Citizens Community Bank Announces Third Quarter 2014 Results and Expansion Plans

SOUTH HILL, Va., Oct. 24, 2014 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for the third quarter of 2014.

Earnings

Citizens Community Bank is pleased to announce net income to common shareholders of $165,493 after preferred stock dividends of $10,000 for the third quarter of 2014, compared to net income to common shareholders of $154,690 after preferred stock dividends of $10,000 for the third quarter of 2013.  On a basic and diluted basis, this was equivalent to $0.11 per share compared to $0.10 per share for the third quarter of 2013.

President and CEO James R. Black stated, "For the quarter, we experienced modest growth in core earnings and in our balance sheet. At the same time, we continue to make investments in our future, such as our recent hire of a commercial Market Executive for the North Raleigh market. We are delighted to have Jeff Billingsley as part of the team and are enthusiastic about the opportunity to expand our market presence. Overall, continued focus on prudent loan growth and earnings enhancement is paramount. I am proud of the team's accomplishments and look forward to our fourth quarter successes." 

In comparing the third quarter of 2014 to the same quarter in 2013, net interest income increased by $77,297 or 5.8%.  The net interest margin for the third quarter of 2014 was 3.67%, compared to 3.64% for the third quarter of 2013; increases in loan balances and reduction of more costly time deposits augmented the margin.  The weighted yield on earning assets was 4.50% for the third quarter of 2014 compared to 4.62% for the same period of 2013.  The weighted cost of funds for the third quarter of 2014 was 1.06% compared to 1.22% for the same period of 2013.     

Noninterest income totaled $197,236 for the third quarter of 2014 compared to $220,569 for the same period in 2013.  The quarter-over-quarter decrease of $23,333 or 10.6% was driven by a reduction in overdraft fee income associated with checking accounts and a tepid demand for secondary market mortgage refinancing.  Noninterest income for the first nine months of 2014 was $602,626, a decrease of $50,243 from $652,869 for the first six months of 2013.  This difference also relates directly to the slower market for mortgage refinances.  Noninterest expense for the third quarter of 2014 was $1,370,308 compared to $1,333,914 for the third quarter of 2013.  Noninterest expense year-to-date is $3,999,648 compared to $4,959,281 at September 30, 2013, a decrease of $959,633 or 19.3%.  Write-downs and costs to dispose of non-earning assets in the first quarter of 2013 account for most of the difference year-over-year. 

Growth

At September 30, 2014, total assets were $166.3 million, up $6.6 million or 4.1% from December 31, 2013. Gross loans were $131.3 million, an increase of $4.8 million or 3.8% from December 31, 2013. The loan pipeline is healthy despite being selective with our credit underwriting.   Deposits totaled $142.4 million, an increase of $9.5 million or 7.2% from December 31, 2013.  Over the same comparable period, FHLB advances and borrowings decreased by $1 million or 33.3% as the Bank has retired borrowings and funded loan growth through deposit growth in new markets. 

Asset Quality

At September 30, 2014 the allowance for loan losses was $2.0 million or 1.55% of loans.  Net recoveries at September 30, 2014 were $32 thousand.  There was no provision expense taken at September 30, 2014 compared to $917 thousand at September 30, 2013, as a result of the effect of net recoveries of previously charged-off loans and improving asset quality.  Nonperforming loans at September 30, 2014 are $503 thousand, compared to $2.6 million at December 31, 2013 and $2.6 million at September 30, 2013. In the first quarter of 2014, a single $2.0 million loan that was placed on nonaccrual during the first quarter of 2013 paid off with a full recovery of principal and interest. 

At September 30, 2014, other real estate owned totaled $881 thousand compared with $989 thousand at year end 2013 and $1.0 million at September 30, 2013.  In aggregate, nonperforming assets equaled $1.4 million or 0.8% of total assets at September 30, 2014, compared to $3.7 million or 2.7% of total assets at September 30, 2013, a reduction of $2.4 million or 63.0%.

Capital

As of September 30, 2014, total risk-based capital was 17.5% compared to 16.7% one year ago, and significantly higher than the 10.0% minimum regulatory requirement for well capitalized institutions. Tier 1 leverage was 12.7%, up from 12.3% at September 30, 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.  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.

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SOURCE Citizens Community Bank

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