Citizens Community Bancorp Inc. (CZWI) 10-Q Quarterly Report November 2019

the parent company of Citizens Community Federal N.A. (the “Bank” or "CCFBank"), today reported earnings of $1.2 million, or $0.11 per diluted share, for the quarter ended September 30, 2019, compared to $4.1 million, or $0.37 per diluted share, for the previous quarter ended June 30, 2019. In the September 2019 quarter, the Company benefited from (1) the full quarter impact of the F. & M. Bancorp. of Tomah, Inc. ("F&M") acquisition, net of merger charge considerations, (2) strong loan fee income from commercial activity, (3) an annual debit card incentive and (4) reduced FDIC insurance assessments due to the FDIC application of Small Bank Assessment Credits to our current quarter invoice. These items were partially offset by (1) increased loan servicing amortization resulting from higher prepayments and (2) higher than normal marketing expenses as CCFBank continues to execute on its plan of brand awareness with recent acquisitions.

Net income as adjusted (non-GAAP)¹ was $3.4 million or $0.30 per diluted share for the quarter ended September 30, 2019 compared to $2.6 million of $0.23 per diluted share for the quarter ended June 30, 2019. The current quarter results were impacted by $2.9 million of acquisition-related expenses which reduced net income by $0.19 per diluted share. Included in GAAP net income and net income as adjusted for the quarter ended September 30, 2019, was the earnings impact from F&M of approximately $0.03 per diluted share, before merger charges. The June 2019 quarter operations reflected a $2.3 million gain on the sale of a branch, or $0.15 per diluted share. This gain was excluded from net income as adjusted and modestly offset by the addition of $206,000 of pre-tax acquisition-related expenses which added $0.01 per diluted share.

The following table reports key financial metric ratios based on a net income and net income as adjusted basis:



	Three Months Ended						Nine Months Ended
	September 30, 2019		June 30, 2019		September 30, 2018		September 30, 2019		September 30, 2018
Ratios based on net income:
Return on average assets (annualized)	0.34	%	1.23	%	0.44	%	0.61	%	0.46	%
Return on average equity (annualized)	3.35	%	11.72	%	3.21	%	5.94	%	4.00	%
Efficiency ratio (non-GAAP)	85	%	61	%	77	%	75	%	80	%
Net interest margin	3.34	%	3.30	%	3.45	%	3.35	%	3.42	%
Ratios based on net income as adjusted (non-GAAP):
Return on average assets as adjusted²(annualized)	0.93	%	0.77	%	0.48	%	0.75	%	0.5	%
Return on average equity as adjusted³ (annualized)	9.22	%	7.27	%	3.45	%	7.23	%	4.35	%
Efficiency ratio⁴	66	%	74	%	78	%	69	%	82	%

The following information was filed by Citizens Community Bancorp Inc. (CZWI) on Monday, October 28, 2019 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-Q Quarterly 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-Q Quarterly Report:

Financial - Expense Highlight
Provision expense for the quarter ended September 30, 2019 of $575 thousand was due to newly originated loan growth, net legacy charge-offs and increases in specific reserves of approximately $150 thousand, primarily on certain specific residential loans.

Other - Other Highlight
In addition to the policies included in Note 1, "Nature of Business and Summary of Significant Accounting Policies," to the Consolidated Financial Statements included as an exhibit in our transition report on Form 10-K for the transition period from October 1, 2018 to December 31, 2018, our critical accounting estimates are as follows: We maintain an allowance for loan losses to absorb probable and inherent losses in our loan portfolio.
Financial - Earnings Highlight
The components of this increase included (1) current year-to-date earnings, (2) the issuance of stock in the F&M acquisitions, (3)reduction in accumulated other comprehensive loss, due to the modest gain in the Securities Available for Sale portfolio (4) the amortization of intangible assets, partially offset by (5) the intangible created in the F&M acquisition.
Financial - Expense Highlight
Provision expense for the nine months ended September 30, 2019, was $2.1 million, resulting from (1) provision expense for newly originated organic loan growth of approximately $1.15 million, (2) approximately $300 thousand related to current year net charge offs on credits with no previous specific reserves and (3) $650 thousand attributed to increases in specific reserves on certain specific impaired credits.
Other - Other Highlight
The use of different assumptions could produce significantly different results, which could have material positive or negative effects on the Company's results of operations, financial condition or disclosures of fair value information.
Financial - Expense
The increase in deposit interest...Read more
Other - Other
The third quarter ended September...Read more
Other - Other
Our objective is to grow...Read more
Other - Other
Nonperforming assets increased to 1.46%...Read more
Financial - Expense
These items were partially offset...Read more
Financial - Earnings
For the quarter ended September...Read more
Financial - Shares
Tangible book value per share...Read more
Other - Other
The effective duration of the...Read more
Other - Other
We determine our provision for...Read more
Financial - Expense
With two bank conversions in...Read more
Financial - Shares
Tangible book value per share...Read more
Other - Other
However, any such modifications could...Read more
Financial - Shares
Book value per share increased...Read more
Other - Other
In addition, a decline in...Read more
Financial - Income
In addition to valuation, the...Read more
Other - Other
The Legacy loan portfolios reflect...Read more
Other - Other
The remaining $300 thousand increase...Read more
Other - Other
At September 30, 2019 and...Read more
Other - Other
Our primary sources of funds...Read more
Financial - Earnings
There can be no assurance...Read more
Financial - Expense
For the nine months ending...Read more
Financial - Expense
Advertising, marketing and public relations...Read more
M & A - Other
The Company amortizes acquired intangible...Read more
M & A - Other
Merger related expenses incurred in...Read more
Other - Other
These refinements could also cause...Read more
Revenue - Geography
Based on an estimate computed...Read more
Revenue - Product
The company sold the Rochester...Read more
Other - Other
However, based on periodic examinations...Read more
Other - Other
The Bank has pledged U.S....Read more
Other - Other
In reviewing our adequacy of...Read more
Other - Other
These statements may be identified...Read more
M & A - Other
Of this increase in non-performing...Read more
Other - Other
We continue to refine our...Read more
Other - Other
Federal Home Loan Bank (FHLB)...Read more
Other - Other
We account for goodwill and...Read more
Other - Other
Classified assets increased to $39.9...Read more
M & A - Other
Classified assets increased $7.5 million...Read more
Other - Other
Examples include but are not...Read more
Other - Other
The following table reflects the...Read more
Other - Other
The additional segmentation of the...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

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

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-Q Quarterly Report
Accession Number: 0001367859-19-000115
Submitted to the SEC: Thu Nov 07 2019 11:10:04 AM EST
Accepted by the SEC: Thu Nov 07 2019
Period: Monday, September 30, 2019
Industry: Savings Institution Federally Chartered

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Citizens Community Bancorp Inc. (CZWI) SEC Filing 10-Q Quarterly report for the period ending Monday, September 30, 2019

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