Citizens Community Bancorp Inc. (Form: SB-2, Received: 06/30/2006 15:41:38)

As filed with the Securities and Exchange Commission on June 30, 2006

Registration No. 333-_________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________

REGISTRATION STATEMENT ON FORM SB-2
UNDER
THE SECURITIES ACT OF 1933
________________________

CITIZENS COMMUNITY BANCORP, INC.
(Exact name of small business issuer as specified in its charter)

Maryland

(State or other jurisdiction of
incorporation or organization)

6035

(Primary Standard Industrial
Classification Code Number)

20-5120010

(I.R.S. Employer Identification No.)

2174 EastRidge Center, Eau Claire, Wisconsin 54701
(715) 836-9994
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)
________________________

James G. Cooley, President and Chief Executive Officer
Citizens Community Bancorp, Inc.
2174 EastRidge Center
Eau Claire, Wisconsin 54701
(715) 836-9994
(Name, address, including zip code, and telephone number, including area code, of agent for service)
________________________

Please send copies of all communications to:

Martin L. Meyrowitz, P.C.
Marianne E. Roche, Esq.
Beth A. Freedman, Esq.
SILVER, FREEDMAN & TAFF, L.L.P.
(a limited liability partnership including professional corporations)
1700 Wisconsin Avenue, NW
Washington, DC 20007
(202) 295-4500
________________________

Approximate date of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

       If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [   ]

       If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [   ]

       If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering. [   ]

       If delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [   ]

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to be Registered	Amount to be Registered	Proposed Maximum Offering Price Per Unit	Proposed Maximum Aggregate Offering Price ⁽¹⁾	Amount of Registration Fee
Common Stock, par value $.01 per share	7,116,519 shares	$10.00	$71,165,190	$7,614.68

_______________________
⁽¹⁾ Estimated solely for the purpose of calculating the registration fee.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

PROSPECTUS

CITIZENS COMMUNITY BANCORP, INC.

(Proposed Holding Company for Citizens Community Federal)

Up to 6,188,277 Shares of Common Stock

(Including up to 4,600,000 newly issued shares and up to 1,588,277 shares

to be exchanged for shares of Citizens Community Bancorp)

Citizens Community Bancorp, Inc. is offering common stock in connection with the Conversion of Citizens Community MHC from the mutual to the stock form of organization. The shares we are offering represent the 74% ownership interest in Citizens Community Bancorp currently owned by Citizens Community MHC, its mutual holding company parent. The remaining 26% ownership interest in Citizens Community Bancorp is owned by the public and will be exchanged for shares of Citizens Community Bancorp, Inc.'s common stock. If you are now a stockholder of Citizens Community Bancorp, your shares will be automatically exchanged for shares of Citizens Community Bancorp, Inc., and the number of shares you will receive will be based on an Exchange Ratio that is dependent upon the number of shares we sell in our Stock Offering. All shares being offered for sale will be sold at a price of $10.00 per share.

If you are a current or former depositor or borrower of Citizens Community Federal as of the eligibility dates:

You have rights to purchase shares of our common stock in the subscription offering.

If you are currently a stockholder of Citizens Community Bancorp:

Each of your shares will be exchanged automatically for between 1.22803 and 1.66145 shares of Citizens Community Bancorp, Inc. common stock.

After the exchange of shares, your percentage ownership will remain essentially equivalent to your current percentage ownership interest in Citizens Community Bancorp.

You will have priority to purchase additional shares in the community offering, to the extent shares remain available after orders are filled in the subscription offering.

If you are a participant in the Citizens Community Federal 401(k) Savings Plan:

You may direct that all or part of your current balances in that plan be invested in shares of Citizens Community Bancorp, Inc. common stock.

You will be receiving a separate supplement to this Prospectus that describes your rights under that plan.

If you fit none of the above categories:

You may have an opportunity to purchase shares of Citizens Community Bancorp, Inc. common stock in the community offering to the extent shares remain available after orders are filled in the subscription offering and after orders from current stockholders of CCB are filled in the community offering.

We are offering for sale up to 4,600,000 shares of common stock; however, we may sell up to 5,290,000 shares because of changes in the market and general financial and economic conditions without notifying prospective purchasers. We must sell a minimum of 3,400,000 shares in order to complete the Conversion and Stock Offering. The minimum purchase is 25 shares. The Stock Offering is expected to terminate on __________, 2006 at 12:00 noon, Eau Claire, Wisconsin time. We may extend this termination date without notice to you until _________, 2006. Once submitted, orders are irrevocable, unless the Stock Offering is terminated or extended beyond __________, 2006. In no event may the Stock Offering be extended beyond _________, 2008. Funds received prior to completion of the Stock Offering up to the minimum of the offering range will be held by Citizens Community Federal. Funds received in excess of the minimum of the offering range may be maintained at Citizens Community Federal, or, at our discretion, at an independent insured depository institution. However, in no event shall we maintain more than one escrow account. All subscriptions received will earn interest at our TYME passbook savings account rate. In the event the Stock Offering is terminated, these funds will be promptly returned with interest.

Citizens Community Bancorp's stock is currently quoted on the OTC Bulletin Board under the symbol "CZWI.OB." We have applied for approval from Nasdaq to have our common stock quoted on the Nasdaq Global Market under the symbol "CZWI."

Keefe, Bruyette & Woods, Inc. will use its best efforts to assist us in our selling efforts. Keefe, Bruyette & Woods, Inc. is not required to purchase any of the common stock that is being offered.

This investment involves risk, including the possible loss of principal. Please read "Risk Factors" beginning at page ___.

	Minimum	Maximum	Maximum, as Adjusted
Number of Newly Issued Shares	3,400,000	4,600,000	5,290,000
Gross Stock Offering Proceeds	$34,000,000	$46,000,000	$52,900,000
Underwriting Commissions and Expenses ⁽¹⁾	$494,370	$645,912	$773,049
Other Stock Offering and Conversion Expenses	$670,000	$670,000	$670,000
Net Proceeds	$32,845,632	$44,694,090	$51,506,954
Net Proceeds Per Share	$9.66	$9.72	$9.74

__________

(1)	For information regarding the compensation to be received by Keefe, Bruyette & Woods, Inc., see “The Stock Offering - Plan of Distribution/Marketing Agreements.”

These securities are not deposits or savings accounts and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other governmental agency.

Neither the Securities and Exchange Commission, the Office of Thrift Supervision, the Federal Deposit Insurance Corporation, nor any state securities regulator has approved or disapproved these securities or determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense.

For assistance, please contact the stock information center at (715) _____-_________.

Keefe, Bruyette & Woods

The date of this Prospectus is _________________, 2006.

TABLE OF CONTENTS

SUMMARY	1
RISK FACTORS	14
SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA	18
HOW WE INTEND TO USE THE PROCEEDS OF THE STOCK OFFERING	20
OUR POLICY REGARDING DIVIDENDS	21
MARKET FOR THE COMMON STOCK	22
CAPITALIZATION	23
PRO FORMA DATA	24
WE EXCEED ALL REGULATORY CAPITAL REQUIREMENTS	30
THE CONVERSION	31
THE STOCK OFFERING	40
PROPOSED PURCHASES BY MANAGEMENT	57
A WARNING ABOUT FORWARD-LOOKING STATEMENTS	59
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	60
BUSINESS OF CITIZENS COMMUNITY BANCORP, INC.	75
BUSINESS OF CITIZENS COMMUNITY FEDERAL	76
HOW WE ARE REGULATED	97
TAXATION	102
MANAGEMENT	103
STOCK OWNERSHIP OF CCB COMMON STOCK	113
COMPARISON OF RIGHTS OF CITIZENS COMMUNITY BANCORP, INC.’S AND CCB’S STOCKHOLDERS	115
RESTRICTIONS ON ACQUISITIONS OF CITIZENS COMMUNITY BANCORP, INC. AND CITIZENS COMMUNITY FEDERAL	123
DESCRIPTION OF CAPITAL STOCK	127
TRANSFER AGENT AND REGISTRAR	129
LEGAL AND TAX OPINIONS	129
EXPERTS	129
REGISTRATION REQUIREMENTS	129
WHERE YOU CAN FIND ADDITIONAL INFORMATION	129
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS	F-1
APPENDIX A - OTS Regulation 552.14 - Dissenter and Appraisal Rights

SUMMARY

This summary highlights selected information from this document and may not contain all the information that is important to you. To better understand the Conversion and Stock Offering, you should read this entire document carefully, including the consolidated financial statements and the notes thereto beginning at page F-1 of this document.

Citizens Community Bancorp, Inc.

Citizens Community Bancorp, Inc. is a newly formed Maryland corporation. Its principal executive offices are located at 2174 EastRidge Center, Eau Claire, Wisconsin 54701 and the telephone number is (715) 836-9994.

Citizens Community Bancorp, Inc. is conducting this Stock Offering in connection with the Conversion of Citizens Community MHC from the mutual to the stock form of organization. The shares of common stock of Citizens Community Bancorp, Inc. to be sold represent the 74% ownership interest in Citizens Community Bancorp, a federally chartered mid-tier stock holding company, which is currently owned by Citizens Community MHC, a federally chartered mutual holding company. The remaining 26% ownership interest in Citizens Community Bancorp is currently owned by public stockholders and will be exchanged for shares of Citizens Community Bancorp, Inc.'s common stock based on an Exchange Ratio, which is dependent upon the number of shares of Citizens Community Bancorp, Inc. common stock sold in the Stock Offering.

Citizens Community Federal

Citizens Community Federal is currently a wholly owned subsidiary of Citizens Community Bancorp and, upon completion of the Conversion and Stock Offering, it will become a wholly owned subsidiary of Citizens Community Bancorp, Inc.

Citizens Community Federal was originally a federal credit union. It became a federal mutual savings bank in December 2001. In 2004, Citizens Community Federal reorganized into the mutual holding company form of organization and became a federal stock savings bank. During 2005, it acquired Community Plus Savings Bank with its two office locations in Michigan, which are operated as the Community Plus Division of Citizens Community Federal.

Citizens Community Federal operates as a traditional community bank, attracting and retaining retail deposits in order to fund a variety of mortgage and consumer loan products. To a lesser extent, it also invests in Federal Home Loan Bank of Chicago stock and deposits at other insured depository institutions and the Federal Home Loan Bank of Chicago. In 2005, as part of the Community Plus Savings Bank acquisition, it obtained an investment portfolio of corporate notes, mortgage-backed securities and mutual funds. Going forward, we will continue our core business of offering retail banking services, one- to four-family residential mortgage loans, home equity loans and lines of credit and consumer loans in our market areas in Wisconsin, Minnesota and Michigan.

Citizens Community MHC

Citizens Community MHC is currently the federally chartered mutual holding company parent for Citizens Community Bancorp. Citizens Community MHC's sole business activity consists of its ownership of 2,768,669 shares of Citizens Community Bancorp's common stock, which represents 74% of its outstanding shares. At the conclusion of the Conversion and Stock Offering, Citizens Community MHC will cease to exist.

Citizens Community Bancorp

Citizens Community Bancorp (referred to as “CCB” hereafter to distinguish it from Citizens Community Bancorp, Inc.) is currently the middle-tier federal stock holding company and sole stockholder of Citizens Community Federal. CCB was formed in March 2004 in connection with the mutual holding company reorganization of Citizens Community Federal. In connection with that reorganization, CCB issued 68% of its common stock to Citizens Community MHC and issued the remaining 32% of its common stock to the public. In 2005, in connection with its acquisition of Community Plus Savings Bank, CCB issued additional shares of its common stock to Citizens Community MHC, increasing its percentage ownership to 74%. Currently, CCB has 3,724,628 shares of common stock issued and outstanding. Citizens Community MHC owns 2,768,669, or 74%, of these shares. The remaining 26% of the shares of common stock of CCB are held by the public. At March 31, 2006, CCB had total consolidated assets of $256.6 million, total deposits of $188.3 million and total stockholders' equity of $29.8 million. At the conclusion of the Conversion and Stock Offering, Citizens Community Bancorp will cease to exist and each outstanding share of CCB, other than those held by Citizens Community MHC, will be exchanged automatically for between 1.22803 and 1.66145 shares of CCB, Inc. common stock. The exact Exchange Ratio will depend upon the number of shares of Citizens Community Bancorp, Inc. common stock sold in the Stock Offering.

Our Business Strategy

Our current business strategy is to operate as a well-capitalized, profitable and community-oriented savings bank dedicated to providing quality customer service. We intend to make primarily one- to four-family residential mortgages and consumer loans in our market areas. Subject to our capital levels and our ability to continue to grow in a reasonable and prudent manner, we may open or acquire additional branches in Wisconsin, Minnesota and Michigan as opportunities arise.

How Our Ownership Structure Will Change After the Conversion

The following chart shows our current structure, commonly referred to as a "two-tier" mutual holding company structure:

Citizens Community MHC		CCB Minority Stockholders
\| 74%		\| 26%

CCB

| 100%

Citizens Community Federal

The following chart shows our ownership structure after the Conversion and Stock Offering:

Public Stockholders

| 100%

Citizens Community Bancorp, Inc.

| 100%

Citizens Community Federal

The Stock Offering

We are selling common stock in a subscription offering, which represents the 74% ownership interest in CCB now owned by Citizens Community MHC in the following order of priority:

First: Depositors at Citizens Community Federal and Community Plus Savings Bank with $50 or more on deposit as of the close of business on March 31, 2005.

Second: Our employee stock ownership plan.

Third : Depositors at Citizens Community Federal with $50 or more on deposit as of close of business on June 30, 2006.

Fourth: Depositors at Citizens Community Federal as of close of business on July 31, 2006.

We are selling between 3,400,000 and 4,600,000 shares of Citizens Community Bancorp, Inc. common stock, all at a price of $10.00 per share. The number of shares sold may be increased to 5,290,000. The actual number of shares we sell will depend on an appraisal performed by RP Financial, LC., an independent appraisal firm. We also are exchanging shares of CCB, other than those held by Citizens Community MHC, for shares of Citizens Community Bancorp, Inc. based on an Exchange Ratio of between 1.22803 and 1.66145. The Exchange Ratio may be increased to as much as 1.91067 in the event the Stock Offering closes at the maximum of the valuation range, as adjusted. See “- Stock Pricing and the Number of Shares to be Offered.”

The subscription offering will terminate at 12:00 noon, Eau Claire, Wisconsin time, on ________________, 2006. We may extend this expiration date without notice to you for up to 45 days, until ________________, 2006. Once submitted, your order is irrevocable unless the Stock Offering is extended beyond ________________, 2006. We may request permission from the Office of Thrift Supervision (“OTS”) to extend the Stock Offering beyond ________________, 2006, but in no event may the Stock Offering be extended beyond________________, 2008. If the Stock Offering is extended beyond ______________, 2006, we will be required to notify each subscriber and resolicit subscriptions. During any extension period, subscribers will have the right to modify or rescind their subscriptions, and, unless an affirmative response is received, a subscriber's funds will be returned with interest at Citizens Community Federal's TYME passbook savings account rate.

We may cancel the Stock Offering at any time prior to the special meeting of members of Citizens Community MHC and the special meeting of stockholders of CCB to vote on our Plan of Conversion and Reorganization. We also may cancel the Conversion and Stock Offering after the special meetings of members and stockholders, if the OTS concurs in our decision to do so. If we cancel the Conversion and Stock Offering, orders for common stock already submitted will be canceled and subscribers' funds will be returned with interest at Citizens Community Federal's TYME passbook savings account rate.

Commencing concurrently with, during or promptly after the subscription offering, we also may offer shares of common stock in a community offering. In the community offering, current stockholders of CCB will have first preference, and natural persons and trusts of natural persons who reside in the counties where Citizens Community Federal has offices will have second preference. This part of the Stock Offering may terminate at any time without notice but will terminate no later than ________________, 2006.

Shares not sold in the subscription or community offering may be offered for sale in a syndicated community offering, which would be an offering to the general public on a best efforts basis by a syndicate of broker dealers managed by Keefe, Bruyette & Woods, Inc. This part of the Stock Offering may terminate at any time without notice but will terminate no later than ______________, 2006.

You cannot transfer your subscription rights, and we will act to ensure that you do not do so. You will be required to certify that you are purchasing shares in the Stock Offering solely for your own account and that you have no agreement or understanding with another person involving the transfer of the shares you purchase. We will not accept any stock orders that we believe involve the transfer of subscription rights. If you attempt to transfer your rights, you may lose the right to purchase shares and may be subject to criminal prosecution and/or other sanctions.

We may, in our sole discretion, reject orders received in the community offering and syndicated community offering either in whole or in part. If your order is rejected in part, you cannot cancel the remainder of your order. See “The Stock Offering” for more information regarding this offering.

The Exchange of CCB Common Stock

If you are now a stockholder of CCB, your shares will be automatically exchanged for shares of Citizens Community Bancorp, Inc. The number of shares you will receive will be based on an Exchange Ratio. The actual number of shares you receive will depend upon the number of shares we sell in our Stock Offering.

The following table shows how the Exchange Ratio will adjust based on the number of shares sold in our Stock Offering. The table also shows how many shares of Citizens Community Bancorp, Inc. an owner of CCB common stock would receive in the exchange, adjusted for the number of shares sold in the Stock Offering.

	Shares to be Sold in the Stock Offering		Shares of Citizens Community Bancorp, Inc. to be Exchanged for Existing Shares of CCB		Total Shares of Common Stock to be Outstanding	Exchange Ratio	100 Shares of CCB Would be Exchanged for the Following Number of Shares of Citizens Community Bancorp, Inc.
	Amount	Percent	Amount	Percent
Minimum	3,400,000	74%	1,173,944	26%	4,573,944	1.22803	122
Midpoint	4,000,000	74	1,381,110	26	5,381,110	1.44474	144
Maximum	4,600,000	74	1,588,277	26	6,188,277	1.66145	166
Maximum, as adjusted	5,290,000	74	1,826,519	26	7,116,519	1.91067	191

If you own your shares of CCB in "street name," the exchange will occur automatically; you do not need to take any action. If you have shares registered in your name, you will receive a transmittal form with instructions to surrender your stock certificates after the Stock Offering is completed. You will receive new certificates of our common stock within five business days after we receive your properly executed transmittal form.

No fractional shares of our common stock will be issued upon consummation of the Conversion. Payment for fractional shares will be calculated based on the $10.00 per share offering price and will be made after the receipt of surrendered CCB stock certificates by Registrar and Transfer Company, which is the transfer agent for CCB stock and will act as the exchange agent in the Conversion.

See “The Conversion - Share Exchange Ratio” for more details about this share exchange.

Tax Effects of the Conversion and Stock Offering

As a general matter, the Conversion and Stock Offering, including the exchange of shares of CCB for shares of Citizens Community Bancorp, Inc., will not be a taxable transaction for purposes of federal or state income taxes for Citizens Community MHC, Citizens Community Bancorp, Inc., CCB, Citizens Community Federal and persons eligible to subscribe for stock in the Stock Offering. The same is true for existing stockholders of CCB, except to the extent they receive cash in lieu of fractional shares; existing stockholders of CCB will recognize gain or loss equal to the difference between the cash received and the tax basis of the fractional shares. See “The Conversion - Federal and State Tax Consequences of the Conversion.”

Reasons for the Conversion and Stock Offering

We believe that the Conversion and Stock Offering will:

Provide us with funds to repay a portion of our outstanding Federal Home Loan Bank advances.

Provide us with additional capital to support future lending and deposit growth and expanded operations, particularly in the Minneapolis-St. Paul and Detroit metropolitan areas.

Support future branching activities, whether by the establishment of de novo branches or the acquisition of branches from other financial institutions, particularly in the Minneapolis-St. Paul and Detroit metropolitan areas.

Better position us to thrive and remain viable as a full service community bank in an increasingly competitive marketplace.

Assist us in our efforts to build stockholder value. Because a greater amount of our outstanding stock will be held by public stockholders after the Stock Offering, we have applied to have our common stock quoted on the Nasdaq Global Market. Listing on the Nasdaq Global Market is expected to provide additional liquidity and visibility for our common stock.

Enhance profitability and earnings through reinvesting and leveraging the proceeds, primarily through traditional funding and lending activities, in order to improve our net interest margin.

Permit us to continue to maintain capital ratios well above the regulatory requirements.

Give us greater strategic flexibility in connection with potential future acquisitions. Currently, however, we have no plans, agreements or understandings regarding any acquisition.

Enable our directors, officers and employees to increase their stock ownership through purchases of shares in the Stock Offering and awards in new stock benefit plans. We believe their stock ownership is an effective performance incentive and means of attracting and retaining qualified personnel.

Conditions to Complete the Conversion

We cannot complete the Conversion and Stock Offering unless:

it is approved by a majority of the votes eligible to be cast by members of Citizens Community MHC;

it is approved by at least two-thirds of the votes eligible to be cast by stockholders of CCB, including those shares held by Citizens Community MHC;

it is approved by a majority of the votes eligible to be cast by stockholders of CCB, excluding those shares held by Citizens Community MHC;

we sell a minimum of 3,400,000 shares of common stock; and

the OTS accepts the final update of our independent valuation.

See “The Conversion - Conditions to the Conversion.”

Stock Pricing and the Number of Shares to be Issued in the Conversion

The number of shares offered is determined by an independent appraisal of the pro forma estimated market value of Citizens Community Bancorp's stock performed by RP Financial, LC. divided by the purchase price of $10.00 and multiplied by 74%, the percentage of shares of CCB that are currently held by Citizens Community MHC, which shares are now being offered to the public.

The amount of stock sold in this offering is required by regulation to be based upon an independent appraisal which is reviewed by the OTS. The independent appraiser, RP Financial, LC., has determined that as of June 16, 2006, our estimated aggregate pro forma market value was $53.8 million. Pursuant to OTS regulations, the appraiser must establish a valuation range from 15% below to 15% above the estimated pro forma market value. Accordingly, the independent appraisal resulted in a valuation range from $45.7 million to $61.9 million. Based on this valuation range and the 74% ownership of CCB by Citizens Community MHC, between 3.4 million shares and 4.6 million shares of common stock are being offered to the public at $10 per share.

The following table presents a summary of selected pricing ratios for Citizens Community Bancorp, Inc. and for the comparable publicly traded peer group companies identified in the valuation report.

		Price-to-earnings multiple	Price-to-book value ratio	Price-to-tangible book value ratio

Citizens Community Bancorp, Inc. (pro forma) ⁽¹⁾
	Minimum	41.48x	76.92%	87.93%
	Midpoint	45.38x	83.03%	93.81%
	Maximum	48.77x	88.22%	98.69%
	Maximum, as adjusted	52.16x	93.28%	103.37%
Valuation of peer group companies as of June 16, 2006 ⁽²⁾
	Average	21.22x	109.07%	115.68%
	Median	21.00x	107.69%	115.60%

___________

(1) Based on CCB's financial data as of and for the twelve months ended March 31, 2006.

(2) Reflects earnings for the most recent 12-month period for which data was publicly available.

The ratios we have presented are commonly considered by prospective investors in order to determine whether or not the stock meets the investor's investment criteria. Because of differences and important factors such as operating characteristics, location, financial performance, asset size, capital structure, and business prospects between us and other fully converted institutions, you should not rely on these comparative valuation ratios as an indication as to whether or not the stock is an appropriate investment for you. The independent valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing the common stock. Because the independent valuation is based on estimates and projections on a number of matters, all of which are subject to change from time to time, no assurance can be given that persons purchasing the common stock will be able to sell their shares at a price equal to or greater than the purchase price. See “Risk Factors - Our stock price may decline when trading commences,” “Pro Forma Data” and “The Stock Offering - Stock Pricing and the Number of Shares to be Offered.”

Based on the independent valuation, we intend to issue between a minimum of 4,573,944 shares and a maximum of 6,188,277 shares, including shares to be exchanged for existing shares of CCB. The independent valuation must be updated and confirmed by RP Financial, LC. before we may complete the Stock Offering. The maximum amount of common stock being offered may be increased by up to 15% without notice to persons who have subscribed for stock, so that a total of 7,116,519 shares could be issued, including shares to be exchanged for existing shares of CCB. If the updated independent valuation would result in more than 7,116,519 shares being issued, we will be required to notify all persons who have subscribed and these persons would have the opportunity to change or cancel their subscription orders, and, unless an affirmative response is received, a subscriber's funds will be returned with interest at Citizens Community Federal's TYME passbook savings account rate.

Limits on the Amount of Stock You May Purchase

The minimum purchase is 25 shares.

The maximum number of shares of stock that any individual (or individuals through a single account) may purchase is 50,000 shares.

The maximum number of shares of stock that any individual may purchase together with any associate or group of persons acting in concert is 75,000 shares.

If you are now a CCB stockholder, the shares of Citizens Community Bancorp, Inc. common stock that you receive in the exchange for shares of CCB common stock, in accordance with the Exchange Ratio, will not count against the above maximum purchase limitations.

If determined to be necessary or desirable by the Board of Directors, the plan may be amended by a vote of the board of directors, with the concurrence of the OTS. Thus, we may increase or decrease the purchase limitations. In the event the maximum purchase limitation is increased, persons who subscribed for the maximum will be notified and permitted to increase their subscription.

For further discussion of the purchase limits and definitions of "associate" and "acting in concert," see “The Stock Offering - Limitations on Purchases of Common Stock.”

How to Purchase Stock in the Offering

If you want to place an order for shares in the Stock Offering, you must complete an original stock order form and send it to us together with full payment. You also must sign the certification that is on the reverse side of the stock order form in which you acknowledge that our common stock is not a bank deposit or account, is not federally insured and is not guaranteed by Citizens Community Federal or by the federal government. The certification also includes an acknowledgment from you that before purchasing shares of our common stock, you received a copy of this Prospectus and that you are aware of the risks involved in the investment, including those described under “Risk Factors.”

We must receive your stock order form before the end of the subscription offering or the end of the community offering, as appropriate. Once we receive your order, you cannot cancel or change it without our consent.

To ensure that we properly identify your subscription rights, you must provide on your stock order form all of the information requested for each of your deposit accounts as of the eligibility dates. If you fail to do so, your subscription may be reduced or rejected if the Stock Offering is oversubscribed.

You may not add the names of others who were not eligible to purchase common stock in the Stock Offering on the applicable date of eligibility. We will reject all stock orders we believe involve the transfer of subscription rights. If you attempt to transfer your subscription rights, you may lose your right to purchase shares and may be subject to criminal prosecution and/or other sanctions.

You may pay for shares in the subscription offering or the community offering in any of the following ways:

By check or money order made payable to Citizens Community Federal.

By authorizing withdrawal from an account at Citizens Community Federal. To use funds in an IRA account at Citizens Community Federal, you must transfer your account into a self-directed IRA account at an unaffiliated institution or broker. Please contact your broker or the stock information center as soon as possible for assistance.

In cash, only if delivered in person, though we prefer that you exchange that cash with one of our tellers for a check.

We will pay interest on your subscription funds from the date we receive your funds at the TYME passbook savings account rate until the Stock Offering is completed or terminated. All funds authorized for withdrawal from deposit accounts with us will earn interest at the applicable account rate until the Stock Offering is completed or terminated. If, as a result of a withdrawal from a certificate of deposit, the balance falls below the minimum balance requirement, the remaining funds will be transferred to a savings account and will earn interest at our TYME passbook savings account rate. There will be no early withdrawal penalty for withdrawals from certificates of deposit used to pay for stock. Funds received in the subscription offering up to the minimum of the offering range will be held in a segregated deposit account at Citizens Community Federal. Funds received in excess of the minimum of the offering range may be maintained at Citizens Community Federal, or, at our discretion, at an independent insured depository institution. However, in no event shall we maintain more than one escrow account.

Proposed Stock Purchases by Management

We expect our directors and executive officers, together with their associates, to subscribe for approximately 111,100 shares of common stock in the Stock Offering. The purchase price paid by them will be the same $10.00 per share price paid by all other persons who purchase shares of common stock in the Stock Offering. Purchases of common stock in the offering by our directors and executive officers, and their associates, will be counted toward the minimum of 3,400,000 shares that must be sold in order to complete the Conversion and Stock Offering. Following the Conversion and Stock Offering, our directors and executive officers, together with their associates, are expected to own 8.7% of our outstanding shares at the midpoint of the offering range, excluding any outstanding stock options. See “Proposed Purchases by Management.”

Our Use of the Proceeds Raised from the Sale of Stock

We estimate that we will receive net proceeds from the sale of the common stock of between $32.8 million at the minimum of the offering range and $44.7 million at the maximum of the offering range. Citizens Community Bancorp, Inc. will use 50% of the net proceeds of the Stock Offering to make a capital contribution to Citizens Community Federal. Citizens Community Bancorp, Inc. also will lend our employee stock ownership plan cash to buy shares in the Stock Offering. The employee stock ownership plan currently holds 119,236 shares of CCB common stock, which will be exchanged for 146,425 to 198,105 shares of Citizens Community Bancorp, Inc. as determined by the Exchange Ratio. In accordance with OTS regulations, the employee stock ownership plan intends to purchase enough shares so that, at the end of the Stock Offering, it owns 8% of the outstanding shares of Citizens Community Bancorp, Inc. Therefore, at the minimum of the offering range, the employee stock ownership plan will purchase 219,490 shares, requiring a $2.2 million loan, and, at the maximum of the offering range, it will purchase 296,958 shares, requiring a $3.0 million loan. The balance will be used for general business purposes, which may include investment in deposits at Citizens Community Federal or other financial institutions, mortgage-backed securities and U.S. government and federal agency securities, as well as for the repurchase of shares of common stock or payment of cash dividends.

The 50% of the net proceeds received by Citizens Community Federal will be used for general business purposes, including, initially, repaying a portion of our Federal Home Loan Bank borrowings and investing in deposits in other financial institutions, mortgage-backed securities and U.S. government and federal agency securities. Over time, the funds will be used to fund loans of the type currently originated by Citizens Community Federal and to finance expansion through new branches or acquisitions of branches of other financial institutions, especially in the Minneapolis-St. Paul and Detroit metropolitan areas. In addition to expansion of our branch network through opening de novo branches or acquiring branch offices, we will consider the acquisition of local financial institutions and/or non-interest income subsidiaries as a means to expand our banking operations. It is uncertain, however, when or if these acquisitions will occur, and we do not have any current understandings, agreements or arrangements for any acquisitions. See “How We Intend to Use the Proceeds of the Stock Offering.”

Stock Benefit Plans for Management

In order to align our officers', directors' and employees' interests with our stockholders' interests, we have established certain benefit plans that use our stock as compensation. At a stockholder meeting held on February 4, 2005, stockholders of CCB approved the CCB 2004 Stock Option and Incentive Plan and the CCB 2004 Recognition and Retention Plan. Officers and directors of CCB and its subsidiaries were awarded options to purchase shares of common stock under the option plan and shares of common stock under the recognition and retention plan. The number of options and the exercise price will be adjusted in accordance with the Exchange Ratio in connection with the Conversion. The restricted stock awards also will be adjusted for the Exchange Ratio in connection with the Conversion. The vesting periods under these plans will remain unchanged. See “Management - Benefits -- Existing Stock Options and Restricted Stock.” Additionally, Citizens Community Federal previously established an employee stock ownership plan in connection with the CCB minority stock offering completed in March 2004, and the shares purchased by this plan will be exchanged for shares of Citizens Community Bancorp, Inc. in the Conversion in accordance with the Exchange Ratio.

We intend to establish additional stock benefit plans in connection with and following this Stock Offering. The following table presents information regarding the existing stock-based benefit plans and anticipated new stock-based benefit plans. The table below assumes that 5,381,110 shares are outstanding after the Stock Offering, which includes the sale of 4,000,000 shares in the Stock Offering (the midpoint) and the issuance of 1,381,110 shares in exchange for shares of CCB. It is assumed that the value of the stock is $10.00 per share and that the exchange of existing shares is in accordance with the Exchange Ratio at the midpoint of the offering range.

Existing and New Stock-Based Benefit Plans:

	Participants	Shares			Estimated Value of Shares		Percentage of Shares Outstanding After the Conversion

Existing Employee Stock Ownership Plan		172,265	⁽¹⁾	$	1,722,650		3.20	%
New Employee Stock Ownership Plan	Eligible	258,224			2,582,240		4.80
Total Employee Stock Ownership Plan	Employees	430,489			4,304,890		8.00

Existing Restricted Stock Awards	Directors and	86,133	⁽²⁾		861,325		1.60
New Restricted Stock Awards	Officers	129,112			1,291,120		2.40
Total Restricted Stock Awards		215,245			2,152,445		4.00

Existing Stock Options ⁽⁵⁾		215,333	⁽³⁾		788,188	⁽⁴⁾	4.00
New Stock Options	Directors and	322,778			926,374	⁽⁶⁾	6.00
Total Stock Options	Officers	538,111			1,714,492		10.00

Total		1,183,845		$	8,171,827		22.00	%

________________

(1)	The existing employee stock ownership plan holds 119,236 shares, which at the midpoint will be exchanged for 172,265 shares.

(2)	A total of 59,618 shares were awarded or available for future awards under the existing recognition and retention plan, which at the midpoint will be exchanged for 86,133 shares.

(3)	A total of 149,046 options were granted or available for future grant under the existing stock option plan, which at the midpoint will be exchanged for 215,333 options.

(4)	Assumes that the options granted under the existing stock option plan have a value of $3.66 per option, which was determined using the Black-Scholes-Merton option pricing formula using various assumptions. See “Pro Forma Data.”

(5)	The new stock option plan may authorize stock appreciation rights in lieu of or in tandem with stock options. This table assumes that no stock appreciation rights will be issued.

(6)

Assumes that the options granted under the new stock option plan have a value of $2.87 per option, which was determined using the Black-Scholes-Merton option pricing formula using various assumptions. See “Pro Forma Data.” If the fair market value per share on the date of grant is different than $10.00, or if the assumptions used in the option pricing formula are different from those used in preparing the pro forma data, the value of the options will be different. There can be no assurance that the actual fair market value per share on the date of grant, and correspondingly the exercise price of the options, will be $10.00 per share.

Stockholders of Citizens Community Bancorp, Inc. will experience a reduction or dilution in the percentage ownership interest of approximately 13.0%, if we use newly issued shares to fund stock options and restricted stock awards made under these plans (or taken individually, dilution of approximately 5.3% for the current plans and 7.7% for the new plan). It is our intention to fund these plans through open market purchases; however, if any options previously granted under the 2004 Stock Option and Incentive Plan are exercised during the first year following the completion of this Stock Offering, they may be funded with newly issued shares.

If we present a new stock option and restricted stock plan for a stockholder vote within one year of the Conversion, current OTS policy would require us to limit the shares under the new plan so that total shares available under the existing and new plans together do not exceed 14% of the shares outstanding after the Conversion. The table and the dilution percentages shown above assume that the new plan is presented for a stockholder vote within one year of the Conversion. If the new plan is voted on after the one year anniversary of the Conversion, we will not be subject to this limit.

Market For Common Stock

We have applied for approval from Nasdaq to have Citizens Community Bancorp, Inc.'s common stock quoted on the Nasdaq Global Market under the symbol "CZWI." Quotations for the common stock of CCB currently appear on the OTC Bulletin Board under the symbol "CZWI.OB." CCB common stock will cease trading following completion of the Stock Offering. While it is expected that Citizens Community Bancorp, Inc.'s common stock will be more easily tradable than CCB's common stock, because there will be significantly more outstanding shares than before the Conversion, there can be no assurance of this. Keefe, Bruyette & Woods, Inc. has advised us that it intends to be a market maker in our common stock but is under no obligation to do so. It also will assist us in obtaining additional market makers.

Changes in Stock holder Rights

As a result of the Conversion, existing stockholders of CCB will become stockholders of Citizens Community Bancorp, Inc. The rights of stockholders of Citizens Community Bancorp, Inc. will be less than the rights stockholders currently have. The decrease in stockholder rights results from differences between the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. and the charter and bylaws of CCB and from distinctions between Maryland and federal law. The differences in stockholder rights under the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. are not mandated by Maryland law but have been chosen by management as being in the best interests of the corporation and all of its stockholders. However, the provisions in Citizens Community Bancorp, Inc.’s articles of incorporation and bylaws may make it more difficult to pursue a takeover attempt that management opposes. In addition, the articles of incorporation of Citizens Community Bancorp, Inc. provide that the board of directors can increase the number of authorized shares of common stock without stockholder approval. The issuance of authorized shares would result in a reduction or dilution in the percentage ownership interest of existing stockholders. See “Comparison of Rights of Citizens Community Bancorp, Inc.’s and CCB’s Stockholders.”

Restrictions on Acquisition s of Control

Maryland and federal law imposes restrictions on the ability of individuals and other financial institutions and companies to acquire control of Citizens Community Bancorp, Inc. or Citizens Community Federal. In addition, our articles of incorporation and bylaws contain provisions that may make it difficult for someone to acquire control of Citizens Community Bancorp, Inc. These provisions may discourage takeover attempts and prevent you from receiving a premium over the market price of your shares as part of a takeover. These provisions include:

authority of our board of directors to increase authorized shares without stockholder approval;

80% stockholder vote required for certain business acquisitions, acquisitions by interested persons and charter amendments;

a prescribed standard for the board of directors to consider in evaluating control offers;

limitations on voting rights of greater than 10% stockholders;

the election of only approximately one-third of our board of directors each year; and

restrictions on the ability of stockholders to call special stockholders' meetings and remove directors.

Dividend Policy

Since the completion of its initial public stock offering in March 2004, CCB has paid quarterly dividends of $0.05 per share beginning with the quarter ended June 30, 2004. After the Stock Offering, Citizens Community Bancorp, Inc. intends to pay a regular quarterly dividend; however, there can be no assurance as to the precise amount of the dividend.

The dividends paid to date by CCB were paid only to the public stockholders, which currently hold 26% of the outstanding shares of CCB, while Citizens Community MHC waived its receipt of the dividend on the 74% of the outstanding shares it currently holds. Following the Conversion and Stock Offering, 100% of the outstanding stock of Citizens Community Bancorp, Inc. will be held by public stockholders and dividends, if and when paid, will be payable on all outstanding shares of common stock.

The payment of dividends will depend on a number of factors, including statutory and regulatory limitations. No assurance can be given that we will pay dividends in the future. See “Our Policy Regarding Dividends.”

Receiving a Prospectus and an Order Form

To ensure that each purchaser receives a Prospectus at least 48 hours before the expiration date of the subscription and community offerings, in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, no Prospectus will be mailed any later than five days prior to the applicable expiration date or hand delivered any later than two days prior to the expiration date. Execution of the order form will confirm receipt or delivery in accordance with Rule 15c2-8. Order forms will be distributed only with a Prospectus.

Risk Factors

An investment in our common stock involves certain risks. See "Risk Factors."

For assistance, please contact the stock information center at (715) _____-________.

RISK FACTORS

You should consider these risk factors, in addition to the other information in this Prospectus, before deciding whether to make an investment in our stock.

Risks Related to Our Business

Our loan portfolio possesses increased risk due to our substantial number of consumer loans.

Our consumer loans accounted for approximately $80.8 million, or 34% of our total loan portfolio as of March 31, 2006, of which $25.2 million consisted of automobile loans, $51.2 million consisted of personal loans secured by other collateral and $4.4 million consisted of unsecured personal loans. Generally, we consider these types of loans to involve a higher degree of risk compared to first mortgage loans on one- to four-family, owner-occupied residential properties. As a result of our large portfolio of consumer loans, it may become necessary to increase the level of our provision for loan losses, which could hurt our profits. Consumer loans generally entail greater risk than do one- to four-family residential mortgage loans, particularly in the case of loans that are secured by rapidly depreciable assets, such as automobiles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, $7.6 million of our automobile loans and $36.6 million of our other secured consumer loans were indirect loans originated by or through third parties, which present greater risk than our direct lending products. See “Business of Citizens Community Federal - Lending Activities -- Consumer Lending” and “--Asset Quality .”

If our allowance for loan losses is not sufficient to cover actual loan losses, our earnings could decrease.

We make various assumptions and judgments about the collectibility of our loan portfolio, including the creditworthiness of our borrowers and the value of the real estate and other assets serving as collateral for the repayment of many of our loans. In determining the amount of the allowance for loan losses, we review our loans and our loss and delinquency experience and evaluate economic conditions. Management recognizes that significant new growth in loan portfolios and the refinancing of existing loans can result in completely new portfolios of unseasoned loans that may not perform in a historical or projected manner. If our assumptions are incorrect, our allowance for loan losses may not be sufficient to cover actual losses, resulting in additions to our allowance. Material additions to our allowance could materially decrease our net income. Our allowance for loan losses was 0.34% of net loans, and 72.66% of non-performing loans at March 31, 2006. Our regulators periodically review our allowance for loan losses and may require us to increase our provision for loan losses or recognize additional loan charge-offs. Any increase in our allowance for loan losses or loan charge-offs as required by these regulatory authorities will have a material adverse effect on our financial condition and results of operations. As of March 31, 2006, we believe that the current allowance level is appropriate.

Rising interest rates may hurt our profits.

To be profitable we have to earn more interest on our loans and investments than we pay on our deposits and borrowings. If interest rates continue to rise, our net interest income and the value of our assets could be reduced if interest paid on interest-bearing liabilities, such as deposits and borrowings, increases more quickly than interest received on interest-earning assets, such as loans and investments. This is most likely to occur if short-term interest rates increase at a faster rate than long-term interest rates, which would cause income to go down. In addition, rising interest rates may hurt our income because they may reduce the demand for loans and the value of our securities. A flat yield curve may also hurt our income, because it would reduce our ability to reinvest proceeds from loan and investment repayments at higher rates. See “Management's Discussion and Analysis of Financial Condition and

Results of Operations - Quantitative and Qualitative Disclosures About Market Risk.” During 2005 and the first half of 2006, interest rates on deposits have been increasing at a slightly faster pace than rates on loans, which has reduced our net interest margin, return on assets and return on equity. See “Selected Consolidated Financial Information and Other Data” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

We operate in a highly regulated environment and may be affected adversely by negative examination results and changes in laws and regulations.

Citizens Community Federal is subject to extensive regulation, supervision and examination by the OTS, our chartering authority, and by the Federal Deposit Insurance Corporation (“FDIC”), the insurer of our deposits. Citizens Community Bancorp, Inc. will be subject to regulation and supervision by the OTS. This regulation and supervision governs the activities in which we may engage and are intended primarily for the protection of the deposit insurance fund administered by the FDIC and our depositors. Regulatory authorities have extensive discretion in their supervisory and enforcement activities, including the imposition of restrictions on our operations, the classification of our assets and determination of the level of our allowance for loan losses. Any change in this regulation and oversight, whether in the form of regulatory policy, regulations, legislation or supervisory action, may have a material impact on our operations and profitability. See “How We Are Regulated.”

Strong competition within our market area s may limit our growth and profitability.

Competition in the banking and financial services industry is intense. In our market areas, we compete with numerous commercial banks, savings institutions, mortgage brokerage firms, credit unions, finance companies, mutual funds, insurance companies, and brokerage and investment banking firms operating locally and elsewhere. Some of our competitors have substantially greater resources and broader lending authority than we have, have greater name recognition and market presence, which benefit them in attracting business, and offer certain services that we do not or cannot provide. In addition, larger competitors may be able to price loans and deposits more aggressively than we do. Our profitability depends upon our continued ability to successfully compete in our market areas. The greater resources and deposit and loan products offered by some of our competitors may limit our ability to increase our interest-earning assets. See “Business - Competition.”

Our business is geographically concentrated in Wisconsin, Minnesota and Michigan and a downturn in economic conditions in these states could reduce our profits.

Most of our loans are to individuals located in Wisconsin, Minnesota and Michigan. Any decline in the economy of these states could have an adverse impact on our earnings. Decreases in local real estate values could adversely affect the value of property used as collateral. Adverse changes in the economy also may have a negative effect on the ability of our borrowers to make timely repayments of their loans, which would have an adverse impact on our earnings.

Risks Related to this Stock Offering

After this offering, our compensation expenses will increase. Our return on equity also will be low compared to other companies. These factors could negatively impact the price of our stock.

The proceeds we will receive from the sale of our common stock will significantly increase our capital and it will take us time to fully deploy those proceeds in our business operations. Our compensation expense will increase because of the costs associated with the employee stock ownership and stock-based benefit plans. We estimate the increase in compensation expense from these plans to be approximately $548,000 on an after-tax basis, based on the maximum of the valuation range. Therefore, we expect our return on equity to be below our historical level and less than many of our regional and national peers. This low return on equity could hurt our stock price. We cannot guarantee when or if we will achieve returns on equity that are comparable to industry peers. For further information regarding pro forma income and expenses, see “Pro Forma Data.”

We have broad discretion in using the proceeds of this offering. Our failure to effectively use these proceeds could reduce our profits.

Citizens Community Bancorp, Inc. will use a portion of the net proceeds it retains to finance the purchase of common stock in the offering by the employee stock ownership plan and may use the remaining net proceeds to pay dividends to stockholders, repurchase shares of common stock, purchase securities, deposit funds in Citizens Community Federal or other financial institutions, or for other general corporate purposes. Citizens Community Federal may use the proceeds it receives to repay a portion of its outstanding Federal Home Loan Bank borrowings, fund new loans, establish or acquire new branches, purchase securities, or for general corporate purposes. In particular, we intend to expand our presence in the Minneapolis-St. Paul and Detroit metropolitan areas through branch acquisitions and de novo branching and indirect loan production relationships. The establishment or acquisition of new branches may negatively affect our earnings until these new offices achieve profitability. We have not, however, earmarked specific amounts of proceeds for any of these purposes, and we will have significant flexibility in determining the amount of net proceeds we apply to different uses and the timing of these proceeds applications. Our failure to utilize these net proceeds effectively could reduce our profitability. We have not established a timetable for the effective deployment of the net proceeds, and we cannot predict how long we will require to effectively deploy those proceeds.

Provisions in our Maryland charter and bylaws that limit the rights of stockholders may deter potential takeovers and may reduce the trading price of our stock.

Provisions in our Maryland charter and bylaws may make it difficult and expensive to pursue a change in control or takeover attempt that our board of directors opposes. As a result, you may not have an opportunity to participate in such a transaction, and the trading price of our stock may not rise to the level of other institutions that are more vulnerable to hostile takeovers. See “Summary - Restrictions on Acquisitions of Control” and “Restrictions on Acquisitions of Citizens Community Bancorp, Inc. and Citizens Community Federal - Charter and Bylaws of Citizens Community Bancorp, Inc.”

The implementation of a new stock-based benefit plan and the ability of all board of directors to increase authorized shares and direct the issuance of authorized shares may dilute your ownership interest.

We intend to adopt a stock-based benefit plan following the Stock Offering. This stock-based benefit plan will be funded through either open market purchases or the issuance of authorized but unissued shares of our common stock. Stockholders would experience a reduction in ownership interest totaling approximately 7.7% in the event newly issued shares of our common stock are used to fund stock options and restricted stock awards under this plan in an amount equal to 6.0% and 2.4%, respectively at the maximum of the valuation range, of the shares to be outstanding after the Stock Offering. Based on the issuance of our common stock at the maximum of the valuation range, we expect to have 6,188,277 shares of common stock outstanding and 13,811,723 shares of authorized but unissued shares. In addition, our board of directors is permitted to authorize additional shares of common stock without stockholder approval. The issuance of these authorized but previously unissued shares would reduce the ownership interest of existing stockholders.

Our stock price may decline when trading commences.

We cannot assure you that if you purchase shares in this Stock Offering, you will later be able to sell them at or above the $10.00 purchase price. In numerous recent cases, shares of common stock issued by newly converted savings institutions or mutual holding companies have traded below the price at which the shares were sold in the offering conducted by those companies. The final aggregate purchase price of the shares of common stock in the offering will be based on an independent appraisal. The appraisal is not intended, and should not be construed, as a recommendation of any kind as to the advisability of purchasing shares of common stock. The valuation is based on estimates and projections of a number of matters, all of which are subject to change from time to time. After our shares begin trading, the trading price of our common stock will be determined by the marketplace and may be influenced by many factors, including prevailing interest rates, the overall performance of the economy, investor perceptions of Citizens Community Bancorp, Inc. and the outlook for the financial institutions industry in general.

There may be a limited trading market in our common stock, which would hinder your ability to sell our common stock and may lower the market price of the stock.

