Citizens Community Bancorp, Inc. Earnings Increase
Post# of 301275
EAU CLAIRE, Wis., Oct. 28, 2016 (GLOBE NEWSWIRE) -- Citizens Community Bancorp, Inc. (the "Company") (Nasdaq: CZWI ) , the parent company of Citizens Community Federal N.A. (the “Bank”), today reported fiscal 2016 GAAP earnings grew 19% to $3.1 million, or $0.59 per diluted share, compared to $2.6 million, or $0.50 per diluted share, one year earlier. Fourth quarter GAAP earnings were $586,000, or $0.12 per share, compared to $691,000, or $0.13 per share, for the fourth quarter a year ago and $967,000, or $0.18, for the preceding quarter. Core earnings (non-GAAP) were $1.2 million, or $0.22 per share, for the fourth quarter, compared to Core earnings (non-GAAP) of $867,000, or $0.16 per share, for the fourth quarter a year ago. Fourth quarter fiscal 2016 Core earnings (non-GAAP) reflect adjustments for numerous one-time expenses associated with the reduction of personnel, cancellation of vendor contracts, one branch closure, one branch relocation and higher data processing fees related to the integration of the Community Bank of Northern Wisconsin (“CBN”) acquisition on May 16, 2016.
Core earnings is a non-GAAP measure that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. See the Data Sheets that follow for additional information.
“Fiscal 2016 saw numerous changes throughout the organization with the acquisition and integration of CBN, the announcement to close six branches, the building of a new traditional branch, the authorization of a stock repurchase program for up to 10% of the outstanding shares, and a new management team and new initiatives for our lending and deposit gathering efforts,” said Stephen Bianchi, President and Chief Executive Officer. “We expect the loan mix to change as we underwrite more commercial loans and discontinue the origination of dealer indirect loans. Meanwhile, we are working to improve operating efficiency to boost core earnings (non-GAAP) and enhance franchise and shareholder value.”
Relative to one year earlier, total assets increased to $696.1 million at September 30, 2016, from $580.1 million at September 30, 2015, and decreased from the immediate prior quarter of $723.0 million at June 30, 2016. The decrease in total assets over the preceding quarter is largely related to the recently announced branch closings and withdrawal of funds paid to the prior owners of CBN which were temporarily on deposit. Tangible book value per share was $11.15 per share as of September 30, 2016, compared to $11.20 per share as of June 30, 2016. Nonperforming assets, as a percentage of total assets, were 0.62% at September 30, 2016, compared to 0.71% at June 30, 2016.
Fiscal Fourth Quarter 2016 Financial Highlights: (at or for the periods ended September 30, 2016, compared to September 30, 2015 and /or June 30, 2016.)
- GAAP Earnings were $586,000, or $0.12 per diluted share, for the fiscal fourth quarter of 2016 versus $967,000, or $0.18 per diluted share, for the third fiscal quarter and $691,000 or $0.13 per diluted share, for the quarter ended September 30, 2015. For the fiscal year ended September 30, 2016, earnings increased 19% to $3.11 million, or $0.59 per diluted share, versus $2.61 million, or $0.50 per diluted share, for fiscal 2015.
- Core earnings (non-GAAP) were $1.2 million for the fiscal fourth quarter ended September 30, 2016 and the previous quarter ended June 30, 2016. For the fiscal year ended September 30, 2016, core earnings (non-GAAP) were $4.1 million, compared to $3.1 million the previous year. Core earnings (non-GAAP) largely reflect adjustments related to merger related costs and branch closure costs.
- The net interest margin was 3.32% for the fiscal fourth quarter of 2016 compared to 3.27% for the three months ended June 30, 2016, and 3.31% for the three months ended September 30, 2015.
- Total assets decreased to $696.1 million at September 30, 2016, from $723.0 million at June 30, 2016, and increased from $580.1 million at September 30, 2015, due largely to the acquisition of CBN, which added $167 million in assets.
- Total net loans decreased slightly to $568.4 million at September 30, 2016, from $577.8 million at June 30, 2016, and were higher than the September 30, 2015, balance of $444.0 million.
- Total deposits decreased to $557.7 million from $585.2 million relative to June 30, 2016, and increased 22% from $456.3 million at September 30, 2015.
- Nonperforming assets ratio improved to 0.62% of total assets at September 30, 2016, compared to 0.71% at June 30, 2016.
- Loan and lease losses allowance totaled 1.06% of total loans at September 30, 2016, compared to 1.07% one quarter earlier.
- Bank capital ratios at September 30, 2016, continued to remain well above the regulatory “well-capitalized” minimum levels:
- Total capital to risk-weighted assets was 14.0% versus 16.5% at September 30, 2015.
- Tier 1 capital to risk-weighted assets was 12.8% versus 15.3% at September 30, 2015.
- Common equity tier 1 capital to risk-weighted assets was 12.8% versus 15.3% at September 30, 2015.
- Tier 1 leverage to adjusted total assets was 9.3% versus 10.4% at September 30, 2015.
- Tangible book value was $11.15 per share at September 30, 2016, compared to $11.55 per share a year ago.
