Citizens Community Bank Announces Solid Second Quarter 2014 Results

SOUTH HILL, Va., July 29, 2014 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for the second quarter of 2014.

Earnings

Citizens Community Bank is pleased to announce net income to common shareholders of $170,464 after preferred stock dividends of $10,000 for the second quarter of 2014.  Compared to the second quarter of 2013, this equates to a 15.6% increase in core earnings, exclusive of non-recurring items related to the disposition of other real estate.  Year-to-date net income available to shareholders at June 30, 2014 was $439,936, compared to a loss of $(853,947) at June 30, 2013.  On a basic and diluted basis, this was equivalent to $0.29 per share compared to $(0.57) per share year-to-date. 

President and CEO James R. Black stated, "This marks the fifth consecutive profitable quarter since the conclusion of our asset resolution strategy. Our momentum and financial strength continue to improve as we execute those strategies that are in the best interest of all stakeholders. I am proud of the CCB team's progress for the first half of 2014 and just as excited about our prospects for the rest of the year."

In comparing the second quarter of 2014 to the same quarter in 2013, net interest revenue increased by $14,295 or 1.0%.  Even though the net interest margin for the second quarter of 2014 was 3.71%, 11 basis points less than 3.82% reported for the second quarter of 2013, the increase in loan balances and reduction in non-performing loans augmented the margin.  The weighted cost of funds for the second quarter of 2014 was 1.04% compared to 1.28% for the second quarter of 2013.  The ability to reprice maturing deposits lower assisted in controlling margin erosion, as new and renewing loans are priced somewhat lower to meet market expectations.   

Noninterest income totaled $200,465 for the second quarter of 2014 compared to $229,364 for the same period in 2013.  A reduction in the demand for secondary market mortgage refinancing which resulted in accompanying reductions in fee income; drove the bulk of the quarter-over-quarter decrease of $28,899 or 12.6%.  Noninterest income for the first six months of 2014 was $405,389, a decrease of $26,562 from $431,951 for the first six months of 2013.  This difference also relates directly to the slower market for mortgage refinances.  Noninterest expense for the second quarter of 2014 was $1,345,200 compared to $1,260,070 for the second quarter of 2013.  Netting out gains and losses from the sale of other real estate resulted in a reduction of 2.9% in non-interest expense for the second quarter of 2014 compared to the second quarter of 2013.  Noninterest expense year-to-date is $2,629,340 compared to $3,625,018 at June 30, 2013, a decrease of $995,678 or 27.5%.  Write-downs and costs to dispose of non-earning assets in the first quarter of 2013 account for most of the difference year-over-year. 

Growth

At June 30, 2014, total assets were $162.7 million, up $2.9 million or 1.8% from December 31, 2013. Gross loans were $129.9 million, an increase of $3.3 million or 2.6% from December 31, 2013. The loan pipeline is healthy despite being selective with our credit underwriting. The securities portfolio balance decreased by $910 thousand or 4.6% from December 31, 2013.  Deposits totaled $139.7 million, an increase of $6.8 million or 5.1% from December 31, 2013.  Over the same comparable period, FHLB advance and borrowings decreased $4.4 million or 77.3% as the Bank has retired borrowings and funded loan growth through organic deposit growth. 

Asset Quality

At June 30, 2014 the allowance for loan losses was $2.0 million or 1.55% of loans.  Net charge-offs at June 30, 2014 were less than $1 thousand and the Bank has not needed to make a provision to the loan loss for 2014 compared to a provision of $917,000 at June 30, 2013.  Nonperforming loans at June 30, 2014 are $416 thousand, compared to $2.6 million at December 31, 2013 and $2.8 million at June 30, 2013. In the first quarter of 2014, a single $2.0 million loan that was placed on nonaccrual during the first quarter of 2013 paid off with a full recovery of principal and interest. 

At June 30, 2014, other real estate owned totaled $891 thousand compared with $989 thousand at year end 2013 and $1.0 million at June 30, 2013.  In aggregate, nonperforming assets equaled $1.3 million or 0.8% of total assets at June 30, 2014, compared to $3.8 million or 2.4% of total assets at June 30, 2013, a reduction of $2.5 million or 65.8%.

Capital

As of June 30, 2014, total risk-based capital was 17.8% compared to 16.7% one year ago, and significantly higher than the 10.0% minimum regulatory requirement for well capitalized institutions. Tier 1 leverage was 12.5%, up from 12.0% at June 30, 2013.

Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Virginia.  Opened in December 1999, it operates five branches, three in south central Virginia and two in northern North Carolina.  For more information and additional financial data, please visit www.ccbsite.com.

