Executive Summary

Q1 2023 net income was $1.14M ($0.20 EPS), down 54% q/q and 44% y/y as net interest margin compressed to 2.56% amid sharply higher funding costs .
Total revenues rose 15.6% y/y to $13.40M on stronger interest income, but q/q were modestly lower vs Q4’s $13.68M; management flagged continued NIM pressure in the current rate environment .
Credit quality remained solid: NPA fell to $4.18M and net recoveries were positive; ACL/LHFI stepped up to 1.06% on CECL adoption .
No formal guidance or earnings call transcript found; dividend maintained at $0.24 per share in the quarter .
Estimate comparisons unavailable due to system limitation retrieving S&P Global consensus; focus near-term is on deposit costs and NIM trajectory .

What Went Well and What Went Wrong

What Went Well

Revenues increased 15.6% y/y to $13.40M driven by +21.85% y/y growth in interest income; “The increase in total revenue is primarily attributed to an increase…in interest income” .
Credit metrics improved: NPA down 2.4% q/q and 16.2% y/y; net recoveries of $71; ACL/LHFI increased to 1.06% with CECL adoption, a level “commensurate with the present risk” .
Book value per share rose to $7.35 from $6.97 on lower medium-term Treasury yields improving securities valuations .

What Went Wrong

Net interest income fell 12.9% q/q and 7.3% y/y to $7.68M; interest expense jumped 55.6% q/q as deposit and borrowing costs rose, compressing NIM to 2.56% (vs 2.87% in Q4) .
Non-interest income decreased 12.8% q/q and 6.7% y/y, primarily due to lower secondary market mortgage origination income amid higher rates .
Non-interest expense rose 2.9% q/q and 5.3% y/y on higher salaries/benefits tied to a tight labor market, pressuring pre-tax income .

Financial Results

Headline Comparisons (Q3 2022 → Q4 2022 → Q1 2023)

Metric	Q3 2022	Q4 2022	Q1 2023
Total Revenues ($USD Thousands)	$12,999	$13,676	$13,395
Net Interest Income ($USD Thousands)	$9,049	$8,810	$7,678
Diluted EPS ($USD)	$0.46	$0.44	$0.20
Net Interest Margin % (tax-equivalent)	2.90%	2.87%	2.56%

Year-over-Year (Q1 2022 → Q1 2023)

Metric	Q1 2022	Q1 2023	YoY Change
Total Revenues ($USD Thousands)	$11,587	$13,395	+15.60%
Net Interest Income ($USD Thousands)	$8,287	$7,678	-7.35%
Diluted EPS ($USD)	$0.36	$0.20	-44.01%
NIM % (tax-equivalent)	2.69%	2.56%	-13 bps

Actuals vs Estimates (Q1 2023)

Metric	Actual	Wall St Consensus	Surprise
Diluted EPS ($USD)	$0.20	Unavailable	N/A
Total Revenues ($USD Thousands)	$13,395	Unavailable	N/A

Note: S&P Global consensus data was unavailable via our system at the time of this analysis.

Income Components (Q3 2022 → Q4 2022 → Q1 2023)

Component ($USD Thousands)	Q3 2022	Q4 2022	Q1 2023
Interest Income – Loans	$6,855	$7,307	$7,323
Interest Income – Securities	$3,187	$3,400	$3,370
Other Interest Income	$80	$258	$339
Interest Expense – Deposits	$496	$958	$1,820
Interest Expense – Borrowed Funds	$577	$1,197	$1,534
Non-Interest Income	$2,877	$2,711	$2,363
Non-Interest Expense	$8,936	$8,499	$8,741

KPIs and Balance Sheet

KPI	Q3 2022	Q4 2022	Q1 2023
ROAA (annualized)	0.71%	0.72%	0.34%
ROAE (annualized)	12.12%	15.30%	11.49%
NIM (tax-equivalent)	2.90%	2.80–2.87%	2.56%
NPA to Loans	0.77%	0.74%	0.74%
ACL to Loans	0.88%	0.91%	1.06%
Net (Recov)/Charge-offs to Avg Loans	-0.08%	-0.11%	-0.01%
Book Value/Share	$5.83	$6.97	$7.35
Total Assets ($USD Thousands)	$1,328,478	$1,324,002	$1,289,469
Loans, net ($USD Thousands)	$578,665	$585,591	$567,240
Deposits ($USD Thousands)	$1,134,936	$1,126,402	$1,115,826
Shareholders’ Equity ($USD Thousands)	$32,637	$39,024	$41,124

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue/Expenses/Tax/Segments	Q2–FY 2023	None provided	None provided	Maintained (no formal guidance)
Dividend	Q1 2023	—	$0.24 per share paid in Q1	Maintained

Note: No formal forward guidance was provided in Q1 materials, beyond qualitative NIM pressure commentary .

