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Citizens Community Bancorp, Inc. Earnings Increase 11% YOY for First Quarter Fiscal 2017; Driven by Growth in Earnings and Strong Revenues

EAU CLAIRE, Wis., Jan. 30, 2017 (GLOBE NEWSWIRE) -- Citizens Community Bancorp, Inc. (the "Company") (Nasdaq:CZWI), the parent company of Citizens Community Federal N.A. (the “Bank”), today reported fiscal first quarter GAAP earnings increased 11% to $940,000, or $0.18 per diluted share, compared to $847,000, or $0.16 per diluted share, one year earlier, and significantly improved from $176,000, or $0.04 per diluted share, in the immediate preceding quarter. Excluding merger expenses and branch closure costs, core earnings (non-GAAP) increased 51% to $1.3 million, or $0.25 per share for Q1 fiscal 2017, compared to $892,000, or $0.17 per share, a year ago and grew 72% from $785,000, or $0.15 per share in the preceding quarter.

Core earnings is a non-GAAP measure that management believes provides a better understanding of 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 Earnings and Core Earnings (non-GAAP)".

“We started fiscal 2017 with momentum from the Community Bank of Northern Wisconsin ("CBN") integration which helped generate a 25% growth in revenue and 51% increase in core earnings year-over-year,” said Stephen Bianchi, President and Chief Executive Officer. “Our efforts to streamline our operations, reduce branch expenses, close and consolidate branch locations and remix our balance sheet, are beginning to generate results. While the rise in interest rates last quarter interrupted some loan closings, we are encouraged by our commercial loan pipeline and deposit generation priorities for the coming year."

“The integration of the CBN acquisition, completed in May 2016, is proceeding on plan and we are on track to achieve projected cost reductions,” Bianchi continued. “We are pleased with the customer retention efforts and the contributions to our financial results from this transaction.” Total assets increased 18% to $686.4 million at December 31, 2016, from $581.8 million at December 31, 2015, reflecting a 21% increase in net loans and a 17% increase in deposits. Total assets decreased 1% from $695.9 million in the immediate prior quarter largely related to exiting the indirect loan business, and account closures related to recently announced branch closings."

First Quarter Fiscal 2017 Financial Highlights: (at or for the periods ended December 31, 2016, compared to December 31, 2015 and /or September 30, 2016.)

  • GAAP Earnings were $940,000, or $0.18 per diluted share, for Q1 fiscal 2017 compared to $847,000, or $0.16 per diluted share, for Q1 fiscal 2016, and $176,000, or $0.04 per diluted share, for Q4 fiscal 2016.

  • Core earnings (non-GAAP) grew 51% to $1.3 million for Q1 fiscal 2017, compared to $892,000 for the quarter ended December 31, 2015, and increased 72% from $785,000 for the quarter ended September 30, 2016. Core earnings (non-GAAP) primarily reflect adjustments related to merger-related costs of the CBN acquisition on May 16, 2016, and the costs associated with the closing of four branches as part of the planned exit from the Eastern Wisconsin market.

  • The net interest margin improved to 3.36% for Q1 fiscal 2017, compared to 3.22% for the three months ended December 31, 2015 and 3.32% for the three months ended September 30, 2016.

  • Total assets increased 18% to $686.4 million at December 31, 2016, from $581.8 million at December 31, 2015, primarily due to contributions of $111.7 million in loans from the acquisition of CBN in May 2016. Total assets declined slightly from $695.9 million, at September 30, 2016.

  • Total net loans grew 21% to $543.0 million at December 31, 2016, compared to $447.2 million at December 31, 2015, and declined by 4% from $568.4 million, on a linked quarter basis, reflecting our increased focus on secondary market lending for one to four family residential loans and exiting the indirect lending business.

  • Total deposits increased 17% to $535.1 million at December 31, 2016, from $457.7 million at December 31, 2015, and declined 4% from $557.7 million at September 30, 2016.

  • The allowance for loan and leases losses as a percentage of total loans was 1.08% at December 31, 2016, compared to 1.42% one year earlier.

  • Asset quality declined during the quarter and the year with nonperforming assets to total assets at 1.08% at December 31, 2016, compared to 0.62% in the preceding quarter and 0.42% a year ago. This increase was mainly due to the deterioration of two larger, acquired agricultural real estate loans.