Balance Sheet and Asset Quality Review
Total assets were $696.1 million at September 30, 2016, compared to $723.0 million at June 30, 2016 and $580.1 million at September 30, 2015. The decline in total assets in the most recent quarter primarily reflects lower deposit levels and a lower level of cash and investments. Total net loans decreased slightly to $568.4 million at September 30, 2016, from $577.8 million at June 30, 2016, but were higher than the $444.0 million balance one year earlier. The slight decline in the loan balance was primarily due to decreased levels of one-to-four family loans and a decreased investment in indirect consumer loans. Meanwhile, commercial and multi-family loan balances increased over the past quarter reflecting increased emphasis on internally underwritten commercial and agricultural loans.
At September 30, 2016, commercial, agricultural, multi-family, construction and land development loans totaled 34.6% of the total loan portfolio. One-to-four family loans represented 32.7% of the total loan portfolio while consumer related loans also totaled 32.7% of the total loan portfolio. Cash and investment balances decreased in the most recent quarter as the Company has used available cash to fund deposit withdrawals related to branch closings. Similarly, investment securities declined slightly relative to the previous quarter. Goodwill increased slightly in the most recent quarter related to purchase accounting adjustments for the acquisition of CBN.
Total deposits were $557.7 million at September 30, 2016, and $585.2 million at June 30, 2016. Despite the decline in total deposits on a linked quarter basis, non-interest bearing demand deposits and savings deposits increased over the past quarter while interest bearing demand deposits, money market accounts and certificate accounts declined. Non-certificate accounts increased to 50.9% of total deposits at September 30, 2016, from 49.3% the previous quarter. The change in composition of deposits reflects a combination of deposit run-off related to the CBN acquisition and the announced closure of the Fox Valley branches.
Federal Home Loan Bank ("FHLB") advances and other borrowings totaled $70.3 million at September 30, 2016, compared to $69.9 million in the previous quarter. To facilitate the purchase of CBN, the Company obtained an adjustable-rate, $11.0 million loan with a maturity date of May 15, 2021.
Nonperforming assets ("NPAs") declined to $4.3 million at September 30, 2016, compared to $5.1 million the previous quarter. At September 30, 2016, NPAs represented 0.62% of total assets and included only $777,000 in foreclosed and repossessed assets.
The allowance for loan and lease losses at September 30, 2016, totaled $6.1 million and represented 1.06% of total loans and leases. Net charge offs to average loans was 0.10% in fiscal 2016 versus 0.14% one year earlier.
Tangible common stockholders' equity was 8.49% of tangible assets at September 30, 2016, compared to 8.17% at June 30, 2016. Tangible book value per common share was $11.15 at September 30, 2015.
Capital ratios continued to remain well above regulatory requirements with Tier 1 capital to risk-weighted assets of 12.8% at September 30, 2016, while the ratio of Tier 1 capital to total adjusted assets was 9.3%. These regulatory ratios were higher than the required minimum levels of 6.00% for Tier 1 capital to risk-weighted assets and 4.00% for Tier 1 capital to total adjusted assets.
Review of Operations
For the fiscal fourth quarter ending September 30, 2016, the Company's operations reflected $936,000 in one-time costs associated with the CBN acquisition and the announced branch closures. Reported GAAP earnings were $586,000 for the quarter ended September 30, 2016, compared to $967,000 for the immediate prior quarter. Core earnings (non-GAAP), which adjusts for non-recurring one-time costs, were $1.2 million, or $0.22 per diluted share for the fiscal fourth quarter ended September 30, 2016, compared to $1.2 million, or $0.23 per diluted share one quarter earlier. Net interest income increased to $5.7 million for the fiscal fourth quarter of 2016, compared to $5.2 million for the previous quarter and $4.6 million in the fiscal fourth quarter ended September 30, 2015. The net interest margin was 3.32% for the fiscal fourth quarter of 2016, compared to 3.27% for the preceding quarter and 3.31% for the quarter ended September 30, 2015.
Provision for loan losses reflect prudent reserves established for the loan portfolio, economic conditions and historical charge-off activity. No provisions were booked for the fiscal second, third or fourth quarters of 2016, compared to $121,000 for the fiscal fourth quarter of 2015. Net charge-offs were $503,000 for the fiscal 2016, versus $666,000 in fiscal 2015.
Noninterest income totaled $1.1 million for the fiscal fourth quarter of 2016, compared to $1.0 million in the fiscal third quarter of 2016. Fees on deposits totaled $463,000 for the fiscal fourth quarter of 2016 versus $410,000 for the third quarter of fiscal 2016. Total noninterest expense was $6.0 million in the fiscal fourth quarter of 2016 compared to $4.7 million for the quarter ended June 30, 2016. The current quarter reflects the addition of new employees related to the CBN acquisition, one-time merger related costs and branch closure costs. Compensation and employee benefits totaled $3.0 million for the fiscal fourth quarter of 2016, versus $2.4 million in the previous quarter. These financial results are preliminary until the Form 10-K is filed in December 2016.
