Citizens Community Bancorp Inc. (CZWI) 10-K Annual Report December 2018

EAU CLAIRE, WI, October 26, 2018 - Citizens Community Bancorp, Inc. (the "Company") (Nasdaq: CZWI), the parent company of Citizens Community Federal N.A. (the “Bank”), today reported earnings of $1.10 million, or $0.10 per diluted share in the fourth quarter of fiscal 2018 ("Q4 fiscal 2018"), compared to $503,000, or $0.08 per diluted share, in the third fiscal quarter. The Q4 fiscal 2018 operations reflected higher net interest income, higher non-interest income and lower non-interest expense relative to the prior quarter. For fiscal year ended September 30, 2018, earnings increased 71% to $4.28 million, or $0.58 per diluted share from $2.50 million, or $0.46 per diluted share for the fiscal year ended September 30, 2017.

Net income as adjusted (non-GAAP)¹ was $1.50 million, or $0.12 per diluted share for Q4 fiscal 2018 compared to $731,000, or $0.14 per diluted shares for Q4 fiscal 2017. Net income as adjusted (non-GAAP)¹ excludes merger and branch closure expenditures, insurance and legal settlements received, and the net impact of the Tax Cuts and Jobs Act of 2017 (the "Tax Act") which are itemized on the accompanying financial table "Reconciliation of GAAP Net Income (Loss) and Net Income as Adjusted (non-GAAP)¹".

“We closed the United Bank acquisition on October 19^th which will enhance the composition of core community banking loans and increase our market presence in Eau Claire and the Chippewa Valley markets. We expect to report assets in excess of $1.2 billion next quarter and rank second in market presence in Eau Claire County as measured by deposits,” said Stephen Bianchi, President and Chief Executive Officer. "The combination of two independent financial institutions will be better positioned to provide enhanced product lines and services along with knowledge and resources to our customers."

"Though the total loan portfolio was flat for the quarter, core community bank loans continued to grow in the 4^th quarter as expected. The legacy indirect and one-to-four family loans continued the planned runoff. Over the past two years, legacy indirect and one-to-four family loans have declined from 62.0% of gross loans to 36.0% of gross loans at the end of fiscal 2018. This change in loan composition is a result of recent mergers as well as a focused effort by our lending team equipped with better resources, knowledge and incentives to provide the borrowing needs of the communities we serve," Mr. Bianchi stated.

Q4 Fiscal 2018 Financial Highlights: (at or for the periods ended September 30, 2018, compared to September 30, 2017 and /or June 30, 2018)


•	Net income totaled $1.1 million, or $0.10 per diluted share in Q4 fiscal 2018, compared to $503,000, or $0.08 per diluted share in Q3 fiscal 2018 and a loss of $458,000, or ($0.08) per diluted share a year ago. Higher net interest and non-interest income, as well as lower non-interest expense more than offset higher tax provisions for the quarter.

¹Net income as adjusted, previously referred to as Core Earnings, is a non-GAAP measure that management believes enhances investors' ability to better understand the underlying business performance and trends related to core business activities. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table "Reconciliation of GAAP Net Income (Loss) and Net Income as Adjusted (non-GAAP)".

The following information was filed by Citizens Community Bancorp Inc. (CZWI) on Friday, October 26, 2018 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Citizens Community Bancorp Inc.'s 10-K Annual Report:

Financial - Expense Highlight
The amortized cost and market values of our investment securities by asset categories as of the dates indicated below were as follows: Amortized Cost Estimated Fair Value Due after one year through five years $ 1,307 $ 1,302 Mortgage backed securities 3,312 3,307 Total held to maturity securities $ 4,619 $ 4,609 The following tables show the fair value and gross unrealized losses of securities with unrealized losses at September 30, 2018 and 2017, respectively, aggregated by investment category and length of time that the individual securities have been in a continuous unrealized loss position: Unrealized losses reflected in the preceding tables have not been included in results of operations because the unrealized loss was not deemed other-than-temporary.

