Citizens Community Bancorp Inc. (CZWI)·Q4 2024 Earnings Summary

Executive Summary

• EPS was $0.27, in line with third‑party consensus; net interest margin expanded 16 bps QoQ to 2.79% on lower deposit costs and fee accretion, while non‑interest income fell $0.9M on weaker loan sales and equity losses . Consensus from S&P Global was unavailable; third‑party sources indicate $0.27 EPS consensus met .
• Balance sheet optimization drove loans down $55.8M and deposits down $32.5M (brokered −$47.5M), lifting TCE/TA to 8.54% and reducing FHLB advances to $5.0M; NPAs improved to 0.82% of assets .
• Board raised the annual dividend 12.5% to $0.36 and repurchased 94k shares at $14.55 in Q4; 238k shares remain authorized, a potential support for TBV and EPS accretion .
• Management guided to modest 1–3% loan growth in 2025 and continued flexibility to repurchase shares, with capital ratios and liquidity providing room to deploy balance sheet strategically .

What Went Well and What Went Wrong

What Went Well

• Net interest margin rose to 2.79% (+16 bps QoQ) primarily from lower deposit costs and ~3 bps from accelerated deferred fee accretion on loan payoffs, improving core spread despite asset shrinkage .
• Credit quality improved: special mention loans −$2.5M QoQ to $8.5M; substandard −$2.3M QoQ to $18.9M; NPAs to assets fell to 0.82%; net charge‑offs minimal at 0.009% of average loans .
• Capital strengthened: TCE/TA increased to 8.54% (from 8.35%); CET1 at bank level 14.4%, with ample liquidity ($725M) equal to 273% of uninsured/unsecured deposits .

Quote: “The quarter reflected our balance sheet optimization efforts, which increased the net interest margin 6%, and increased the tangible common equity ratio… provides flexibility to grow the loan portfolio and potentially repurchase shares in 2025.” — Stephen Bianchi, Chairman, President & CEO .

What Went Wrong

• EPS declined to $0.27 from $0.32 in Q3 on lower non‑interest income (−$0.9M) driven by weaker gain on sale of loans (−$0.5M) and higher equity security losses (−$0.2M); efficiency ratio worsened to 76% .
• Loans contracted $55.8M with deliberate runoff in non‑strategic relationships; deposit balances fell $32.5M as brokered deposits were reduced (−$47.5M), tempering near‑term NII growth .
• Equity market losses and REO‑related expenses rose (~$0.2M increase in each), contributing to higher non‑interest expense QoQ (+$0.4M) and pressuring operating leverage .

Financial Results

Segment loan composition (end of period):

KPIs:

Guidance Changes

Earnings Call Themes & Trends

Note: A Q4 2024 earnings call transcript was not available via our document tools; themes below reflect management’s Q2–Q4 earnings materials and press releases.

Management Commentary

• “Deposits, net of the decrease in wholesale deposits, increased $27 million. Loans decreased $56 million during the quarter… we forecast modest loan growth of one to three percent in 2025. Credit metrics improved and we continue to maintain a healthy reserve for credit losses to total loans at 1.50%.” — Stephen Bianchi .
• “Book value per share improved to $17.94… Tangible book value… up 9.5% YoY… TCE increased to 8.54%… due to asset shrinkage.” — Company release .
• “Net interest margin increased to 2.79%, primarily due to lower deposit costs… favorably impacted by accelerated deferred fee accretion” — Company release .

Q&A Highlights

A Q4 2024 earnings call transcript was not available via our tools; no Q&A themes or clarifications could be reviewed.

Estimates Context

• EPS comparison: Actual EPS $0.27; S&P Global consensus could not be retrieved due to data access limits. Third‑party sources (Yahoo/Zacks and MarketBeat) indicate consensus EPS $0.27, implying results met expectations .
• Revenue estimates: Not applicable/Unavailable (banks typically reported NII/non‑interest income; third‑party pages show N/A) .
• Implications: With NIM expansion and capital return, estimate revisions may focus on higher NII trajectory and lower funding costs; however, non‑interest income volatility and efficiency ratio deterioration could cap upward EPS revisions absent improved fee income mix .

EPS vs consensus:

Key Takeaways for Investors

• NIM expansion and funding de‑risking are tangible positives; continued reduction in brokered deposits and FHLB borrowings supports sustainable margin improvement into 2025 .
• Capital strength (TCE/TA 8.54%, CET1 14.4%) enables balanced capital deployment: modest loan growth and opportunistic buybacks; the 12.5% dividend increase signals confidence and provides yield support .
• Credit normalization appears contained; special mention and substandard balances declined QoQ, NPAs fell, and net charge‑offs remain minimal, reducing downside risk to provision expense near term .
• Operating leverage is the watch item: higher efficiency ratio (76%) and softer fee income (loan sale gains, equity losses) weighed on EPS; focus on cost discipline and fee mix recovery could be the next catalyst .
• Tactical loan runoff in non‑strategic books improved capital and risk metrics; management’s 1–3% loan growth guide suggests a measured re‑acceleration as funding mix improves .
• TBV per share and BVPS increased; ongoing buybacks at accretive prices can further enhance per‑share metrics if liquidity and capital remain robust .
• Near‑term trading: Neutral to positive bias on margin expansion and dividend/buyback support, tempered by non‑interest income variability; watch deposit cost trends and fee line recovery for upside surprise potential .

Appendix: Additional Press Releases and Prior Quarters Reviewed

• Q3 2024 press release and supplement (EPS $0.32; NIM 2.63%; liquidity $718M; brokered deposits −$30.1M; buybacks 223k) .
• Q2 2024 press release and supplement (EPS $0.35; NIM 2.72%; buyback authorization +5%; criticized assets −18%) .
• Dividend declaration: Annual dividend $0.36 payable Feb 21, 2025; record Feb 7, 2025 .