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Citizens Community Bancorp, Inc. Earnings Increased 19% to $3.1 million for Fiscal 2016

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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 estate32  $3,413  32  $3,414  34  $3,479 
Commercial/Agricultural real estate           
Consumer non-real estate21  320  25  384  39  531 
Commercial/Agricultural non-real estate           
Total originated loans53  $3,733  57  $3,798  73  $4,010 
Acquired loans:           
Residential real estate17  $1,058  2  $75    $ 
Commercial/Agricultural real estate5  1,811  6  1,560     
Consumer non-real estate2  11         
Commercial/Agricultural non-real estate16  2,092  1  13     
Total acquired loans40  $4,972  9  $1,648    $ 
Total loans:           
Residential real estate49  $4,471  34  $3,489  34  $3,479 
Commercial/Agricultural real estate5  1,811  6  1,560     
Consumer non-real estate23  331  25  384  39  531 
Commercial/Agricultural non-real estate16  2,092  1  13     
Total loans93  $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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