Earnings Call Themes & Trends

No earnings call transcript was found for Q1 2023; themes derived from press releases.

Topic	Previous Mentions (Q3 2022)	Previous Mentions (Q4 2022)	Current Period (Q1 2023)	Trend
Interest rate environment & NIM	Higher rates lifted asset yields; early deposit cost increases; NIM 2.90%	Cost of funds increased sharply; NIM 2.87%	Funding costs surged; NIM fell to 2.56%; “Management expects continued pressure on NIM”	Deteriorating
Deposit competition/cost of funds	Started raising deposit rates marginally to remain competitive	“Competition for deposits has increased significantly”; interest expense doubled q/q	Interest expense +55.6% q/q; deposit costs continued rising	Deteriorating
Securities portfolio & AOCI/book value	Reclassified AFS→HTM to mitigate equity volatility; equity impact dynamics explained	Book value recovered to 6.97 on yield declines; AOCI loss ($83,070)	Book value increased to 7.35; AOCI loss ($79,822) persists, improved with yield move	Improving (with rate relief), but still pressured
Credit quality	NPA fell; net recoveries; allowance ~0.88%	NPA continued falling; net recoveries; allowance ~0.91%	NPA down; net recoveries; ACL/LHFI up to 1.06% under CECL	Stable/Improving
Mortgage/fee income	Lower securities gains; mortgage income down on rates	Noninterest income down y/y (no securities gains)	Noninterest income fell on weaker mortgage originations	Deteriorating
Regulatory/accounting	—	—	CECL adopted Jan 1, 2023; raised ACL/LHFI	Structurally higher reserve

Management Commentary

“Management expects continued pressure on NIM given the current interest rate environment” .
“The increase in ACL to loans was primarily attributed to the implementation of Accounting Standard Update (“ASU”) 2016-13 as of January 1, 2023” .
“The increase in non-interest expense is mainly attributable to an increase in salaries and employee benefits due to an overall tight labor market” .
Q4 context: “Competition for deposits has increased significantly” and interest expense rose 100.8% q/q heading into year-end .

Q&A Highlights

No public Q1 2023 earnings call transcript or Q&A was found; analysis is based on press releases .

Estimates Context

S&P Global Wall Street consensus for Q1 2023 EPS and revenue was unavailable via our system at the time of analysis; as a result, beat/miss assessment cannot be determined. Focus should remain on internal drivers (NIM, funding costs) until estimates are accessible.

Key Takeaways for Investors

Margin pressure is the central narrative: NIM fell to 2.56% as funding costs spiked; management anticipates continued pressure, making deposit pricing and mix pivotal in coming quarters .
Credit remains a bright spot with declining NPAs and net recoveries; CECL adoption lifts reserves to 1.06% of loans, providing additional buffer .
Book value stabilized/increased with rate relief; AOCI remains a headwind but should moderate if yields decline or securities accrete .
Fee income softness persists on mortgage activity; without securities gains, operating leverage depends on controlling personnel and occupancy costs .
Near-term trading: sensitivity to any signals of deposit cost stabilization or funding mix improvement; disclosures on NIM trajectory could be catalysts .
Medium-term thesis: earnings normalization hinges on balancing asset yields and funding costs; credit discipline and reserve strength support downside protection .
Dividend maintained ($0.24/share in Q1) suggests commitment to shareholder returns despite earnings volatility; monitor payout sustainability versus earnings trend .

Source Documents Read

Q1 2023 8-K 2.02 press release and financial highlights, April 25, 2023 .
Q4 2022 8-K 2.02 press release and financial highlights, January 24, 2023 .
Q3 2022 8-K 2.02 press release and financial highlights, October 25, 2022 .

No Q1 2023 earnings call transcript or additional Q1 press releases were found in the document set [ListDocuments results].

CITIZENS HOLDING CO /MS/ (CIZN)·Q1 2023 Earnings Summary