This press release contains "forward-looking statements" that concern future events which are subject to risks and uncertainties.  Any such statements are based on certain assumptions and analyses by the Bank and other factors it believes are appropriate in the circumstances and at the time at which such statements are made.  The Bank's actual results, events and developments may differ materially from those contemplated by any forward-looking statement.  The Bank has no responsibility to update such forward-looking statements.

Citizens Community Bank - Financial Highlights - June 30, 2014















(Unaudited)







(Actual dollars, except per share data)

Three Months Ended June 30

Six Months Ended June 30

Selected Operating Data:

2014


2013

2014


2013








Net interest income

$ 1,394,943


$ 1,380,648

$ 2,871,800


$ 2,803,477

Provision for loan losses

-


10,000

-


917,000

Noninterest income

200,465


229,364

405,389


431,951

Noninterest expense

1,345,200


1,260,070

2,629,340


3,625,018

Income (loss) before income tax 

250,208


339,941

647,849


(1,306,590)

Income tax expense (benefit)

69,744


102,886

187,913


(472,643)

Net income (loss)

$    180,464


$    237,055

$    459,936


$  (833,947)

Less: Preferred dividends

$      10,000


$      10,000

$      20,000


$      20,000

Net income (loss) available to common







shareholders

$    170,464


$    227,055

$    439,936


$  (853,947)








Income (loss) per share available to







common shareholders:(1)







Basic 

$0.11


$0.15

$0.29


($0.57)

Diluted

$0.11


$0.15

$0.29


($0.57)








Average shares outstanding, basic

1,508,046


1,500,948

1,507,816


1,500,948

Average shares outstanding, diluted

1,508,046


1,500,948

1,507,816


1,500,948








(1) share amounts revised to show restricted stock grants awarded in 2013 and 2014.

 

Citizens Community Bank


Financial Highlights


















(Actual dollars, except per share data)

June 30


December 31


June 30



Balance Sheet Data:

2014


2013


2013











Total assets

$162,659,727


$159,712,201


$161,223,561



Loans, gross

$129,862,341


$126,553,951


$123,710,107



Loans, net of ALLR

127,855,845


124,548,206


121,348,318



Deposits

139,663,348


132,882,671


138,456,414



Federal funds purchased

299,000


2,716,000


-



Borrowings

1,000,000


3,000,000


2,000,000



Preferred stock

4,000,000


4,000,000


4,000,000



Stockholders' equity

21,378,269


20,846,015


20,503,447



Book value per share (1) (2)

$           11.52


$           11.18


$           11.00



Total shares outstanding (2)

1,508,046


1,507,212


1,500,948












Three months ended June 30


Six months ended June 30

Performance Ratios:

2014


2013


2014


2013

Return on average assets

0.41%


0.57%


0.54%


(1.06%)

Return on average common equity

3.94%


5.49%


5.15%


(10.13%)

Net interest margin 

3.71%


3.82%


3.81%


3.83%

Overhead efficiency

84.22%


80.61%


80.16%


89.15%










June 30


December 31


June 30



Asset Quality Data:

2014


2013


2013



Allowance for loan loss

$    2,006,496


$    2,005,745


$    2,361,789



Nonperforming loans (3)

$       416,137


$    2,580,874


$    2,812,007



Other real estate owned

$       891,109


$       989,367


$    1,007,777



Nonperforming assets (3)

$    1,307,246


$    3,570,241


$    3,819,784



Performing troubled debt restructurings

$       782,063


$       576,095


$       614,772



Net charge offs (recoveries)

$            (751)


$       977,942


$       731,276



Classified loans

$    4,929,566


$    5,197,240


$    6,827,424



Total Classified Assets

$    5,820,675


$    6,186,607


$    7,835,201




















June 30


December 31


June 30



Asset Quality Ratios:

2014


2013


2013



Allowance for loan loss to total loans

1.55%


1.58%


1.91%



Nonperforming loans to total loans

0.32%


2.04%


2.27%



Nonperforming assets to total assets

0.80%


2.24%


2.37%



Net charge-offs (recoveries) to average loans 

0.00%


0.77%


0.58%











Capital Ratios:








Total risk-based capital

17.77%


17.07%


16.71%



Tier 1 risk-based capital

16.51%


15.81%


15.45%



Tier 1 leverage capital

12.51%


12.32%


11.96%











Note: (1) Book value excludes $4,000,0000 of preferred stock for all periods.

         (2) Shares outstanding reflect issuance of restricted stock awards in 2013 and 2014.

         (3) Excludes performing troubled debt restructurings.

 

 

SOURCE Citizens Community Bank



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