Citizens Community Bank Reports First Quarter 2011 Results

SOUTH HILL, Va., May 3, 2011 /PRNewswire/ -- Citizens Community Bank (OTC: CZYB) today reported first quarter results for the quarter ended March 31, 2011.  For the first quarter of 2011, net income available to common shareholders equaled $64,150, a decrease of $20,743 or 24.4% from the first quarter of 2010.  Basic and diluted earnings per share to common shareholders equaled $0.05 for the first quarter of 2011 compared to $0.06 for the first quarter of 2010.

At March 31, 2011 total assets were $162.1 million, a decline of $2.4 million or 1.5% from December 31, 2010. Gross loans amounted to $125.5 million, a decline of $4.0 million or 3.1% from year end 2010. The investment portfolio declined $1.3 million or 7.2% as cash flows and maturities were reinvested into overnight investments. Total deposits equaled $136.2 million, a slight increase of $521,147 or 0.4% since December 31, 2010.

President and CEO Thomas C. Manson stated, "Despite the decrease in quarterly earnings as compared to the same quarter in 2010, we are happy to report that the net interest margin is up 24 basis points when compared to the quarter ended March 31, 2010.  Our non interest income also was up, increasing $19,179 or 8.6% over the same period a year earlier.  We also are progressing well in our efforts to change our core processing system which will allow us to offer more products and services in a more efficient environment.  We are excited about implementing that system, and therefore improving the CCB customer experience."

For the first quarter of 2011, net interest income totaled $1,646,853, a slight decrease of $9,299 or 0.6% over the first quarter of 2010. The stability in net interest income was attributable to a strong net interest margin. For the three months ended March 31, 2011, the net interest margin was 4.47%, up 24 basis points over the first quarter of 2010. The strength in the net interest margin was generated through substantially lower funding costs, which offset a decline in the volume and yield on earning assets.

Noninterest income totaled $183,666, a decline of $29,765 or 13.9% when compared to the first quarter of 2010. During the first quarter of 2011, the bank incurred a loss of $39,121 on the sale of other real estate owned. When excluding this item, noninterest income equaled $222,787, which was an increase of $9,356 or 4.4% over the first quarter of 2010.

Noninterest expense equaled $1,428,402, an increase of $73,142 or 5.4% over the first quarter of 2010 due to higher loan related expense, FDIC insurance premiums, and data processing costs.

Salaries and compensation expenses remained relatively unchanged as these expenses were $5,553 or 0.9% higher than the first quarter of 2010.

For the three months ended March 31, 2011, provision for loan losses totaled $245,461 an decrease of $78,263 or 24.2 % over the first quarter of 2010. For the first quarter of 2011, net loan charge-offs equaled $386,583 or 1.21% of average loans on an annualized basis compared to $222,883 or 0.67% of loans for the first quarter of 2010 and 0.64% for full year 2010. Nonperforming loans equaled $2,615,021 or 2.08% of outstanding loans compared to $3,200,559 or 2.44% on March 31, 2010 and $4,166,913 or 3.22% at year end 2010. Of the $2,615,021 in nonperforming loans, $803,858 is related to a troubled debt restructured loan that was not accruing interest as this loan was in nonaccrual status prior to the restructuring. At March 31, 2011, there were $760,962 of troubled debt restructurings that were accruing interest and included with nonperforming loans. All of the restructured loans, which include accrual and nonaccrual troubled debt restructurings were complying with their modified terms.  There were no loans 90 days past due and still accruing interest on March 31, 2011.

As of March 31, 2011, the Bank held $2,847,237 of other real estate owned compared with $2,687,237 at year end 2010 and $1,016,527 one year ago. In aggregate, nonperforming assets equaled $5,462,237 or 3.37% of total assets, down from $6,854,150 or 4.17% on December 31, 2010 but up from $4,217,086 or 2.45% on March 31, 2010. The allowance for loan losses equaled 2.04% of loans as of March 31, 2011 compared to 2.08% on December 31, 2010 and 1.69% on March 31, 2010.

Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Va.  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.  The Bank's actual results, events and developments may differ materially from those contemplated by any forward-looking statement.  

SOURCE Citizens Community Bank