Citizens Community Bancorp Inc. [CZWI] Filings

10-Q 1 czwi-20230331.htm 10-Q czwi-20230331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 001-33003

CITIZENS COMMUNITY BANCORP, INC.

(Exact name of registrant as specified in its charter)


Maryland						20-5120010
(State or other jurisdiction of incorporation or organization)						(IRS Employer Identification Number)

2174 EastRidge Center

Eau Claire, WI 54701

(Address and Zip Code of principal executive offices)

715-836-9994

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.01 par value per share	CZWI	NASDAQ Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date:

At May 4, 2023 there were 10,484,321 shares of the registrant’s common stock, par value $0.01 per share, outstanding.

CITIZENS COMMUNITY BANCORP, INC.

FORM 10-Q

March 31, 2023

INDEX


			Page Number
Part I – FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022	5
		Consolidated Statements of Operations (Unaudited) for the three months ended March 31, 2023 and 2022	6
		Consolidated Statements of Comprehensive (Loss) Income (Unaudited) for the three months ended March 31, 2023 and 2022	7
		Consolidated Statement of Changes in Stockholders’ Equity (Unaudited) for the three months ended March 31, 2023 and the year ended December 31, 2022	8
		Consolidated Statements of Cash Flows (Unaudited) for the three months ended March 31, 2023 and 2022	10
		Condensed Notes to Consolidated Financial Statements (Unaudited)	12
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	55
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	77
	Item 4.	Controls and Procedures	78
Part II – OTHER INFORMATION			78
	Item 1.	Legal Proceedings	78
	Item 1A.	Risk Factors	79
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	79
	Item 3.	Defaults Upon Senior Securities	79
	Item 4.	Mine Safety Disclosures	79
	Item 5.	Other Information	79
	Item 6.	Exhibits	80
SIGNATURES			81

PART 1 – FINANCIAL INFORMATION

ITEM 1.FINANCIAL STATEMENTS

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Balance Sheets

March 31, 2023 (unaudited) and December 31, 2022

(derived from audited financial statements)

(in thousands, except share and per share data)


	March 31, 2023		December 31, 2022
Assets
Cash and cash equivalents	$	65,050	$	35,363
Other interest bearing deposits	249		249
Securities available for sale "AFS"	173,423		165,991
Securities held to maturity "HTM"	95,301		96,379
Equity investments	2,151		1,794
Other investments	17,428		15,834
Loans receivable	1,420,955		1,411,784
Allowance for credit losses	(22,679)		(17,939)
Loans receivable, net	1,398,276		1,393,845
Loans held for sale	761		—
Mortgage servicing rights, net	4,120		4,262
Office properties and equipment, net	20,197		20,493
Accrued interest receivable	5,550		5,285
Intangible assets	2,245		2,449
Goodwill	31,498		31,498
Foreclosed and repossessed assets, net	1,113		1,271
Bank owned life insurance ("BOLI")	25,118		24,954

Other assets	18,240		16,719
TOTAL ASSETS	$	1,860,720	$	1,816,386


Liabilities and Stockholders’ Equity
Liabilities:
Deposits	$	1,436,793	$	1,424,720
Federal Home Loan Bank (“FHLB”) and Federal Reserve Bank (“FRB”) advances	182,530		142,530
Other borrowings	67,300		72,409
Other liabilities	9,536		9,639
Total liabilities	1,696,159		1,649,298

Stockholders’ Equity:

Common stock—$0.01 par value, authorized 30,000,000; 10,482,821 and 10,425,119 shares issued and outstanding, respectively	105		104
Additional paid-in capital	119,327		119,240
Retained earnings	61,720		65,400

Accumulated other comprehensive loss	(16,591)		(17,656)
Total stockholders’ equity	164,561		167,088
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,860,720	$	1,816,386

See accompanying condensed notes to unaudited consolidated financial statements.