  • Bank capital ratios exceeded regulatory guidelines for a well-capitalized financial institution under the Basel III regulatory requirements at December 31, 2016:

Citizens
Community
Federal N.A.
To Be Well Capitalized Under
Prompt Corrective Action
Provisions
Total capital (to risk weighted assets) 14.7% 10.0%
Tier 1 capital (to risk weighted assets) 13.5% 8.0%
Common equity tier 1 capital (to risk weighted assets) 13.5% 6.5%
Tier 1 leverage ratio (to adjusted total assets) 9.8% 5.0%

  • Tangible book value was $11.09 per share at December 31, 2016, compared to $11.86 per share a year ago.

Balance Sheet and Asset Quality Review

Total assets were $686.4 million at December 31, 2016, compared to $581.8 million at December 31, 2015, and $695.9 million at September 30, 2016. The increase in total assets from a year ago primarily reflects higher cash levels and loans outstanding primarily due to the CBN acquisition, while the decline in total assets on a linked quarter basis is mainly due to the decision made to discontinue indirect lending and reduced emphasis on one to four family residential loans.

Total net loans grew 21% to $543.0 million at December 31, 2016, from $447.2 million at December 31, 2015, and declined 4% from $568.4 million at September 30, 2016. The increase in loans year-over-year was primarily due to the CBN acquisition, which included $111.7 million of net loans. The decline in the loan balances from the immediate prior quarter was primarily due to decreased levels of one to four family loans and a decreased investment in indirect consumer loans. At the same time, commercial and agricultural loan balances increased over the past quarter reflecting increased emphasis on internally underwritten loans.

At December 31, 2016, commercial, agricultural, multi-family, construction and land development loans totaled 36.2% of the total loan portfolio. One to four family residential real estate loans represented 32.1% of the total loan portfolio, while consumer related non-real estate loans totaled 31.7% of the total loan portfolio - down from 32.7% in the prior quarter.

Total deposits grew 17% to $535.1 million at December 31, 2016, compared to $457.7 million at December 31, 2015, and declined 4% from $557.7 million at September 30, 2016. Non-interest bearing demand deposits more than doubled year-over-year and grew 5% on a linked quarter basis. Despite the decline in total deposits on a linked quarter basis, demand deposits, both interest bearing and non-interest bearing, more than doubled and savings deposits increased 76% over the past year. Money market accounts declined 11% year-over-year, while certificate accounts increased 8% year-over-year. Non-certificate accounts increased to 52% of total deposits at December 31, 2016, from 47% a year ago. The change in composition of deposits reflects a combination of deposit run-off related to the CBN acquisition, the announced closure of the four Eastern Wisconsin branches and the increase in commercial deposit accounts.

Federal Home Loan Bank ("FHLB") advances and other borrowings totaled $73.5 million at December 31, 2016, compared to $59.3 million at September 30, 2016. To facilitate the purchase of CBN, the Company obtained an adjustable-rate, $11.0 million loan with a maturity date of May 15, 2021.

Nonperforming assets ("NPAs") totaled $7.4 million, or 1.08% of total assets, at December 31, 2016, compared to $2.4 million, or 0.42% of total assets, at December 31, 2015, and $4.3 million, or 0.62% of total assets, at September 30, 2016. This increase was mainly due to the deterioration of two larger, acquired agricultural loans.

The allowance for loan and lease losses at December 31, 2016, totaled $5.9 million and represented 1.08% of total loans, compared to $6.1 million and 1.06% of total loans at September 30, 2016. Net charged off loans totaled $151,000 and $130,000 and represented 0.11% and 0.12% of average loans on an annualized basis at December 31, 2016 and 2015, respectively.

Tangible common stockholders' equity was 8.57% of tangible assets at December 31, 2016, compared to 8.55% at September 30, 2016. Tangible book value per common share was $11.09 at December 31, 2016 compared to $11.22 at September 30, 2016.

Capital ratios for the Bank continued to remain well above regulatory requirements with Tier 1 capital to risk weighted assets of 13.5% at December 31, 2016, up from 12.9% at September 30, 2016. Tier 1 leverage capital to adjusted total assets improved to 9.8% at quarter end compared to 9.3% the preceding quarter. These regulatory ratios were higher than the required minimum levels of 6.00% for Tier 1 capital to risk weighted assets and 4.00% for Tier 1 leverage capital to adjusted total assets.

Review of Operations

Net interest income increased 22% to $5.6 million for the fiscal first quarter of 2017, compared to $4.6 million for the fiscal first quarter of 2016, primarily due to growth in the loan portfolio. Net interest income declined 3% from $5.7 million on a linked quarter basis mainly due to a reduction in the loan portfolio.

