On July 29, 2024, Citizens Community Bancorp Inc (CZWI, Financial) released its 8-K filing reporting earnings of $3.7 million and earnings per diluted share of $0.35 for the second quarter ended June 30, 2024. This performance surpasses the analyst estimate of $0.27 per share. The company also announced a new 5% stock buyback authorization.
Company Overview
Citizens Community Bancorp Inc is a bank holding company that offers traditional community banking services to businesses, agricultural operators, and consumers. The company provides a variety of loan products, including commercial real estate loans, commercial and industrial loans, agricultural real estate loans, residential mortgages, and consumer loans. It also offers deposit products through its branches, including demand deposits, savings accounts, money-market accounts, and certificates of deposit.
Performance and Challenges
For the second quarter of 2024, Citizens Community Bancorp Inc reported earnings of $3.7 million, or $0.35 per diluted share, compared to $4.1 million, or $0.39 per diluted share, in the previous quarter, and $3.2 million, or $0.31 per diluted share, in the same quarter last year. The decrease from the previous quarter was primarily due to lower nonaccrual interest income and a decrease in non-interest income.
Despite these challenges, the company saw improvements in book value per share, which increased to $17.10 at June 30, 2024, from $16.61 at March 31, 2024, and $15.81 at June 30, 2023. Tangible book value per share also saw a significant increase, reflecting the company's strong financial position.
Financial Achievements
Citizens Community Bancorp Inc's financial achievements include a decrease in criticized assets by 18%, a reduction in nonperforming assets to $10.3 million, and a decrease in special mention loans by $4.9 million. These improvements in asset quality are crucial for maintaining the bank's financial health and stability.
"I was pleased with our execution of strategic objectives during the quarter that further strengthened franchise value. The quarter reflected our balance sheet optimization efforts, improving credit quality, and net interest margin expansion," stated Stephen Bianchi, Chairman, President, and Chief Executive Officer.
Income Statement Highlights
Net interest income for the second quarter of 2024 was $11.6 million, a decrease from $11.9 million in the previous quarter and $11.7 million in the same quarter last year. The net interest margin was 2.72%, down from 2.77% in the previous quarter but consistent with the same quarter last year.
Non-interest income decreased to $1.9 million from $3.3 million in the previous quarter and $2.9 million in the same quarter last year. This decrease was largely due to lower gains on the sale of SBA loans and higher losses on equity securities.
Non-interest expense decreased to $10.3 million from $10.8 million in the previous quarter but increased from $9.8 million in the same quarter last year. The decrease from the previous quarter was primarily due to lower SBA recourse reserves and professional costs, partially offset by higher compensation costs and branch closure costs.
Balance Sheet and Asset Quality
Total assets decreased by $17.0 million during the quarter to $1.80 billion. Cash and cash equivalents increased by $8.2 million, while securities available for sale decreased by $5.2 million. Gross loans decreased by $21.7 million, largely due to criticized loan principal reductions and lower origination activity.
Total deposits decreased by $7.9 million during the quarter to $1.52 billion, reflecting seasonal decreases in public deposits partially offset by an increase in brokered deposits. Federal Home Loan Bank advances were reduced by $8.0 million to $31.5 million.
Key Financial Metrics
| Metric | June 30, 2024 | March 31, 2024 | June 30, 2023 |
|---|---|---|---|
| Book Value Per Share | $17.10 | $16.61 | $15.81 |
| Tangible Book Value Per Share | $13.91 | $13.43 | $12.61 |
| Net Interest Margin | 2.72% | 2.77% | 2.72% |
| Nonperforming Assets | $10.3 million | $10.6 million | N/A |
Analysis
Citizens Community Bancorp Inc's performance in the second quarter of 2024 demonstrates resilience and strategic execution despite facing challenges such as lower nonaccrual interest income and decreased non-interest income. The company's focus on improving asset quality and optimizing its balance sheet has resulted in significant financial achievements, including an increase in book value per share and a reduction in criticized assets.
The approval of an additional 5% stock buyback authorization reflects the company's confidence in its financial stability and commitment to enhancing shareholder value. Overall, Citizens Community Bancorp Inc's performance in the second quarter of 2024 positions it well for future growth and stability in the banking industry.
Explore the complete 8-K earnings release (here) from Citizens Community Bancorp Inc for further details.
