Citizens Community Bancorp : Earnings Release Supplement – First Quarter 2025

Published: 2025-04-28 09:32:12 ET CZWI

‌EXHIBIT 99.2

Page(s)

Cautionary Notes and Additional Disclosures Deposit Composition

Commercial Deposit Concentrations Top 100 Depositors

Liquidity

Non-Owner Occupied CRE Owner Occupied CRE Multi-family

Commercial & Industrial Loans Construction & Development Loans Agricultural Real Estate & Operating Loans Hotel Loans

Restaurant Loans Campground Loans Office Loans

Credit Quality/Risk Rating Descriptions Loans by Risk Rating as of March 31, 2025

Loans by Risk Rating as of December 31, 2024 Loans by Risk Rating as of March 31, 2024 Allowance for Credit Losses - Loans Allowance for Credit Losses - Unfunded Commitments

Delinquency as of March 31, 2025 and December 31, 2024

Delinquency as of September 30, 2024 and June 30, 2024

Nonaccrual Loans Roll Forward

Other Real Estate Owned Roll Forward

Investments - Amortized Cost and Fair Value 24

Investments - Credit Ratings 24

Earnings Per Share 25

Economic Value of Equity 26

Net Interest Income Over One Year Horizon 26

Selected Capital Composition Highlights - Bank 27

and Company

Fair Value Accounting and Fair Value Table 28

DATES AND PERIODS PRESENTED

In this earnings release financial supplement, unless otherwise noted, "20YY" refers to either the corresponding fiscal year-end date or the corresponding 12-months (i.e. fiscal year) then ended. "MMM-YY" refers to either the corresponding quarter-end date, or the corresponding three-month period then ended.

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This earnings release financial supplement may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, descriptions of the financial condition, results of operations, asset and credit quality trends, profitability, projected earnings, future plans, strategies and expectations of Citizens Community Bancorp, Inc. ("CZWI" or the "Company") and its subsidiary, Citizens Community Federal, National Association ("CCFBank"). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions of the Company, are generally identifiable by use of the words "believe," "expect," "estimates," "intend," "anticipate," "estimate," "project," "on pace," "seek," "target," "potential," "focus," "may," "preliminary," "could," "should" or similar expressions. These forward-looking statements express management's current expectations or forecasts of future events, and by their nature, are subject to risks and uncertainties. Therefore, there are a number of factors that might cause actual results to differ materially from those in such statements.

These uncertainties include: conditions in the financial markets and economic conditions generally; the impact of inflation on our business and our customers; geopolitical tensions, including current or anticipated impact of military conflicts; higher lending risks associated with our commercial and agricultural banking activities; future pandemics (including new variants of COVID-19); cybersecurity risks; adverse impacts on the regional banking industry and the business environment in which it operates; interest rate risk; lending risk; changes in the fair value or ratings downgrades of our securities; the sufficiency of allowance for credit losses; competitive pressures among depository and other financial institutions; disintermediation risk; our ability to maintain our reputation; our ability to maintain or increase our market share; our ability to realize the benefits of net deferred tax assets; our ability to obtain needed liquidity; our ability to raise capital needed to fund growth or meet regulatory requirements; our ability to attract and retain key personnel; our ability to keep pace with technological change; prevalence of fraud and other financial crimes; the possibility that our internal controls and procedures could fail or be circumvented; our ability to successfully execute our acquisition growth strategy; risks posed by acquisitions and other expansion opportunities, including difficulties and delays in integrating the acquired business operations or fully realizing the cost savings and other benefits; restrictions on our ability to pay dividends; the potential volatility of our stock price; accounting standards for credit losses; legislative or regulatory changes or actions, or significant litigation, adversely affecting the Company or Bank; public company reporting obligations; changes in federal or state tax laws; and changes in accounting principles, policies or guidelines and their impact on financial performance.

Stockholders, 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 December 31, 2024, filed with the Securities and Exchange Commission ("SEC") on March 13, 2025, and the Company's subsequent filings with the SEC. The Company undertakes no obligation to make any revisions to the forward-looking statements contained herein or to update them to reflect events or circumstances occurring after the date hereof.

NON-GAAP FINANCIAL MEASURES

This earnings release financial supplement contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States.

Non-GAAP financial measures referred to herein include net income as adjusted, return on average equity as adjusted, and return on average assets as adjusted. Reconciliations of all non-GAAP financial measures used herein to the comparable GAAP financial measures appear in the appendix at the end of this presentation.