For the fiscal fourth quarter ended September 30, 2016, the Company's operations reflected $1.1 million in one-time costs associated with the CBN acquisition and announced branch closures.

For the fiscal first quarter of 2017, the net interest margin expanded 14 basis points to 3.36% from 3.22% one year earlier, and 3.32% for the fiscal fourth quarter ended September 30, 2016, primarily due to higher earning asset yields.

No provision for loan losses was recorded for the fiscal first quarter of 2017 nor for the fiscal fourth quarter of 2016, compared to $75,000 for the fiscal first quarter of 2016. Management believes the Bank is amply reserved for any loan losses with an allowance for loan losses totaling $5.9 million at December 31, 2016. Total charged off loans were $215,000 for the fiscal first quarter of 2017, compared to $179,000 a year ago and $718,000 for the fiscal fourth quarter ended September 30, 2016. Allowance for loan losses increased as a percentage of total loans to 1.08% as of December 31, 2016 compared to 1.06% as of September 30, 2016.

Noninterest income totaled $1.3 million for the fiscal first quarter of 2017, compared to $950,000 a year ago and $1.1 million for the immediate preceding quarter. Overdraft fees and charges have decreased industry wide, as customers utilize online and mobile tools to better manage their finances, an industry trend we have also experienced. Offsetting this traditional fee income source, was our secondary market fee income generated from customer mortgage activity due to advantages over the ARM loan portfolio mortgage offering.

Total noninterest expense was $5.5 million in the fiscal first quarter of 2017 compared to $4.1 million for the quarter ended December 31, 2015. The current quarter saw a $461,000 decrease in salaries and related benefits from the prior quarter, which included employees of the CBN acquisition, and has yet to show the full compensation savings from four branch closings during the current quarter and other branch closing costs. Occupancy expenses increased year-over-year due to branch closure costs for the four branches in Eastern Wisconsin.

These financial results are preliminary until the Form 10-Q is filed in February 2017.

About the Company

Citizens Community Federal N.A., a wholly owned subsidiary of Citizens Community Bancorp, Inc., is a full-service national bank based in Altoona, Wisconsin, serving more than 50,000 customers in Wisconsin, Minnesota and Michigan through 16 branch locations. The Company’s stock trades on the NASDAQ Global Market under the symbol “CZWI.”

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this release are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “planned,” “potential,” “should,” “will,” “would” or the negative of those terms or other words of similar meaning. Such forward-looking statements in this release are inherently subject to many uncertainties arising in the Company’s operations and business environment. These uncertainties include general economic conditions, in particular, relating to consumer demand for the Bank’s products and services; the Bank’s ability to maintain current deposit and loan levels at current interest rates; competitive and technological developments; deteriorating credit quality, including changes in the interest rate environment reducing interest margins; prepayment speeds, loan origination and sale volumes, charge-offs and loan loss provisions; the Bank’s ability to maintain required capital levels and adequate sources of funding and liquidity; maintaining capital requirements may limit the Bank’s operations and potential growth; changes and trends in capital markets; competitive pressures among depository institutions; effects of critical accounting estimates and judgments; changes in accounting policies or procedures as may be required by the Financial Accounting Standards Board (FASB) or other regulatory agencies overseeing the Bank; the Bank’s ability to implement its cost-savings and revenue enhancement initiatives, including costs associated with its branch consolidation and new market branch growth initiatives; legislative or regulatory changes or actions or significant litigation adversely affecting the Bank; fluctuation of the Company’s stock price; the Bank's ability to attract and retain key personnel; the Bank's ability to secure confidential information through the use of computer systems and telecommunications networks; and the impact of reputational risk created by these developments on such matters as business generation and retention, funding and liquidity. Shareholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other risks that may affect the Company’s performance are discussed further in Part I, Item 1A, “Risk Factors,” in the Company’s Form 10-K, for the year ended September 30, 2016 filed with the Securities and Exchange Commission on December 29, 2016. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this news release or to update them to reflect events or circumstances occurring after the date of this release.

