CITIZENS COMMUNITY BANCORP, INC. EXHIBIT 99.2
Earnings Release Supplement
First Quarter 2024
Citizens Community Bancorp, Inc. Table of Contents
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, 2024 Loans by Risk Rating as of December 31, 2023 Loans by Risk Rating as of March 31, 2023 Allowance for Credit Losses - Loans Allowance for Credit Losses - Unfunded Commitments
Delinquency as of March 31, 2024 and December 31, 2023
Delinquency as of September 30, 2023 and June 30, 2023
Nonaccrual Loans Roll forward
Other Real Estate Owned Roll forward
Page(s)
- Investments - Amortized Cost and Fair Value
- Investments - Credit Ratings
- Earnings Per Share
- Economic Value of Equity
- Net Interest Income Over One Year Horizon
- Selected Capital Composition Highlights - Bank
- and Company
- Fair Value Accounting and Fair Value Table
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Cautionary Notes and Additional Disclosures
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 inability 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, 2023, filed with the Securities and Exchange Commission ("SEC") on March 5, 2024, 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 in the appendix at the end of this presentation.
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$1.53 Billion
83% of deposits insured or collateralized
Deposit Composition | |||
March 31, 2024 | |||
Average Account Size (In Thousands) | |||
Type | Amount | ||
Retail | $15 | ||
Commercial | $78 | ||
Public | $416 | ||
Top 10 Depositors | |||
Rank | % of Deposits | Industry | Coverage Beyond FDIC(1) |
1 | 2.1% | Public Administration | ICS |
2 | 1.9% | Health Care | ICS |
3 | 1.7% | Educational Services | ICS |
4 | 1.5% | Public Administration | Collateralized |
5 | 1.3% | Public Administration | Collateralized |
6 | 1.1% | Public Administration | Collateralized |
7 | 1.0% | Public Administration | Collateralized |
8 | 0.9% | Educational Services | ICS & Collateralized |
9 | 0.6% | Construction | None |
10 | 0.6% | Educational Services | Collateralized |
(1) Coverage by ICS and private insurance may not cover entire balance
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Commercial Deposit Concentrations
March 31, 2024
Diverse commercial deposit base with no industry concentration over 11%
Source: Internal Company Documents
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$422
Million
Top 100 Depositors
March 31, 2024
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Liquidity
March 31, 2024
$697
Million
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Non - Owner | 2% | 3% |
Occupied CRE | 3% | |
As of 3/31/24 | 5% | |
Non - Owner Occupied CRE
Portfolio Characteristics - Non-Owner Occupied CRE
6% | 23% |
10% | |
11% | 19% |
18% | |
CRE - Campground | Investor Residential |
Hotel | CRE - Senior Living |
CRE - Retail | CRE - Office |
CRE - Industrial/Manufacturing | CRE - Warehouse/Mini Storage |
CRE - Mixed Use | Other |
As of
Loan Balance Outstanding In Millions
Number of Loans
Average Loan Size In Thousands
Approximate Weighted Average LTV
Weighted Average Seasoning In Months
Trailing 12 Month Net Charge-Offs
Criticized Loans Millions
Criticized Loans as a Percent of Total
3/31/2024 $515 775 $664 55%
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0.00% $13.0 2.7%
12/31/2023 $522 786 $664 55%
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0.00% $23.0 4.5%
By Geography As of 3/31/24
24%
51%
25%
Portfolio Fundamentals
• 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 |
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Owner | ||
Occupied CRE | 4% | 12% |
As of 3/31/24 | ||
22% |
Owner Occupied CRE
Portfolio Characteristics - Owner Occupied CRE
11% | |
11% | 22% |
18% | |
CRE Warehouse/Mini Storage | CRE Restaurant |
CRE Industrial/Manufacturing | CRE Retail |
CRE Mixed Use | CRE Office |
Other | |
4% |
As of
Loan Balance Outstanding In Millions
Number of Loans
Average Loan Size In Thousands
Approximate Weighted Average LTV
Weighted Average Seasoning In Months
Trailing 12 Month Net Charge-Offs (Recoveries)
Criticized Loans In Millions
Criticized Loans as a Precent of Total
3/31/2024 $231 375 $617 51%
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(0.01%) $1.0 0.4%
12/31/2023 $229 373 $614 54%
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0.00% $1.0 0.6%
By Geography | |
As of 3/31/24 | 16% |
80%
Wisconsin | Minnesota | Other |
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 climates, no income tax states
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By Vintage | 1% 1% | |||
As of 3/31/24 | 4% | 7% | 2% | |
Multi-family
Portfolio Characteristics - Multi-family
22%
19%
44%
2024 2023 2022 2021 2020 2019 2018 Prior
As of
Loan Balance Outstanding In Millions
Number of Loans
Average Loan Size In Millions
Approximate Weighted Average LTV
Weighted Average Seasoning In Months
Trailing 12 Month Net Charge-Offs
Criticized Loans in Millions
Criticized Loans as a Percent of Total
3/31/2024 $235 130 $1.81 61%
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0% $0.0 0.0%
12/31/2023 $228 131 $1.74 62%
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0% $0.0 0.0%
By Geography | 5% | ||
As of 3/31/24 | |||
35%
60%
Wisconsin | Minnesota | Other |
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-familysponsors 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)
- Covenant for minimum DSC/Global DSC
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Disclaimer
Citizens Community Bancorp Inc. published this content on 25 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 May 2024 05:47:03 UTC.
