CCB Reports Strong Third Quarter Growth and Improved Earnings

SOUTH HILL, Va., Oct. 27, 2015 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for the third quarter of 2015.

Earnings
Citizens Community Bank is pleased to announce net income to common shareholders of $179,055 after preferred stock dividends of $2,500 for the third quarter of 2015, compared to net income to common shareholders of $165,493 after preferred stock dividends of $10,000 for the third quarter of 2014.  On a basic and diluted basis, this was equivalent to $0.12 per share compared to $0.11 per share for the third quarter of 2014.  Year to date, net income after preferred stock dividends was $559,824, compared to $605,430 for the same period of 2014.  Before taxes and provisions for loan losses, net income stood at $1,040,359 at September 30, 2015, an increase of $282,680 or 37.3% over the same period of 2014.  

President and CEO James R. Black, commented: "We are progressively improving our financial strength and market presence as demonstrated during the third quarter. We experienced solid growth in core earnings and excellent growth in our new markets. Our expansion into northern North Carolina is being well received as we deliver the CCB community banking experience. I am excited about the momentum and progress being made by the team as we leverage our operating structure and talents."

In comparing the third quarter of 2015 to the same quarter in 2014, net interest income increased by $150,337 or 10.7%.  The net interest margin for the third quarter of 2015 was 3.83%, compared to 3.67% for the third quarter of 2014; increases in loan balances and reduction of more costly time deposits augmented the margin.  The weighted yield on earning assets was 4.37% for the third quarter of 2014 compared to 4.50% for the same period of 2014.  The weighted cost of funds for the third quarter of 2014 was 0.58% compared to 0.90% for the same period of 2014.     

Noninterest income totaled $202,075 for the third quarter of 2015 compared to $197,236 for the same period in 2014.  Noninterest income for the first nine months of 2015 was $597,323, compared to $602,626 for the same period of 2014.  Noninterest expense for the third quarter of 2015 was $1,396,113 compared to $1,370,308 for the third quarter of 2014.  Noninterest expense year-to-date is $4,046,576 compared to $3,999,648 at September 30, 2014, a decrease of $46,928 or 1.2%.

Growth
At September 30, 2015, total assets were $174.3 million, up $7.3 million or 4.4% from December 31, 2014. Gross loans were $144.6 million, an increase of $8.9 million or 6.6% from December 31, 2014, and $13.2 million or 10.1% from September 30, 2014.  Deposits totaled $151.6 million, an increase of $8.7 million or 6.1% from December 31, 2014.  The Bank's business development model is enabling it to create opportunities in all of its markets, resulting in balanced and profitable growth. 

Asset Quality
At September 30, 2015 the allowance for loan losses was $2.2 million or 1.50% of loans.  Nonperforming loans at September 30, 2015 were $983 thousand, compared to $292 thousand at December 31, 2014 and $503 thousand at September 30, 2014.  Loans to one borrower totaling $475 thousand comprise 48% of the nonperforming loans.  Management continues to closely monitor this credit relationship and evaluate the magnitude of any impairment, the required level of specific reserves, and the overall collectability.  Provision expense at September 30, 2015 was $210,000.  There was no provision expense taken at September 30, 2014.  As activity in new markets and diversity of products increase, it is prudent to evaluate the allowance and make provisions as growth and asset quality warrant. 

At September 30, 2015, other real estate owned totaled $387 thousand compared with $762 thousand at year end 2014 and $882 thousand at September 30, 2014.  In aggregate, nonperforming assets equaled $1.4 million or 0.8% of total assets at September 30, 2015, flat to the levels at September 30, 2014.   

Capital
As of September 30, 2015, total risk-based capital was 15.2% and Tier 1 leverage was 10.9%.  In June 2015, the Bank repaid $3 million of the preferred stock issued in connection with the Treasury's Small Business Lending Fund which resulted in a reduction in the capital ratios.  Without this redemption, total risk-based capital would have been 17.4% and Tier 1 leverage would have been 12.7%, compared to 17.5% and 12.7%, respectively, at September 30, 2014. 

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, two in northern North Carolina and loan production centers in North Raleigh and Louisburg, 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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