$1.52

Billion

82% of deposits insured or collateralized

Average Account Size (In Thousands)

Type

Amount

Retail

$16

Commercial

$67

Public

$475

Top 10 Depositors

Rank

% of Deposits

Industry

Coverage Beyond FDIC(1)

2.2%

Health Care

ICS

2.0%

Public Administration

ICS

1.6%

Educational Services

ICS

1.4%

Public Administration

Collateralized

1.4%

Public Administration

Collateralized

1.3%

Public Administration

Collateralized

0.8%

Educational Services

Collateralized

0.8%

Wholesale Trade

ICS

0.7%

Educational Services

ICS & Collateralized

0.7%

Public Administration

Collateralized

(1) Coverage by ICS and private insurance may not cover entire balance

Diverse commercial deposit base with no industry concentration over 10%

Source: Internal Company Documents

Customer Type

$441

Million

Insured or Collateralized

Insured or ColJateralized • Uninsured or U ncollateralized

Insured or Collateralized by Customer Type

PUGJC Et9gO9t5 Commerical Deposits

z Inbred or Collateralzied • Uninwred or tlncollateralized

Total Sources

$852

Million

0 n Balance Sheet • Off Balance Sheet CoIt ateralized • Off Balance Sheet Uncollateralized

Compo5ition

Avail able For Sale Securities

Fed Discount Window Capacity Cash Balances at FRB

a FHLB Cnicago Borrowing Capacity

Fed Funds Lines of Credit Held to Maturity Secur ities

Non - Owner Occupied CRE As of 3/31/25

Portfolio Characteristics - Non-Owner Occupied CRE

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$471

Number of Loans

740

746

Average Loan Size In Thousands

$636

$632

Approximate Weighted Average LTV

52%

Weighted Average Seasoning In Months

Trailing 12 Month Net Charge-Offs

0.00%

Criticized Loans Millions

$7.6

Criticized Loans as a Percent of Total

1.6%

3%2% 3%

28%

11%

18%

20%

CRE - Campground

Hotel

CRE - Retail CRE - Office

CRE - Industrial/Manufacturing

Investor Residential

CRE - Senior Living

CRE - Warehouse/Mini Storage CRE - Mixed Use

Other

Portfolio Fundamentals

By Geography As of 3/31/25

28%

21%

51%

Typically, well seasoned investors with multiple projects, track record of success and personal financial strength (Net Worth/Liquidity)

Maximum LTV =<80% with recourse to owners with >20% interest

Term of 5-10 years with 20 to 25-year amortizations depending on property type, markets and strength and liquidity of sponsors

Minimum DSC and/or Global DSC covenant required to monitor performance ranging from 1.15x-1.25x

Conservative underwriting approach emphasizing actual results or market data

Wisconsin Minnesota Other

Appropriate use of SBA 504/7a for lower cash injection or special use projects

Portfolio Characteristics - Owner Occupied CRE

16%

20%

Owner Occupied CRE As of 3/31/25

1% 15%

10%

12%

CRE Restaurant

CRE Industrial/Manufacturing CRE Mixed Use

Residential Lot

By Geography As of 3/31/25

CRE Warehouse/Mini Storage

CRE Retail CRE Office Other

21%

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$239

$238

Number of Loans

388

385

Average Loan Size In Thousands

$616

$617

Approximate Weighted Average LTV

53%

51%

Weighted Average Seasoning In Months

Trailing 12 Month Net Charge-Offs (Recoveries)

0.00%

Criticized Loans In Millions

$8.3

$4.2

Criticized Loans as a Precent of Total

3.5%

1.7%

16%

80%

Portfolio Fundamentals

Underwritten to <80% LTV based on appraised value (<75% for Restaurant)

Term of 5-10 years with 20-year amortization

Recourse to owners with greater than 20% interest

DSC covenant of 1.25x on project and/or Global DSC of 1.15x

Appropriate use of SBA 504/7a for lower cash injection or special use projects

By Geography "Other" segment includes borrowers with warm

Wisconsin Minnesota Other

climates, no income tax states

By Vintage As of 3/31/25

Portfolio Characteristics - Multi-family

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$238

$221

Number of Loans

131

129

Average Loan Size In Millions

$1.82

$1.71

Approximate Weighted Average LTV

61%

62%

Weighted Average Seasoning In Months

Trailing 12 Month Net Charge-Offs

Criticized Loans in Millions

$0.0

Criticized Loans as a Percent of Total

0.0%

3% 3% 1%

42%

16%

24%

2025

2020

2024

2019

2023

2018

2022

Prior

2021

By Geography As of 3/31/25

28%

11%

61%

Portfolio Fundamentals

Robust housing markets in Eau Claire and Mankato markets supported by student populations at state universities, technical colleges, and

growing population and job markets

Multi-family sponsors experienced owners with multi-project portfolios

Typically underwritten to 75% LTV based on appraised value with recourse; metro markets and/or strong sponsors may warrant up to 80% LTV