We expect that our common stock will be quoted on the Nasdaq Global Market under the symbol “CZWI.” There is no guarantee that an active and liquid trading market in shares of our common stock will develop. Persons purchasing shares may not be able to sell their shares when they desire if a liquid trading market does not develop or to sell them at a price equal to or above the initial purchase price of $10.00 per share, even if a liquid trading market develops. This limited trading market for our common stock may reduce the market value of the common stock and make it difficult to buy or sell our shares on short notice. See “Market for the Common Stock.”

Our new organizational structure will result in changes in stockholder rights for existing stockholders.

As a result of the Conversion, the existing stockholders of CCB will become stockholders of Citizens Community Bancorp, Inc. There are certain differences in stockholder rights arising from distinctions between CCB’s federal charter and bylaws and Citizen Community Bancorp, Inc.’s articles of incorporation and bylaws, which are based on Maryland corporate law. The rights of stockholders to call special meetings, make director nominations and stockholder proposals and amend the corporation’s governing instruments are more limited under Citizens Community Bancorp, Inc.’s articles of incorporation and bylaws. Additionally, the articles of incorporation of Citizens Community Bancorp, Inc. allows the board of directors to increase authorized shares without stockholder vote and limits the voting rights of shares held in excess of 10% of the outstanding shares. See “Comparison of Rights of Citizens Community Bancorp, Inc’s and CCB’s Stockholders.”

SELECTED CONSOLIDATED FINANCIAL INFORMATION AND OTHER DATA

The financial information under the captions Balance Sheet Data and Summary of Operations in this section is derived from CCB's audited financial statements for the five fiscal years ended September 30, 2005 and unaudited financial statements for the six months ended March 31, 2006 and 2005, and should be read together with the financial statements and the notes thereto beginning on page F-1 of this document. In the opinion of management, all adjustments consisting of normal recurring adjustments that are necessary for a fair presentation of the interim periods have been reflected. The results of operations and other data presented for the six months ended March 31, 2006 do not necessarily indicate the results that may be expected for the fiscal year ending September 30, 2006 or any other period.

	March 31,		September 30,
	2006			2005		2004		2003		2002		2001
	(In thousands)

Selected Financial Condition Data :

Total assets	$	256,625	$	245,707	$	161,980	$	130,400	$	115,257	$	108,083
Loans receivable, net		234,324		217,931		152,376		123,107		104,091		93,618
Other interest-bearing deposits		1,153		1,444		---		---		1,485		6,931
Securities available for sale		1,839		2,088		---		---		---		---
Deposits		188,298		177,469		127,976		114,963		104,429		98,128
Total borrowings		36,200		36,200		13,500		3,700		---		---
Stockholders' equity ⁽¹⁾		29,814		29,553		19,606		10,991		10,393		9,729

	For the Six Months Ended March 31,				At or For the Year Ended September 30,
	2006		2005		2005		2004		2003		2002		2001
	(In thousands)
Selected Operations Data :
Total interest income	$	7,524	$	5,397	$	11,926	$	9,619	$	8,880	$	8,493	$	8,822
Total interest expense		3,141		1,649		3,992		2,889		3,178		3,859		4,844
Net interest income		4,383		3,748		7,934		6,730		5,702		4,634		3,978
Provision for loan losses		108		202		414		396		406		375		230
Net interest income after provision for loan losses		4,275		3,546		7,520		6,334		5,296		4,259		3,748
Fees and service charges		670		519		1,160		1,038		1,009		821		782
Gain (loss) on sales of loans, mortgage- backed securities and investment securities		27		---		---		---		---		---		---
Other non-interest income		173		589		861		331		323		286		218
Total non-interest income		870		1,108		2,021		1,369		1,332		1,107		1,000
Total non-interest expense		4,719		3,672		7,806		6,323		5,641		4,675		4,189
Income before taxes		426		982		1,735		1,380		987		691		559
Income tax provision ⁽²⁾		176		398		684		543		390		27		--
Net income	$	250	$	584	$	1,051	$	837	$	597	$	664	$	559

Basic and diluted earnings per share	$	0.07	$	0.20	$	0.35		N/A ⁽³⁾		N/A ⁽³⁾		N/A ⁽³⁾		N/A ⁽³⁾

Selected Financial Ratios and Other Data

	For the Six Months Ended March 31,		At or For the Year Ended September 30,
	2006	2005	2005	2004	2003	2002	2001

Performance Ratios ⁽³⁾
Return on assets (ratio of net income to average total assets)	0.20%	0.69%	0.56%	0.57%	0.49%	0.60%	0.54%
Return on assets, net of tax ⁽²⁾	0.20%	0.69%	0.56%	0.57%	0.49%	0.37%	0.33%
Return on equity (ratio of net income to average equity)	1.68%	6.07%	4.87%	5.47%	5.59%	6.61%	5.92%
Return on equity, net of tax ⁽²⁾	1.68%	6.07%	4.87%	5.47%	5.59%	4.15%	3.58%
Dividend payout ratio	1.42%	0.50%	0.57%	0.67% ⁽⁴⁾	N/A ⁽⁵⁾	N/A ⁽⁵⁾	N/A ⁽⁵⁾
Interest rate spread information
Average during period	3.49%	4.29%	4.28%	4.50%	4.82%	4.30%	3.99%
End of period	3.53%	4.33%	3.92%	4.59%	4.80%	4.74%	3.88%
Net interest margin	3.73%	4.52%	4.19%	4.70%	4.90%	4.39%	4.14%
Ratio of operating expense to average total assets	3.77%	4.33%	4.12%	4.33%	4.59%	4.19%	4.05%
Ratio of average interest-bearing assets to average interest-bearing liabilities	1.09%	1.12%	1.11%	1.10%	1.05%	1.03%	1.03%

Quality Ratios
Non-performing assets to total assets at end of period	0.43%	0.36%	0.29%	0.43%	0.43%	0.53%	0.37%
Allowance for loan losses to non- performing loans	72.66%	100.92%	118.26%	79.51%	82.92%	65.36%	75.74%
Allowance for loan losses to net loans	0.34%	0.38%	0.37%	0.36%	0.38%	0.34%	0.33%

Capital Ratios
Equity to total assets at end of period	11.62%	10.83%	12.03%	12.10%	8.43%	9.02%	9.00%
Average equity to average assets	11.82%	11.44%	11.40%	10.46%	8.70%	9.01%	9.14%

Other Data
Number of full-service offices	12	10	12	9	8	7	6

_________________

(1)	Prior to March 29, 2004, Citizens Community Federal was a mutual institution whose equity was retained earnings.

(2)

Until its conversion to a federally chartered mutual savings bank on December 10, 2001, Citizens Community Federal was a credit union, exempt from federal and state income taxes. Had Citizens Community Federal been subject to federal and state income taxes for the fiscal years ended September 30, 2002 and 2001, income tax expense would have been approximately $273,000 and $221,000, respectively, and net income would have been approximately $418,000, and $338,000, respectively.

(3)	Performance ratios for the six month period ended March 31, 2006 and 2005 are annualized where appropriate.

(4)

This reflects only the last two quarters of the fiscal year with earnings per share of $0.15 for the two quarters and dividends of $0.05 for each quarter. During the first two quarters of the fiscal year, CCB did not exist, and Citizens Community Federal was a mutual institution with no outstanding stock.

(5)	Because the formation of CCB was completed on March 29, 2004, per share earnings for those years are not meaningful.

HOW WE INTEND TO USE THE PROCEEDS OF THE STOCK OFFERING

We are conducting this Stock Offering principally to raise additional capital to support our continued growth. The actual net proceeds will depend on the number of shares sold, the independent valuation, market considerations and the expenses of the Stock Offering. Although the actual net proceeds from the sale of the common stock cannot be determined until the Stock Offering is completed, we estimate that we will receive net proceeds from the sale of common stock of between $32.8 million at the minimum and $51.5 million at the maximum, as adjusted, of the offering range.

Assuming expenses of between $1.2 million at the minimum and $1.4 million at the maximum, as adjusted, of the offering range and assuming the proposed purchase of shares by our employee stock ownership plan, the following table shows the manner in which we will use the net proceeds:

	Minimum					Midpoint					Maximum					Maximum, as Adjusted
	$		%			$		%			$		%			$		%
	(Dollars in thousands)

Loan to employee stock ownership plan	$	2,195		6.7	%	$	2,582		6.7	%	$	2,970		6.6	%	$	3,415	$	6.6	%
Investment in Citizens Community Federal		16,423		50.0			19,385		50.0			22,347		50.0			25,754		50.0
Citizens Community Bancorp, Inc. working capital .		14,228		43.3			16,803		43.3			19,377		43.4			22,338		43.4
Net Proceeds		32,846		100.0	%		38,770		100.0	%		44,694		100.0	%		51,507		100.0	%

We will use 50% of the net proceeds of the Stock Offering to make a capital contribution to Citizens Community Federal. We will also lend Citizens Community Federal's employee stock ownership plan cash to enable the plan to buy enough shares so that, at the end of the Stock Offering, it owns 8% of our outstanding shares, including the 119,236 it currently owns, as adjusted in accordance with the Exchange Ratio. The balance, ranging from $14.2 million at the minimum of the offering range to $22.3 million at the maximum, as adjusted, will be retained as our initial capitalization. We will use these funds for general business purposes, which may include investment in deposits at Citizens Community Federal and other financial institutions, mortgage-backed securities and U.S. government and federal agency securities, as well as the repurchase of shares of our common stock or payment of cash dividends. For additional information regarding the payment of cash dividends, see “Our Policy Regarding Dividends.” Under current OTS regulations, Citizens Community Bancorp, Inc. may not repurchase shares of its common stock during the first year following the Conversion, except to fund restricted stock awards in a stockholder-approved, stock-based benefit plan or, with prior regulatory approval, when extraordinary circumstances exist.

The 50% of the net proceeds funds received by Citizens Community Federal from us will be used for general business purposes, including, initially, paying a portion of its Federal Home Loan Bank borrowings and investing in deposits in other financial institutions, mortgage-related securities and U.S. government and federal agency securities. Our Federal Home Loan Bank borrowings have grown recently as we have leveraged our balance sheet by funding loan originations, primarily one- to four-family mortgage loans, with overnight borrowings. Over time, these funds will be used:

to fund new loans of a type that are currently made by Citizens Community Federal;

to hire additional loan originators to accelerate our mortgage and consumer loan growth;

to finance the possible expansion of its business activities, including developing new branch locations or acquiring branches of other financial institutions; or

for general corporate purposes.

Though we have no present understandings, agreements or arrangements for any acquisitions, we may consider acquisitions of other financial institutions and/or non-interest income subsidiaries as a means of expanding our operations.

Except as described above, neither Citizens Community Bancorp, Inc. nor Citizens Community Federal has any specific plans for the investment of the proceeds of this offering and has not earmarked a specific portion of the proceeds to any particular use. For a discussion of our business reasons for undertaking the Conversion, see “The Conversion - Reasons for the Conversion and Stock Offering.”

If the employee stock ownership plan is not able to purchase all shares of our common stock it wants in the Stock Offering, it may purchase shares in the open market after the Stock Offering. If the purchase price of the common stock is higher than $10.00 per share, the amount of proceeds required for the purchase by the employee stock ownership plan will increase, and the resulting stockholders' equity will decrease.

The net proceeds may vary significantly because total expenses of the Stock Offering may be significantly more or less than those estimated at the various points of the offering range. Payments for shares made through withdrawals from existing deposit accounts at Citizens Community Federal will not result in the receipt of new funds for investment but will result in a reduction of Citizens Community Federal’s deposits and interest expense as funds are transferred from interest-bearing certificates or other deposit accounts.

OUR POLICY REGARDING DIVIDENDS

Since the completion of its initial public stock offering in March 2004, CCB has paid $0.05 per share dividends each quarter since the quarter ended June 30, 2004. After the Conversion, Citizens Community Bancorp, Inc. intends to pay a regular quarterly dividend. The continued ability to pay dividends will depend on a number of factors including our regulatory capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations, and general economic conditions. No assurance can be given that we will pay dividends in the future, or that, if paid, dividends will not be reduced or eliminated in future periods.

The dividends paid to date by CCB were paid only to the public stockholders, which currently hold 26% of the outstanding shares of CCB, while Citizens Community MHC waived its receipt of the dividend on the 74% of the outstanding shares it currently holds. Following the Conversion and Stock Offering, however, 100% of the outstanding stock of Citizens Community Bancorp, Inc. will be held by public stockholders, and dividends will be payable on all outstanding shares of common stock.

Under Maryland law, Citizens Community Bancorp, Inc. may pay dividends on its common stock if, after giving effect thereto, it would be able to pay its debts as they become due in the usual course of its business and if its total assets exceed its total liabilities and the amount needed, if it were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have a preference in the event of dissolution. Citizens Community Bancorp, Inc.'s ability to pay dividends also may depend on the receipt of dividends from Citizens Community Federal, which is subject to a variety of regulatory limitations on the payment of dividends. See “How We Are Regulated - Limitations on Dividends and Other Capital Distributions.” Furthermore, as a condition to the OTS giving its authorization to conduct the Stock Offering, Citizens Community Bancorp, Inc. has agreed that it will not initiate any action within one year of completion of the Stock Offering in the furtherance of payment of a special distribution or return of capital to stockholders of Citizens Community Bancorp, Inc.

MARKET FOR THE COMMON STOCK

Quotations for CCB's common stock currently appear on the OTC Bulletin Board under the symbol "CZWI.OB." Citizens Community Bancorp, Inc. is a newly formed Maryland corporation and has not issued capital stock. It will not have any stock outstanding until the completion of this Stock Offering. It is expected that there will be a more active trading market for the common stock of Citizens Community Bancorp, Inc. than there has been for CCB because there will be more shares outstanding to the public. We have applied for approval from Nasdaq to have our common stock quoted on the Nasdaq Global Market under the symbol "CZWI." Keefe, Bruyette & Woods, Inc. intends to become a market maker in our common stock following the Stock Offering, but is under no obligation to do so.There can be no assurance, however, that an active and liquid trading market for our common stock will develop or, if developed, be maintained.

The following table sets forth the high and low sales prices for CCB's common stock and dividends paid per share for the periods indicated. CCB's common stock commenced trading on March 29, 2004. The following stock price information represents inter-dealer quotations and, therefore, may not include retail markups, markdowns, or commissions and may not reflect actual transactions. As of March 31, 2006, there were 955,959 shares of CCB's common stock outstanding to persons other than Citizens Community MHC. In connection with the Conversion, each share of CCB common stock will be converted into between 1.22803 and 1.91067 shares of common stock of Citizens Community Bancorp, Inc., based upon the Exchange Ratio. Accordingly, the information in this table should be reviewed in conjunction with the Exchange Ratio information at “The Conversion - Share Exchange Ratio.”

	High	Low	Dividends
Fiscal 2004
Second Quarter (March 29, 2004 to March 31, 2004)	$13.50	$12.10	$ --
Third Quarter (April 1, 2004 to June 30, 2004)	13.25	11.25	0.05
Fourth Quarter (July 1, 2004 to September 30, 2004)	12.75	11.80	0.05

Fiscal 2005
First Quarter (October 1, 2004 to December 31, 2004)	$15.50	$12.50	$0.05
Second Quarter (January 1, 2005 to March 31, 2005)	15.50	13.00	0.05
Third Quarter (April 1, 2005 to June 30, 2005)	12.75	12.75	0.05
Fourth Quarter (July 1, 2005 to September 30, 2005)	13.00	12.50	0.05

Fiscal 2006
First Quarter (October 1, 2005 to December 31, 2005)	$13.20	$10.30	$0.05
Second Quarter (January 1, 2006 to March 31, 2006)	14.25	12.90	0.05
Third Quarter (April 1, 2006 to June 16, 2006)	18.00	13.75	0.05

At April 24, 2006, the business day immediately preceding the public announcement of the Conversion and Stock Offering, and at June 16, 2006, the closing price of CCB’s common stock as reported on the OTC Bulletin Board was $14.14 per share and $17.65 per share, respectively. At June 16, 2006, CCB had 350 stockholders of record.

CAPITALIZATION

Set forth below is the historical capitalization of Citizens Community Bancorp, Inc. as of March 31, 2006, and its pro forma capitalization after giving effect to the Stock Offering. The table also gives effect to the assumptions set forth under “Pro Form Data.” A change in the number of shares sold in the Stock Offering may materially affect this pro forma capitalization.

	Pro Forma Capitalization at March 31, 2006
	Actual at March 31, 2006 ⁽¹⁾			Minimum 3,400,000 shares at $10.00 per share			Midpoint 4,000,000 shares at $10.00 per share			Maximum 4,600,000 shares at $10.00 per share			Maximum, as adjusted, 5,290,000 shares at $10.00 per share ⁽²⁾
	(In thousands)
Deposits ⁽³⁾	$	188,298		$	188,298		$	188,298		$	188,298		$	188,298
Federal Home Loan Bank advances ⁽⁴⁾		36,200			36,200			36,200			36,200			36,200
Total deposits and borrowings	$	224,498		$	224,498		$	224,498		$	224,498		$	224,498

Stockholders’ equity
Preferred stock, $0.01 par value, 1,000,000 shares authorized (post Conversion);
None to be issued	$	--		$	--		$	--		$	--		$	--
Common stock, $0.01 par value, 20,000,000 shares authorized (post Conversion); assuming shares outstanding as shown ⁽⁵⁾		37			46			54			62			71
Additional paid-in capital ⁽⁵⁾ ⁽⁶⁾		18,797			51,635			57,551			63,466			70,270
Retained earnings ⁽⁷⁾		12,691			12,691			12,691			12,691			12,691
Assets received from Citizens Community
MHC ⁽⁸⁾		--			95			95			95			95
Less:
Accumulated other comprehensive loss, net of tax		(22	)		(22	)		(22	)		(22	)		(22	)
Unearned employee stock ownership plan shares ⁽⁹⁾		(954	)		(3,149	)		(3,536	)		(3,923	)		(4,369	)
Unearned restricted stock ⁽¹⁰⁾		( 341	)		( 1,438	)		( 1,632	)		( 1,826	)		( 2,048	)
Treasury stock		(394	)		(394	)		(394	)		(394	)		(394	)
Total stockholders’ equity	$	29,814		$	59,463		$	64,806		$	70,149		$	76,293

Pro forma stockholders’ equity to assets ⁽³⁾		11.62	%		20.77	%		22.22	%		23.62	%		25.17	%

____________

(1)	Actual capitalization at March 31, 2006 consists of the existing capitalization of CCB.

(2)	As adjusted to give effect to an increase in the number of shares that could occur due to an increase in the independent valuation and a commensurate increase in the offering range of up to 15% to reflect changes in market and financial conditions.

(3)	Does not reflect withdrawals from deposit accounts for the purchase of stock in the offering. Any withdrawals would reduce pro forma deposits and assets by an amount equal to the withdrawals.

(4)

We intend, in the near term, to use a portion of the proceeds to repay a portion of our outstanding Federal Home Loan Bank borrowings. At March 31, 2006, these borrowings totaled $36.2 million. Pro forma Federal Home Loan Bank advances would decrease if we use a portion of the proceeds to repay half of these borrowings.

(5)	Pro forma common stock and additional paid-in capital reflect the number of shares of common stock to be outstanding after the Stock Offering. Additional paid-in capital amounts under pro forma capitalization are net of estimated expenses of the offering.

(6)

No effect has been given to the issuance of additional shares of stock pursuant to the 2004 Stock Option and Incentive Plan or any stock option plan that may be adopted by Citizens Community Bancorp, Inc. and presented for approval by the stockholders after the Stock Offering. An amount equal to 10% of the shares of stock outstanding after the offering would be issued or available for issuance upon the exercise of options to be granted under the existing and new stock option plan following the Stock Offering. See “Management - Benefits -- Potential Stock Benefit Plans.”

(7)	The retained earnings of Citizens Community Federal will be substantially restricted after the Conversion. See “How We Are Regulated - Limitations on Dividends and Other Capital Distributions.”

(8)	Pro forma data reflects the consolidation of $95,000 of capital from Citizens Community MHC.

(9)

The purchase price of unearned shares held by the employee stock ownership plan is reflected as a reduction of stockholders' equity. Includes unearned shares held currently by the existing employee stock ownership plan and assumes that enough shares will be purchased by the new employee stock ownership plan so that it owns 8% of our common stock outstanding at the end of the Stock Offering, and that the funds used by the employee stock ownership plan to acquire the additional shares will be borrowed from Citizens Community Bancorp, Inc. For an estimate of the impact of the loan on earnings, see “Pro Forma Data.” Citizens Community Federal intends to make scheduled discretionary contributions to the employee stock ownership plan sufficient to enable the plan to service and repay its debt over a ten-year period. See “Management - Benefits -- Employee Stock Ownership Plan.” If the employee stock ownership plan does not purchase stock in the Stock Offering and the purchase price in the market is greater than $10.00 per share, there will be a corresponding reduction in stockholders' equity. See “The Stock Offering - Subscription Offering -- Subscription Rights.”

(10)

The purchase price of unearned shares held by the current and to be used by the new restricted stock plan is reflected as a reduction of stockholders' equity, which is an amount equal to 4% of the shares of our stock outstanding at the end of the Stock Offering have been or will be purchased for the restricted stock plans following the Stock Offering at $10.00 per share. If the purchase price in the open market is greater than $10.00 per share, there will be a corresponding reduction in stockholders' equity. See footnote (2) to the table under “Pro Forma Data.” See “Management - Benefits -- Potential Stock Benefit Plans.”

PRO FORMA DATA

The actual net proceeds from the sale of the stock cannot be determined until the Stock Offering is completed. However, investable net proceeds to Citizens Community Bancorp, Inc. are currently estimated to be between approximately $32.8 million and $44.7 million (or $51.5 million if the independent valuation is increased by 15%) based on the following assumptions:

Receipt of assets of $95,000 from Citizens Community MHC;

The amount of our loan to our employee stock ownership plan to enable it to purchase enough shares in the Stock Offering so that, at the end of the Stock Offering, it owns 8% of all outstanding shares;

An amount equal to approximately 4% of our shares outstanding at the end of the Stock Offering less the 59,618 shares reserved for restricted stock under our current recognition and retention plan as adjusted in accordance with the Exchange Ratio will be awarded pursuant to a new stock-based benefit plan adopted no sooner than six months following the Stock Offering, funded through open market purchases;

The payment of a fee to Keefe, Bruyette & Woods, Inc. equal to 1.35% of the aggregate purchase price of shares sold in the Stock Offering (excluding shares purchased by the employee stock option plan and our directors, officers, employees and their immediate families); and

Other expenses of the Stock Offering are estimated to be approximately $710,000.

We have prepared the following table, which sets forth our historical net income and stockholders' equity prior to the Stock Offering and our pro forma consolidated net income and stockholders' equity following the Stock Offering. In preparing this table, and in calculating pro forma data, we have made the following assumptions:

Pro forma earnings have been calculated assuming the stock had been sold at the beginning of the period and the net proceeds had been invested at a before-tax average yield of 4.82% for the six months ended March 31, 2006 and 4.01% for the year ended September 30, 2005, which approximates the yield on a one-year U.S. Treasury bill on March 31, 2006 and September 30, 2005. An effective tax rate of 40% is utilized for both periods, resulting in net after-tax yields of 2.89% and 2.41%, respectively. The yield on a one-year U.S. Treasury bill, rather than an arithmetic average of the average yield on interest-earning assets and the average rate paid on deposits, has been used to estimate income on net proceeds because it is believed that the one-year U.S. Treasury bill rate is a more accurate estimate of the rate that would be obtained on an investment of net proceeds from the Stock Offering.

We did not include any withdrawals from deposit accounts to purchase shares in the Stock Offering.

Historical and pro forma per share amounts have been calculated by dividing historical and pro forma amounts by the indicated number of shares of stock, as adjusted in the pro forma net earnings per share to give effect to the purchase of shares by the employee stock ownership plan.

Pro forma stockholders' equity amounts have been calculated as if the stock had been sold on March 31, 2006 and September 30, 2005, respectively, and no effect has been given to the assumed earnings effect of the transactions.

The following pro forma data rely on the assumptions we outlined above, and these data do not represent the fair market value of the common stock, the current value of assets or liabilities, or the amount of money that would be distributed to stockholders if we liquidated Citizens Community Bancorp, Inc. The pro forma data do not predict how much we will earn in the future. You should not use the following information to predict future results of operations.

The pro forma information does not take into account our anticipated future expenses in connection with de novo branching or the expenses related to our growth strategy, including the hiring of additional loan originators. It also does not reflect any expenses for the current stock option and restricted stock plans. Please see Note 14 to the Consolidated Financial Statements and Note 3 to the Pro Forma Data tables below.

The following tables summarize historical data and pro forma data at or for the six months ended March 31, 2006 and at or for the year ended September 30, 2005 based on the assumptions set forth above and in the tables and should not be used as a basis for projections of market value of the stock following the Stock Offering. Pro forma stockholders' equity per share does not give effect to the liquidation account to be established in the Conversion. See “Management - Benefits -- Potential Stock Benefit Plans” and “The Conversion - Liquidation Rights.”

	At or for the Six Months Ended March 31, 2006
	3,400,000 Shares sold at $10.00 per share			4,000,000 Shares sold at $10.00 per share			4,600,000 Shares sold at $10.00 per share			5,290,000 Shares sold at $10.00 per share
	(Dollars in thousands, except per share amounts)
Gross Proceeds	$	34,000		$	40,000		$	46,000		$	52,900
Less expenses		(1,154	)		(1,230	)		(1,306	)		(1,393	)
Estimated net proceeds		32,846			38,770			44,694			51,507
Plus: Assets received from Citizens Community MHC		95			95			95			95
Less: employee stock ownership plan funded by Citizens Community Bancorp, Inc		(2,195	)		(2,582	)		(2,970	)		(3,415	)
Less: recognition and retention plan adjustment		( 1,097	)		( 1,291	)		( 1,485	)		( 1,708	)
Estimated investable net proceeds	$	29,649		$	34,992		$	40,335		$	46,469

Net Income:
Historical	$	250		$	250		$	250		$	250
Pro forma income on net proceeds		428			505			582			671
Plus: Pro forma income on assets received from Citizens Community MHC		1			1			1			1
Less: Pro forma employee stock ownership plan adjustment ⁽¹⁾		(66	)		(77	)		(89	)		(102	)
Less: Pro forma recognition and retention plan adjustment ⁽²⁾		(66	)		(77	)		(89	)		(102	)
Less: Pro forma options adjustment - new options ⁽³⁾		(71	)		(84	)		(95	)		(111	)
Less: Pro forma options adjustment - February 2005 options ⁽⁴⁾		( 34	)		( 34	)		( 34	)		(34	)
Pro forma net income ^{(1)(2)(3)(4)(5)}	$	442		$	484		$	526		$	573

Per share net income:
Historical	$	0.06		$	0.05		$	0.04		$	0.04
Pro forma income on net proceeds		0.10			0.10			0.10			0.10
Plus: Pro forma income on assets received from Citizens Community MHC		-			-			-			-
Less: Pro forma employee stock ownership plan adjustment		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Less: Pro forma recognition and retention plan adjustments		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Less: Pro forma options adjustment - new options		(0.02	)		(0.02	)		(0.02	)		(0.02	)
Less: Pro forma options adjustment - February 2005 options		( 0.01	)		( 0.01	)		( 0.01	)		--
Pro forma net income per share ^{(1)(2)(3)(4)(5)}	$	0.09		$	0.08		$	0.07		$	0.08

Offering price as a multiple of pro forma net income per share		55.56	x		62.50	x		71.43	x		62.50	x

Shares used in calculation of income per share		4,365,428			5,135,797			5,906,167			6,792,093

Stockholders’ equity:

Historical	$	29,814		$	29,814		$	29,814		$	29,814
Estimated net proceeds		32,846			38,770			44,694			51,507
Plus: Assets received from Citizens Community MHC		95			95			95			95
Less: common stock acquired by the employee stock ownership plan ⁽¹⁾		(2,195	)		(2,582	)		(2,970	)		(3,415	)
Less: common stock acquired by the recognition and retention plan ⁽²⁾		(1,097	)		(1,291	)		(1,485	)		(1,708	)
Pro forma stockholders' equity		59,463			64,806			70,149			76,293
Less: intangible assets		( 7,446	)		( 7,446	)		( 7,446	)		( 7,446	)
Pro forma tangible stockholders' equity	$	52,017		$	57,360		$	62,703		$	68,847

Stockholders’ equity per share:

Historical	$	6.52		$	5.54		$	4.82		$	4.19
Estimated net proceeds		7.18			7.20			7.22			7.24
Plus: Assets received from Citizens Community MHC		0.02			0.02			0.02			0.01
Less: common stock acquired by the employee stock ownership plan ⁽¹⁾		(0.48	)		(0.48	)		(0.48	)		(0.48	)
Less: common stock acquired by the recognition and retention plan ⁽²⁾		( 0.24	)		( 0.24	)		( 0.24	)		( 0.24	)

Pro forma stockholders' equity per share	$	13.00		$	12.04		$	11.34		$	10.72
Less: intangible assets per share		( 1.63	)		( 1.38	)		( 1.20	)		( 1.05	)
Pro forma tangible stockholders’ equity per share	$	11.37		$	10.66		$	10.14		$	9.67

Offering price as a percentage of pro forma stockholders' equity per share		76.92	%		83.06	%		88.18	%		93.28	%
Offering price as a percentage of pro forma tangible stockholders’ equity per share		87.95	%		93.81	%		98.62	%		103.41	%

Shares used in calculation of stockholders' equity per share ⁽⁶⁾		4,573,944			5,381,110			6,188,277			7,116,519

(Footnotes on following page)

(1)

Assumes that the employee stock ownership plan will purchase enough shares so that it owns 8% of our outstanding shares at the end of the Stock Offering, including the 119,236 shares of CCB it has already purchased, as adjusted in accordance with the Exchange Ratio. The plan will borrow funds from Citizens Community Bancorp, Inc. to make that acquisition of shares. The stock acquired by the employee stock ownership plan is reflected as a reduction of stockholders' equity. Citizens Community Federal intends to make annual contributions to the plan in an amount at least equal to the principal and interest requirement of the loan. This table assumes a ten-year amortization period. See “Management - Benefits -- Employee Stock Ownership Plan.” The pro forma net earnings assumes: (i) that Citizens Community Federal's contribution to the employee stock ownership plan for the principal portion of the debt service requirement for the six months ended March 31, 2006 was made at the end of the period; (ii) that 10,975, 12, 911, 14,848, 17,075 shares at the minimum, midpoint, maximum, and 15% above the maximum of the range, respectively, were committed to be released during the six months ended March 31, 2006, at an average fair value of $10.00 per share and were accounted for as a charge to expense in accordance with Statement of Position ("SOP") No. 93-6; and (iii) only the employee stock ownership plan shares committed to be released were considered outstanding for purposes of the net earnings per share calculations. All employee stock ownership plan shares were considered outstanding for purposes of the stockholders' equity per share calculations.

(2)

Gives effect to a restricted stock plan that may be adopted following the Stock Offering and presented for approval at a meeting of stockholders to be held after completion of the Stock Offering. If that plan is approved by the stockholders, the restricted stock plan is expected to acquire an amount of stock equal to 4% of our outstanding shares at the end of the Stock Offering, (excluding the 59,618 shares originally reserved for restricted stock under the current plan as adjusted in accordance with the Exchange Ratio) or 109,745, 129,112, 148,479 and 170,751 shares of stock, respectively, at the minimum, midpoint, maximum and 15% above the maximum of the range through open market purchases. Funds used by the restricted stock plan to purchase shares will be contributed to the restricted stock plan by Citizens Community Federal. In calculating the pro forma effect of the restricted stock plan, it is assumed that the required stockholder approval has been received for the plan, that the shares were acquired by the restricted stock plan at the beginning of the six months ended March 31, 2006 through open market purchases, at $10.00 per share, and that 10% of the amount contributed was amortized to expense during the six months ended March 31, 2006. The restricted stock plan will be amortized over 5 years. The issuance of authorized but unissued shares of stock to the restricted stock plan instead of open market purchases would dilute the voting interests of existing stockholders by approximately 2.45% and pro forma net income per share for the six months ended March 31, 2006 would be $ 0.10 , $ 0.10 , $ 0.09 and $ 0.09 at the minimum, midpoint, maximum and 15% above the maximum of the range, respectively, and pro forma stockholders' equity per share at March 31, 2006 would be $ 12.93 , $ 12.00 , $ 11.30 and $ 10.70 at the minimum, midpoint, maximum and 15% above the maximum of the range, respectively. There can be no assurance that stockholder approval of the restricted stock plan will be obtained, or the actual purchase price of the shares will be equal to $10.00 per share. See “Management - Benefits -- Potential Stock Benefit Plan.”

(3)

Gives effect to a stock option plan that may be adopted by Citizens Community Bancorp, Inc. following the Stock Offering and presented for approval at a meeting of stockholders to be held after completion of the Stock Offering and assumes that the options granted under the stock option plan have a value of $ 2.87 per option, which was determined using the Black-Scholes-Merton option pricing formula using the following assumptions: (i) the trading price on date of grant was $10.00 per share; (ii) exercise price is equal to the trading price on the date of grant; (iii) dividend yield of 1.4%; (iv) expected life of 10 years; (v) expected volatility of 12.62%; and risk-free interest rate of 4.86%. The assumed expected volatility is based on the historical volatility of the SNL Thrift Index, an index of all publicly traded thrifts, over the most recent 15 months. If the fair market value per share on the date of grant is different than $10.00, or if the assumptions used in the option pricing formula are different from those used in preparing this pro forma data, the value of the options and the related expense recognized will be different. There can be no assurance that the actual fair market value per share on the date of grant, and correspondingly the exercise price of the options, will be $10.00 per share. The issuance of authorized but unissued shares of stock instead of on market purchases to fund exercises of options granted under the stock option plan would dilute the voting interests of existing stockholders by approximately 5.91%. See “Management - Benefits -- Potential Stock Benefit Plans.”

(4)

The pro forma data for the six months ended March 31, 2006 includes an adjustment for stock option expense for those options awarded in February 2005. Please see Note 14 to the Consolidated Financial Statements for the pro forma expense disclosed and Note 3 above for the Black-Scholes assumptions and number of options.

(5)	Retained earnings will continue to be substantially restricted after the Stock Offering. See “Our Policy Regarding Dividends” and “How We Are Regulated - Limitations on Dividends and Other Capital Distributions.”

(6)

For purposes of calculating net income per share, only the employee stock ownership plan shares committed to be released under the plan were considered outstanding. For purposes of calculating stockholders' equity per share, all employee stock ownership shares were considered outstanding. We have also assumed that no options granted under the stock option plan were exercised during the period and that the trading price of Citizens Community Bancorp, Inc. common stock at the end of the period was $10.00 per share. Under this assumption, using the treasury stock method, no additional shares of stock were considered to be outstanding for purposes of calculating earnings per share or stockholders' equity per share.

	At or for the Year Ended September 30, 2005
	3,400,000			4,000,000			4,600,000			5,290,000
	Shares sold			Shares sold			Shares sold			Shares sold
	at $10.00			at $10.00			at $10.00			at $10.00
	per share			per share			per share			per share
	(Dollars in thousands, except per share amounts)

Gross proceeds	$	34,000		$	40,000		$	46,000		$	52,900

Less: expenses		(1,154	)		(1,230	)		(1,306	)		(1,393	)
Estimated net proceeds		32,846			38,770			44,694			51,507
Plus: Assets received from Citizens Community MHC		95			95			95			95
Less: employee stock ownership plan funded by Citizens Community Bancorp, Inc.		(2,195	)		(2,582	)		(2,970	)		(3,415	)
Less: recognition and retention plan adjustment		( 1,097	)		( 1,291	)		( 1,485	)		( 1,708	)
Estimated investable net proceeds	$	29,649		$	34,992		$	40,335		$	46,479

Net Income:
Historical	$	1,051		$	1,051		$	1,051		$	1,051
Pro forma income on net proceeds		711			840			968			1,116
Plus: Pro forma income on assets received from Citizens Community MHC		2			2			2			2
Less: Pro forma employee stock ownership plan adjustment ⁽¹⁾		(132	)		(155	)		(178	)		(205	)
Less: Pro forma recognition and retention plan adjustment ⁽²⁾		(132	)		(155	)		(178	)		(205	)
Less: Pro forma options adjustment - new options ⁽³⁾		(142	)		(167	)		(192	)		(221	)
Less: Pro forma options adjustment - February 2005 options ⁽⁴⁾		( 67	)		( 67	)		( 67	)		( 67	)
Pro forma net income ^{(1)(2)(3)(4)(5)}	$	1,291		$	1,349		$	1,406		$	1,471

Per share net income:
Historical	$	0.24		$	0.20		$	0.18		$	0.15
Pro forma income on net proceeds		0.16			0.16			0.16			0.16
Plus: Pro forma income on assets received from Citizens Community MHC		-			-			-			-
Less: Pro forma employee stock ownership plan adjustment"		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: Pro forma recognition and retention plan adjustments		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: Pro forma options adjustment - new options		(0.03	)		(0.03	)		(0.03	)		(0.03	)
Less: Pro forma options adjustment - February 2005 options		( 0.02	)		( 0.01	)		(0.01	)		( 0.01	)
Pro forma net income per share ^{(1)(2)(3)(4)(5)}	$	0.29		$	0.26		$	0.24		$	0.21

Offering price as a multiple of pro forma net income per share		34.48	x		38.46	x		41.67	x		47.62	x

Shares used in calculation of income per share		4,376,402			5,148,709			5,921,015			6,809,168
Stockholders' equity:
Historical	$	29,553		$	29,553		$	29,553		$	29,553
Estimated net proceeds		32,846			38,770			44,694			51,507
Plus: Assets received from Citizens Community MHC		95			95			95			95
Less: common stock acquired by the employee stock ownership plan ⁽¹⁾		(2,195	)		(2,582	)		(2,970	)		(3,415	)
Less: common stock acquired by the recognition and retention plan ⁽²⁾		( 1,097	)		( 1,291	)		( 1,485	)		( 1,708	)
Pro forma stockholders' equity		59,202			64,545			69,887			76,032
Less: intangible assets		( 7,597	)		( 7,597	)		( 7,597	)		( 7,597	)
Pro forma tangible stockholders' equity	$	51,605		$	56,948		$	62,290		$	68,435

Stockholders' equity per share:
Historical	$	6.46		$	5.49		$	4.78		$	4.15
Estimated net proceeds		7.18			7.20			7.22			7.24
Less: Assets received from Citizens Community MHC		0.02			0.02			0.02			0.01
Less: common stock acquired by the employee stock ownership plan ⁽¹⁾		(0.48	)		(0.48	)		(0.48	)		(0.48	)
Less: common stock acquired by the recognition and retention plan ⁽²⁾		( 0.24	)		( 0.24	)		( 0.24	)		( 0.24	)

Pro forma stockholders' equity per share		12.94			11.99			11.30			10.68
Less: intangible assets per share		( 1.66	)		( 1.41	)		( 1.23	)		( 1.07	)
Pro forma tangible stockholders’ equity per share	$	11.28		$	10.58		$	10.07		$	9.62

Offering price as a percentage of pro forma stockholders' equity per share		77.28	%		83.40	%		88.50	%		93.63	%
Offering price as a percentage of pro forma tangible stockholders’ equity per share		88.65	%		94.52	%		99.30	%		104.06	%

Shares used in calculation of stockholders' equity per share ⁽⁶⁾		4,573,944			5,381,110			6,188,277			7,116,519

(Footnotes on following page)

(1)

Assumes that the employee stock ownership plan will purchase enough shares so that it owns 8% of our outstanding shares at the end of the Stock Offering, including the 119,236 shares of CCB it has already purchased, as adjusted in accordance with the Exchange Ratio. The plan will borrow funds from Citizens Community Bancorp, Inc. to make that acquisition of shares. The stock acquired by the employee stock ownership plan is reflected as a reduction of stockholders' equity. Citizens Community Federal intends to make annual contributions to the plan in an amount at least equal to the principal and interest requirement of the loan. This table assumes a ten-year amortization period. See “Management - Benefits -- Employee Stock Ownership Plan.” The pro forma net earnings assumes: (i) that Citizens Community Federal's contribution to the employee stock ownership plan for the principal portion of the debt service requirement for year ended September 30, 2005 was made at the end of the period; (ii) that 21,949, 25,822, 29,696 and 34,150 shares at the minimum, midpoint, maximum, and 15% above the maximum of the range, respectively, were committed to be released during the year ended September 30, 2005, at an average fair value of $10.00 per share and were accounted for as a charge to expense in accordance with Statement of Position ("SOP") No. 93-6; and (iii) only the employee stock ownership plan shares committed to be released were considered outstanding for purposes of the net earnings per share calculations. All employee stock ownership plan shares were considered outstanding for purposes of the stockholders' equity per share calculations.

(2)

Gives effect to a restricted stock plan that may be adopted following the Stock Offering and presented for approval at a meeting of stockholders to be held after completion of the Stock Offering. If that plan is approved by the stockholders, the restricted stock plan is expected to acquire an amount of stock equal to 4% of our outstanding shares at the end of the Stock Offering, (excluding the 59,618 shares originally reserved for restricted stock under the current plan as adjusted in accordance with the Exchange Ratio) or 109,745, 129,112, 148,479, 170,751 shares of stock, respectively, at the minimum, midpoint, maximum and 15% above the maximum of the range through open market purchases. Funds used by the restricted stock plan to purchase shares will be contributed to the restricted stock plan by Citizens Community Federal. In calculating the pro forma effect of the restricted stock plan it is assumed that the required stockholder approval has been received for the plan, that the shares were acquired by the restricted stock plan at the beginning of the year ended September 30, 2005 through open market purchases, at $10.00 per share, and that 20% of the amount contributed was amortized to expense during the year ended September 30, 2005. The restricted stock plan will be amortized over 5 years. The issuance of authorized but unissued shares of stock to the restricted stock plan instead of on market purchases would dilute the voting interests of existing stockholders by approximately 2.45% and pro forma net income per share for the year ended September 30, 2005 would be $0.29, $0.26, $0.24 and $0.22 at the minimum, midpoint, maximum and 15% above the maximum of the range, respectively, and pro forma stockholders' equity per share at September 30, 2005 would be $12.87, $11.95, $11.26 and $10.67 at the minimum, midpoint, maximum and 15% above the maximum of the range, respectively. There can be no assurance that stockholder approval of the restricted stock plan will be obtained, or the actual purchase price of the shares will be equal to $10.00 per share. See “Management - Benefits -- Potential Stock Benefit Plan.”

(3)

Gives effect to a stock option plan that may be adopted by Citizens Community Bancorp, Inc. following the Stock Offering and presented for approval at a meeting of stockholders to be held after completion of the Stock Offering and assumes that the options granted under the stock option plan have a value of $2.87 per option, which was determined using the Black-Scholes-Merton option pricing formula using the following assumptions: (i) the trading price on date of grant was $10.00 per share; (ii) exercise price is equal to the trading price on the date of grant; (iii) dividend yield of 1.4%; (iv) expected life of 10 years; (v) expected volatility of 12.62%; and risk-free interest rate of 4.86%. The assumed expected volatility is based on the historical volatility of the SNL Thrift & Index, an index of all publicly traded thrifts, over the most recent 15 months. If the fair market value per share on the date of grant is different than $10.00, or if the assumptions used in the option pricing formula are different from those used in preparing this pro forma data, the value of the options and the related expense recognized will be different. There can be no assurance that the actual fair market value per share on the date of grant, and correspondingly the exercise price of the options, will be $10.00 per share. The issuance of authorized but unissued shares of stock instead of open market purchases to fund exercises of options granted under the stock option plan would dilute the voting interests of existing stockholders by approximately 5.90%. See “Management - Benefits -- Potential Stock Benefit Plans.”

(4)	Retained earnings will continue to be substantially restricted after the Stock Offering. See “Our Policy Regarding Dividends” and “How We Are Regulated - Limitations on Dividends and Other Capital Distributions.”

(5)

WE EXCEED ALL REGULATORY CAPITAL REQUIREMENTS

The following table presents Citizens Community Federal’s historical and pro forma capital position and its capital requirements as of March 31, 2006. Pro forma capital levels assume receipt by Citizens Community Federal of 50% of the net proceeds of the Stock Offering. For a discussion of the assumptions underlying the pro forma capital calculations presented below, see “How We Intend to Use the Proceeds of the Stock Offering,” “Capitalization” and “Pro Forma Data.” The definitions of the terms used in the table are those provided in the capital regulations issued by the OTS. For a discussion of the capital standards applicable to Citizens Community Federal, see “Regulation - Regulatory Capital Requirements.”

	Actual, at March 31, 2006					$34,000,000 Minimum Offering					$40,000,000 Midpoint Offering					$46,000,000 Maximum Offering					$52,900,000 Maximum, As Adjusted Offering ⁽¹⁾
	Amount		Percentage of Assets ⁽²⁾			Amount		Percentage of Assets ⁽²⁾			Amount		Percentage of Assets ⁽²⁾			Amount		Percentage of Assets ⁽²⁾			Amount		Percentage of Assets ⁽²⁾
	(Dollars in thousands)

GAAP Capital ⁽³⁾	$	26,675		10.39	%	$	39,806		14.76	%	$	42,187		15.50	%	$	44,568		16.23	%	$	47,306		17.06	%

Tangible Capital:
Actual or Pro Forma	$	19,251		7.72	%	$	32,382		12.33	%	$	34,763		13.12	%	$	37,144		13.89	%	$	39,882		14.77	%
Required		3,742		1.50			3,939		1.50			3,975		1.50			4,010		1.50			4,051		1.50
Excess	$	15,509		6.22	%	$	28,443		10.83	%	$	30,788		11.62	%	$	33,133		12.39	%	$	35,831		13.27	%

Core Capital:
Actual or Pro Forma	$	19,251		7.72	%	$	32,382		12.33	%	$	34,763		13.12	%	$	37,144		13.89	%	$	39,882		14.77	%
Required ⁽⁴⁾		9,978		4.00			10,504		4.00			10,599		4.00			10,694		4.00			10,804		4.00
Excess	$	9,273		3.72	%	$	21,878		8.23	%	$	24,164		9.12	%	$	26,450		9.89	%	$	29,078		10.77	%

Risk-Based Capital:
Actual or Pro Forma ^(5) (6)	$	19,879		12.08	%	$	33,010		19.28	%	$	35,391		20.53	%	$	37,772		21.76	%	$	40,510		23.16	%
Required		13,170		8.00			13,695		8.00			13,790		8.00			13,886		8.00			13,995		8.00
Excess	$	6,709		4.08	%	$	19,314		11.28	%	$	21,600		12.53	%	$	23,886		13.76	%	$	26,515		15.16	%

Tier 1 Risk-Based Capital:
Actual or Pro Forma ⁽⁵⁾⁽⁶⁾	$	19,251		11.69	%	$	32,382		18.92	%	$	34,763		20.17	%	$	37,144		21.40	%	$	39,882		22.80	%
Required		6,585		4.00			6,848		4.00			6,895		4.00			6,943		4.00			6,998		4.00
Excess	$	12,666		7.69	%	$	25,534		14.92	%	$	27,867		16.17	%	$	30,201		17.40	%	$	32,884		18.80	%

_______

(1)	As adjusted to give effect to an increase in the number of shares that could occur due to an increase in the offering range of up to 15% as a result of regulatory considerations or changes in market or general financial and economic conditions following the commencement of the Stock Offering.

(2)	Tangible and core capital levels are shown as a percentage of total adjusted assets. The risk-based capital level is shown as a percentage of risk-weighted assets.

(3)	GAAP capital includes unrealized gain (loss) on available-for-sale securities, net, goodwill, and other intangibles which are not included as regulatory capital.

(4)	The current OTS core capital requirement for savings banks is 3% of total adjusted assets for thrifts that receive the highest supervisory rating for safety and soundness and 4% to 5% for all other thrifts. Our required level is 4%. See “Regulation - Regulatory Capital Requirements.”

(5)	Assumes net proceeds are invested in assets that carry a 50% risk-weighing.

(6)	The difference between equity under GAAP and regulatory risk-based capital is attributable to the addition of $22,000 for accumulated other comprehensive loss, $628,000 for the allowance for loan losses, and the subtraction of $7,446,000 for goodwill and other intangibles.

