Market Overview

Citizens Community Bancorp, Inc. Earnings Increase 11% YOY for First Quarter Fiscal 2017; Driven by Growth in Earnings and Strong Revenues

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EAU CLAIRE, Wis., Jan. 30, 2017 (GLOBE NEWSWIRE) -- Citizens Community Bancorp, Inc. (the "Company") (Nasdaq: CZWI), the parent company of Citizens Community Federal N.A. (the "Bank"), today reported fiscal first quarter GAAP earnings increased 11% to $940,000, or $0.18 per diluted share, compared to $847,000, or $0.16 per diluted share, one year earlier, and significantly improved from $176,000, or $0.04 per diluted share, in the immediate preceding quarter.  Excluding merger expenses and branch closure costs, core earnings (non-GAAP) increased 51% to $1.3 million, or $0.25 per share for Q1 fiscal 2017, compared to $892,000, or $0.17 per share, a year ago and grew 72% from $785,000, or $0.15 per share in the preceding quarter.

Core earnings is a non-GAAP measure that management believes provides a better understanding of the underlying business performance and trends related to core business activities.  For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table "Reconciliation of GAAP Earnings and Core Earnings (non-GAAP)".

"We started fiscal 2017 with momentum from the Community Bank of Northern Wisconsin ("CBN") integration which helped generate a 25% growth in revenue and 51% increase in core earnings year-over-year," said Stephen Bianchi, President and Chief Executive Officer.  "Our efforts to streamline our operations, reduce branch expenses, close and consolidate branch locations and remix our balance sheet, are beginning to generate results.  While the rise in interest rates last quarter interrupted some loan closings, we are encouraged by our commercial loan pipeline and deposit generation priorities for the coming year."

"The integration of the CBN acquisition, completed in May 2016, is proceeding on plan and we are on track to achieve projected cost reductions," Bianchi continued.  "We are pleased with the customer retention efforts and the contributions to our financial results from this transaction."  Total assets increased 18% to $686.4 million at December 31, 2016, from $581.8 million at December 31, 2015, reflecting a 21% increase in net loans and a 17% increase in deposits.  Total assets decreased 1% from $695.9 million in the immediate prior quarter largely related to exiting the indirect loan business, and account closures related to recently announced branch closings."

First Quarter Fiscal 2017 Financial Highlights: (at or for the periods ended December 31, 2016, compared to December 31, 2015 and /or September 30, 2016.)

  • GAAP Earnings were $940,000, or $0.18 per diluted share, for Q1 fiscal 2017 compared to $847,000, or $0.16 per diluted share, for Q1 fiscal 2016, and $176,000, or $0.04 per diluted share, for Q4 fiscal 2016.

  • Core earnings (non-GAAP) grew 51% to $1.3 million for Q1 fiscal 2017, compared to $892,000 for the quarter ended December 31, 2015, and increased 72% from $785,000 for the quarter ended September 30, 2016.  Core earnings (non-GAAP) primarily reflect adjustments related to merger-related costs of the CBN acquisition on May 16, 2016, and the costs associated with the closing of four branches as part of the planned exit from the Eastern Wisconsin market.

  • The net interest margin improved to 3.36% for Q1 fiscal 2017, compared to 3.22% for the three months ended December 31, 2015 and 3.32% for the three months ended September 30, 2016.

  • Total assets increased 18% to $686.4 million at December 31, 2016, from $581.8 million at December 31, 2015, primarily due to contributions of $111.7 million in loans from the acquisition of CBN in May 2016.  Total assets declined slightly from $695.9 million, at September 30, 2016.

  • Total net loans grew 21% to $543.0 million at December 31, 2016, compared to $447.2 million at December 31, 2015, and declined by 4% from $568.4 million, on a linked quarter basis, reflecting our increased focus on secondary market lending for one to four family residential loans and exiting the indirect lending business.

  • Total deposits increased 17% to $535.1 million at December 31, 2016, from $457.7 million at December 31, 2015, and declined 4% from $557.7 million at September 30, 2016.

  • The allowance for loan and leases losses as a percentage of total loans was 1.08% at December 31, 2016, compared to 1.42% one year earlier.

