Citizens Community Bank Reports Record Profit for 2014

SOUTH HILL, Va., Feb. 10, 2015 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for 2014. 

Earnings

Citizens Community Bank is pleased to announce earnings to common shareholders of $207,266 for the fourth quarter of 2014, compared to $216,202 for the fourth quarter of 2013.  Earnings per share on a basic and dilutive basis were $0.14 per share for the fourth quarter of both 2014 and 2013.  For the year ended December 31, 2014, the Bank recorded net income of $812,696 or $0.54 per share on both a basic and dilutive basis compared to a net loss to common shareholders of $(483,055) or ($0.32) per share on both a basic and diluted basis for 2013.  Preferred dividend payments for 2014 totaled $40,000 compared to $54,605 for 2013, as a result of achieving the lowest dividend tier in the small business lending program.

On December 4, 2014, the bank declared a cash dividend, its first to common stockholders, of $0.05 per share.  The dividend, payable to shareholders of record on December 15, 2014, was paid on January 12, 2015. 

President and CEO James R. Black stated, "The team executed well for 2014, which provided for record earnings and our first annual cash dividend.  The drastic turnaround in earnings resulted from improved asset quality and continued focus on core earning initiatives.  We were able to achieve solid growth in loans and deposits and we expanded our market presence with a branch office in Henderson, N.C. and a loan office in North Raleigh, N.C.  By remaining focused on our business model and our customer needs, we will continue to build momentum and shareholder value into 2015."

In comparing the fourth quarter of 2014 to the same quarter in 2013, net interest income increased by $85,789 or 6.3%.  This resulted from greater average balances in earning assets – $7.5 million – and a 16 basis point reduction in the weighted cost of funds.  Noninterest income at $197,723 for the fourth quarter of 2014 was flat to the same time period in 2013 at $195,403.  Noninterest expense for the fourth quarter of 2014 was $1,316,337, compared to $1,311,159 in the fourth quarter of 2013, a reduction of 0.4%.  The Bank did not provide to the allowance for loan losses in in the fourth quarter of 2014, compared to a release of $109,377 in the fourth quarter of 2013.  Write downs and net losses on other real estate amounted to $49,368 in the fourth quarter of 2014 compared to gains of $7,146 in the fourth quarter of 2013.   Absent the impact of write downs and gains or losses on sales, non-interest expense decreased by 3.9% on a quarter-over-quarter comparison. 

For the year ended December 31, 2014, net interest income increased $231,409 or 4.2%.  Primary contributing factors include interest income of $137,338 from the full collection of a $2 million non-performing loan in the first quarter of 2014, average growth of $6 million in earning assets, and a 19 basis points reduction in the weighted cost of funds.  Interest-bearing funding expense at 1.14% for 2014 compares favorably to 1.35% for 2013.  Conversely, the average yield on earning assets for 2014 was 4.98% compared to 5.17% for 2013, a decrease of 19 basis points.  Continued modest decreases in the cost of funding for 2015 are projected as higher-cost time deposits renew at lower rates.   

Noninterest income for 2014 was $800,350 compared to $848,273 for 2013, a decrease of $47,923 or 5.7%.  Fee income on deposit accounts and related services decreased by $55 thousand or 16.6% as regulatory changes make recognition of many traditional services charges more challenging.  Fees for origination of mortgages for the secondary market decreased by $46 thousand or 48.9%.  This reduction was twofold:  the Bank's interest rate risk position allowed it to retain a portion of originations on its balance sheet, and the market for originations and refinances was tepid given a higher rate environment.  When excluding write downs and gains and losses associated with the sale of other real estate, noninterest expense for 2014 was $5,257,749, which represents a decrease of $143,598 or 2.7% from 2013.  Reductions in collection expenses and carrying costs associated with nonperforming assets factored into the overall reduction in noninterest expense for 2014.   

Growth

At December 31, 2014, total assets were $167.0 million, up $7.3 million, or 4.6% from December 31, 2013. Gross loans were $135.7 million, an increase of $9.1 million or 7.2% from December 31, 2013. The securities portfolio balance, excluding restricted securities, decreased by $1.8 million or 9.3% from December 31, 2013. Deposits totaled $142.9 million, an increase of $10.0 million or 7.5% since December 31, 2013. FHLB borrowings and Federal funds purchased stood at $2.0 million compared to $5.7 million at December 31, 2013.       

Asset Quality

At December 31, 2014 the allowance for loan losses was $1,945,382 compared to $2,005,745 at December 31, 2013.  There was no provision expense for 2014 compared to $807,623 for 2013.  The provision expense incurred during 2013 replenished the allowance for loan losses after the write down and ultimate disposal of a large portion of loans which were nonperforming at December 31, 2012.  The allowance for loan losses represented 1.43% of loans as of December 31, 2014 compared to 1.58% on December 31, 2013.  For 2014, net charge-offs equaled $60,363 or 0.05% of average loans compared to $977,942 or 0.77% of average loans one year ago. Nonperforming loans, which exclude performing troubled debt restructurings, equaled $291,790 or 0.22% of loans compared to $2,580,874 or 2.04% at December 31, 2013. There were no loans 90 days past due and still accruing interest on December 31, 2014.

At December 31, 2014, other real estate owned was $762,239 compared with $989,367 at year end 2013.  For 2014, there were $48,124 of valuation write-downs and net gains on sale of other real estate of $10,113.  In aggregate, nonperforming assets equaled $1,054,029 or 0.63% of total assets at December 31, 2014, down 70.5% from $3,570,241 or 2.24% of total assets at December 31, 2013.  As of December 31, 2014, total adversely classified assets totaled $4.9 million, down $1.3 million from December 31, 2013.

Capital

As of December 31, 2014, total risk-based capital was 17.4% compared to 17.1% one year ago, and significantly higher than the 10.0% minimum regulatory requirement for well capitalized institutions. Tier 1 leverage was 12.6%, up from 12.3% at December 31, 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 as well as a loan production office in North Raleigh, 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.

SOURCE Citizens Community Bank

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http://www.ccbsite.com