About the Company
Citizens Community Federal N.A., a wholly owned subsidiary of Citizens Community Bancorp, Inc., is a full-service national bank based in Altoona, Wisconsin, serving more than 50,000 customers in Wisconsin, Minnesota and Michigan through 20 branch locations. The Company’s stock trades on the NASDAQ Global Market under the symbol “CZWI.”
Cautionary Statement Regarding Forward-Looking Statements
Certain statements contained in this release are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Such forward-looking statements in this release are inherently subject to many uncertainties arising in the Company’s operations and business environment. These uncertainties include general economic conditions, in particular, relating to consumer demand for the Bank’s products and services; the Bank’s ability to maintain current deposit and loan levels at current interest rates; competitive and technological developments; deteriorating credit quality, including changes in the interest rate environment reducing interest margins; prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; the Bank’s ability to maintain required capital levels and adequate sources of funding and liquidity; maintaining capital requirements may limit the Bank’s operations and potential growth; changes and trends in capital markets; competitive pressures among depository institutions; effects of critical accounting estimates and judgments; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies overseeing the Bank; the Bank’s ability to implement its cost-savings and revenue enhancement initiatives, including costs associated with its branch consolidation and new market branch growth initiatives; legislative or regulatory changes or actions or significant litigation adversely affecting the Bank; fluctuation of the Company’s stock price; the Bank's ability to attract and retain key personnel; the Bank's ability to secure confidential information through the use of computer systems and telecommunications networks; and the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other risks that may affect the Company’s performance are discussed further in Part I, Item 1A, “Risk Factors,” in the Company’s Form 10-K, for the year ended September 30, 2015 filed with the Securities and Exchange Commission on December 7, 2015. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this news release or to update them to reflect events or circumstances occurring after the date of this release.
Non-GAAP Financial Measures
This press release contains both financial measures based on accounting principles generally accepted in the United States (GAAP) and non-GAAP based financial measures, which are used where management believes it to be helpful in understanding the Company's results of operations or financial position and in comparing the Company's results of operations and financial position over different periods. Management believes that one-time expenses related to acquisition and branch closure costs, such as data processing termination fees, legal costs, severance pay, accelerated depreciation expense, lease termination fees and other costs are not organic costs to run our operations and facilities. Merger related charges represent expenses to either satisfy contractual obligations of acquired entities without any useful benefit to the Company or to convert and consolidate customer records onto the Company platforms. These costs are unique to each transaction based on the contracts in existence at the merger date. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions.
| CITIZENS COMMUNITY BANCORP, INC. | ||||||||||||
| Consolidated Balance Sheets (unaudited) | ||||||||||||
| (in thousands) | ||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||
| Assets | ||||||||||||
| Cash and cash equivalents | $ | 10,046 | $ | 21,345 | $ | 23,872 | ||||||
| Other interest bearing deposits | 745 | 745 | 2,992 | |||||||||
| Securities available for sale "AFS" | 80,123 | 84,508 | 79,921 | |||||||||
| Securities held to maturity "HTM" | 6,669 | 7,163 | 8,012 | |||||||||
| Non-marketable equity securities, at cost | 5,034 | 5,034 | 4,626 | |||||||||
| Loans receivable | 574,439 | 584,046 | 450,510 | |||||||||
| Allowance for loan losses | (6,068 | ) | (6,236 | ) | (6,496 | ) | ||||||
| Loans receivable, net | 568,371 | 577,810 | 444,014 | |||||||||
