2014

Citizens Community Bank Reports 2012 First Quarter Results --Asset Quality Improvements Remain A Top Priority--

SOUTH HILL, Va., May 7, 2012 /PRNewswire/ -- Citizens Community Bank (OTC: CZYB) today reported that for the first quarter of 2012, net income available to common shareholders equaled $85,197, an increase of $21,047 or 32.8% over the first quarter of 2011. Basic and diluted earnings per share available to common shareholders equaled $0.06 for the first quarter of 2012, up from $0.04 over the first quarter of 2011. For the three months ended March 31, 2012 return on average assets equaled 0.22% compared to 0.16% the first quarter of 2011. Return on average common equity equaled 1.81%, up 45 basis points over the first quarter of 2011.

At March 31, 2012, total assets were $158.3 million, a decrease of $3.2 million or 2.0% from December 31, 2011. Gross loans amounted to $125.2 million, a decline of $2.9 million or 2.2% from year end 2011. The investment portfolio declined $509,175 or 3.5% from December 31, 2011, as cash flows and maturities were reinvested in overnight investments. Total deposits equaled $133.3 million, a decrease of $1.3 million or 1.0% since December 31, 2011. Over the same comparable period, noninterest bearing demand deposits increased $756,026 or 4.7%. FHLB borrowings declined $2.0 million as the Bank repaid maturing borrowings during the first quarter of 2012.

"We continue to make steady progress in addressing Asset Quality concerns. Our advancement is witnessed by the improvement in provision expense of $105,461 over the first quarter of 2011.  We also maintain an aggressive approach of addressing any remaining issues which have contributed to the reduction in the total loan portfolio balances outstanding.  In recent months, we have seen some increase in loan demand which we are hopeful will lead to an increase in outstanding loan balances during the remainder of 2012," says President and CEO Thomas C. Manson.

For the first quarter of 2012, net interest income totaled $1,468,893, a decrease of $177,960 or 10.8% from the first quarter of 2011. The decline resulted from a decrease in earning assets and lower yields on both the loan and securities portfolios. For the three months ended March 31, 2012, average earning assets declined $4.7 million or 3.1% from the first quarter of 2011. Of this amount, there was a $1.9 million reduction in average outstanding loans and a $1.9 million decline in the securities portfolio over the comparable quarters. For the first quarter of 2012, the net interest margin was 4.09%, down 38 basis points from the first quarter of 2011, but up 7 basis points from the fourth quarter of 2011. The tightening of the net interest margin resulted from a continual downward repricing of earning assets and an increase in nonaccrual loans, which offset the benefits of lower funding costs. The yield on earning assets equaled 5.37%, down 54 basis points from the first quarter of 2011. For the same three month period our overall funding costs were 1.56%, down 17 basis points from over a year ago as deposits repriced in a lower rate environment.

Despite a sharp increase in secondary mortgage revenue during the first quarter of 2012, a decline in deposit service charge revenue and other operating income caused a $15,731 or 7.1% decline in non noninterest income.  Noninterest income totaled $207,056 for the first quarter of 2012 compared to $222,787 for the first quarter of 2011.

Noninterest expense equaled $1,361,242, a decline of $106,281 or 7.2% from the first quarter of 2011 due primarily to a reduced costs related to the disposition and/or writedown of other real estate owned combined with lower data processing and FDIC insurance costs. During the first quarter of 2012, we had a net gain on the sale of other real estate owned of $19,117, compared to $39,121 of net losses on the sale of other real estate owned during the first quarter of 2011. Additionally, the Bank had other real estate owned valuation writedowns of $27,500 during the first quarter of 2012 compared with having none during the first quarter of 2011. The Bank benefited from a $37,266 or 25.7% reduction in data processing expenses and $28,836 or 30.5% reduction in FDIC insurance costs compared to the first quarter of 2011. Salaries and employee benefits totaled $635,012, an increase of $10,302 over the first quarter of 2011. Legal and professional expenses increased $14,692 to $35,491 as the Bank incurred additional expenses related to hiring additional personnel for the loan production office as well as professional fees associated with general corporate affairs.