THE CONVERSION

On April 20, 2006, the boards of directors of Citizens Community MHC, CCB and Citizens Community Federal adopted a Plan of Conversion and Reorganization, which authorizes the Conversion and Stock Offering, subject to the approval of the OTS, members of Citizens Community MHC, stockholders of CCB and the satisfaction of certain other conditions. In accordance with the plan, Citizens Community MHC will convert from a mutual holding company to a full stock corporation. Public stockholders currently own 26% of CCB and the remaining 74% is owned by Citizens Community MHC. Upon consummation of the Conversion, Citizens Community MHC will cease to exist. The stock held by the public stockholders of CCB will be converted into shares of Citizens Community Bancorp, Inc., a newly formed Maryland corporation. After the conversion, Citizens Community Federal will be a wholly owned subsidiary of Citizens Community Bancorp, Inc. We received authorization from the OTS to conduct the Conversion and Stock Offering on ______________, 2006. OTS authorization does not constitute a recommendation or endorsement of an investment in our stock by the OTS.

Request for a Copy of the Plan of Conversion and Reorganization

The following is a brief summary of the pertinent aspects of the Conversion. A copy of the Plan of Conversion and Reorganization is available upon request and is available for inspection at the offices of Citizens Community Federal and the OTS. The Plan of Conversion and Reorganization also is filed as an exhibit to the registration statement, of which this Prospectus forms a part, that Citizens Community Bancorp, Inc. has filed with the SEC. See “Where You Can Find Additional Information.”

Reasons for the Conversion and Stock Offering

After considering the advantages and disadvantages of the Conversion, the boards of directors of Citizens Community MHC, CCB and Citizens Community Federal unanimously approved the Conversion as being in their respective best interests and in the best interests of their stockholders or members. The boards of directors concluded that the Conversion offers a number of advantages that will be important to our future growth and performance.

The Conversion will result in the raising of additional capital for Citizens Community Bancorp, Inc. and Citizens Community Federal, which will support Citizens Community Federal’s future lending and operational growth and may also support possible future branching activities. It also will better position Citizens Community Federal to thrive and remain viable as a full-service community bank and to meet the increasing competition in its market areas. Through the reinvestment and leveraging of the proceeds, we hope to enhance our profitability and earnings by improving our net interest margin. As a fully converted stock holding company, we will have greater flexibility in structuring mergers and acquisitions with other financial institutions or financial services companies, including the form of consideration paid in a transaction. Our current mutual holding company structure, by its nature, limits our ability to offer our common stock as consideration in a merger or acquisition. Our new stock holding company structure will enhance our ability to compete with other bidders when acquisition opportunities arise by better enabling us to offer stock or cash consideration or a combination of the two.

Our additional capital will permit us to maintain capital ratios well above the regulatory requirements. The proceeds from the Stock Offering will provide us with additional equity capital, which will support our proposed future deposit growth and expanded operations. While we currently exceed applicable regulatory capital requirements, the sale of stock, coupled with the accumulation of earnings, less dividends or other reductions in capital, from year to year, represents a means for the orderly preservation and expansion of our capital base.

After completion of the Conversion, the unissued common and preferred stock authorized by Citizens Community Bancorp, Inc.’s articles of incorporation will permit it to raise additional capital through further sales of securities. Although CCB currently has the ability to raise additional capital through the sale of additional shares of CCB common stock, that ability is limited by the mutual holding company structure, which, among other things, requires that Citizens Community MHC hold a majority of the outstanding shares of CCB’s common stock.

We believe the Conversion and Stock Offering will assist us in our efforts to build stockholder value. As a result of the Stock Offering, 100% of our shares will be held by public stockholders. This greater amount of publicly held shares enabled us to apply to have our common stock quoted on the Nasdaq Global Market. Although no assurances can be given, we expect that listing on the Nasdaq Global Market will result in a more active and liquid market for Citizens Community Bancorp, Inc. common stock, which we have applied to have listed on the Nasdaq Global Market, than currently exists for CCB common stock, which is not listed on Nasdaq and has limited liquidity.

The Conversion will afford our officers and employees the opportunity to increase their stock ownership, which we believe to be an effective performance incentive and an effective means of attracting and retaining qualified personnel. The Conversion also will provide our customers and local community members with an opportunity to acquire our stock.

Description of the Conversion

Citizens Community Bancorp, Inc. has been incorporated under Maryland law as a first-tier wholly owned subsidiary of Citizens Community Federal. To effect the Conversion, the following will occur.

CCB will convert into an interim federal stock savings bank and simultaneously merge with and into Citizens Community Federal and cease to exist;

Citizens Community MHC will convert from mutual form to an interim federal stock savings bank and simultaneously merge with and into Citizens Community Federal and cease to exist and the shares of CCB common stock held by Citizens Community MHC will be canceled; and

CCBC Interim Three Savings Bank will be formed as a wholly owned subsidiary of Citizens Community Bancorp, Inc., and then will merge with and into Citizens Community Federal.

As a result of the merger of CCBC Interim Three Savings Bank with and into Citizens Community Federal, Citizens Community Federal will become a wholly owned subsidiary of Citizens Community Bancorp, Inc. and the outstanding shares of CCB common stock held by the general public will be converted into a number of shares of Citizens Community Bancorp, Inc. common stock that will result in the holders of such shares owning in the aggregate approximately the same percentage of Citizens Community Bancorp, Inc. common stock to be outstanding upon the completion of the Conversion (i.e., the common stock and the exchange shares) as the percentage of CCB common stock owned by them in the aggregate immediately before consummation of the Conversion before giving effect to the payment of cash in lieu of issuing fractional exchange shares and any shares of common stock purchased by public stockholders in the Stock Offering.

Pursuant to OTS regulations, consummation of the Conversion (including the offering of common stock in the Stock Offering, as described below) is conditioned upon the approval of the Plan of Conversion and Reorganization by (1) the OTS, (2) at least a majority of the total number of votes eligible to be cast by members of Citizens Community MHC at the special meeting of members, (3) holders of two-thirds of the shares of the outstanding CCB common stock (including Citizens Community MHC) at the special meeting of stockholders, and (4) the holders of a majority of the shares of CCB (excluding Citizens Community MHC) at the special meeting.

Share Exchange Ratio

OTS regulations provide that in this Conversion of our mutual holding company to stock form, the minority public stockholders of CCB will be entitled to exchange their shares of common stock for common stock of Citizens Community Bancorp, Inc., provided that Citizens Community Federal and the mutual holding company demonstrate to the satisfaction of the OTS that the basis for the exchange is fair and reasonable. On the date of completion of the Conversion, each publicly held share of CCB common stock will automatically be converted into and become the right to receive a number of exchange shares determined pursuant to the Exchange Ratio. The public stockholders of CCB common stock will own the same percentage of Citizens Community Bancorp, Inc. after the Conversion as they currently hold in CCB, subject to additional purchases and the receipt of cash in lieu of fractional shares.

Based on the independent valuation, the 74% of the outstanding shares of CCB common stock held by Citizens Community MHC as of the date of the independent valuation and the 26% public ownership interest of CCB, the following table sets forth, at the minimum, midpoint, maximum, and adjusted maximum of the offering range:

the total number of subscription shares and exchange shares to be issued in the Conversion;

the total shares of common stock outstanding after the Conversion;

the Exchange Ratio; and

the number of shares an owner of CCB will receive in the exchange, adjusted for the number of shares sold in the Stock Offering.

	Shares to be sold in the Stock Offering		Shares of Citizens Community Bancorp, Inc. to be exchanged for existing shares of CCB		Total Shares of Common Stock to be Outstanding	Exchange Ratio	100 shares of CCB would be exchanged for the following number of shares of Citizens Community Bancorp, Inc.
	Amount	Percent	Amount	Percent	Total Shares of Common Stock to be Outstanding	Exchange Ratio

Minimum	3,400,000	74%	1,173,944	26%	4,573,944	1.22803	122
Midpoint	4,000,000	74	1,381,110	26	5,381,110	1.44474	144
Maximum	4,600,000	74	1,588,277	26	6,188,277	1.66145	166
Adjusted maximum	5,290,000	74	1,826,519	26	7,116,519	1.91067	191

Options to purchase shares of CCB common stock will be converted into options to purchase shares of Citizens Community Bancorp, Inc. common stock. Additionally, restricted stock awards of CCB will also be converted into restricted shares of Citizens Community Bancorp, Inc. common stock. At March 31, 2006, there were outstanding options to purchase 105,827 shares of CCB common stock and there were 36,962 restricted stock awards of CCB common stock outstanding. The number of shares of common stock to be received upon exercise of these options will be determined pursuant to the Exchange Ratio. The aggregate exercise price, duration, and vesting schedule of these options and restricted stock awards will not be affected.

Effect of the Conversion on Minority Stockholders

Effect on Stockholders' Equity Per Share of the Shares Exchanged. The Conversion will increase the stockholders' equity of the public stockholders of CCB common stock. At March 31, 2006, the stockholders' equity per share of CCB common stock was $6.52, including shares held by Citizens Community MHC. As set forth under the March 31, 2006 “Pro Forma Data,” pro forma stockholders' equity per share is $13.00, $12.04, $11.34, and $10.72, respectively, at the minimum, midpoint, maximum and adjusted maximum, of the offering range.

Effect on Earnings per Share of the Shares Exchanged. The Conversion also will affect the public stockholders of CCB common stock pro forma earnings per share. For the six months ended March 31, 2006, basic and diluted earnings per share of CCB common stock was $0.07, including shares held by Citizens Community MHC. As set forth under the six months ended March 31, 2006 “Pro Forma Data,” pro forma earnings per share range from $0.09 to $0.08 for the minimum to the adjusted maximum of the offering range.

Dissenters' and Appraisal Rights. Under OTS regulations, dissenters' rights of appraisal are available to holders of CCB’s common stock in connection with the Conversion. The following discussion is not a complete statement of the law pertaining to dissenters' rights under the OTS Regulations and is qualified in its entirety by the full text of Section 552.14 of the OTS Regulations, which is referred to as Section 552.14 and is reprinted in its entirety as Appendix A to this Prospectus. Any CCB stockholder who desires to exercise his or her dissenters' rights should review carefully Section 552.14 and is urged to consult a legal advisor before electing or attempting to exercise his or her rights. All references in Section 552.14 to a "stockholder" and in this summary of dissenters' rights are to the record holder of shares of CCB common stock as to which dissenters' rights are asserted. Subject to the exceptions stated below, holders of CCB common stock who comply with the applicable procedures summarized below will be entitled to exercise dissenters' rights under Section 552.14.

A stockholder electing to exercise his or her rights to dissent from the Conversion is required to file with CCB (addressed to Stockholder Relations, Citizens Community Bancorp, 2174 EastRidge Center, Eau Claire, Wisconsin 54701) prior to voting on the Plan of Conversion and Reorganization, a written statement identifying himself or herself and stating his or her intention to demand appraisal of, and payment for, his or her shares. This demand must be made in addition to, and separate from, any proxy or vote. A failure to vote on the proposal to approve the Plan of Conversion and Reorganization will not constitute a waiver of appraisal rights, but a vote for the Plan of Conversion and Reorganization will be deemed a waiver of such rights. A vote against the Plan of Conversion and Reorganization will not be deemed to satisfy the requirement to file the written statement. However, if a stockholder returns a signed proxy but does not specify a vote against the Plan of Conversion and Reorganization, or a direction to abstain, the proxy, if not revoked prior to the CCB stockholders' meeting, will be voted for approval of the Plan of Conversion and Reorganization, which will have the effect of waiving that stockholder's dissenters' rights.

Within ten days after the completion of the Conversion and Stock Offering, Citizens Community Bancorp, Inc. shall (i) give written notice by mail to any dissenting stockholder who has not voted in favor of the Plan of Conversion and Reorganization, (ii) make a written offer to each dissenting stockholder to pay for his or her shares at a specified price deemed by Citizens Community Bancorp, Inc. to be fair value of such shares, and (iii) inform any dissenting stockholder that within 60 days of the completion of the Conversion and Stock Offering the dissenting stockholder must file a petition with the OTS, 1700 G Street, N.W., Washington, D.C. 20552, if the stockholder and Citizens Community Bancorp, Inc. do not agree as to the fair market value.

If, within 60 days of the completion of the Conversion and Stock Offering, the fair value is agreed upon between Citizens Community Bancorp, Inc. and any dissenting stockholder, payment will be made within 90 days of the completion of the Conversion and Stock Offering. If, within such period, however, Citizens Community Bancorp, Inc. and any dissenting stockholder do not agree as to the fair value of such shares, such stockholder may file a petition with the OTS demanding a determination of the fair market value of the stock. A copy of such petition must be sent by registered or certified mail to Citizens Community Bancorp, Inc. Any such stockholder who fails to file the petition within 60 days of the completion of the Conversion and Stock Offering is deemed to have accepted the terms of the Plan.

Each dissenting stockholder, within 60 days of the completion of the Conversion and Stock Offering, must submit his or her certificates to the transfer agent for notation thereon that an appraisal and payment have been demanded. Any stockholder who fails to submit his or her certificates will not be entitled to appraisal rights and will be deemed to have accepted the terms of the Plan.

Any stockholder who is demanding payment for his shares in accordance with Section 552.14 shall not thereafter be entitled to vote or exercise any rights of a stockholder except the right to receive payment for his shares pursuant to the provisions of Section 552.14 and the right to maintain certain legal actions. The respective shares for which payment has been demanded shall not thereafter be considered outstanding for the purposes of any subsequent vote of stockholders.

Comparison of Stockholders' Rights of CCB and Citizens Community Bancorp, Inc.

As a result of the Conversion, the current public stockholders of CCB, a federal corporation chartered by the OTS, will become stockholders of Citizens Community Bancorp, Inc., a Maryland chartered corporation. There are certain differences in stockholder rights arising from distinctions between CCB's federal charter and bylaws and Citizens Community Bancorp, Inc.'s articles of incorporation and bylaws and from differences in federal laws and regulations governing mutual holding companies and Maryland corporate law. These differences include the ability of the board of directors of Citizens Community Bancorp, Inc. to authorize additional shares without stockholder approval, more stringent perquisites for stockholders' nominations, proposals and calling special meetings, limits on acquisitions of greater than 10% of our stock and various anti-takeover provisions. See “Comparison of Rights of Stockholders of Citizens Community Bancorp, Inc.’s and CCB’s Stockholders.”

Effects of the Conversion on Depositors, Borrowers and Members

Continuity. The Conversion will not have any effect on Citizens Community Federal's present business of accepting deposits and investing its funds in loans and other investments permitted by law. The Conversion will not result in any change in the existing services provided to depositors and borrowers, or in existing offices, management, and staff. After the Conversion, Citizens Community Federal will continue to be subject to regulation, supervision, and examination by the OTS and the FDIC.

Deposits and Loans. Each holder of a deposit account in Citizens Community Federal at the time of the Conversion will continue as an account holder in Citizens Community Federal after the Conversion, and the Conversion will not affect the deposit balance, interest rate, or other terms. Each deposit account will be insured by the FDIC to the same extent as before the Conversion. Depositors will continue to hold their existing certificates, savings records, checkbooks, and other evidence of their accounts. The Conversion will not affect the loans of any borrower from Citizens Community Federal. The amount, interest rate, maturity, security for, and obligations under each loan will remain contractually fixed as they existed prior to the Conversion.

Voting Rights of Members. At present, all depositors of Citizens Community Federal are members of, and have voting rights in, Citizens Community MHC as to all matters requiring membership action. Upon completion of the Conversion, depositors and borrowers will cease to be members of Citizens Community MHC and will no longer be entitled to vote at meetings of Citizens Community MHC. Upon completion of the Conversion, Citizens Community Bancorp, Inc. will be the sole stockholder of Citizens Community Federal and have all voting rights in Citizens Community Federal. Stockholders of Citizens Community Bancorp, Inc. will have exclusive voting rights in the corporation. Depositors of Citizens Community Federal will not have voting rights after the Conversion, except to the extent that they become our stockholders through the purchase of common stock.

Effect on Liquidation Rights. Each depositor in Citizens Community Federal has both a deposit account in Citizens Community Federal and a pro rata ownership interest in the net worth of Citizens Community MHC based upon the balance in his or her account. This interest may only be realized in the event of a complete liquidation of Citizens Community MHC and Citizens Community Federal. However, this ownership interest is tied to the depositor's account and has no tangible market value separate from the deposit account. Any depositor who opens a deposit account obtains a pro rata ownership interest in Citizens Community MHC without any additional payment beyond the amount of the deposit. A depositor who reduces or closes his or her account receives a portion or all of the balance in the deposit account but nothing for his or her ownership interest in the net worth of Citizens Community MHC, which is lost to the extent that the balance in the account is reduced or closed.

Consequently, depositors in a stock subsidiary of a mutual holding company normally have no way of realizing the value of their ownership interest, which has realizable value only in the unlikely event that Citizens Community MHC and Citizens Community Federal are liquidated. If this occurs, the depositors of record at that time, as owners, would share pro rata in any residual surplus and reserves of Citizens Community MHC after other claims, including claims of depositors to the amounts of their deposits, are paid.

In the unlikely event that Citizens Community Federal were to liquidate after the conversion, all claims of creditors, including those of depositors, also would be paid first, followed by distribution of the "liquidation account" to depositors as of March 31, 2005 and June 30, 2006 who continue to maintain their deposit accounts as of the date of liquidation, with any assets remaining thereafter distributed to CCB as the holder of Citizens Community Federal's capital stock. Pursuant to the rules and regulations of the OTS, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation, and the liquidation account would be assumed by the surviving institution. See “- Liquidation Rights.”

Federal and State Tax Consequences of the Conversion

We have received opinions from Silver, Freedman & Taff, L.L.P, and from Wipfli LLP regarding the federal and Wisconsin tax consequences of the Conversion. The opinions have been filed as exhibits to the registration statement of which this Prospectus is a part and cover those federal and state tax matters that are material to the transaction. The opinions are made in reliance upon various statements, representations and declarations as to matters of fact made by us, as detailed in the opinions. The opinions provide that:

The transactions qualify as statutory mergers and each merger required by the Plan qualifies as a reorganization within the meaning of Code Section 368(a)(1)(A). Citizens Community MHC, CCB, Citizens Community Bancorp, Inc. and Citizens Community Federal will be a party to a "reorganization" as defined in Code Section 368(b).

Citizens Community MHC will not recognize any gain or loss on the transfer of its assets to Citizens Community Federal in exchange for Citizens Community Federal liquidation interests for the benefit of Citizens Community MHC members who remain depositors of Citizens Community Federal.

No gain or loss will be recognized by Citizens Community Federal upon the receipt of the assets of Citizens Community MHC in exchange for the transfer to the members of Citizens Community Federal liquidation interests.

No gain or loss will be recognized by Citizens Community Federal upon the receipt of the assets of CCBC Interim Two Savings Bank and CCBC Interim Three Savings Bank pursuant to the Conversion.

No gain or loss will be recognized by CCBC Interim Two Savings Bank following its Conversion to a federal stock savings bank.

The reorganization of Citizens Community Bancorp, Inc. as the holding company of Citizens Community Federal qualifies as a reorganization within the meaning of Code Section 368(a)(I)(A) by virtue of Code Section 368(a)(2)(E). Therefore, Citizens Community Federal, CCB, and CCBC Interim Three Savings Bank will each be a party to a reorganization, as defined in Code Section 368(b).

No gain or loss will be recognized by CCBC Interim Three Savings Bank upon the transfer of its assets to Citizens Community Federal pursuant to the Conversion.

Members will recognize no gain or loss upon the receipt of Citizens Community Federal liquidation interests.

No gain or loss will be recognized by Citizens Community Bancorp, Inc., upon the receipt of Citizens Community Federal Stock solely in exchange for stock of Citizens Community Bancorp, Inc.

Current stockholders of CCB will not recognize any gain or loss upon their exchange of common stock solely for shares of stock of Citizens Community Bancorp, Inc.

Each stockholder's aggregate basis in shares of stock of Citizens Community Bancorp, Inc. received in the exchange will be the same as the aggregate basis of common stock surrendered in the exchange before giving effect to any payment of cash in lieu of fractional shares.

No gain or loss will be recognized by Citizens Community Bancorp, Inc. on the receipt of money in exchange for stock of Citizens Community Bancorp, Inc. sold in the Stock Offering.

No gain or loss will be recognized by Eligible Account Holders, Supplemental Eligible Account Holders and Other Members upon the distribution to them of the non-transferable subscription rights to purchase shares of stock of Citizens Community Bancorp, Inc.

The opinion in the last bullet above is predicated on representations from Citizens Community Federal, CCB, Citizens Community Bancorp, Inc. and Citizens Community MHC that no person shall receive any payment, whether in money or property, in lieu of the issuance of subscription rights. The opinion in the last bullet above is based on the position that the subscription rights to purchase shares of common stock received by Eligible Account Holders, Supplemental Eligible Account Holders and Other Members have a fair market value of zero. In reaching their opinion stated in the second bullet above, Silver, Freedman & Taff, L.L.P. has noted that the subscription rights will be granted at no cost to the recipients, will be legally non-transferable and of short duration, and will provide the recipients with the right only to purchase shares of common stock at the same price to be paid by members of the general public in any community offering. Silver, Freedman & Taff, L.L.P. believes that it is more likely than not that the fair market value of the subscription rights to purchase common stock is zero.

If the non-transferable subscription rights to purchase common stock are subsequently found to have a fair market value, income may be recognized by various recipients of the subscription rights (in certain cases, whether or not the rights are exercised), and we may be taxed on the distribution of the subscription rights.

We are also subject to Wisconsin income taxes and have received an opinion from Wipfli LLP that the Stock Offering will be treated for Wisconsin state tax purposes similarly to the treatment of the Stock Offering for federal tax purposes.

Unlike a private letter ruling from the IRS, the federal and state tax opinions have no binding effect or official status, and no assurance can be given that the conclusions reached in any of those opinions would be sustained by a court if contested by the IRS or the Wisconsin tax authorities. Eligible Account Holders, Supplemental Eligible Account Holders and Other Members are encouraged to consult with their own tax advisers as to the tax consequences in the event the subscription rights are determined to have any market value.

Liquidation Rights

In the unlikely event of a complete liquidation of CCB prior to the Conversion, all claims of creditors of CCB, including those of depositors to the extent of their deposit balances, would be paid first. Thereafter, if there were any assets of CCB remaining, these assets would be distributed to stockholders, including Citizens Community MHC. In the unlikely event that Citizens Community MHC and CCB are liquidated prior to the Conversion, all claims of creditors would be paid first. Then, if there were any assets of Citizens Community MHC remaining, members of Citizens Community MHC would receive those remaining assets, pro rata, based upon the deposit balances in their deposit account in Citizens Community Federal immediately prior to liquidation. In the unlikely event that Citizens Community Federal were to liquidate after the Conversion, all claims of creditors, including those of depositors, would be paid first, followed by distribution of the liquidation account to certain depositors, with any assets remaining thereafter distributed to Citizens Community Bancorp, Inc. as the holder of Citizens Community Federal capital stock. Pursuant to the rules and regulations of the OTS, a post-conversion merger, consolidation, sale of bulk assets or similar combination or transaction with another insured savings institution would not be considered a liquidation and, in these types of transactions, the liquidation account would be assumed by the surviving institution.

The Plan of Conversion and Reorganization provides that Citizens Community Federal shall establish, upon the completion of the Conversion, the special liquidation account for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders (as those terms are defined in the Plan of Conversion and Reorganization) in an amount equal to the greater of:

(1)

74% (Citizens Community MHC's ownership interest) of the retained earnings of CCB as of the date of its latest balance sheet contained in this Prospectus; or

(2)

the retained earnings of Citizens Community Federal at December 31, 2003 (the date of its latest balance sheet in the prospectus used at the time that it reorganized into the mutual holding company form).

The purpose of the liquidation account is to provide Eligible Account Holders and Supplemental Eligible Account Holders who maintain their deposit accounts with Citizens Community Federal after the Conversion with an interest in the unlikely event of the complete liquidation of Citizens Community Federal after the Conversion. Each Eligible Account Holder and Supplemental Eligible Account Holder that continues to maintain his or her deposit account at Citizens Community Federal, would be entitled, on a complete liquidation of Citizens Community Federal after the Conversion, to an interest in the liquidation account prior to any payment to the stockholders of Citizens Community Bancorp, Inc. Each Eligible Account Holder and Supplemental Eligible Account Holder would have an initial interest in the liquidation account for each deposit account, including savings accounts, checking accounts, money market deposit accounts, and certificates of deposit, with a balance of $50 or more held in Citizens Community Federal as of the close of business on March 31, 2005, or June 30, 2006. Each Eligible Account Holder and Supplemental Eligible Account Holder would have a pro rata interest in the total liquidation account for each such deposit account, based on the proportion that the balance of each such deposit account on March 31, 2005 or June 30, 2006 bears to the balance of all deposit accounts in Citizens Community Federal on these dates.

If, however, on any September 30 annual closing date commencing after the completion of the Conversion, the amount in any deposit account is less than the amount in that deposit account on March 31, 2005 or June 30, 2006 or any other annual closing date, then the interest in the liquidation account relating to that deposit account would be reduced from time to time by the proportion of the reduction, and the interest will cease to exist if the deposit account is closed. In addition, no interest in the liquidation account would ever be increased despite any subsequent increase in the related deposit account. Payment pursuant to liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders would be separate and apart from the payment of any insured deposit accounts to a depositor. Any assets remaining after the above liquidation rights of Eligible Account Holders and Supplemental Eligible Account Holders are satisfied would be distributed to Citizens Community Bancorp, Inc. as the sole stockholder of Citizens Community Federal.

Amendment or Termination of the Plan of Conversion and Reorganization

If deemed necessary or desirable by the Board of Directors, the Plan of Conversion and Reorganization may be substantively amended, as a result of comments from regulatory authorities or otherwise, at any time prior to the solicitation of proxies from members and stockholders to vote on the plan and at any time thereafter with the concurrence of the OTS. Any amendment to the plan made after approval by the members and stockholders with the concurrence of the OTS shall not necessitate further approval by the members or stockholders unless otherwise required by the OTS. The plan shall terminate if the sale of all shares of stock is not completed within 24 months from the date of the special meeting of members. Prior to the earlier of the special meeting of members and the stockholders' meeting, the plan may be terminated by the Board of Directors without approval of the OTS. After the special meeting or the stockholders' meeting, the Board of Directors may terminate the plan only with the approval of the OTS.

Conditions to the Conversion and Stock Offering

We cannot complete our Conversion and our Stock Offering unless:

(1)

We sell a minimum of 3,400,000 shares of common stock;

(2)

The Plan of Conversion and Reorganization is approved by a majority of the votes eligible to be cast by members of Citizens Community MHC;

(3)

The Plan of Conversion and Reorganization is approved by at least two-thirds of the votes eligible to be cast by stockholders of Citizens Community Bancorp, including those shares held by Citizens Community MHC; and

(4)

The Plan of Conversion and Reorganization is approved by a majority of the votes eligible to be cast by stockholders of Citizens Community Bancorp, excluding those shares held by Citizens Community MHC.

The Plan of Conversion and Reorganization also must be approved by the OTS, which has given its conditional approval. If these conditions are not met before we complete the Stock Offering, all funds received will be promptly returned with interest at Citizens Community Federal's TYME passbook savings account rate and all withdrawal authorizations will be canceled. The stock purchases of our officers and directors will be counted for purposes of meeting the minimum number of shares.

Citizens Community MHC intends to vote its 74% ownership interest in favor of the Conversion. In addition, as of May 31, 2006, directors and executive officers of CCB and their associates own 252,858 outstanding shares of CCB, or 6.8% of the total outstanding shares. They intend to vote those shares in favor of the Conversion.

THE STOCK OFFERING

General

On April 26, 2006, the boards of directors of Citizens Community MHC, CCB and Citizens Community Federal adopted the Plan of Conversion and Reorganization authorizing the Conversion and Stock Offering, subject to the approval of the OTS, members of Citizens Community MHC and stockholders of CCB. The Plan provides that Citizens Community Bancorp, Inc. will sell shares of common stock to eligible depositors of Citizens Community Federal in a subscription offering and, if necessary, to the general public, if a community and/or a syndicated community offering is held. The boards of directors unanimously adopted the plan after consideration of the advantages and the disadvantages of the Conversion and the Stock Offering. The Stock Offering will be accomplished in accordance with the procedures set forth in the plan, the requirements of applicable law and regulations and the policies of the OTS. We received authorization from the OTS to conduct the Stock Offering on August ____, 2006. OTS authorization does not constitute a recommendation or endorsement of an investment in our stock by the OTS.

We are offering between a minimum of 3,400,000 shares and a maximum of 4,600,000 shares of common stock in the offering (subject to adjustment to up to 5,290,000 shares if our estimated pro forma market value has increased at the conclusion of the Stock Offering), which will expire at 12:00 noon, Eau Claire, Wisconsin time on _________________ 2006, unless extended. See “- Deadlines for Purchasing Stock.” The minimum purchase is 25 shares of common stock (minimum investment of $250). Our common stock is being offered at a fixed price of $10.00 per share in the Stock Offering.

In accordance with Rule 15c2-4 of the Securities Exchange Act of 1934, pending completion or termination of the Stock Offering, subscription funds received by us will be invested only in investments permissible under Rule 15c2-4.

Conduct of the Stock Offering

Subject to the limitations of the plan adopted by our boards of directors, shares of common stock are being offered in descending order of priority in the subscription offering to:

Eligible Account Holders (depositors of both Citizens Community Federal and Community Plus Savings Bank at the close of business on March 31, 2005 with deposits of at least $50.00);

Our employee stock ownership plan;

Supplemental Eligible Account Holders (depositors at the close of business on June 30, 2006 with deposits of at least $50.00, excluding our directors, officers and their associates); and

Other Members (depositors at the close of business on July 31, 2006).

To the extent that shares remain available and depending on market conditions at or near the completion of the subscription offering, we may conduct a community offering and possibly a syndicated community offering. The community offering, if any, may commence simultaneously with, during or subsequent to the completion of the subscription offering. A syndicated community offering, if we conduct one, would commence just prior to, or as soon as practicable after, the termination of the subscription offering. In any community offering or syndicated community offering, we will first fill orders for our common stock in an equitable manner as determined by the board of directors in order to achieve a wide distribution of the stock. If an oversubscription occurs in the Stock Offering by Eligible Account Holders, the employee stock ownership plan may, in whole or in part, fill its order through open market purchases subsequent to the closing of the Stock Offering, subject to any required regulatory approval.

Shares sold above the maximum of the offering range may be sold to the employee stock ownership plan before satisfying remaining unfilled orders of Eligible Account Holders to fill the plan's subscription, or the plan may purchase some or all of the shares covered by its subscription after the Stock Offering in the open market, subject to any required regulatory approval.

Subscription Offering

Subscription Rights. Non-transferable subscription rights to subscribe for the purchase of common stock have been granted under the plan of stock issuance to the following persons:

Priority 1: Eligible Account Holders. Each Eligible Account Holder shall be given the opportunity to purchase, subject to the overall limitations described under “-Limitations on Purchases of Stock,” up to the greater of (i) the maximum purchase limitation in the community offering (i.e., 50,000 shares or $500,000), (ii) one-tenth of 1% of the total offering of shares of common stock offered in the subscription offering, and (iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock offered in the subscription offering by a fraction, of which the numerator is the amount of the qualifying deposits of the Eligible Account Holder

and the denominator is the total amount of all qualifying deposits of all Eligible Account Holders. If there are insufficient shares available to satisfy all subscriptions of Eligible Account Holders, shares will be allocated to Eligible Account Holders so as to permit each subscribing Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares ordered. Thereafter, unallocated shares will be allocated to remaining subscribing Eligible Account Holders whose subscriptions remain unfilled in the same proportion that each subscriber's qualifying deposit bears to the total amount of qualifying deposits of all subscribing Eligible Account Holders, in each case on March 31, 2005, whose subscriptions remain unfilled. Subscription rights received by officers and directors, based on their increased deposits in Citizens Community Federal in the one year preceding the eligibility record date will be subordinated to the subscription rights of other eligible account holders. To ensure proper allocation of stock, each Eligible Account Holder must list on his or her order form all accounts in which he or she had an ownership interest as of the Eligibility Record Date.

Priority 2: The Employee Plans. The tax qualified employee plans may be given the opportunity to purchase in the aggregate up to 10% of the common stock issued in the subscription offering. It is expected that the employee stock ownership plan will purchase enough shares in the Stock Offering so that it owns 8% of our common stock outstanding at the end of the Stock Offering (including the 119,236 shares it already holds, as adjusted in accordance with the Exchange Ratio). If an oversubscription occurs in the Stock Offering by Eligible Account Holders, the employee stock ownership plan may, in whole or in part, fill its order through open market purchases subsequent to the closing of the Stock Offering, subject to any required regulatory approval.

Priority 3: Supplemental Eligible Account Holders. If there are sufficient shares remaining after satisfaction of subscriptions by Eligible Account Holders and the employee stock ownership plan and other tax-qualified employee stock benefit plans, each Supplemental Eligible Account Holder shall have the opportunity to purchase, subject to the overall limitations described under “- Limitations on Purchases of Common Stock,” up to the greater of (i) the maximum purchase limitation in the community offering (i.e., 50,000 shares or $500,000), (ii) one-tenth of 1% of the total offering of shares of common stock offered in the subscription offering, or (iii) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of common stock offered in the subscription offering by a fraction, of which the numerator is the amount of the qualifying deposits of the Eligible Account Holder and the denominator is the total amount of all qualifying deposits of all Eligible Account Holders. If Supplemental Eligible Account Holders subscribe for a number of shares which, when added to the shares subscribed for by Eligible Account Holders and the employee stock ownership plan and other tax-qualified employee stock benefit plans, if any, is in excess of the total number of shares offered in the Stock Offering, the shares of common stock will be allocated among subscribing Supplemental Eligible Account Holders first so as to permit each subscribing Supplemental Eligible Account Holder to purchase a number of shares sufficient to make his or her total allocation equal to the lesser of 100 shares or the number of shares ordered. Thereafter, unallocated shares will be allocated to each subscribing Supplemental Eligible Account Holder whose subscription remains unfilled in the same proportion that each subscriber's qualifying deposits bear to the total amount of qualifying deposits of all subscribing Supplemental Eligible Account Holders, in each case on June 30, 2006, whose subscriptions remain unfilled. To ensure proper allocation of stock, each Supplemental Eligible Account Holder must list on his or her order form all accounts in which he or she had an ownership interest as of the Supplemental Eligibility Record Date.

Priority 4: Other Members. To the extent that there are shares remaining after satisfaction of subscriptions by Eligible Account Holders, our tax-qualified employee stock benefit plans, and Supplemental Eligible Account Holders, each member of Citizens Community MHC (depositors of Citizens Community Federal) on the voting record date of July 31, 2006 who is not an Eligible Account Holder or Supplemental Eligible Account Holder ("Other Members") will receive, without payment therefor, nontransferable subscription rights to purchase up to the greater of 50,000 shares of common stock or one-tenth of 1% of the total offering of shares of common stock offered in the subscription

offering, subject to the overall purchase limitations. See “- Limitations on Purchases of Common Stock.” If there are not sufficient shares available to satisfy all subscriptions, available shares will be allocated among subscribing Other Members first to permit each such subscriber to purchase shares up to the lesser of 100 or the number of shares ordered. Thereafter, remaining shares available shall be allocated among subscribing Other Members with unsatisfied orders over 100 shares on a pro rata basis in the same proportion as each such subscriber’s subscription bears to the total of all such subscribing Other Members.

Restrictions on Transfer of Subscription Rights and Shares. Subscription rights are not transferable under any circumstances. The Plan of Conversion and Reorganization prohibits any person with subscription rights from transferring or entering into any agreement or understanding to transfer the legal or beneficial ownership of the subscription rights or the shares of common stock to be issued when subscription rights are exercised. Furthermore, it is illegal to take any such action. Subscription rights may be exercised only by the person to whom they are granted and only for his or her account. Each person subscribing for shares will be required to certify that he or she is purchasing shares solely for his or her own account and that he or she has no agreement or understanding regarding the sale or transfer of the shares. OTS regulations also prohibit any person from offering or making an announcement of an offer or intent to make an offer to purchase subscription rights or shares of common stock before the completion of the Stock Offering.

We will pursue any and all legal and equitable remedies in the event we become aware of the transfer of subscription rights and will not honor orders that we determine involve the transfer of subscription rights.

Deadlines for Purchasing Stock

The subscription offering will terminate at 12:00 noon, Eau Claire, Wisconsin time, on September ___, 2006. We may extend this expiration date without notice to you for up to 45 days, until October ___, 2006. Once submitted, your order is irrevocable unless the Stock Offering is extended beyond October ___, 2006. We may request permission from the OTS to extend the Stock Offering beyond October ___, 2006, and the OTS may grant one or more extensions of the Stock Offering of up to 90 days per extension, but in no event may the Stock Offering be extended beyond October ___, 2008. If the Stock Offering is extended beyond October ____, 2006, we will be required to notify each subscriber and resolicit subscriptions. During any extension period, subscribers will have the right to modify or rescind their subscriptions, and, unless an affirmative response is received, a subscriber's funds will be returned with interest at Citizens Community Federal's TYME passbook savings account rate. A community offering and a syndicated community offering, if these offerings are conducted, may terminate at any time without notice but no later than ______________, 2006.

We may cancel the Conversion and Stock Offering at any time prior to the special meeting of members of Citizens Community MHC and the special meeting of stockholders of CCB to vote on the Plan of Conversion and Reorganization. We also may cancel the Conversion and Stock Offering after the special meetings of members and stockholders if the OTS concurs in our decision to do so. If we cancel the Conversion and Stock Offering, orders for common stock already submitted will be canceled and subscribers' funds will be returned with interest at Citizens Community Federal's TYME passbook savings account rate.

Community Offering and Syndicated Community Offering

Community Offering. The community offering, if any, may commence simultaneously with, during or subsequent to the completion of the subscription offering. The community offering, if any, must be completed within 45 days after the completion of the subscription offering unless otherwise extended by the OTS.

If less than the total number of shares of common stock to be subscribed for in the Stock Offering are sold in the subscription offering and depending on market conditions at or

near the completion of the subscription offering, shares remaining unsubscribed may be made available for purchase in the community offering to certain members of the general public. The maximum amount of common stock that any person may purchase in the community offering, subject to the overall purchase limitations described under “- Limitations on Purchases of Common Stock” is 50,000 shares, or $500,000. In the community offering, if any, shares will be available for purchase by the general public, and preference will be given first to existing stockholders of CCB and second to natural persons and trusts of natural persons residing in counties in which Citizens Community Federal has branch offices. These counties include Eau Claire, Buffalo, Jackson, Sauk, Barron and Chippewa counties in Wisconsin, Blue Earth and Washington counties in Minnesota and Oakland and McComb counties in Michigan. We will attempt to issue the shares in an equitable manner that would promote a wide distribution of common stock.

If purchasers in the community offering, whose orders would otherwise be accepted, subscribe for more shares than are available for purchase, the shares available to them will be allocated first to each preferred subscriber whose order is accepted in an amount equal to the lesser of 100 shares or the number of shares subscribed for by each such preferred subscriber, if possible. Thereafter, unallocated shares shall be allocated among the preferred subscribers whose accepted orders remain unsatisfied in the same proportion that the unfilled order bears to the total unfilled orders of all preferred subscribers whose accepted orders remain unsatisfied, provided that no fractional shares shall be issued. If any shares remain after the orders of preferred subscribers are filled, such shares shall be allocated to the general public in the same fashion as allocated among preferred subscribers.

We, in our absolute discretion, reserve the right to reject any or all orders in whole or in part which are received in the community offering, at the time of receipt or as soon as practicable following the completion of the community offering.

Syndicated Community Offering. If shares remain available after the subscription offering, and depending on market conditions at or near the completion of the subscription offering, we may offer shares to selected persons through a syndicated community offering on a best-efforts basis conducted by Keefe, Bruyette & Woods, Inc., acting as our agent, in accordance with such terms, conditions and procedures as may be determined by our board of directors. A syndicate of broker-dealers (selected dealers) may be formed to assist in the syndicated community offering. A syndicated community offering, if we conduct one, would commence just prior to, or as soon as practicable after, the termination of the subscription offering. Neither Keefe, Bruyette & Woods, Inc. nor any registered broker-dealer will have any obligation to take or purchase any shares of the common stock in the syndicated community offering; however, Keefe, Bruyette & Woods, Inc. has agreed to use its best efforts in the sale of shares in any syndicated community offering.

Orders received in connection with the syndicated community offering, if any, will receive a lower priority than orders received in the subscription offering and community offering. Common stock sold in the syndicated community offering will be sold at the same price as all other shares in the subscription offering. A syndicated community offering would be open to the general public beyond the local community. Orders received in the syndicated community offering shall be filled first to a maximum of 2% of the total number of shares available in the Stock Offering, and, thereafter, any remaining shares will be allocated on an equal number of shares basis per order until all orders are filled. We have the right to reject orders, in whole or in part, in our sole discretion in the syndicated community offering. No person will be permitted, subject to the overall purchase limitations described under “- Limitations on Purchases of Common Stock” to purchase more than 50,000 shares, or $500,000, of common stock in the syndicated community offering.

The date by which orders must be received in the syndicated community offering will be set by us at the time the syndicated community offering commences; but if the syndicated community offering is extended beyond ________________, 2006, each purchaser will have the opportunity to maintain, modify, or rescind his or her order. In that event, all funds received in the syndicated community offering will be promptly returned with interest at Citizens Community Federal's TYME passbook savings account rate to each purchaser unless he or she requests otherwise.

Limitations on Purchases of Common Stock

The following additional limitations have been imposed on purchases of shares of common stock:

The maximum number of shares that may be purchased in the Stock Offering by any individual (or individuals through a single account) shall not exceed 50,000 shares, or $500,000. This limit applies to stock purchases in total in the subscription, community and syndicated community offerings.

The maximum number of shares that may be purchased by any individual together with any associate or group of persons acting in concert is 75,000 shares, or $750,000. This limit applies to stock purchases in total in the subscription, community and syndicated community offerings. This limit does not apply to our employee stock benefit plans, which in the aggregate may subscribe for up to 10% of the common stock issued in the Stock Offering.

The maximum number of shares which may be purchased in all categories in the Stock Offering by our officers and directors and their associates in the aggregate shall not exceed 31% of the total number of shares issued in the Stock Offering.

The minimum order is 25 shares or $250.

If the number of shares otherwise allocable to any person or that person's associates would be in excess of the maximum number of shares permitted as set forth above, the number of shares allocated to that person shall be reduced to the lowest limitation applicable to that person, and then the number of shares allocated to each group consisting of a person and that person's associates shall be reduced so that the aggregate allocation to that person and his or her associates complies with the above maximums, and the maximum number of shares shall be reallocated among that person and his or her associates in proportion to the shares subscribed by each (after first applying the maximums applicable to each person separately).

Depending on market or financial conditions, we may decrease or increase the purchase limitations, provided that the maximum purchase limitations may not be increased to a percentage in excess of 5% of the Stock Offering. If we increase the maximum purchase limitations, we are only required to resolicit persons who subscribed for the maximum purchase amount and may, in our sole discretion, resolicit certain other large subscribers.

If the total number of shares offered increases in the Stock Offering due to an increase in the maximum of the estimated valuation range of up to 15% (the adjusted maximum) the additional shares will be used in the following order of priority: (a) to fill the employee stock ownership plan's subscription so it acquires enough shares so that it owns, at the end of the Stock Offering, 8% of the shares outstanding at the adjusted maximum of the offering range, including shares it has historically acquired adjusted in accordance with the Exchange Ratio (unless the employee stock ownership plan elects to purchase stock subsequent to the Stock Offering in the open market); (b) if there is an oversubscription

at the Eligible Account Holder level, to fill unfilled subscriptions of Eligible Account Holders exclusive of the adjusted maximum unless the employee stock ownership plan elects to purchase stock subsequent to the Stock Offering in the open market; (c) if there is an oversubscription at the Supplemental Eligible Account Holder level, to fill unfilled subscriptions of Supplemental Eligible Account Holders exclusive of the adjusted maximum; (d) if there is an oversubscription at the Other Members level, to fill unfilled subscriptions of Other Members exclusive of the adjusted maximum; (e) to fill orders received in a community offering exclusive of the adjusted maximum, with preference given to existing stockholders and persons who live in the local community; and (f) to fill orders received in the syndicated community offering exclusive of the adjusted maximum.

No person will be allowed to purchase any stock if that purchase would be illegal under any federal law or state law or regulation or would violate regulations or policies of the National Association of Securities Dealers, Inc., particularly those regarding free riding and withholding. We and/or our representatives may ask for an acceptable legal opinion from any purchaser regarding the legality of the purchase and may refuse to honor any purchase order if that opinion is not timely furnished.

We have the right to reject any order submitted by a person whose representations we believe are untrue or who we believe is violating, circumventing, or intends to violate, evade, or circumvent the terms and conditions of the plan of stock issuance, either alone or acting in concert with others.

10.

The above restrictions also apply to purchases by persons acting in concert under applicable regulations of the OTS. Under regulations of the OTS, our directors are not considered to be affiliates or a group acting in concert with other directors solely as a result of membership on our board of directors.

11.

In addition, in any community offering or syndicated community offering, we must first fill orders for our common stock in the Stock Offering in a manner that will achieve a wide distribution of the stock, using the allocation methods referenced above in “- Community Offering and Syndicated Community Offering.”

The term "associate" of a person is defined in the plan of stock issuance to mean:

(1)

any corporation or organization of which a person is an officer or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class of equity securities;

(2)

any trust or other estate in which a person has a substantial beneficial interest or as to which a person serves as trustee or in a similar fiduciary capacity; or

(3)

any relative or spouse of a person or any relative of a spouse, who has the same home as that person.

For example, a corporation for which a person serves as an officer would be an associate of that person and all shares purchased by that corporation would be included with the number of shares which that person individually could purchase under the above limitations.

The term "acting in concert" means:

(1)

knowing participation in a joint activity or interdependent conscious parallel action towards a common goal whether or not pursuant to an express agreement; or

(2)

a combination or pooling of voting or other interests in the securities of an issuer for a common purpose pursuant to any contract, understanding, relationship, agreement or other arrangement, whether written or otherwise.

A person or company which acts in concert with another person or company ("other party") shall also be deemed to be acting in concert with any person or company who is also acting in concert with that other party, except that any tax-qualified employee stock benefit plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated. We will presume that certain persons are acting in concert based upon various facts, including the fact that persons have joint account relationships or the fact that persons have filed joint Schedules 13D with the Securities and Exchange Commission with respect to other companies. We reserve the right to make an independent investigation of any facts or circumstances brought to our attention that indicate that one or more persons acting independently or as a group acting in concert may be attempting to violate or circumvent the regulatory prohibition on the transferability of subscription rights.

We have the right, in our sole discretion, to determine whether prospective purchasers are "associates" or "acting in concert." These determinations are in our sole discretion and may be based on whatever evidence we believe to be relevant, including joint account relationships or shared addresses on the records of Citizens Community Federal.

Each person purchasing shares of the common stock in the Stock Offering will be considered to have confirmed that his or her purchase does not conflict with the maximum purchase limitation. If the purchase limitation is violated by any person or any associate or group of persons affiliated or otherwise acting in concert with that person, we will have the right to purchase from that person at the $10.00 purchase price per share all shares acquired by that person in excess of that purchase limitation or, if the excess shares have been sold by that person, to receive the difference between the purchase price per share paid for the excess shares and the price at which the excess shares were sold by that person. Our right to purchase the excess shares will be assignable.

Common stock purchased in the Stock Offering will be freely transferable, except for shares purchased by our directors and executive officers. For certain restrictions on the common stock purchased by our directors and executive officers, see “- Restrictions on Transferability by Directors and Executive Officers.”

Ordering and Receiving Common Stock

Use of Order Forms. Rights to subscribe may only be exercised by completion of an order form. Any person receiving an order form who desires to subscribe for shares of common stock must do so prior to the applicable expiration date by delivering by mail or in person a properly executed and completed order form, together with full payment of the purchase price for all shares for which subscription is made; provided, however, that if the employee plans subscribe for shares during the subscription offering, the employee plans will not be required to pay for the shares at the time they subscribe but rather may pay for the shares upon completion of the Stock Offering. All subscription rights will expire on the expiration date, whether or not we have been able to locate each person entitled to subscription rights. Once tendered, subscription orders cannot be revoked without our consent.

