Citizens Holding Company Reports Earnings

Citizens Holding Company (NASDAQ:CIZN) announced today results of
operations for the three and twelve months ended December 31, 2018.

Net income for the three months ended December 31, 2018 of $1.715
million, or $0.35 per share-basic and diluted, an increase of $2.840
million from a net loss of ($1.125) million, or ($0.23) per share-basic
and diluted for the same quarter in 2017. The majority of the increase
relates to the impact of the Tax Cuts and Jobs Act of 2017. Adjusting
the three months ending December 31, 2017 earnings for this impact
results in an earnings per share, basic and diluted, of $0.30.

Net interest income for the fourth quarter of 2018, after the provision
for loan losses, was $6.231 million, approximately 12.0% lower than the
same period in 2017. The provision for loan losses for the three months
ended December 31, 2018 was $193 thousand compared to a negative $288
thousand for the same period in 2017. The increase 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 an increase in total loans outstanding. The net interest margin was
2.93% for the fourth quarter of 2018 compared to 2.98% for the same
period in 2017. This decrease was due to both an increase in interest
rates paid on interest bearing liabilities partially offset by an
increase in yields on interest bearing assets.

Non-interest income increased in the fourth quarter of 2018 by $110
thousand, or 5.3%, while non-interest expenses decreased $545 thousand,
or 7.4%, compared to the same period in 2017. 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
partially offset by a decrease in other non-interest income.
Non-interest expense decreased due to a decrease in salaries and
employee benefits, occupancy expense and other non-interest expenses.
The decrease in non-interest expense was due in a large part to reduced
loan collection expense and other losses coupled with an overall focus
on cost containment company-wide.

Net income for the twelve months ended December 31, 2018 increased 80.2%
to $6.672 million, or $1.36 per share-basic and diluted, from $3.703
million, or $0.76 per share-basic and diluted, for the twelve months
ended December 31, 2017. The majority of the increase relates to the
impact of the Tax Cuts and Jobs Act of 2017. Adjusting December 31, 2017
earnings for this impact results in an earnings per share, basic and
diluted, of $1.29. Net interest income for the twelve months ended
December 31, 2018, after the provision for loan losses, decreased 4.2%
to $26.566 million from $27.728 million for the same period in 2017. Net
interest margin for the twelve months ended December 31, 2018, increased
to 3.05% in 2018 from 3.01% in the same period in 2017. The provision
for loan losses for the twelve months ended December 31, 2018 was $334
thousand compared to negative $543 thousand in 2017. The increase 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 an increase in loans outstanding.

Non-interest income increased by $325 thousand, or 3.9%, and
non-interest expense decreased by $563 thousand, or 2.0%, for the twelve
months ended December 31, 2018 when compared to the same period in 2017.
The increase in other non-interest income was the result of increases in
service charges on deposit accounts and other service charges and fees
partially offset by a decrease in other non-interest income.
Non-interest expense decreased due to a decrease in salary and benefits
costs and other operating expenses partially offset by an increase in
occupancy expense.

Total assets as of December 31, 2018 decreased to $958.630 million, down
$34.466 million, or 3.5%, when compared to $993.096 million at December
31, 2017. Deposits increased by $35.537 million, or 4.9%, and loans, net
of unearned income, increased by $23.867 million, or 5.9%, when compared
to December 31, 2017. The increase in loans, net of unearned income, was
due to new loan demand in excess of loan payments. Non-performing assets
increased by $979 thousand to $13.348 million at December 31, 2018 as
compared to $12.369 million at December 31, 2017, due to decreases in
other real estate owned, loans 90 days or more past due and still
accruing interest offset by an increase in non-accrual loans.

During the twelve months of 2018, the Company paid dividends totaling
$0.96 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 and 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 banking
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.

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