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Citizens Community Bank Announces Fourth Quarter And Full-Year 2013 Results

SOUTH HILL, Va., Feb. 12, 2014 /PRNewswire/ -- Citizens Community Bank (OTCQB: CZYB) today announced its unaudited results of operations for 2013. 


Citizens Community Bank is pleased to announce earnings to common shareholders of $216,202 or $0.14 per share on both a basic and diluted basis for the fourth quarter of 2013, compared to a net loss to common shareholders of $972,649 or ($0.65) per share for the same time period of 2012.  For the year ended December 31, 2013, the Bank reported a net loss to common shareholders of $483,055 or ($0.32) per share on both a basic and diluted basis, compared to a net loss to common shareholders of $980,576 or ($0.65) per share for 2012.  Preferred dividend payments for 2013 totaled $54,605 compared to $177,432 for 2012, as growth in small business lending during 2013 offered lower dividend rates.

President and CEO James R. Black stated, "We posted another successful quarter, which allowed us to drastically reduce the net loss incurred during the first quarter of 2013. We continue to gain momentum on various fronts and expect a profitable and successful 2014. I am proud of our most recent advances and enthusiastic about CCB's future. We look forward to sharing more successes throughout the year."

In comparing the fourth quarter of 2013 to the same quarter in 2012, net interest income decreased by $129,429 or 8.7%.  This resulted from a tighter net interest margin, which equaled 3.65%, down 30 basis points from the fourth quarter of 2012. Noninterest income declined $21,836 or 10.0%, primarily as a result of a reduction in origination of mortgages for sale to the secondary market.  In the fourth quarter of 2013, the Bank was able to take a provision release of $109,377, compared to a provision expense of $1,042,713 in the fourth quarter of 2012.  This release serves as a tangible signal that the Bank continues to manage and resolve non-performing loans without deterioration of operating results.  Noninterest expense of $1,311,159 was $809,746 or 38.1% less than the fourth quarter of 2012, as a result of active control of non-interest expense and significant reductions in the write down and carrying expenses of nonperforming assets.  During the fourth quarter of 2013, there were no write-downs of other real estate owned and net gains on sales of $7,146 compares favorably to valuation write-downs and losses on the sale of other real estate owned of $327,339 in the fourth quarter of 2012.

For the year ended December 31, 2013, net interest income decreased $400,651 or 6.8% due to a tighter net interest margin and reductions in outstanding balances.  The net interest margin decreased 27 basis points to 3.74% as earning assets yields dropped 46 basis points, which was only partially offset by a 22 basis point reduction in funding costs. Lower earning assets yields resulted from the elevated level of nonperforming assets, especially in the first six months of 2013 and the reinvestment of loans and securities at lower yields during this abnormally low rate environment. For 2013, funding costs were lowered to 1.23%, down from 1.45% one year ago as result of the low rate environment and the ability to take advantage of lower-cost funding solutions.

Noninterest income for 2013 was $848,273, virtually flat to $851,369 reported for 2012.  Fee income for 2013 increased modestly at 1.0% over 2012.  The year-over-year reduction in mortgage loan origination fee income of 13.5% was fueled by rising rates in the secondary mortgage market, and contributed to the 2013 reduction in noninterest income.  When excluding write downs and gains and losses associated with the sale of other real estate, noninterest expense for 2013 was $5,401,337, which represents a decrease of $632,672 or 10.5% from 2012.  Reductions in collection expenses and carrying costs associated with nonperforming assets factored into the overall reduction in noninterest expense for 2013 as well as one-time severance costs recognized in 2012.


At December 31, 2013, total assets were $159.7 million, a reduction of $2.8 million, or 1.7% from December 31, 2012. Gross loans were $126.6 million, a decrease of $5.8 million or 4.4% from December 31, 2012.  While loan balances declined for the first eight months of 2013, each month in the fourth quarter brought net increases in outstanding balances, and the Bank continues to originate loans commensurate with its underwriting standards.  The securities portfolio balance, excluding restricted securities, increased by $5.8 million or 41.7% from December 31, 2012. Deposits totaled $132.9 million, a decrease of $5.8 million or 4.2% since December 31, 2012. Over the same comparable period, higher cost certificates of deposit decreased by $9.3 million or 12.2%. FHLB borrowings and overnight Federal funds purchased increased to $5.7 million over $2.0 million at December 31, 2012.   