If a stock order form:

is not delivered and is returned to us by the United States Postal Service or we are unable to locate the addressee;

is not received or is received after the applicable expiration date;

is not completed correctly or executed; or

is not accompanied by the full required payment for the shares subscribed for, including instances where a savings account or certificate balance from which withdrawal is authorized is unavailable, uncollected or insufficient to fund the required payment, but excluding subscriptions by the employee plans,

then the subscription rights for that person will lapse as though that person failed to return the completed order form within the time period specified.

However, we may, but will not be required to, waive any irregularity on any order form or require the submission of corrected order forms or the remittance of full payment for subscribed shares by a date that we may specify. The waiver of an irregularity on an order form in no way obligates us to waive any other irregularity on any other order form. Waivers will be considered on a case by case basis. We will not accept orders received on photocopies or facsimile order forms, or for which payment is to be made by wire transfer or payment from private third parties. Our interpretation of the terms and conditions of the Plan of Conversion and Reorganization and of the acceptability of the order forms will be final, subject to the authority of the OTS.

You may not add the names of others to your order forms who were not eligible to purchase common stock in the Stock Offering on the applicable date of eligibility. We will reject all stock orders we believe involve the transfer of subscription rights. If you attempt to transfer your subscription rights, you may lose your right to purchase shares and may be subject to criminal prosecution and/or other sanctions.

To ensure that each purchaser receives a prospectus at least 48 hours before the applicable expiration date, in accordance with Rule 15c2-8 of the Securities Exchange Act of 1934, no prospectus will be mailed any later than five days prior to the expiration date or hand delivered any later than two days prior to the expiration date. Execution of the order form will confirm receipt or delivery in accordance with Rule 15c2-8. Order forms will only be distributed with a prospectus.

Payment for Shares. For subscriptions to be valid, payment for all subscribed shares will be required to accompany all properly completed order forms on or prior to the expiration date specified on the order form unless we extend the date. Employee plans subscribing for shares during the subscription offering may pay for those shares upon completion of the Stock Offering. Payment for shares of common stock may be made:

by check or money order made payable to Citizens Community Federal;

for shares subscribed for in the subscription offering, by authorization of withdrawal from deposit accounts maintained with Citizens Community Federal; or

in cash, only if delivered in person, though we prefer that you exchange that cash with one of our tellers for a check.

In accordance with Rule 15c2-4 of the Securities Exchange Act of 1934, subscribers' checks must be made payable to Citizens Community Bancorp, Inc., and checks received by the stock information center will be transmitted by noon of the following business day directly to the segregated deposit account at Citizens Community Federal established to hold funds received as payment for shares. Funds received before completion of the Stock Offering up to the minimum of the offering range will be held by Citizens Community Federal. Funds received in excess of the minimum offering range may be maintained at Citizens Community Federal, or, at its discretion, in our account at an independent insured depository institution. However, in no event shall we maintain more than one escrow account. We may, at our discretion, determine during the Stock Offering period that it is in the best interest of Citizens Community Federal to instead hold subscription funds in an escrow account at another insured financial institution.

Appropriate means by which account withdrawals may be authorized are provided on the order form. Once a withdrawal has been authorized, none of the designated withdrawal amount may be used by a subscriber for any purpose other than to purchase the common stock for which a subscription has been made until the Stock Offering has been completed or terminated. In the case of payments authorized to be made through withdrawal from savings accounts, all sums authorized for withdrawal will continue to earn interest at the contract rate until the Stock Offering has been completed or terminated. Interest penalties for early withdrawal applicable to certificate accounts will not apply to withdrawals authorized for the purchase of shares; however, if a partial withdrawal results in a certificate account with a balance less than the applicable minimum balance requirement, the certificate shall be canceled at the time of withdrawal, without penalty, and the remaining balance will earn interest at the TYME passbook savings account rate subsequent to the withdrawal. In the case of payments made in cash or by check or money order, funds will be placed in a segregated account and interest will be paid by Citizens Community Federal at the TYME passbook savings account rate from the date payment is received until the Stock Offering is completed or terminated. An executed order form, once we receive it, may not be modified, amended, or rescinded without our consent, unless the Stock Offering is not completed within 45 days after the conclusion of the subscription offering, in which event subscribers may be given the opportunity to increase, decrease, or rescind their subscription for a specified period of time. If the Stock Offering is not completed for any reason, all funds submitted pursuant to the offerings will be promptly refunded with interest as described above.

Owners of self-directed IRAs may use the assets of their IRAs to purchase shares of common stock in the offerings, provided that their IRAs are not maintained on deposit at Citizens Community Federal. Persons with IRAs maintained at Citizens Community Federal must have their accounts transferred to an unaffiliated institution or broker to purchase shares of common stock in the offerings. There is no early withdrawal or IRS interest penalties for these transfers. Depositors interested in using funds in a Citizens Community Federal IRA to purchase common stock should contact their broker or the stock information center as soon as possible so that the necessary forms may be forwarded, executed and returned prior to the expiration date.

Federal regulations prohibit Citizens Community Federal from lending funds or extending credit to any person to purchase the common stock in the Stock Offering (excluding the funds provided to the employee stock ownership plan).

Stock Information Center. Our stock information center is located at 219 Fairfax Street, Altoona, Wisconsin 54720. The telephone number is (715) _____-________. The stock information center's hours of operation are 11:00 a.m. to 5:00 p.m. on Monday, 8:30 a.m. to 5:00 p.m. on Tuesday to Thursday and 8:30 a.m. to 3:30 p.m. on Friday (all Eau Claire, Wisconsin time).

Exchange of Stock Certificates of Minority Public Stockholders

The conversion of outstanding shares of common stock of CCB (excluding shares owned by Citizens Community MHC) into shares of Citizens Community Bancorp, Inc. common stock will occur automatically on the date of completion of the Conversion. After this date, former holders of common stock (excluding Citizens Community MHC) will have no further equity interest in CCB, other than as stockholders of Citizens Community Bancorp, Inc., and there will be no further transfers of shares of CCB common stock on the stock transfer records of CCB. Shares of CCB owned by Citizens Community MHC will be cancelled.

As soon as practicable after the completion of the Conversion, the exchange agent will send a transmittal form to each stockholder of CCB. The transmittal forms are expected to be mailed within five business days after the date of the completion of the Conversion and will contain instructions with respect to the surrender of certificates representing CCB common stock to be exchanged into Citizens Community Bancorp, Inc. common stock in accordance with the Exchange Ratio. It is expected that certificates for shares of Citizens Community Bancorp, Inc. common stock will be distributed within five business days after the receipt of properly executed transmittal forms and other required documents. Stockholders should not forward their stock certificates to the exchange agent until they have received transmittal forms.

Until the certificates representing CCB common stock are surrendered for exchange after consummation of the Conversion, in compliance with the terms of the transmittal form, holders of these certificates will not receive new certificates for shares of Citizens Community Bancorp, Inc. All shares of Citizens Community Bancorp, Inc. common stock issued upon exchange of shares of CCB common stock shall be deemed to have been issued in full satisfaction of all rights pertaining to shares of CCB common stock.

No fractional shares of our common stock will be issued to any stockholder upon consummation of the Conversion. For each fractional share that would otherwise be issued, we will pay by check an amount equal to the product obtained by multiplying the fractional share interest to which the holder would otherwise be entitled by the subscription price. Payment for fractional shares will be made as soon as practicable after the receipt by the exchange agent of surrendered CCB stock certificates.

If a certificate for CCB common stock has been lost, stolen or destroyed, the exchange agent will issue the consideration properly payable upon receipt of appropriate evidence as to the loss, theft or destruction, appropriate evidence as to the ownership of the certificate by the claimant, and appropriate and customary indemnification.

Delivery of Stock Certificates of Citizens Community Bancorp, Inc.

Certificates representing common stock of Citizens Community Bancorp, Inc. issued in the Stock Offering, to all persons other than minority stockholders of CCB, will be mailed to the persons entitled thereto at the address noted on the order form as soon as practicable following consummation of the Stock Offering. Any certificates returned as undeliverable will be held until claimed by persons legally entitled thereto or otherwise disposed of in accordance with applicable law. Until certificates for the common stock are available and delivered to subscribers, subscribers may not be able to sell the shares of stock for which they subscribed.

Restrictions on Repurchase of Shares

Under OTS regulations, during the first year following the Stock Offering, we will not be permitted to repurchase shares of our stock: except (1) in an offer approved by the OTS to all stockholders to repurchase the common stock on a pro rata basis, (2) the repurchase of qualifying shares of a director, or (3) repurchases to fund restricted stock plans or tax-qualified employee stock benefit plans. If extraordinary circumstances exist and if we can show a compelling and valid business purpose for the repurchase, the OTS may approve repurchases of up to 5% of the outstanding stock during the first year after the Stock Offering. After the first year following the Stock Offering, we can repurchase any amount of stock so long as the repurchase would not cause us to become undercapitalized. If, in the future, the rules and regulations regarding the repurchase of stock are liberalized, we may utilize the rules and regulations then in effect.

Stock Offering and the Number of Shares to be Offered

The Plan of Conversion and Reorganization requires that the purchase price of the common stock must be based on the appraised pro forma market value of Citizens Community Bancorp, Inc. and Citizens Community Federal, as determined on the basis of an independent valuation. RP Financial, LC., a financial services industry consulting firm with extensive experience in valuing financial institutions for conversions and stock offerings, has been retained to make this valuation. We selected RP Financial, LC. based upon its experience and reputation in valuing stock offerings by issuers such as Citizens Community Bancorp, Inc. RP Financial, LC. performed the appraisal in CCB’s 2004 offering. For its services in making this appraisal, RP Financial, LC.'s fees are estimated to be $40,000 and it will be reimbursed for out-of-pocket expenses not to exceed $5,000. We have agreed to indemnify RP Financial, LC. and any employees of RP Financial, LC. who act for or on behalf of RP Financial, LC. in connection with the appraisal against any and all loss, cost, damage, claim, liability or expense of any kind, including claims under federal and state securities laws, arising out of any misstatement, untrue statement of a material fact or omission to state a material fact in the information supplied by us to RP Financial, LC., unless RP Financial, LC. is determined to be negligent or otherwise at fault.

RP Financial, LC. made its appraisal in reliance upon the information contained in this Prospectus, including the financial statements. RP Financial, LC. also considered the following factors, among others:

the present and projected operating results and financial condition of CCB and Citizens Community Federal, which were prepared by Citizens Community Federal and then adjusted by RP Financial, LC. to reflect the net proceeds of this Stock Offering and the economic and demographic conditions in Citizens Community Federal’s existing marketing area as prepared by RP Financial, LC.;

certain historical, financial and other information relating to Citizens Community Federal prepared by Citizens Community Federal; and

the impact of the Stock Offering on our net worth and earnings potential as calculated by RP Financial, LC.

The appraisal also incorporated an analysis of a peer group of publicly-traded companies that RP Financial, LC. considered to be comparable to us. The peer group analysis conducted by RP Financial, LC. included a total of 10 publicly traded thrift holding companies with total assets ranging from $156 million to $443 million. The analysis of comparable publicly traded institutions included an evaluation of the average and median price-to-earnings and price-to-book value ratios indicated by the market prices of the peer companies. RP Financial, LC. applied the peer group's pricing ratios, as adjusted for certain qualitative valuation factors to account for differences between us and the peer group, to our pro forma earnings, book value and assets to derive our estimated pro forma market value.

The board of directors reviewed the methodologies and the appropriateness of the assumptions used by RP Financial, LC. in addition to the factors listed above, and the board of directors believes that these assumptions were reasonable. On the basis of the foregoing, RP Financial, LC. has advised us that in its opinion, dated June 16, 2006, the estimated pro forma market value of Citizens Community Bancorp, Inc. following the Conversion of Citizens Community MHC from the mutual holding company to the stock form of organization ranged from a minimum of $45.7 million to a maximum of $61.9 million with a midpoint of $53.8 million. Our board of directors determined that the common stock should be sold at $10.00 per share. Based on the estimated valuation and the $10.00 per share price, the number of shares of common stock that Citizens Community Bancorp, Inc. will issue, including shares issued in exchange for shares of CCB, will range from a minimum of 4,573,944 shares to a maximum of 6,188,277 shares, with a midpoint of 5,381,110 shares.

The estimated valuation range may be amended with the approval of the OTS or if necessitated by subsequent developments in our financial condition or market conditions generally. In the event the estimated valuation range is updated to amend the value of Citizens Community Bancorp, Inc. below $45.7 million, which is the minimum of the estimated valuation range, or above $71.2 million, which is the maximum of the estimated valuation range, as adjusted by 15%, a new appraisal will be filed with the OTS.

Based upon current market and financial conditions and recent practices and policies of the OTS, if we receive orders for common stock in excess of $46,000,000 (the maximum of the estimated valuation range of shares to be sold to the public) and up to $52,900,000 (the maximum of the estimated valuation range of shares to be sold to the public, as adjusted by 15%), the OTS may require us to accept all of these orders. We cannot guarantee, however, that we will receive orders for common stock in excess of the maximum of the estimated valuation range of shares to be sold to the public or that, if such orders are received, that all of these orders will be accepted because our final valuation and the number of shares to be issued are subject to the receipt of an updated appraisal from RP Financial, LC. which reflects this increase in the valuation and the approval of an increase by the OTS. In addition, an increase in the number of shares to be sold above 4,600,000 shares will first be used, if necessary, to fill the order of the employee stock ownership plan. There is no obligation or understanding on the part of management to take and/or pay for any shares in order to complete the Stock Offering.

The following table presents a summary of selected pricing ratios for the peer group companies and the pricing ratios for Citizens Community Bancorp, Inc. reflecting the pro forma impact of the Stock Offering. Compared to the median pricing ratios of the peer group, Citizens Community Bancorp, Inc.'s pro forma pricing ratios at the midpoint of the offering range indicated a premium of 116.1% on a price-to-earnings basis and a discount of 18.9% on a price-to-tangible book value basis. The estimated appraised value and the resulting premiums or discounts took into consideration the potential financial impact of the Stock Offering.

	Price-to-earnings multiple	Price-to-book value ratio	Price-to-tangible book value ratio
Citizens Community Bancorp, Inc. (pro forma) ⁽¹⁾

Minimum	41.48x	76.92%	87.93%
Midpoint	45.38x	83.03%	93.81%
Maximum	48.77x	88.22%	98.69%
Maximum, as adjusted	52.16x	93.28%	103.37%
Valuation of peer group companies as of June 16, 2006 ⁽²⁾
Average	21.22x	109.07%	115.68%
Median	21.00x	107.69%	115.60%

________________

(1)	Based on CCB’s financial data as of and for the twelve months ended March 31, 2006.

(2)	Reflects earnings for the most recent 12-month period for which data was publicly available.

RP Financial, LC.'s valuation is not intended, and must not be construed, as a recommendation of any kind as to the advisability of purchasing shares of Citizens Community Bancorp, Inc. RP Financial, LC. did not independently verify the consolidated financial statements and other information we provided to them, nor did RP Financial, LC. value independently our assets or liabilities. The valuation considers Citizens Community Bancorp, Inc. as a going concern and should not be considered as an indication of the liquidation value of Citizens Community Bancorp, Inc. Moreover, because this valuation is necessarily based upon estimates and projections of a number of matters, all of which are subject to change from time to time, no assurance can be given that persons purchasing common stock in the offerings will thereafter be able to sell their shares at prices at or above the purchase price or in the range of the valuation described above.

No sale of shares of common stock in the Stock Offering may be completed unless RP Financial, LC. confirms that nothing of a material nature has occurred which would cause it to conclude that the aggregate value of the common stock to be issued is materially incompatible with the estimate of our pro forma market value. If this confirmation is not received, we may cancel the Stock Offering, extend the Stock Offering period and establish a new estimated valuation and offering range and/or estimated price range, extend, reopen or hold a new Stock Offering or take any other action the OTS may permit.

Depending upon market or financial conditions following the start of the subscription offering, the total number of shares of common stock to be issued may be increased or decreased without a resolicitation of subscribers, provided that the product of the total number of shares issued times the purchase price is not below the minimum or more than 15 % above the maximum of the estimated valuation range. If market or financial conditions change so as to cause the aggregate value of the common stock to be issued to be below the minimum of the estimated valuation range or more than 15% above the maximum of this range, purchasers will be resolicited and be permitted to continue their orders, in which case they will need to reconfirm their subscriptions prior to the expiration of the resolicitation offering or their subscription funds will be promptly refunded with interest, or be permitted to modify or rescind their subscriptions. Any change in the estimated valuation range must be approved by the OTS.

An increase in the number of shares of common stock to be issued as a result of an increase in the estimated pro forma market value would decrease both a subscriber's ownership interest and Citizens Community Bancorp, Inc.'s pro forma net income and stockholders' equity on a per share basis while increasing pro forma net income and stockholders' equity on an aggregate basis. A decrease in the number of shares of common stock to be issued would increase both a subscriber's ownership interest and Citizens Community Bancorp, Inc.'s pro forma net income and stockholders' equity on a per share basis while decreasing pro forma net income and stockholders' equity on an aggregate basis.

Copies of the appraisal report of RP Financial, LC., including any amendments, and the detailed report of the appraiser setting forth the method and assumptions for the appraisal are available for inspection at the main office of Citizens Community Federal and the other locations specified under “Where You Can Find Additional Information.” In addition, the appraisal report is an exhibit to the registration statement of which this Prospectus is a part. Portions of the appraisal report included in the registration statement are available on the SEC's website at www.sec.gov .

Pricing Characteristics and After-Market Trends

The following table, prepared by RP Financial, LC., presents for all second-step conversions completed between January 1, 2002 and June 16, 2006, the percentage stock appreciation from the initial trading date of the offering to the dates shown in the table. The table also presents the average and the median percentage stock appreciation from January 1, 2002 to June 16, 2006. This information relates to stock appreciation experienced by other companies that reorganized in different market areas and in different stock market and economic environments. In addition, the companies may have no similarities to Citizens Community Bancorp, Inc. with regard to market area, earnings quality and growth potential, among other factors. The information shown in the following table was not included in the appraisal report; however, the appraisal prepared by RP Financial did consider the after market trading experience of transactions that closed three months prior to the June 16, 2006 valuation date used in the appraisal.

This table is not intended to indicate how our stock may perform. Furthermore, this table presents only short-term price performance and may not be indicative of the longer-term stock price performance of these companies. The increase in any particular company's stock price is subject to various factors, including, but not limited to, the amount of proceeds a company raises, the company's historical and anticipated operating results, the nature and quality of the company's assets, the company's market area, and the quality of management and management's ability to deploy proceeds (such as through loans and investments, the acquisition of other financial institutions or other businesses, the payment of dividends and common stock repurchases). In addition, stock prices may be affected by general market and economic conditions, the interest rate environment, the market for financial institutions and merger or takeover transactions, the presence of professional and other investors who purchase stock on speculation, as well as other unforeseeable events not in the control of management. Before you make an investment decision, we urge you to carefully read this Prospectus, including, but not limited to, “Risk Factors.”

						Price Appreciation After
Institution	State	Conversion Date		Total Assets ($Mil.)	Stock Offered by MHC (%)	One Day (%)	One Week (%)	One Month (%)
*Second Step Conversions*
NEBS Bancshares, Inc.	CT	12/29/05	$	219.9	58%	6.6%	7.0%	7.0%
American Bancorp of New Jersey	NJ	10/06/05		443.2	70%	1.6%	-2.5%	1.6%
Hudson City Bancorp, Inc.	NJ	06/07/05		21,131.2	66%	9.6%	10.8%	15.9%
First Federal of NM Bancorp, Inc.	MI	04/04/05		262.8	55%	-5.1%	-8.0%	-16.0%
Rome Bancorp, Inc.	NY	03/31/05		270.1	62%	0.5%	-2.5%	-5.6%
Roebling Financial Corp.	NJ	10/01/04		90.0	54%	-1.0%	-0.5%	-8.0%
DSA Financial Corporation	IN	07/30/04		78.2	52%	-2.0%	-5.0%	-7.0%
Partners Trust Financial Group, Inc.	NY	07/15/04		3,628.5	54%	-0.1%	-0.2%	-1.9%
Synergy Financial Group, Inc.	NJ	01/21/04		591.3	57%	8.1%	8.0%	7.9%
Provident Bancorp, Inc.	NY	01/15/04		1,544.2	56%	15.0%	11.5%	15.1%
Bank Mutual Corporation	WI	10/30/03		2,865.1	52%	17.8%	18.5%	15.4%
Jefferson Bancshares, Inc.	TN	07/01/03		265.5	79%	23.9%	25.0%	40.0%
First Niagara Fin Grp, Inc.	NY	01/21/03		3,290.8	58%	12.7%	14.5%	11.8%
Wayne Savings Bancshares, Inc.	OH	01/09/03		337.2	52%	12.0%	12.0%	11.5%
Sound Federal Bancorp, Inc.	NY	01/07/03		672.6	59%	10.0%	12.0%	16.1%
Bridge Street Financial, Inc.	NY	01/06/03		179.0	56%	1.6%	7.0%	9.4%
Citizens South Banking Corp.	NC	10/01/02		439.3	58%	-0.5%	-6.0%	-2.5%
Brookline Bancorp, Inc.	MA	07/10/02		1,138.4	58%	10.6%	14.0%	15.5%
Willow Grove Bancorp, Inc.	PA	04/04/02		643.8	57%	10.0%	15.5%	16.2%

Average			$	2,004.8	58%	6.9%	6.9%	7.5%
Median			$	443.2	57%	8.1%	8.0%	9.4%

Data presented in the table reflects a small number of transactions. You should be aware that, in certain market conditions, stock prices in initial public offerings by savings associations have decreased. For example, as the above table illustrates, after one month, the shares of six companies traded below their initial offering price. There can be no assurance that our stock price will trade similarly to these companies. There can also be no assurance that our stock price will not trade below $10.00 per share, particularly as the substantial proceeds raised as a percentage of pro forma stockholders' equity may have a negative effect on our stock price performance.

Plan of Distribution/Marketing Arrangements

We have retained Keefe, Bruyette & Woods, Inc., to consult with and to advise and assist us, on a best efforts basis, in the distribution of our common stock in this Stock Offering. The services that Keefe, Bruyette & Woods, Inc. will provide include, but are not limited to:

training the employees of Citizens Community Federal who will perform certain ministerial functions in the subscription offering and direct community offering regarding the mechanics and regulatory requirements of the Stock Offering process;

managing the stock information center by assisting interested stock subscribers and by keeping records of all stock orders; and

preparing marketing materials.

For its services, Keefe, Bruyette & Woods, Inc., will receive a management fee of $30,000 and a success fee of 1.35% of the aggregate purchase price, less any shares of common stock sold to directors, officers, and employees and the Tax-Qualified Employee Plans. The success fee paid to Keefe, Bruyette & Woods, Inc., will be reduced by the amount of the management fee. The total fees that are expected to be paid to Keefe, Bruyette & Woods, Inc. for its services in the Subscription and Community Offerings range from $414,370 at the minimum to $653,049 at the adjusted maximum. We have made payments totaling $30,000 to Keefe, Bruyette & Woods, Inc. for the management fee, that is included in the total fees. In the event that selected dealers are used to assist in the sale of our common stock in the direct community offering, these dealers will be paid a fee of up to 5.5% of the total purchase price of the shares sold by the dealers. We have agreed to indemnify Keefe, Bruyette & Woods, Inc., against certain claims or liabilities, including certain liabilities under the Securities Act of 1933, as amended, and will contribute to payments Keefe, Bruyette & Woods, Inc. may be required to make in connection with any such claims or liabilities. In addition, Keefe, Bruyette & Woods, Inc., will be reimbursed for the fees of its legal counsel in an amount not to exceed $40,000 and other reasonable out-of-pocket expenses not to exceed $40,000.

Sales of shares of our common stock will be made by registered representatives affiliated with Keefe, Bruyette & Woods, Inc., or by the broker-dealers managed by Keefe, Bruyette & Woods, Inc. Keefe, Bruyette & Woods, Inc. has undertaken that our common stock will be sold in a manner that will ensure that the distribution standards of the Nasdaq Global Market will be met. A stock information center will be established at the office of Citizens Community Federal located at 219 Fairfax Street, Altoona, Wisconsin 54720. We will rely on Rule 3a4-1 of the Securities Exchange Act of 1934 and sales of our common stock will be conducted within the requirements of this rule, so as to permit officers, directors and employees to participate in the sale of our common stock in those states where the law permits. No officer, director or employee of Citizens Community Federal, CCB or Citizens Community Bancorp, Inc. will be compensated directly or indirectly by the payment of commissions or other remuneration in connection with his or her participation in the sale of common stock.

Restrictions on Transferability by Directors and Executive Officers

Shares of the common stock purchased by our directors or executive officers cannot be sold for a period of one year following completion of the Stock Offering, except for a disposition of shares after death. To ensure this restriction is upheld, shares of the common stock issued to directors and executive officers will bear a legend restricting their sale. Any shares issued to directors and executive officers as a stock dividend, stock split, or otherwise with respect to restricted stock will be subject to the same restriction.

For a period of three years following the Stock Offering, our directors and executive officers and their associates may not, without the prior approval of the OTS, purchase our common stock except from a broker or dealer registered with the SEC. This prohibition does not apply to negotiated transactions for more than 1% of our common stock or purchases made for tax qualified or non-tax qualified employee stock benefit plans which may be attributable to individual directors or executive officers.

Restrictions on Agreements or Understandings Regarding Transfer of Common Stock to be Purchased in the Stock Offering

Before the completion of the Stock Offering, no depositor may transfer or enter into an agreement or understanding to transfer any subscription rights or the legal or beneficial ownership of the shares of common stock to be purchased in the Stock Offering. Depositors who submit an order form will be required to certify that their purchase of common stock is solely for their own account and there is no agreement or understanding regarding the sale or transfer of their shares. We intend to pursue any and all legal and equitable remedies after we become aware of any agreement or understanding, and will not honor orders we reasonably believe to involve an agreement or understanding regarding the sale or transfer of shares.

PROPOSED PURCHASES BY MANAGEMENT

The following table sets forth, for each of our directors and executive officers and for all of the directors and executive officers as a group, the following information:

(1)

the number of exchange shares to be held upon consummation of the Conversion, based upon their ownership of CCB outstanding shares of common stock as of May 31, 2006;

(2)

the proposed purchases of subscription shares, assuming sufficient shares are available to satisfy their subscriptions; and

(3)

the total amount of our outstanding shares of common stock to be held upon consummation of the Conversion and Stock Offering.

The table below assumes that 5,381,110 shares are outstanding after the Stock Offering, which includes the sale of 4,000,000 shares in the stock offering (the midpoint of the offering range) and the issuance of 1,381,110 shares in exchange for outstanding shares of CCB. See “The Stock Offering - Limitations on Purchases of Common Stock.” The table does not take into account any stock benefit plans to be adopted following the Stock Offering. See “Management - Benefits -- Potential Stock Benefit Plans.” The amounts include shares that may be purchased through individual retirement accounts and by associates of the directors and executive officers. These purchases are intended for investment purposes only and not for resale.

	Number of	Proposed Number of Shares to be	Proposed Total Common Stock Held After the Stock Offering
Name ⁽¹⁾	Exchange Shares to be Held ⁽²⁾	Purchased in the Stock Offering ⁽³⁾		Number of Shares	Percent of Total

Richard McHugh Chairman and Director	136,623	10,000		146,623	2.7	%
David B. Westrate Director	67,281	10,000		77,281	1.4
James G. Cooley President, Chief Executive Officer and Director	92,724	50,000		142,724	2.7
Thomas C. Kempen Vice Chairman and Director	10,390	1,000		11,390	*
Brian R. Schilling Director	1,866	─		1,866	*
Adonis E. Talmage Director	1,866	100		1,966	*
John D. Zettler Chief Financial Officer	12,222	10,000		22,222	*
Johnny W. Thompson Senior Vice President and Chief Administration Officer	8,252	10,000		18,252	*
Timothy J. Cruciani Executive Vice President	23,417	15,000		38,417	*
Rebecca Johnson Vice President, MIC/Accounting	10,669	5,000		15,669	*
Brian P. Ashley Senior Vice President, Community Plus Division	─	─		─	─
Total	365,310	111,100		476,410	8.9	%

____________________

(1)	All executive officers are officers of both CCB and Citizens Community Federal, except for Mr. Ashley, who is solely an executive officer of Citizens Community Federal.

(2)	Outstanding shares of CCB owned on May 31, 2006, (including all restricted stock awards and allocations under the employee stock ownership plan) are adjusted by the 1.44474 Exchange Ratio at the midpoint of the valuation range. Does not include shares underlying outstanding options.

(3)	Does not include the subscription order by the employee stock ownership plan, a portion of which, over time, will be allocated to these executive officers.

*	Less than 1% of pro forma outstanding shares.

A WARNING ABOUT FORWARD-LOOKING STATEMENTS

This Prospectus contains forward-looking statements, which can be identified by the use of words such as "believes," "expects," "anticipates," "estimates" or similar expressions. Forward-looking statements include:

statements of our goals, intentions and expectations;

statements regarding our business plans, prospects, growth and operating strategies;

statements regarding the quality of our loan and investment portfolios; and

estimates of our risks and future costs and benefits.

These forward-looking statements are subject to significant risks and uncertainties. Actual results may differ materially from those contemplated by the forward-looking statements due to, among others, the following factors:

general economic conditions, either nationally or in our market area, that are worse than expected;

changes in the interest rate environment that reduce our interest margins or reduce the fair value of financial instruments;

increased competitive pressures among financial services companies;

changes in consumer spending, borrowing and savings habits;

legislative or regulatory changes that adversely affect our business;

adverse changes in the securities markets;

our ability to successfully manage our growth;

changes in accounting policies and practices, as may be adopted by the bank regulatory agencies or the Financial Accounting Standards Board; and

our ability to enter into new markets and/or expand product offerings successfully and take advantage of growth opportunities.

Any of the forward-looking statements that we make in this prospectus and in other public statements we make may turn out to be incorrect because of inaccurate assumptions we might make, because of the factors illustrated above or because of other factors that we cannot foresee. Consequently, no forward-looking statement can be guaranteed.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

General

Our results of operations depend primarily on our net interest income. Net interest income is the difference between the interest income we earn on our interest-earning assets, consisting primarily of loans, investment securities and interest-bearing deposits with other financial institutions, and the interest we pay on our interest-bearing liabilities, consisting primarily of savings accounts, money market accounts, time deposits and borrowings. Our results of operations are also affected by our provision for loan losses, noninterest income and noninterest expense. Noninterest income consists primarily of service charges on deposit accounts, insurance commissions and loan fees. We have initiated a mortgage banking operation in the Minneapolis/St. Paul and Detroit metropolitan areas. Loans originated in this operation will be sold with servicing released. This will generate more fee income and gains/losses on sales of loans. Noninterest expense includes salaries and employee benefits, occupancy, equipment, data processing costs and deposit insurance premiums. Our results of operations may also be affected significantly by general and local economic and competitive conditions, changes in market interest rates, governmental policies and actions of regulatory authorities.

Evolution of Business Strategy

CCB is a federally chartered holding company formed on March 29, 2004, for the purpose of acquiring all of the common stock of Citizens Community Federal concurrent with its reorganization and stock issuance plan. The reorganization was consummated on March 29, 2004. In connection with the reorganization, CCB sold 978,650 shares of its common stock, par value of $0.01 per share, in a subscription offering, and issued 2,063,100 shares to Citizens Community MHC raising approximately $8.9 million net of costs. CCB is a majority owned subsidiary of Citizens Community MHC, a federally chartered mutual holding company.

On July 1, 2005, CCB acquired Community Plus Savings Bank, Rochester Hills, Michigan, through a merger with and into Citizens Community Federal. In accordance with the merger agreement, CCB issued 705,569 additional shares to Citizens Community MHC, based on the $9.25 million independently appraised value of Community Plus Savings Bank and the members of Community Plus became members of Citizens Community MHC. At June 30, 2005, Community Plus Savings Bank had total assets of $46.0 million and deposits and other liabilities of $41.8 million, prior to purchase accounting adjustments.

Historically, we were a federal credit union. We accepted deposits and made loans to members, who were the people who lived, worked or worshiped in the Wisconsin counties of Chippewa and Eau Claire, and parts of Pepin, Buffalo and Trempealeau. In addition, this included businesses and other entities located in these counties, and members and employees of the Hocak Nation. In December 2001, we converted to a federal mutual savings bank in order to better serve our customers and the local community through the broader lending ability of a federal savings bank, and to expand our customer base beyond the limited field of membership permitted for credit unions. As a federal savings bank, we have expanded authority in structuring residential mortgage and consumer loans, and the ability to make commercial loans, although the Bank does not currently have any immediate plans to commence making commercial loans.

We have utilized this expanded lending authority to significantly increase our ability to market one- to four-family residential lending. Most of these loans are originated through our internal marketing efforts and our existing and walk-in customers. We typically do not rely on real estate brokers and builders to help us generate loan originations.

In order to differentiate ourselves from our competitors, we have stressed the use of personalized branch-oriented customer service. Rather than building additional electronic means for our customers to conduct banking, we have structured operations around a branch system that is staffed with knowledgeable and well-equipped employees. A key to ensuring a high level of quality customer service is our ongoing commitment to training all levels of our staff.

CCB anticipates continued strong loan growth and fee income that should help offset the decline in rate spread going forward. We are expanding our presence in the Minneapolis/St. Paul and Detroit markets through a mortgage banking operation. Loans funded in this program will be sold to Countrywide Financial Corporation with servicing released.

Our current business strategy is to operate as a well-capitalized, profitable and community-oriented savings bank dedicated to providing quality customer service. We intend to make primarily one- to four-family residential and consumer loans. Subject to capital requirements and our ability to continue to grow in a reasonable and prudent manner, we may open or acquire additional branches as opportunities arise. One element of our business plan is to open one branch per year in either the Minneapolis/St. Paul or Detroit markets. There can be no assurances that we will successfully implement our strategy.

Comparison of Operating Results for the Six Months Ended March 31, 2006 and March 31, 2005

Overview. For the six months ended March 31, 2006, CCB continued to see strong loan demand with a leveling off of the rapid deposit growth from the previous quarter as management reduced its cash position to fund the loan demand. Loan quality remains good with low delinquency levels and a continued reduction in provision for loan loss. Interest rates on deposits continued to increase at a slightly faster pace than the rates on loans. CCB incurred increased operating expenses, primarily associated with the two Michigan offices acquired July 1, 2005, and with non-recurring costs associated with overtime, training and other non-interest expenses related to the computer conversion completed during the quarter.

Net Income. Net income was $250,000 for the six months ended March 31, 2006, as compared to net income of $584,000 for the same period in 2005. The decrease was primarily a result of income generated from the January 12, 2005 merger of PULSE-EFT and Discover Financial Services. CCB was a stockholder and member of PULSE-EFT. As a result of the merger, CCB received $384,000 in pre-tax income in the second quarter of fiscal 2005 from this one-time event. Both net interest margin and interest spread decreased from 4.42% and 4.40%, respectively, for the prior six-month period to 3.53% and 3.47%, respectively, for the current six-month period. The decrease in both net interest margin and interest spread were a result of the increase in short-term interest rates and the flat yield curve that existed during the periods.

Total Interest Income. Total interest income increased by $2.1 million for the six-month period ended March 31, 2006, to $7.5 million from $5.4 million for the six-month period ended March 31, 2005. The increase was a result of an increase in the average balance of loans receivable attributed to strong loan demand. The yield on loans receivable decreased from 6.59% for the six-month period ended March 31, 2005, to 6.47% for the six-month period ended March 31, 2006, reflecting the payments and payoffs on higher yielding loans being replaced by new loans with lower interest rates.

Net Interest Income. Net interest income increased by $635,000 for the six-month period ended March 31, 2006, from $3.7 million to $4.4 million. The increase in net interest income was due to an increase in the average balance of loans receivable, partially offset by a decrease in average loan yield and an increase in interest expense due to an increase in the average balance of deposits and an increase in the average rate paid on interest-bearing liabilities. The average cost of interest-bearing liabilities increased from 2.35% for the six-month period ended March 31, 2005, to 3.08% for the current six-month period.

Provision for Loan Losses. We establish the provision for loan losses, which is charged to operations, at a level management believes will adjust the allowance for loan losses to reflect probable incurred credit losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers the types of loans and the amount of loans in the loan portfolio, historical loss experience, adverse situations that may affect the borrower’s ability to repay, estimated value of any underlying collateral, and prevailing economic conditions. Based on our evaluation of these factors, we made provisions of $108,000 for the six-month period ended March 31, 2006 compared to provisions of $202,000 for the prior six-month period. Non-performing assets were approximately $1.1 million at March 31, 2006, as compared to $701,000 at September 30, 2005. Non-performing assets were 0.43% of total assets as compared to 0.29% of total assets as of September 30, 2005. The primary cause of the increase was a result of one borrower filing bankruptcy. The borrower owes $293,000 on a loan secured by a one- to four-family home. Minimal loss is anticipated. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available, or as future events change. We used the same methodology and generally similar assumptions in assessing the loan allowance for both periods.

The level of the allowance is based on estimates and the ultimate losses may vary from the estimates. Management assesses the allowance for loan losses on a monthly basis and makes provisions for loan losses as necessary in order to maintain the allowance. While management uses available information to recognize losses on loans, future loan loss provisions may be necessary based on changes in economic conditions or changes in individual account conditions. In addition, various regulatory agencies, as an integral part in their examination process, periodically review the allowance for loan losses and may require us to recognize additional provisions based on their judgment of information available to them at the time of their examination.

Non-Interest Income. For the six-month period ended March 31, 2006, non-interest income decreased to $870,000 from $1.1 million for the six-month period ended March 31, 2005. The decrease came primarily as a result of non-recurring income generated from the previously discussed January 12, 2005 merger of PULSE-EFT and Discover Financial Services.

Non-Interest Expense. Non-interest expense increased from $3.7 million for the six-month period ended March 31, 2005 to $4.7 million for the same period in 2006. The increase was due primarily to the additional operating costs associated with the two Michigan offices acquired July 1, 2005, located in Rochester Hills and Lake Orion. In addition, there were non-recurring costs in the current periods associated with the February 2006 computer conversion due to considerable time and effort involved with the project. The cost of overtime, training, travel expenses, customer mailings and form replacement totaled approximately $50,000 during the period ended March 31, 2006.

Comparison of Operating Results for the Years Ended September 30, 2005 and September 30, 2004

Overview. Net income increased by 25.6% to $1.1 million for the year ended September 30, 2005 from $837,000 for the year ended September 30, 2004. The growth in net income at Citizens Community Federal was a result of an increase in non-interest income, and an increase in net interest income partially offset by an increase in non-interest expense.

Interest Income. Total interest and dividend income increased by $2.3 million or 24.0% to $11.9 million for the year ended September 30, 2005 from $9.6 million for the year ended September 30, 2004. The primary reason for the increase in interest income was the $38.6 million increase in the average outstanding balance of loans receivable from $138.3 million for the year ended September 30, 2004 to $176.8 million for the year ended September 30, 2005. The increase was the result of loan originations exceeding repayments due to strong loan demand and the merger of the Community Plus Savings Bank on July 1, 2005, with loans receivable of $26.7 million. The yield in average loans receivable decreased to 6.65% from 6.90%, reflecting the nearly steady long-term market rates of interest and the repayments and refinancing of higher yielding existing loans receivable. The increase in loan demand was a result of strong internal marketing to existing customers.

Interest Expense. Total interest expense increased $1.1 million, or 38.2% to $4.0 million for the year ended September 30, 2005, from $2.9 million for the year ended September 30, 2004. The increase in interest expense resulted from an increase in expenses on both deposits and interest on notes payable as a result of an increase in average deposits outstanding and an increase in advances from the Federal Home Loan Bank of Chicago. Management used the advances as it sought the most cost-effective source of funds. The use of borrowed funds helped to keep deposit yields lower than would have been necessary to attract the additional funding for loan demand. The average cost of interest- bearing liabilities increased from 2.22% for the year ended September 30, 2004 to 2.40% for the year ended September 30, 2005, reflecting generally higher market rates of interest in fiscal 2005.

Net Interest Income. Net interest income increased 17.9% to $7.9 million for the year ended September 30, 2005, from $6.7 million for the year ended September 30, 2004. The average net interest spread for fiscal 2005 was 4.10%, a decrease of 40 basis points from the average interest spread for 2004 of 4.50%. The average interest rate margin decreased 37 basis points to 4.33% from 4.70%. The net interest spread and net interest margin performance was a result of an increase in average outstanding balance of loans receivable offset by a reduction in loan yield and an increase in interest expense.

Provision for Loan Losses. We establish provisions for loan losses, which are charged to operations, at a level management believes will reflect probable incurred credit losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers the types of loans and the amount of loans in the loan portfolio, historical loss experience, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral, and prevailing economic conditions.

In fiscal 2005, we recorded a provision for loan losses of $414,000, compared to $396,000 in 2004. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available, or as future events change. The allowance for loan losses as a percentage of loans receivable increased to 0.37% at September 30, 2005, from 0.36% at September 30, 2004. The level of the allowance is based on estimates and the ultimate losses may vary from the estimates. Non-performing assets were approximately $701,000 at September 30, 2005, as compared to $697,000 at September 30, 2004.

Nonperforming loans at September 30, 2005 were 0.29% of total assets as compared to 0.43% of total assets at September 30, 2004. Net charged-off loans were $205,000 for the year ended September 30, 2005, compared to $309,000 for the year ended September 30, 2004. The allowance for loan losses as a percentage of non-performing loans was 118.3% at September 30, 2005 compared to 79.5% at September 30, 2004. The increase in the allowance was primarily a result of the 43% increase in loans receivable, including 29.3% in consumer loans, which are viewed as having a higher risk of loss than one- to four-family residential loans.

Management assesses the allowance for loan losses on a quarterly basis and makes provisions for loan losses as necessary in order to maintain the allowance. While management uses available information to recognize losses on loans, future loan loss provisions may be necessary based on changes in economic conditions. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the allowance for loan losses and may require us to recognize additional provisions based on their judgment of information available to them at the time of their examination. The allowance for loan losses as of September 30, 2005 was maintained at a level that represents management's best estimate of probable losses inherent in the loan portfolio, and such losses were both probable and reasonably estimable.

Non-Interest Income. Total non-interest income increased $600,000 from $1.4 million in fiscal 2004 to $2.0 million in fiscal 2005, as a result of continued strong loan fee income and income generated from the January 12, 2005 merger of PULSE-EFT and Discover Financial Services. CCB was a stockholder and member of PULSE-EFT. As a result of this merger, CCB received $448,000 in pre-tax income in fiscal 2005.

Non-Interest Expense. Total non-interest expense for the year ended September 30, 2005 increased 23.5% to $7.8 million from $6.3 million for the year ended September 30, 2004. The increase was primarily due to the additional operating cost associated with the three new branch offices; Oakdale, Minnesota, which opened in October 2004; and the two Michigan offices acquired July 1, 2005, located in Rochester Hills and Lake Orion.

Income Tax Expense. Income tax expense increased to $684,000, or 39.4% of income before income taxes for the year ended September 30, 2005, from $543,000, or 39.5% of income before income taxes for the year ended September 30, 2004. The increase was due to the increase in income before taxes.

Comparison of Financial Condition at March 31, 2006 and September 30, 2005

Total Assets. Total assets of CCB as of March 31, 2006 were $256.6 million, compared to $245.7 million as of September 30, 2005, an increase of $10.9 million, or 4.4%. Assets increased primarily as a result of an increase in loans receivable. Contributing to the increase in loans was the continued growth of the Mankato and Oakdale, Minnesota branches.

Cash and Cash Equivalents. Cash and cash equivalents decreased from $9.3 million on September 30, 2005 to $4.3 million on March 31, 2006. The decrease was a result of using cash to fund loan growth in the period.

Loans Receivable. Loans increased by $16.4 million, or 7.5%, from $218.7 million as of September 30, 2005 to $235.1 million as of March 31, 2006. At March 31, 2006, the loan portfolio was comprised of $154.2 million of loans secured by real estate, or 65.6% of total loans, $80.8 million of consumer loans, or 34.4% of total loans, and commercial loans of $74,000, less than 1% of total loans.

At September 30, 2005, the loan portfolio mix included real estate loans of $144.5 million or 66.1% of total loans, consumer loans of $74.2 million or 33.9% of total loans and commercial loans of $75,000, less than 1% of total loans. As noted above, approximately one-half of the increase in loans receivable was the result of loan production at the Mankato and Oakdale, Minnesota branches. At March 31, 2006, loans receivable were $15.2 million at Mankato and $15.8 million at Oakdale, compared to $11.2 million at Mankato and $11.6 million at Oakdale at September 30, 2005.

Allowance for Loan Losses. The following table is an analysis of the activity in the allowance for loan losses for the six-month periods ended March 31, 2006 and March 31, 2005.

	Six Months Ended March 31,
	2006		2005

Balance at Beginning	$	803,218	$	554,210

Provisions Charged to Operating Expense		108,451		202,136

Loans Charged Off		109,554		128,405

Recoveries on Loans		5,651		13,402

Balance at End	$	807,766	$	641,343

Office Properties and Equipment. Total investment in office properties and equipment was $2.9 million on September 30, 2005 and $3.6 million on March 31, 2006, an increase of $700,000 or 24.1%. The increase came primarily from the purchase of computer equipment and software totaling $800,000. On September 9, 2005, CCB entered into a series of purchase agreements and software user agreements with Information Technology, Inc. for computer equipment and software. The purchase was completed in March 2006.

Deposits. Deposits as of March 31, 2006 were $188.3 million, compared to $177.5 million as of September 30, 2005, an increase of $10.8 million, or 6.1%. The majority of the deposit growth came from the two Minnesota branch offices, as management sought the most cost-effective markets to attract deposits.

Borrowed Funds. Federal Home Loan Bank advances were unchanged at $36.2 million on September 30, 2005 and March 31, 2006.

Comparison of Financial Condition at September 30, 2005 and September 30, 2004

Total Assets. Total assets of CCB as of September 30, 2005 were $245.7 million as compared to $162.0 million as of September 30, 2004, an increase of 51.7%. Assets increased primarily as a result of a marked increase in loans receivable and the acquisition of Community Plus Savings Bank. Of the $83.7 million in increased assets, $52.3 million was due to the assets assumed by CCB through the acquisition of Community Plus Savings Bank, of which $26.7 million were loans receivable.

Loans Receivable. Loan demand was strong in 2005. Total loans, net of allowance for loan losses, increased by 43.0% from $152.4 million as of September 30, 2004 to $217.9 million as of September 30, 2005. Loan demand was strong in 2005 as a result of our marketing efforts. Management expects continued strong loan demand in fiscal 2006 as a result of our continuing marketing strategies, and our expanded market base as a result of our acquisition. At September 30, 2005, the loan portfolio consisted of: $144.6 million, or 66.1%, of loans secured by real estate; $74.2 million, or 33.9%, of consumer loans; and commercial loans of $75,000, or less than 1% of total loans. At September 30, 2004 the mix in the loan portfolio included real estate loans of $95.6 million or 62.4% of total loans, consumer loans of $57.4 million or 37.5% of total loans and commercial loans of $115,000, less than 1% of total loans.

Deposits. Deposits as of September 30, 2005 were $177.5 million, compared to $128.0 million as of September 30, 2004, an increase of $49.5 million, or 38.7%. The majority of the deposit growth came from the acquisition of Community Plus Savings Bank.

Borrowed Funds. Federal Home Loan Bank advances increased from $13.5 million at September 30, 2004 to $36.2 million at September 30, 2005, as the need to borrow funds to support loan demand increased.

Stockholders' Equity. Stockholders' equity increased $10.0 million to $29.6 million at September 30, 2005, from $19.6 million at September 30, 2004. The increase for the period was a result of retained earnings of $854,310 (net of $193,106 dividends paid), an increase in capital of $9.8 million as a result of the issuance of stock to Citizens Community MHC in connection with the July 1, 2005 acquisition of Community Plus Savings Bank, and a decrease of $673,000 related primarily to the shares of stock purchased for the recognition and retention plan.

Average Balances, Net Interest Income, Yields Earned and Rates Paid

The following table presents for the periods indicated the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Also presented is the weighted average yield on interest-earning assets, rates paid on interest-bearing liabilities and the resultant spread at September 30, 2005. No tax equivalent adjustments were made. For 2005, average balances were calculated using quarter-end balances and for 2004, average balances were calculated using beginning and end of year balances, which would not result in materially different rates from those calculated using average monthly or daily balances. Non-accruing loans have been included in the table as loans carrying a zero yield.