Non-GAAP Financial Measures

This press release contains non-GAAP financial measures, which management believes may be helpful in understanding the Company's results of operations or financial position and comparing results over different periods. Non-GAAP measures eliminates the impact of certain one-time expenses such as acquisition and branch closure costs and related data processing termination fees, legal costs, severance pay, accelerated depreciation expense and lease termination fees. Merger related charges represent expenses to either satisfy contractual obligations of acquired entities without any useful benefit to the Company or to convert and consolidate customer records onto the Company platforms. These costs are unique to each transaction based on the contracts in existence at the merger date. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this press release. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions.

CITIZENS COMMUNITY BANCORP, INC.
Consolidated Balance Sheets (unaudited)
(in thousands)
December 31, 2016 September 30, 2016 December 31, 2015
(As Restated)
Assets
Cash and cash equivalents $20,444 $10,046 $15,230
Other interest bearing deposits 745 745 3,242
Securities available for sale "AFS" 81,136 80,123 87,161
Securities held to maturity "HTM" 6,235 6,669 7,724
Non-marketable equity securities, at cost 5,365 5,034 4,626
Loans receivable 548,904 574,439 453,649
Allowance for loan losses (5,917) (6,068) (6,441)
Loans receivable, net 542,987 568,371 447,208
Office properties and equipment, net 5,166 5,338 2,803
Accrued interest receivable 2,073 2,032 1,586
Intangible assets 829 872 90
Goodwill 4,663 4,663
Foreclosed and repossessed assets, net 784 776 804
Other assets 15,987 11,196 11,296
TOTAL ASSETS $686,414 $695,865 $581,770
Liabilities and Stockholders’ Equity
Liabilities:
Deposits $535,112 $557,677 $457,732
Federal Home Loan Bank advances 73,491 59,291 58,891
Other borrowings 11,000 11,000
Other liabilities 2,985 3,353 3,005
Total liabilities 622,588 631,321 519,628
Stockholders’ equity:
Common stock—$0.01 par value, authorized 30,000,000; 5,261,170, 5,260,098 and 5,231,265 shares issued and outstanding, respectively 53 53 52
Additional paid-in capital 54,983 54,963 54,744
Retained earnings 10,047 9,107 8,011
Unearned deferred compensation (205) (193) (261)
Accumulated other comprehensive (loss) gain (1,052) 614 (404)
Total stockholders’ equity 63,826 64,544 62,142
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $686,414 $695,865 $581,770


CITIZENS COMMUNITY BANCORP, INC.
Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Ended
December 31,
2016
September 30,
2016
December 31,
2015
(As Restated)
Interest and dividend income:
Interest and fees on loans $6,530 $6,784 $5,250
Interest on investments 418 410 424
Total interest and dividend income 6,948 7,194 5,674
Interest expense:
Interest on deposits 1,119 1,212 956
Interest on FHLB borrowed funds 173 168 165
Interest on other borrowed funds 99 96
Total interest expense 1,391 1,476 1,121
Net interest income 5,557 5,718 4,553
Provision for loan losses 75
Net interest income after provision for loan losses 5,557 5,718 4,478
Non-interest income:
Net gains on available for sale securities 29 16
Service charges on deposit accounts 398 462 423
Loan fees and service charges 603 411 321
Other 283 253 206
Total non-interest income 1,313 1,142 950
Non-interest expense:
Salaries and related benefits 2,674 3,135 2,218
Occupancy 1,068 991 569
Office 281 385 252
Data processing 472 528 409
Amortization of core deposit intangible 43 45 14
Advertising, marketing and public relations 63 245 137
FDIC premium assessment 83 139 85
Professional services 401 579 172
Other 378 682 259
Total non-interest expense 5,463 6,729 4,115
Income before provision for income taxes 1,407 131 1,313
(Provision) benefit for income taxes (467) 45 (466)
Net income attributable to common stockholders $940 $176 $847
Per share information:
Basic earnings $0.18 $0.04 $0.16
Diluted earnings $0.18 $0.04 $0.16
Cash dividends paid $ $ $
Book value per share at end of period $12.13 $12.27 $11.88
Tangible book value per share at end of period $11.09 $11.22 $11.86

Reconciliation of GAAP Earnings and Core Earnings (non-GAAP):

Three Months Ended
December 31,
2016
September 30,
2016
December 31,
2015
(As Restated)
(Dollars in Thousands, except share data)
GAAP earnings before income taxes $1,407 $131 $1,313
Merger related costs (1) 444
Branch closure costs (2) 633 614 38
Core earnings before income taxes (3) 2,040 1,189 1,351
Provision for income tax on core earnings at 34% 694 404 459
Core earnings after income taxes (3) $1,346 $785 $892
GAAP diluted earnings per share, net of tax $0.18 $0.04 $0.16
Merger related costs, net of tax 0.05
Branch closure costs, net of tax 0.07 0.06 0.01
Core diluted earnings per share, net of tax $0.25 $0.15 $0.17
Average diluted shares outstanding 5,293,700 5,274,505 5,262,718

