CITIZENS COMMUNITY BANK (VIRGINIA) 
By SOUTH HILL, Va., Oct. 28 /PRNewswire-FirstCall/ -- Citizens Community Bank (OTC Bulletin Board: CZYB) today reported third quarter and year-to-date results for the quarter ended September 30, 2010. For the third quarter of 2010, net income available to common shareholders equaled $38,248, a decrease of $21,833 or 36.3% from the third quarter of 2009. Basic and diluted earnings per share to common shareholders equaled $0.03 for the third quarter of 2010 compared to $0.04 for the third quarter of 2009. Core operating results as measured by pre-provision, pre-tax earnings equaled $502,623, an increase of $149,743 or 42.4% over the third quarter of 2009. When excluding a $104,747 valuation writedown on other real estate owned in the third quarter of 2009, adjusted core operating results increased $44,996 or 9.8%.
For the nine month period ended September 30, 2010, net income available to common shareholders totaled $210,063, an increase of $83,500 or 66.0% over the first nine months of 2009. Year to date, basic and diluted earnings per share to common shareholders equaled $0.15 compared to $0.09 for the same period in 2009. When excluding the $104,747 valuation writedown in 2009 adjusted core operating results, which are pre-provision and pre-tax earnings, equaled $1,479,676, up $618,712 or 71.9% over the first three quarters of 2009.
At September 30, 2010, total assets were $170.6 million, a decline of $1.3 million or 0.8% from December 31, 2009. Gross loans amounted to $131.3 million, a decline of $1.2 million or 0.9% from year end 2009. The investment portfolio declined $4.0 million or 16.8% over the past nine months as cash flows and maturities were reinvested into overnight investments. Total deposits equaled $141.6 million, a slight decrease of $705,310 or 0.5% since December 31, 2009.
President and CEO Thomas C. Manson stated, "The steady improvement in our year-to-date earnings is evidence of a strong balance sheet and healthy but aggressive management tactics. While short-term volatility and market uncertainty remain at the forefront of our conscience, we have been able to capitalize on the strength of our net interest margin to balance an aggressive approach in rebranding and managing charge-offs while continuing to build our loan loss reserve."
For the third quarter of 2010, net interest income totaled $1,651,138, an increase of $129,987 or 8.5% over the third quarter of 2009. The growth in net interest income was attributable to a stronger net interest margin. For the quarter ended September 30, 2010, the net interest margin was 4.11%, up 37 basis points over the third quarter of 2009. The strength in the net interest margin was generated through substantially lower funding costs, which offset a decline in the yield on earning assets.
For the three month period ended September 30, 2010, average earning assets totaled $160.1 million, down $2.4 million from the same period in 2009. Earning assets yields declined 26 basis points to 5.67%; however, this was more than offset by a 73 basis points decline in the cost of interest bearing liabilities to 1.84% over the comparable period.
For the first nine months of 2010, net interest income totaled $5,003,550, an increase of $818,885 or 19.6% over the first nine months of 2009 due to a wider net interest margin. For the first three quarters of 2009 average earning assets remained relatively changed at $159.3 million; however average earning asset yields declined by 10 basis points to 5.86%. This was more than offset through lower funding costs, with the cost of interest liabilities dropping 91 basis points to 1.94% for the same comparable period.
Noninterest income totaled $242,322, an increase of $19,179 or 8.6% when excluding $104,747 of valuation writedowns on other real estate during the third quarter of 2009. The increase reflected higher service charge revenue on deposit accounts, ATMs, along with other operating income. For the third quarter of 2010, fee revenue on secondary mortgages declined by $9,210 or 33.7% over the same period last year. For the nine months ended September 30, 2010, noninterest income equaled $691,803, up $107,915 or 18.5% when excluding the $104,747 of valuation writedowns in 2009. The increase in fee revenue reflected higher income from service charges on deposit accounts, ATMs, and other operating income which includes rental income from other real estate owned.
Noninterest expense equaled $1,390,837, an increase of $104,170 or 8.1% over the third quarter of 2009 as expenses related to the branding and marketing of the new "CCB" were incurred as well as slightly higher employment costs over the comparable period. Salaries and compensation expenses were $25,710 or 4.5% higher than the third quarter of 2009. For the nine months ended September 30, 2010, noninterest expense totaled $4,215,677, an increase of $308,088 or 7.9% due primarily to branding and marketing related expenses coupled with an increase in overall loan related and general operating expenses. Salaries and benefits, which represented 43.3% of noninterest expense, increased 2.4% or $42,247 over the first three quarters of 2009.
For the three months ended September 30, 2010, provision for loan losses amounted to $391,000 an increase of $177,900 over the third quarter of 2009. For the first three quarters of 2010, provision for loan losses equaled $996,724, an increase of $525,114 over the first nine months of 2009. The elevated level of provision expenses resulted from the recent level of charge-offs and the Bank increasing its loan loss reserve ratio as nonperforming assets remained elevated in this weak local and national economy.