	At March 31,			Six Months Ended March 31,														Year Ended September 30,
	2006			2006							2005							2005							2004
	Average Yield/ Cost			Average Outstanding Balance		Interest Earned/ Paid		Yield/ Rate			Average Outstanding Balance		Interest Earned/ Paid		Yield/ Rate			Average Outstanding Balance		Interest Earned/ Paid		Yield/ Rate			Average Outstanding Balance		Interest Earned/ Paid		Yield/ Rate



Interest-Earning Assets:
Cash equivalents		3.75	%	$	7,514	$	134		3.58	%	$	4,098	$	17		0.83	%	$	5,489	$	134		2.44	%	$	4,133	$	30		0.73	%
Loans receivable(1)		6.58			226,343		7,373		6.53			160,942		5,348		6.66			176,802		11,763		6.65			138,252		9,545		6.90
Other interest-bearing deposits		2.89			1,277		23		3.61			---		---		---			215		8		3.72			---		---		---
Securities available for sale		4.11			1,905		33		3.47			---		---		---			522		21		4.02			---		---		---
Federal Home Loan Bank stock		3.67			2,025		30		2.97			984		26		5.30			1,345		54		4.01			749		45		6.01
Total interest-earning assets		6.62		$	239,065		7,593		6.37		$	166,197		5,391		6.51		$	184,373		11,980		6.50		$	143,134		9,620		6.72

Interest-Bearing Liabilities:
Savings accounts		0.66		$	24,134		73		0.61		$	13,550		53		0.78		$	15,877		122		0.77		$	14,020		115		0.82
Demand accounts(2)		0.13			19,517		14		0.14			11,938		15		0.25			13,346		30		0.22			11,003		31		0.28
Money market accounts		1.87			28,865		263		1.83			23,767		218		1.84			24,527		433		1.77			19,739		389		1.97
CDs		3.93			101,189		1,851		3.67			71,988		1,037		2.89			78,052		2,370		3.04			67,553		1,969		2.91
IRAs		3.45			10,561		167		3.17			8,981		133		2.97			9,316		308		3.31			9,156		302		3.30
Federal Home Loan Bank advances		4.94			34,414		773		4.50			18,667		193		2.07			25,140		729		2.90			8,600		83		0.97
Total interest-bearing liabilities		3.09		$	218,680		3,141		2.88		$	148,891		1,649		2.22		$	166,258		3,992		2.40		$	130,071		2,889		2.22

Net interest income						$	4,452						$	3,742						$	7,988						$	6,731
Net interest rate spread		3.53							3.49	%						4.29	%						4.10	%						4.50	%
Net interest margin (3)									3.73	%						4.52	%						4.33	%						4.70	%
Average interest-earning assets to average interest- liabilities							1.09x							1.12x							1.11x							1.10x

_________________

⁽¹⁾	Calculated net of loan fees ($(69) in March 2006 and $6 in march 2005; $(54) in 2005 and $(1) in 2004), loan discounts, loans in process and allowance for losses on loans.

⁽²⁾

Includes $15.0 million and $6.9 million of non-interest-bearing demand deposits during the six months ended March 31, 2006 and 2005, respectively; includes $8.2 million, $5.9 million and $4.9 million of non-interest-bearing demand deposits during the years ended September 30, 2005, 2004 and 2003, respectively.

⁽³⁾	Net interest income divided by interest-earning assets.

Rate/Volume Analysis

The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume, which are changes in volume multiplied by the old rate, and (2) changes in rate, which are changes in rate multiplied by the old volume. Changes attributable to both rate and volume which cannot be segregated have been allocated proportionately to the change due to volume and the change due to rate.

		Six Months Ended March 31, 2006 vs. 2005								Year Ended September 30, 2005 vs. 2004
		Increase (Decrease) Due to								Increase (Decrease) Due to
		Volume		Rate			Total Increase (Decrease)			Volume		Rate			Total Increase (Decrease)
	(In Thousands)

Interest-earning assets:
Loans receivable(1)		$	3,240	$	(217	)	$	3,023		$	2,576	$	(358	)	$	2,218
Other			248		(23	)		225			113		29			142

Total interest-earning assets		$	3,488	$	(240	)		3,248		$	2,689	$	(329	)		2,360

Interest-bearing liabilities:
Savings accounts		$	54	$	(30	)		24		$	15	$	(8	)		7
Demand accounts			11		(13	)		(2	)		6		(7	)		(1	)
Money market accounts			79		16			95			87		(43	)		44
IRA accounts			40		(13	)		27			316		85			401
Certificates of deposit			788		554			1,342			5		(1	)		6
FHLB advances			328		493			821			316		330			646

Total interest-bearing liabilities		$	1,300	$	1,007			2,307		$	745	$	358			1,103

Net interest income							$	940							$	1,257

______________

(1) Calculated net of loan fees of $(69) in 2006, $(54) in 2005, $(1) in 2004 and $50 in 2003.

Liquidity and Commitments

We are required to have enough investments that qualify as liquid assets in order to maintain sufficient liquidity to ensure a safe and sound operation. Liquidity may increase or decrease depending upon the availability of funds and comparative yields on investments in relation to the return on loans. Historically, we have maintained liquid assets above levels believed to be adequate to meet the requirements of normal operations, including potential deposit outflows. Cash flow projections are regularly reviewed and updated to assure that adequate liquidity is maintained. At March 31, 2006, our liquidity ratio, which is our liquid assets as a percentage of net withdrawable savings deposits with a maturity of one year or less and current borrowings was 7.19%.

Citizens Community Federal's liquidity, represented by cash and cash equivalents, is a product of its operating, investing and financing activities. Citizens Community Federal's primary sources of funds are deposits, amortization, prepayments and maturities of outstanding loans and other short-term investments and funds provided from operations. While scheduled payments from the amortization of loans and maturing short-term investments are relatively predictable sources of funds, deposit flows and loan prepayments are greatly influenced by general interest rates, economic conditions and competition. In addition, Citizens Community Federal invests excess funds in short-term interest-earning assets, which provide liquidity to meet lending requirements. Citizens Community Federal also generates cash through borrowings. Citizens Community Federal utilizes Federal Home Loan Bank advances to leverage its capital base and provide funds for its lending and investment activities, and to enhance its interest rate risk management.

Liquidity management is both a daily and long-term function of business management. Excess liquidity is generally invested in short-term investments such as overnight deposits or certificates of deposit in other financial institutions. On a longer term basis, Citizens Community Federal maintains a strategy of investing in various lending products as described in greater detail under "Business Strategies." Citizens Community Federal uses its sources of funds primarily to meet its ongoing commitments, to pay maturing certificates of deposit and savings withdrawals, and to fund loan commitments.

At March 31, 2006, the total approved loan origination commitments outstanding amounted to $378,000. At the same date, unused approved lines of credit to our customers were $7.8 million and certificates of deposit scheduled to mature in one year or less, totaled $61.0 million.

The average cost of deposits has increased throughout fiscal 2005 and the first six months of 2006, management's policy is to maintain deposit rates at levels that are competitive with other local financial institutions. Based on the competitive rates and on historical experience, management believes that a significant portion of maturing deposits will remain with Citizens Community Federal. In addition, the Bank had the ability as of March 31, 2006 to borrow an additional $72.1 million from the Federal Home Loan Bank of Chicago as a funding source to meet commitments and for liquidity purposes.

Capital

Consistent with its goals to operate a sound and profitable financial organization, Citizens Community Federal actively seeks to maintain a "well capitalized" institution in accordance with regulatory standards. Total equity of Citizens Community Federal was $19.9 million at March 31, 2006, or 8.0% of total assets on that date. As of March 31, 2006, Citizens Community Federal exceeded all capital requirements of the Office of Thrift Supervision. Citizens Community Federal's regulatory capital ratios at March 31, 2006 were as follows: core capital 7.7%; Tier I risk-based capital, 11.7%; and total risk-based capital, 12.1%. The regulatory capital requirements to be considered well capitalized are 5.0%, 6.0% and 10.0%, respectively.

Impact of Inflation

The consolidated financial statements presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America. These principles require the measurement of financial position and operating results in terms of historical dollars, without considering changes in the relative purchasing power of money over time due to inflation.

Our primary assets and liabilities are monetary in nature. As a result, interest rates have a more significant impact on our performance than the effects of general levels of inflation. Interest rates, however, do not necessarily move in the same direction or with the same magnitude as the price of goods and services, since such prices are affected by inflation. In a period of rapidly rising interest rates, the liquidity and maturity structures of our assets and liabilities are critical to the maintenance of acceptable performance levels.

The principal effect of inflation, as distinct from levels of interest rates, on earnings is in the area of noninterest expense. Such expense items as employee compensation, employee benefits and occupancy and equipment costs may be subject to increases as a result of inflation. An additional effect of inflation is the possible increase in the dollar value of the collateral securing loans that we have made. We are unable to determine the extent, if any, to which properties securing our loans have appreciated in dollar value due to inflation.

Recent Accounting Pronouncements

The Financial Accounting Standard Board ("FASB") recently issued the following accounting standards related to the financial services industry:

In December 2004, the FASB issued SFAS No. 123R, Share-Based Payment, which replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS No. 123R requires that the cost of share-based payment transactions (including those with employees and nonemployees) be recognized in the financial statements. SFAS No. 123R applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity's shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity's shares or other equity instruments.

CCB plans to adopt SFAS No. 123R, as required, on October 1, 2006. While CCB is still in the process of evaluating the effect of the FASB statement on the financial statements, Note 1 does disclose the effect on earnings had SFAS No. 123 been adopted in prior periods. Since the statement will be adopted using the modified-prospective method, the effect the adoption will have on the financial statements can be materially impacted by the number of options granted in future periods and existing grants not yet vested.

Quantitative and Qualitative Disclosures About Market Risk

Our Risk When Interest Rates Change. The rates of interest we earn on assets and pay on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, our results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of our assets and liabilities. The risk associated with changes in interest rates and our ability to adapt to these changes is known as interest rate risk and is our most significant market risk.

How We Measure Our Risk of Interest Rate Changes. As part of our attempt to manage our exposure to changes in interest rates and comply with applicable regulations, we monitor our interest rate risk. In monitoring interest rate risk we continually analyze and manage assets and liabilities based on their payment streams and interest rates, the timing of their maturities, and their sensitivity to actual or potential changes in market interest rates.

In order to manage the potential for adverse effects of material and prolonged increases in interest rates on our results of operations, we adopted asset and liability management policies to better align the maturities and repricing terms of our interest-earning assets and interest-bearing liabilities. These policies are implemented by the asset and liability management committee. The asset and liability management committee is comprised of members of senior management. The asset and liability management committee establishes guidelines for and monitors the volume and mix of assets and funding sources taking into account relative costs and spreads, interest rate sensitivity and liquidity needs. The objectives are to manage assets and funding sources to produce results that are consistent with liquidity, capital adequacy, growth, risk and profitability goals. The asset and liability management committee generally meets on a weekly basis to review, among other things, economic conditions and interest rate outlook, current and projected liquidity needs and capital position, anticipated changes in the volume and mix of assets and liabilities and interest rate risk exposure limits versus current projections pursuant to net present value of portfolio equity analysis. At each meeting, the asset and liability management committee recommends strategy changes, as appropriate, based on this review. The committee is responsible for reviewing and reporting on the effects of the policy implementations and strategies to the board of directors on a monthly basis.

In order to manage our assets and liabilities and achieve the desired liquidity, credit quality, interest rate risk, profitability and capital targets, we have focused our strategies on:

originating first mortgage loans, with a clause allowing for payment on demand after a stated period of time,

originating shorter-term consumer loans,

originating prime-based home equity lines of credit,

managing our deposits to establish stable deposit relationships,

using Federal Home Loan Bank advances to align maturities and repricing terms, and

attempting to limit the percentage of long-term fixed-rate loans in our portfolio which do not contain a payable on demand clause.

At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the asset and liability management committee may determine to increase Citizens Community Federal's interest rate risk position somewhat in order to maintain its net interest margin.

In light of our performance in 2005 and first two quarters of 2006, management believes our strategies have proven to be effective. Credit quality continued to be strong with delinquency and charge-off ratios remaining low. Interest rate risk, defined by net portfolio value, continued to show minimal risk. By continuing to use our payment on demand clauses on our first mortgage loan originations, less than 10% of the Citizen Community Federal assets were represented by traditional fixed-rate mortgage loans with amortizations of fifteen years or greater. Citizen Community Federal’s profitability increased compared to fiscal 2004 with capital levels remaining on target.

As part of its procedures, the asset and liability management committee regularly reviews interest rate risk by forecasting the impact of alternative interest rate environments on net interest income and market value of portfolio equity. Market value of portfolio equity is defined as the net present value of an institution's existing assets, liabilities and off-balance sheet instruments, and evaluating such impacts against the maximum potential changes in net interest income and market value of portfolio equity that are authorized by the board of directors of Citizens Community Federal.

The following table sets forth, at March 31, 2006, an analysis of Citizen Community Federal's interest rate risk as measured by the estimated changes in NPV resulting from instantaneous and sustained parallel shifts in the yield curve (up 300 basis points and down 200 basis points, measured in 100 basis point increments). As of March 31, 2006, due to the current level of interest rates, the OTS no longer provides NPV estimates for decreases in interest rates greater than 200 basis points.

Change in Interest Rates in Basis Points ("bp")	Net Portfolio Value								Net Portfolio Value as % of Present Value of Assets
(Rate Shock in Rates) ⁽¹⁾	Amount		Change			Change			NPV Ratio			Change
	(Dollars in Thousands)
+300 bp	$	16,520	$	(6,405	)		(28	)%		6.83	%		(227	) bp
+200 bp		18,715		(4,220	)		(18	)		7.62			(147	)
+100 bp		20,880		(2,055	)		(9	)		8.39			(71	)
0 bp		22,935		---			---			9.10			---
-100 bp		24,605		1,670			7			9.65			55
-200 bp		25,468		2,533			11			9.90			81

___________

⁽¹⁾	Assumes an instantaneous uniform change in interest rates at all maturities.

For comparative purposes, the table below sets forth, at September 30, 2005, an analysis of Citizen Community Federal's interest rate risk as measured by the estimated changes in NPV resulting from instantaneous and sustained parallel shifts in the yield curve (up 300 basis points and down 200 basis points, measured in 100 basis point increments). As of September 30, 2005, due to the current level of interest rates, the OTS no longer provides NPV estimates for decreases in interest rates greater than 200 basis points.

Change in Interest Rates in Basis Points ("bp")	Net Portfolio Value								Net Portfolio Value as % of Present Value of Assets
(Rate Shock in Rates) ⁽¹⁾	Amount		Change			Change			NPV Ratio			Change
	(Dollars in Thousands)
+300 bp	$	17,011	$	(5,622	)		(25	)%		7.34	%		(206	) bp
+200 bp		18,970		(3,644	)		(16	)		8.08			(132	)
+100 bp		20,886		(1,748	)		(8	)		8.78			(62	)
0 bp		22,634		---			---			9.40			---
-100 bp		23,823		1,189			5			9.79			140
-200 bp		2,131		1,497			117			9.86			46

___________

⁽¹⁾	Assumes an instantaneous uniform change in interest rates at all maturities.

The OTS uses certain assumptions in assessing the interest rate risk of savings associations. These assumptions relate to interest rates, loan prepayment rates, deposit decay rates, and the market values of certain assets under differing interest rate scenarios, among others.

The assumptions used by management to evaluate the vulnerability of Citizens Community Federal's operations to changes in interest rates in the table above are utilized in, and set forth under, the gap table below. Although management finds these assumptions reasonable, the interest rate sensitivity of Citizens Community Federal's assets and liabilities and the estimated effects of changes in interest rates on Citizens Community Federal's net interest income and market value of portfolio equity indicated in the above table could vary substantially if different assumptions were used or actual experience differs from such assumptions.

The following table summarizes the anticipated maturities or repricing of Citizens Community Federal's interest-earning assets and interest-bearing liabilities at March 31, 2006, based on the information and assumptions set forth below.

	Six Months or Less			Over Six Months to One Year			Over One to Three Years			Over Three to Five Years			Over Five Years			Total
	(Dollars in Thousands)
Real estate mortgage loans	$	28,378		$	20,601		$	54,480		$	27,391		$	23,457		$	154,307
Consumer loans		36,844			24,363			16,157			1,445			2,016			80,825
Securities available for sale		1,073			73			311			179			235			1,871
Other interest-bearing deposits		564			589			---			---			---			1,153
Federal Home Loan Bank stock		1,826			---			---			---			---			1,826
Cash equivalents		4,296			---			---			---			---			4,296
Total interest-earning assets		72,981			45,626			70,948			29,015			25,708			244,278

Savings accounts		2,665			2,665			20,488			820			39			26,677
Demand and money market		6,879			6,879			10,317			2,580			21,056			47,711
Certificates of deposit		29,701			31,287			43,986			8,900			---			113,874
FHLB advances		28,850			---			7,350			---			---			36,200
Total interest-bearing liabilities		68,095			40,831			82,141			12,300			21,095			224,462

Interest-earning assets less interest-bearing liabilities	$	4,886		$	4,795		$	(11,193	)	$	16,715		$	4,613		$	19,816

Cumulative interest rate sensitivity gap	$	4,886		$	9,681		$	(1,152	)	$	15,203		$	19,816		$	19,816

Cumulative interest rate gap as a percentage of assets at March 31, 2006		1.90	%		3.77	%		(0.59	)%		5.92	%		7.72	%		7.72	%

Cumulative interest rate gap as a percentage of interest-earning assets at March 31, 2006		2.00	%		3.96	%		(0.62	)%		6.23	%		8.11	%		8.11	%

The difference between repricing assets and liabilities for a specific period is referred to as the GAP. An excess of repriceable assets over liabilities is referred to as a positive gap. An excess of repriceable liabilities over assets is referred to as a negative gap. The cumulative gap is the summation of the gap for all periods to the end of the period for which the cumulative gap is being measured.

Assets and liabilities scheduled to reprice are included in the period in which the rate is next scheduled to adjust rather than in the period in which the assets or liabilities are due. Fixed-rate loans are included in the periods in which they are scheduled to be repaid, based on scheduled amortization, as adjusted to take into account estimated prepayments based on OTS prepayment tables. No effect is given to the payable on demand clause in certain mortgage loans originated by Citizens Community Federal.

As with any method of measuring interest rate risk, certain shortcomings are inherent in the method of analysis presented in the foregoing table. For example, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Also, the interest rates on certain types of assets and liabilities may fluctuate in advance of changes in market interest rates, while interest rates on other types may lag behind changes in market rates. Additionally, a limited amount of our assets have features which restrict changes in interest rates on a short-term basis and over the life of the asset. Further, if interest rates change, expected rates of prepayments on loans and early withdrawals from certificates could deviate significantly from those assumed in calculating the table.

Critical Accounting Policies

There are certain accounting policies that we have established which require us to use our judgment. The only critical accounting policy, in addition to the policies included in Note 1, "Summary of Significant Accounting Policies," to the Consolidated Financial Statements, is as follows:

Allowance for Loan Losses. Establishing the amount of the allowance for loan losses requires the use of our judgment. We evaluate our assets at least quarterly, and review their risk components as part of that evaluation. If we misjudge a major component and experience a loss, it will likely affect our earnings. In addition, by the very nature of the determination of the allowance, developments as to particular loans can affect year-to-year provision amounts. We consistently challenge ourselves in the review of the risk components to identify any changes in trends and their cause.

BUSINESS OF CITIZENS COMMUNITY BANCORP, INC.

Citizens Community Bancorp, Inc. has not engaged in any significant business to date. Its primary activity will be to hold all of the stock of Citizens Community Federal. Citizens Community Bancorp, Inc. will invest the proceeds of the Stock Offering to support the growth of Citizens Community Bancorp, Inc., including through potential acquisitions or new branches. See “How We Intend to Use the Proceeds of the Stock Offering.” In the future, it may pursue other business activities, including mergers and acquisitions, investment alternatives and diversification of operations. There are, however, no current understandings or agreements for these activities. Citizens Community Bancorp, Inc. will not maintain offices separate from those of Citizens Community Federal or employ any persons other than certain of Citizens Community Federal's officers. Officers of Citizens Community Bancorp, Inc. will not be separately compensated for their service.

CCB is currently the middle-tier federal stock holding company and sole stockholder of Citizens Community Federal. Citizens Community Federal previously converted from a federal mutual savings bank to the mutual holding company form of organization in March 2004. At the same time, CCB was chartered as the mid-tier stock holding company for Citizens Community Federal. In connection with that mutual holding company reorganization, CCB undertook a minority stock offering and sold 32% of its outstanding stock to the public, and the remaining 68% of its common stock was issued to Citizens Community MHC, its parent mutual holding company.

Since then, CCB has repurchased some of its publicly held shares and has issued restricted stock and other stock-related awards to management. See “Management - Benefits -- Existing Stock Options and Restricted Stock.” In addition, in connection with the acquisition of Community Plus Savings Bank, a mutual institution, on July 1, 2005, CCB issued an additional 705,569 shares of its common stock to Citizens Community MHC.

At the conclusion of this Stock Offering and the completion of the Conversion of Citizens Community MHC, CCB will cease to exist, and will be succeeded by a newly formed Maryland corporation called Citizens Community Bancorp, Inc., which will own all of the outstanding common stock of Citizens Community Federal. As of March 31, 2006, CCB had 3,724,628 shares of common stock issued and outstanding. Citizens Community MHC owns 2,768,669 shares, or 74%, of CCB's outstanding common stock. The remaining shares of common stock are held by the public.

At March 31, 2006, CCB had total assets of $256.6 million, total deposits of $188.3 million and stockholders' equity of $29.8 million.

CCB’s internet website is www.citizenscommunityfederal.net under “News.” CCB makes available free of charge on or through its website its annual reports on Forms 10-KSB, quarterly reports on Forms 10-QSB, current reports on Forms 8-K and any amendments to these reports filed or furnished pursuant to the Securities and Exchange Act of 1934, as soon as reasonably practicable after CCB electronically files such material with, or furnishes it to, the SEC. Except as specifically incorporated by reference into this Prospectus, information on our website is not a part of this Prospectus.

BUSINESS OF CITIZENS COMMUNITY FEDERAL

Historically, Citizens Community Federal was a federal credit union, which accepted deposits and made loans to members, who were the people who lived, worked or worshipped in the Wisconsin counties of Chippewa and Eau Claire, and parts of Pepin, Buffalo and Trempealeau. Through an acquisition in 2003, we expanded operations into Minnesota. In addition, this included businesses and other entities located in these counties, and members and employees of the Hocak Nation. In December 2001, Citizens Community Federal converted to a federal mutual savings bank in order to better serve our customers and the local community through the broader lending ability of a federal savings bank and to expand our customer base beyond the limited field of membership permitted for credit unions. As a federal savings bank, Citizens Community Federal has expanded authority in structuring residential mortgage and consumer loans. It also has the ability to make commercial loans, though it does not engage in such lending at this time. In 2004, Citizens Community Federal reorganized into the mutual holding company form of organization and became a federal stock savings bank. On July 1, 2005, we acquired Community Plus Savings Bank, Rochester Hills, Michigan, through a merger with and into Citizens Community Federal. Citizens Community Federal is a federally chartered stock savings bank with twelve full-service offices in Wisconsin, Minnesota and Michigan.

Market Area

Citizens Community Federal is a community-oriented financial institution offering a variety of financial services to meet the needs of the communities we serve. Citizens Community Federal is headquartered in Eau Claire, Wisconsin, and has twelve retail offices primarily serving Eau Claire, Buffalo, Jackson, Sauk, Barron and Chippewa counties in Wisconsin; Blue Earth and Washington Counties in Minnesota; and Oakland and McComb counties in Michigan. The geographic market area for loans and deposits is principally northwestern and central Wisconsin, south central Minnesota, and southeastern Michigan.

In all but Washington, Oakland and McComb counties, the economy is balanced between manufacturing and service-oriented jobs. Median household income and per capita income for this area are below the state and national averages, reflecting the lack of urban nature of the market and availability of high paying white collar and technical jobs. Washington, Oakland and McComb counties, all located in or near large metropolitan areas, have a more diverse economy. Our expansion efforts are concentrated in those counties. Major employers in our market area include Chippewa Valley Technical College, Consumer Co-op Association, University of Wisconsin-Eau Claire, Taylor Corporation, Trans Industries Inc. and Energy Conversion Devices Inc.

Competition

Citizens Community Federal faces strong competition in originating real estate and consumer loans and in attracting deposits. Competition in originating real estate loans comes primarily from other savings institutions, commercial banks, credit unions and mortgage bankers. Other savings institutions, commercial banks, credit unions and finance companies provide vigorous competition in consumer lending.

Citizens Community Federal attracts deposits through its branch office system. Competition for those deposits is principally from other savings institutions, commercial banks and credit unions located in the same community, as well as mutual funds and other alternative investments. Citizens Community Federal competes for these deposits by offering superior service and a variety of deposit accounts at competitive rates. Based on branch deposit data provided by the FDIC at June 30, 2005, Citizens Community Federal's share of deposits was approximately 8.78% in Eau Claire County and less than 2.53% in all other market area counties.

Lending Activities

General. Citizens Community Federal's first mortgage loans carry a fixed rate of interest. First mortgage loans generally are long-term and amortize on a monthly basis with principal and interest due each month. A majority of Citizens Community Federal's first mortgage loans also contain a payable on demand clause, which allows Citizens Community Federal to call the loan due after a stated period, usually between two and five years from origination. Citizens Community Federal also has home equity loans in its portfolio, which have an interest rate that adjusts based on the prime rate. At March 31, 2006 and September 30, 2005, the net loan portfolio totaled $234.3 million and $217.9 million, respectively, which constituted 91.3% and 88.7% of total assets, respectively.

Mortgage loans up to $500,000 and consumer loans may be approved at various levels by loan officers and senior management. The President may approve loans up to our regulatory lending limit, which is currently $2.9 million, along with recommendations from the Chief Financial Officer and the Executive Vice President. Loans outside our general underwriting guidelines must be approved by the board of directors.

At March 31, 2006, the maximum amount which Citizens Community Federal could have loaned to any one borrower and the borrower's related entities was approximately $2.9 million. The largest lending relationship to a single borrower or a group of related borrowers consisted of three loans to a single borrower with a total balance of $460,000. These loans were current as of March 31, 2006.

Loan Portfolio Composition. The following table presents information concerning the composition of the Citizen Community Federal’s loan portfolio in dollar amounts and in percentages (before deductions for allowances for loan losses) as of the dates indicated.

	At March 31,					At September 30,
	2006					2005					2004					2003					2002					2001
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in Thousands)

Real Estate Loans:
One - to four-family first mortgages	$	146,077		62.1	%	$	136,647		62.5	%	$	89,841		58.8	%	$	71,108		57.5	%	$	54,505		52.2	%	$	43,026		45.8	%
Second mortgages		7,960		3.4			7,630		3.5			5,398		3.5			4,661		3.8			5,687		5.4			1,638		1.7
Multi-family and commercial		270		0.1			274		0.1			321		0.2			239		0.3			147		0.1			---		---
Total real estate loans		154,307		65.6			144,551		66.1			95,560		62.5			76,008		61.6			60,339		57.7			44,664		47.5

Consumer Loans:
Automobile ⁽¹⁾		25,223		10.7			25,980		11.9			25,808		16.9			26,905		21.7			29,882		28.6			26,403		28.1
Other secured personal loans ⁽²⁾		51,162		21.8			43,460		19.8			27,607		18.0			17,028		13.8			10,615		10.2			18,738		20.0
Unsecured personal loans ⁽³⁾		4,440		1.9			4,743		2.2			3,955		2.6			3,633		2.9			3,604		3.5			4,119		4.4
Total consumer loans		80,825		34.4			74,183		33.9			57,370		37.5			47,566		38.4			44,101		42.3			49,260		52.5

Total loans		235,132		100.0	%		218,734		100.0	%		152,930		100.0	%		123,574		100.0	%		104,440		100.0	%		93,924		100.0	%

Less:
Allowance for loan losses		808					803					554					467					349					306

Total loans receivable, net	$	234,324				$	217,931				$	152,376				$	123,107				$	104,091				$	93,618

_______________

(1)	Includes both direct and indirect lending activities.

(2)	Includes both direct and indirect lending activities for personal items other than automobiles.

(3)	Includes only direct lending.

The following table shows the composition of Citizen Community Federal’s loan portfolio by fixed- and adjustable-rate at the dates indicated.

	At March 31,					At September 30,
	2006					2005					2004					2003					2002					2001
	Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent			Amount		Percent
	(Dollars in Thousands)
Fixed Rate Loans
Real estate
One - to four-family first mortgages (1)	$	137,685		58.6	%	$	128,300		58.7	%	$	89,841		58.8	%	$	71,108		57.5	%	$	54,505		52.2	%	$	43,026		45.8	%
Second mortgages		6,868		2.9			6,189		2.8			4,772		3.1			4,099		3.3			5,303		5.1			1,148		1.2
Multi-family and commercial		270		0.1			274		0.1			321		0.2			239		0.3			147		0.1			---		---
Total fixed-rate real estate loans		144,823		61.6			134,763		61.6			94,934		62.1			75,446		61.1			59,955		57.4			44,174		47.0

Consumer loans		80,825		34.4			74,183		33.9			57,370		37.5			47,566		38.5			44,101		42.2			49,260		52.5

Total fixed rate loans		225,648		96.0			208,946		95.5			152,304		99.6			123,012		99.6			104,056		99.6			93,434		99.5

Adjustable Rate Loans
Real estate
One - to four-family first mortgages		8,392		3.6			8,347		3.8			---		---			---		---			---		---			---		---
Second mortgages		1,092		0.4			1,441		0.7			626		0.4			562		0.4			384		0.4			490		0.5
Multi-family and commercial		---		---			---		---			---		---			---		---			---		---			---		---
Total adjustable rate real estate loans		9,484		4.0			9,788		4.5			626		0.4			562		0.4			384		0.4			490		0.5

Consumer		---		---			---		---			---		---			---		---			---		---			---		---

Total adjustable rate loans		9,484		4.0			9,788		4.5			626		0.4			562		0.4			384		0.4			490		0.5

Total loans		235,132		100.0	%		218,734		100.0	%		152,930		100.0	%		123,574		100.0	%		104,440		100.0	%		93,924		100.0	%

Less :
Allowance for loan losses		808					803					554					467					349					306

Total loans receivable, net	$	234,324				$	217,931				$	152,376				$	123,107				$	104,091				$	93,618

__________________

(1)	Includes $111.7 million in March 2006, $102.9 million in 2005, $81.6 million in 2004, $66.4 million in 2003, $51.2 million in 2002 and $41.3 million in 2001 of loans with a payable on demand clause.

The following schedule illustrates the contractual maturity of Citizen Community Federal’s loan portfolio at March 31, 2006. Mortgages which have adjustable or renegotiable interest rates are shown as maturing in the period during which the contract is due. The schedule does not reflect the effects of possible prepayments or enforcement of due-on-demand clauses.

	Real Estate															Consumer
	One- to Four-Family First Mortgage ⁽¹⁾					Second Mortgage					Multi-Family and Commercial					Automobile					Secured Personal					Unsecured Personal					Total
	Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate			Amount		Weighted Average Rate
	(Dollars in thousands)


2007 ⁽²⁾	$	9,095		4.77	%	$	1,355		8.99	%	$	40		5.75	%	$	986		8.61	%	$	1,327		6.71	%	$	2,785		12.20	%	$	15,588		6.87	%
2008		169		6.40			411		8.05			138		7.25			2,941		8.29			1,763		8.22			534		10.18			5,956		8.34
2009		221		5.15			874		7.79			---		---			6,283		7.83			4,288		7.61			488		9.62			12,154		7.77
2010 - 2011		969		6.17			2,886		7.41			59		6.75			12,845		7.58			13,837		7.51			633		9.95			31,229		7.54
2012 - 2013		1,314		6.23			969		7.80			---		---			1,758		6.81			6,533		7.33			---		---			10,574		7.15
2014 - 2028		51,030		5.91			1,196		7.33			33		6.50			410		7.09			23,414		7.05			---		---			76,083		6.29
2029 and after		83,279		6.22			269		5.99			---		---			---		---			---		---			---		---			83,548		6.22

	$	146,077		6.02		$	7,960		7.74		$	270		6.83		$	25,223		7.70		$	51,162		7.29		$	4,440		11.35		$	235,132		6.64

_______________

(1)	Includes $111.7 million of loans with a payable on demand clause.

(2)	Includes home equity lines of credit, credit card loans, loans having no stated maturity and overdraft loans.

The total amount of loans due after March 31, 2006 which have predetermined interest rates is $225.6 million, while the total amount of loans due after such date which have floating or adjustable interest rates is $9.5 million.

First Mortgage Lending. Citizens Community Federal focuses its lending efforts primarily on the origination of loans secured by first mortgages on owner-occupied, one- to four-family residences in our market area. At March 31, 2006 and September 30, 2005, one- to four-family residential mortgage loans totaled $146.1 and $136.6 million, or 62.1% and 62.5% of the gross loan portfolio, respectively.

For the year, mortgage originations increased primarily due to general increases in demand throughout all of our markets. In addition, Citizens Community Federal's new branch in Oakdale, Minnesota and the acquisition of Community Plus Savings Bank in Michigan accounted for mortgage increases over the previous year.

Citizens Community Federal generally underwrites its one- to four-family loans based on the applicant's employment and credit history, their debt to income ratio and the appraised value of the subject property. Presently, Citizens Community Federal generally lends up to 80% of the appraised value for one- to four-family residential loans and up to 70% for non-owner occupied residential loans. For loans used to purchase the property with a loan-to-value ratio in excess of 80%, Citizens Community Federal requires private mortgage insurance in order to reduce our exposure below 80%. Properties securing one- to four-family loans are appraised by independent fee appraisers approved by the board of directors to the extent the loan exceeds $50,000. In-house appraisals, prepared by persons other than the originating loan officer, may be used for loans of less than $50,000, or loans of less than $100,000 if the loan-to-value ratio is less than 50%. Citizens Community Federal requires its borrowers to obtain evidence of clear title and hazard insurance, and flood insurance, if necessary.

Citizens Community Federal currently originates most of its one- to four-family mortgage loans on a fixed-rate basis. Citizens Community Federal's pricing strategy for mortgage loans includes setting interest rates that benefit our asset/liability management strategies. Our one- to four-family loans are not assumable.

Most mortgage loans include a payable on demand clause, which allows the loan to be called at any time after the demand date. The purpose behind the payable on demand clause is to provide Citizens Community with some protection against sharp and prolonged interest rate increases. Citizens Community Federal has had no reason to utilize the clause over the past several years, because rates have been historically low during this period (although they have moved up over the last 18 months). May 2000 was the last and only time the clause was utilized. At that time, 13 loans, totaling $541,442, were called. It is Citizens Community Federal’s policy to write the majority of its real estate loans with a payable on demand clause. The intent of the clause is to give Citizens Community Federal some ability to protect against sharp and prolonged interest rate increases and their impact on net interest margin. The clause is not intended for responding to temporary interest rate fluctuations. The following factors are considered in determining whether and when to utilize the clause: (1) a significant, prolonged increase in market rates of interest; (2) the liquidity needs of Citizens Community Federal; (3) Citizens Community Federal’s desire to restructure its balance sheet; and (4) an unsatisfactory payment history, including real estate taxes. Other factors considered include the remaining term of the loan (i.e., a shorter remaining term could justify not calling a loan with the same rate as a loan with a longer remaining term), other lending relationships, payment history and the equity position of the borrower. When Citizens Community Federal determines to utilize the clause, we call loans with the lowest interest rates first.

The following trigger guidelines are used to determine whether to utilize the payable on demand clause: (1) when rates available for six month investment certificates of deposit exceed the rate on loans calling the payable on demand clause by more than 75 basis points, or (2) when local market rates of interest for real estate loans exceed the rate on existing loans with the payable on demand clause by 150 basis points. If either of these triggers are reached, management has 12 months to utilize the clause and call loans, if management determines that doing so would be in the overall best interests of Citizens Community Federal. The existence of the payable on demand clauses is not considered as a factor in determining our accounting policies for loan origination fees and costs, because we have only used the clause once in May 2000 with respect to 13 loans.

The demand date is set based on the loan to value ratio and other underwriting criteria, and is usually two to five years from the date of origination. For the six months ended March 31, 2006, Citizens Community Federal originated $23.1 million on one- to four-family loans that included the payable on demand clause. During the year ended September 30, 2005, Citizens Community Federal originated $45.0 million of one- to four-family loans that included the payable on demand clause. Fixed-rate loans secured by one- to four-family residences have contractual maturities of up to 30 years, and are generally fully amortizing, with payments due monthly.

We recently implemented a mortgage banking operation, primarily in our Minnesota and Michigan markets. We utilize internal marketing efforts to originate real estate loans in these areas. We fund these loans and sell them in the secondary market to Countrywide Financial Corporation. This generates additional loan fee income and gains/losses on the sale of loans.

Second Mortgage Lending. Citizens Community Federal also offers second mortgage loans and home equity lines of credit. Home equity lines of credit totaled $1.1 million and $1.4 million and comprised 0.46% and 0.70% of the gross loan portfolio at March 31, 2006 and September 30, 2005, respectively. These loans may be originated in amounts, together with the amount of the existing first mortgage, of up to 80% of the value of the property securing the loan. A loan may go over 80% of the value of the property securing the loan if Citizens Community Federal holds the first mortgage. Home equity lines of credit are originated with an adjustable rate of interest, based on the prime rate of interest plus a margin, fixed for the first year and adjustable monthly thereafter. Home equity lines of credit have up to a 10 year draw period and require the payment of 1.5% of the outstanding loan balance per month during the draw period, which amount may be re-borrowed at any time during the draw period. Once the draw period has lapsed, the payment is fixed based on the loan balance at that time. At March 31, 2006, un-funded commitments on these lines of credit totaled $1,038,460.

Citizens Community Federal also offers second mortgage loans with a fixed rate of interest. These loans may be amortized up to 15 years with a balloon payment at three, five or 10 years. At March 31, 2006 and September 30, 2005, fixed-rate second mortgage loans totaled $6.9 and $6.2 million, or 2.92% and 2.83% of the gross loan portfolio, respectively.

Consumer Lending. At March 31, 2006 and September 30, 2005, consumer and other loans totaled $80.8 million and $74.2 million, or 34.37% and 33.92% of the gross loan portfolio, respectively. Citizens Community Federal offers a variety of secured consumer loans, including new and used auto, motorcycle, boat and recreational vehicle loans, loans secured by savings deposits, and a limited amount of unsecured loans. Citizens Community Federal originates consumer and other loans primarily in its market areas. For fiscal 2005 through the first six months of fiscal 2006, consumer lending increased primarily due to Citizens Community Federal's increased presence in the Minneapolis/St. Paul metropolitan market.

Auto loans totaled $25.2 million and $26.0 million at March 31, 2006 and September 30, 2005, or 10.73% and 11.87% of gross loans, respectively. Auto loans may be written for up to five years for a new car and four years for a used car with fixed rates of interest. Loan-to-value ratios are up to 100% of the sales price for new autos and 100% of the retail value on used autos, based on a valuation from official used car guides. In addition, Citizens Community Federal may, on occasion, originate auto secured loans in excess of 100% loan-to-value ratio based upon the credit quality of the borrower. Auto loans also may be originated through Citizens Community Federal's indirect lending program. Indirect auto loans are made using the same underwriting guidelines as auto loans originated directly by Citizens Community Federal.

Citizens Community Federal also originates secured loans on an indirect basis through its indirect dealer program. These secured consumer loans consist of loans for a wide variety of products, including motorcycles, recreational vehicles, pianos, all-terrain vehicles, televisions and sewing machines. An indirect dealer network is currently comprised of 279 active dealers with businesses located throughout Citizens Community Federal's market area. In some instances, the participating dealer may receive a premium rate for the amount over our initial interest rate. The loans are generally originated with terms from 36 to 60 months and carry fixed rates of interest. Citizens Community Federal follows its internal underwriting guidelines in evaluating loans obtained through the indirect dealer program, including using credit scoring to approve loans.

Citizens Community Federal originates secured direct loans on a variety of collateral with terms varying from 36 to 60 months. At March 31, 2006, Citizens Community Federal had secured direct consumer loans totaling $32.2 million, of which $17.6 million was for automobiles. At March 31, 2006, the indirect lending portfolio totaled $44.2 million, of which $7.6 million was for automobiles.

Citizens Community Federal also originates unsecured consumer loans consisting primarily of credit card loans totaling $1.5 million at March 31, 2006 and $1.5 million at September 30, 2005, overdraft protection loans totaling $535,000 at March 31, 2006 and $574,000 at September 30, 2005 and loans made through the Freedom Loan program. The Freedom Loan program offers unsecured loans to consumers with a fixed rate of interest for a maximum term of 48 months for amounts not to exceed $20,000 per individual. At March 31, 2006, loans originated through the Freedom Loan program totaled $2.5 million.

Consumer loans generally have shorter terms to maturity, which reduces Citizens Community Federal's exposure to changes in interest rates, and carry higher rates of interest than do one- to four-family residential mortgage loans. In addition, management believes that offering consumer loan products helps to expand and create stronger ties to our existing customer base by increasing the number of customer relationships and providing cross-marketing opportunities.

Consumer and other loans may entail greater risk than do one- to four-family residential mortgage loans, particularly in the case of consumer loans which are secured by rapidly depreciable assets, such as automobiles and recreational vehicles. In these cases, any repossessed collateral for a defaulted loan may not provide an adequate source of repayment of the outstanding loan balance. As a result, consumer loan collections are dependent on the borrower's continuing financial stability and, thus, are more likely to be adversely affected by job loss, divorce, illness or personal bankruptcy.

Multi-family and Commercial Real Estate Lending. We generally do not engage in this type of lending, but may consider doing so in the future. However, as part of the acquisition of the Chippewa Falls branch on November 1, 2002, Citizens Community Federal obtained a nominal amount of multi-family and commercial real estate loans. At March 31, 2006 and September 30, 2005, our two multi-family and commercial real estate loans totaled $270,000 and $274,000, or 0.11% and 0.13% of our loan portfolio, respectively. In order to monitor the adequacy of cash flows on these loans, the borrower is requested or required to provide periodic financial information.

Loan Originations and Repayments

Citizens Community Federal originates loans through marketing efforts and our existing and walk-in customers. The ability to originate loans is dependent upon customer demand for loans in Citizens Community Federal's market areas. Demand is affected by competition and the interest rate environment. Since becoming a savings bank, Citizens Community Federal has significantly increased its origination of residential real estate loans. During the past few years, Citizens Community Federal, like many other financial institutions, has experienced significant prepayments on loans due to the low interest rate environment prevailing in the United States. In periods of economic uncertainty, the ability of financial institutions, including Citizens Community Federal, to originate or purchase large dollar volumes of real estate loans may be substantially reduced or restricted, with a resultant decrease in interest income.

We recently implemented a mortgage banking operation in the Minneapolis/St. Paul and Detroit markets. We will originate these loans using our internal marketing efforts. We intend to fund these loans and sell them in the secondary market to Countrywide Financial Corporation with servicing released. As of March 31, 2006, we had not originated or sold any loans through this new operation. Citizens Community Federal does not purchase any loans and does not service any loans other than those it originates.

The following table shows the loan origination, purchase, sale and repayment activities of Citizens Community Federal for the periods indicated.

	Six Months Ended March 31,				Year Ended September 30,
	2006		2005		2005		2004		2003
	(In thousands)
Originations by type :
Real estate ⁽¹⁾	$	26,989	$	29,228	$	53,731	$	43,604	$	48,369
Non-real estate - consumer		31,042		25,892		55,010		46,044		38,995
Total loans originated		58,031		55,120		108,741		89,648		87,364

Loans obtained through merger		---		---		26,670		---		---

Repayments :
Principal repayments		41,633		37,702		69,608		60,292		68,129
Loans transferred to other real estate		---		---		---		---		101
Net increase (decrease)	$	16,398	$	17,418	$	65,803	$	29,356	$	19,134

_______________

(1)

Real estate loans include loans with a payable on demand feature of $23.1 million for six months ended March 31, 2006, $23.2 million for the six months ended March 31, 2005, $45.0 million in fiscal 2005, $35.0 million in fiscal 2004 and $42.2 million in fiscal 2003. Real estate loans also include home equity lines of credit of $69,000 for the six months ended March 31, 2006, $126,000 for the six months ended March 31, 2005, $150,000 in fiscal 2005, $203,000 in fiscal 2004 and $163,000 in fiscal 2003.

Asset Quality

Procedures. When a borrower fails to make a payment on a mortgage loan on or before the due date, a late notice is mailed five days after the due date. When the loan is 10 days past due, a loan officer will begin contacting the borrower by phone. This process will continue until satisfactory payment arrangements have been made. If the loan becomes two payments and ten days past due, a notice of right-to-cure default is sent. If the loan becomes over 90 days delinquent, a drive-by inspection is done while further attempts to contact the borrower by phone are made. After the loan is 120 days past due, and acceptable arrangements have not been made, Citizens Community Federal will generally refer the loan to legal counsel, with instructions to prepare a notice of intent to foreclose. This notice allows the borrower up to 30 days to bring the loan current. During this 30 day period, Citizens Community Federal will still attempt to contact the borrower to implement satisfactory payment arrangements. If the loan becomes 150 days past due and satisfactory arrangements have not been made, foreclosure will be instituted.

For consumer loans a similar process is followed, with the initial written contact being made once the loan is five days past due. Follow-up contacts are generally on an accelerated basis compared to the mortgage loan procedure.

Citizens Community Federal divides its loans into two categories, mortgage loans and non-mortgage loans. For all loans in both categories, Citizens Community Federal employs a dual loss reserve strategy. First, using a running five-year history, all loans are assigned an inherent loss reserve. Next, each loan (mortgage and non-mortgage) that becomes over 61 days delinquent is reviewed by senior management. In addition, Citizens Community Federal assesses several factors including negative change in income, negative change in collateral, negative change in employment and other characteristics.

The procedure for charging off consumer loans does not differentiate between the different types of consumer loans. Citizens Community Federal's loan underwriting is based mainly on the borrowers' ability to pay, along with the value of the collateral. All closed-end consumer loans are either charged off or recognized as a specific loss after they become delinquent 120 days. All open-end consumer loans are charged off or recognized as a specific loss after they become delinquent 180 days. Consumer loans with collateral are charged off or recognized as a specific loss down to collateral resale value less 10 percent if repossession of collateral is assured.

In lieu of charging off the entire balance, loans with non-real estate collateral may be written down to the value of the collateral, if repossession is assured and in process. For open-end and closed-end loans secured by real estate, a current assessment of value will be made no later than 180 days past due. Any outstanding loan balance in excess of the value of the property, less selling costs, is charged off.

Delinquent Loans. The following table sets forth our loan delinquencies by type, number and amount at March 31, 2006.

	Loans Delinquent For:
	60-89 Days				90 Days and Over				Total Delinquent Loans
	Number		Amount		Number		Amount		Number		Amount
	(Dollars in thousands)

Real estate		4	$	128		6	$	565		10	$	693

Consumer ⁽¹⁾		102		426		120		498		222		924

Total		106	$	554		126	$	1,063		232	$	1,617

__________

(1)	Includes credit card accounts.

Non-performing Assets. The table below sets forth the amounts and categories of non-performing assets in our loan portfolio. Loans are placed on non-accrual status when the loan becomes more than 90 days delinquent. At all dates presented, we had no troubled debt restructurings which involve forgiving a portion of interest or principal on any loans or making loans at a rate materially less than that of market rates. Foreclosed assets owned include assets acquired in settlement of loans.

	At March 31,			At September 30,
	2006			2005			2004			2003			2002			2001
	(Dollars in thousands)
Non-accruing loans:
One- to four-family	$	565		$	207		$	300		$	162		$	51		$	---
Consumer ⁽¹⁾		498			462			397			400			483			404
Total		1,063			669			697			562			534			404

Foreclosed assets:
One- to four-family		---			---			---			---			73			---
Consumer		49			32			---			---			---			---
Total		49			32			---			---			73			---

Total non-performing assets	$	1,112		$	701		$	697		$	562		$	607		$	404

Total as a percentage of total assets		0.43	%		0.29	%		0.43	%		0.43	%		0.53	%		0.37	%

___________

(1)	Includes credit card accounts.

