Citizens Community Bank Announces Solid Second Quarter 2015 Results

Jul 30, 2015, 17:14 ET from Citizens Community Bank

SOUTH HILL, Va., July 30, 2015 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for the second quarter of 2015.

Earnings
Citizens Community Bank is pleased to announce net income to common shareholders of $175,011 after preferred stock dividends of $9,333 for the second quarter of 2015, compared to net income to common shareholders of $170,464 after preferred stock dividends of $10,000 for the second 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 second quarter of 2014.

President and CEO James R. Black stated, "I would characterize the second quarter as one where we are really getting poised for higher performance. During the quarter we repaid $3 million of SBLF preferred stock, experienced moderate loan growth and improved pre-tax, pre-provision earnings by 44% from the second quarter of last year. We did however have a $475 thousand borrowing relationship that we prudently placed on nonaccrual and will continue to assess whether further impairments are required. Our focus remains on the business model of true community banking and we are actively investing wisely for our future."  

In comparing the second quarter of 2015 to the same quarter in 2014, net interest revenue increased by $83 thousand or 6.0%.   The net interest margin for the second quarter of 2015 was 3.67%, flat to the margin for the second quarter of 2014.  On a year-to-date basis, the net interest margin at June 30, 2015 was 3.67%, compared to 3.82% for the first six months of 2014.  Without the effect of a $137 thousand interest income recovery on a non-performing loan in February 2014, the margin would have been 3.63% for the second quarter of 2014.   On a core basis, this represents a 4 basis point improvement, due primarily to increased loan balances and further reductions in the cost of funds. 

Noninterest income totaled $194,234 for the second quarter of 2015 compared to $200,465 for the same period in 2014, a 3.6% reduction.  Service charge income was down almost 22% as the bank moves toward relationship pricing and collection of NSF fees becomes more challenging.  Noninterest expense of $1,312,672 represents a 2.4% reduction from $1,345,200 for the second quarter of 2014.  Noninterest expense year-to-date is at $2.6 million, flat to June 30, 2015.  Improvements in FDIC insurance premiums, fewer expenditures for collection and resolution of problem credits, and ongoing attention to operating expenses have resulted in overall reductions which have offset the costs related to staffing and loan production. Provision expense at June 30, 2015 was $100 thousand compared to no provision at June 30, 2014.  As the Bank continues to reach into new geographic markets and enhance its product lines, commensurate additions to the provision are just careful operating strategy.  Net income for the first six months of 2015 after the preferred stock dividend was $380,770 compared to $439,936 for the first six months of 2014.  While on its face this translates to a 13.5% decrease, core earnings for the first six months compares favorably.  Absent 2015 provision expense and the February 2014 non-recurring income item, pre-tax core earnings at June 30, 2015 of $665 thousand represent a 30% increase over June 30, 2014 of $511 thousand.  

Growth
At June 30, 2015, total assets were $170.2 million, up $3.2 million or 1.9% from December 31, 2014. Gross loans were $138.7 million, an increase of $5.0 million or 3.7% from December 31, 2014 and $5.3 million or 4.0% higher than the first quarter of 2015.  The loan pipeline is healthy despite being selective with our credit underwriting. Deposits totaled $147.8 million, an increase of $4.9 million or 3.4% from December 31, 2014. 

Asset Quality
At June 30, 2015 the allowance for loan losses was $2.0 million or 1.46% of loans.  Net charge-offs at June 30, 2015 were $16 thousand.  Provision expense at June 30, 2015 was $100,000 compared to no provision at June 30, 2014.  Nonperforming loans at June 30, 2015 were $685 thousand, compared to $292 thousand at December 31, 2014 and $416 thousand at June 30, 2014. 

At June 30, 2015, other real estate owned totaled $435 thousand compared with $762 thousand at year end 2014 and $891 thousand at June 30, 2014.  In aggregate, nonperforming assets equaled $1.1 million or 0.7% of total assets at June 30, 2015, compared to $1.3 million or 0.8% of total assets at June 30, 2014, a reduction of $200 thousand or 14.3%.

Capital 
As of June 30, 2015, total risk-based capital was 15.5% compared to 17.8% one year ago, and significantly higher than the 10.0% minimum regulatory requirement for well capitalized institutions. Tier 1 leverage was 10.7%, down from 12.6% at December 31, 2014.   On June 23, 2015, the Bank redeemed $3.0 million of preferred stock which had been issued in connection with participation in the Small Business Lending Fund.  This will represent a significant savings when the interest rate increases to 6% in January 2016; capital ratios still exceed regulatory guidelines to be well-capitalized and the Bank's capital position enables it to provide the products and services demanded by the communities it serves.    