For the third quarter of 2010, net loan charge-offs equaled $294,018 or 0.90% of average loans on an annualized basis compared to $74,697 or 0.23% of loans for the third quarter of 2009. For the nine months ended September 30, 2010, net charge-offs stood at $681,579 or 0.69% of average loans, compared to $176,330 or 0.18% one year ago. Nonperforming loans equaled $4,737,530 or 3.61% of outstanding loans compared to $3,593,182 or 2.73% on September 30, 2009. Of the $4,737,530 in nonperforming loans, $818,887, were troubled debt restructured loans that were not accruing interest as these loans were in nonaccrual status prior to the restructuring. At September 30, 2010, there were $766,428 of troubled debt restructurings that were accruing interest and included with nonperforming loans.
All of the restructured loans, which include accruing and nonaccrual troubled debt restructurings were complying with their modified terms. There were no loans 90 days past due and still accruing interest as of September 30, 2010. As of September 30 2010, the Bank held $1,106,923 of other real estate owned. The allowance for loan losses equaled 1.85% of loans as of September 30, 2010 compared to 1.38% on September 30, 2009 and 1.60% on December 31, 2009.
Citizens Community Bank is a Virginia state chartered bank headquartered in South Hill, Va. Opened in December 1999, it operates five branches, three in south central Virginia and two in northern 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. The Bank's actual results, events and developments may differ materially from those contemplated by any forward-looking statement.
Citizens Community Bank
Financial Highlights
Three months ended
(Unaudited) September 30,
(Actual
dollars,
except per
share data) ------------------
Selected
Operating
Data: 2010 2009
---- ----
Net interest
income $1,651,138 $1,521,151
Provision for
loan losses 391,000 213,100
Noninterest
income 242,322 118,396
Noninterest
expense 1,390,837 1,286,667
--------- ---------
Income before
income tax 111,623 139,780
Income tax
expense 25,000 31,324
------ ------
Net income $86,623 $108,456
======= ========
Less:
Preferred
dividends $48,375 $48,375
------- -------
Net income
available to
common
shareholders $38,248 $60,081
======= =======
Income per
share
available to
common
shareholders:
Basic $0.03 $0.04
===== =====
Diluted $0.03 $0.04
===== =====
Average shares
outstanding,
basic 1,364,670 1,364,670
Average shares
outstanding,
diluted 1,364,670 1,364,670
Nine months ended
(Unaudited) September 30,
(Actual
dollars,
except per
share data) ------------------
Selected
Operating
Data: 2010 2009
---- ----
Net interest
income $5,003,550 $4,184,665
Provision for
loan losses 996,724 471,610
Noninterest
income 691,803 479,141
Noninterest
expense 4,215,677 3,907,589
--------- ---------
Income before
income tax 482,952 284,607
Income tax
expense 127,764 33,811
------- ------
Net income $355,188 $250,796
======== ========
Less:
Preferred
dividends $145,125 $124,233
-------- --------
Net income
available to
common
shareholders $210,063 $126,563
======== ========
Income per
share
available to
common
shareholders:
Basic $0.15 $0.09
===== =====
Diluted $0.15 $0.09
===== =====
Average shares
outstanding,
basic 1,364,670 1,364,670
Average shares
outstanding,
diluted 1,364,670 1,364,670
Citizens Community Bank
Financial Highlights
(Unaudited) (Audited)
September
30, December 31,
(Actual dollars, except
per share data) 2010 2009
---- ----
Balance Sheet Data:
Total assets $170,550,824 $171,862,449
Loans, net 128,817,766 130,301,003
Deposits 141,600,825 142,306,135
Borrowings 7,000,000 8,000,000
Preferred stock 3,053,167 3,030,667
Stockholders' equity 21,744,972 21,396,677
Book value per share
(1) $13.70 $13.46
Total shares
outstanding 1,364,670 1,364,670
Three months ended Nine months ended
September 30, September 30,
------------------ -----------------
2010 2009 2010 2009
---- ---- ---- ----
(Unaudited)
Asset Quality
Ratios:
Allowance for
loan loss $2,433,860 $1,817,855 $2,433,860 $1,817,855
Nonperforming
assets 5,844,453 4,968,751 5,844,453 4,968,751
Nonperforming
loans 4,737,530 3,593,182 4,737,530 3,593,182
Other real
estate owned 1,106,923 1,375,569 1,106,923 1,375,569
Net charge-offs 294,018 74,697 681,579 176,330
Allowance for
loan loss to
total loans 1.85% 1.38% 1.85% 1.38%
Nonperforming
loans to total
loans 3.61% 2.73% 3.61% 2.73%
Nonperforming
assets to total
assets 3.43% 2.87% 3.43% 2.87%
Net charge-offs
to average
loans 0.90% 0.23% 0.69% 0.18%
Selected
Performance
Ratios:
Return on
average assets 0.09% 0.14% 0.16% 0.10%
Return on
average common
equity 0.80% 1.28% 1.50% 0.92%
Net interest
margin 4.11% 3.74% 4.22% 3.54%
Overhead
efficiency 73.45% 78.48% 74.02% 83.79%
Note: (1) Book value excludes $3,053,167 and $3,030,667 of preferred
stock for 2010 and 2009, respectively.
SOURCE Citizens Community Bank
