expense, which increased $1,242, or 7.7%, as well as an increase in technology expense of $426, or 12.6%. Management remains focused on investing in talent in strategic markets/business lines, technology to increase efficiency and the necessary risk management areas to grow the Company.

Effective Tax Rate

The effective tax rate for the three months ended September 30, 2026, was 17.9%, compared to 16.5% for the three months ended June 30, 2026, and 11.3% for the same period in 2025. The effective tax rate for the nine months ended September 30, 2026, was 16.7%, compared to 15.9% for the nine months ended September 30, 2025.

The effective tax rate increased compared to the second quarter of 2026, primarily due to the tax effects of the sale-leaseback transaction completed during the quarter but this was partially offset by the purchase of a $1,620 transferable federal Investment Tax Credit in which the Bank participated with another bank. Despite the quarter-over-quarter increase, the Company’s effective tax rate remained generally comparable to the prior-year period, due to the Bank's investment in Mississippi New Market Tax Credits initiated during the third quarter of 2025, the aforementioned federal Investment Tax Credit, as well as the receipt of tax-exempt life insurance proceeds.

Dividends

The Company did not pay cash dividends during the nine-month period ended September 30, 2026, compared to $226, or $0.04 per share, for the same period in 2025.

About Citizens Holding Company

Citizens Holding Company is a one-bank holding company and the parent company of the Bank, both headquartered in Philadelphia, Mississippi. The Bank currently has locations in fourteen counties throughout the state of Mississippi. In addition to full service commercial banking, the Company offers mortgage loans, title insurance services through third party partnerships 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 web site, www.thecitizensbankphila.com. Citizens Holding Company stock is listed on the OTCQX Best Market and is traded under the symbol CIZN. The Company's transfer agent is Equiniti Trust Company LLC. Investor relations information may be obtained at the corporate website, https://www.thecitizensbankphila.com/investor-relations.

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 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.

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Phillip R. Branch
Senior Vice President & Chief Financial Officer
601/519-4016
Phillip.branch@thecitizensbank.bank

Source: Citizens Holding Company