For the six months ended March 31, 2006 and for years ended September 30, 2005 and 2004, gross interest income which would have been recorded had the non-accruing loans been current in accordance with their original terms amounted to $55,000, $36,000 and $38,000, respectively. No amount was included in interest income on these loans for these periods.

Other Loans of Concern. In addition to the non-performing assets set forth in the table above, as of March 31, 2006, there was also an aggregate of $447,000 of loans with respect to which known information about the possible credit problems of the borrowers have caused management to have doubts as to the ability of the borrowers to comply with present loan repayment terms and which may result in the future inclusion of such items in the non-performing asset categories. These loans are not considered "classified" due to their delinquency status; however, they are identified as "watch" loans. They are not reserved for in the allowance for loan losses other than as part of the inherent portion. These loans have been considered in management's determination of the adequacy of our allowance for loan losses.

Classified Assets. OTS regulations provide for the classification of loans and other assets, such as debt and equity securities considered to be of lesser quality, as "substandard," "doubtful" or "loss." An asset is considered "substandard" if it is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. "Substandard" assets include those characterized by the "distinct possibility" that the insured institution will sustain "some loss" if the deficiencies are not corrected. Assets classified as "doubtful" have all of the weaknesses inherent in those classified "substandard," with the added characteristic that the weaknesses present make "collection or liquidation in full," on the basis of currently existing facts, conditions, and values, "highly questionable and improbable." Assets classified as "loss" are those considered "uncollectible" and of such little value that their continuance as assets without the establishment of a specific loss reserve is not warranted.

When we classify problem assets as either substandard or doubtful, we may establish general allowances for loan losses in an amount deemed prudent by management and approved by the board of directors. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. When we classify problem assets as "loss," we are required either to establish a specific allowance for losses equal to 100% of that portion of the asset so classified or to charge off such amount. Our determination as to the classification of our assets and the amount of its valuation allowances is subject to review by the OTS and the FDIC, which may order the establishment of additional general or specific loss allowances.

In connection with the filing of our periodic reports with the OTS and in accordance with our classification of assets policy, we regularly review the problem assets in our portfolio to determine whether any assets require classification in accordance with applicable regulations. On the basis of management's review of our assets, at March 31, 2006, Citizens Community Federal had classified $967,000 of the loans in its portfolio as substandard, all of which was included in non-performing assets, $0 as doubtful and $0 as loss. The total amount classified represented 3.24% of CCB’s equity capital and 0.38% of assets at March 31, 2006.

Provision for Loan Losses. Citizens Community Federal recorded a provision for loan losses for the six months ended March 31, 2006 of $108,000 compared to $202,000 for the six months ended March 31, 2005. Citizens Community Federal recorded a provision for loan losses for the year ended September 30, 2005 of $414,000, compared to $396,000 for the year ended September 30, 2004. The provision for loan losses is charged to income to bring the allowance for loan losses to reflect probable incurred losses based on the factors discussed below under "-- Allowance for Loan Losses." The provision for loan losses for the six months ended March 31, 2006 and for the year ended September 30, 2005 was based on management's review of such factors which indicated that the allowance for loan losses reflected probable incurred losses in the loan portfolio as of the six months ended March 31, 2006 and the year ended September 30, 2005.

Allowance for Loan Losses. Citizens Community Federal maintains an allowance for loan losses to absorb probable incurred losses in the loan portfolio. The allowance is based on ongoing, quarterly assessments of the estimated probable incurred losses in the loan portfolio. In evaluating the level of the allowance for loan losses, management considers the types of loans and the amount of loans in the loan portfolio, historical loss experience, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral, and prevailing economic conditions.

At March 31, 2006, the allowance for loan losses was $808,000, or 0.34%, of the total loan portfolio. Assessing the allowance for loan losses is inherently subjective as it requires making material estimates, including the amount and timing of future cash flows expected to be received on impaired loans, that may be susceptible to significant change. In the opinion of management, the allowance, when taken as a whole, reflects estimated probable loan losses in our loan portfolios.

The following table sets forth an analysis of our allowance for loan losses.

	Six Months Ended March 31,			Year Ended September 30,
	2006			2005			2004			2003			2002			2001
	(Dollars in thousands)

Balance at beginning of period	$	803		$	554		$	467		$	349		$	306		$	333

Charge-offs:
One- to four-family		---			(24	)		---			(16	)		(2	)		(13	)
Consumer		(109	)		(212	)		(342	)		(297	)		(340	)		(266	)
Total charge-offs		(109	)		(236	)		(342	)		(313	)		(342	)		(279	)

Recoveries:
Consumer		6			31			33			25			10			22
Total recoveries		6			31			33			25			10			22

Net charge-offs		(103	)		(205	)		(309	)		(288	)		(332	)		(257	)
Other - obtained through merger		---			40			---			---			---			---
Additions charged to operations		108			414			396			406			375			230
Balance at end of period	$	808		$	803		$	554		$	467		$	349		$	306

Ratio of allowance for loan losses to net loans outstanding at end of period		0.34	%		0.37	%		0.36	%		0.38	%		0.34	%		0.33	%

Ratio of net charge-offs during the period to average loans outstanding during the period		0.05	%		0.12	%		0.22	%		0.25	%		0.33	%		0.27	%

Ratio of net charge-offs during the period to average non- performing assets		11.40	%		28.37	%		49.05	%		49.23	%		65.61	%		64.25	%

The distribution of our allowance for losses on loans at the dates indicated is summarized as follows:

	At March 31,														At September 30,
	2006							2005							2005							2004
	Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans			Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans			Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans			Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)

Real estate	$	77	$	154,307		66	%	$	68	$	109,332		64	%	$	59	$	144,551		66	%	$	61	$	95,560		62	%
Consumer		731		80,825		34			573		61,017		36			744		74,183		34			490		57,370		38
Unallocated		---		---		---			---		---		---			---		---		---			3		---		---
Total	$	808	$	235,132		100	%	$	641	$	170,349		100	%	$	803	$	218,734		100	%	$	554	$	152,930		100	%

	At September 30,
	2003							2002							2001
	Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans			Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans			Amount of Loan Loss Allowance		Loan Amounts by Category		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)

Real estate	$	9	$	75,769		61	%	$	4	$	60,192		58	%	$	4	$	44,664		48	%
Consumer		433		47,805		39			340		44,248		42			293		49,260		52
Unallocated		25		---		---			5		---		---			9		---		---
Total	$	467	$	123,574		100	%	$	349	$	104,440		100	%	$	306	$	93,924		100	%

Investment Activities

Federally chartered savings institutions have the authority to invest in various types of liquid assets, including United States Treasury obligations, securities of various federal agencies, including callable agency securities, certain certificates of deposit of insured banks and savings institutions, certain bankers' acceptances, repurchase agreements and federal funds. Subject to various restrictions, federally chartered savings institutions may also invest their assets in investment grade commercial paper and corporate debt securities and mutual funds whose assets conform to the investments that a federally chartered savings institution is otherwise authorized to make directly.

The chief financial officer has the basic responsibility for the management of our investment portfolio, subject to the direction and guidance of the investment committee. The chief financial officer considers various factors when making decisions, including the marketability, maturity and tax consequences of the proposed investment. The maturity structure of investments will be affected by various market conditions, including the current and anticipated slope of the yield curve, the level of interest rates, the trend of new deposit inflows, and the anticipated demand for funds via deposit withdrawals and loan originations and purchases.

The general objectives of our investment portfolio are to provide liquidity when loan demand is high, to assist in maintaining earnings when loan demand is low and to maximize earnings while satisfactorily managing risk, including credit risk, reinvestment risk, liquidity risk and interest rate risk.

Our investment securities have historically consisted solely of certificates of deposit with insured financial institutions and the Federal Home Loan Bank of Chicago. In the fourth quarter of fiscal 2005, we acquired an investment portfolio consisting of corporate notes, mortgage-backed securities and mutual funds in our merger with Community Plus Savings Bank.

The following table sets forth the composition of Citizens Community Federal's investment securities and interest-bearing deposits at the dates indicated.

	At March 31,					At September 30,
	2006					2005					2004					2003
	Book Value		% of Total			Book Value		% of Total			Book Value		% of Total			Book Value		% of Total
	(Dollars in thousands)

Investment securities:
Federal Home Loan Bank stock	$	1,826		37.90	%	$	2,095		37.24	%	$	828		100.00	%	$	671		100.00	%
Interest-bearing deposits with banks		1,153		23.93			1,444		25.67			---		---			---		---
Mortgage-backed securities		848		17.60			946		16.81			---		---			---		---
Corporate notes		991		20.57			981		17.44			---		---			---		---
Mutual funds		---		---			160		2.84			---		---			-- -		---
	$	4,818		100.00	%	$	5,626		100.00	%	$	828		100.00	%	$	671		100.00	%

Sources of Funds

General. Citizens Community Federal's sources of funds are deposits, borrowings, payment of principal and interest on loans, interest earned on or maturation of other investment securities and funds provided from operations.

Deposits. Citizens Community Federal offers a variety of deposit accounts to both consumers and businesses having a wide range of interest rates and terms. Deposits consist of savings accounts, money market deposit accounts and demand accounts and certificates of deposit. Citizens Community Federal solicits deposits primarily in its market areas and from financial institutions and has accepted a limited amount of brokered deposits. At March 31, 2006 and September 30, 2005, Citizens Community Federal had $3.4 million and $4.4 million of brokered deposits, respectively. We obtain these deposits from seven brokers when the rates requested are 20 to 30 basis points less than the amount we pay our retail customers. The typical term for these brokered deposits are 12 to 18 months. Our experience is that these are not volatile deposits subject to significant early withdrawal. Citizens Community Federal primarily relies on competitive pricing policies, marketing and customer service to attract and retain these deposits. Citizens Community Federal from time to time participates in an auction for brokered deposits to assist in finding the lowest cost deposits possible. Citizens Community Federal constantly searches for the most cost-effective source of funds, either through brokered deposits, or through marketing our own rates to protect our margin and maintain our sales culture.

The flow of deposits is influenced significantly by general economic conditions, changes in money market and prevailing interest rates and competition. The variety of deposit accounts we offer has allowed us to be competitive in obtaining funds and to respond with flexibility to changes in consumer demand. We have become more susceptible to short-term fluctuations in deposit flows, as customers have become more interest rate conscious. We try to manage the pricing of our deposits in keeping with our asset/liability management, liquidity and profitability objectives, subject to competitive factors. Based on experience, management believes that Citizens Community Federal's deposits are relatively stable sources of funds. Despite this stability, the ability to attract and maintain these deposits and the rates paid on them has been and will continue to be significantly affected by market conditions.

The following table sets forth deposit flows during the periods indicated.

	Six Months Ended March 31,						Year Ended September 30,
	2006			2005			2005			2004			2003
	(Dollars in Thousands)

Opening balance	$	177,469		$	127,976		$	127,976		$	114,963		$	104,429
Deposits assumed in merger		---			---			41,571			---			---
Net deposits		8,461			4,193			4,659			10,208			7,358
Interest credited		2,368			1,456			3,263			2,805			3,176

Ending balance	$	188,298		$	133,625		$	177,469		$	127,976		$	114,963

Net increase	$	10,829		$	5,649		$	49,493		$	13,013		$	10,534

Percent increase		6.1	%		4.4	%		38.7	%		11.3	%		10.1	%

The following table sets forth the dollar amount of savings deposits in the various types of deposit programs we offered at the dates indicated.

	At March 31,										At September 30,
	2006					2005					2005					2004					2003
	Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total			Amount		Percent of Total
	(Dollars in thousands)
Transaction Accounts and Savings Deposits :

Demand accounts	$	20,198		10.73	%	$	12,224		9.15	%	$	19,315		10.88	%	$	11,447		8.94	%	$	10,559		9.19	%
Savings accounts		26,677		14.17			15,317		17.25			27,193		17.09			15,420		12.05			15,096		13.13
Money market accounts		27,513		14.61			23,044		11.46			30,323		15.33			23,629		18.46			15,849		13.79

Total non-certificates		74,388		39.51			50,585		37.86			76,831		43.30			50,496		39.46			41,504		36.11

Certificates :

6-12 month		14,713		7.82			13,975		10.45			15,519		8.74			17,274		13.50			19,204		16.70
17-18 month		47,518		25.24			27,223		20.37			33,818		19.05			12,294		9.61			9,588		8.34
24-60 month		27,789		14.76			25,003		18.71			30,368		17.11			31,021		24.24			31,980		27.82
Anniversary		576		0.31			336		0.25			493		0.28			553		0.43			1,452		1.26
Institutional		14,404		7.65			8,939		6.69			12,415		7.00			8,908		6.96			2,794		2.43
Borrowers		---		---			1		0.01			1		0.01			28		0.02			8		0.01
IRA		8,872		4.71			7,563		5.66			8,024		4.51			7,402		5.78			8,433		7.33

Total certificates		113,910		60.49			83,040		62.14			100,638		56.70			77,480		60.54			73,459		63.89

Total Deposits	$	188,298		100.00	%	$	133,625		100.00	%	$	177,469		100.00	%	$	127,976		100.00	%	$	114,963		100.00	%

The following table shows rate and maturity information for Citizens Community Federal’s certificates of deposit at March 31, 2006.

	0.00- 1.99 %			2.00- 3.99 %			4.00- 5.99 %			6.00- 7.99 %			Total		Percent of Total
	(Dollars in thousands)
Certificate accounts maturing during the twelve months ended:
March 31, 2007	$	2,467		$	39,076		$	19,482		$	---		$	61,025		53.5	%
March 31, 2008		179			9,307			30,298			---			39,784		34.9
March 31, 2009		---			1,347			2,855			---			4,202		3.7
March 31, 2010		---			105			8,770			---			8,875		7.8
Thereafter		---			---			24			---			24		0.1

Total	$	2,646		$	49,835		$	61,429		$	---		$	113,910		100.0	%

Percent of total		2.3	%		43.8	%		53.9	%		---	%

The following table indicates the amount of Citizens Community Federal's certificates of deposit by time remaining until maturity as of March 31, 2006.

	3 Months or Less		Over 3 to 6 Months		Over 6 to 12 Months		Over 12 Months		Total
	(In thousands)

Certificates of deposit less than $100,000	$	7,970	$	13,240	$	26,193	$	42,924	$	90,327

Certificates of deposit of $100,000 or more		3,945		4,583		5,094		9,961		23,583

Total certificates of deposit	$	11,915	$	17,823	$	31,287	$	52,885	$	113,910

Borrowings. Although deposits are our primary source of funds, Citizens Community Federal may utilize borrowings when they are a less costly source of funds and can be invested at a positive interest rate spread, when it desires additional capacity to fund loan demand or when they meet asset/liability management goals. Borrowings consist of advances from the Federal Home Loan Bank of Chicago. See Note 8 of the Notes to Consolidated Financial Statements.

Citizens Community Federal may obtain advances from the Federal Home Loan Bank of Chicago upon the security of certain of our mortgage loans and mortgage-backed and other securities. These advances may be made pursuant to several different credit programs, each of which has its own interest rate, range of maturities and call features. At March 31, 2006, Citizens Community Federal had $36.2 million in Federal Home Loan Bank advances outstanding and the ability to borrow an additional $72.1 million.

Citizens Community Federal is authorized to borrow from the Federal Reserve Bank of Chicago's "discount window" after it has exhausted other reasonable alternative sources of funds, including Federal Home Loan Bank borrowings. We have never borrowed from our Federal Reserve Bank.

The following table sets forth the maximum month-end balance and average balance of borrowings for the periods indicated.

	Six Months Ended March 31,				Year Ended September 30,
	2006		2005		2005		2004		2003
	(In thousands)
Maximum Balance :
FHLB advances	$	36,200	$	24,000	$	36,200	$	13,500	$	3,700

Average Balance :
FHLB advances	$	34,414	$	16,786	$	24,850	$	8,600	$	386

The following table sets forth certain information as to Citizens Community Federal's borrowings at the dates indicated.

	At March 31,						At September 30,
	2006			2005			2005			2004			2003
	(Dollars in Thousands)

FHLB advances	$	36,200		$	24,000		$	36,200		$	13,500		$	3,700

Total borrowings	$	36,200		$	24,000		$	36,200		$	13,500		$	3,700

Weighted average interest rate of FHLB advances		4.28	%		2.30	%		4.09	%		2.21	%		1.39	%

Subsidiary and Other Activities

As a federally chartered savings bank, Citizens Community Federal is permitted by OTS regulations to invest up to 2% of assets, or $5.1 million at March 31, 2006, in the stock of, or unsecured loans to, service corporation subsidiaries. Citizens Community Federal may invest an additional 1% of our assets in service corporations where such additional funds are used for inner-city or community development purposes. Citizens Community Federal does not currently have any subsidiary service corporations.

Employees

At March 31, 2006, the Bank had a total of 73 full-time employees and 68 part-time employees. Employees are not represented by any collective bargaining group. Management considers its employee relations to be good.

Properties

At March 31, 2006, the Bank had twelve full service offices and two administrative offices. The Bank leases the space for its administrative offices in Eau Claire and Rochester. At March 31, 2006, the Bank owned all but five of its branch offices. The net book value of investment in premises, equipment and leaseholds, excluding computer equipment, was approximately $2.8 million at March 31, 2006. All of our branch offices are designed for banking purposes and are suitable for current operations.

The following table provides a list of the Bank's main and branch offices and indicates whether the properties are owned or leased.

Location	Owned or Leased	Lease Expiration Date	Net Book Value at March 31, 2006 (Dollars in Thousands)
ADMINISTRATIVE OFFICE 2174 EastRidge Center Eau Claire, WI 54701	Leased	April 30, 2009	N/A
414 Main Street Rochester Hills, MI 48306	Leased	July 31, 2006 ⁽¹⁾	N/A
BRANCH OFFICES:
Westside Branch 2125 Cameron Street Eau Claire, WI 54703	Owned	N/A	$305,800
Eastside Branch 1028 N. Hillcrest Parkway Altoona, WI 54720	Owned	N/A	$363,750
Fairfax Branch 219 Fairfax Street Altoona, WI 54720	Owned	N/A	$822,000
Mondovi Branch 695 E. Main Street Mondovi, WI 54755	Leased	June 30, 2007 ⁽²⁾	N/A
Rice Lake Branch 2462 S. Main Street Rice Lake, WI 54868	Leased	April 30, 2007	N/A
Chippewa Falls Branch 427 W. Prairie View Road Chippewa Falls, WI 54729	Owned	N/A	$262,000
Baraboo Branch S2423 Highway 12 Baraboo, WI 53913	Owned ⁽³⁾	N/A	$ 1,000
Black River Falls Branch W9036 Highway 54 E. Black River Falls, WI 54615	Owned ⁽³⁾	N/A	$ 31,000
Mankato Branch 1410 Madison Avenue Mankato, MN 56001	Leased	October 30, 2010	N/A
Oakdale Branch 7035 10 ^th Street North Oakdale, MN 55128	Leased	September 30, 2009	N/A
Lake Orion Branch ⁽⁴⁾ 688 S. Lapeer Road Lake Orion, MI 48362	Leased	February 28, 2012	N/A
Rochester Hills Branch 310 West Tienken Road Rochester Hills, MI 48306	Owned	N/A	$608,000

______________

(1)	Lease converts to month-to-month status on August 1, 2006.

(2)	Citizens Community Federal has a right to extend this lease beyond June 30, 2007.

(3)	The building is owned and the land is leased.

(4)	Citizens Community Federal has a right to cancel this lease on or after March 1, 2007, with the cancellation to take effect 90 days after it exercises the right to cancel.

Management believes that the current facilities are adequate to meet the present and immediately foreseeable needs of Citizens Community Federal and Citizens Community Bancorp, Inc.

Citizens Community Federal currently utilizes Fiserv-Information Tech Inc., an in-house data processing system. The net book value of the data processing and computer equipment utilized by Citizens Community Federal at March 31, 2006 was $891,771.

On September 9, 2005, Citizens Community Federal entered into a data processing services agreement with Fiserv Solutions, Inc. for a period of five years, subject to automatic extensions of one year unless written notice of non-renewal is provided by either party at least 180 days prior to expiration. Citizens Community Federal also entered into a series of purchase agreements and software user agreements, for a corresponding period, with Information Technology Inc. for the computer equipment and software to be operated by Fiserv Solutions, Inc. on behalf of Citizens Community Federal. Data processing expenses are not expected to change materially under this new Fiserv contract.

Under the agreement, Fiserv Solutions, Inc. provides data processing services and resources, and Information Technology Inc. will provide a license to use its database processing software products and licenses for other Information Technology Inc. software and third party interfaces to and from the Information Technology Inc. software to Citizens Community Federal pursuant to the agreements. The services provided by Fiserv to Citizens Community Federal generally include, but are not limited to, the general management of Citizens Community Federal’s data processing, installation and enhancement of Information Technology Inc. software, operation of Information Technology Inc. software and software developed by third parties, programming, furnishing, maintaining and operating computer equipment, providing information in various media forms, and the implementation through Information Technology Inc. of automated teller machine/electronic funds transfer processing, electronic bill payment, and e-delivery services.

HOW WE ARE REGULATED

Set forth below is a brief description of certain laws and regulations that are applicable to Citizens Community Bancorp, Inc. and Citizens Community Federal. The description of these laws and regulations, as well as descriptions of laws and regulations contained elsewhere herein, does not purport to be complete and is qualified in its entirety by reference to the applicable laws and regulations.

Legislation is introduced from time to time in the United States Congress that may affect our operations. In addition, the regulations governing Citizens Community Bancorp, Inc. and Citizens Community Federal may be amended from time to time by the OTS, the FDIC or the SEC, as appropriate. Any such legislative or regulatory changes in the future could adversely affect our operations and financial condition. No assurance can be given as to whether or in what form any such changes may occur.

Citizens Community Federal

Citizens Community Federal, as a federally chartered savings bank, is subject to regulation and oversight by the OTS extending to all aspects of its operations. Citizens Community Federal also is subject to regulation and examination by the FDIC, which insures the deposits of Citizens Community Federal to the maximum extent permitted by law. This regulation of Citizens Community Federal is intended for the protection of depositors and the insurance of accounts fund and not for the purpose of protecting stockholders. Citizens Community Federal is required to maintain minimum levels of regulatory capital and is subject to some limitations on the payment of dividends to Citizens Community Bancorp, Inc. See “- Regulatory Capital Requirements” and “- Limitations on Dividends and Other Capital Distributions.” As a federal savings bank, Citizens Community Federal is required to file periodic reports with the OTS and is subject to periodic examinations by the OTS.

OTS Regulation. Our relationship with our depositors and borrowers is regulated to a great extent by federal laws and OTS regulations, especially in such matters as the ownership of savings accounts and the form and content of our mortgage requirements. In addition, the branching authority of Citizens Community Federal is regulated by the OTS. Citizens Community Federal is generally authorized to branch nationwide.

The investment and lending authority of Citizens Community Federal is prescribed by federal laws and regulations and it is prohibited from engaging in any activities not permitted by such laws and regulations. This includes a 35% of total assets limit on consumer loans, commercial paper and corporate debt securities. When Citizens Community Federal converted from a credit union to a federal savings bank, the OTS granted it a waiver of that 35% limit. The waiver expired December 10, 2005. At March 31, 2006, Citizens Community Federal had 31% of its assets in consumer loans, commercial paper and corporate debt securities, in compliance with the limit.

As a federal savings bank, Citizens Community Federal is required to meet a qualified thrift lender test. This test requires Citizens Community Federal to have at least 65% of its portfolio assets, as defined by regulation, in qualified thrift investments on a monthly average for nine out of every 12 months on a rolling basis. As an alternative, we may maintain 60% of its assets in those assets specified in Section 7701(a)(19) of the Internal Revenue Code. Under either test, we are required to maintain a significant portion of our assets in residential-housing-related loans and investments. Any institution that fails to meet the qualified thrift lender test becomes subject to certain restrictions on its operations and must convert to a national bank charter, unless it re-qualifies as, and thereafter remains, a qualified thrift lender. If such an institution has not requalified or converted to a national bank within three years after the failure, it must divest of all investments and cease all activities not permissible for a national bank. We were not subject to a similar requirement when we were a credit union and were not in compliance with this requirement at the time we became a federal savings bank. As of March 31, 2006, Citizens Community Federal met this requirement with a qualified thrift lender percentage of 85.5%.

Under OTS regulations, Citizens Community Federal is subject to a lending limit for loans to one borrower or group of related borrowers. This lending limit is equal to the greater of $500,000 or 15% of unimpaired capital and surplus (except for loans fully secured by certain readily marketable collateral, in which case the limit is increased to 25% of impaired capital and surplus). At March 31, 2006, Citizens Community Federal’s lending limit under this restriction was $2.9 million. Our outstanding loans are in compliance with this lending limit.

The OTS’s oversight of Citizens Community Federal includes reviewing its compliance with the customer privacy requirements imposed by the Gramm-Leach-Bliley Act of 1999 and the anti-money laundering provisions of the USA Patriot Act. The Gramm-Leach-Bliley privacy requirements place limitations on the sharing of consumer financial information with unaffiliated third parties. They also require each financial institution offering financial products or services to retail customers to provide such customers with its privacy policy and with the opportunity to “opt out” of the sharing of their personal information with unaffiliated third parties. The USA Patriot Act significantly expands the responsibilities of financial institutions in preventing the use of the United States financial system to fund terrorist activities. Its anti-money laundering provisions require financial institutions operating in the United States to develop anti-money laundering compliance programs and due diligence policies and controls to ensure the detection and reporting of money laundering. These compliance programs are intended to supplement existing compliance requirements under the Bank Secrecy Act and the Office of Foreign Assets Control Regulations.

We are subject to periodic examinations by the OTS. During these examinations, the examiners may require Citizens Community Federal to provide for higher general or specific loan loss reserves, which can impact our capital and earnings. As a federal savings bank, Citizens Community Federal is subject to a semi-annual assessment, based upon its total assets, to fund the operations of the OTS.

Transactions between Citizens Community Federal and its affiliates generally are required to be on terms as favorable to the institution as transactions with non-affiliates, and certain of these transactions, such as loans to an affiliate, are restricted to a percentage of Citizens Community Federal's capital. In addition, Citizens Community Federal may not lend to any affiliate engaged in activities not permissible for a bank holding company or acquire the securities of most affiliates. Citizens Community Bancorp, Inc. will be an affiliate of Citizens Community Federal.

The OTS has adopted guidelines establishing safety and soundness standards on such matters as loan underwriting and documentation, asset quality, earnings standards, internal controls and audit systems, interest rate risk exposure and compensation and other employee benefits. Any institution regulated by the OTS that fails to comply with these standards must submit a compliance plan.

The OTS has extensive enforcement authority over all savings associations and their holding companies, including, Citizens Community Federal and Citizens Community Bancorp, Inc. This enforcement authority includes, among other things, the ability to assess civil money penalties, to issue cease-and-desist or removal orders and to initiate injunctive actions. In general, these enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. Other actions or inactions may provide the basis for enforcement action, including misleading or untimely reports filed with the OTS. Except under certain circumstances, public disclosure of final enforcement actions by the OTS is required by law.

FDIC Regulation and Insurance of Accounts. Citizens Community Federal’s deposits are insured up to the applicable limits by the FDIC, and such insurance is backed by the full faith and credit of the United States Government. As insurer, the FDIC imposes deposit insurance premiums and is authorized to conduct examinations of and to require reporting by FDIC-insured institutions. It also may prohibit any FDIC-insured institution from engaging in any activity the FDIC determines by regulation or order to pose a serious risk to the deposit insurance fund. The FDIC also has the authority to initiate enforcement actions against Citizens Community Federal and may terminate our deposit insurance if it determines that we have engaged in unsafe or unsound practices or is in an unsafe or unsound condition.

Citizens Community Bancorp, Inc.

Upon the completion of the Conversion, as a savings association holding company, Community Bancorp, Inc. will be subject to regulation, supervision and examination by the OTS. Applicable federal law and regulations limit the activities of Citizens Community Bancorp, Inc. and require the approval of the OTS for any acquisition or divestiture of a subsidiary, including another financial institution or holding company thereof. Citizens Community Bancorp, Inc. will be an affiliate of Citizens Community Federal, so its transactions with Citizens Community Federal will be subject to regulatory limits and must be on terms as favorable to Citizens Community Federal as in transactions with non-affiliates.

If Citizens Community Federal fails the qualified thrift lender test after the end of its three-year waiver, as discussed above, Citizens Community Bancorp, Inc. must obtain the approval of the OTS prior to continuing after such failure, directly or through other subsidiaries, any business activity other than those approved for bank holding companies or their subsidiaries. In addition, within one year of such failure Citizens Community Bancorp, Inc. must register as, and will become subject to, the restrictions applicable to bank holding companies.

Regulatory Capital Requirements

Capital Requirements for Citizens Community Federal. Citizens Community Federal is required to maintain minimum levels of regulatory capital under regulations of the OTS. These regulations established three capital standards, a tangible capital requirement, a leverage or core capital requirement and a risk-based capital requirement. The OTS is also authorized to impose capital requirements in excess of these standards on a case-by-case basis.

The capital regulations require tangible capital of at least 1.5% of adjusted total assets, as defined by regulation. Tangible capital generally includes common stockholders' equity and retained earnings, and certain noncumulative perpetual preferred stock and related earnings and excludes most intangible assets, which also are deducted from assets for purposes calculating this capital ratio. At March 31, 2006, Citizens Community Federal had tangible capital of $19.3 million or 7.7% of adjusted total assets, which was approximately $15.5 million above the required level.

The capital standards require core or Tier 1 capital equal to at least 3.0% of adjusted total assets for the strongest institutions with the highest examination rating and 4.0% of adjusted total assets for all other institutions, unless the OTS requires a higher level based on the particular circumstances or risk profile of the institution. Core capital generally consists of tangible capital, plus certain intangibles. At March 31, 2006, Citizens Community Federal had $7.4 million of intangibles included in core capital. At March 31, 2006, Citizens Community Federal had core capital equal to $19.3 million, or 7.7% of adjusted total assets, which was $9.3 million above the required level of 4%.

The OTS also requires Citizens Community Federal to have total capital of at least 8.0% of risk-weighted assets. Total capital consists of core or Tier 1 capital, as defined above, and Tier 2 capital, which consists of certain permanent and maturing capital instruments that do not qualify as Tier 1 capital and of the allowance for possible loan and lease losses up to a maximum of 1.25% of risk-weighted assets. Tier 2 capital may be used to satisfy this risk-based requirement only to the extent of Tier 1 capital. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet items, will be multiplied by a risk weight, ranging from 0% to 100%, based on the risk inherent in the type of asset. The OTS is authorized to require Citizens Community Federal to maintain an additional amount of total capital to account for concentration of credit risk, level of interest rate risk, equity investments in non-financial companies and the risk of non-traditional activities. At March 31, 2006, Citizens Community Federal had $164.6 million in risk-weighted assets and total capital of $19.9 million, or 12.1% of risk-weighted assets, which was $6.7 million above the required level.

The OTS is authorized and, under certain circumstances, required to take certain actions against savings banks that fail to meet these capital requirements, or that fail to maintain an additional capital ratio of Tier 1 capital of at least 4.0% of risk weighted-assets. The OTS is generally required to take action to restrict the activities of an “undercapitalized institution,” which is an institution with less than either a 4.0% core capital ratio, a 4.0% Tier 1 risked-based capital ratio or an 8.0% total risk-based capital ratio. Any such institution must submit a capital restoration plan and until such plan is approved by the OTS may not increase its assets, acquire another institution, establish a branch or engage in any new activities, and generally may not make capital distributions. The OTS is authorized to impose the additional restrictions on undercapitalized institutions.

Any institution that fails to comply with its capital plan or has Tier 1 risk-based or core capital ratios of less than 3.0% or a total risk-based capital ratio of less than 6.0% is considered “significantly undercapitalized” and must be made subject to one or more additional specified actions and operating restrictions that may cover all aspects of its operations and may include a forced merger or acquisition of the institution. An institution with tangible equity to total assets of less than 2.0% is “critically undercapitalized” and becomes subject to further mandatory restrictions on its. The OTS generally is authorized to reclassify an institution into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition. The imposition by the OTS of any of these measures on Citizens Community Federal may have a substantial adverse effect on its operations and profitability.

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Institutions with at least a 4.0% core capital ratio, a 4.0% Tier 1 risked-based capital ratio and an 8.0% total risk-based capital ratio are considered “adequately-capitalized.” An institution is deemed “well-capitalized” institution if it has at least a 5% leverage capital ratio, a 6.0% Tier 1 risked-based capital ratio and an 10.0% total risk-based capital ratio. At March 31, 2006, Citizens Community Federal was considered a “well-capitalized” institution.

The OTS is also generally authorized to reclassify an institution into a lower capital category and impose the restrictions applicable to such category if the institution is engaged in unsafe or unsound practices or is in an unsafe or unsound condition. The imposition by the OTS of any of these measures on Citizens Community Federal may have a substantial adverse effect on its operations and profitability.

Capital Requirements for Citizens Community Bancorp, Inc. Citizens Community Bancorp, Inc. is not subject to any specific capital requirements. The OTS, however, will expect Citizens Community Bancorp, Inc. to support Citizens Community Federal, including providing additional capital when Citizens Community Federal does not meet its capital requirements. As a result of this expectation, the OTS regulates the ability of Citizens Community Federal to pay dividends to Citizens Community Bancorp, Inc.

Limitations on Dividends and Other Capital Distributions

OTS regulations impose various restrictions on savings institutions with respect to the ability of Citizens Community Federal to make distributions of capital, which include dividends, stock redemptions or repurchases, cash-out mergers and other transactions charged to the capital account. Citizens Community Federal must file a notice or application with the OTS before making any capital distribution. Citizens Community Federal generally may make capital distributions during any calendar year in an amount up to 100% of net income for the year-to-date plus retained net income for the two preceding years, so long as it is well-capitalized after the distribution. If Citizens Community Federal, however, proposes to make a capital distribution when it does not meet its current minimum capital requirements (or will not following the proposed capital distribution) or that will exceed these net income limitations, it must obtain OTS approval prior to making such distribution. The OTS may always object to any distribution based on safety and soundness concerns.

Citizens Community Bancorp, Inc. will not be subject to OTS regulatory restrictions on the payment of dividends. Dividends from Citizens Community Bancorp, Inc., however, may depend, in part, upon its receipt of dividends from Citizens Community Federal. In addition, Citizens Community Federal may not make a distribution that would constitute a return of capital during the three-year term of the business plan submitted in connection with this mutual holding company reorganization and stock issuance. No insured depositary institution may make a capital distribution if, after making the distribution, the institution would be undercapitalized. See "Our Policy Regarding Dividends."

Federal Securities Law

The stock of Citizens Community Bancorp, Inc. is registered with the SEC under the Securities Exchange Act of 1934, as amended. Citizens Community Bancorp, Inc. will be subject to the information, proxy solicitation, insider trading restrictions and other requirements of the SEC under the Securities Exchange Act of 1934.

Citizens Community Bancorp, Inc. stock held by persons who are affiliates of Citizens Community Bancorp, Inc. may not be resold without registration unless sold in accordance with certain resale restrictions. Affiliates are generally considered to be officers, directors and principal stockholders. If Citizens Community Bancorp, Inc. meets specified current public information requirements, each affiliate of Citizens Community Bancorp, Inc. will be able to sell in the public market, without registration, a limited number of shares in any three-month period.

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The SEC and the NASDAQ have adopted regulations and policies under the Sarbanes-Oxley Act of 2002 that will apply to Citizens Community Bancorp, Inc. as a registered company under the Securities Exchange Act of 1934 and a NASDAQ traded company. The stated goals of these Sarbanes-Oxley requirements are to increase corporate responsibility, provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to the securities laws. The SEC and NASDAQ Sarbanes-Oxley-related regulations and policies include very specific additional disclosure requirements and new corporate governance rules. The Sarbanes-Oxley Act represents significant federal involvement in matters traditionally left to state regulatory systems, such as the regulation of the accounting profession, and to state corporate law, such as the relationship between a board of directors and management and between a board of directors and its committees.

TAXATION

Federal Taxation

General . Citizens Community Bancorp, Inc., CCB and Citizens Community Federal are subject to federal income taxation in the same general manner as other corporations, with some exceptions discussed below. The following discussion of federal taxation is intended only to summarize certain pertinent federal income tax matters and is not a comprehensive description of the tax rules applicable to Citizens Community Bancorp, Inc., CCB or Citizens Community Federal. Prior to December 2001, Citizens Community Federal was a credit union and was not generally subject to corporate income tax. CCB files consolidated federal tax returns with Citizens Community Federal, and Citizens Community Bancorp, Inc., expects to do the same.

Method of Accounting . For federal income tax purposes, Citizens Community Federal currently reports its income and expenses on the accrual method of accounting and uses a fiscal year ending on September 30, for filing its federal income tax return.

Minimum Tax . The Internal Revenue Code imposes an alternative minimum tax at a rate of 20% on a base of regular taxable income plus certain tax preferences, called alternative minimum taxable income. The alternative minimum tax is payable to the extent such alternative minimum taxable income is in excess of the regular tax. Net operating losses can offset no more than 90% of alternative minimum taxable income. Certain payments of alternative minimum tax may be used as credits against regular tax liabilities in future years. Citizens Community Federal has not been subject to the alternative minimum tax, nor do we have any such amounts available as credits for carryover.

Net Operating Loss Carryovers . A financial institution may carryback net operating losses to the preceding two taxable years and forward to the succeeding 20 taxable years. This provision applies to losses incurred in taxable years beginning after August 6, 1997. At September 30, 2005, Citizens Community Federal had no net operating loss carryforwards for federal income tax purposes.

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Corporate Dividends-Received Deduction . If Citizens Community Bancorp, Inc. elects to file a consolidated return with Citizens Community Federal, dividends it receives from Citizens Community Federal will not be included as income to Citizens Community Bancorp, Inc.. The corporate dividends-received deduction is 100% or 80%, in the case of dividends received from corporations with which a corporate recipient does not file a consolidated tax return, depending on the level of stock ownership of the payer of the dividend.

State Taxation

Citizens Community Bancorp, Inc., CCB and Citizens Community Federal are subject to the Wisconsin corporate franchise (income) tax, which is assessed at the rate of 7.9% of taxable income. Wisconsin taxable income generally is the same as federal taxable income with certain adjustments. Citizens Community Federal has branch offices in Minnesota and Michigan and, accordingly, is subject to state taxes in these states as well. Neither CCB nor Citizens Community Federal has been audited by Wisconsin or any other state taxing authorities during the past five years.

As a Maryland corporation, Citizens Community Bancorp, Inc. is required to file an annual report with and pay an annual fee to the State of Maryland.

MANAGEMENT

Directors and Executive Officers of Citizens Community Bancorp, Inc.

Our board of directors consists of six individuals, all of whom also serve as directors of Citizens Community Bancorp, Inc., CCB and Citizens Community Federal. Approximately one-third of the directors are elected annually to serve for a three-year period or until their respective successors are elected and qualified. The table below sets forth information regarding each director of Citizens Community Bancorp, Inc. and CCB.

Name	Age ⁽¹⁾	Position(s) Held with Citizens Community Bancorp, Inc., CCB and Citizens Community Federal	Director Since ⁽²⁾	Term to Expire

Brian R. Schilling	52	Director	1987	2009
David B. Westrate	63	Director	1991	2009
Adonis E. Talmage	80	Director	1984	2007
James G. Cooley	59	President, Chief Executive Officer and Director	1993	2007
Richard McHugh	64	Chairman and Director	1985	2008
Thomas C. Kempen	65	Vice-Chairman	1982	2008

_________________________________

(1)	At September 30, 2005.
(2)	Includes service as a director of Citizens Community Federal and its predecessors.

Set forth below is the principal occupation of each director of Citizens Community Bancorp, Inc., each of whom has held his or her present position for at least five years, unless otherwise indicated.

Brian R. Schilling. Mr. Schilling is the Managing Partner of W.J. Bauman Associates, LTD, a certified public accounting firm.

David B. Westrate. Mr. Westrate currently serves as planning supervisor for Sterling Education Services, Co., a position he has held for three years. Prior to that time, he was not employed.

Adonis E. ("Donna") Talmage. Ms. Talmage is currently retired. Prior to her retirement, she was an accountant and data processor for Consumers Co-Op Association.

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James G. Cooley. Mr. Cooley is President and Chief Executive Officer of Citizens Community Federal, a position he has held since 1987.

Richard McHugh. Mr. McHugh is the Owner/President of Choice Products, USA.

Thomas C. Kempen. Mr. Kempen is the owner of T. C. Kempen Landscaping Supplies & Consulting.

Executive Officers of Citizens Community Bancorp, Inc.

The executive officers of Citizens Community Bancorp, Inc., CCB and Citizens Community Federal are elected annually and hold office until their respective successors have been elected or until death, resignation or removal by the board of directors. All of the individuals listed below, except Brian P Ashley, are executive officers of Citizens Community Bancorp, Inc., CCB and Citizens Community Federal. Mr. Ashley serves solely as an executive officer of Citizens Community Federal.

Name	Age (1)	Position(s) Held with Citizens Community Bancorp, Inc., CCB and Citizens Community Federal (2)

James G. Cooley	59	President, Chief Executive Officer and Director
John D. Zettler	51	Senior Vice President and Chief Financial Officer
Johnny W. Thompson	53	Senior Vice President and Chief Administration Officer
Timothy J. Cruciani	45	Executive Vice President
Rebecca Johnson	45	Vice President, MIC/Accounting
Brian P. Ashley	59	Senior Vice President, Community Plus Division of the Bank

_________________________________

(1)	At September 30, 2005.
(2)	Includes service as a director of Citizens Community Federal and its predecessors. Mr. Ashley services only as an officer of Citizens Community Federal.

Set forth below is the principal occupation of each executive officer listed in the table above (excluding Mr. Cooley, whose background is included above in the discussion of the backgrounds of our directors), each of whom has held his or her present position for at least five years, unless otherwise indicated.

John Zettler . Mr. Zettler is currently serving as Chief Financial Officer. In his capacity as Senior Vice President, Mr. Zettler assists the President in all of his duties with primary responsibility for financial information and human resources activity of Citizens Community Federal. Mr. Zettler joined Citizens Community Federal in 1980 and was named Senior Vice President in 1997.

Timothy J. Cruciani . Mr. Cruciani is currently serving as Executive Vice President and Senior Vice President of Operations. He joined Citizens Community Federal in 1989. Mr. Cruciani oversees the branch operations and the indirect paper operations of Citizens Community Federal.

Johnny W. Thompson. Mr. Thompson currently serves as Senior Vice President/Chief Administrative Officer, a position he has held since he joined Citizens Community Federal in 2002. Mr. Thompson's responsibilities include direct marketing and public relations associated with Citizens Community Federal. Prior to joining Citizens Community Federal, Mr. Thompson served as Vice President of Karwoski & Courage, a marketing communications firm.

Rebecca Johnson. Ms. Johnson serves as Vice President MIC/Accounting for Citizens Community Federal, a position she has held since 2002. She directs all computer/data processing and accounting activities associated with Citizens Community Federal. Ms. Johnson joined Citizens Community Federal in 1980.

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Brian P. Ashley . Mr. Ashley has served as the Senior Vice President of our Community Plus Division located in our Michigan offices since July 2005. For over five years prior to that, he was President of Community Plus Savings Bank, Rochester Hills, Michigan.

Meetings and Committees of the Board of Directors

The board of directors of Citizens Community Bancorp, Inc., generally meets on a monthly basis. The board of directors of CCB generally meets on a monthly basis, holding additional special meetings as needed. During fiscal 2005, the board of directors CCB held nine regular meetings and two special meetings. Meetings of the board of directors of Citizens Community Federal also are generally held on a monthly basis. In 2005, the board of directors of Citizens Community Federal held twelve regular meetings and two special meetings. No director attended fewer than 75% of the board meetings and meetings of the committees on which they served during the period they were directors.

The board of directors of CCB has standing Compensation, Audit and Nominating Committees. These committees will become committees of the board of directors of Citizens Community Bancorp, Inc., after the completion of the Conversion and Stock Offering.

The Compensation Committee is currently comprised of Directors McHugh and Westrate. The Compensation Committee is responsible for reviewing all issues pertaining to executive compensation, reviewing and recommending all changes in employee benefit plans and making recommendations to the board regarding director compensation. This committee met once in fiscal 2005.

The board of directors has adopted written charters for its Audit and Nominating Committees, as well as a written Code of Business Conduct and Ethics that applies to all our directors, officers, and employees. You may obtain a copy of these documents free of charge by writing to: Donna Talmage, Corporate Secretary, Citizens Community Bancorp, 2174 EastRidge Center, Eau Claire, Wisconsin 54701, or by calling (715) 836-9994. In addition, our Code of Business Conduct and Ethics was filed with the SEC as Exhibit 14 to the Company's Annual Report on Form 10-KSB for the fiscal year ended September 30, 2004.

The Audit Committee operates under a written charter adopted by the full board of directors. The Audit Committee currently has two members, including directors Westrate and Schilling, each of whom is an "independent director" under the standards established by the United States Securities and Exchange Commission (the "SEC") for members of audit committees as required by the Nasdaq Rules. A third "independent director" will be added prior to completion of the Stock Offering, in compliance with Nasdaq requirements. Mr. Schilling is an "audit committee financial expert" as defined in the rules of the SEC and the Nasdaq.

This committee is responsible for the review of the company's annual audit report prepared by our independent auditors. The functions of the Audit Committee include:

reviewing significant financial information including all quarterly reports and press releases containing financial information for the purpose of giving added assurance that the information is accurate and timely and that it includes all appropriate financial statement disclosures;

ascertaining the existence of effective accounting and internal control systems; and

overseeing the entire audit function including reviewing all reports received from the independent auditor.

In fiscal 2005, this committee met eleven times.

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During fiscal 2005, the full board of directors of CCB acted as a nominating committee for the selection of nominees for election as directors and met one time for this purpose. After completion of the Stock Offering, the Nominating Committee will be comprised solely of independent directors, in compliance with Nasdaq requirements. The Nominating Committee is responsible for identifying and recommending director candidates to serve on the Board of Directors. Final approval of director nominees is determined by the full Board, based on the recommendations of the Nominating Committee.

The Nominating Committee operates under a formal written charter adopted by the board, under which the Nominating Committee has the following responsibilities:

(1)

recommend to the board the appropriate size of the board and assist in identifying, interviewing and recruiting candidates for the board;

(2)

recommend candidates (including incumbents) for election and appointment to the board of directors, subject to the provisions set forth in our charter and bylaws relating to the nomination or appointment of directors, based on the following criteria: business experience, education, integrity and reputation, independence, conflicts of interest, diversity, age, number of other directorships and commitments (including charitable organizations), tenure on the board, attendance at board and committee meetings, stock ownership, specialized knowledge (such as an understanding of banking, accounting, marketing, finance, regulation and public policy) and a commitment to our communities and shared values, as well as overall experience in the context of the needs of the board as a whole;

(3)

review nominations submitted by stockholders, which have been addressed to our Secretary, and which comply with the requirements of our charter and bylaws. Nominations from stockholders will be considered and evaluated using the same criteria as all other nominations;

(4)

annually recommend to the board committee assignments and committee chairs on all committees of the board, and recommend committee members to fill vacancies on committees as necessary; and

(5)

perform any other duties or responsibilities expressly delegated to the Committee by the board.

Corporate Governance Policies and Procedures

In addition to adopting charters for and establishing the Audit, Compensation and Nominating Committees of the board of directors, we have adopted a code of business conduct and ethics and will several corporate governance policies to govern the activities of Citizens Community Bancorp, Inc., CCB and Citizens Community Federal.

The code of business conduct and ethics, which applies to all employees and directors, addresses conflicts of interest, the treatment of confidential information, general employee conduct and compliance with applicable laws, rules and regulations. In addition, the code of business conduct and ethics is designed to deter wrongdoing and to promote honest and ethical conduct, the avoidance of conflicts of interest, full and accurate disclosure and compliance with all applicable laws, rules and regulations.

The corporate governance policies are expected to cover such matters as the following:

The duties and responsibilities of each director;

The composition and responsibilities of each director committee;

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The establishment and operation of board committees, including provisions of charters for the Audit, Nominating and Compensation Committees of the board;

Convening executive sessions of independent directors;

The board of directors’ interaction with management and third parties; and

The evaluation of the performance of the board of directors and the chief executive officer.