(1) Costs incurred are included as data processing, advertising, marketing and public relations, professional fees and other non-interest expense on the income statement.
(2) Branch closure costs include severance pay recorded in salaries and other benefits, accelerated depreciation expense and lease termination fees included in occupancy and other non-interest expense on the income statement.
(3) 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.

Non-performing Assets:

December
31, 2016
and Three
Months
Ended
September
30, 2016
and Twelve
Months
Ended
December
31, 2015
and Three
Months
Ended
Nonperforming assets:
Nonaccrual loans $5,750 $3,191 $848
Accruing loans past due 90 days or more 894 380 772
Total nonperforming loans (“NPLs”) (1) 6,644 3,571 1,620
Other real estate owned (1) 655 725 734
Other collateral owned 129 52 70
Total nonperforming assets (“NPAs”) (1) $7,428 $4,348 $2,424
Troubled Debt Restructurings (“TDRs”) - Originated Loans $3,529 $3,733 $3,794
Nonaccrual TDRs - Originated Loans $410 $515 $311
Average outstanding loan balance $561,672 $512,475 $445,687
Loans, end of period 548,904 574,439 453,649
Total assets, end of period 686,414 695,865 581,770
ALL, at beginning of period 6,068 6,496 6,496
Loans charged off:
Residential real estate (43) (140) (41)
Commercial/agriculture real estate
Consumer non-real estate (172) (460) (138)
Commercial agriculture non-real estate (118)
Total loans charged off (215) (718) (179)
Recoveries of loans previously charged off:
Residential real estate 3 11 2
Commercial/agriculture real estate
Consumer non-real estate 61 204 47
Commercial agriculture non-real estate
Total recoveries of loans previously charged off: 64 215 49
Net loans charged off (“NCOs”) (151) (503) (130)
Additions to ALL via provision for loan losses charged to operations 75 75
ALL, at end of period $5,917 $6,068 $6,441
Ratios:
ALL to NCOs (annualized) 979.64% 1,206.36% 1,238.65%
NCOs (annualized) to average loans 0.11% 0.10% 0.12%
ALL to total loans 1.08% 1.06% 1.42%
NPLs to total loans 1.21% 0.62% 0.36%
NPAs to total assets 1.08% 0.62% 0.42%

(1) Total Nonperforming assets increased due to the CBN acquisition in Fiscal 2016. Acquired nonperforming loans were $5,090 and $1,778 at December 31, 2016 and September 30, 2016, respectively. Acquired real estate owned property balances were $143 and $212 at December 31, 2016 and September 30, 2016, respectively.

Troubled Debt Restructurings:

December 31, 2016 September 30, 2016 December 31, 2015
Number of
Modifications
Recorded
Investment
Number of
Modifications
Recorded
Investment
Number of
Modifications
Recorded
Investment
Troubled debt restructurings:
Originated loans:
Residential real estate 30 $3,214 32 $3,413 32 $3,305
Commercial/Agricultural real estate
Consumer non-real estate 22 315 21 320 33 489
Commercial/Agricultural non-real estate
Total originated loans 52 $3,529 53 $3,733 65 $3,794

Loan Composition:

December 31, 2016 September 30, 2016
Originated Loans:
Residential real estate:
One to four family $151,180 $160,961
Commercial/Agricultural real estate:
Commercial real estate 62,724 58,768
Agricultural real estate 4,803 3,418
Multi-family real estate 15,550 18,935
Construction and land development 12,812 12,977
Consumer non-real estate:
Originated indirect paper 111,507 119,073
Purchased indirect paper 44,006 49,221
Other Consumer 17,851 18,926
Commercial/Agricultural non-real estate:
Commercial non-real estate 20,803 17,969
Agricultural non-real estate 9,621 9,994
Total originated loans $450,857 $470,242
Acquired Loans:
Residential real estate:
One to four family $24,884 $26,777
Commercial/Agricultural real estate:
Commercial real estate 28,444 30,172
Agricultural real estate 24,133 24,780
Multi-family real estate 200
Construction and land development 2,710 3,603
Consumer non-real estate:
Other Consumer 604 789
Commercial/Agricultural non-real estate:
Commercial non-real estate 12,650 13,032
Agricultural non-real estate 4,466 4,653
Total acquired loans $97,891 $104,006
Total Loans:
Residential real estate:
One to four family $176,064 $187,738
Commercial/Agricultural real estate:
Commercial real estate 91,168 88,940
Agricultural real estate 28,936 28,198
Multi-family real estate 15,550 19,135
Construction and land development 15,522 16,580
Consumer non-real estate:
Originated indirect paper 111,507 119,073
Purchased indirect paper 44,006 49,221
Other Consumer 18,455 19,715
Commercial/Agricultural non-real estate:
Commercial non-real estate 33,453 31,001
Agricultural non-real estate 14,087 14,647
Gross loans $548,748 $574,248
Net deferred loan costs (fees) 156 191
Total loans receivable $548,904 $574,439

Deposit Composition:

December 31,
2016
September 30,
2016
Non-interest bearing demand deposits $47,463 $45,408
Interest bearing demand deposits 50,779 48,934
Savings accounts 51,826 52,153
Money market accounts 125,923 137,234
Certificate accounts 259,121 273,948
Total deposits $535,112 $557,677

Average balances, Interest Yields and Rates:

Three months ended December
31, 2016
Three months ended
September 30, 2016
Three months ended December
31, 2015
Average
Balance
Interest
Income/
Expense
Average
Yield/
Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/
Rate
Average
Balance
Interest
Income/
Expense
Average
Yield/
Rate
Average interest earning assets:
Cash and cash equivalents $10,238 $12 0.47% $19,088 $19 0.40% $19,575 $15 0.30%
Loans receivable 561,519 6,530 4.61% 580,151 6,784 4.65% 451,809 5,250 4.61%
Interest bearing deposits 745 3 1.60% 745 4 2.14% 3,055 17 2.21%
Investment securities (1) 86,617 430 1.97% 88,705 405 1.82% 88,938 424 1.89%
Non-marketable equity securities, at cost 5,200 45 3.43% 5,034 54 4.27% 4,626 28 2.40%
Total interest earning assets $664,319 $7,020 4.19% $693,723 $7,266 4.17% $568,003 $5,734 4.01%
Average interest bearing liabilities:
Savings accounts $43,743 $17 0.15% $42,368 $17 0.16% $27,019 $8 0.12%
Demand deposits 48,989 74 0.60% 52,868 85 0.64% 23,952 44 0.73%
Money market accounts 130,057 134 0.41% 143,493 149 0.41% 144,284 154 0.42%
CD’s 245,646 814 1.31% 265,357 878 1.32% 219,873 683 1.23%
IRA’s 29,000 80 1.09% 30,237 83 1.09% 22,528 67 1.18%
Total deposits $497,435 $1,119 0.89% $534,323 $1,212 0.90% $437,656 $956 0.87%
FHLB advances and other borrowings 78,841 273 1.37% 73,426 264 1.43% 58,891 165 1.11%
Total interest bearing liabilities $576,276 $1,392 0.96% $607,749 $1,476 0.97% $496,547 $1,121 0.90%
Net interest income $5,628 $5,790 $4,613
Interest rate spread 3.23% 3.20% 3.11%
Net interest margin 3.36% 3.32% 3.22%
Average interest earning assets to average interest bearing liabilities 115.28% 114.15% 114.39%

(1) For the 3 months ended December 31, 2016, September 30, 2016 and December 31, 2015, the average balance of the tax exempt investment securities, included in investment securities, were $31,986, $31,819 and $26,572 respectively. The interest income on tax exempt securities is computed on a tax-equivalent basis using a tax rate of 34% for all periods presented.


CITIZENS COMMUNITY FEDERAL N.A.
Selected Capital Composition Highlights (unaudited)
December 31,
2016
September 30,
2016
To Be Well Capitalized Under
Prompt Corrective Action
Provisions
Total capital (to risk weighted assets) 14.7% 14.1% 10.0%
Tier 1 capital (to risk weighted assets) 13.5% 12.9% 8.0%
Common equity tier 1 capital (to risk weighted assets) 13.5% 12.9% 6.5%
Tier 1 leverage ratio (to adjusted total assets) 9.8% 9.3% 5.0%

Contact: Steve Bianchi, CEO (715)-836-9994

Source:Citizens Community Bancorp, Inc.