Asset Quality

At December 31, 2013 the allowance for loan losses was $2,005,745 compared to $2,176,065 at December 31, 2012.  Provision expense for 2013 was $807,623 compared to $1,641,850 for 2012.  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 provision release taken in the fourth quarter attests to improving asset quality.  The allowance for loan losses represented 1.58% of loans as of December 31, 2013 compared to 1.64% on December 31, 2012.  For 2013, net charge-offs equaled $977,942 or 0.77% of average loans compared to $2,130,585 or 1.65% of average loans one year ago. Nonperforming loans, which exclude performing troubled debt restructurings, equaled $2,850,874 or 2.04% of loans compared to $3,859,123 or 2.92% at December 31, 2012. There were no loans 90 days past due and still accruing interest on December 31, 2013.

At December 31, 2013, other real estate owned was $989,367 compared with $2,517,634 at year end 2012.  For 2013, there were $960,759 of valuation write-downs and net gains on sale of other real estate of $91,665.  In aggregate, nonperforming assets equaled $3,570,241 or 2.24% of total assets at December 31, 2013, down 44.0% from $6,376,757 or 3.92% of total assets at December 31, 2012.  As of December 31, 2013, total adversely classified assets totaled $5.2 million, down $4.7 million from December 31, 2012.


As of December 31, 2013, total risk-based capital was 17.1% 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 12.3%, down from 12.6% at December 31, 2012.

Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Virginia.  Opened in December 1999, it operates four branches, three in south central Virginia and one in northern North Carolina as well as a loan production office in Oxford, 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.

Citizens Community Bank - Financial Highlights - December 31, 2013


(Actual dollars, except per share data)

Three Months Ended December 31

Year Ended December 31

Selected Operating Data:





Net interest income

$   1,353,794

$    1,483,223

$   5,491,344

$    5,891,995

Provision for loan losses





Noninterest income





Noninterest expense





Income (loss) before income tax 





Income tax expense (benefit)





Net income (loss)

$      240,807

$      (945,044)

$    (428,450)

$      (803,144)

Less: Preferred dividends

$        24,605

$         27,605

$        54,605

$       177,432

Net income (loss) available to common


$      216,202

$      (972,649)

$    (483,055)

$      (980,576)

Income (loss) per share available to

common shareholders:(1)











Average shares outstanding, basic





Average shares outstanding, diluted





(1) share amounts revised to show restricted stock grants awarded July 1 and December 18, 2013.


Citizens Community Bank

Financial Highlights

(Actual dollars, except per share data)

December 31

December 31,

Balance Sheet Data:



Total assets

$      159,712,201

$    162,545,826

Loans, net of ALLR






Federal funds purchased






Preferred stock



Stockholders' equity



Book value per share (1) (2)

$                 11.18

$               11.68

Total shares outstanding (2)



Year ended December 31,

Performance Ratios:



Return on average assets



Return on average common equity



Net interest margin 



Overhead efficiency



December 31

December 31,

Asset Quality Data:



Allowance for loan loss

$          2,005,745

$        2,176,065

Nonperforming assets



Nonperforming loans (3)



Other real estate owned



Net charge-offs (recoveries)



Classified Loans



Total Classified Assets



December 31,

December 31,

Asset Quality Ratios:



Allowance for loan loss to total loans



Nonperforming loans to total loans



Nonperforming assets to total assets



Net charge-offs (recoveries) to average loans 



Capital Ratios:

Total risk-based capital



Tier 1 risk-based capital



Tier 1 leverage capital





(1) Book value excludes $4,000,0000 of preferred stock for December 31, 2013 and 2012.

(2) Shares outstanding reflect issuance of restricted stock awards on July 1 and December 18, 2013.

(3) Excludes performing troubled debt restructurings of $576,095 and $722,663, for December 31, 2013 and 2012, respectively.


SOURCE Citizens Community Bank

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