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Operations (unaudited)

Three Months Ended March 31, 2023 and 2022

(in thousands, except per share data)


	Three Months Ended
	March 31, 2023		March 31, 2022
Interest and dividend income:
Interest and fees on loans	$	17,126	$	13,767
Interest on investments	2,547		1,609
Total interest and dividend income	19,673		15,376
Interest expense:
Interest on deposits	4,348		1,068
Interest on FHLB and FRB borrowed funds	1,493		311
Interest on other borrowed funds	1,037		830
Total interest expense	6,878		2,209
Net interest income before provision for credit losses	12,795		13,167
Provision for credit losses	50		—
Net interest income after provision for credit losses	12,745		13,167
Non-interest income:
Service charges on deposit accounts	485		488
Interchange income	551		549
Loan servicing income	569		701
Gain on sale of loans	298		722
Loan fees and service charges	80		92

Net gains on investment securities	56		(37)



Other	253		198
Total non-interest income	2,292		2,713
Non-interest expense:
Compensation and related benefits	5,338		5,398
Occupancy	1,423		1,365

Data processing	1,460		1,301
Amortization of intangible assets	204		399
Mortgage servicing rights expense, net	158		(327)
Advertising, marketing and public relations	136		212
FDIC premium assessment	201		115
Professional services	505		402
Gain on repossessed assets, net	(29)		(7)
New market tax credit depletion	—		163
Other	725		647
Total non-interest expense	10,121		9,668
Income before provision for income taxes	4,916		6,212
Provision for income taxes	1,254		1,506
Net income attributable to common stockholders	$	3,662	$	4,706
Per share information:
Basic earnings	$	0.35	$	0.45
Diluted earnings	$	0.35	$	0.45
Cash dividends paid	$	0.29	$	0.26

See accompanying condensed notes to unaudited consolidated financial statements.

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Comprehensive Income (Loss) (unaudited)

Three months ended March 31, 2023 and 2022

(in thousands)


	Three Months Ended
	March 31, 2023		March 31, 2022
Net income attributable to common stockholders	$	3,662	$	4,706
Other comprehensive gain (loss), net of tax:
Securities available for sale
Net unrealized gains (losses) arising during period, net of tax	1,065		(7,123)


Other comprehensive gain (loss), net of tax	1,065		(7,123)



Comprehensive income (loss)	$	4,727	$	(2,417)

See accompanying condensed notes to unaudited consolidated financial statements.

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Three Months Ended March 31, 2023

(in thousands, except shares and per share data)


				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (loss)		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance, January 1, 2023	10,425,119	$	104	$	119,240	$	65,400	$	(17,656)	$	167,088
Net income	—	—		—		3,662		—		3,662
Other comprehensive income, net of tax	—	—		—		—		1,065		1,065
Forfeiture of unvested shares	(1,168)	—		—		—		—		—
Surrender of restricted shares of common stock	(10,287)	—		(129)		—		—		(129)
Restricted common stock awarded under the equity incentive plan	50,606	1		—		—		—		1



Restricted common stock issued upon achievement of the 2020 performance criteria	18,551	—		—		—		—		—



Amortization of restricted stock	—	—		216		—		—		216
Cumulative change in accounting principle for adoption of ASU 2016-13	—	—		—		(4,432)		—		(4,432)
Cumulative change in accounting principle for adoption of ASU 2023-02	—	—		—		130		—		130
Cash dividends ($0.29 per share)	—	—		—		(3,040)		—		(3,040)
Balance at March 31, 2023	10,482,821	$	105	$	119,327	$	61,720	$	(16,591)	$	164,561

See accompanying condensed notes to unaudited consolidated financial statements.

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statement of Changes in Stockholders’ Equity (unaudited)

Twelve Months Ended December 31, 2022

(in thousands, except shares and per share data)


				Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Total Stockholders’ Equity
	Common Stock
	Shares	Amount
Balance, January 1, 2022	10,502,442	$	105	$	119,925	$	50,675	$	161	$	170,866
Net income	—	—		—		4,706		—		4,706
Other comprehensive loss, net of tax	—	—		—		—		(7,123)		(7,123)

Surrender of restricted shares of common stock	(10,119)	—		(141)		—		—		(141)
Restricted common stock awarded under the equity incentive plan	38,586	—		—		—		—		—
Restricted stock issued upon achievement of the 2019 performance criteria	11,834	—		—		—		—		—

Common stock options exercised	2,500	—		20		—		—		20
Common stock repurchased	(18,462)	—		(211)		(77)		—		(288)
Stock option expense	—	—		1		—		—		1
Amortization of restricted stock	—	—		195		—		—		195