For the three months ended March 31, 2012, provision for loan losses totaled $140,000 compared to $245,461 for the first quarter of 2011. For the first quarter of 2012, net loan charge-offs equaled $46,113 or 0.14% of average loans on an annualized basis compared to $386,583 or 1.21% of loans for the first quarter of 2011 and 0.65% for full year 2011. Nonperforming loans equaled $7,183,797 or 5.74% of outstanding loans compared to $2,615,021 or 2.08% on March 31, 2011 and $4,527,476 or 3.53% at year end 2011. The marked increase in nonperforming loans since December 31, 2011 results primarily from a single $2.5 million commercial construction project. As of March 31, 2012, the Bank has allocated a large portion of loan loss reserves against this particular credit. Of the $7,183,797 in nonperforming loans, $2,628,080 are troubled debt restructured loans that were not accruing interest as these loans were either in nonaccrual status prior to the restructuring or deemed nonaccrual after the troubled debt classification.  At March 31, 2012, there were $1,129,096 of troubled debt restructurings that were accruing interest and included in nonperforming loan category. All of these loans were complying with their modified terms.  There were no loans 90 days past due and still accruing interest on March 31, 2012.

As of March 31, 2012, the Bank held $2,500,009 of other real estate owned compared with $2,379,558 at year end 2011 and $2,847,237 one year ago. In aggregate, nonperforming assets equaled $9,683,806 or 6.12% of total assets, up from $5,462,258 or 3.37% on March 31, 2011 and $6,907,034 or 4.28% at December 31, 2011. The allowance for loan losses equaled 2.20% of loans as of March 31, 2012 compared to 2.08% on December 31, 2011 and 2.04% on March 31, 2011. With the increase in nonperforming loans, the Bank increased specific reserves against certain nonperforming loans, thus a higher loan loss reserve ratio.

Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Va.  Opened in December 1999, it operates four branches, three in south central Virginia and one 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 March 31,

Selected Operating Data:

2012


2011





Net interest income

$   1,468,893


$    1,646,853

Provision for loan losses

140,000


245,461

Noninterest income

207,056


183,666

Noninterest expense

1,361,242


1,428,402

Income before income tax

174,707


156,656

Income tax expense 

39,510


44,131

Net income 

$      135,197


$       112,525

Less: Preferred dividends

$        50,000


$         48,375

Net income available to common




shareholders

$        85,197


$         64,150





Income per share available to




common shareholders:




Basic 

$0.06


$0.04

Diluted

$0.06


$0.04





Average shares outstanding, basic

1,500,948


1,500,948

Average shares outstanding, diluted

1,500,948


1,500,948

 

 


Citizens Community Bank




Financial Highlights















(Actual dollars, except per share data)

March 31,


December 31,



Balance Sheet Data:

2012


2011









Total assets

$ 158,301,289


$  161,463,457



Loans, net

122,484,045


125,457,700



Deposits

133,308,908


134,655,123



Borrowings

2,000,000


4,000,000



Preferred stock

4,000,000


4,000,000



Stockholders' equity

22,674,934


22,594,950



Book value per share (1)

$            12.44


$             12.39



Total shares outstanding

1,500,948


1,500,948










Three months ended March 31,



Selected Data:

2012


2011



Allowance for loan loss

$     2,758,687


$      2,557,000



Nonperforming assets

9,683,806


5,462,257



Nonperforming loans

7,183,797


2,615,021



Other real estate owned

2,500,009


2,847,237



Net charge-offs

46,113


386,583



Return on average assets

0.22%


0.16%



Return on average common equity

1.81%


1.39%



Net interest margin 

4.09%


4.47%



Overhead efficiency

81.22%


78.49%










March 31,


December 31,


March 31,

Asset Quality Ratios:

2012


2011


2011

Allowance for loan loss to total loans

2.20%


2.08%


2.04%


Nonperforming loans to total loans

5.74%


3.53%


2.08%

Nonperforming assets to total assets

6.12%


4.28%


3.37%

Net charge-offs to average loans

0.14%


0.65%


1.21%







Note: (1) Book value excludes $4,000,000 and $3,068,167 of preferred stock for 2012 and 2011, respectively.

SOURCE Citizens Community Bank



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