Citizens Holding Company Reports Earnings

Citizens Holding Company (the "Company") (OTCQX:CIZN) announced today results of operations for the three and twelve months ended December 31, 2025.

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(in thousands, except share and per share data)

Net income for the three months ended December 31, 2025 was $2,079 or $0.37 per share-basic and diluted, a linked-quarter decrease of $278, or 11.8%, from net income of $2,357, or $0.42 per share-basic and diluted, for the three months ended September 30, 2025. Net income increased $762, or 57.8%, from net income of $1,317, or $0.23, per share-basic and diluted for the same quarter in 2024.

Net income for the twelve months ended December 31, 2025 was $8,148, or $1.44 per share-basic and diluted, an increase of $2,657, or 48.4%, from net income of $5,490, or $0.98, per share-basic and diluted, for the same period in 2024. See supplemental information for additional disclosures.

Fourth Quarter Highlights

• Net interest margin ("NIM") increased 5 basis points ("bps") to 3.25% for the three months ended December 31, 2025 from 3.20% for the three months ended September 30, 2025 and increased 48 bps from 2.77% for the three months ended December 31, 2024.
• Total loans held for investment (LHFI), as of December 31, 2025 totaled $841,136 an increase of $10,920, or 1.3%, compared to September 30, 2025, and an increase of $76,270, or 10.0% compared to December 31, 2024.
• Credit quality continues to remain solid with total non-performing assets ("NPA") to loans at 66 bps at December 31, 2025 compared to 85 bps at September 30, 2025. Total non-performing assets decreased $1,479, or 20.9%, to $5,584 at December 31, 2025, compared to $7,063 at September 30, 2025, and increased $783, or 16.3%, compared to $4,801 at December 31, 2024.
• Allowance for credit losses ("ACL") to loans was 1.06% at December 31, 2025 compared to 1.04% in the prior quarter and 0.91% the same period a year ago.
• Tangible book value per common share, as of December 31, 2025 was $8.67, an increase of $0.71 compared to $7.96 as of September 30, 2025 and an increase of $2.49 compared to $6.18 as of December 31, 2024.

Chief Executive Officer ("CEO") Commentary

Stacy Brantley, President and Chief Executive Officer of Citizens Holding Company stated, "I'm extremely proud of our team and greatly encouraged by the progress made over the fourth quarter of 2025 and in wrapping up a transformational year for the company. We were able to significantly expand our net interest margin, increase reserves, and grow capital during the quarter and over the course of the year. Through disciplined execution of our strategic plan, we continue to reposition our balance sheet driving improved operating results and positioning the Bank for future growth and expanded profitability.

"The Bank's net interest margin was 3.25% for the quarter, up 5bps from the prior quarter and up 48bps from the linked prior year quarter-end. This significant expansion of our margin is a result of solid loan growth and disciplined management of our funding costs. Earning asset yields increased 9bps during the quarter while funding costs decreased 9bps. The Bank was able to grow non-interest-bearing deposits by 0.21% during the quarter and by 10.48% or $27,064 over the quarter ended December 31, 2024. This growth is a direct result of directed focus on retail deposit gathering and expanded efforts in treasury and cash management services. This will be a primary focus as we enter 2026.

"Our lending and credit teams produced solid growth for the quarter at $10,920 or 1.32%. Net loan growth for the year was 9.97%. As previously stated, loan pipelines have shallowed slightly but remain solid. Additions to our banking teams over the last year have begun to build new business pipeline and we anticipate solid growth augmented by these additions in the coming quarter and year.

"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 2 bps over the prior quarter-end to 1.06% and by 15bps over the quarter ended December 31, 2024. We anticipate additional provisioning as our asset mix shifts from bonds to loans over the coming quarters. This reflects the Company's commitment to strengthen its balance sheet and fund reserves to accommodate loan growth.

"The Company will continue to expand its banking teams, build operational and risk infrastructure, and reposition its balance sheet to expand profitability. We enter 2026 with great momentum driven by engaged and empowered bankers focused on client service and building trusted partnerships across our footprint."

Financial Condition and Results of Operations

Loans and Deposits

Total loans outstanding, net of unearned income, as of December 31, 2025 totaled $841,136, compared to $830,216 at September 30, 2025 and $764,867 as of December 31, 2024.