Other - Other Highlight
Certain external factors may result in higher future losses but are not readily determinable at this time, including, but not limited to: unemployment rates, increased taxes and continuing increased regulatory expectations with respect to ALL levels, including CECL, a new accounting standared for computation of the allowance for loan losses, which will become effective for the bank in 2020.
Financial - Expense Highlight
The amortization of core deposit expenses increased in 2018 due to the full year impact of the core deposit intangible and customer acquisition cost related to the WFC acquisition.
Financial - Expense Highlight
Non-interest expense increased 30% to $29,764 for the year ended September 30, 2018, from $22,878 for the comparable prior 2017 period, primarily due to (1) the full-year impact of the WFC acquisition, (2) the impact of losses on OREO valuation reductions, primarily due to the sales of the Company's two closed branches, and largest OREO parcel totaling $504, (3) a branch closing and (4) increased professional service costs associated with the United Bank acquisition, legal costs of $198 for litigation settled in June 2018, and Sarbanes-Oxley 404 compliance costs.
Other - Other Highlight
The use of different assumptions could produce significantly different results, which could have material positive or negative effects on the Companys results of operations, financial condition or disclosures of fair value information.
Financial - Income
The increases in loan servicing...Read more
Financial - Shares
The resulting impact on stockholders?...Read more
Financial - Income
At December 31, 2017, we...Read more
Financial - Expense
Data processing expenses increased in...Read more
Other - Other
We recorded provisions for loan...Read more
Revenue - Product
As shown in the rate/volume...Read more
Other - Other
See Note 1, "Nature of...Read more
Financial - Expense
Increases in fiscal 2018 are...Read more
Other - Other
In addition, a decline in...Read more
Financial - Income
For the items for which...Read more
Other - Other
Below is a discussion of...Read more
Financial - Expense
Borrowing costs increased due to...Read more
Other - Other
Borrowings balances were lower at...Read more
Revenue - Product
Average loan volume increases were...Read more
Other - Other
However, any such modifications could...Read more
Financial - Earnings
For the year ended September...Read more
Financial - Expense
In fiscal 2017, other expenses...Read more
Financial - Income
In addition to valuation, the...Read more
Other - Other
We believe our credit and...Read more
Financial - Expense
Advertising, marketing and public relations...Read more
Other - Other
We also maintain lines of...Read more
Other - Other
At September 30, 2018, there...Read more
Financial - Earnings
There can be no assurance...Read more
Financial - Expense
Other expenses decreased $519 in...Read more
Financial - Income
Income tax expense recorded in...Read more
Financial - Expense
Occupancy costs, consisting primarily of...Read more
M & A - Other
The Company amortizes acquired intangible...Read more
Revenue - Product
The modest increase is due...Read more
Other - Other
In March 2017, the Bank...Read more
Other - Other
These refinements could also cause...Read more
Other - Other
See Note 4, "Loans, Allowance...Read more
Revenue - Geography
Based on an estimate computed...Read more
Other - Other
The Bank increased its commercial...Read more
M & A - Other
The acquisition resulted in increases...Read more
Financial - Income
Growth in non-interest income is...Read more
Other - Other
However, based on periodic examinations...Read more
Financial - Expense
In the fourth quarter of...Read more
Other - Other
In reviewing our adequacy of...Read more
Other - Other
We continue to refine our...Read more
Other - Other
Average loans outstanding increased to...Read more
Other - Other
We account for goodwill and...Read more
M & A - Other
The full-year impact of the...Read more
Financial - Income
For the year ended September...Read more
Financial - Income
See Note 1, "Nature of...Read more
Other - Other
We maintain access to additional...Read more
Financial - Expense
Also included in 2018 professional...Read more
Other - Other
Examples include but are not...Read more
Other - Other
The additional segmentation of the...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Material Contracts, Statements, Certifications & more

Citizens Community Bancorp Inc. provided additional information to their SEC Filing as exhibits

Exhibit 2.4: Plan Of Acquisition, Reorganization, Arrangement, Liquidation Or Succession

Exhibit 10.24: Material Contract

Exhibit 10.25: Material Contract

Exhibit 10.26: Material Contract

Exhibit 10.27: Material Contract

Exhibit 21: Subsidaries Of The Registrant

Exhibit 23: Consents Of Experts And Counsel

Exhibit 31.1: Section 302 Ceo Certification

Exhibit 31.2: Section 302 Cfo Certification

Exhibit 32.1: Section 906 Ceo And Cfo Certification

Ticker: CZWI
CIK: 1367859
Form Type: 10-K Annual Report
Accession Number: 0001367859-18-000178
Submitted to the SEC: Mon Dec 10 2018 12:09:40 PM EST
Accepted by the SEC: Mon Dec 10 2018
Period: Sunday, September 30, 2018
Industry: Savings Institution Federally Chartered

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Citizens Community Bancorp Inc. (CZWI) SEC Filing 10-K Annual report for the fiscal year ending Sunday, September 30, 2018

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