Citizens Holding Company (the “Company”) (OTCQX:CIZN) announced today results of operations for the three and nine months ended September 30, 2025.

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(in thousands, except share and per share data)

Net income for the three months ended September 30, 2025 was $2,357, or $0.42 per share-basic and diluted, a linked-quarter increase of $509, or 27.6%, from a net income of $1,848, or $0.33 per share-basic and diluted, for the three months ended June 30, 2025. Net income increased $2,039, or 641.23%, from net income of $318, or $0.06, per share-basic and diluted for the same quarter in 2024.

Net income for the nine months ended September 30, 2025 was $6,057, or $0.66 per share-basic and diluted, an increase of $6,419, or 1773.7%, from net income of ($362), or $0.74, per share-basic and diluted, for the same period in 2024. See supplemental information for additional disclosures.

Third Quarter Highlights

• Net interest margin (“NIM”) increased 12 basis points (“bps) to 3.20% for the three months ended September 30, 2025 from 3.08% for the three months ended June 30, 2025 and increased 58 bps from 2.50% for the three months ended September 30, 2024.
• Total loans held for investment (LHFI), as of September 30, 2025 totaled $831,202 an increase of $13,210, or 1.6%, compared to June 30, 2025, and an increase of $119,658, or 16.8% compared to September 30, 2024.
• Credit quality continues to remain solid with total non-performing assets (“NPA”) to loans at 0.85% bps at September 30, 2025 compared to 82% bps at March 31, 2025. Total non-performing assets increased $330, or 4.9%, to $7,063 at September 30, 2025, compared to $6,733 at June 30, 2025, and increased $1,933, or 37.7%, compared to $5,130 at September 30, 2024.
• Allowance for credit losses (“ACL”) to loans was 1.04% at September 30, 2025 compared to 1.00% in the prior quarter and 0.96% the same period a year ago.
• Tangible book value per common share, as of September 30, 2025 was $7.96, and increase of $1.29 compared to $6.67 as of June 30, 2025 and an increase of $1.35 compared to $6.61 as of September 30, 2024.

Chief Executive Officer (“CEO”) Commentary

Stacy Brantley, President and Chief Executive Officer of Citizens Holding Company stated, “I’m excited to report our earnings for the quarter which reflect continued progress and execution of our strategic plan. Our banking team produced strong directional results growing our margin, profitability, loans, credit reserves, and capital. The Company’s net interest margin expanded 6bps over the prior quarter and 58bps over the same quarter for the prior year to 3.08%. As a result, net income for the quarter was up 27.6% over prior quarter and approximately 87% over organic earnings from the same quarter prior year, netting out bond losses recorded at liquidation during the period.

Loan growth continues to be the primary driver of net interest margin expansion and net income growth. Loan growth for the quarter was $13.21MM or 1.6% over the prior quarter-end and $119.7MM or 16.82% over the same quarter of the year. While we expect continued loan growth, we do anticipate slower growth in the next few quarters as pipelines remain solid but have shallowed. We were able to decrease our cost of funds by 3bp during the quarter while increasing the yield on earning assets by 1bp. Strengthened focus on disciplined CD pricing, retail deposit gathering, and treasury sales are the primary drivers contributing to lower cost of funds. We will continue to seek sound loan growth and low-cost deposits focusing on outstanding client service.

“Credit metrics remain strong with past dues and non-performing loans well within management established targets. The Company increased its ACL as a percentage of LHFI by 4 bps over the prior quarter-end to 1.04%. Provision for credit losses for the quarter was $551 versus $489 for the prior quarter and $0 for the linked prior quarter. This reflects the Company’s commitment to strengthen its balance sheet and fund reserves to accommodate loan growth.”

“The Company’s success remains rooted in its culture of service. Our growth and improved profitability are direct outtakes of our focus on and commitment to our culture and to outstanding service. Realignment of Risk Management and Human Resources through expansion of our management team is focused on driving culture forward in our organization and ensuring risk management infrastructure is well positioned to accommodate growth. The restructuring of our balance sheet over the last few quarters has driven improved profitability and allowed the company to grow capital while funding reserves through provisioning. We have implemented this restructuring with a parallel focus on building strong infrastructure and risk management practices. I look forward to continuing our momentum into the fourth quarter and delivering much improved results to our shareholders as we wrap up 2025.”

Financial Condition and Results of Operations

Loans and Deposits

Total loans outstanding, net of unearned income, as of September 30, 2025 totaled $831,302 compared to $817,992 at June 30, 2025 and $711,544 as of September 30, 2024.

Total deposits as of September 30, 2025 were $1,182,358 compared to $1,265,573 at June 30, 2025 and $1,092,738 as of September 30, 2024. The Company continues to focus on core deposit growth to not only fund future loan growth but to also minimize cost of funds.

Net Interest Income

Net interest income for the three months ended September 30, 2025 was $10,952, an increase of $255, or 2.4%, compared to $10,697 for the three months ended June 30, 2025, and an increase of $2,195, or 25.0%, compared to $8,757 for the three months ended September 30 2024. NIM was 3.20% for the three months ended September 30, 2025 compared to 3.08% for the three months ended June 30, 2025 and 2.40% for the same period in 2024.