Total deposits as of December 31, 2025 were $1,337,282, an increase of $154,690, or 13.08%, compared to $1,182,593 at September 30, 2025 and an increase of $265,684, or 24.8%, compared to $1,071,599 at December 31, 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 December 31, 2025 was $11,384, an increase of $431, or 3.9%, compared to $10,952 for the three months ended September 30, 2025, and an increase of $2,108, or 22.7%, compared to $9,276 for the three months ended December 31 2024. NIM was 3.25% for the three months ended December 31, 2025 compared to 3.20% for the three months ended September 30, 2025 and 2.77% 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 $147, or 0.8%, as well as a decrease in interest expense of $284, or 4.0%, compared to the three months ended September 30, 2025. The increase from the same period ended December 31, 2024 is due to both an increase in interest income of $1,258, or 7.4% and a decrease in interest expense of $850, or 11.0%.

Net interest income for the twelve months ended December 31, 2025 increased $8,523 or 24.6%, to $43,145 from $34,622 for the same period in 2024. The year-to-date NIM was 3.10% as of December 31, 2025 compared to 3.02% at September 30, 2025 and 2.57% for the same period in 2024.

The increase in net interest income for the twelve months ended December 31, 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 $5,082, or 7.7% when compared to the same period in 2024. This increase is primarily the result of interest income on loans, including fees, increasing $9,932, or 21.4%, to $56,396 for the twelve months ended December 31, 2025 from $46,464 for the same period in 2024. Additionally, interest expense decreased $3,441, or 10.8%, to $28,385 for the twelve months ended December 31, 2025 from $31,826 for the same period in 2024. This decrease is primarily the result of interest expense on other borrowed funds decreasing $2,542, or 21.8% compared to the same period in 2024. The Bank has strategically reduced its reliance on securities sold under agreement to repurchase which allows management to more effectively manage the Bank's cost of funds.

Credit Quality

The Company's NPAs to loans were 66 bps at December 31, 2025 compared to 85 bps at September 30, 2025. Total non-performing assets decreased $1,479, or 20.9%, to $5,584 at December 31, 2025, compared to $7,063 at September 30, 2025, and increased $783, or 16.3%, compared to $4,801 at December 31, 2024.

Net losses were $158 for the twelve months ended December 31, 2025. Year-to-date net losses to average loans were 0.02% at December 31, 2025 compared to (0.03)% at December 31, 2024.

The provision for credit losses ("PCL") for the three months ended December 31, 2025 was $582, an increase of $31, or 5.6% compared to $551 for the linked quarter and, an increase of $239, or 69.7%, from $343 for the same period a year ago.

PCL for the twelve months ended December 31, 2025 increased $1,428, or 171.4%, to $2,261 from $833 for the twelve months ended December 31, 2024. The PCL increase for both the three months and year end December 31, 2025 was primarily driven by loan growth coupled with qualitative factor adjustments due to the current economic uncertainty. The ACL to LHFI increased 2 bps to 1.06% at December 31, 2025 from 1.04% at September 30, 2025 and 15 bps from 0.91% at December 31, 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 12.9% at December 31, 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 $638,000, which consists of the following:

• $220,000 from the Federal Home Loan Bank of Dallas ("FHLB")
• Approximately $242,000 in brokered deposit availability
• $157,000 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 decreased for the three months ended December 31, 2025, by $322, or 10.8%, compared to the three months ended September 30, 2025, and increased by $120, or 4.7%, compared to the same period in 2024.

The decrease quarter-over-quarter is primarily due to the decrease in other noninterest income of $276, or 42.6%, to $373 for the three months ended December 31, 2025 from $649 for the three months ended September 30, 2025. Noninterest income for the three months ended September 30, 2025 included $300 thousand in income from BOLI proceeds.

Noninterest income decreased for the twelve months ended December 31, 2025, by $982, or 8.1%, from $12,096 to $11,114 for the twelve months ended December 31, 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 ($2,563) during the twelve months ended December 31, 2024.

Noninterest Expense

Noninterest expense increased for the three months ended December 31, 2025, by $393, or 3.7%, compared to the three months ended September 30, 2025 and increased by $1,286, or 13.1%, compared to the same period in 2024.

Noninterest expense increased for the twelve months ended December 31, 2025 by $3,478, or 8.9%, compared to the same period in 2024.

The increase year-over-year is primarily due to salaries and employee benefits increasing by $1,934, or 9.7%, to $21,811 for the twelve months ended December 31, 2025 from $19,877 for the twelve months ended December 31, 2024.

During 2025, the Bank hired a number of key production hires in key, strategic markets throughout MS. Additionally, the Bank hired two key, top-level management hires to ensure the Bank maintains a strong risk management culture.

Dividends

The Company has paid aggregate cash dividends in the amount of $266, or $0.04 per share, during the twelve-month period ended December 31, 2025 compared to $3,607, or $0.64 per share, for the same period in 2024.

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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Citizens Holding Company, Philadelphia

Phillip R. Branch, 601/519-4016

[email protected]