Citizens Community Bank Reports 2010 Fourth Quarter and Year-To-Date Results -Patience and prudence fuel improved earnings performance-

SOUTH HILL, Va., Jan. 28, 2011 /PRNewswire/ -- Citizens Community Bank (Pink Sheets: CZYB) today reported fourth quarter and year-to-date results for 2010.  For the fourth quarter of 2010, net income available to common shareholders equaled $50,492, compared to a net loss of ($293,229) for the fourth quarter of 2009.  Basic and diluted earnings per share to common shareholders equaled $0.04 for the fourth quarter of 2010 compared to a net loss of ($0.21) for the fourth quarter of 2009. During the fourth quarter of 2010, provision for loan losses equaled $424,076 compared to $954,246 for the fourth quarter of 2009.  

For the year ended December 31, 2010, net income available to common shareholders totaled $260,555, compared to a net loss to common shareholders of ($166,665) for the year ended December 31, 2009.  For full year 2010, basic and diluted earnings per share to common shareholders equaled $0.19 compared to a net loss of ($0.12) for 2009. Core operating results, which are pre-provision and pre-tax earnings, equaled $2,027,516, up $713,000 or 54.2% over 2009.

At December 31, 2010, total assets were $164.5 million, a decline of $7.3 million or 4.3% from December 31, 2009. Gross loans equaled $129.5 million, a decline of $3.0 million or 2.2% from year end 2009. The investment portfolio declined $6.2 million or 26.0% as cash flows and maturities were reinvested into overnight investments and supplemented the runoff of higher cost deposits. Total deposits equaled $135.6 million, a decrease of $6.7 million or 4.7% since December 31, 2009.

President and CEO Thomas C. Manson stated, "Our year-over-year performance speaks greatly in favor of the bank's management strategies implemented during difficult times.  Our conservative approach balanced with focused expansion and branding efforts have begun to show returns that benefit our shareholders and clients.  Thanks to a strong net interest margin, we are hopeful we also will see improvement in nonperforming loans and write downs which will keep the earnings momentum on track."

For the fourth quarter of 2010, net interest income totaled $1,663,031, an increase of $61,415 or 3.8% over the fourth quarter of 2009. The growth in net interest income was attributable to a stronger net interest margin. For the three months ended December 31, 2010, the net interest margin was 4.22%, up 29 basis points over the fourth quarter of 2009. The strength in the net interest margin was generated through substantially lower funding costs, which offset a decline in the yield on earning assets.

For the three month period ended December 31, 2010, average earning assets totaled $157.2 million, down $5.6 million from the same period in 2009. Earning assets yields declined 22 basis points to 5.70%; however, this was more than offset by a 57 basis points decline in the cost of interest bearing liabilities to 1.78% over the comparable period. For the year ended 2010, net interest income totaled $6,666,580, an increase of $880,299 or 15.2% over 2009 due to a stronger net interest margin. For 2010, earning assets averaged $158.8 million, down $1.5 million or 0.9% from 2009. The yield on earning assets equaled 5.82%, down 13 basis points from 2009. This was mitigated through lower funding costs as the cost of interest bearing liabilities fell from 2.72% to 1.90%.  

For the fourth quarter of 2010, noninterest income totaled $245,843, up $18,175 or 8.0% over the fourth quarter 2009 as the Bank benefited primarily from additional revenue from deposit accounts. For full year 2010, noninterest income equaled $937,646, an increase of $230,837 or 32.7%. When excluding $104,747 of valuation writedowns on other real estate in 2009, the adjusted increase is $126,090 or 15.5%. The additional fee revenue for 2010 was generated by service charges on deposit accounts, ATM fees, and rental income from other real estate owned.

Noninterest expense equaled $1,361,034 for the fourth quarter of 2010, an increase of $90,048 or 7.1% over the fourth quarter of 2009 due primarily to higher compensation and benefit costs and branding expenses. For full year 2010, noninterest expense amounted to $5,576,710, an increase of $398,136 or 7.7%. When excluding a special one-time FDIC assessment and related FDIC accrual adjustments of $129,072 in 2009, noninterest expense increased $527,208 or 10.4%. The increase reflected the additional expenditures related to the branding of the CCB logo, higher loan and other real estate related expenses, along with higher data processing and compensation costs.

