Citizens munity Bancorp(US:CZWI)2025-11-04 21:31Interest Income and Margin - Net interest income for Q3 2025 was $13.2 million, an increase of $1.9 million compared to Q3 2024, primarily due to lower liability expenses and higher asset yields[212][232]. - The net interest margin for Q3 2025 increased to 3.20%, up from 2.63% in Q3 2024, driven by a decrease in liability costs and favorable impacts from loan payoffs[233]. - For the nine months ended September 30, 2025, net interest income rose to $38.1 million, a $3.3 million increase from the same period in 2024, attributed to lower liability costs and income from loan payoffs[234]. - For the three months ended September 30, 2025, net interest income was $13,214 thousand, compared to $11,285 thousand for the same period in 2024, reflecting an increase in the interest rate spread from 1.99% to 2.61%[238]. - The net interest margin for the nine-month period ended September 30, 2025, increased to 3.11%, up from 2.71% for the same period in 2024, primarily due to a decrease in liability costs of 33 basis points and favorable impacts from loan payoffs[235][241]. - The company reported a net interest income increase of $3,353 thousand for the nine months ended September 30, 2025, compared to the same period in 2024, driven by favorable rate changes[247]. Credit Loss Provision - The total provision for credit losses for Q3 2025 was $0.650 million, compared to a negative provision of $0.400 million in Q3 2024, reflecting changes in credit quality and delinquent loans[213]. - For the nine months ended September 30, 2025, the provision for credit losses was $1.750 million, a significant increase from a negative provision of $2.725 million in the same period in 2024[217]. - The provision for credit losses is determined based on estimated lifetime losses in the loan portfolio, using a third-party model to evaluate and estimate the Allowance for Credit Losses[249]. - For the nine months ended September 30, 2025, the total provision for credit losses was $1.750 million, compared to a negative provision of $2.725 million for the same period in 2024, driven by higher reserves on impaired loans and increased delinquencies[251]. Non-Interest Income and Expense - Non-interest income for Q3 2025 increased by $0.1 million, mainly due to higher gains on loan sales[214]. - Non-interest expense for Q3 2025 rose to $11.1 million, an increase of $0.7 million from Q3 2024, primarily due to higher compensation expenses[214]. - Non-interest income for Q3 2025 increased by 3.46% to $3.022 million compared to Q3 2024, while for the nine months ended September 30, 2025, it rose by 4.36% to $8.451 million[257]. - The gain on sale of loans increased by 31.91% in Q3 2025 compared to Q3 2024, with a 60% increase in SBA loan sales contributing significantly[259]. - Total non-interest expense for Q3 2025 was $11.051 million, a 6.05% increase from $10.421 million in Q3 2024, primarily due to higher compensation and related benefits[263]. Income and Earnings - The company reported net income of $3.7 million for Q3 2025, compared to $3.3 million for Q3 2024, with diluted earnings per share increasing to $0.37 from $0.32[224]. - For the nine months ended September 30, 2025, net income was $10.1 million, down from $11.0 million in the same period in 2024, with diluted earnings per share decreasing to $1.02 from $1.07[224]. Loans and Loan Portfolio - As of September 30, 2025, total loans outstanding decreased by $0.05 billion to $1.32 billion from $1.37 billion at December 31, 2024[274]. - The composition of the loan portfolio shows that commercial real estate loans accounted for $683.9 million (51.7%) as of September 30, 2025, compared to $709.0 million (51.8%) at December 31, 2024[274]. - The total outstanding loan balance in the commercial real estate (CRE) portfolio is $1,008 million, with a weighted average loan-to-value (LTV) ratio of 52% for non-owner occupied CRE and 51% for owner-occupied CRE[276]. - The average loan size for non-owner occupied commercial real estate loans was $0.6 million with a weighted average loan-to-value (LTV) ratio of 52% as of September 30, 2025[275]. - Criticized loans in the commercial real estate portfolio amounted to $5.8 million, representing 1.3% of total non-owner occupied loans as of September 30, 2025[275]. - The average outstanding loan balance was $1,342,635 thousand for the three months ended September 30, 2025[283]. - Total loans at the end of the period decreased to $1,323,010 thousand as of September 30, 2025, from $1,368,981 thousand at December 31, 2024, representing a decline of approximately 3.9%[286]. Deposits - The total deposits for the nine months ended September 30, 2025, were $1,243,294 thousand, with an interest expense of $25,104 thousand, compared to $1,272,173 thousand and $28,712 thousand in 2024[241]. - Total deposits decreased by $7.6 million to $1,480,554 thousand during the nine months ended September 30, 2025, largely due to a reduction in brokered deposits[296]. - The composition of the deposit portfolio as of September 30, 2025, was 58% consumer, 28% commercial, 12% public, and 2% wholesale deposits[296]. - Uninsured deposits accounted for 28% of total deposits at September 30, 2025, amounting to $421.5 million, compared to 29% at December 31, 2024[298]. Capital and Liquidity - Stockholders' equity increased to $186.8 million at September 30, 2025, from $179.1 million at December 31, 2024, driven by net income of $10.1 million and a decrease in net unrealized losses of $3.2 million[310]. - The liquidity ratio increased by 1.69% to 13.44% at September 30, 2025, compared to December 31, 2024[312]. - On-balance sheet liquidity, collateralized new borrowing capacity, and uncommitted federal funds borrowing availability was $741 million, or 267% of uninsured and uncollateralized deposits at September 30, 2025[315]. - The Company had approximately $191.5 million in unused loan commitments as of September 30, 2025, compared to $137.0 million at December 31, 2024[320]. - The Bank's available and unused portion under the FHLB borrowing arrangement was approximately $414.4 million as of September 30, 2025, compared to $424.7 million as of December 31, 2024[301]. Risk Management - The ALCO is responsible for managing interest rate risk and meets regularly to review economic conditions and interest rate outlook[325]. - The estimated change in Economic Value of Equity (EVE) for a +300 basis points shift in interest rates at September 30, 2025, was an increase of 6%[329]. - The projected change in net interest income for a +300 basis points shift in interest rates at September 30, 2025, was a decrease of 4%[331].