Director Compensation

All directors, except the Chairman receives a fee of $666.66 per month for services on the boards of directors of Citizens Community Bancorp, Inc, CCB and Community Federal. The Chairman is paid $1,500 for board and board committee service. Total fees paid to directors of CCB and Citizens Community Federal during the fiscal year ended September 30, 2005, were $60,765.

Citizens Community Federal maintains a Supplemental Executive and Director's Retirement Plan, which is an unfunded, non-contributory defined benefit plan providing for supplemental pension benefits for certain key employees and directors. Benefits are based on a formula that includes participants' past and future earnings and years of service with Citizens Community Federal. This retirement plan is administered by the Compensation Committee, which selects participants in the plan. Director McHugh is credited with one month of service under the plan for each month served since August 1, 2002. The remaining directors are credited with one month of service under the plan for every two months of service since August 1, 2002. The benefits under the plan are monthly payments for the lesser of 120 months or actual months of service under the plan, rounded up to the next full quarter end. All of the non-employee directors are participants in the plan. Director McHugh has monthly benefits of $4,500 per month, and the remaining non-officer directors have monthly benefits of $2,000 per month. Unless a vesting schedule is included in a participant's plan agreement, each participating director is fully vested in the benefits under the plan upon executing the plan agreement. The benefits under the plan are unfunded and unsecured and are merely promised by Citizens Community Federal. We are under no obligation to fund the plan in advance; however, if we chose to do so, such funded amounts would be automatically expensed at the time of funding. We accrue for the new liability based on a present valuation calculation. Benefits are expensed on a straight line basis over the remaining months until eligible retirement.

CCB and its stockholders adopted a 2004 Stock Option and Incentive Plan and a 2004 Recognition and Retention Plan, which provides for the granting of shares of restricted stock. Each non-employee director of CCB was awarded options to purchase shares of CCB common stock under the option plan and shares of CCB common stock under the restricted stock plan. The number of outstanding options and the exercise price will be adjusted in accordance with the Exchange Ratio in connection with the Conversion. The restricted stock awards also will be adjusted for the Exchange Ratio in connection with the Conversion. See “Benefits - Existing Stock Options and Restricted Stock” details related to these stock plans.

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Executive Compensation

The following table sets forth summary information concerning compensation awarded to, earned by or paid to CCB's President, Chief Financial Officer, Senior Vice President and Executive Vice President. No other executive officer of CCB earned a salary and bonus in excess of $100,000 for the fiscal year ended September 30, 2005. The named executive officers received perquisites and other personal benefits in addition to salary and bonus during the periods stated. The aggregate amount of these perquisites and other personal benefits, however, did not exceed the lesser of $50,000 or 10% of the total of their respective annual salary and bonus and, therefore, has been omitted as permitted by the rules of the SEC.

		Annual Compensation							Long Term Compensation Awards
Name and Principal Position	Fiscal Year	Salary		Bonus		Other Annual Compensation ($) ⁽¹⁾			Restricted Stock Award ($) ⁽²⁾		Options (#) ⁽²⁾		All Other Compensation ⁽³⁾
James G. Cooley	2005	$	213,036	$	20,000	$	---		$	200,472		37,262	$	102,680
President, Chief Executive	2004		206,894		---		---			---		---		88,369
Officer and Director	2003		188,003		---		---			---		---		57,436

John Zettler	2005	$	127,777	$	---	$	---		$	32,078		5,962	$	16,786
Senior Vice President and	2004		124,093		---		---			---		---		13,656
Chief Financial Officer	2003		112,336		---		---			---		---		10,360

Johnny W. Thompson	2005	$	113,993	$	---	$	4,800 ⁽⁴	⁾	$	32,078		5,962	$	12,324
Senior Vice President and	2004		111,352		---		4,800 ⁽⁴	⁾		---		---		12,639
Chief Administration Officer	2003		106,703		---		13,800 ⁽⁴	⁾		---		---		14,965

Timothy J. Cruciani	2005	$	101,962	$	---	$	---		$	72,173		13,414	$	11,282
Executive Vice President	2004		98,177		---		---			---		---		8,336
	2003		84,083		---		---			---		---		5,415

_____________

(1)	This amount does not include personal benefits or perquisites which did not exceed the lesser of $50,000 or 10% of the named individuals' salary and bonus.

(2)	This amount represents the dollar value of restricted stock awarded pursuant to the Company's 2004 Recognition and Retention Plan.

(3)

This amount represents Citizens Community Federal's contribution to its supplemental executive retirement plans of $96,289, $12,952 $12,324 and $8,223 in 2005, $81,562, $10,005, $9,184 and $5,600 in 2004 and $52,058, $7,012, $14,240 and $3,190 in 2003, respectively, and to its 401(k) plan of $6,391, $3,834, $3,420 and $3,059 in 2005, $6,807, $3,651, $3,455 and $2,736 in 2004 and $5,378, $3,348, $725 and $2,225 in 2003, respectively, on behalf of the named executive officers.

(4)	This amount includes $4,800 auto allowance in 2005 and 2004, and $9,000 relocation expense and $4,800 auto allowance in 2003.

Benefits

General . We provide health and welfare benefits to employees, including hospitalization, comprehensive medical insurance and dental, life, short term and long-term disability insurance, subject to certain deductibles and copayments by employees. We also provides certain retirements benefits. See Notes _ and _ of the Notes to Consolidated Financial Statements.

Supplemental Executive Retirement Plans. Our Supplemental Executive Retirement Plan, which provides benefits to our directors, also provides benefits to certain key employees selected by the Compensation Committee upon retirement. This plan is an unfunded, non-contributory defined benefit under which we will pay supplemental pension benefits to certain key employees upon retirement. Benefits are based on a formula that includes participants’ past and future earnings and years of service. All executive officers in the Summary Compensation Table are participants in this plan.

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401(k) Savings Plan. We offer our employees a 401(k) plan, which is a qualified, tax-exempt savings plan with a cash or deferred feature qualifying under Section 401(k) of the Internal Revenue Code. All employees who have attained age 21 and completed twelve months of continuous employment, during which they worked at least 1,000 hours, are eligible to participate.

Participants are permitted to make salary reduction contributions to the 401(k) Plan of up to 100% of their annual salary, up to a maximum of $15,000 ($20,000 for employees over 50 years of age). We match each contribution in an amount equal to 150% of the participant’s 401(k) deferrals for the year up to 3% of their salary. All contributions made by participants are before-tax contributions. All participant contributions and earnings are fully and immediately vested. All matching contributions are vested at a rate of 20% per year after a two year period over a five-year period commencing after one year of employment with us. However, in the event of retirement at age 65 or older, permanent disability or death, a participant will automatically become 100% vested in the value of all matching contributions and earnings thereon, regardless of the number of years of employment.

Employees are eligible to begin deferrals under the 401(k) Plan immediately upon hire, provided they are age 21. They must wait one year and be age 21 for the employer match.

Participants may invest amounts contributed to their 401(k) plan accounts in one or more investment options available under the 401(k) plan. Changes in investment directions among the funds are permitted on a periodic basis pursuant to procedures established by the plan administrator. Each participant receives a quarterly statement that provides information regarding, among other things, the market value of all investments and contributions made to the 401(k) plan on the participant’s behalf. All executive officers in the Summary Compensation Table received 3% contributions during our last fiscal year.

Employee Stock Ownership Plan . Citizens Community Federal established an employee stock ownership plan in 2004 for employees of Citizens Community Federal We intend to continue this plan after the Conversion, and the plan will own 8% of the shares of common stock of Citizens Community Bancorp, Inc., following the completion of the Stock Offering.

The employee stock ownership plan borrowed funds from CCB and will be borrowing funds from Citizens Community Bancorp, Inc., to purchase shares of common stock of those entities. The interest rate for the loans is the prime rate of interest, and that stock purchased with loan proceeds serves as collateral for these loans. Shares purchased by the employee stock ownership plan with the proceeds of the loans are held in a suspense account. As Citizens Community Federal repays those loans over a ten-year period, shares are released to participants’ accounts.

In any plan year, we may make additional discretionary contributions for the benefit of plan participants in either cash or shares of common stock, which may be acquired through the purchase of outstanding shares in the market or from individual stockholders, upon the original issuance of additional shares by us or upon the sale of our treasury shares. These purchases, if made, would be funded through additional borrowings by the employee stock ownership plan or additional contributions by Citizens Community Federal. The timing, amount and manner of future contributions to the employee stock ownership plan will be affected by various factors, including prevailing regulatory policies, the requirements of applicable laws and regulations and market conditions.

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Shares released from the employee stock ownership plan are allocated to each eligible participant's employee stock ownership plan account based on the ratio of each such participant's compensation to the total compensation of all eligible employee stock ownership plan participants. Forfeitures are reallocated among remaining participating employees and may reduce any amount we might otherwise have contributed to the employee stock ownership plan. The account balances of participants within the employee stock ownership plan become 100% vested after five years of service. Credit for eligibility and vesting is given for years of service prior to adoption of the employee stock ownership plan. In the case of a “change in control,” as defined in the employee stock ownership plan, which triggers a termination of the employee stock ownership plan, participants will become immediately fully vested in their account balances. Benefits are payable upon retirement or other separation from service. Our contributions to the employee stock ownership plan are not fixed, so benefits payable under the employee stock ownership plan cannot be estimated.

First Bankers Trust Company of Quincy, Quincy, Illinois serves as trustee of the employee stock ownership plan. Under the employee stock ownership plan, the trustee must vote all allocated shares held in the employee stock ownership plan in accordance with the instructions of the participating employees, and unallocated shares are voted in the same ratio on any matter as those allocated shares for which instructions are given.

GAAP requires that any third party borrowing by the employee stock ownership plan be reflected as a liability on Citizens Community Bancorp, Inc.’s (and CCB’s) balance sheet. Since the employee stock ownership plan borrows from CCB or Citizens Community Bancorp, Inc., such obligations are not treated as a liability, but are excluded from stockholders' equity until repaid. If the employee stock ownership plan purchases newly issued shares, total stockholders' equity would neither increase nor decrease, but per share stockholders' equity and per share net earnings would decrease as the newly issued shares are allocated to the employee stock ownership plan participants.

The employee stock ownership plan is subject to the requirements of ERISA, and the regulations of the IRS and the Department of Labor thereunder. The IRS has provided a favorable determination that the employee stock ownership plan is a tax-qualified plan.

Existing Stock Options and Restricted Stock . On February 4, 2005, our directors and executive officers were awarded options to purchase shares of common stock of CCB under CCB’s 2004 Stock Option and Incentive Plan, at an exercise price equal to the fair market value of the common stock on the date of grant. These options are first exercisable at a rate of 20% one year after the date of grant (February 4, 2006) and 20% annually thereafter during continued service as an employee, director or director emeritus. Upon disability, death, or a change in control, these awards become 100% exercisable. The number of options and the exercise price will be adjusted in accordance with the Exchange Ratio in connection with the Conversion.

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Each non-employee director was awarded 7,453 options in February 2005. The following table shows information with respect to grants of options to the named executive officers during fiscal year ended September 30, 2005.

	Individual Grants
Name	Number of Securities Underlying Options Granted (#)	% of Total Options Granted to Employees in Fiscal Year	Exercise Price ($/Share)	Expiration Date

James G. Cooley President	37,262	54.3%	$13.45	2/4/2015

John D. Zettler Senior Vice President and Chief Financial Officer	5,962	8.7%	$13.45	2/4/2015

Johnny W. Thompson Senior Vice President and Chief Administration Officer	5,962	8.7%	$13.45	2/4/2015

Timothy J. Cruciani Executive Vice President	13,414	19.6%	$13.45	2/4/2015

The following table summarizes certain information relating to the value of options held by the named executive officers at September 30, 2005. Value realized upon exercise is the difference between the fair market value of the underlying stock on the exercise date and the exercise price of the option. At September 30, 2005, none of these options were in-the-money. These options have not been, and may not ever be, exercised. Actual gains, if any, on exercise will depend on the value of CCB and, after the Conversion, Citizens Community Bancorp, Inc. common stock on the date of exercise.

			Number of Securities Underlying Unexercised Options at FY-End (#)		Value of Unexercised In-the-Money Options FY-End ($)
Name	Shares Acquired on Exercise (#)	Value Realized ($)	Exercisable	Unexercisable	Exercisable	Unexercisable


James G. Cooley President	---	---	---	37,262	---	---

John D. Zettler Senior Vice President and Chief Financial Officer		---	---	5,962	---	---

Johnny W. Thompson Senior Vice President and Chief Administration Officer	---	---	---	5,962	---	---

Timothy J. Cruciani Senior Vice President and Chief Administration Officer	---	---	---	13,414	---	---

On February 4, 2005, our directors and officers were awarded shares of restricted stock under CCB’s 2004 Recognition and Retention Plan. Each non-employee director was awarded 1,192 shares of restricted stock. President and Chief Executive Officer Cooley was awarded 14,905 shares of restricted

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stock. Officers Zettler, Thompson and Cruciani were awarded 2,385, 2,385 and 5,366 shares of restricted stock, respectively. In addition, in November 2005, Directors McHugh and Kempen were awarded another 1,788 shares of restricted stock. Restricted stock awards vest at the rate of 20% beginning one year after the date of grant and 20% annually thereafter during periods of service as an employee, director or advisory director. All awards become immediately 100% vested upon death or disability or termination of service following a change in control. The restricted stock awards will be adjusted in accordance with the Exchange Ratio in connection with the Conversion. We intend to continue to make stock purchases in the open market from time to time to fund this plan after the completion of the Stock Offering.

Employment Agreements for Executive Officers . Citizens Community Federal currently has rolling three-year employment agreements with James G. Cooley, John D. Zettler, Johnny W. Thompson and Timothy J. Cruciani. Under the employment agreements, the salary levels for fiscal 2005 were $213,063, $127,777, $113,993, and $101,606 for each of these officers, respectively. In addition, the amount of salary provided for under the agreements is increased by 5% per year with respect to Mr. Thompson. The agreements also provide for equitable participation by the officers in Citizen Community Federal's employee benefit plans.

The agreements may be terminated by Citizens Community Federal at any time or by the executive if he is assigned duties inconsistent with his title, duties, responsibilities and status. In the event that the officer's employment is terminated without cause or constructively terminated, Citizens Community Federal would be required to honor the terms of the agreement through the expiration of the contract, including payment of the then current cash compensation.

Certain Transactions . Like many financial institutions, Citizens Community Federal has followed a policy of granting loans to our officers, directors and employees on the security of their primary residences and also of granting consumer loans to such persons. We have never granted loans to directors and executive officers on preferred terms. In accordance with the requirements of applicable law, loans to executive officers and directors of the CCB and Citizens Community Federal are made on substantially the same terms, including interest rates, fees and collateral, as those prevailing at the time for comparable transactions with other persons, and in the opinion of management do not involve more than the normal risk of collectibility or present other unfavorable features. At March 31, 2006, loans to directors and executive officers totaled $58,000.

Potential New Stock Benefit Plan

Citizens Community Bancorp, Inc., intends to adopt a new equity incentive plan at least six months from the completion of the Conversion, which will provide for the granting of stock options, stock appreciation rights and restricted stock to directors, executive officers and other officers designated by the Compensation Committee. If we decide to adopt that plan sooner than one year following the Conversion, the plan will comply with OTS regulations related to stock benefit plans adopted after a Conversion, including limitations on vesting and allocation of awards. In addition, any plan adopted within one year of the completion of the Conversion will be subject to stockholder approval at a meeting of stockholders held no sooner than six months subsequent to the completion of the Conversion.

The purpose of the equity incentive plan will be to attract and retain qualified personnel in key positions, provide officers and directors with a proprietary interest in Citizens Community Bancorp, Inc., as an incentive to contribute to our success and reward directors and officers for outstanding performance. No determinations have been made as to the time of implementation of the equity incentive plan, the specific terms of the plan or any allocation of awards that may be made under the plan.

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If we present the new equity incentive plan for a stockholder vote within one year of the Conversion, current OTS policy would limit the shares reserved under the plan and require us to take into account shares reserved under our current plans. The equity incentive plan may reserve up to approximately 4% and 10% of the shares outstanding after the Stock Offering for restricted stock and stock option awards under the new plan, excluding the shares originally reserved under the 2004 plans. Under these limitations and at the midpoint of the offering range, the new plan may not reserve an amount of common stock for stock options exceeding approximately 6.0% of the shares sold in the Stock Offering, and the new plan may not reserve an amount of common stock for restricted stock exceeding approximately 2.4% of the shares sold in the Stock Offering.

Although the terms of the plan have not yet been determined, the plan would be in effect for up to ten years from the earlier of adoption by board of directors or approval by the stockholders. It is expected that it will provide for the grant of stock options intended to qualify as incentive stock options under the Internal Revenue Code (incentive stock options) and options that do not so qualify (non-statutory stock options). Options would expire no later than 10 years from the date granted and would expire earlier if the Compensation Committee so determines or in the event of termination of employment. The plan would also provide for the granting of stock appreciation rights and restricted stock. Awards under the plan would be granted based upon several factors, including length of service, job duties and responsibilities and job performance. Shares used to fund the awards under the plan may be acquired through open market purchases or provided from authorized but unissued shares.

While our intention is to fund the existing and new stock benefits plans through open market purchases, stockholders will experience a reduction or dilution in ownership interest if the plans are instead funded with newly-issued shares. If the Stock Offering closes at the mid-point of the offering range, and the new plan is adopted within one year of the Conversion, the issuance of authorized but unissued shares of stock to the new plan, rather than open market purchases, would dilute the voting interests of existing stockholders by approximately 7.7%. However, if the existing plans also are funded with newly issued shares instead of open market purchases, the aggregate dilution from both plans would be approximately 13.0%.

We currently have 21,170 exercisable options outstanding. If any options are exercised during the first year following the completion of the Stock Offering, OTS regulations require that they may be funded with newly issued shares.

STOCK OWNERSHIP OF CCB COMMON STOCK

The following table sets forth, as of the May 31, 2006, information regarding share ownership of:

those persons or entities (or groups of affiliated persons or entities) known by management to beneficially own more than five percent of CCB common stock, other than directors and executive officers;

each director of CCB;

each executive officer of CCB named in the Summary Compensation Table appearing under "Management - Executive Compensation;" and

all current directors and executive officers of CCB as a group.

The address of each of the beneficial owners, except where otherwise indicated, is the same address as that of CCB. An asterisk (*) in the table indicates that an individual beneficially owns less than one percent of the outstanding common stock of CCB.

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Beneficial ownership is determined in accordance with the rules of the SEC. As of the record date, there were 3,724,628 shares of CCB common stock outstanding. In computing the number of shares beneficially owned by a person and the percentage ownership of that person, shares of common stock subject to outstanding options that are currently exercisable or exercisable within 60 days after May 31, 2006 are included in the number of shares beneficially owned by the person and are deemed outstanding for the purpose of calculating the person's percentage ownership. These shares, however, are not deemed outstanding for the purpose of computing the percentage ownership of any other person.

Beneficial Owners	Number of Shares Beneficially Owned ⁽¹⁾		Percent of Common Stock Outstanding
Beneficial Owners of More Than 5% Other than Directors and Named Executive Officers
Citizens Community MHC 2174 EastRidge Center Eau Claire, Wisconsin 54701		2,768,669		74.3	%
Citizens Community Bancorp Employee Stock Ownership Plan Trust ⁽²⁾ 2174 EastRidge Center Eau Claire, Wisconsin 54701		119,236		3.2	%

Directors and Named Executive Officers
Directors :
Richard McHugh ⁽³⁾		96,057		2.6	%
David B. Westrate ⁽⁴⁾		48,061		1.3	%
James G. Cooley ⁽⁵⁾		71,634		1.9	%
Thomas C. Kempen ⁽⁶⁾		8,683		*
Brian R. Schilling ⁽⁶⁾		2,783		*
Adonis E. Talmage ⁽⁶⁾		2,783		*
Named Executive Officers :
Timothy J. Cruciani ⁽⁷⁾		18,892		*
Johnny W. Thompson ⁽⁸⁾		6,904		*
John D. Zettler ⁽⁹⁾		9,652		*
Director of Citizens Community Federal
Brian P. Ashley
Directors and executive officers of CCB, as a group (11 persons) ⁽¹⁰⁾		274,026		7.3	%

___________________________________

(1)

Except as otherwise noted in these footnotes, the nature of beneficial ownership for shares reported in this table is sole voting and investment power. Included in the shares beneficially owned by the directors and named executive officers are options currently exercisable or exercisable within 60 days to purchase shares of CCB common stock.

(2)

Represents shares held by the employee stock option plan. Of these shares, 20,866 have been allocated to accounts of participants. Pursuant to the terms of the employee stock ownership plan, each employee stock ownership plan participant has the right to direct the voting of shares of CCB common stock allocated to his or her account.

(3)	Includes 17,820 shares held by Mr. McHugh's spouse. Amount also includes 2,980 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 1,491 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan.

(4)

Amount includes 5,000 shares held by Mr. Westrate’s daughter. Amount includes 2,980 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 1,491 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to the Company’s 2004 stock option plan.

(5)

Amount includes 10,000 shares held by Mr. Cooley's spouse and 5,000 shares held by Mr. Cooley’s son. Amount also includes 14,905 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 7,453 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan. Amount includes 1,776 shares allocated to Mr. Cooley’s employee stock ownership plan account.

(6)	Amount includes 1,192 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 1,491 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan.

(7)

Amount includes 5,366 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 2,683 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan. Amount includes 843 shares allocated to Mr. Cruciani’s employee stock ownership account.

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(8)

Amount includes 2,385 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 1,193 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan. Amount includes 1,009 shares allocated to Mr. Thompson’s employee stock ownership account.

(9)

Amount includes 2,385 shares of restricted stock granted pursuant to CCB’s 2004 restricted stock plan and 1,193 shares subject to options that are exercisable within 60 days of May 31, 2006, granted pursuant to CCB’s 2004 stock option plan. Amount includes 1,075 shares allocated to Mr. Zettler’s employee stock ownership plan account.

(10)	Amount includes 8,577 shares of another executive officer, which includes 2,385 shares of restricted stock and 1,193 stock options exercisable within 60 days.

*	Less than 1% ownership.

COMPARISON OF RIGHTS OF CITIZENS COMMUNITY BANCORP, INC.’S AND CCB’S STOCKHOLDERS

As a result of the Conversion, current holders of CCB common stock will become stockholders of Citizens Community Bancorp, Inc. There are certain differences in stockholder rights arising from distinctions between the federal stock charter and bylaws of CCB and the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. and from distinctions between federal laws and regulations governing federally chartered holding companies and Maryland corporate law. The discussion herein is qualified in its entirety by reference to Citizens Community Bancorp, Inc.'s articles of incorporation and bylaws and the provisions of Maryland corporate law.

In some instances, the rights of stockholders of Citizens Community Bancorp, Inc. will be less than the rights stockholders of CCB currently have. The decrease in stockholder rights under the Maryland articles of incorporation and bylaws are not mandated by Maryland law but have been chosen by management as being in the best interests of Citizens Community Bancorp, Inc. In some instances, the differences in stockholder rights may increase management rights. In other instances, these provisions in Citizens Community Bancorp, Inc.’s articles of incorporation and bylaws described below may make it more difficult to pursue a takeover attempt that management opposes. These provisions will also make the removal of the board of directors or management, or the appointment of new directors, more difficult. We believe that the provisions described below are prudent and will enhance our ability to remain an independent financial institution and reduce our vulnerability to takeover attempts and certain other transactions that have not been negotiated with and approved by our board of directors. These provisions also will assist us in the orderly deployment of the Conversion proceeds into productive assets and allow us to implement our business plan during the initial period after the Conversion. We believe these provisions are in the best interests of Citizens Community Bancorp, Inc. and its stockholders.

The following discussion is not intended to be a complete statement of the differences affecting the rights of stockholders, but rather summarizes the more significant differences and certain important similarities. The discussion herein is qualified in its entirety by reference to the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. and Maryland law.

Authorized Capital Stock . The authorized capital stock of Citizens Community Bancorp, Inc. consists of 20,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share. The current authorized capital stock of CCB consists of 5,000,000 shares of common stock, par value $0.01 per share, and 1,000,000 shares of preferred stock, par value $0.01 per share.

CCB’s charter and Citizens Community Bancorp, Inc.’s articles of incorporation both authorize the board of directors to establish one or more series of preferred stock and, for any series of preferred stock, to determine the terms and rights of the series, including voting rights, conversion rates and liquidation preferences. Although neither board of directors has any intention at the present time of doing so, it could issue a series of preferred stock that could, depending on its terms, impede a merger, tender offer or other takeover attempt.

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The articles of incorporation of Citizens Community Bancorp, Inc. authorize the board of directors to authorize additional shares of common and preferred stock without stockholder approval. Although the board of directors has no intention to authorize additional shares at the present time, it could do so and issue additional shares in a fashion that impedes a takeover attempt. In addition, the issuance of additional common stock would dilute the ownership interests of then-existing stockholders.

Issuance of Capital Stock . Currently, pursuant to applicable laws and regulations, Citizens Community MHC is required to own not less than a majority of the outstanding common stock of CCB. There will be no such restriction applicable to Citizens Community Bancorp, Inc. following consummation of the Conversion, as Citizens Community MHC will cease to exist.

Citizens Community Bancorp, Inc.’s articles of incorporation does not contain restrictions on the issuance of shares of capital stock to the directors, officers or controlling persons of Citizens Community Bancorp, Inc., whereas the current federal stock charter of CCB restricts such issuance to general public offerings, or if qualifying shares, to directors, unless the share issuance or the plan under which they would be issued has been approved by a majority of the total votes eligible to be cast at a legal meeting. Thus, Citizens Community Bancorp, Inc. could adopt stock-related compensation plans such as stock option plans without stockholder approval and shares of the capital stock of Citizens Community Bancorp, Inc. could be issued directly to directors or officers without stockholder approval. The rules of the NASD, however, generally require corporations with securities that are quoted on the Nasdaq Global Market, like Citizens Community Bancorp, Inc. will be, to obtain stockholder approval of most compensation plans for directors, officers and key employees of the corporation. Moreover, although generally not required, stockholder approval of stock-related compensation plans may be sought in certain instances to qualify such plans for favorable treatment under current federal income tax laws and regulations. We plan to submit the stock compensation plans discussed in this Prospectus to stockholders for their approval. In addition, the issuance of additional common stock would dilute the ownership interests of then-existing stockholders.

Neither the federal stock charter and bylaws of CCB nor the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. provide for preemptive rights to stockholders in connection with the issuance of capital stock.

Voting Rights . Neither the federal stock charter of CCB nor the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. permits cumulative voting in the election of directors. Cumulative voting entitles you to as many votes as equal to the number of shares you hold, multiplied by the number of directors to be elected. Cumulative voting allows you to cast all your votes for a single nominee or apportion your votes among any two or more nominees. For example, when three directors are to be elected, cumulative voting allows a holder of 100 shares to cast 300 votes for a single nominee, apportion 100 votes for each nominee, or apportion 300 votes in any other manner.

Payment of Dividends . The ability of Citizens Community Federal to pay dividends on its capital stock is restricted by OTS regulations and by tax considerations related to savings associations. Citizens Community Federal will continue to be subject to these restrictions after the Conversion, and such restrictions will indirectly affect Citizens Community Bancorp, Inc. because dividends from Citizens Community Federal will be a primary source of funds for the payment of dividends to the stockholders of Citizens Community Bancorp, Inc.

Maryland law generally provides that, unless otherwise restricted in a corporation’s charter, a corporation’s board of directors may authorize and a corporation may pay dividends to stockholders. However, a distribution may not be made if, after giving effect thereto:

the corporation would not be able to pay its debts as they become due in the usual course of business; or

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the total assets of the corporation would be less than the sum of its total liabilities plus (unless otherwise provided in its charter) the amount that would be needed, if the corporation were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution.

Board of Directors. The federal stock charter and bylaws of CCB and the articles of incorporation and bylaws of Citizens Community Bancorp, Inc. each require the board of directors to be divided into three classes as nearly equal in number as possible and that the members of each class be elected for a term of three years and until their successors are elected and qualified, with one class being elected annually. Under both the bylaws of CCB and the bylaws of Citizens Community Bancorp, Inc., any vacancy occurring in the board of directors, however caused, may be filled by an affirmative vote of the majority of the directors then in office, whether or not a quorum is present, and any director so chosen shall hold office only until the next annual meeting of stockholders at which directors are elected.

Under the bylaws of CCB, any director may be removed only for cause by vote of the holders of a majority of the outstanding voting shares at a meeting of stockholders called for such purpose. The articles of incorporation of Citizens Community Bancorp, Inc. provides that any director may be removed by stockholders only for cause upon the affirmative vote of the holders of not less than 80% of the outstanding voting shares. The higher vote threshold will make it more difficult for stockholders to remove directors and replace them with their own nominees.

Limitations on Liability. The articles of incorporation of Citizens Community Bancorp, Inc. provides that, to the fullest extent permitted under Maryland law, directors and officers of Citizens Community Bancorp, Inc. will not be personally liable to Citizens Community Bancorp, Inc. or its stockholders for monetary damages. This provision would absolve directors and officers of personal liability for monetary damages for negligence in the performance of their duties, including gross negligence, and it would not affect the availability of injunctive or other equitable relief as a remedy.

Currently, federal law does not permit federally chartered savings and loan holding companies like CCB to limit the personal liability of directors in the manner provided by Maryland law and the laws of many other states.

Indemnification of Directors, Officers, Employees and Agents. The federal bylaws of CCB provide that CCB must indemnify its directors, officers and employees for any costs incurred in connection with any action involving any such person’s activities as a director, officer or employee if such person obtains a final judgment on the merits in his or her favor. In addition, indemnification is permitted in the case of a settlement, a final judgement against such person or final judgement other than on the merits, if a majority of disinterested directors determines that such person was acting in good faith within the scope of his or her employment as he or she could reasonably have perceived it under the circumstances and for a purpose he or she could reasonably have believed under the circumstances was in the best interest of CCB or its stockholders. CCB also is permitted to pay ongoing expenses incurred by a director, officer or employee if a majority of disinterested directors concludes that such person may ultimately be entitled to indemnification. Before making any indemnification payment, CCB is required to notify the OTS of its intention and such payment cannot be made if the OTS objects thereto.

The articles of incorporation of Citizens Community Bancorp, Inc. provides that it will indemnify its directors and officers, whether serving it or at its request any other entity, to the fullest extent permitted under Maryland law. Such indemnification includes the advancement of expenses. The articles of incorporation of Citizens Community Bancorp, Inc. also provide that it will indemnify it employees and agents to such extent as shall be authorized by the board of directors of the bylaws and be permitted by law.

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Special Meetings of Stockholders. The bylaws of CCB provide that special meetings of the stockholders of CCB may be called by the chairman, President, a majority of the board of directors or the holders of not less than ten percent of the outstanding capital stock of CCB entitled to vote at the meeting. The bylaws of Citizens Community Bancorp, Inc. contain a provision pursuant to which special meetings of the stockholders of Citizens Community Bancorp, Inc. may be called by the Chairman, the President, the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors which Citizens Community Bancorp, Inc. would have if there were no vacancies on the Board of Directors or the holders of not less than a majority of the capital stock of Citizens Community Bancorp, Inc. entitled to vote at a meeting.

Stockholder Nominations and Proposals . The bylaws of CCB generally provide that stockholders may submit new business to be taken up at the annual meeting. Any stockholder may make any proposal at the annual meeting and the same may be discussed and considered, provided such submission is provided in writing and filed with the secretary at least five days before the meeting.

Citizens Community Bancorp, Inc.’s bylaws establish an advance notice procedure for stockholders to nominate directors or bring other business before an annual meeting of stockholders of Citizens Community Bancorp, Inc. A person may not be nominated for election as a director unless that person is nominated by or at the direction of the Citizens Community Bancorp, Inc. board or by a stockholder who has given appropriate notice to Citizens Community Bancorp, Inc. before the meeting. Similarly, a stockholder may not bring business before an annual meeting unless the stockholder has given Citizens Community Bancorp, Inc. appropriate notice of its intention to bring that business before the meeting. Citizens Community Bancorp, Inc.’s secretary must receive notice of the nomination or proposal not less than 90 days before the annual meeting; provided, however, that if less than 100 days’ notice of prior public disclosure of the date of the meeting is given or made to the stockholders, notice by the stockholder to be timely must be received not later than the close of business on the 10th day following the day on which such notice of the date of the annual meeting was mailed or such public disclosure was made. A stockholder who desires to raise new business must provide certain information to Citizens Community Bancorp, Inc. concerning the nature of the new business, the stockholder and the stockholder’s interest in the business matter. Similarly, a stockholder wishing to nominate any person for election as a director must provide Citizens Community Bancorp, Inc. with certain information concerning the nominee and the proposing stockholder.

Advance notice of nominations or proposed business by stockholders gives Citizens Community Bancorp, Inc.’s Board of Directors time to consider the qualifications of the proposed nominees, the merits of the proposals and, to the extent deemed necessary or desirable by the Board of Directors, to inform stockholders and make recommendations about those matters.

Stockholder Action Without a Meeting . The bylaws of CCB and Citizens Community Bancorp, Inc. provide for action to be taken by stockholders without a meeting, if all stockholders entitled to vote on the action consent to taking such action without a meeting.

Stockholder’s Right to Examine Books and Records . A federal regulation, which is currently applicable to CCB provides that stockholders, holding of record at least $100,000 of stock or at least 1% of the total outstanding voting shares, may inspect and make extracts from specified books and records of a federally chartered savings and loan associations after proper written notice for a proper purpose. Maryland law provides that a stockholder holding less than five percent of the outstanding capital stock may inspect specified books and records. Additionally, stockholders who have for at least six months beneficially owned more than five percent of the outstanding capital stock may, upon written request, inspect and copy the corporation’s books of account and stock ledger.

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Limitations on Voting Rights . The articles of incorporation of Citizens Community Bancorp, Inc. provide that in no event shall any person, who directly or indirectly beneficially owns in excess of 10% of the then-outstanding shares of common stock as of the record date for the determination of stockholders entitled or permitted to vote on any matter (the “10% limit”), be entitled or permitted to any vote in respect of the shares held in excess of the 10% limit. Beneficial ownership is determined pursuant to the federal securities laws and includes, but is not limited to, shares as to which any person and his or her affiliates (1) have the right to acquire upon the exercise of conversion rights, exchange rights, warrants or options and (2) have or share investment or voting power (but shall not be deemed the beneficial owner of any voting shares solely by reason of a revocable proxy granted for a particular meeting of stockholders, and that are not otherwise beneficially, or deemed by Citizens Community Bancorp, Inc. to be beneficially, owned by such person and his or her affiliates).

The foregoing restriction does not apply to:

any director or officer acting solely in their capacities as directors and officers; or

any employee benefit plans of Citizens Community Bancorp, Inc. or any subsidiary or a trustee of a plan.

The charter of CCB provides that, for a period of five years from the effective date of Citizens Community Federal’s mutual holding company reorganization, no person, other than Citizens Community MHC, shall directly or indirectly offer to acquire or acquire more than 10% of the then-outstanding shares of common stock. The foregoing restriction does not apply to:

the purchase of shares by underwriters in connection with a public offering; or

the purchase of shares by any employee benefit plans of CCB or any subsidiary.

Mergers, Consolidations and Sales of Assets . Federal regulations currently require the approval of two-thirds of the Board of Directors of CCB and the holders of two-thirds of the outstanding stock of CCB entitled to vote thereon for mergers, consolidations and sales of all or substantially all of its assets. Such regulation permits CCB to merge with another corporation without obtaining the approval of its stockholders if:

it does not involve an interim savings institution;

the charter of CCB is not changed;

each share of CCB stock outstanding immediately before the effective date of the transaction is to be an identical outstanding share or a treasury share of CCB after such effective date; and

either: (a) no shares of voting stock of CCB and no securities convertible into such stock are to be issued or delivered under the plan of combination or (b) the authorized unissued shares or the treasury shares of voting stock of CCB to be issued or delivered under the plan of combination, plus those initially issuable upon conversion of any securities to be issued or delivered under such plan, do not exceed 15% of the total shares of voting stock of CCB outstanding immediately before the effective date of the transaction.

Citizens Community Bancorp, Inc.’s articles of incorporation require the approval of the Board of Directors and the affirmative vote of a majority of the votes entitled to be cast by all stockholders entitled to vote thereon. However, Maryland law provides that:

a merger of a 90% of more owned subsidiary with and into its parent may be approved without stockholder approval; provided, however that (1) the charter of the successor is not

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amended in the merger other than to change its name, the name or other designation or the par value of any class or series of its stock or the aggregate par value of its stock and (2) the contractual rights of any stock of the successor issued in the merger in exchange for stock of the other corporation participating in the merger are identical to the contract rights of the stock for which the stock of the successor was exchanged;

a share exchange need not be approved by the stockholders of the successor;

a transfer of assets need not be approved by the stockholders of the transferee; and

a merger need not be approved by the stockholders of a Maryland successor corporation provided that the merger does not reclassify or change the terms of any class or series of its stock that is outstanding immediately before the merger becomes effective or otherwise amend its charter and the number of shares of stock of such class or series outstanding immediately after the effective time of the merger does not increase by more than 20% of the number of shares of the class or series of stock that is outstanding immediately before the merger becomes effective.

Business Combinations with Interested Stockholders . The articles of incorporation of Citizens Community Bancorp, Inc. require the approval of the holders of at least 80% of Citizens Community Bancorp, Inc.’s outstanding shares of voting stock entitled to vote to approve certain “business combinations” with an “interested stockholder.” This supermajority voting requirement will not apply in cases where the proposed transaction has been approved by a majority of disinterested directors or where various fair price and procedural conditions have been met.

Under Citizens Community Bancorp, Inc.’s articles of incorporation, the term “interested stockholder” means any person who or which is:

the beneficial owner, directly or indirectly, of more than 10% of the voting power of the then outstanding voting stock of Citizens Community Bancorp, Inc.;

an affiliate of Citizens Community Bancorp, Inc. and at any time in the two-year period before the date in question was the beneficial owner of 10% or more of the voting power of the then outstanding voting stock of the Citizens Community Bancorp, Inc.; or

an assignee of or has otherwise succeeded to any shares of voting stock that were at any time within the two-year period immediately before the date in question beneficially owned by any interested stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933, as amended.

A “business combination” includes, but is not limited to:

any merger or consolidation of Citizens Community Bancorp, Inc. or of its subsidiaries with (a) any interested stockholder; or (b) any other corporation, which is, or after such merger or consolidation would be, an affiliate of an interested stockholder; or

any sale, lease, exchange or other disposition to or with any interested stockholder, or any affiliate of any interested stockholder, of any assets of Citizens Community Bancorp, Inc. or any of its subsidiaries having an aggregate fair market value equaling or exceeding 25% or more of the combined assets of the Citizens Community Bancorp, Inc. and its subsidiaries; or

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the issuance or transfer by Citizens Community Bancorp, Inc. or any of its subsidiaries of any securities of Citizens Community Bancorp, Inc. or any of its subsidiaries to any interested stockholder or any affiliate of any interested stockholder in exchange for cash, securities or other property having an aggregate fair market value equaling or exceeding 25% of the combined fair market value of the outstanding common stock of Citizens Community Bancorp, Inc., except for any issuance or transfer pursuant to an employee benefit plan of Citizens Community Bancorp, Inc. or any of its subsidiaries; or

the adoption of any plan for the liquidation or dissolution of Citizens Community Bancorp, Inc. proposed by or on behalf of any interested stockholder or any affiliate or associate of such interested stockholder; or

any reclassification of securities, or recapitalization of Citizens Community Bancorp, Inc., or any merger or consolidation of Citizens Community Bancorp, Inc. with any of its subsidiaries or any other transaction (whether or not with or into or otherwise involving an interested stockholder) which has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of Citizens Community Bancorp, Inc. or any of its subsidiaries, which is directly or indirectly owned by any interested stockholder or any affiliate of any interested stockholder.

Neither the charter and bylaws of CCB nor the federal laws and regulations applicable to CCB contain a provision that restricts business combinations between CCB and any interested stockholder in the manner set forth above.

Dissenters’ Rights of Appraisal . A federal regulation that is applicable to CCB generally provides that a stockholder of a federally chartered savings and loan association that engages in a merger, consolidation or sale of all or substantially all of its assets shall have the right to demand from such institution payment of the fair or appraised value of his or her stock in the institution, subject to specified procedural requirements. This regulation also provides, however, that the stockholders of a federally chartered savings and loan association that is listed on a national securities exchange or quoted on the Nasdaq Global Market are not entitled to dissenters’ rights in connection with a merger if the stockholder is required to accept only “qualified consideration” for his or her stock, which is defined to include cash, shares of stock of any institution or corporation which at the effective date of the merger will be listed on a national securities exchange or quoted on the Nasdaq Global Market or any combination of such shares of stock and cash. This exception does not currently apply to CCB because its stock is not listed on a national securities exchange or quoted on the Nasdaq Global Market.

After the Conversion, the rights of appraisal of the dissenting stockholders of Citizens Community Bancorp, Inc. will be governed by Maryland law. Pursuant to the Maryland law, a stockholder of a Maryland corporation generally has the right to dissent from any merger involving the corporation, share exchange, sale of all or substantially all of the corporation’s assets or an amendment of the charter that materially adversely affects stockholder rights, and to obtain fair value for his or her shares, subject to specified procedural requirements. However, no such appraisal rights are generally available for shares which are listed on a national securities exchange or on the Nasdaq Global Market.

Evaluation of Offers . The articles of incorporation of Citizens Community Bancorp, Inc. provide that its board of directors, when evaluating a transaction that would or may involve a change in control of Citizens Community Bancorp, Inc. (including a tender or exchange offer, merger or consolidation or sale of all or substantially all of the assets of Citizens Community Bancorp, Inc.) may, in connection with the exercise of its judgment in determining what is in the best interest of Citizens Community Bancorp, Inc. and its stockholders, give consideration to the following factors:

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the economic effect, both immediate and long-term, upon Citizens Community Bancorp, Inc.’s stockholders, including stockholders, if any, not to participate in the transaction;

the social and economic effect on the employees, depositors and customers of, and others dealing with, Citizens Community Bancorp, Inc. and its subsidiaries and on the communities in which Citizens Community Bancorp, Inc. and its subsidiaries operate or are located;

whether the proposal is acceptable based on the historical and current operating results or financial condition of Citizens Community Bancorp, Inc.;

whether a more favorable price could be obtained for Citizens Community Bancorp, Inc.’s stock or other securities in the future;

the reputation and business practices of the offeror and its management and affiliates as they would affect the employees;

the future value of the stock or any other securities of Citizens Community Bancorp, Inc.; and

any antitrust or other legal and regulatory issues that are raised by the proposal.

By having these standards in the articles of incorporation of Citizens Community Bancorp, Inc., the Board of Directors may be in a stronger position to oppose such a transaction if the Board concludes that the transaction would not be in the best interest of Citizens Community Bancorp, Inc., even if the price offered is significantly greater than the then market price of any equity security of Citizens Community Bancorp, Inc.

Amendment of Governing Instruments . No amendment of the charter of CCB may be made unless it is first proposed by the board of directors, then preliminarily approved by the OTS, and thereafter approved by the holders of a majority of the total votes eligible to be cast at a legal meeting. The articles of incorporation of Citizens Community Bancorp, Inc. generally may be amended by the holders of a majority of the shares entitled to vote; provided, however, that any amendment of Section C of Article 5 (Issuing Preferred Stock; Limitation of Voting Common Stock), Article 7 (Directors), Article 8 and 14 (Amendment of Governing Instruments), Article 9 (Approval of Business Combinations), Article 11 (Acquisitions of Securities from Interested Persons), 12 (Indemnification) and Article 13 (Limitation of Liability) must be approved by the affirmative vote of the holders of at least 80% of the outstanding shares entitled to vote, except that the board of directors may amend the articles of incorporation without any action by the stockholders to increase or decrease the aggregate number of shares of capital stock.

The bylaws of CCB may be amended in a manner consistent with regulations of the OTS and shall be effective after (1) approval of the amendment by a majority vote of the authorized Board of Directors, or by a majority of the votes cast by the stockholders of CCB at any legal meeting and (2) receipt of applicable regulatory approval. The bylaws of Citizens Community Bancorp, Inc. may be amended by the board with a majority vote of the number of authorized directors.

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RESTRICTIONS ON ACQUISITIONS OF

CITIZENS COMMUNITY BANCORP, INC. AND CITIZENS COMMUNITY FEDERAL

The principal federal regulatory restrictions that affect the ability of any person, firm or entity to acquire Citizens Community Bancorp, Inc., Citizens Community Federal or a controlling interest in their respective capital stock are described below. Certain provisions in Citizens Community Bancorp, Inc.'s charter and bylaws that may be deemed to affect the ability of a person, firm or entity to acquire Citizens Community Bancorp, Inc. also are described below. These descriptions are qualified by reference to the laws and regulations referred to and the provisions of the charter and bylaws of Citizens Community Bancorp, Inc.

Federal Law

Citizens Community Federal is a federal savings bank. Acquisitions of control of Citizens Community Federal by an individual is governed by the Change in Bank Control Act and by another company are governed by Section 10 of the Home Owners' Loan Act. The OTS has promulgated regulations under these laws.

The Change in Bank Control Act provides that no person, acting directly or indirectly or through or in concert with one or more other individuals, may acquire control of a federal savings bank, unless the OTS has been given 60 days prior written notice. Similar notice is required to be provided to the OTS by an individual acquiring a similar ownership interest in savings association holding company. The Home Owners' Loan Act provides that no company may acquire "control" of a savings association without the prior approval of the OTS. Any company that acquires such control becomes a savings and loan holding company subject to registration, examination and regulation by the OTS. In addition, acquisitions of control of a savings association holding company by another company are subject to the approval of the OTS.

Pursuant to the acquisition of control regulations of the OTS, control of a savings institution is conclusively deemed to have been acquired by, among other things, the acquisition of more than 25% of any class of voting stock of the institution or the ability to control the election of a majority of the directors of an institution. Moreover, control is presumed to have been acquired, subject to rebuttal, upon the acquisition of more than 10% of any class of voting stock, or of more than 25% of any class of stock of a savings institution, where certain enumerated "control factors" are also present in the acquisition. The OTS may prohibit an acquisition of control if:

it would result in a monopoly or substantially lessen competition;

the financial condition of the acquiring person might jeopardize the financial stability of the institution; or

the competence, experience or integrity of the acquiring person indicates that it would not be in the interest of the depositors or of the public to permit the acquisition of control by such person.

These restrictions do not apply to the acquisition of a savings institution's capital stock by one or more tax-qualified employee stock benefit plans, provided that the plans do not have beneficial ownership of more than 25% of any class of equity security of the savings institution.

For a period of three years following completion of the reorganization, OTS regulations generally prohibit any person from acquiring or making an offer to acquire beneficial ownership of more than 10% of the stock of Citizens Community Bancorp, Inc. or Citizens Community Federal without OTS approval.

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State Law

Maryland corporate law contains certain provisions, described below, which may be applicable to Citizens Community Bancorp, Inc. upon consummation of the conversion.

Business Combinations with Interested Stockholders . The articles of incorporation require the approval of the holders of at least 80% of Citizens Community Bancorp, Inc.’s outstanding shares of voting stock entitled to vote to approve certain “business combinations” with an “interested stockholder.” This supermajority voting requirement will not apply in cases where the proposed transaction has been approved by a majority of those members of Citizens Community Bancorp, Inc.’s board of directors who are unaffiliated with the interested stockholder and who were directors before the time when the interested stockholder became an interested stockholder or if the proposed transaction meets certain conditions that are designed to afford the stockholders a fair price in consideration for their shares. In each such case, where stockholder approval is required, the approval of only a majority of the outstanding shares of voting stock is sufficient.

The term “interested stockholder” includes any individual, group acting in concert, corporation, partnership, association or other entity (other than Citizens Community Bancorp, Inc. or its subsidiary) who or which is the beneficial owner, directly or indirectly, of 10% or more of the outstanding shares of voting stock of Citizens Community Bancorp, Inc.