Generally, term of 5-10 years with 20 to 25-year amortization (varies

by new versus existing, size of market and sponsor strength)

Wisconsin Minnesota Other

Covenant for minimum DSC/Global DSC

Commercial & Industrial

As of 3/31/25

15%

Finance and Insurance

Public Admin Construction

Real Estate, Rental and Leasing Education Services

Other

10% 10%

Transportation and Warehousing

Manufacturing Wholesale Trade Administrative Support Retail Trade Agriculture

By Geography As of 3/31/25

14%

13%

Portfolio Fundamentals

Portfolio Characteristics - Commercial & Industrial

As of

3/31/2025

12/31/2024

Loan Balance In Millions

$110

$116

Number of Loans

637

638

Average Loan Size In Thousands

$172

$181

Weighted Average Seasoning In Months

Trailing 12 Month Net Charge-Offs

0.09%

(0.01%)

Committed Line, if collateral In Millions

$33

$45

Criticized Loans In Millions

$8.0

$5.1

Criticized Loans as a Precent of Total

7.3%

4.4%

92%

Wisconsin Minnesota Other

Highly diversified, secured loan portfolio underwritten with recourse

Lines of credit reviewed annually and may have borrowing base certificates governing line usage

Fixed asset LTV's based on age and type of equipment; <5-year amortization

Use of SBA Guaranty Program (Preferred Lender or General Processing) as appropriate

"Retail Trade" segment consists of Farm Supply, Franchised Hardware, Franchised Auto Parts, Franchised and Non-franchised Auto Dealers and Repair Shops, Convenience Stores/Gas Stations

Construction & Development As of 3/31/25

19%

27%

11%

12%

16%

14%

Multi-Family

1-4 Family

Campgrounds

Land

Hospitality

Retail

Other

By Geography As of 3/31/25

Portfolio Characteristics - Construction & Development

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$58

$78

Number of Loans

Average Loan Size In Millions

$0.6

$0.9

Approximate Weighted Average LTV

70%

74%

Trailing 12 Month Net Charge-Offs

0.00%

Percent Utilized of Commitments

67%

83%

Criticized Loans in Millions

$0.0

$0.1

Criticized Loans as a Percent of Total

0.0%

0.1%

2% 1%

12%

70%

Wisconsin Tennessee Minnesota Colorado South Dakota Texas

Portfolio Fundamentals

Underwritten to 75-80% LTV based on lesser of cost or appraised value with full recourse

Interest only typically up to 18 months (depending on project complexity and seasonal timing) followed by amortization of 15-25 years (terms vary by property type)

Borrower equity contribution of cash/land value =>15% injected at the beginning of project (cash/land contribution)

Construction loans require 3rdparty inspections and title company draws after balancing to sworn construction statement

1-4 residential construction centered in eastern Twin Cities and Northwest Wisconsin. Generally, 80% LTC /60%-80% of AV.

Spec building capped. Progress reporting monthly by individual home

Agricultural As of 3/31/25

Portfolio Characteristics - Agricultural

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$100

$104

Number of Loans

462

472

Average Loan Size In Thousands

$217

$221

Weighted Average Seasoning In Months

Trailing 12 Month Net Charge-Offs (Recoveries)

(0.05%)

(0.28%)

Criticized Loans in Millions

$7.3

$7.6

Criticized Loans as a Percent of Total

7.3%

15%

39%

19%

27%

Crop Other Farming Dairy Other

By Geography As of 3/31/25

Portfolio Fundamentals

20%

79%

Producers required to have marketing plans to mitigate volatility of commodities

Appropriate crop/revenue insurance and/or dairy margin protection required

Maximum ag RE LTV of less than 65%; equipment LTV of less than 75%

Appropriate structuring to separate crop production cycles and to match length of loan with asset financed

Use of Farmer Mac, FSA, SBA or USDA programs to address DSC, collateral margins or working capital

Wisconsin Minnesota Other

Operating and ag loan relationships are typically cross collateralized

17%

Hotels

As of 3/31/25

Portfolio Characteristics - Hotels

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$87

$88

Number of Loans

Average Loan Size In Millions

$4.4

Approximate Weighted Average LTV

50%

51%

Trailing 12 Month Net Charge Offs (Recoveries)

(0.04%)