| Office properties and equipment, net | 5,338 | 5,576 | 2,669 | |||||||||
| Accrued interest receivable | 2,032 | 1,971 | 1,574 | |||||||||
| Intangible assets | 872 | 917 | 104 | |||||||||
| Goodwill | 4,663 | 4,003 | — | |||||||||
| Foreclosed and repossessed assets, net | 776 | 911 | 902 | |||||||||
| Other assets | 11,461 | 13,026 | 11,462 | |||||||||
| TOTAL ASSETS | $ | 696,130 | $ | 723,009 | $ | 580,148 | ||||||
| Liabilities and Stockholders’ Equity | ||||||||||||
| Liabilities: | ||||||||||||
| Deposits | $ | 557,677 | $ | 585,224 | $ | 456,298 | ||||||
| Federal Home Loan Bank advances | 59,291 | 58,874 | 58,891 | |||||||||
| Other borrowings | 11,000 | 11,000 | — | |||||||||
| Other liabilities | 3,995 | 4,316 | 4,424 | |||||||||
| Total liabilities | 631,963 | 659,414 | 519,613 | |||||||||
| Stockholders’ equity: | ||||||||||||
| Common stock—$0.01 par value, authorized 30,000,000; 5,260,098 and 5,232,579 shares issued and outstanding, respectively | 53 | 52 | 52 | |||||||||
| Additional paid-in capital | 54,963 | 54,793 | 54,740 | |||||||||
| Retained earnings | 8,730 | 8,144 | 6,245 | |||||||||
| Unearned deferred compensation | (193 | ) | (179 | ) | (288 | ) | ||||||
| Accumulated other comprehensive gain (loss) | 614 | 785 | (214 | ) | ||||||||
| Total stockholders’ equity | 64,167 | 63,595 | 60,535 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 696,130 | $ | 723,009 | $ | 580,148 | ||||||
| CITIZENS COMMUNITY BANCORP, INC. | ||||||||||||||||||||
| Consolidated Statements of Operations (unaudited) | ||||||||||||||||||||
| (in thousands, except per share data) | ||||||||||||||||||||
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||||
| Interest and dividend income: | ||||||||||||||||||||
| Interest and fees on loans | $ | 6,784 | $ | 6,072 | $ | 5,366 | $ | 23,407 | $ | 21,641 | ||||||||||
| Interest on investments | 410 | 402 | 365 | 1,677 | 1,363 | |||||||||||||||
| Total interest and dividend income | 7,194 | 6,474 | 5,731 | 25,084 | 23,004 | |||||||||||||||
| Interest expense: | ||||||||||||||||||||
| Interest on deposits | 1,212 | 1,081 | 963 | 4,200 | 3,808 | |||||||||||||||
| Interest on FHLB borrowed funds | 168 | 167 | 154 | 664 | 630 | |||||||||||||||
| Interest on other borrowed funds | 96 | 47 | — | 143 | — | |||||||||||||||
| Total interest expense | 1,476 | 1,295 | 1,117 | 5,007 | 4,438 | |||||||||||||||
| Net interest income | 5,718 | 5,179 | 4,614 | 20,077 | 18,566 | |||||||||||||||
| Provision for loan losses | — | — | 121 | 75 | 656 | |||||||||||||||
| Net interest income after provision for loan losses | 5,718 | 5,179 | 4,493 | 20,002 | 17,910 | |||||||||||||||
| Non-interest income: | ||||||||||||||||||||
| Net gains on available for sale securities | 16 | 43 | — | 63 | 60 | |||||||||||||||
| Service charges on deposit accounts | 463 | 410 | 442 | 1,627 | 1,715 | |||||||||||||||
| Loan fees and service charges | 410 | 302 | 368 | 1,296 | 1,291 | |||||||||||||||
| Other | 253 | 258 | 214 | 929 | 847 | |||||||||||||||
| Total non-interest income | 1,142 | 1,013 | 1,024 | 3,915 | 3,913 | |||||||||||||||
| Non-interest expense: | ||||||||||||||||||||
| Salaries and related benefits | 3,023 | 2,378 | 2,095 | 9,807 | 8,643 | |||||||||||||||
| Occupancy | 991 | 554 | 799 | 2,826 | 2,872 | |||||||||||||||
| Office | 361 | 350 | 280 | 1,225 | 1,105 | |||||||||||||||
| Data processing | 528 | 445 | 413 | 1,802 | 1,590 | |||||||||||||||
| Amortization of core deposit intangible | 46 | 31 | 14 | 112 | 57 | |||||||||||||||
| Advertising, marketing and public relations | 153 | 174 | 160 | 609 | 570 | |||||||||||||||
| FDIC premium assessment | 139 | 86 | 84 | 394 | 390 | |||||||||||||||
| Professional services | 138 | 182 | 248 | 712 | 1,088 | |||||||||||||||
| Other | 682 | 453 | 355 | 1,688 | 1,404 | |||||||||||||||
| Total non-interest expense | 6,061 | 4,653 | 4,448 | 19,175 | 17,719 | |||||||||||||||
| Income before provision for income taxes | 799 | 1,539 | 1,069 | 4,742 | 4,104 | |||||||||||||||
| Provision for income taxes | 213 | 572 | 378 | 1,628 | 1,490 | |||||||||||||||
| Net income attributable to common stockholders | $ | 586 | $ | 967 | $ | 691 | $ | 3,114 | $ | 2,614 | ||||||||||
| Per share information: | ||||||||||||||||||||
| Basic earnings | $ | 0.12 | $ | 0.18 | $ | 0.13 | $ | 0.59 | $ | 0.50 | ||||||||||
| Diluted earnings | $ | 0.12 | $ | 0.18 | $ | 0.13 | $ | 0.59 | $ | 0.50 | ||||||||||
