Citizens Holding Company Reports Solid First Quarter 2025 Performance Amid Strategic Balance Sheet Repositioning and Profitability Growth
Citizens Holding Company (OTCQX: CIZN), the parent company of The Citizens Bank of Philadelphia, Mississippi, has reported its financial results for the three months ended March 31, 2025. The results reflect the company’s ongoing commitment to disciplined execution of its strategic initiatives, including balance sheet optimization, organic loan growth, and enhanced profitability.
President and Chief Executive Officer Stacy Brantley expressed confidence in the company’s direction, stating: “I am proud to announce earnings for the first quarter and highlight the tremendous progress made in our effort to reposition the balance sheet and grow profitability. This progress is driven by our team’s tireless execution in the buildout of key infrastructure to facilitate business development and manage growth.”
Earnings Overview
For the first quarter of 2025, Citizens reported net income of $1.85 million, or $0.33 per basic and diluted share. This represents a 40.3% increase compared to net income of $1.32 million, or $0.23 per share, reported in the fourth quarter of 2024. However, on a year-over-year basis, net income declined by 35.5% from $2.87 million, or $0.51 per share, in the first quarter of 2024. The prior year’s figure included a one-time gain from a sale-leaseback transaction totaling $4.54 million, partially offset by a $1.57 million loss on the sale of securities.
When adjusted to exclude these one-time, non-core items, Citizens’ core net income increased significantly, rising 186.4% to $1.85 million from $646,000 in Q1 2024. This core earnings performance reflects the company’s strengthened underlying business operations and prudent management of financial resources.
Revenue Growth and Interest Income Expansion
Total revenues for the quarter reached $20.36 million, a 4.2% increase compared to the prior quarter. This growth was primarily fueled by higher interest income, which increased by $436,000, or 2.6%, quarter-over-quarter, driven by robust loan production.
Net interest income rose to $10.11 million in Q1 2025, up $837,000 or 9.0% compared to Q4 2024, and up $2.32 million or 29.8% year-over-year. The company’s net interest margin (NIM) expanded meaningfully to 2.97%, up 20 basis points (bps) from the prior quarter’s 2.77% and up 57 bps from 2.40% in Q1 2024. This reflects the positive impact of increased loan yields and strategic funding cost management.
Loan yields reached 6.94% for Q1 2025, marking a 43 bps increase compared to Q1 2024. Yields on earning assets overall improved to 5.05%, up from 5.01% in the prior quarter and 4.61% in the year-ago period.
Loan Growth and Deposit Expansion
The company’s strategy to transition its balance sheet towards higher-yielding assets, especially loans, is evident in the significant increase in loan balances. Loans held for investment (LHFI) climbed to $803.89 million as of March 31, 2025—an increase of $37.76 million, or 4.9%, from December 31, 2024, and a $136.47 million, or 20.5%, rise from March 31, 2024.
Citizens’ strong on-balance-sheet liquidity continues to position it well to fund high-quality loan demand. The addition of experienced banking talent across its service footprint has also played a crucial role in facilitating this growth, supported by renewed infrastructure and expanded product offerings.
Total deposits stood at $1.23 billion as of March 31, 2025, up from $1.07 billion at the end of Q4 2024, and slightly higher than $1.21 billion a year ago. Non-interest-bearing deposits increased by $11.5 million, or 4.5%, during the quarter to $269.5 million. Maintaining a healthy mix of low-cost deposits remains a core priority for the company to support sustainable NIM expansion.
Asset Quality and Credit Loss Provisioning
Citizens continues to maintain strong credit quality, with non-performing assets (NPAs) to loans at 0.66% as of March 31, 2025, compared to 0.63% at the end of the previous quarter. Total NPAs increased modestly by $506,000, or 10.5%, to $5.32 million quarter-over-quarter, and by $1.75 million, or 49.2%, year-over-year. Management attributed this increase to two specific borrower relationships rather than a broader deterioration in credit quality.
The allowance for credit losses (ACL) as a percentage of loans was 0.95% at quarter-end, up from 0.91% in Q4 2024 but down slightly from 1.00% in Q1 2024. The company’s provision for credit losses rose to $639,000 during Q1 2025, up from $343,000 in Q4 2024 and $192,000 a year ago. This increase was primarily due to continued loan growth and qualitative adjustments accounting for macroeconomic uncertainty.
Net charge-offs for the quarter were minimal at $17, maintaining a net charge-off rate of 0.00% for the year-to-date period, consistent with Q1 2024. Citizens’ ongoing discipline in underwriting and risk management has allowed it to maintain stable credit metrics despite growth in the loan portfolio.
Liquidity and Capital Strength
Amid heightened industry focus on liquidity and capital stability following the 2023 banking industry turbulence, Citizens has provided detailed insights into its liquidity position. As of March 31, 2025, the company had no overnight Federal Funds borrowings and continued to maintain a conservative approach to wholesale funding.
Available borrowing capacity includes $188 million from the Federal Home Loan Bank of Dallas, $200 million in brokered deposit availability, and $50 million in correspondent Fed Funds lines. Additional collateral could also be pledged to the FHLB to increase capacity if necessary. This robust and diversified liquidity profile reflects Citizens’ traditional and stable community banking model.
Looking Ahead
CEO Stacy Brantley emphasized the company’s forward-looking priorities, stating: “Although we expect loan growth to slow slightly, the current pipeline remains solid and should help further expand the NIM over the next few quarters. Deposit gathering and cost of funds management remains a primary focus for the Company.”
Brantley also highlighted the company’s broader strategic goals: “We remain focused first on our people and culture, as well as service to our communities. Our team will continue to block and tackle—pursuing excellence in customer service, responsible loan growth, low-cost deposits, and seeking operational efficiencies and savings.”
Total assets increased by $114.2 million, or 7.76%, over the prior year’s first quarter. Citizens attributes this solid growth to successful execution of its long-term strategic plan, as laid out by the executive team and the Board of Directors.
Citizens Holding Company’s first-quarter 2025 results reflect a resilient and steadily growing banking institution. Through disciplined execution of its strategy—focused on high-quality loan growth, margin expansion, credit stability, and core deposit strength—the company continues to deliver improved financial performance and long-term value for its shareholders and community stakeholders. With a strong foundation and a clear focus on operational excellence, Citizens is well-positioned to navigate evolving market conditions and pursue sustainable growth throughout 2025 and beyond.