Criticized Loans in Millions

$3.9

$4.0

Criticized Loans as a Precent of Total

4.5%

4.6%

By Geography As of 3/31/25

Other

Full Service

Limited Service

30%

53%

Portfolio Fundamentals

16%

38%

41%

Mainly experienced multi project hoteliers and guarantors with strong personal financial statements (net worth and liquidity)

Mainly flagged/franchised limited stay properties

Underwriting consistent with management's conservative approach to Investor CRE, emphasizing actual results in underwriting

Minnesota Wisconsin Illinois Colorado

Restaurants As of 3/31/25

Portfolio Characteristics - Restaurants

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$58

$59

Number of Loans

Average Loan Size In Thousands

$710

$762

Approximate Weighted Average LTV

48%

Trailing 12 Month Net Charge-Offs

0.00%

Criticized Loans In Millions

$0.04

Criticized Loans as a Percent of Total

0.1%

3%3%1%

11%

21%

61%

Culver's - Limited Service Restaurants

Bowling Centers Drinking Establishments Other National Limited Services Other

27%

17%

By Geography As of 3/31/25

56%

Portfolio Fundamentals

Experienced developers/operators of national Limited /Quick Service brands (Culver's, Subway, Dairy Queen, McDonalds, Jimmy John's, A&W)

Underwritten to =<80% LTV with full recourse (depending on sponsor history); 20-year amortization with 5 to 10-year terms

Use of SBA Guaranty Program (Preferred Lender or General Processing) as appropriate

Drinking establishments may have other collateral pledged and tend to be in smaller communities in our footprint

Lessors of RE include investor and owner-occupied structure

Wisconsin Minnesota Other

Portfolio Characteristics - Campgrounds

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$141

$139

Number of Loans

Average Loan Size In Millions

$2.0

Approximate Weighted Average LTV

48%

49%

Weighted Average Seasoning in Months

Trailing 12 Month Net Charge-Offs

0.00%

Criticized Loans in Millions

$0.0

Criticized Loans as a Percent of Total

0.0%

By Vintage As of 3/31/25

2%2% 4%

24%

19%

21%

20%

2025

2020

2024

2017

2023

2016

2022

Prior

2021

By Geography As of 3/31/25

17%

20%

11%

Portfolio Fundamentals

Experienced multi-unit operators and owner-occupied franchised campgrounds (typically Jellystone Park)

Grounds offer a mix of camping, RV and cabin options with recreational amenities

6% 9%

6% 7% 9%

Wisconsin Alabama Ohio Tennessee Illinois Pennsylvania Maryland Utah Kentucky New York North Carolina Other

Park locations within reasonable proximity of metropolitan areas and/or near national and state parks

Underwritten with recourse generally with 5-10 year terms and 20 year amortization

Use of SBA 7a and 504, or other government guaranteed loan programs as appropriate

20+ years of history through CCF acquisition with no charge-off history

Maturity or Next Repricing Date As of 3/31/25

Portfolio Characteristics - Office

As of

3/31/2025

12/31/2024

Loan Balance Outstanding In Millions

$28

Number of Loans

Average Loan Size In Thousands

$383

$387

Approximate Weighted Average LTV

57%

58%

Weighted Average Seasoning in Months

Trailing 12 Month Net Charge-Offs

0.00%

Criticized Loans in Millions

$0.5

Criticized Loans as a Percent of Total

1.8%

10%

34%

56%

2025

2026

2027 & Beyond

By Geography As of 3/31/25

Portfolio Fundamentals

83%

Wisconsin Minnesota Other

Properties financed are generally in Wisconsin and Minnesota and 98% of properties are located outside of large cities

Projects underwritten with 5-10 year term, up to 20 year amortization, and less than 80% LTV

Loans are with recourse to the sponsor/owner(s)

Buildings are mostly single level buildings and no more than three floors high

Tenants centered in medical, insurance, professional services and government

‌Credit Quality/Risk Ratings: Management utilizes a numeric risk rating system to identify and quantify the Bank's risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant.‌

Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank's loan portfolio is presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows:

1 through 4 - Pass. A "Pass" loan means that the condition of the borrower and the performance of the loan is satisfactory or better.

- Watch. A "Watch" loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future.

- Special Mention. A "Special Mention" loan has one or more potential weakness that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution's credit position in the future.

- Substandard. A "Substandard" loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

- Doubtful. A "Doubtful" loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

- Loss. Loans classified as "Loss" are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.

As of March 31, 2025, and December 31, 2024, there were no loans classified as doubtful with a risk rating of 8 and no loans classified as loss with a risk rating of 9.

Residential and consumer loans are typically not rated until they are past due 90 days at month-end which is why they are classified as pass graded 1-5 and once past due or have a history of delinquencies, get assigned a grade 7.

