Executive Summary

Q4 2022 delivered accelerating total revenues to $13.676M (+5.21% q/q) on higher asset yields, while net income slipped to $2.463M (-4.53% q/q) as deposit competition lifted funding costs; EPS was $0.44 vs $0.46 in Q3 and $0.32 in Q4 2021 .
Net interest margin compressed modestly to 2.87% (from 2.90% in Q3) as interest expense rose sharply (+100.84% q/q), partly offset by stronger loan and securities interest income .
Book value per share rebounded to $6.97 from $5.83 in Q3 on lower medium-term Treasury yields and retained earnings, though it remains far below $18.95 in Q4 2021 due to accumulated OCI losses on the securities portfolio .
Credit quality remained a bright spot: non-performing assets to loans fell to 0.74% (0.77% in Q3; 1.13% in Q4 2021) and net recoveries continued year-to-date .
Wall Street consensus estimates were unavailable via S&P Global for Q4 2022; no formal guidance was provided. Near-term stock reaction catalysts include deposit pricing pressure on NIM and continuing AOCI-driven equity volatility .

What Went Well and What Went Wrong

What Went Well

Asset yields rose to 354 bps in Q4 (323 bps in Q3), driving a 5.21% sequential increase in total revenues; management emphasized benefits from Fed rate hikes .
Credit quality improved: NPAs fell to $4.278M (0.74% of loans) vs $4.429M in Q3 and $6.455M in Q4 2021; net recoveries for the quarter were $168 and year-to-date net recoveries reached $627 .
Book value per share increased to $6.97 in Q4, with management citing lower Treasury yields and earnings retention as key drivers .

What Went Wrong

Net interest income declined 2.64% q/q to $8.810M as interest expense surged (+$1.082M q/q) amid significantly higher competition for deposits, compressing the NIM to 2.87% .
Noninterest income fell $166 q/q (largely due to a one-time insurance gain recognized in Q3), and noninterest expense decreased $437 q/q but includes ongoing deposit competition impacts on pricing and salary pressures .
AOCI losses continued to weigh on equity in 2022, with accumulated other comprehensive loss at ($83.070M); despite QoQ book value improvement, BVPS remains down sharply vs prior year due to unrealized losses in the securities portfolio .

Financial Results

Metric	Q2 2022	Q3 2022	Q4 2022
Total Revenues ($USD Millions)	$12.323	$12.999	$13.676
Net Interest Income ($USD Millions)	$8.763	$9.049	$8.810
Total Interest Income ($USD Millions)	$9.560	$10.122	$10.965
Total Noninterest Income ($USD Millions)	$2.763	$2.877	$2.711
Total Noninterest Expense ($USD Millions)	$8.432	$8.936	$8.499
Provision for Loan Losses ($USD Thousands)	$56	$(53)	$28
Net Income ($USD Millions)	$2.541	$2.580	$2.463
Diluted EPS ($USD)	$0.45	$0.46	$0.44
Net Interest Margin (%)	2.78%	2.90%	2.87%

Year-over-year snapshots (Q4 2022 vs Q4 2021):

Metric	Q4 2021	Q4 2022
Total Interest Income ($USD Millions)	$9.852	$10.965
Total Noninterest Income ($USD Millions)	$2.673	$2.711
Net Income ($USD Millions)	$1.810	$2.463
Diluted EPS ($USD)	$0.32	$0.44
Book Value per Share ($)	$18.95	$6.97

KPIs and Balance Sheet/Credit Metrics:

KPI	Q2 2022	Q3 2022	Q4 2022
Yield on Earning Assets (bps)	302	323	354
Non-Performing Assets to Loans (%)	0.84%	0.77%	0.74%
Allowance for Loan Losses to Loans (%)	0.86%	0.88%	0.91%
Net (Recoveries)/Charge-offs to Avg Net Loans (YTD, %)	-0.07%	-0.08%	-0.11%
ROA (YTD, %)	0.68%	0.71%	0.72%
ROE (YTD, %)	11.52%	12.12%	15.30%
Equity ($USD Millions, period-end)	$25.926	$32.637	$39.024
Book Value per Share ($)	4.64	5.83	6.97