| Cash dividends paid | $ | — | $ | — | $ | — | $ | 0.12 | $ | 0.08 | ||||||||||
| Book value per share at end of period | $ | 12.20 | $ | 12.14 | $ | 11.57 | $ | 12.20 | $ | 11.57 | ||||||||||
| Tangible book value per share at end of period | $ | 11.15 | $ | 11.20 | $ | 11.55 | $ | 11.15 | $ | 11.55 | ||||||||||
Reconciliation of GAAP Earnings and Core Earnings (non-GAAP):
| Three Months Ended | Twelve Months Ended | |||||||||||||||||||||||||||
| December 31, 2015 | March 31, 2016 | June 30, 2016 | September 30, 2016 | September 30, 2015 | September 30, 2016 | September 30, 2015 | ||||||||||||||||||||||
| (Dollars in Thousands, except share data) | ||||||||||||||||||||||||||||
| GAAP earnings before income taxes | $ | 1,334 | $ | 1,070 | $ | 1,539 | $ | 799 | $ | 1,069 | $ | 4,742 | $ | 4,104 | ||||||||||||||
| Merger related costs (1) | — | 45 | 222 | 486 | — | 753 | — | |||||||||||||||||||||
| Branch closure costs (2) | 59 | 187 | — | 450 | 245 | 696 | 614 | |||||||||||||||||||||
| Core earnings before income taxes | 1,393 | 1,302 | 1,761 | 1,735 | 1,314 | 6,191 | 4,718 | |||||||||||||||||||||
| Provision for income tax on core earnings at 34% | 474 | 441 | 584 | 584 | 447 | 2,083 | 1,584 | |||||||||||||||||||||
| Core earnings after income taxes | $ | 919 | $ | 861 | $ | 1,177 | $ | 1,151 | $ | 867 | $ | 4,108 | $ | 3,134 | ||||||||||||||
| GAAP diluted earnings per share, net of tax | $ | 0.16 | $ | 0.13 | $ | 0.18 | $ | 0.12 | $ | 0.13 | $ | 0.59 | $ | 0.50 | ||||||||||||||
| Merger related costs, net of tax | — | 0.01 | 0.03 | 0.06 | — | 0.10 | — | |||||||||||||||||||||
| Branch closure costs, net of tax | 0.01 | 0.02 | — | 0.06 | 0.03 | 0.09 | 0.08 | |||||||||||||||||||||
| Tax reconciliation adjustment | — | — | 0.02 | (0.02 | ) | — | — | — | ||||||||||||||||||||
| Core diluted earnings per share, net of tax | $ | 0.17 | $ | 0.16 | $ | 0.23 | $ | 0.22 | $ | 0.16 | $ | 0.78 | $ | 0.58 | ||||||||||||||
| Average diluted shares outstanding | 5,262,718 | 5,263,246 | 5,262,188 | 5,274,505 | 5,264,039 | 5,257,304 | 5,239,943 | |||||||||||||||||||||
(1) Costs incurred are included as data processing, advertising, marketing and public relations, professional fees and other non-interest expense on the income statement. (2) Branch closure costs include severance pay recorded in salaries and other benefits, accelerated depreciation expense and lease termination fees included in occupancy and other non-interest expense on the income statement.
Non-performing Assets:
| September 30, 2016 and Twelve Months Ended | June 30, 2016 and Nine Months Ended | September 30, 2015 and Twelve Months Ended | ||||||||||
| Nonperforming assets: | ||||||||||||
| Nonaccrual loans | $ | 3,191 | $ | 3,226 | $ | 748 | ||||||
| Accruing loans past due 90 days or more | 380 | 979 | 473 | |||||||||
| Total nonperforming loans (“NPLs”) | 3,571 | 4,205 | 1,221 | |||||||||
| Other real estate owned | 725 | 835 | 838 | |||||||||
| Other collateral owned | 52 | 76 | 64 | |||||||||
| Total nonperforming assets (“NPAs”) | $ | 4,348 | $ | 5,116 | $ | 2,123 | ||||||
| Troubled Debt Restructurings (“TDRs”) | $ | 8,705 | $ | 5,446 | $ | 4,010 | ||||||
| Nonaccrual TDRs | $ | 1,606 | $ | 1,026 | $ | 332 | ||||||
| Average outstanding loan balance | $ | 512,475 | $ | 517,278 | $ | 460,438 | ||||||
| Loans, end of period (1) | 574,439 | 584,046 | 450,510 | |||||||||
| Total assets, end of period | 696,130 | 723,009 | 580,148 | |||||||||
| ALL, at beginning of period | 6,496 | 6,496 | 6,506 | |||||||||
| Loans charged off: | ||||||||||||
| Residential real estate | (140 | ) | (111 | ) | (405 | ) | ||||||
| Commercial/agriculture real estate | — | — | — | |||||||||
| Consumer non-real estate | (460 | ) | (394 | ) | (601 | ) | ||||||
| Commercial agriculture non-real estate | (118 | ) | — | |||||||||
| Total loans charged off | (718 | ) | (505 | ) | (1,006 | ) | ||||||
| Recoveries of loans previously charged off: | ||||||||||||
| Residential real estate | 11 | 7 | 69 | |||||||||
| Commercial/agriculture real estate | — | — | — | |||||||||
| Consumer non-real estate | 204 | 163 | 271 | |||||||||
| Commercial agriculture non-real estate | — | — | — | |||||||||
| Total recoveries of loans previously charged off: | 215 | 170 | 340 | |||||||||
| Net loans charged off (“NCOs”) | (503 | ) | (335 | ) | (666 | ) | ||||||
| Additions to ALL via provision for loan losses charged to operations | 75 | 75 | 656 | |||||||||