Cash dividends ($0.26 per share)	—	—		—		(2,742)		—		(2,742)
Balance at March 31, 2022	10,526,781	105		119,789		52,562		(6,962)		165,494
Net income	—	—		—		4,366		—		4,366
Other comprehensive loss, net of tax	—	—		—		—		(5,315)		(5,315)
Forfeiture of unvested shares	(866)	—		—		—		—		—

Common stock awarded under the equity incentive plan	4,500	—		—		—		—		—




Stock option expense	—	—		1		—		—		1
Amortization of restricted stock	—	—		197		—		—		197



Balance at June 30, 2022	10,530,415	105		119,987		56,928		(12,277)		164,743
Net income	—	—		—		3,993		—		3,993
Other comprehensive loss, net of tax	—	—		—		—		(4,980)		(4,980)
Forfeiture of unvested shares	(1,260)	—		—		—		—		—
Surrender of restricted shares of common stock	(120)	—		(2)		—		—		(2)
Restricted common stock awarded under the equity incentive plan	2,136	—		—		—		—		—
Common stock repurchased	(52,961)	—		(603)		(88)		—		(691)



Stock option expense	—	—		1		—		—		1
Amortization of restricted stock	—	—		255		—		—		255



Balance, September 30, 2022	10,478,210	105		119,638		60,833		(17,257)		163,319
Net income	—	—		—		4,696		—		4,696
Other comprehensive loss, net of tax	—	—		—		—		(399)		(399)
Forfeiture of unvested shares	(500)	—		—		—		—		—

Surrender of restricted shares of common stock	(491)	—		(7)		—		—		(7)


Common stock options exercised	5,400	—		51		—		—		51
Common stock repurchased	(57,500)	(1)		(655)		(129)		—		(785)




Amortization of restricted stock	—	—		213		—		—		213
Balance, December 31, 2022	10,425,119	$	104	$	119,240	$	65,400	$	(17,656)	$	167,088

See accompanying condensed notes to unaudited consolidated financial statements.

CITIZENS COMMUNITY BANCORP, INC.

Consolidated Statements of Cash Flows (unaudited)

Three Months Ended March 31, 2023 and 2022

(in thousands)


	Three Months Ended
	March 31, 2023		March 31, 2022
Cash flows from operating activities:
Net income attributable to common stockholders	$	3,662	$	4,706
Adjustments to reconcile net income to net cash provided by operating activities:
Investment securities net (discount accretion) premium amortization	(30)		33
Depreciation expense	606		573
Provision for credit losses	50		—

Citizens Community Bancorp Inc. [CZWI] Filings
10-Q	[2023-05-04]
10-K	[2023-03-07]
10-Q	[2022-11-07]
10-Q	[2022-08-04]
10-Q	[2022-05-04]
10-K	[2022-03-02]
10-Q	[2021-11-08]
10-Q	[2021-08-05]
10-Q	[2021-05-06]
10-K	[2021-03-08]
10-Q	[2020-11-06]
10-Q	[2020-08-06]
10-Q	[2020-05-11]
10-K	[2020-03-10]
10-Q	[2019-11-07]
10-Q	[2019-08-08]
10-Q	[2019-05-09]
10-K	[2018-12-10]
10-Q	[2018-08-10]
10-Q	[2018-05-14]
10-Q	[2018-02-13]
10-K	[2017-12-13]
10-Q	[2017-08-07]
10-Q	[2017-05-08]
10-Q	[2017-02-13]
10-K	[2016-12-29]
10-Q	[2016-08-12]
10-Q	[2016-05-13]
10-Q	[2016-02-08]
10-K	[2015-12-07]
10-Q	[2015-08-10]
10-Q	[2015-05-11]
10-Q	[2015-02-09]
10-K	[2014-12-08]
10-Q	[2014-08-11]
10-Q	[2014-05-12]
10-Q	[2014-02-10]
10-K	[2013-12-09]
10-Q	[2013-08-12]
10-Q	[2013-05-13]
10-Q	[2013-02-11]
10-K	[2012-12-10]
10-Q	[2012-08-13]
10-Q	[2012-05-15]
10-Q	[2012-02-10]