  • Asset quality declined during the quarter and the year with nonperforming assets to total assets at 1.08% at December 31, 2016, compared to 0.62% in the preceding quarter and 0.42% a year ago.  This increase was mainly due to the deterioration of two larger, acquired agricultural real estate loans.

  • Bank capital ratios exceeded regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at December 31, 2016:
         
    Citizens
Community
Federal N.A.
  To Be Well Capitalized Under
Prompt Corrective Action
Provisions
Total capital (to risk weighted assets)   14.7 %   10.0 %
Tier 1 capital (to risk weighted assets)   13.5 %   8.0 %
Common equity tier 1 capital (to risk weighted assets)   13.5 %   6.5 %
Tier 1 leverage ratio (to adjusted total assets)   9.8 %   5.0 %
             
  • Tangible book value was $11.09 per share at December 31, 2016, compared to $11.86 per share a year ago.

Balance Sheet and Asset Quality Review

Total assets were $686.4 million at December 31, 2016, compared to $581.8 million at December 31, 2015, and $695.9 million at September 30, 2016.  The increase in total assets from a year ago primarily reflects higher cash levels and loans outstanding primarily due to the CBN acquisition, while the decline in total assets on a linked quarter basis is mainly due to the decision made to discontinue indirect lending and reduced emphasis on one to four family residential loans.

Total net loans grew 21% to $543.0 million at December 31, 2016, from $447.2 million at December 31, 2015, and declined 4% from $568.4 million at September 30, 2016.  The increase in loans year-over-year was primarily due to the CBN acquisition, which included $111.7 million of net loans.  The decline in the loan balances from the immediate prior quarter was primarily due to decreased levels of one to four family loans and a decreased investment in indirect consumer loans.  At the same time, commercial and agricultural loan balances increased over the past quarter reflecting increased emphasis on internally underwritten loans.

At December 31, 2016, commercial, agricultural, multi-family, construction and land development loans totaled 36.2% of the total loan portfolio.  One to four family residential real estate loans represented 32.1% of the total loan portfolio, while consumer related non-real estate loans totaled 31.7% of the total loan portfolio - down from 32.7% in the prior quarter.

Total deposits grew 17% to $535.1 million at December 31, 2016, compared to $457.7 million at December 31, 2015, and declined 4% from $557.7 million at September 30, 2016.  Non-interest bearing demand deposits more than doubled year-over-year and grew 5% on a linked quarter basis.  Despite the decline in total deposits on a linked quarter basis, demand deposits, both interest bearing and non-interest bearing, more than doubled and savings deposits increased 76% over the past year.  Money market accounts declined 11% year-over-year, while certificate accounts increased 8% year-over-year.  Non-certificate accounts increased to 52% of total deposits at December 31, 2016, from 47% a year ago.  The change in composition of deposits reflects a combination of deposit run-off related to the CBN acquisition, the announced closure of the four Eastern Wisconsin branches and the increase in commercial deposit accounts.

Federal Home Loan Bank ("FHLB") advances and other borrowings totaled $73.5 million at December 31, 2016, compared to $59.3 million at September 30, 2016.  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") totaled $7.4 million, or 1.08% of total assets, at December 31, 2016, compared to $2.4 million, or 0.42% of total assets, at December 31, 2015, and $4.3 million, or 0.62% of total assets, at September 30, 2016.  This increase was mainly due to the deterioration of two larger, acquired agricultural loans.

The allowance for loan and lease losses at December 31, 2016, totaled $5.9 million and represented 1.08% of total loans, compared to $6.1 million and 1.06% of total loans at September 30, 2016.   Net charged off loans totaled $151,000 and $130,000 and represented 0.11% and 0.12% of average loans on an annualized basis at December 31, 2016 and 2015, respectively.

Tangible common stockholders' equity was 8.57% of tangible assets at December 31, 2016, compared to 8.55%  at September 30, 2016.  Tangible book value per common share was $11.09 at December 31, 2016 compared to $11.22 at September 30, 2016.

Capital ratios for the Bank continued to remain well above regulatory requirements with Tier 1 capital to risk weighted assets of 13.5% at December 31, 2016, up from 12.9% at September 30, 2016.  Tier 1 leverage capital to adjusted total assets improved to 9.8% at quarter end compared to 9.3% the preceding quarter.  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 leverage capital to adjusted total assets.