| ALL, at end of period | $ | 6,068 | $ | 6,236 | $ | 6,496 | ||||||
| Ratios: | ||||||||||||
| ALL to NCOs (annualized) | 1,206.36 | % | 1,396.12 | % | 975.38 | % | ||||||
| NCOs (annualized) to average loans | 0.10 | % | 0.09 | % | 0.14 | % | ||||||
| ALL to total loans | 1.06 | % | 1.07 | % | 1.44 | % | ||||||
| NPLs to total loans | 0.62 | % | 0.72 | % | 0.27 | % | ||||||
| NPAs to total assets | 0.62 | % | 0.71 | % | 0.37 | % | ||||||
Troubled Debt Restructurings:
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||||
| Number of Modifications | Recorded Investment | Number of Modifications | Recorded Investment | Number of Modifications | Recorded Investment | |||||||||||||||
| Troubled debt restructurings: | ||||||||||||||||||||
| Originated loans: | ||||||||||||||||||||
| Residential real estate | 32 | $ | 3,413 | 32 | $ | 3,414 | 34 | $ | 3,479 | |||||||||||
| Commercial/Agricultural real estate | — | — | — | — | — | — | ||||||||||||||
| Consumer non-real estate | 21 | 320 | 25 | 384 | 39 | 531 | ||||||||||||||
| Commercial/Agricultural non-real estate | — | — | — | — | — | — | ||||||||||||||
| Total originated loans | 53 | $ | 3,733 | 57 | $ | 3,798 | 73 | $ | 4,010 | |||||||||||
| Acquired loans: | ||||||||||||||||||||
| Residential real estate | 17 | $ | 1,058 | 2 | $ | 75 | — | $ | — | |||||||||||
| Commercial/Agricultural real estate | 5 | 1,811 | 6 | 1,560 | — | — | ||||||||||||||
| Consumer non-real estate | 2 | 11 | — | — | — | — | ||||||||||||||
| Commercial/Agricultural non-real estate | 16 | 2,092 | 1 | 13 | — | — | ||||||||||||||
| Total acquired loans | 40 | $ | 4,972 | 9 | $ | 1,648 | — | $ | — | |||||||||||
| Total loans: | ||||||||||||||||||||
| Residential real estate | 49 | $ | 4,471 | 34 | $ | 3,489 | 34 | $ | 3,479 | |||||||||||
| Commercial/Agricultural real estate | 5 | 1,811 | 6 | 1,560 | — | — | ||||||||||||||
| Consumer non-real estate | 23 | 331 | 25 | 384 | 39 | 531 | ||||||||||||||
| Commercial/Agricultural non-real estate | 16 | 2,092 | 1 | 13 | — | — | ||||||||||||||
| Total loans | 93 | $ | 8,705 | 66 | $ | 5,446 | 73 | $ | 4,010 | |||||||||||
Loan Composition:
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||
| Originated Loans: | ||||||||||||||||||
| Residential real estate: | ||||||||||||||||||
| One to four family | $ | 160,961 | $ | 169,727 | $ | 181,206 | ||||||||||||
| Commercial/Agricultural real estate: | ||||||||||||||||||
| Commercial real estate | 67,382 | 62,328 | 39,883 | |||||||||||||||
| Agricultural real estate | 3,304 | 4,696 | 2,415 | |||||||||||||||
| Multi-family real estate | 18,935 | 16,694 | 14,869 | |||||||||||||||
| Construction and land development | 11,702 | 11,940 | 6,099 | |||||||||||||||
| Consumer non-real estate: | ||||||||||||||||||
| Originated indirect paper | 119,073 | 123,544 | 130,993 | |||||||||||||||
| Purchased indirect paper | 49,221 | 47,865 | 39,705 | |||||||||||||||
| Other Consumer | 18,926 | 17,171 | 22,900 | |||||||||||||||
| Commercial/Agricultural non-real estate: | ||||||||||||||||||
| Commercial non-real estate | 10,744 | 10,289 | 6,292 | |||||||||||||||
| Agricultural non-real estate | 9,994 | 9,268 | 3,718 | |||||||||||||||
| Total originated loans | $ | 470,242 | $ | 473,522 | $ | 448,080 | ||||||||||||
| Acquired Loans: | ||||||||||||||||||
| Residential real estate: | ||||||||||||||||||
| One to four family (1) | $ | 26,777 | $ | 25,824 | $ | — | ||||||||||||
| Commercial/Agricultural real estate: | ||||||||||||||||||
| Commercial real estate (1) | 34,267 | 31,624 | — | |||||||||||||||
| Agricultural real estate (1) | 22,504 | 23,756 | — | |||||||||||||||
| Multi-family real estate | 200 | 301 | — | |||||||||||||||
| Construction and land development | 3,107 | 5,282 | — | |||||||||||||||
| Consumer non-real estate: | ||||||||||||||||||
| Other Consumer | 789 | 1,915 | — | |||||||||||||||
| Commercial/Agricultural non-real estate: | ||||||||||||||||||
| Commercial non-real estate | 11,709 | 15,175 | — | |||||||||||||||
| Agricultural non-real estate | 4,653 | 5,956 | — | |||||||||||||||
| Total acquired loans | $ | 104,006 | $ | 109,833 | $ | — | ||||||||||||
| Total Loans: | ||||||||||||||||||
| Residential real estate: | ||||||||||||||||||
| One to four family | $ | 187,738 | $ | 195,551 | $ | 181,206 | ||||||||||||
| Commercial/Agricultural real estate: | ||||||||||||||||||