The linked-quarter increase in net interest income is primarily a result of the increase in interest income of $413, or 2.3%, offset by an increase in interest expense of $158, or 2.3%, compared to the three months ended June 30, 2025. The increase from the same period ended September 30, 2024 is due to both an increase in interest income of $895, or 5.2% and a decrease in interest expense of $1,300, or 15.4%.

Net interest income for the nine months ended September 30, 2025 increased $6,414, or 25.3%, to $31,762 from $25,347 for the same period in 2024. The year-to-date NIM was 3.08% as of September 30, 2025 compared to 3.02% at June 30, 2025 and 2.50% for the same period in 2024.

The increase in net interest income for the nine months ended September 30, 2025 is attributable to both increases in interest income and decreases in interest expense when compared to the same period in 2024. Interest income increased $3,823, or 7.73% when compared to the same period in 2024. This increase is primarily the result of interest income on loans, including fees, increasing $7,879, or 23.4%, from $33,697 to $41,576 for the same period. Additionally, interest expense decreased $2,592, or 10.8%, to $21,503 for the nine months ended September 30, 2025 from $24,095 for the same period in 2024.

Credit Quality

The Company’s NPAs to loans was 85 bps at September 30, 2025 compared to 82 bps at June 30, 2025. Total non-performing assets increased $330, or 4.9%, to $7,063 at September 30, 2025, compared to $6,733 at June 30, 2025, and increased $1,933, or 37.7%, compared to $5,130 at September 30, 2024. The increase in NPAs relates to the foreclosure of 2 relationships totaling $929 partially offset by paydowns on nonaccrual loans.

Net losses were $141 for the nine months ended September 30, 2025. Year-to-date net losses to average loans were 0.02% at September 30, 2025 compared to 0.00% at September 30, 2024.

The provision for credit losses (“PCL”) for the three months ended September 30, 2025 was $551 compared to $489 for the linked quarter and $490 for the same period a year ago. The PCL was primarily driven by loan growth coupled with qualitative factor adjustments due to the current economic uncertainty. The ACL to LHFI increased 4 bps to 1.04% at September 30, 2025 from 1.00% at June 30, 2025 and 7 bps from 0.96% at September 30, 2024.

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 14.9% at September 30, 2025.

In addition to the Company OBS liquidity, the Company has a variety of off-balance sheet sources should funding needs arise. The capacity to borrow from wholesale funding sources totaling $569,000, which consists of the following:

• $210,000 from the Federal Home Loan Bank of Dallas (“FHLB”)
• Approximately $211,000 in brokered deposit availability
• $98,000 of off-balance sheet deposits held in the IntraFi Network’s ICS deposit program
• $50,000 in availability with our correspondent Fed Funds lines

Additionally, the Company could provide additional collateral to the FHLB to increase the capacity there, should that avenue be needed.

The Company and the Bank remain in a strong capital position and well-capitalized. A comparison of the various regulatory ratios for the Company and the Bank are noted below:

Noninterest Income

Noninterest income increased for the three months ended September 30, 2025, by $392, or 15.2%, compared to the three months ended June 30, 2025, and increased by $1,644, or 123.9%, compared to the same period in 2024.

The increase quarter-over-quarter is primarily due to service charges on deposit accounts increasing $452, or 46.3%, to $1,428 for the three months ended September 30, 2025 from $976 for the three months ended June 30, 2025. Included in the increase of service charges on deposit accounts was an increase in overdraft charges of $94, or 14.0% to $767 for the three months ended September 30, 2025 from $673 for the three months ended June 30, 2025.

Noninterest income decreased for the nine months ended September 30, 2025, by ($1,033), or (10.9)%, from $9,504 to $8,471 for the three months ended September 30, 2024.

The decrease year-over-year is primarily attributed to a gain from a sale-leaseback transaction in the first quarter of 2024 resulting in a gain of $4,535 which was offset by net losses of securities sold totaling ($2,562) during the nine months ended September 30, 2024. Additionally, no securities have been sold during the nine months ended September 30, 2025.

Noninterest Expense

Noninterest expense increased for the three months ended September 30, 2025, by $239, or 2.3%, compared to the three months ended June 30, 2025 and increased by $879, or 8.9%, compared to the same period in 2024.

Noninterest expense increased for the nine months ended September 30, 2025 by $2,260, or 7.8%, compared to the same period in 2024.

The increase year-over-year is primarily due to salaries and employee benefits increasing by $1,300, or 8.75%, to $16,163 for the nine months ended September 30, 2025 from $14,863 for the nine months ended September 30, 2024. The Bank is committed to recruiting and retaining top talent in its strategic markets.

Dividends

The Company has paid aggregate cash dividends in the amount of $226, or $0.04 per share, during the nine-month period ended September 30, 2025 compared to $2,705, or $0.48 per share, for the same period in 2024.

SELECTED FINANCIAL INFORMATION

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 American Stock Transfer & Trust Company. 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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The Company’s success remains rooted in its culture of service. Our growth and improved profitability are direct outtakes of our focus on and commitment to our culture and to outstanding service.