Below is a breakdown of loans by risk rating as of March 31, 2025: (in thousands)

1 to 5

TOTAL

Total Loans:

Commercial/Agricultural real estate:

Commercial real estate

$ 694,112

$ 7,728

$ 8,135

$ 709,975

Agricultural real estate

64,968

143

5,960

71,071

Multi-family real estate

237,872

Construction and land development

58,461

C&I/Agricultural operating:

Commercial and industrial

101,594

6,605

1,421

109,620

Agricultural operating

28,073

514

723

29,310

Residential mortgage:

Residential mortgage

125,872

3,198

129,070

Purchased HELOC loans

2,443

117

2,560

Consumer installment:

Originated indirect paper

3,400

3,434

Other consumer

4,676

4,679

Gross loans

$ 1,321,471

$ 14,990

$ 19,591

$ 1,356,052

Less:

Unearned net deferred fees and costs and loans in process

(2,542)

Unamortized discount on acquired loans

(782)

Allowance for credit losses

(20,205)

Loans receivable, net

$ 1,332,523

Below is a breakdown of loans by risk rating as of December 31, 2024: (in thousands)

1 to 5

TOTAL

Total Loans:

Commercial/Agricultural real estate:

Commercial real estate

$ 697,273

$ 3,953

$ 7,792

$ 709,018

Agricultural real estate

66,737

145

6,248

73,130

Multi-family real estate

220,805

Construction and land development

78,386

103

78,489

C&I/Agricultural operating:

Commercial and industrial

110,529

3,992

1,136

115,657

Agricultural operating

29,819

390

791

31,000

Residential mortgage:

Residential mortgage

129,664

2,677

132,341

Purchased HELOC loans

2,839

117

2,956

Consumer installment:

Originated indirect paper

3,945

3,970

Other consumer

5,010

5,012

Gross loans

$ 1,345,007

$ 8,480

$ 18,891

$ 1,372,378

Less:

Unearned net deferred fees and costs and loans in process

(2,547)

Unamortized discount on acquired loans

(850)

Allowance for credit losses

(20,549)

Loans receivable, net

$ 1,348,432

Below is a breakdown of loans by risk rating as of March 31, 2024: (in thousands)

1 to 5

TOTAL

Total Loans:

Commercial/Agricultural real estate:

Commercial real estate

$ 731,757

$ 4,418

$ 9,545

$ 745,720

Agricultural real estate

73,898

6,172

381

80,451

Multi-family real estate

235,450

Construction and land development

93,302

109

149

93,560

C&I/Agricultural operating:

Commercial and industrial

124,939

3,038

457

128,434

Agricultural operating

25,133

1,104

26,237

Residential mortgage:

Residential mortgage

126,624

- 3,041

129,665

Purchased HELOC loans

2,895

- -

2,895

Consumer installment:

Originated indirect paper

5,805

5,851

Other consumer

5,740

5,750

Gross loans

$ 1,425,543

$ 13,737

$ 14,733

$ 1,454,013

Less:

Unearned net deferred fees and costs and loans in process

(2,757)

Unamortized discount on acquired loans

(1,097)

Allowance for loan losses

(22,436)

Loans receivable, net

$ 1,427,723

Allowance for Credit Losses - Loans

(in thousand, except ratios)

March 31, 2025 and Three Months Ended

December 31, 2024 and Three Months Ended

September 30, 2024 and Three Months Ended

June 30, 2024

and Three Months Ended

Allowance for Credit Losses ("ACL")

ACL - Loans, at beginning of period

$ 20,549

$ 21,000

$ 21,178

$ 22,436

Loans charged off:

Commercial/Agricultural real estate

(51)

(39)

C&I/Agricultural operating

(20)

(143)

Residential mortgage

(4)

Consumer installment

(11)

(7)

(11)

(12)

Total loans charged off

(82)

(150)

(54)

(12)

Recoveries of loans previously charged off:

Commercial/Agricultural real estate

C&I/Agricultural operating

Residential mortgage

Consumer installment

Total recoveries of loans previously charged off:

Net loan recoveries/(charge-offs) ("NCOs")

(127)

(30)

(Reductions) additions to ACL - Loans via provision for credit losses charged to operations

(351)

(324)

(148)

(1,262)

ACL - Loans, at end of period

$ 20,205 $ 20,549 $ 21,000

21,178

Average outstanding loan balance

$ 1,363,352 $

1,396,854 $

1,429,928

$ 1,439,535

Ratios:

NCOs (annualized) to average loans

0.00 %

0.04 %

0.01 %

0.00 %

Allowance for Credit Losses - Unfunded Commitments:

(in thousands)

In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of $0.435 million at March 31, 2025, $0.334 million at December 31, 2024, and $0.975 million at March 31, 2024, classified in other liabilities on the consolidated balance sheets.

