Citizens munity Bancorp(CZWI) - 2025 Q1 - Quarterly Report

Part I – FINANCIAL INFORMATION Financial Statements Presents unaudited consolidated financial statements including balance sheets, operations, and cash flows for Q1 2025 Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total Assets | $1,779,963 | $1,748,519 | | Loans receivable, net | $1,332,523 | $1,348,432 | | Total Deposits | $1,523,654 | $1,488,148 | | Total Stockholders' Equity | $180,051 | $179,084 | Consolidated Statements of Operations Highlights (in thousands, except per share data) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Interest Income | $11,594 | $11,905 | | (Negative) Provision for Credit Losses | $(250) | $(800) | | Net Income | $3,197 | $4,088 | | Diluted Earnings Per Share | $0.32 | $0.39 | Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,613 | $9,148 | | Net Cash from Investing Activities | $21,661 | $18,046 | | Net Cash from Financing Activities | $26,753 | $(35,694) | | Net (Decrease) in Cash | $50,027 | $(8,500) | Condensed Notes to Consolidated Financial Statements (Unaudited) Provides detailed explanations of accounting policies and specific financial items, covering assets, liabilities, and valuation methodologies - The company, through its subsidiary Citizens Community Federal N.A., operates 21 branch locations primarily in Wisconsin and Minnesota, offering traditional community banking services[28] - Total loans receivable stood at $1.35 billion as of March 31, 2025, a slight decrease from $1.37 billion at year-end 2024. The Allowance for Credit Losses (ACL) on loans was $20.2 million[110] - Total deposits increased to $1.524 billion at March 31, 2025, from $1.488 billion at December 31, 2024, with non-interest bearing deposits remaining stable at approximately $253 million[151] - As of March 31, 2025, the Bank had no outstanding FHLB advances, down from $5.0 million at year-end 2024. Total other borrowings, primarily subordinated and senior notes, were $61.7 million[154] - The Bank was categorized as 'Well Capitalized' under Prompt Corrective Action provisions as of March 31, 2025, with a Tier 1 leverage ratio of 12.0% and a Total capital to risk-weighted assets ratio of 15.6%[162][163] Management's Discussion and Analysis of Financial Condition and Results of Operations Analyzes the company's financial condition and results of operations for Q1 2025, covering key income statement and balance sheet items - Net income for Q1 2025 was $3.2 million ($0.32 per diluted share), a decrease from $4.1 million ($0.39 per diluted share) in Q1 2024. The decline was primarily driven by a $0.7 million decrease in non-interest income and a smaller benefit from the provision for credit losses[203][205][208] - Net interest income decreased by $0.3 million year-over-year to $11.6 million. This was due to a smaller loan portfolio, although the net interest margin improved to 2.85% from 2.77% in Q1 2024, benefiting from a decrease in liability costs[216] - A negative provision (benefit) for credit losses of $0.3 million was recorded in Q1 2025, compared to a larger benefit of $0.8 million in Q1 2024. The Q1 2025 figure resulted from a $0.35 million decrease in on-balance sheet ACL, partially offset by a $0.1 million increase in off-balance sheet reserves[226] - Total deposits increased by $35.5 million during the quarter to $1.52 billion, driven by increases in consumer, commercial, and seasonal public deposits[269] - Liquidity remains strong, with an on-balance sheet liquidity ratio of 14.38%. Total available liquidity, including borrowing capacity, was $852 million, representing 314% of uninsured and uncollateralized deposits as of March 31, 2025[284][287] Quantitative and Qualitative Disclosures about Market Risk Details the company's market risk exposure, primarily interest rate risk, including governance and sensitivity analyses for EVE and NII - The company's most significant market risk is interest rate risk, which is managed by the Asset and Liability Management Committee (ALCO)[297][299] Interest Rate Risk Sensitivity Analysis (as of March 31, 2025) | Rate Shock (Basis Points) | % Change in Economic Value of Equity (EVE) | % Change in Net Interest Income (NII) Over 1 Year | | :--- | :--- | :--- | | +300 bp | 3% | (8)% | | +200 bp | 2% | (5)% | | +100 bp | 1% | (2)% | | -100 bp | (1)% | 2% | | -200 bp | (4)% | 3% | Controls and Procedures Evaluates the effectiveness of disclosure controls and procedures, confirming no material changes to internal controls during Q1 2025 - Based on an evaluation as of March 31, 2025, the CEO and CFO concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level[309] - There were no changes in the company's internal control over financial reporting during the first quarter of 2025 that materially affected, or are reasonably likely to materially affect, these controls[310] Part II – OTHER INFORMATION Legal Proceedings Discusses legal proceedings, noting no expected material adverse effect on financial condition from ongoing cases - In the normal course of business, the Company and its Bank are involved in various legal proceedings, which are not expected to have a material adverse effect on the Company's financial condition[311] Risk Factors Refers readers to the comprehensive risk factor disclosures in the 2024 Annual Report on Form 10-K - The report refers readers to the 'Risk Factors' section in Item 1A of the 2024 Form 10-K for a comprehensive discussion of risks[312] Unregistered Sales of Equity Securities and Use of Proceeds Provides an update on the stock repurchase program, noting no repurchases in Q1 2025 and remaining authorized shares - No shares of common stock were repurchased during the quarter ended March 31, 2025[313] - As of March 31, 2025, 238,769 shares remain available for repurchase under the July 2024 share repurchase program[313] Other Information Discloses that no Section 16 officers or directors adopted or terminated Rule 10b5-1 trading arrangements in Q1 2025 - During the three months ended March 31, 2025, no Section 16 officers or directors adopted or terminated a Rule 10b5-1 trading arrangement[316] Exhibits Lists exhibits filed with the Form 10-Q, including CEO/CFO certifications and Inline XBRL financial data - The exhibits filed with the report include CEO and CFO certifications under Rule 13a-14(a) and Section 906 of the Sarbanes-Oxley Act, as well as financial data in Inline XBRL format[318]