10-Q · November 4, 2022
For Q3 2022 Citizens Holding Company reported net revenue (net interest income + other income) of $11,926,000 and diluted EPS of $0.46, up from $11,896,000 and $0.34 in Q3 2021. Net interest income increased to…
Earnings analysis · 10-K
CIZN earnings analysis
Filed March 16, 2023 · Our reading of the company's report
The latest report
Citizens Holding Company is a one-bank holding company (The Citizens Bank of Philadelphia) that reported revenues of $50,586 and operating profit of $11,501 (amounts stated in the filing in thousands) for the year ended…
Read full summary
Citizens Holding Company is a one-bank holding company (The Citizens Bank of Philadelphia) that reported revenues of $50,586 and operating profit of $11,501 (amounts stated in the filing in thousands) for the year ended December 31, 2022. Management highlights strong capital positions (met Basel III requirements and classified as well capitalized) but notes stagnant loan demand and compressed loan yields; the loan portfolio is concentrated with 80.7% in real estate. The 10-K contains standard forward-looking cautions but provides no numeric public guidance.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Operating margin
- 22.74%
- Segment
- Bank (only reportable segment) — revenues $50,586 and operating profit $11,501; total assets $1,324,003 (amounts presented in the filing in thousands).
What stood out
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Single-reportable-segment scale
The Company’s only reportable segment is the Bank, which produced revenues of $50,586 and operating profit of $11,501 as of December 31, 2022 (amounts reported in the filing in thousands).
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Well-capitalized under regulators
Management states that, as of December 31, 2022, the Company and the Bank 'met all capital adequacy requirements under Basel III' and are classified as 'well capitalized' under FRB/FDIC guidelines.
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Loan interest & fees remain largest revenue source but declined
Revenue from loan interest and fees comprised 53.8% of gross revenues in 2022, down from 61.6% in 2021 (filing-provided percentages).
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High real-estate loan concentration
Approximately 80.7% of the Company’s loan portfolio was attributed to real estate lending as of December 31, 2022 (filing figure).
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Dividend transfer capacity quantified
At December 31, 2022, the maximum amount available for transfer from the Bank to the Company in the form of a dividend was approximately $104,804, or 185.9% of the Bank’s consolidated net assets (filing).
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Balance sheet size and deposits
The filing reports total assets of $1,323,586 and total deposits of $1,126,927 as of December 31, 2022 (amounts presented in the filing, in thousands).
What to watch
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Interest-rate and monetary policy risk
The filing explicitly cites 'expectations about the movement of interest rates, including actions that may be taken by the Federal Reserve Board' as a risk that could materially affect results (direct paraphrase).
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Asset quality and loan demand deterioration
The 10-K warns of 'adverse changes in asset quality and loan demand, and the potential insufficiency of the allowance for loan losses and our ability to foreclose on delinquent mortgages' (direct paraphrase).
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Concentration in real-estate lending
Concentration risk: the loan portfolio was ~80.7% real estate as of December 31, 2022, increasing exposure to downturns in real-estate and related local markets (filing figure).
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Stagnant loan demand and compressed yields
Management states 'Loan demand was stagnant and loan yields compressed due to the low-rate environment coupled with aggressive loan terms offered by other financial institutions' (direct quote/paraphrase from filing).
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Regulatory / FDIC cost risk and transfer limits
The filing warns that 'Any future increases in FDIC insurance premiums may have a material and adverse effect on our earnings' and shows transfer limits: maximum dividend transfer ~$104,804 and maximum loan transfer $5,637 (10% of consolidated net assets) as of December 31, 2022 (filing figures).
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Leadership transition
Executive change: Greg L. McKee retired in January 2023 and Stacy M. Brantley was employed in February 2023 and 'was named President and Chief Executive Officer of the Bank' (dates and names from filing), which represents recent management turnover.
Management's outlook
No numeric forward guidance is provided in the 10-K; the filing contains standard forward-looking statement language and defers quantitative outlook to periodic earnings releases/calls.
Earlier filings 4
10-Q · May 6, 2022
Citizens Holding Company reported Q1 results with revenue of $10,820,000 and net income of $2,036,000 (diluted EPS $0.36). Net interest income increased to $8,287,000 while other income declined to $2,533,000; operating…
10-Q · November 5, 2021
Q3 2021 results: revenue (net interest income + other income) rose to $11,896,000 (+$353,000, +3.1% YoY) driven by other income, but profitability compressed as income before taxes fell to $2,187,000 and diluted EPS…
10-Q · August 6, 2021
Citizens Holding Company reported core revenue of $11,483,000 and diluted EPS of $0.34 for the three months ended June 30, 2021, up from $10,820,000 and $0.26 in the prior-year quarter. Net interest income rose modestly…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.