Review of Operations

Net interest income increased 22% to $5.6 million for the fiscal first quarter of 2017, compared to $4.6 million for the fiscal first quarter of 2016, primarily due to growth in the loan portfolio.  Net interest income declined 3% from $5.7 million on a linked quarter basis mainly due to a reduction in the loan portfolio.

For the fiscal fourth quarter ended September 30, 2016, the Company's operations reflected $1.1 million in one-time costs associated with the CBN acquisition and announced branch closures.

For the fiscal first quarter of 2017, the net interest margin expanded 14 basis points to 3.36% from 3.22% one year earlier, and 3.32% for the fiscal fourth quarter ended September 30, 2016, primarily due to higher earning asset yields.

No provision for loan losses was recorded for the fiscal first quarter of 2017 nor for the fiscal fourth quarter of 2016, compared to $75,000 for the fiscal first quarter of 2016.  Management believes the Bank is amply reserved for any loan losses with an allowance for loan losses totaling $5.9 million at December 31, 2016.  Total charged off loans were $215,000 for the fiscal first quarter of 2017, compared to $179,000 a year ago and $718,000 for the fiscal fourth quarter ended September 30, 2016. Allowance for loan losses increased as a percentage of total loans to 1.08% as of December 31, 2016 compared to 1.06% as of September 30, 2016.

Noninterest income totaled $1.3 million for the fiscal first quarter of 2017, compared to $950,000 a year ago and $1.1 million for the immediate preceding quarter. Overdraft fees and charges have decreased industry wide, as customers utilize online and mobile tools to better manage their finances, an industry trend we have also experienced. Offsetting this traditional fee income source, was our secondary market fee income generated from customer mortgage activity due to advantages over the ARM loan portfolio mortgage offering.

Total noninterest expense was $5.5 million in the fiscal first quarter of 2017 compared to $4.1 million for the quarter ended December 31, 2015.  The current quarter saw a $461,000 decrease in salaries and related benefits from the prior quarter, which included employees of the CBN acquisition, and has yet to show the full compensation savings from four branch closings during the current quarter and other branch closing costs.  Occupancy expenses increased year-over-year due to branch closure costs for the four branches in Eastern Wisconsin.

These financial results are preliminary until the Form 10-Q is filed in February 2017.

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 16 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, 2016 filed with the Securities and Exchange Commission on December 29, 2016. 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 non-GAAP financial measures, which management believes may be helpful in understanding the Company's results of operations or financial position and comparing results over different periods.  Non-GAAP measures eliminates the impact of certain one-time expenses such as acquisition and branch closure costs and related data processing termination fees, legal costs, severance pay, accelerated depreciation expense and lease termination fees.  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)
 
    December 31, 2016   September 30, 2016   December 31, 2015
(As Restated)
Assets            
Cash and cash equivalents   $ 20,444     $ 10,046     $ 15,230  
Other interest bearing deposits   745     745     3,242  
Securities available for sale "AFS"   81,136     80,123     87,161  
Securities held to maturity "HTM"   6,235     6,669     7,724  
Non-marketable equity securities, at cost   5,365     5,034     4,626  
Loans receivable   548,904     574,439     453,649  
Allowance for loan losses   (5,917 )   (6,068 )   (6,441 )
Loans receivable, net   542,987     568,371     447,208  
Office properties and equipment, net   5,166     5,338     2,803  
Accrued interest receivable   2,073     2,032     1,586  
Intangible assets   829     872     90  
Goodwill   4,663     4,663      
Foreclosed and repossessed assets, net   784     776     804  
Other assets   15,987     11,196     11,296  
TOTAL ASSETS   $ 686,414     $ 695,865     $ 581,770  
Liabilities and Stockholders' Equity            
Liabilities:            
Deposits   $ 535,112     $ 557,677     $ 457,732  
Federal Home Loan Bank advances   73,491     59,291     58,891  
Other borrowings   11,000     11,000      
Other liabilities   2,985     3,353     3,005  
Total liabilities   622,588     631,321     519,628  
Stockholders' equity:            
Common stock—$0.01 par value, authorized 30,000,000; 5,261,170, 5,260,098 and 5,231,265 shares issued and outstanding, respectively   53     53     52  
Additional paid-in capital   54,983     54,963     54,744  
Retained earnings   10,047     9,107     8,011  
Unearned deferred compensation   (205 )   (193 )   (261 )
Accumulated other comprehensive (loss) gain   (1,052 )   614     (404 )
Total stockholders' equity   63,826     64,544     62,142  
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 686,414     $ 695,865     $ 581,770  
                         