March 31, 2025 and Three Months Ended

December 31, 2024 and Three Months Ended

March 31, 2024 and Three Months Ended

ACL - Unfunded commitments - beginning of

period $ 334

460

$ 1,250

Additions (reductions) to ACL - Unfunded commitments via provision for credit losses

charged to operations 101

(126)

(275)

ACL - Unfunded commitments - End of period $ 435 $ 334 $ 975

Delinquency Detail

Loan balances at amortized cost (in thousands)

30-59 Days Past Due

60-89 Days Past Due

Greater Than 89 Days Past Due

Total

Past Due Current

Total Loans

March 31, 2025

Commercial/Agricultural real estate:

Commercial real estate

$ 217

$ 224

$ 370

$ 811

$ 707,183

$ 707,994

Agricultural real estate

554

656

70,070

70,726

Multi-family real estate

237,736

Construction and land development

289

57,869

58,158

C&I/Agricultural operating:

Commercial and industrial

501

551

108,928

109,479

Agricultural operating

725

28,604

29,329

Residential mortgage:

Residential mortgage

1,069

830

1,953

126,680

128,633

Purchased HELOC loans

117

2,443

2,560

Consumer installment:

Originated indirect paper

3,417

3,434

Other consumer

4,619

4,679

Total

$ 1,726

$ 356

$ 3,097

$ 5,179

$1,347,549

$1,352,728

December 31, 2024

Commercial/Agricultural real estate:

Commercial real estate

$ 857

$ 322

$ 367

$ 1,546

$ 705,463

$ 707,009

Agricultural real estate

556

582

72,156

72,738

Multi-family real estate

220,706

Construction and land development

78,146

C&I/Agricultural operating:

Commercial and industrial

566

564

1,180

114,355

115,535

Agricultural operating

793

30,224

31,017

Residential mortgage:

Residential mortgage

1,873

796

500

3,169

128,723

131,892

Purchased HELOC loans

117

2,839

2,956

Consumer installment:

Originated indirect paper 25

3,945

3,970

Other consumer

4,985

5,012

Total

$ 3,374

$ 1,168

$ 2,897

$ 7,439

$1,361,542

$1,368,981

Delinquency Detail (Continued) Loan balances at amortized cost (in thousands)

30-59 Days

60-89 Days

Greater Than 89 Days Past

Total

Past Due Past Due Due Past Due Current Loans

September 30, 2024

Commercial/Agricultural real estate:

Commercial real estate

$ 125

$ - $ 232

$ 357

$ 728,090

$ 728,447

Agricultural real estate

229

- 354

583

75,030

75,613

Multi-family real estate

- -

239,065

Construction and land development

413

86,968

87,381

C&I/Agricultural operating:

Commercial and industrial

253

421

722

118,792

119,514

Agricultural operating

901

26,666

27,567

Residential mortgage:

Residential mortgage

1,534

770

1,070

3,374

131,093

134,467

Purchased HELOC loans

117

2,815

2,932

Consumer installment:

Originated indirect paper

4,384

4,405

Other consumer

5,385

5,437

Total

$ 2,379

$ 1,052

$ 3,109

$ 6,540

$1,418,288

$1,424,828

June 30, 2024

Commercial/Agricultural real estate:

Commercial real estate

$ 103

$ 111

$ 533

$ 747

$ 726,423

$ 727,170

Agricultural real estate

354

77,428

77,782

Multi-family real estate

234,624

Construction and land development

87,379

C&I/Agricultural operating:

Commercial and industrial

277

421

698

126,610

127,308

Agricultural operating

1,017

26,405

27,422

Residential mortgage:

Residential mortgage

3,025

692

814

4,531

128,487

133,018

Purchased HELOC loans

117

2,798

2,915

Consumer installment:

Originated indirect paper

5,074

5,110

Other consumer

5,814

5,860

Total

$ 3,448

$ 932

$ 3,166

$ 7,546

$1,421,042

$1,428,588

Nonaccrual Loans Roll Forward Loan balances at amortized cost (in thousands)

Quarter Ended

March 31, 2025

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

Balance, beginning of period $ 13,168

15,042

$ 8,352

$ 8,413

$ 13,184

Additions 694

1,054

7,486

352

961

Charge offs (21)

(138)

Transfers to OREO -

(201)

(124)

Payments received (752)

(2,515)

(641)

(411)

