African-American Bank Citizens Bancshares Is an Interesting Choice for Income Investors

Katie Kao

One of the best dividend-paying stocks to buy is Atlanta-based Citizens Bancshares Corp. (OTCBB:CZBS).


Citizen Bancshares currently has a market capitalization of $22 million and continues to perform as Georgia’s largest African owned bank. From 2018 to 2019, it offered a 100% increase in dividend payouts, including both its annual dividend and a $0.20 special dividend.

About Citizens Bancshares

One of the best dividend-paying stocks to buy is Citizens Bancshares Corp., a bank holding company of Citizens Trust Bank that provides commercial banking services and offers a 3.31% dividend yield. It also pays annual dividends and special dividends on occasion.


Founded in 1921, Citizens Bancshares is Georgia’s oldest and largest African-American owned bank. The company reported $417.8 million in total assets for the year ended December 31, 2019, up 18% compared to $410.6 million a year ago. From its annual reports, the company has continued to bring in earnings and also keeps raising its annual dividend payments to shareholders.

Performance of Citizens Bancshares 

While Citizens Bancshares reported a 5% drop in its net income to $3.75 million for the year ended December 31, 2019, compared to a year ago, the total interest income displayed a 3.8% increase. 

Citizens Bancshares’ stock price since the start of the year has fallen 5.7%, after a high of $13.40 on June 18, 2020, as of July 27, 2020. Its current stock price of $10.58 is 4.7% lower than the stock price a year ago. However, Citizens Bancshares’s stock price has recovered well to approach its original range near $11 since its low of $8.25 on April 1 due to COVID-19. 


Commenting on earnings results, Ray M. Robinson, chairman of Citizens Bancshares Corp., highlights the company’s Pandemic Plan to address the safety and continuity of the bank’s operations and to maintain its commitments to the values and customers of the bank. 

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“Our guiding principles, our six strategic pillars – Customer Engagement, Customer Experience, Innovative Solutions, Inspired People, Community Impact and Financial Success – remain at the core of our continued progress and success,” Robinson said. “We are well-positioned, and strongly capitalized. Our team and our commitment cause us to be optimistic about the future. We will confront the challenges, but will focus on the opportunities to expand and build new relationships, to attract new talent, and to differentiate and grow our company.”

Moving Forward with Citizens Bancshares

Citizens Bancshares aims to provide high-touch customer responsiveness, integrity and teamwork. This is intended to give the company a competitive advantage in serving customers and attracting outstanding team members. The company reported a breakthrough in loan penetration into new markets in Florida, Tennessee, South Carolina and Mississippi, which is reflected in its improved interest income for 2019.

On June 22, Citizens Bancshares reported it received $5 million in grants from Morgan Stanley. The grant is intended to help local banks to assist small businesses impacted by COVID-19. Cynthia Day, the president and CEO of Citizens Bancshares Corp., reaffirmed Citizens Bancshares’s commitment to local small businesses. 


“During this pandemic, when our communities are more severely impacted, our commitment to this mission carries an even greater significance,” Day said. “We thank and applaud Morgan Stanley for their genuine engagement and partnership. Their bold action will assist us in continuing to support our communities, expand our reach and create meaningful change.”  

Citizens Bancshares Has Boosted Payouts by 17% 

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Citizens Bancshares currently offers a forward dividend yield of 3.31% with a declared dividend payment of 0.35. This payment is a 17% increase in its annual dividend payout from 2019 to 2020. It has made two payments totaling $0.55 in the last 12 months with a special dividend of $0.20.

Price/Book Ratio

Citizens Bancshares currently trades at a 0.58 price to book ratio, which is low and relatively rare compared to major stocks in the S&P 500 index. The low price-book value suggests market undervaluation of the stock and high potential future returns.

Price/Earnings Ratio


Citizens Bancshares also has a 12.64 trailing price-to-earnings (P/E) ratio, which is 28% lower than the overall financial services industry P/E ratio of 17.56. This low P/E ratio in comparison to the S&P 500 index poses high earnings potential for Citizens Bancshares.

Major Internal Collaboration Policy

Following its commitment to internal collaboration with employees and external collaboration with customers, Citizens Bancshares launched ProjectElevate, a new collaboration project between the company and its customers. This is a sizable commitment that requires collaboration across all business lines to execute on a successful transition of Citizens Bancshares’s core operating system and concludes in 2020. 

The company also instituted a Leadership Development Academy in 2019 to groom and inspire the leaders of the future. It declared these projects as new ways to continuously engage and collaborate with the company’s community.

Why Investors Should Consider Citizens Bancshares:

  • Citizens Bancshares’ stock price recovery from the COVID-19 crisis market shock shows the company’s capabilities as a valuable investment. 
  • It has a high dividend growth rate of 17%, with long-term growth rates at 55% and 30% over three years and five years, respectively. 
  • It displays low price book and P/E ratios that signal high future returns.
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Key Risks for Citizens Bancshares:

  • Interest income and earnings depend on the performance of Citizens Bancshares’s market and customer behavior and can continue to be adversely affected by the impacts of COVID-19 and market crises. 
  • This article compiled information based on the latest annual report from 2019, not including the earnings reports after the market crash in March 2020 caused by COVID-19.

*Important Note: This article is compiled from information in CItizens Bancshares’s most recently released earnings report, the 10K annual report for the period ended Dec. 31, 2019. Although the impacts of the COVID-19 financial crisis was not fully displayed in the 2019 annual report, the pandemic likely impacted Citizens Bancshares’s net earnings for the year to date, with effects to be reported.

Katie Kao is an editorial intern with Eagle Financial Publications and she writes for

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