CITIZENS COMMUNITY BANCORP, INC.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
     
    Three Months Ended
    December 31,
2016
  September 30,
2016
  December 31,
2015
(As Restated)
Interest and dividend income:            
Interest and fees on loans   $ 6,530     $ 6,784     $ 5,250  
Interest on investments   418     410     424  
Total interest and dividend income   6,948     7,194     5,674  
Interest expense:            
Interest on deposits   1,119     1,212     956  
Interest on FHLB borrowed funds   173     168     165  
Interest on other borrowed funds   99     96      
Total interest expense   1,391     1,476     1,121  
Net interest income   5,557     5,718     4,553  
Provision for loan losses           75  
Net interest income after provision for loan losses   5,557     5,718     4,478  
Non-interest income:            
Net gains on available for sale securities   29     16      
Service charges on deposit accounts   398     462     423  
Loan fees and service charges   603     411     321  
Other   283     253     206  
Total non-interest income   1,313     1,142     950  
Non-interest expense:            
Salaries and related benefits   2,674     3,135     2,218  
Occupancy   1,068     991     569  
Office   281     385     252  
Data processing   472     528     409  
Amortization of core deposit intangible   43     45     14  
Advertising, marketing and public relations   63     245     137  
FDIC premium assessment   83     139     85  
Professional services   401     579     172  
Other   378     682     259  
Total non-interest expense   5,463     6,729     4,115  
Income before provision for income taxes   1,407     131     1,313  
(Provision) benefit for income taxes   (467 )   45     (466 )
Net income attributable to common stockholders   $ 940     $ 176     $ 847  
Per share information:            
Basic earnings   $ 0.18     $ 0.04     $ 0.16  
Diluted earnings   $ 0.18     $ 0.04     $ 0.16  
Cash dividends paid   $     $     $  
Book value per share at end of period   $ 12.13     $ 12.27     $ 11.88  
Tangible book value per share at end of period   $ 11.09     $ 11.22     $ 11.86  
                         

Reconciliation of GAAP Earnings and Core Earnings (non-GAAP):

    Three Months Ended
    December 31,
2016
  September 30,
2016
  December 31,
2015 
(As Restated)
                         
    (Dollars in Thousands, except share data)
GAAP earnings before income taxes   $ 1,407     $ 131     $ 1,313  
Merger related costs (1)       444      
Branch closure costs (2)   633     614     38  
Core earnings before income taxes (3)   2,040     1,189     1,351  
Provision for income tax on core earnings at 34%   694     404     459  
Core earnings after income taxes (3)   $ 1,346     $ 785     $ 892  
GAAP diluted earnings per share, net of tax   $ 0.18     $ 0.04     $ 0.16  
Merger related costs, net of tax       0.05      
Branch closure costs, net of tax   0.07     0.06     0.01  
Core diluted earnings per share, net of tax   $ 0.25     $ 0.15     $ 0.17  
             
Average diluted shares outstanding   5,293,700     5,274,505     5,262,718  
                   

(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.
(3)  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.

Non-performing Assets:

    December
31, 2016
and Three
Months
Ended
  September
30, 2016
and Twelve
Months
Ended
  December
31, 2015
and Three
Months
Ended
Nonperforming assets:            
Nonaccrual loans   $ 5,750     $ 3,191     $ 848  
Accruing loans past due 90 days or more   894     380     772  
Total nonperforming loans ("NPLs") (1)   6,644     3,571     1,620  
Other real estate owned (1)   655     725     734  
Other collateral owned   129     52     70  
Total nonperforming assets ("NPAs") (1)   $ 7,428     $ 4,348     $ 2,424  
Troubled Debt Restructurings ("TDRs") - Originated Loans   $ 3,529     $ 3,733     $ 3,794  
Nonaccrual TDRs - Originated Loans   $ 410     $ 515     $ 311  
Average outstanding loan balance   $ 561,672     $ 512,475     $ 445,687  
Loans, end of period   548,904     574,439     453,649  
Total assets, end of period   686,414     695,865     581,770  
ALL, at beginning of period   6,068     6,496     6,496  
Loans charged off:            
Residential real estate   (43 )   (140 )   (41 )
Commercial/agriculture real estate            
Consumer non-real estate   (172 )   (460 )   (138 )
Commercial agriculture non-real estate       (118 )      
Total loans charged off   (215 )   (718 )   (179 )
Recoveries of loans previously charged off:            
Residential real estate   3     11     2  
Commercial/agriculture real estate            
Consumer non-real estate   61     204     47  
Commercial agriculture non-real estate            
Total recoveries of loans previously charged off:   64     215     49  
Net loans charged off ("NCOs")   (151 )   (503 )   (130 )
Additions to ALL via provision for loan losses charged to operations       75     75  
ALL, at end of period   $ 5,917     $ 6,068     $ 6,441  
Ratios:            
ALL to NCOs (annualized)   979.64 %   1,206.36 %   1,238.65 %
NCOs (annualized) to average loans   0.11 %   0.10 %   0.12 %
ALL to total loans   1.08 %   1.06 %   1.42 %
NPLs to total loans   1.21 %   0.62 %   0.36 %
NPAs to total assets   1.08 %   0.62 %   0.42 %
                   

(1)  Total Nonperforming assets increased due to the CBN acquisition in Fiscal 2016.  Acquired nonperforming loans were $5,090 and $1,778 at December 31, 2016 and September 30, 2016, respectively.  Acquired real estate owned property balances were $143 and $212 at December 31, 2016 and September 30, 2016, respectively.

Troubled Debt Restructurings:

    December 31, 2016   September 30, 2016   December 31, 2015
    Number of
Modifications
  Recorded
Investment
  Number of
Modifications
  Recorded
Investment
  Number of
Modifications
  Recorded
Investment
Troubled debt restructurings:                        
Originated loans:                        
Residential real estate   30     $ 3,214     32     $ 3,413     32     $ 3,305  
Commercial/Agricultural real estate                        
Consumer non-real estate   22     315     21     320     33     489  
Commercial/Agricultural non-real estate                        
Total originated loans   52     $ 3,529     53     $ 3,733     65     $ 3,794  
                                           

Loan Composition:

    December 31, 2016   September 30, 2016
Originated Loans:        
Residential real estate:        
One to four family   $ 151,180     $ 160,961  
Commercial/Agricultural real estate:        
Commercial real estate   62,724     58,768  
Agricultural real estate   4,803     3,418  
Multi-family real estate   15,550     18,935  
Construction and land development   12,812     12,977  
Consumer non-real estate:        
Originated indirect paper   111,507     119,073  
Purchased indirect paper   44,006     49,221  
Other Consumer   17,851     18,926  
Commercial/Agricultural non-real estate:        
Commercial non-real estate   20,803     17,969  
Agricultural non-real estate   9,621     9,994  
Total originated loans   $ 450,857     $ 470,242  
Acquired Loans:        
Residential real estate:        
One to four family   $ 24,884     $ 26,777  
Commercial/Agricultural real estate:        
Commercial real estate   28,444     30,172  
Agricultural real estate   24,133     24,780  
Multi-family real estate       200  
Construction and land development   2,710     3,603  
Consumer non-real estate:        
Other Consumer   604     789  
Commercial/Agricultural non-real estate:        
Commercial non-real estate   12,650     13,032  
Agricultural non-real estate   4,466     4,653  
Total acquired loans   $ 97,891     $ 104,006  
Total Loans:        
Residential real estate:        
One to four family   $ 176,064     $ 187,738  
Commercial/Agricultural real estate:        
Commercial real estate   91,168     88,940  
Agricultural real estate   28,936     28,198  
Multi-family real estate   15,550     19,135  
Construction and land development   15,522     16,580  
Consumer non-real estate:        
Originated indirect paper   111,507     119,073  
Purchased indirect paper   44,006     49,221  
Other Consumer   18,455     19,715  
Commercial/Agricultural non-real estate:        
Commercial non-real estate   33,453     31,001  
Agricultural non-real estate   14,087     14,647  
Gross loans   $ 548,748     $ 574,248  
Net deferred loan costs (fees)     156       191  
Total loans receivable   $ 548,904     $ 574,439  
                 