(5,767)

Other, net 2

(74)

(31)

(2)

Balance, end of period

13,091

13,168

$ 15,042

8,352

8,413

Other Real Estate Owned Roll Forward

(in thousands)

Quarter Ended

March 31, 2025

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

Balance, beginning of period

891

$ 1,567

$ 1,662

$ 1,845

$ 1,795

Loans transferred in

201

Real estate transferred in from fixed assets value reduction

(245)

(27)

Branch properties sales

(637)

Sales

(25)

(183)

Write-downs

(15)

(70)

Other, net

Balance, end of period

876

$ 891

$ 1,567

$ 1,662

$ 1,845

The amortized cost, estimated fair value and related unrealized gains and losses on securities available for sale and held to maturity as of March 31, 2025 and December 31, 2024, respectively, were as follows:

(in thousands)

Available-for-sale securities

Amortized Cost

Gross Unrealized Gains

Gross Unrealized Losses

Estimated Fair Value

March 31, 2025

U.S. government agency obligations

$ 13,062

$ 24

$ 100

$ 12,986

Mortgage-backed securities

86,510

17,806

68,704

Corporate debt securities

42,436

2,933

39,591

Asset-backed securities

18,496

163

18,361

Total available-for-sale securities $ 160,504 $ 140 $ 21,002 $ 139,642

December 31, 2024

U.S. government agency obligations

$ 13,853

$ 28

$ 128

$ 13,753

Mortgage-backed securities

87,762

19,376

68,386

Corporate debt securities

44,931

111

3,326

41,716

Asset-backed securities

19,058

105

18,996

Total available-for-sale securities $ 165,604 $ 182 $ 22,935 $ 142,851

(in thousands)

Held-to-maturity securities

Amortized Cost

Gross Unrecognized Gains

Gross Unrecognized Losses

Estimated Fair Value

March 31, 2025

Obligations of states and political subdivisions

$ 400

$ -

$ 21

$ 379

Mortgage-backed securities

83,901

18,094

65,812

Total held-to-maturity securities $ 84,301 $ 5 $ 18,115 $ 66,191

December 31, 2024

Obligations of states and political subdivisions

$ 500 $

- $

22 $

478

Mortgage-backed securities

85,004

19,864

65,144

Total held-to-maturity securities $ 85,504 $ 4 $ 19,886 $ 65,622

The composition of our available for sale portfolios by credit rating as of the dates indicated below was as follows:

(in thousands)

March 31, 2025 December 31, 2024

Available-for-sale securities

Amortized Cost

Fair Value

Amortized Cost

Fair Value

U.S. government agency

$ 92,066

$ 74,225

$ 94,327

$ 74,910

AAA

7,677

7,649

7,210

7,148

20,343

20,169

19,136

19,077

5,100

4,427

5,950

5,620

BBB

35,318

33,172

38,981

36,096

Non-rated

Total available for sale securities $ 160,504 $ 139,642 $ 165,604 $ 142,851

The composition of our held to maturity portfolio by credit rating as of the dates indicated was as follows:

(in thousands)

March 31, 2025 December 31, 2024

Held-to-maturity securities

Amortized Cost

Fair Value

Amortized Cost

Fair Value

U.S. government agency

$ 83,901

$ 65,812

$ 85,004

$ 65,144

400

379

500

478

Total

$ 84,301 $ 66,191 $ 85,504 $ 65,622

On July 25, 2024, the Board of Directors authorized a stock repurchase program of 5% of the outstanding shares on that date or 512,709 shares. As of the beginning of the quarter ended March 31, 2025, 238 thousand shares were available for purchase under the 2024 share repurchase program. During the quarter ended March 31, 2025, no shares were repurchased under the program. As of March 31, 2025, an additional 238 thousand shares remain available for repurchase under the 2024 share repurchase program.

Earnings Per Share

(Amounts in thousands, except per share data)

March 31,

2025

Three Months Ended December 31,

2024

March 31,

2024

Basic

Net income attributable to

common shareholders $ 3,197 $ 2,702 $ 4,088

Weighted average common shares

outstanding

9,989

10,023

10,439

Basic earnings per share

$ 0.32

$ 0.27

$ 0.39

Diluted Net income attributable to

Weighted average common shares outstanding

9,989

10,023

10,439

common shareholders $ 3,197 $ 2,702 $ 4,088

Add: Dilutive stock options

outstanding 12 11 4

Average shares and dilutive potential common shares

10,001

10,034

10,443

Diluted earnings per share

$ 0.32

$ 0.27

$ 0.39

Common stock issued and outstanding

9,990

9,982

10,407

Economic Value of Equity

Percent Change in Economic Value of Equity (EVE)