| Commercial real estate | 101,649 | 93,952 | 39,883 | |||||||||||||||
| Agricultural real estate | 25,808 | 28,452 | 2,415 | |||||||||||||||
| Multi-family real estate | 19,135 | 16,995 | 14,869 | |||||||||||||||
| Construction and land development | 14,809 | 17,222 | 6,099 | |||||||||||||||
| Consumer non-real estate: | ||||||||||||||||||
| Originated indirect paper | 119,073 | 123,544 | 130,993 | |||||||||||||||
| Purchased indirect paper | 49,221 | 47,865 | 39,705 | |||||||||||||||
| Other Consumer | 19,715 | 19,086 | 22,900 | |||||||||||||||
| Commercial/Agricultural non-real estate: | ||||||||||||||||||
| Commercial non-real estate | 22,453 | 25,464 | 6,292 | |||||||||||||||
| Agricultural non-real estate | 14,647 | 15,224 | 3,718 | |||||||||||||||
| Gross loans | $ | 574,248 | $ | 583,355 | $ | 448,080 | ||||||||||||
| Net deferred loan costs (fees) | 191 | $ | 691 | 2,430 | ||||||||||||||
| Total loans receivable | $ | 574,439 | $ | 584,046 | $ | 450,510 | ||||||||||||
(1) Some acquired real estate loans were reclassified into the proper loan segment as a result of the operational conversion in August 2016.
Deposit Composition:
| September 30, 2016 | June 30, 2016 | September 30, 2015 | ||||||||||||||||
| Non-interest bearing demand deposits | $ | 45,408 | $ | 37,555 | $ | 19,354 | ||||||||||||
| Interest bearing demand deposits | 48,934 | 52,138 | 22,547 | |||||||||||||||
| Savings accounts | 52,153 | 49,906 | 29,395 | |||||||||||||||
| Money market accounts | 137,234 | 148,810 | 146,201 | |||||||||||||||
| Certificate accounts | 273,948 | 296,815 | 238,801 | |||||||||||||||
| Total deposits | $ | 557,677 | $ | 585,224 | $ | 456,298 | ||||||||||||
Average balances, Interest Yields and Rates:
| Three months ended September 30, 2016 | Three months ended September 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | ||||||||||||||||||||||||||||||||||||||||||
| Average interest earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 19,088 | $ | 19 | 0.40 | % | $ | 17,665 | $ | 10 | 0.22 | % | |||||||||||||||||||||||||||||||||||
| Loans receivable | 580,151 | 6,784 | 4.65 | % | 454,089 | 5,366 | 4.69 | % | |||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 745 | 4 | 2.14 | % | 2,244 | 12 | 2.12 | % | |||||||||||||||||||||||||||||||||||||||
| Investment securities (1) | 88,705 | 405 | 1.82 | % | 81,088 | 369 | 1.80 | % | |||||||||||||||||||||||||||||||||||||||
| Non-marketable equity securities, at cost | 5,034 | 54 | 4.27 | % | 4,626 | 26 | 2.23 | % | |||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | $ | 693,723 | $ | 7,266 | 4.17 | % | $ | 559,712 | $ | 5,783 | 4.10 | % | |||||||||||||||||||||||||||||||||||
| Average interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Savings accounts | $ | 42,368 | $ | 17 | 0.16 | % | $ | 26,901 | $ | 8 | 0.12 | % | |||||||||||||||||||||||||||||||||||
| Demand deposits | 52,868 | 85 | 0.64 | % | 22,295 | 42 | 0.75 | % | |||||||||||||||||||||||||||||||||||||||
| Money market accounts | 143,493 | 149 | 0.41 | % | 147,146 | 165 | 0.44 | % | |||||||||||||||||||||||||||||||||||||||
| CD’s | 265,357 | 878 | 1.32 | % | 218,756 | 682 | 1.24 | % | |||||||||||||||||||||||||||||||||||||||
| IRA’s | 30,237 | 83 | 1.09 | % | 22,252 | 66 | 1.18 | % | |||||||||||||||||||||||||||||||||||||||
| Total deposits | $ | 534,323 | $ | 1,212 | 0.90 | % | $ | 437,350 | $ | 963 | 0.88 | % | |||||||||||||||||||||||||||||||||||
| FHLB advances and other borrowings | 73,426 | 264 | 1.43 | % | 51,891 | 154 | 1.18 | % | |||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | $ | 607,749 | $ | 1,476 | 0.97 | % | $ | 489,241 | $ | 1,117 | 0.91 | % | |||||||||||||||||||||||||||||||||||
| Net interest income | $ | 5,790 | $ | 4,666 | |||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 3.20 | % | 3.19 | % | |||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.32 | % | 3.31 | % | |||||||||||||||||||||||||||||||||||||||||||
| Average interest earning assets to average interest bearing liabilities | 114.15 | % | 114.40 | % | |||||||||||||||||||||||||||||||||||||||||||
(1) For the 3 months ended September 30, 2016 and 2015, the average balance of the tax exempt investment securities, included in investment securities, were $31,819 and $22,648 respectively. The interest income on tax exempt securities is computed on a tax-equivalent basis using a tax rate of 34% for all periods presented.