Deposit Composition:

    December 31,
2016
  September 30,
 2016
Non-interest bearing demand deposits   $ 47,463     $ 45,408  
Interest bearing demand deposits   50,779       48,934  
Savings accounts   51,826       52,153  
Money market accounts   125,923       137,234  
Certificate accounts   259,121       273,948  
Total deposits   $ 535,112     $ 557,677  
                 

Average balances, Interest Yields and Rates:

    Three months ended December
31, 2016
  Three months ended
September 30, 2016
  Three months ended December
31, 2015
    Average
Balance
  Interest
Income/
Expense
  Average
Yield/
Rate
  Average
Balance
  Interest
Income/
Expense
  Average
Yield/
Rate
  Average
Balance
  Interest
Income/
Expense
  Average
Yield/
Rate
Average interest earning assets:                                    
Cash and cash equivalents   $ 10,238     $ 12     0.47 %   $ 19,088     $ 19     0.40 %   $ 19,575     $ 15     0.30 %
Loans receivable   561,519     6,530     4.61 %   580,151     6,784     4.65 %   451,809     5,250     4.61 %
Interest bearing deposits   745     3     1.60 %   745     4     2.14 %   3,055     17     2.21 %
Investment securities (1)   86,617     430     1.97 %   88,705     405     1.82 %   88,938     424     1.89 %
Non-marketable equity securities, at cost   5,200     45     3.43 %   5,034     54     4.27 %   4,626     28     2.40 %
Total interest earning assets   $ 664,319     $ 7,020     4.19 %   $ 693,723     $ 7,266     4.17 %   $ 568,003     $ 5,734     4.01 %
Average interest bearing liabilities:                                    
Savings accounts   $ 43,743     $ 17     0.15 %   $ 42,368     $ 17     0.16 %   $ 27,019     $ 8     0.12 %
Demand deposits   48,989     74     0.60 %   52,868     85     0.64 %   23,952     44     0.73 %
Money market accounts   130,057     134     0.41 %   143,493     149     0.41 %   144,284     154     0.42 %
CD's   245,646     814     1.31 %   265,357     878     1.32 %   219,873     683     1.23 %
IRA's   29,000     80     1.09 %   30,237     83     1.09 %   22,528     67     1.18 %
Total deposits   $ 497,435     $ 1,119     0.89 %   $ 534,323     $ 1,212     0.90 %   $ 437,656     $ 956     0.87 %
FHLB advances and other borrowings   78,841     273     1.37 %   73,426     264     1.43 %   58,891     165     1.11 %
Total interest bearing liabilities   $ 576,276     $ 1,392     0.96 %   $ 607,749     $ 1,476     0.97 %   $ 496,547     $ 1,121     0.90 %
Net interest income       $ 5,628             $ 5,790             $ 4,613      
Interest rate spread           3.23 %           3.20 %           3.11 %
Net interest margin           3.36 %           3.32 %           3.22 %
Average interest earning assets to average interest bearing liabilities           115.28 %           114.15 %           114.39 %
                                           

(1)  For the 3 months ended December 31, 2016, September 30, 2016 and December 31, 2015, the average balance of the tax exempt investment securities, included in investment securities, were $31,986, $31,819 and $26,572 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)
             
    December 31,
2016
  September 30,
2016
  To Be Well Capitalized Under
Prompt Corrective Action
Provisions
Total capital (to risk weighted assets)   14.7 %   14.1 %   10.0 %
Tier 1 capital (to risk weighted assets)   13.5 %   12.9 %   8.0 %
Common equity tier 1 capital (to risk weighted assets)   13.5 %   12.9 %   6.5 %
Tier 1 leverage ratio (to adjusted total assets)   9.8 %   9.3 %   5.0 %
                   

Contact: Steve Bianchi, CEO
(715)-836-9994

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