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 and a Loan Production Office in North Raleigh, NC.  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, 2015






















(Unaudited)









(Actual dollars, except per share data)


 

Three Months Ended June 30

 

Six Months Ended June 30

Selected Operating Data:



2015


2014

2015


2014










Net interest income



$   1,477,695


$    1,394,943

$   2,920,131


$    2,871,800

Provision for loan losses



100,000


-

100,000


-

Noninterest income



194,234


200,465

395,249


405,389

Noninterest expense



1,312,672


1,345,200

2,650,464


2,629,340

Income (loss) before income tax 


259,257


250,208

564,916


647,849

Income tax expense (benefit)



74,913


69,744

164,813


187,913

Net income (loss)



$      184,344


$       180,464

$      400,103


$       459,936

Less: Preferred dividends



$          9,333


$         10,000

$        19,333


$         20,000

Net income (loss) available to common








shareholders



$      175,011


$       170,464

$      380,770


$       439,936










Income (loss) per share available to







common shareholders: (1)









Basic 



$0.12


$0.11

$0.25


$0.29

Diluted



$0.12


$0.11

$0.25


$0.29










Average shares outstanding, basic


1,509,945


1,508,046

1,509,462


1,507,816

Average shares outstanding, diluted

1,509,945


1,508,046

1,509,462


1,507,816










(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:


2015


2014


2014












Total assets


$    170,235,720


$      167,009,003


$      162,659,727



Loans, gross


$    138,671,375


$      133,715,226


$      129,862,341



Loans, net of ALLR


136,642,226


135,660,608


127,855,845



Deposits


147,791,225


142,879,158


139,663,348



Federal funds purchased


-


-


299,000



Borrowings


3,000,000


2,000,000


1,000,000



Preferred stock


1,000,000


4,000,000


4,000,000



Stockholders' equity


19,073,967


21,704,881


21,378,269



Book value per share (1) (2)


$               11.98


$                 11.74


$                 11.52



Total shares outstanding (2)


1,509,045


1,508,046


1,508,046














Three months ended June 30


Six months ended June 30

Performance Ratios:


2015


2014


2015


2014

Return on average assets


0.43%


0.41%


0.47%


0.54%

Return on average common equity


4.08%


3.94%


4.48%


5.15%

Net interest margin


3.67%


3.71%


3.67%


3.81%

Overhead efficiency


78.61%


84.22%


80.35%


80.16%












June 30


December 31


June 30



Asset Quality Data:


2015


2014


2014



Allowance for loan loss


$        2,029,149


$          1,945,382


$          2,006,496



Nonperforming loans (3)


$           685,052


$             291,790


$             416,137



Other real estate owned


$           434,695


$             762,239


$             891,109



Nonperforming assets (3)


$        1,119,747


$          1,054,029


$          1,307,246



Performing troubled debt restructurings

$           572,031


$             749,602


$             782,063



Net charge offs (recoveries)


$             42,705


$               60,363


$                  (751)



Classified loans


$        4,434,054


$          4,135,462


$          4,929,566



Total Classified Assets


$        4,868,749


$          4,897,701


$          5,820,675























June 30


December 31


June 30



Asset Quality Ratios:


2015


2014


2014



Allowance for loan loss to total loans

1.46%


1.43%


1.55%



Nonperforming loans to total loans


0.49%


0.22%


0.32%



Nonperforming assets to total assets


0.66%


0.63%


0.80%



Net charge-offs (recoveries) to average loans

0.03%


0.05%


0.00%












Capital Ratios:                               








Total capital ratio                            

15.48%


17.42%


17.77%



Tier 1 capital ratio                           

14.22%


16.17%


16.51%



Common equity tier 1 ratio             


13.66%


N/A


N/A



Tier 1 leverage ratio                         

10.73%


12.57%


12.51%












Note: (1) Book value excludes $4,000,0000 of preferred stock for 6/30/14 and 12/31/14 and $1,000,000 for 6/30/15.

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


          (3) Excludes performing troubled debt restructurings.




 

SOURCE Citizens Community Bank



RELATED LINKS

http://www.ccbsite.com