| Year ended September 30, 2016 | Year ended September 30, 2015 | ||||||||||||||||||||||||||||||||||||||||||||||
| Average Balance | Interest Income/ Expense | Average Yield/ Rate | Average Balance | Interest Income/ Expense | Average Yield/ Rate | ||||||||||||||||||||||||||||||||||||||||||
| Average interest earning assets: | |||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 18,873 | $ | 70 | 0.37 | % | $ | 19,456 | $ | 47 | 0.24 | % | |||||||||||||||||||||||||||||||||||
| Loans receivable | 504,972 | 23,407 | 4.64 | % | 457,707 | 21,641 | 4.73 | % | |||||||||||||||||||||||||||||||||||||||
| Interest bearing deposits | 2,378 | 47 | 1.98 | % | 1,495 | 30 | 2.01 | % | |||||||||||||||||||||||||||||||||||||||
| Investment securities (1) | 90,565 | 1,655 | 1.83 | % | 73,282 | 1,307 | 1.78 | % | |||||||||||||||||||||||||||||||||||||||
| Non-marketable equity securities, at cost | 4,783 | 172 | 3.60 | % | 4,997 | 111 | 2.22 | % | |||||||||||||||||||||||||||||||||||||||
| Total interest earning assets | $ | 621,571 | $ | 25,351 | 4.08 | % | $ | 556,937 | $ | 23,136 | 4.15 | % | |||||||||||||||||||||||||||||||||||
| Average interest bearing liabilities: | |||||||||||||||||||||||||||||||||||||||||||||||
| Savings accounts | $ | 33,538 | $ | 43 | 0.13 | % | $ | 27,608 | $ | 30 | 0.11 | % | |||||||||||||||||||||||||||||||||||
| Demand deposits | 36,878 | 240 | 0.65 | % | 20,797 | 156 | 0.75 | % | |||||||||||||||||||||||||||||||||||||||
| Money market accounts | 141,938 | 585 | 0.41 | % | 143,194 | 632 | 0.44 | % | |||||||||||||||||||||||||||||||||||||||
| CD’s | 239,363 | 3,037 | 1.27 | % | 221,827 | 2,727 | 1.23 | % | |||||||||||||||||||||||||||||||||||||||
| IRA’s | 25,854 | 295 | 1.14 | % | 22,275 | 263 | 1.18 | % | |||||||||||||||||||||||||||||||||||||||
| Total deposits | $ | 477,571 | $ | 4,200 | 0.88 | % | $ | 435,701 | $ | 3,808 | 0.87 | % | |||||||||||||||||||||||||||||||||||
| FHLB advances and other borrowings | 65,857 | 807 | 1.23 | % | 52,199 | 630 | 1.21 | % | |||||||||||||||||||||||||||||||||||||||
| Total interest bearing liabilities | $ | 543,428 | $ | 5,007 | 0.92 | % | $ | 487,900 | $ | 4,438 | 0.91 | % | |||||||||||||||||||||||||||||||||||
| Net interest income | $ | 20,344 | $ | 18,698 | |||||||||||||||||||||||||||||||||||||||||||
| Interest rate spread | 3.16 | % | 3.24 | % | |||||||||||||||||||||||||||||||||||||||||||
| Net interest margin | 3.27 | % | 3.36 | % | |||||||||||||||||||||||||||||||||||||||||||
| Average interest earning assets to average interest bearing liabilities | 114.38 | % | 114.15 | % | |||||||||||||||||||||||||||||||||||||||||||
(1) For the 12 months ended September 30, 2016 and 2015, the average balance of the tax exempt investment securities, included in investment securities, were $29,232 and $15,019 respectively. The interest income on tax exempt securities is computed on a tax-equivalent basis using a tax rate of 34% for all periods presented.
| CITIZENS COMMUNITY FEDERAL N.A. | ||||||||||||||||
| Selected Capital Composition Highlights (unaudited) | ||||||||||||||||
| September 30, 2016 | June 30, 2016 | September 30, 2015 | To Be Well Capitalized Under Prompt Corrective Action Provisions | |||||||||||||
| Total capital (to risk weighted assets) | 14.0 | % | 14.2 | % | 16.5 | % | 10.0 | % | ||||||||
| Tier 1 capital (to risk weighted assets) | 12.8 | % | 13.0 | % | 15.3 | % | 8.0 | % | ||||||||
| Common equity tier 1 capital (to risk weighted assets) | 12.8 | % | 13.0 | % | 15.3 | % | 6.5 | % | ||||||||
| Tier 1 leverage ratio (to adjusted total assets) | 9.3 | % | 9.2 | % | 10.4 | % | 5.0 | % | ||||||||
Contact: Steve Bianchi, CEO (715)-836-9994
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