Change in Interest Rates in Basis Points ("bp") Rate Shock in Rates (1)

At March 31, 2025

At December 31, 2024

+300 bp

3 %

2 %

+200 bp

2 %

+100 bp

1 %

-100 bp

(1)%

-200 bp

(4)%

Net Interest Income Over One Year Horizon

Percent Change in Net

One Year

Interest Income Over Horizon

Change in Interest Rates in Basis Points ("bp") Rate Shock in Rates (1)

At March 31, 2025

At December 31, 2024

+300 bp

(8)%

+200 bp

(5)%

+100 bp

(2)%

(3)%

-100 bp

2 %

-200 bp

3 %

CITIZENS COMMUNITY FEDERAL N.A.

Selected Capital Composition Highlights

March 31,

2025

(unaudited)

December 31,

2024

(audited)

September 30,

2024

(unaudited)

June 30,

2024

(unaudited)

To Be Well Capitalized Under Prompt Corrective Action Provisions

Tier 1 leverage ratio (to adjusted total assets)

12.0%

11.9%

11.7%

5.0%

Tier 1 capital (to risk weighted assets)

14.3%

14.4%

13.8%

13.7%

8.0%

Common equity tier 1 capital (to risk weighted assets)

14.3%

14.4%

13.8%

13.7%

6.5%

Total capital (to risk weighted assets)

15.6%

15.0%

10.0%

CITIZENS COMMUNITY BANCORP, INC.

Selected Capital Composition Highlights

March 31,

2025

(unaudited)

December 31,

2024

(audited)

September 30,

2024

(unaudited)

June 30,

2024

(unaudited)

For Capital Adequacy Purposes

Tier 1 leverage ratio (to adjusted total assets)

9.5%

9.2%

9.1%

4.0%

Tier 1 capital (to risk weighted assets)

11.3%

11.4%

10.8%

10.7%

6.0%

Common equity tier 1 capital (to risk weighted assets)

11.3%

11.4%

10.8%

10.7%

4.5%

Total capital (to risk weighted assets)

16.0%

16.1%

15.3%

15.2%

8.0%

Fair Value Accounting

ASC Topic 820-10, "Fair Value Measurements and Disclosures" establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The topic describes three levels of inputs that may be used to measure fair value:

Level 1- Quoted prices (unadjusted) for identical assets or liabilities in active markets that the Company has the ability to access as of the measurement date.

Level 2- Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3- Significant unobservable inputs that reflect the Company's assumptions about the factors that market participants would use in pricing an asset or liability.

A financial instrument's categorization within the valuation hierarchy is based upon the lowest level of input within the valuation hierarchy that is significant to the fair value measurement.

The fair value of securities available for sale is determined by obtaining market price quotes from independent third parties wherever such quotes are available (Level 1 inputs); or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities' relationship to other benchmark quoted securities (Level 2 inputs). Where such quotes are not available, we utilize independent third party valuation analysis to support our own estimates and judgments in determining fair value (Level 3 inputs).

Fair Value Table

The table below represents what we would receive to sell an asset or what we would have to pay to transfer a liability in an orderly transaction between market participants at the measurement date. The carrying amount and estimated fair value of the Company's financial instruments as of the dates indicated below were as follows:

Valuation Method Used

Carrying Amount

March 31, 2025

Estimated Fair Value

Financial assets:

Cash and cash equivalents

(Level I)

$ 100,199

Securities available for sale "AFS"

(Level II)

139,642

Securities held to maturity "HTM"

(Level II)

84,301

66,141

Farmer Mac equity securities

(Level I)

539

Preferred equity

(Level III)

1,362

Equity investments valued at NAV (1)

N/A

3,561

N/A

Other investments

(Level II)

12,496

Loans receivable, net

(Level III)

1,332,523

1,292,183

Loans held for sale - Residential mortgage

(Level I)

328

Loans held for sale - SBA /FSA

(Level II)

2,968

Mortgage servicing rights

(Level III)

3,583

5,090

Accrued interest receivable

(Level I)

5,926

Financial liabilities:

Deposits

(Level III)

$ 1,523,654

$ 1,523,290

FHLB advances

(Level II)

Other borrowings

(Level II)

61,664

59,139

Accrued interest payable

(Level I)

6,369

(1) Investments valued at NAV are excluded from being reported under the fair value hierarchy but are presented to permit reconciliation with the balance sheet in accordance with ASC 820-10-35-54B.

Disclaimer

Citizens Community Bancorp Inc. published this content on April 28, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 28, 2025 at 13:31 UTC.