Segment breakdown: N/A – Citizens Holding Company is a one-bank holding company (The Citizens Bank of Philadelphia) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cost of Funds	Near-term (Q3→Q4 2022)	Management “started to increase rates marginally” and expected cost of funds to start increasing	Management expects cost of funds to continue to increase, partially offset by higher asset yields	Raised (directional)
Dividends	Q3→Q4 2022	$0.24 per share paid in Q3	$0.24 per share paid in Q4; $0.96 for FY22; payout ratio 55.81%	Maintained

No formal revenue/EPS/expense/tax guidance provided in Q4 2022 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2022)	Previous Mentions (Q3 2022)	Current Period (Q4 2022)	Trend
Interest rate environment	Positioned to benefit from rising rates; did not expect significant cost of funds increase due to liquidity	Cost of funds starting to increase; higher yields on loans/securities lifting NIM	Cost of funds expected to continue rising; partially offset by higher asset yields	Rising funding costs; improving asset yields
Deposit competition	Not highlighted as a major pressure	Began increasing deposit rates marginally to remain competitive	Competition for deposits increased significantly, driving interest expense up	Intensifying
Credit quality	NPAs stable; net recoveries; improving trends	NPAs decreased; net recoveries YTD	NPAs decreased further; net recoveries continue	Improving
Equity/AOCI management	Equity declined due to AFS fair value marks	Reclassified $413.9M AFS→HTM to mitigate future equity impacts	AOCI loss rose to ($83.070M) in 2022; BVPS improved QoQ on lower Treasury yields	AOCI volatile; BVPS recovery QoQ
Noninterest income	Mortgage banking down on higher rates	Other income supported by BOLI; no bond sale gains	Lower q/q due to one-time insurance gain in Q3 not repeating	Structurally lower vs 2021; lumpy items

Note: No earnings call transcript found for Q4 2022; themes reflect press release disclosures .

Management Commentary

“The linked-quarter decrease in net interest income is primarily a result of higher cost of funds as competition for deposits has increased significantly.”
“Management expects cost of funds to continue to increase; with those increases partially offset by increases in interest income as a result of higher yields on both new loan originations and security purchases.”
“During the quarter, the Company’s book value per share increased... primarily due to a decrease in medium term treasury yields coupled with an increase in earnings.”
“This reclassification [AFS to HTM] will help to further mitigate any future negative impacts on stockholders’ equity that could result from continued interest rate hikes.”

Q&A Highlights

No Q4 2022 earnings call transcript was available; therefore, there are no Q&A highlights to report .

Estimates Context

Wall Street consensus EPS and revenue estimates for Q4 2022 were unavailable via S&P Global due to data limitations (request limit reached). As a result, we cannot quantify beats/misses versus consensus for this quarter. Analysts may update models to reflect management’s expectation of continued increases in cost of funds and the partial offset from higher asset yields .

Key Takeaways for Investors

Revenue momentum is intact on rising asset yields, but funding cost inflation is pressuring NIM and net interest income; watch deposit pricing and competitive dynamics in the footprint .
Credit remains solid with lower NPAs and net recoveries YTD, supporting loss-absorption capacity amid macro uncertainty .
BVPS showed sequential improvement as Treasury yields eased, but AOCI remains the dominant driver of equity volatility; actions like AFS→HTM reclassification help mitigate future OCI impacts .
Noninterest income has structural headwinds (mortgage banking down on higher rates) and is subject to lumpy one-time items; expense control remains a focus .
Dividend held at $0.24 in Q4; FY22 payout ratio declined to 55.81% as earnings rose, suggesting a balanced capital return posture amid OCI pressure .
Near term, expect margin sensitivity to deposit competition and cost of funds; medium term, earning asset repricing should provide offsets as the asset side resets higher .

Sources: Q4 2022 8-K and press release with financial highlights ; prior quarters Q3 2022 8-K and Q2 2022 8-K .

CITIZENS HOLDING CO /MS/ (CIZN)·Q4 2022 Earnings Summary