For the three months ended December 31, 2010, provision for loan losses equaled $424,076 a decrease of $530,170 or 55.6% over the fourth quarter of 2009. For the year ended December 31, 2010, provision for loan losses totaled $1,420,800, a slight decrease of $5,056 or 0.4% from 2009. For full year 2010, net charge-offs equaled $841,393 or 0.64% of average loans, an increase of $11,677 over 2009. The additional provisions in 2010 increased the reserve ratio to 2.08%, up 48 basis points from December 31, 2009.    

At December 31, 2010, nonperforming loans equaled $4,166,913 or 3.22% of outstanding loans compared to $3,459,742 or 2.61% on December 31, 2009. Of the $4,166,913 in nonperforming loans, there was $3,403,245 of nonaccrual loans. Within the nonaccrual category, this included an $812,816, troubled debt restructured loan that was not accruing interest as this loan was in nonaccrual status prior to the restructuring. As of December 31, 2010, there were $763,668 of troubled debt restructurings that were accruing interest and included with nonperforming loans. All of the restructured loans, which include accruing and nonaccrual troubled debt restructurings were complying with their modified terms. There were no loans 90 days past due and still accruing interest as of December 31, 2010. At year end December 31 2010, the Bank held $2,687,237 of other real estate owned, compared to $812,527 one year ago. For the year ended December 31, 2010, nonperforming assets totaled $6,854,150, or 4.17% of total assets compared to $4,272,269 or 2.49% at December 31, 2009.

Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Va.  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.  The Bank's actual results, events and developments may differ materially from those contemplated by any forward-looking statement.  

Citizens Community Bank

Financial Highlights





















(Unaudited)










(Actual dollars, except per share data)


Three months ended December 31,



For the years ended December 31,

Selected Operating Data:


2010


2009



2010


2009











Net interest income


$ 1,663,031


$ 1,601,616



$ 6,666,580


$ 5,786,281

Provision for loan losses


424,076


954,246



1,420,800


1,425,856

Noninterest income


245,843


227,668



937,646


706,809

Noninterest expense


1,361,034


1,270,986



5,576,710


5,178,574

Income (loss) before income tax


123,764


(395,948)



606,716


(111,340)

Income tax expense (benefit)


24,897


(151,094)



152,661


(117,283)

Net income


$      98,867


$  (244,854)



$    454,055


$        5,943

Less: Preferred dividends


$      48,375


$      48,375



$    193,500


$    172,608

Net income (loss) available to common










shareholders


$      50,492


$  (293,229)



$    260,555


$  (166,665)











Income (loss) per share available to










common shareholders:










Basic


$0.04


($0.21)



$0.19


($0.12)

Diluted


$0.04


($0.21)



$0.19


($0.12)











Average shares outstanding, basic


1,364,670


1,364,670



1,364,670


1,364,670

Average shares outstanding, diluted


1,364,670


1,364,670



1,364,670


1,364,670



Citizens Community Bank

Financial Highlights






(Unaudited)


(Audited)







December 31,


December 31,





(Actual dollars, except per share data)


2010


2009





Balance Sheet Data:


















Total assets


$  164,514,389


$  171,862,449





Loans, net


126,762,672


130,301,003





Deposits


135,640,302


142,306,135





Borrowings


7,000,000


8,000,000





Preferred stock


3,060,667


3,030,667





Stockholders' equity


21,601,688


21,396,677





Book value per share (1)


$             13.59


$             13.46





Total shares outstanding


1,364,670


1,364,670


















Three months ended December 31,


Years ended December 31,



2010


2009


2010


2009

(Unaudited)









Asset Quality Ratios:









Allowance for loan loss


$                    -


$                    -


$ 2,698,122


$ 2,118,715

Nonperforming assets


-


-


6,854,150


4,272,269

Nonperforming loans


-


-


4,166,913


3,459,742

Other real estate owned


-


-


2,687,237


812,527

Net charge-offs


159,814


653,386


841,393


829,716

Allowance for loan loss to total loans


-


-


2.08%


1.60%

Nonperforming loans to total loans


-


-


3.22%


2.61%

Nonperforming assets to total assets


-


-


4.17%


2.49%

Net charge-offs to average loans


0.49%


1.97%


0.64%


0.63%










Selected Performance Ratios:









Return (loss) on average assets


.12%


(.67%)


.15%


(.10%)

Return (loss) on average common equity


1.06%


(6.17%)


1.39%


(.90%)

Net interest margin


4.22%


3.93%


4.22%


3.64%

Overhead efficiency


71.30%


69.48%


73.34%


79.76%










Note: (1) Book value excludes $3,060,667 and $3,030,667 of preferred stock for 2010 and 2009, respectively.



SOURCE Citizens Community Bank



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