A “business combination” includes:

any merger or consolidation of Citizens Community Bancorp, Inc. or any of its subsidiaries with any interested stockholder or affiliate of an interested stockholder or any corporation which is, or after such merger or consolidation would be, an affiliate of an interested stockholder;

any sale or other disposition to or with any interested stockholder of 25% or more of the assets of Citizens Community Bancorp, Inc. or combined assets of Citizens Community Bancorp, Inc. and its subsidiaries;

the issuance or transfer to any interested stockholder or its affiliate by Citizens Community Bancorp, Inc. (or any subsidiary) of any securities of Citizens Community Bancorp, Inc. (or any subsidiary) in exchange for cash, securities or other property the value of which equals or exceeds 25% of the fair market value of the common stock of Citizens Community Bancorp, Inc.;

the adoption of any plan for the liquidation or dissolution of Citizens Community Bancorp, Inc. proposed by or on behalf of any interested stockholder or its affiliate; and

any reclassification of securities, recapitalization, merger or consolidation of Citizens Community Bancorp, Inc. with any of its subsidiaries which has the effect of increasing the proportionate share of common stock or any class of equity or convertible securities of Citizens Community Bancorp, Inc. or subsidiary owned directly or indirectly, by an interested stockholder or its affiliate.

Our charter provides that this statutory limit on business combinations will not apply to Citizens Community Bancorp, Inc.

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Control Share Acquisitions. Maryland corporate law provides that “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights unless approved by a vote of two-thirds of the votes entitled to be cast on the matter, excluding shares owned by the acquiror or by the corporation’s officers or directors who are employees of the corporation. Control shares are shares of voting stock which, if aggregated with all other shares of stock previously acquired, would entitle the acquiror to exercise voting power in electing directors within one of the following ranges of voting power:

20% or more but less than 33 ¹ /3 %;

33 ¹ /3 % or more but less than a majority; or

a majority of all voting power.

Control shares do not include shares of stock an acquiring person is entitled to vote as a result of having previously obtained stockholder approval. A control share acquisition generally means the acquisition of, ownership of or the power to direct the exercise of voting power with respect to, control shares.

A person who has made or proposes to make a “control share acquisition,” under specified conditions, including an undertaking to pay expenses, may require the board of directors to call a special stockholders’ meeting to consider the voting rights of the shares. The meeting must be held within 50 days of the demand. If no request for a meeting is made, the corporation may itself present the question at any stockholders’ meeting.

If voting rights are not approved at the meeting or if the acquiring person does not deliver an acquiring person statement as permitted by the statute, the corporation generally may redeem any or all of the control shares, except those for which voting rights have previously been approved. This redemption of shares must be for fair value, determined without regard to the absence of voting rights as of the date of the last control share acquisition or of any stockholders’ meeting at which the voting rights of the shares are considered and not approved. If voting rights for “control shares” are approved at a stockholders’ meeting and the acquiror becomes entitled to vote a majority of the shares entitled to vote, all other stockholders may exercise appraisal rights. The fair value of the stock determined for purposes of appraisal rights may not be less than the highest price per share paid in the control share acquisition. The limitations and restrictions otherwise applicable to the exercise of dissenters’ rights do not apply in the context of a “control share acquisition.”

The control share acquisition statute does not apply to stock acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction, or to acquisition previously approved or exempted by a provision in the charter or bylaws of the corporation.

Charter and Bylaws of Citizens Community Bancorp, Inc.

Certain provisions in Citizens Community Bancorp, Inc.'s articles of incorporation and bylaws may be deemed to affect the ability of a person, firm or entity to acquire Citizens Community Bancorp, Inc. The following discussion is a summary of the material provisions. This summary is necessarily general and qualified by reference to the articles of incorporation and bylaws. Certain of these provisions, in addition to discouraging a takeover attempt that a majority of our stockholders might determine to be in their best interest or in which our stockholders might receive a premium over the current market prices for their shares, may have the effect of rendering the removal of our management more difficult.

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Classified Board of Directors. The board of directors of Citizens Community Bancorp, Inc. is required by the articles of incorporation to be divided into three staggered classes which are as equal in size as is possible. One class is required to be elected annually for three-year terms, and classes are elected in series. A classified board promotes continuity and stability of management of Citizens Community Bancorp, Inc., but makes it more difficult for stockholders to change a majority of the directors because it generally takes at least two annual elections of directors for this to occur.

Authorized but Unissued Shares of Capital Stock. Following the Stock Offering, Citizens Community Bancorp, Inc. will have authorized but unissued shares of preferred stock and common stock. See “Description of Capital Stock.” These shares could be used by the board of directors to make it more difficult or to discourage an attempt to obtain control of Citizens Community Bancorp, Inc. through a merger, tender offer, proxy contest or otherwise.

Special Meetings of Stockholders. Citizens Community Bancorp, Inc.'s bylaws provide that special meetings of stockholders may be called only by Citizens Community Bancorp, Inc.'s President or by its board of directors by a resolution adopted by a majority of the number of authorized directors, and by a majority of the holders of our stock entitled to vote at the meeting being called.

Prohibition on Cumulative Voting. Citizens Community Bancorp, Inc.'s articles of incorporation provides that there will not be cumulative voting by stockholders for the election of Citizens Community Bancorp, Inc.'s directors. This could prevent minority stockholder representation on Citizens Community Bancorp, Inc.'s board of directors.

Restrictions on Acquisition of Shares and Vote Sterilization. Citizens Community Bancorp, Inc.'s articles of incorporation provides that for a period of five years from the date of completion of the conversion, no person may offer to acquire or acquire the beneficial ownership of more than 10% of any class of equity security of Citizens Community Bancorp, Inc. In addition, all shares owned over the 10% limit may not be voted in any matter submitted to stockholders for a vote.

Procedures for Stockholder Nominations. Citizens Community Bancorp, Inc.'s bylaws provide that any stockholder wanting to make a nomination for the election of directors or a proposal for new business at a meeting of stockholders must send written notice to the Secretary of Citizens Community Bancorp, Inc. at least 90 days before the anniversary date of the prior year's annual meeting. The bylaws further provide that stockholder nominations and proposals that do not follow the prescribed procedures will not be presented for stockholder vote. Management believes that it is in the best interests of Citizens Community Bancorp, Inc. and its stockholders to provide enough time for management to disclose to stockholders information about a dissident slate of nominations for directors. This advance notice requirement may also give management time to solicit its own proxies in an attempt to defeat any dissident slate of nominations if management thinks it is in the best interest of stockholders generally. Similarly, adequate advance notice of stockholder proposals will give management time to study these proposals and to determine whether to recommend to the stockholders that these proposals be adopted.

Procedures for Business Combinations . Our articles of incorporation prohibits any merger, consolidation, sale, liquidation, or dissolution (each, a business combination) of Citizens Community Bancorp, Inc., with any "interested stockholder" for a period of five years following the interested stockholder's stock acquisition date, unless the business combination is approved by a two-thirds vote of the Board prior to the stock acquisition date. An interested stockholder is any person who, directly or indirectly, has the right to vote or to sell 10% or more of the outstanding shares. Affiliates and associates of an interested stockholder are also considered to be interested stockholders.

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In addition, our articles of incorporation requires that at least one of the following conditions be met to engage in a business combination with an interested stockholder: (i) approval by a vote of majority of the Board prior to the interested stockholder's stock acquisition date and thereafter approved by stockholders; (ii) approval by the affirmative vote of the holders of at least 80% of the voting shares not beneficially owned by that interested stockholder at a meeting called for that purpose; or (iii) satisfaction of certain minimum price conditions, as set forth in our articles of incorporation.

In addition to the interested stockholder restrictions, our articles of incorporation also requires the affirmative vote of at least 80% of the outstanding shares in order for us to enter into any merger, consolidation, sale, liquidation, or dissolution of us, unless the transaction is approved by majority of our board of directors.

Amendment to Articles of Incorporation and Bylaws. Amendments to our articles of incorporation must be approved by our board of directors and also by the holders of a majority of the shares. Approval by at least 80% of the shares is required to amend provisions relating to preemptive rights; stockholder meetings; cumulative voting; proxies; stockholder proposals and nominations; directors; removal of directors; restrictions on the acquisition and voting of more than 10% of the common stock; approval of business combinations with interested stockholders; directors' and officers' liability; and indemnification of officers and directors; amendment of the bylaws; and amendment of the articles of incorporation.

Our bylaws may be amended by the board of directors by a majority vote of the number of authorized directors or by the holders of at least 80% of the shares.

DESCRIPTION OF CAPITAL STOCK

General

Citizens Community Bancorp, Inc. is a newly formed Maryland corporation. It is authorized to issue 20,000,000 shares of common stock, par value $0.01 per share and 1,000,000 shares of serial preferred stock, par value $0.01 per share. We will issue between 3,600,000 and 4,600,000 shares of common stock in the Stock Offering. Upon payment of the purchase price shares of common stock issued in the Stock Offering will be fully paid and non-assessable. No shares of preferred stock will be issued in the Stock Offering. The board of directors can, without stockholder approval, issue additional shares of common stock.

Common Stock

Each share of common stock will have the same relative rights as, and will be identical in all respects with, each other share of common stock. The common stock will represent non-withdrawable capital, will not be an account of insurable type and will not be insured by the FDIC or any other governmental agency.

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Dividends. Citizens Community Bancorp, Inc. can pay dividends if, after giving effect to the distribution, it would be able to pay its indebtedness as the indebtedness comes due in the usual course of business and its total assets exceed the sum of its liabilities and the amount needed, if Citizens Community Bancorp, Inc. were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have a preference in the event of dissolution. The holders of common stock of Citizens Community Bancorp, Inc. will be entitled to receive and share equally in dividends as may be declared by the board of directors of Citizens Community Bancorp, Inc. out of funds legally available for dividends. If Citizens Community Bancorp, Inc. issues preferred stock, the holders of the preferred stock may have a priority over the holders of the common stock with respect to dividends. See “Our Policy Regarding Dividend” and “How We Are Regulated.” OTS regulations also limit our ability to pay dividends. See “How We Are Regulated - Limitations on Dividends and Other Distributions.”

Voting Rights . After the Conversion, the holders of common stock of Citizens Community Bancorp, Inc. will possess exclusive voting rights in Citizens Community Bancorp, Inc. The holder of shares of common stock will be entitled to one vote for each share held on all matters subject to stockholder vote and will not have any right to cumulate votes in the election of directors.

Liquidation Rights. In the event of any liquidation, dissolution, or winding-up of Citizens Community Bancorp, Inc., the holders of the common stock generally would be entitled to receive, after payment of all debts and liabilities of Citizens Community Bancorp, Inc. (including all debts and liabilities of Citizens Community Federal and distribution of the balance in the special liquidation account of Citizens Community Federal to eligible account holders and supplemental eligible account holders), all assets of Citizens Community Bancorp, Inc. available for distribution. If preferred stock is issued, the holders thereof may have a priority over the holders of the common stock in the event of liquidation or dissolution.

Preemptive Rights; Redemption . Because the holders of the common stock do not have any preemptive rights with respect to any shares that may be issued by Citizens Community Bancorp, Inc., the board of directors may sell shares of capital stock of Citizens Community Bancorp, Inc. without first offering these shares to existing stockholders. The common stock will not be subject to any redemption provisions.

Preferred Stock

We are authorized to issue up to 1,000,000 shares of serial preferred stock and to fix and state voting powers, designations, preferences, or other special rights of preferred stock and the qualifications, limitations and restrictions of those shares as the board of directors may determine in its discretion. Preferred stock may be issued in distinctly designated series, may be convertible into common stock and may rank prior to the common stock as to dividend rights, liquidation preferences, or both, and may have full or limited voting rights. The issuance of preferred stock could adversely affect the voting and other rights of holders of common stock.

The authorized but unissued shares of preferred stock and the authorized but unissued and unreserved shares of common stock will be available for issuance in future mergers or acquisitions, in future public offerings or private placements. Except as otherwise required to approve the transaction in which the additional authorized shares of preferred stock would be issued, no stockholder approval generally would be required for the issuance of these shares.

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TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for Citizens Community Bancorp, Inc. common stock will be Registrar and Transfer Co., 10 Commerce Drive, Cranford, New Jersey 07016, 1-(800) 368-5948. Registrar and Transfer Co. also is the transfer agent and registrar for CCB common stock.

LEGAL AND TAX OPINIONS

The legality of the issuance of the common stock being offered and certain matters relating to the Conversion and Stock Offering and federal and state taxation will be passed upon for us by Silver, Freedman & Taff, L.L.P., Washington, D.C. and Wipfli LLP, our independent auditors. Certain legal matters will be passed upon for Keefe, Bruyette & Woods, Inc. by Muldoon Murphy & Aguggia LLP, Washington, D.C.

EXPERTS

The consolidated financial statements of CCB at September 30, 2005 and for the two years ended September 30, 2005 have been included in this Prospectus in reliance upon the report of Wipfli LLP, our independent auditors, appearing elsewhere in this Prospectus, and upon the authority of said firm as experts in accounting and auditing.

RP Financial, LC. has consented to the publication in this document of a summary of its letter to Citizens Community Bancorp, Inc. setting forth its conclusion as to the estimated pro forma market value of the common stock and has also consented to the use of its name and statements with respect to it appearing in this document.

REGISTRATION REQUIREMENTS

Our common stock will be registered with the SEC pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We will be subject to the information, proxy solicitation, insider trading restrictions, tender offer rules, periodic reporting and other requirements of the SEC under the Exchange Act. We will not deregister the common stock under the Exchange Act for a period of at least three years following the Stock Offering.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

Citizens Community Bancorp, Inc. has filed with the SEC a registration statement on Form SB-2 under the Securities Act of 1933, as amended, with respect to the common stock offered in this document. As permitted by the rules and regulations of the SEC, this Prospectus does not contain all the information set forth in the registration statement. This information, including the Plan of Conversion and Reorganization and the appraisal report, which are exhibits to the registration statement, can be examined without charge at the public reference facilities of the SEC located at 100 F Street, N.E., Washington, D.C. 20549, and copies of the registration materials can be obtained from the SEC at prescribed rates. You may obtain information on the operation of the Public Reference Room by calling 1-800-SEC-0330. The SEC also maintains an Internet address ("web site") that contains reports, proxy and information statements and other information regarding registrants, including Citizens Community Bancorp, Inc. and CCB, that file electronically with the SEC. The address for this web site is " http://www.sec.gov ." The statements contained in this document as to the contents of any contract or other document filed as an exhibit to the Form SB-2 are, of necessity, brief descriptions, and each statement is qualified by reference to the complete contract or document.

Citizens Community MHC and Citizens Community Bancorp, Inc. have filed Applications with the OTS with respect to the Conversion and the Stock Offering, which include proxy materials for the special meeting of members of Citizens Community MHC and certain other information. This Prospectus omits certain information contained in those applications. The applications may be examined at the principal office of the Office of Thrift Supervision, 1700 G Street, N.W., Washington, D.C. 20552, and at the Midwest Regional Office of the Office of Thrift Supervision located at 122 W. John Carpenter Freeway, Suite 600, Irving, Texas 75039.

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In connection with the offering, Citizens Community Bancorp, Inc. has registered its common stock with the SEC under Section 12 of the Securities Exchange Act of 1934, and, upon such registration, Citizens Community Bancorp, Inc. and the holders of its stock will become subject to the proxy solicitation rules, reporting requirements and restrictions on stock purchases and sales by directors, officers and greater than 10% stockholders, the annual and periodic reporting and certain other requirements of the Securities Exchange Act of 1934. Under the Plan of Conversion and Reorganization, Citizens Community Bancorp, Inc. has undertaken that it will not terminate this registration for a period of at least three years following the Stock Offering.

A copy of the Plan of Conversion and Reorganization, the charter and bylaws of Citizens Community Bancorp, Inc. and Citizens Community Federal are available without charge from Citizens Community Federal. Requests for such information should be directed to: Stockholder Relations, Citizens Community Federal, 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

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CITIZENS COMMUNITY BANCORP AND SUBSIDIARY

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS






Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Income	F-4
Consolidated Statements of Changes in Stockholders’ Equity	F-5
Consolidated Statements of Cash Flows	F-6
Notes to Consolidated Financial Statements	F-8

Other schedules are omitted as they are not required or are not applicable or the required information is shown in the consolidated financial statements or related notes.

F-1

Report of Independent Registered Public Accounting Firm

Board of Directors

Citizens Community Bancorp

Eau Claire , Wisconsin

We have audited the accompanying consolidated balance sheets of Citizens Community Bancorp and Subsidiary as of September 30, 2005 and 2004, and the related consolidated statements of income, changes in stockholders’ equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Citizens Community Bancorp and Subsidiary as of September 30, 2005 and 2004, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States.

Wipfli LLP

May 5, 2006

Eau Claire, Wisconsin

F-2

Citizens Community Bancorp and Subsidiary

Consolidated Balance Sheets

March 31, 2006 and 2005 (unaudited) and September 30, 2005 and 2004

	March 31,			September 30,
Assets	2006			2005			2004
	(unaudited)

Cash and cash equivalents	$	4,296,325		$	9,265,477		$	4,768,007
Other interest-bearing deposits		1,152,900			1,444,233			0
Securities available-for-sale (at fair value)		1,839,081			2,088,349			0
Federal Home Loan Bank stock		1,826,480			2,094,900			827,700
Loans receivable - Net of allowance for loan losses of $807,766 in 2006 and $803,218 and $554,210 in 2005 and 2004, respectively		234,323,644			217,930,666			152,376,330
Office properties and equipment - Net		3,611,821			2,922,884			2,198,809
Accrued interest receivable - Loans		749,953			612,644			466,399
Intangible assets		1,980,170			2,130,949			348,486
Goodwill		5,465,619			5,465,619			0
Other assets		1,379,029			1,751,770			994,065

TOTAL ASSETS	$	256,625,022		$	245,707,491		$	161,979,796

Liabilities and Stockholders’ Equity

Deposits		188,298,100		$	177,469,100		$	127,976,262
Federal Home Loan Bank advances		36,200,000			36,200,000			13,500,000
Other liabilities		2,312,833			2,484,991			897,612

Total liabilities		226,810,933			216,154,091			142,373,874

Preferred stock - Par Value $.01:
Authorized - 1,000,000 shares
Issued and outstanding - 0 shares
Common stock - Par value $.01:
Authorized - 5,000,000 shares
Issued and outstanding - 3,747,319 in 2006 and 2005, and 3,041,750 shares in 2004		37,473			37,473			30,418
Additional paid-in capital		18,796,945			18,779,709			9,029,696
Retained earnings		12,690,688			12,536,512			11,678,548
Unearned ESOP shares		(953,820	)		(1,013,460	)		(1,132,740	)
Unearned compensation		(340,749	)		(389,169	)		0
Accumulated other comprehensive loss		(22,226	)		(3,654	)		0
Treasury stock, at cost - 22,691 and 26,251 shares in 2006 and 2005, respectively		(394,222	)		(394,011	)		0

Total stockholders’ equity		29,814,089			29,553,400			19,605,922

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	256,625,022		$	245,707,491		$	161,979,796

See accompanying notes to consolidated financial statements.

F-3

Citizens Community Bancorp and Subsidiary

Consolidated Statements of Income

Six Months Ended March 31, 2006 and 2005 (unaudited) and Years Ended September 30, 2005 and 2004

	Six Months Ended				Years Ended
	March 31,				September 30,
	2006		2005		2005		2004
	(unaudited)

Interest and dividend income:
Interest and fees on loans	$	7,304,728	$	5,353,499	$	11,708,703	$	9,544,179
Interest on investments		219,072		43,378		217,386		75,309

Total interest and dividend income		7,523,800		5,396,877		11,926,089		9,619,488

Interest expense:
Interest on deposits		2,367,794		1,455,950		3,263,059		2,804,710
Interest on FHLB advances		772,884		192,871		728,618		84,597

Total interest expense		3,140,678		1,648,821		3,991,677		2,889,307

Net interest income		4,383,122		3,748,056		7,934,412		6,730,181
Provision for loan losses		108,451		202,136		414,078		395,997

Net interest income after provision for loan losses		4,274,671		3,545,920		7,520,334		6,334,184

Noninterest income:
Service charges on deposit accounts		475,265		370,433		832,188		784,318
Insurance commissions		165,477		196,660		397,287		308,835
Loan fees and service charges		194,534		148,508		328,329		258,784
Net gain on securities		27,110		0
Other		7,805		392,899		463,045		16,720

Total noninterest income		870,191		1,108,500		2,020,849		1,368,657

Noninterest expense:
Salaries and related benefits		2,771,676		2,183,639		4,687,447		3,986,524
Occupancy - Net		468,290		349,893		752,336		629,849
Office		428,457		299,869		667,968		546,510
Data processing		207,133		154,528		329,761		301,503
Other		843,460		684,215		1,368,267		858,582

Total noninterest expense		4,719,016		3,672,144		7,805,779		6,322,968

Income before provision for income taxes		425,846		982,276		1,735,404		1,379,873
Provision for income taxes		176,252		398,286		684,334		543,328

Net income		249,594		583,990	$	1,051,070	$	836,545

Basic earnings per share	$	0.07	$	0.20	$	0.35	$	0.33

Diluted earnings per share	$	0.07	$	0.20	$	0.35	$	0.33

See accompanying notes to consolidated financial statements.

F-4

Citizens Community Bancorp and Subsidiary

Consolidated Statements of Changes in Stockholders' Equity

Six Months Ended March 31, 2006 and 2005 (unaudited) and Years Ended September 30, 2005 and 2004

																	Accumulated
					Additional						Unearned						Other
			Common		Paid-In			Retained			ESOP			Unearned			Comprehensive			Treasury
	Shares		Stock		Capital			Earnings			Shares			Compensation			Loss			Stock			Totals

Balance, September 30, 2003		0	$	0	$	0		$	10,990,935		$	0		$	0		$	0		$	0		$	10,990,935

Comprehensive income:
Net income									836,545															836,545
Sale of common stock - Unearned ESOP shares		978,650		9,787		9,038,403																		9,048,190
Common stock acquired by ESOP - 119,236 shares												(1,192,360	)											(1,192,360	)
Committed ESOP shares												59,620												59,620
Appreciation in fair value of ESOP shares
charged to expense						11,924																		11,924
Capitalization of CCMHC		2,063,100		20,631		(20,631	)		(100,000	)														(100,000	)
Cash dividends ($.05 per share)									(48,932	)														(48,932	)

Balance, September 30, 2004		3,041,750		30,418		9,029,696			11,678,548			(1,132,740	)		0			0			0			19,605,922

Comprehensive income:
Net income									1,051,070															1,051,070
Net unrealized loss on available-for-sale securities																		(3,654	)					(3,654	)

Total comprehensive income																								1,047,416

Common stock issued due to merger		705,569		7,055		9,758,975																		9,766,030
Common stock purchased - 59,637 shares																					(895,135	)		(895,135	)
Committed ESOP shares						43,120						119,280												162,400
Common stock awarded for Recognition and
Retention Plan - 33,386 shares						(52,082	)								(449,042	)					501,124			0
Amortization of restricted stock															59,873									59,873
Cash dividends ($.05 per share)									(193,106	)														(193,106	)

Balance, September 30, 2005		3,747,319	$	37,473	$	18,779,709		$	12,536,512			($1,013,460	)		($389,169	)		($3,654	)		($394,011	)	$	29,553,400

See accompanying notes to consolidated financial statements.

F-5

Citizens Community Bancorp and Subsidiary

Consolidated Statements of Changes in Stockholders' Equity (Continued)

Six Months Ended March 31, 2006 and 2005 (unaudited) and Years Ended September 30, 2005 and 2004

																	Accumulated
					Additional						Unearned						Other
			Common		Paid-In			Retained			ESOP			Unearned			Comprehensive			Treasury
	Shares		Stock		Capital			Earnings			Shares			Compensation			Loss			Stock			Totals

Balance, September 30, 2004		3,041,750	$	30,418	$	9,029,696		$	11,678,549			($1,132,740	)	$	0		$	0		$	0		$	19,605,923

Comprehensive income:
Net income									583,990															583,990
Net unrealized loss on available-for-sale securities																		0						0

Total comprehensive income																								583,990

Common stock purchase - 59,618 shares																					(894,866	)		(894,866	)
Committed ESOP shares						25,327						59,640												84,967
Common stock awarded for Recognition and Retention Plan - 33,386 shares						(52,082	)								(449,042	)					501,124			0
Amortization of restricted stock															14,968									14,968
Cash dividends ($.10 per share)									(97,866	)														(97,866	)

Balance, March 31, 2005		3,041,750		30,418		9,002,941			12,164,673			(1,073,100	)		(434,074	)		0			(393,742	)		19,297,116

Balance, September 30, 2005		3,747,319		37,473		18,779,709			12,536,512			(1,013,460	)		(389,169	)		(3,654	)		(394,011	)		29,553,400

Comprehensive income:
Net income									249,594															249,594
Net unrealized loss on available-for-sale securities																		(18,572	)					(18,572	)

Total comprehensive income																								231,022

Committed ESOP shares												59,640												59,640
Appreciation in fair value shares charged to expense						17,236																		17,236
Common stock purchased - 16 shares																					(211	)		(211	)
Amortization of restricted stock															48,420									48,420
Cash dividends ($.10 per share)									(95,418	)														(95,418	)

Balance, March 31, 2006		3,747,319		37,473		18,796,945			12,690,688			(953,820	)		(340,749	)		(22,226	)		(394,222	)	$	29,814,089

See accompanying notes to consolidated financial statements.

F-6

Citizens Community Bancorp and Subsidiary

Consolidated Statements of Cash Flows

Six Months Ended March 31, 2006 and 2005 (unaudited) and Years Ended September 30, 2005 and 2004

	Six Months Ended						Years Ended
	March 31,						September 30,
	2006			2005			2005			2004
	(unaudited)

Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Net income	$	249,594		$	583,990		$	1,051,070		$	836,545

Adjustments to reconcile net income to net cash provided by operating activities:
Provision for depreciation		181,276			123,051			278,032			256,162
Provision for loan losses		108,451			202,136			414,078			395,997
Amortization of purchase accounting adjustments		(38,454	)		0			19,277			0
Amortization of core deposit intangible		150,779			12,765			94,537			24,330
Amortization of restricted stock		48,421			14,968			59,873			0
Provision (benefit) for deferred income taxes		14,000			(11,000	)		104,000			(124,000	)
Federal Home Loan Bank stock dividends		(16,480	)		(23,900	)		(53,600	)		(44,700	)
ESOP contribution expense in excess of shares released		17,236			25,327			43,120			11,924
(Increase) decrease in accrued interest receivable and other assets		273,886			(299,979	)		(622,922	)		(286,784	)
Increase (decrease) in other liabilities		(186,158	)		302,105			360,967			128,022

Total adjustments		552,957			345,473			697,362			360,951

Net cash provided by operating activities		802,551			929,463			1,748,432			1,197,496

Cash flows from investing activities:
Proceeds from maturities of other interest-bearing deposits		291,333			0			363,112			0
Sale (purchase) of Federal Home Loan Bank stock		284,900			(348,400	)		(928,700	)		(112,000	)
Proceeds from sale of securities available for sale		230,696			0			0			0
Net increase in loans		(16,501,429	)		(17,533,499	)		(39,270,812	)		(28,959,211	)
Capital expenditures		(870,213	)		(142,474	)		(235,216	)		(87,885	)
Cash received for branch acquisition		0			0			13,172,051			6,970,198

Net cash used in investing activities		(16,564,713	)		(18,024,373	)		(26,899,565	)		(22,188,898	)

F-7

Citizens Community Bancorp and Subsidiary

Consolidated Statements of Cash Flows (Continued)

Six Months Ended March 31, 2006 and 2005 (unaudited) and Years Ended September 30, 2005 and 2004

	Six Months Ended						Years Ended
	March 31,						September 30,
	2006			2005			2005			2004
	(unaudited)

Cash from financing activities:
Increase in borrowings	$	0		$	10,500,000		$	22,700,000		$	9,800,000
Increase in deposits		10,829,000			5,648,288			7,917,564			5,118,868
Payments to acquire treasury stock		(211	)		(894,866	)		(895,135	)		0
Proceeds from sale of common stock		0			0			0			9,048,189
Formation of CCMHC		0			0			0			(100,000	)
Loan to ESOP for purchase of common stock		0			0			0			(1,192,360	)
Reduction in unallocated shares held by ESOP		59,640			59,640			119,280			59,620
Cash dividends paid		(95,418	)		(97,866	)		(193,106	)		(48,932	)

Net cash provided by financing activities		10,793,011			15,215,196			29,648,603			22,685,385

Net increase (decrease) in cash and cash equivalents		(4,969,151	)		(1,879,714	)		4,497,470			1,693,983
Cash and cash equivalents at beginning		9,265,477			4,768,077			4,768,007			3,074,024

Cash and cash equivalents at end		4,296,326			2,888,363		$	9,265,477		$	4,768,007

Supplemental cash flow information:
Cash paid during the year for:
Interest	$	3,189,116		$	1,651,389		$	3,845,432		$	2,982,359
Income taxes		334,140			248,710			728,000			686,406

Supplemental schedule of noncash investing and financing activities:

The fair values of noncash assets acquired and liabilities assumed in the merger with Community Plus Savings Bank were $52,328,000 and $42,570,000, respectively. Approximately 706,000 shares of common stock, valued at $9,250,000, were issued in connection with this merger. Note 2 provides additional detail related to this transaction.

In November 2003, the Company purchased certain assets and assumed the deposits of the Mankato branch of Alliance Bank. In conjunction with the acquisition, the Company received $6,970,198 and the following assets and liabilities:

Loans	$	705,751
Other assets		241,756

Assets acquired	$	947,507

Deposits assumed	$	7,894,530
Other liabilities		23,175

Liabilities assumed	$	7,917,705

F-8

Citizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies

Nature of Operations

Citizens Community Bancorp (the “Company”) is a federally chartered holding company formed on March 29, 2004, for the purpose of acquiring all of the common stock of Citizens Community Federal (the “Bank”) concurrent with its reorganization and stock issuance plan. The reorganization was consummated on March 29, 2004. In connection with the reorganization, the Company sold 978,650 shares of its common stock, par value $0.01 per share, in a subscription offering, and issued 2,063,100 shares to Citizens Community MHC (CCMHC), raising approximately $8.9 million, net of costs. The Company is a majority-owned subsidiary of CCMHC, a federally chartered mutual holding company.

The Bank is a federally chartered stock savings bank. It operates its business from several banking offices located in Wisconsin, Minnesota, and Michigan. The Bank is engaged in the business of attracting deposits from the general public and investing those deposits in residential and consumer loans.

Principles of Consolidation

The consolidated financial statements include the accounts of Citizens Community Bancorp and its wholly owned subsidiary, Citizens Community Federal. All significant intercompany balances and transactions have been eliminated. The accounting and reporting policies of the Company conform to generally accepted accounting principles (GAAP) and to the practices within the banking industry.

Use of Estimates in Preparation of Financial Statements

The preparation of the accompanying consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash due from banks and interest-bearing deposits with original maturities of three months or less.

Other Interest-Bearing Deposits

Other interest-bearing deposits mature within three years and are carried at cost, which approximates fair value.

F-9

Citizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Securities

Securities are classified as available for sale and are carried at fair value, with unrealized gains and losses reported in other comprehensive income. Amortization of premiums and accretion of discounts are recognized in interest income using the interest method over the estimated lives of the securities.

Declines in fair value of securities that are deemed to be other than temporary, if applicable, are reflected in earnings as realized losses. In estimating other-than-temporary impairment losses, management considers the length of time and the extent to which fair value has been less than cost; the financial condition and near-term prospects of the issuer; and the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method.

Federal Home Loan Bank Stock

The Bank owns stock in the Federal Home Loan Bank (FHLB). FHLB stock is carried at cost which approximates fair value. The Bank is required to hold the stock as a member of the FHLB system, and transfer of the stock is substantially restricted. The stock is pledged as collateral for outstanding FHLB advances.

Interest and Fees on Loans

Interest on loans is credited to income over the contractual life of the loans based on the principal amount outstanding using the interest method. Accrual of interest is discontinued when a loan becomes over 90 days delinquent. Uncollectible interest previously accrued is charged off or an allowance is established by means of a charge to interest income. Income is subsequently recognized only to the extent cash payments are received until all past due interest and principal have been collected, in which case the loan is returned to accrual status. Interest income recognition on loans considered to be impaired under current accounting standards is consistent with recognition on all other loans.

Loan origination fees are credited to income when received, as capitalization and amortization of the fees and related costs would not have a material effect on the overall consolidated financial statements. Premiums paid for origination of loans by dealers and merchants are deferred and recognized as an adjustment to interest income using the interest method over the contractual life of the loans.

F-10

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses charged to expense. Loan losses are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely. Subsequent recoveries, if any, are credited to the allowance.

The Bank considers loans secured by real estate and all consumer loans to be large groups of smaller-balance homogeneous loans. Each portfolio of smaller-balance, homogeneous loans is collectively evaluated for impairment. The allowance for credit losses attributed to these loans is established via a process that estimates the probable losses inherent in the portfolio, based on various analyses. These include historical delinquency and credit loss experience and the current aging of the portfolio, together with analyses that reflect current trends and conditions. Management also considers overall portfolio indicators including historical credit losses, delinquent, nonperforming and classified loans, and trends in volumes and terms of loans; an evaluation of overall credit quality and the credit process, including lending policies and procedures; and economic, geographical, and other environmental factors and regulatory guidance.

In management’s judgment, the allowance for loan losses is maintained at a level that represents its best estimate of probable losses relating to specifically identified loans, as well as probable losses inherent in the balance of the loan portfolio. While management uses the best information available to make its evaluation, future adjustments to the allowance may be necessary if there are significant changes in economic conditions.

Foreclosed Properties

Assets acquired by foreclosure or in lieu of foreclosure are held for sale and are initially recorded at fair value less estimated costs to sell. Costs relating to the development and improvement of property are capitalized; holding costs are charged to expense.

After foreclosure, valuations are periodically performed by management and a charge to income is recorded if the carrying value of a property exceeds its fair value less estimated selling costs. Revenue and expenses from operations and changes in any valuation allowance are included in loss on foreclosed real estate.

Office Properties and Equipment

Office properties and equipment are stated at cost. Maintenance and repair costs are charged to expense as incurred. Gains or losses on disposition of office properties and equipment are reflected in income. Depreciation is computed principally on the straight-line method and is based on the estimated useful lives of the assets, varying from 10 to 40 years for buildings and 3 to 10 years for equipment.

F-11

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Intangible Assets and Goodwill

Intangible assets attributable to the value of core deposits acquired and the excess of purchase price over fair value of assets acquired (goodwill) are stated at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over periods of seven to fifteen years. Goodwill is not amortized.

The Company reviews intangible assets for impairment at least annually and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The evaluation includes assessing the estimated fair value of the intangible asset based on market prices for similar assets, where available, and the present value of the estimated future cash flows associated with the intangible asset. Adjustments are recorded if it is determined that the benefit of the intangible asset has decreased.

Income Taxes

Deferred income taxes have been provided under the liability method. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement and tax bases of assets and liabilities as measured by the current enacted tax rates which will be in effect when these differences are expected to reverse. Provision (credit) for deferred taxes is the result of changes in the deferred tax assets and liabilities.

Advertising Costs

Advertising costs are expensed as incurred.

Earnings Per Share

Basic earnings per share (EPS) is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. The weighted average number of shares outstanding was 3,628,263 and 3,007,681 for basic EPS and 3,630,118 and 3,009,002 for diluted EPS for the six months ended March 31, 2006 (unaudited) and year ended September 30, 2005.

The formation of the Company was completed on March 29, 2004. The basic and diluted EPS shown in the financial statements are presented on a pro forma basis as if the formation was completed on October 1, 2003. The pro forma weighted average number of shares outstanding in 2004 was 2,552,425 for basic and diluted EPS.

F-12

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Future Accounting Changes

In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS No. 123R, Share-Based Payment , which replaces SFAS No. 123, Accounting for Stock-Based Compensation , and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees . SFAS No. 123R requires that the cost of share-based payment transactions (including those with employees and nonemployees) be recognized in the financial statements. SFAS No. 123R applies to all share-based payment transactions in which an entity acquires goods or services by issuing (or offering to issue) its shares, share options, or other equity instruments (except for those held by an ESOP) or by incurring liabilities (1) in amounts based (even in part) on the price of the entity’s shares or other equity instruments, or (2) that require (or may require) settlement by the issuance of an entity’s shares or other equity instruments.

The Company plans to adopt SFAS No. 123R, as required, on October 1, 2006. While the Company is still in the process of evaluating the effect of the FASB statement on the financial statements, Note 1 does disclose the effect on earnings had SFAS No. 123R been adopted in prior periods. Since the statement will be adopted using the modified- prospective method, the effect the adoption will have on the financial statements can be materially impacted by the number of options granted in future periods.

Stock-Based Compensation

Generally accepted accounting principles encourage all entities to adopt a fair-value- based method of accounting for employee stock compensation plans, whereby compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. At March 31, 2006 and September 30, 2005, the rules also allow an entity to continue to measure compensation cost for those plans using the intrinsic-value-based method of accounting, whereby compensation cost is the excess, if any, of the quoted market price of the stock at the grant date over the amount an employee must pay to acquire the stock. However, effective during the quarter ending December 31, 2006, this treatment will change to require all stock-based compensation to be reflected as income (refer to “Future Accounting Changes”).

Citizens Community Bancorp follows the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees , and uses the “intrinsic value method” of recording stock-based compensation cost. Because stock options are granted with an exercise price equal to fair value at the date of grant, no compensation expense is recorded.

F-13

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Stock-Based Compensation (Continued)

The following table illustrates the effect of net income and earnings per share if the fair-value-based method had been applied to all outstanding and unvested awards in each period:

	March 31,				September 30,
	2006		2005		2005		2004
	(unaudited)
Net income, as reported	$	249,594	$	583,990	$	1,051,070	$	836,545
Deduct:
Total stock-based employee compensation expense
determined under the fair-value-based method for all
awards, net of related tax effects		33,432		0		44,576		0

Pro forma net income	$	216,162	$	583,990	$	1,006,494	$	836,545

Earnings per share - Basic and diluted
As reported:
Basic	$	0.07	$	0.20	$	0.35	$	0.33
Diluted	$	0.07	$	0.20	$	0.35	$	0.33

Pro forma:
Basic	$	0.06	$	0.20	$	0.33	$	0.33
Diluted	$	0.06	$	0.20	$	0.33	$	0.33

The fair value of stock options granted in 2005 was estimated at the date of grant using the Black-Scholes methodology. No options were granted in 2004. The following assumptions were made in estimating the fair value for options granted for the six months ended March 31, 2006 (unaudited) and the year ended September 30, 2005:

Dividend yield	1.49	%
Risk-free interest rate	4.16	%
Weighted average expected life (years)	10
Expected volatility	16.08	%

The weighted average fair value of options at their grant date, using the assumptions shown above, was computed at $3.66 per share for options granted for the six months ended March 31, 2006 (unaudited) and year ended September 30, 2005, respectively.

Off-Balance-Sheet Financial Instruments

In the ordinary course of business, the Bank has entered into off-balance-sheet financial instruments consisting of commitments to extend credit and commitments under credit card arrangements. Such financial instruments are recorded in the financial statements when they become payable.

F-14

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 1 Summary of Significant Accounting Policies (Continued)

Other Comprehensive Income

The Company’ accumulated other comprehensive income (loss) is comprised of the unrealized gain or loss on securities available for sale, net of tax.

Segment Information

The Company, through a branch network of its banking subsidiary, provides a full range of banking services in northern Wisconsin, Minnesota, and Michigan.

While the Company’s chief decision makers monitor the revenue streams of various Company products and services, operations are managed and financial performance is evaluated on a companywide basis. Accordingly, all of the Company’s banking operations are considered by management to be aggregated in one reportable operating segment.

Unaudited Periods

Balances as of March 31, 2006 and for the six months ended March 31, 2006 and 2005 have not been audited. In the opinion of management, all adjustments consisting of normal recurring adjustments that are necessary for a fair presentation of the unaudited periods have been reflected.

Note 2 Merger

On July 1, 2005, the acquisition of Community Plus Savings Bank (CPSB) by the Company in a tax-free merger of CPSB with and into the Bank (the Merger) was completed. In accordance with the agreement, the Company issued 705,569 additional shares to CCMHC as determined under the agreement. The primary objectives of the Merger were to provide additional liquidity and geographic growth opportunities for the Company.

The merger was accounted for using the purchase method of accounting. Accordingly, the results of operations of CPSB since the date of acquisition are included in the consolidated financial statements.

The purchase price to complete the merger was $9.76 million. In conjunction with the Merger, net cash of $13,172,051 was received. The purchase price of the Merger has been allocated to the assets acquired and liabilities assumed, using their fair values at the merger date.

Goodwill and other purchase accounting adjustments were recorded upon the consummation of the purchase acquisition where the purchase price exceeded the fair value of net assets acquired. The Bank recorded a core deposit intangible of $1,877,000, which is being amortized as indicated in Note 8. In addition, approximately $516,000 of expenses associated with the acquisition were capitalized. The computation of the purchase price and the allocation of the purchase price to the net assets of CPSB - based on their fair values as of July 1, 2005 - and the resulting goodwill follow.

F-15

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 2 Merger (Continued)

(In thousands, except per share amounts)	July 1, 2005

Purchase price
Company common stock issued		705,569
Average price per Company common share ¹	$	13.11

	$	9,250
Merger costs capitalized		516

Total purchase price	$	9,766

Net assets acquired:
CPSB stockholders’ equity	$	4,144

Adjustments to reflect assets acquired at fair value:
Investment securities		(11	)
Loans receivable		(456	)
Office properties and equipment		(82	)
Core deposit intangible		1,877
Other assets		(420	)

Adjustments to reflect liabilities assumed at fair value:
Deposits		(50	)
Deferred income taxes		(405	)
Pension liability		(220	)
Other liabilities		(77	)

Net assets acquired at fair market value		4,300

Goodwill resulting from Merger	$	5 ,466

¹ The value of the Company's common stock issued to CCMHC was based on the average closing bid price of the Company's common stock for the 20th

through the 5th trading days prior to the July 1, 2005, closing date.

F-16

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 2 Merger (Continued)

Unaudited pro forma condensed combined financial information

The following unaudited pro forma condensed combined financial information presents the results of operations of CPSB had the Merger taken place at the beginning of each period.

(In thousands, except per share amounts)	2005		2004

Net interest income	$	9,028	$	8,563
Noninterest income		2,173		1,406
Provision for loan losses		427		409
Other noninterest expense		9,260		8,132
Income before income taxes		1,514		1,428
Net income		920		870

Basic and diluted earnings per share	$	0.28		N/A

Note 3 Cash and Cash Equivalents

In the normal course of business, the Bank maintains cash and due from bank balances with correspondent banks which routinely exceed insured amounts. Accounts at each institution are insured by the Federal Deposit Insurance Corporation up to $100,000. The Bank monitors the financial condition of correspondent banks and believes credit risk is minimal.

Note 4 Securities

The amortized cost and fair value of securities, with gross unrealized gains and losses, follows:

	March 31, 2006 (unaudited)
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value

Securities Available for Sale

Debt securities:
Corporate securities	$	1,000,000	$	0	$	8,835	$	991,165
Mortgage-related securities		870,849		0		22,933		847,916

Total securities available for sale	$	1,870,849	$	0	$	31,768	$	1,839,081

F-17

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 4 Securities (Continued)

	September 30, 2005
			Gross		Gross
	Amortized		Unrealized		Unrealized		Estimated
	Cost		Gains		Losses		Fair Value

Securities Available for Sale

Debt securities:
Corporate securities	$	1,000,000	$	0	$	18,740	$	981,260
Mortgage-related securities		952,254		246		6,147		946,353
Mutual funds		141,518		19,218		0		160,736

Total securities available for sale	$	2,093,772	$	19,464	$	24,887	$	2,088,349

The following table shows the fair value and gross unrealized losses of securities with unrealized losses aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position:

	March 31, 2006
	(unaudited)
	Less than 12 Months				12 Months or More				Total
Description	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
of Securities	Value		Losses		Value		Losses		Value		Losses

Corporate securities	$	991,165	$	8,835	$	0	$	0	$	991,165	$	8,835
Mortgage-related securities		847,916		22,933		0		0		847,916		22,933

Total temporarily impaired
securities	$	1,839,081	$	31,768	$	0	$	0	$	1,839,081	$	31,768

	September 30, 2005
	Less than 12 Months				12 Months or More				Total
Description	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
of Securities	Value		Losses		Value		Losses		Value		Losses

Corporate securities	$	981,260	$	18,740	$	0	$	0	$	981,260	$	18,740
Mortgage-related securities		608,160		6,147		0		0		608,160		6,147

Total temporarily impaired
securities	$	1,589,420	$	24,887	$	0	$	0	$	1,589,420	$	24,887

F-18

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 4 Securities (Continued)

At March 31, 2006 (unaudited), five securities have unrealized losses with aggregate depreciation of 1.7% from the Company’s amortized cost basis. At September 30, 2005, four securities have unrealized losses with aggregate depreciation of 1.6% from the Company’s amortized cost basis. The unrealized losses relate principally to the increase in interest rates and are not due to changes in the financial condition of the issuer. When analyzing an issuer’s financial condition, management considers whether the securities are issued by a government body or agency, whether a rating agency has downgraded the securities, and industry analysts’ reports. Since management has the ability to hold securities until the foreseeable future for securities available for sale, no declines are deemed to be other than temporary.

The following is a summary of amortized cost and estimated fair value of debt securities by contractual maturity. Contractual maturities will differ from expected maturities for mortgage-related securities because borrowers may have the right to call or prepay obligations without penalties:

	Available for Sale
	Amortized		Estimated
	Cost		Fair Value

March 31, 2006 (unaudited)
Due in one year or less	$	1,000,000	$	991,165
Mortgage-related securities		870,849		847,916

Total	$	1,870,849	$	1,839,081

September 31, 2005
Due in one year or less	$	1,000,000	$	981,260
Mortgage-related securities		952,254		946,353
Mutual funds		141,518		160,736

Total	$	2,093,772	$	2,088,349

F-19

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 5 Loans

The composition of loans were as follows:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Real estate loans:
First mortgages — 1- to 4-family	$	146,075,634	$	136,646,768	$	89,841,081
Multifamily and commercial		270,007		274,450		320,616
Second mortgages		7,960,733		7,629,782		5,398,362

Total real estate loans		154,306,374		144,551,000		95,560,059

Consumer loans:
Automobile		25,223,228		25,979,550		25,808,371
Secured personal		51,161,685		43,459,864		27,607,256
Unsecured personal		4,440,123		4,743,470		3,954,854

Total consumer loans		80,825,036		74,182,884		57,370,481

Gross loans		235,131,410		218,733,884		152,930,540
Less - Allowance for loan losses		807,766		803,218		554,210

Loans receivable, net	$	234,323,644	$	217,930,666	$	152,376,330

The aggregate amount of nonperforming loans was $1,063,000, $669,220, and $697,072 at March 31, 2006 (unaudited) and at September 30, 2005 and 2004, respectively. Nonperforming loans are those which are contractually past due more than 90 days as to interest or principal payments, on a nonaccrual of interest status, or loans the terms of which have been renegotiated to provide a reduction or deferral of interest or principal. If interest on those loans had been accrued, such income would have been $55,182, $36,276, and $37,608 for the six months ended March 31, 2006 and for the years ended September 30, 2005 and 2004, respectively. No loans were considered impaired.

Directors, officers, principal stockholders, and employees of the Company, including their families and firms in which they are principal owners, are considered to be related parties. Substantially all loans to directors and executive officers were made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with others and, in the opinion of management, did not involve more than the normal risk of collectibility or present other unfavorable features.

Company directors, executive officers, principal stockholders and their affiliates had aggregate borrowings (direct and indirect) from the Bank totaling approximately $58,381, $61,998, and $79,500 at March 31, 2006 (unaudited), September 30, 2005, and 2004, respectively.

F-20

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 5 Loans (Continued)

An analysis of the activity in the allowance for loan losses follows:

	March 31,			September 30,
	2006			2005			2004
	(unaudited)

Balance at beginning	$	803,218		$	554,210		$	466,527
Provisions charged to operating expense		108,451			414,078			395,997
Allowance for loan losses obtained through bank merger		0			39,825			0
Loans charged off		(109,554	)		(236,059	)		(341,437	)
Recoveries on loans		5,651			31,164			33,123

Balance at end	$	807,766		$	803,218		$	554,210

Note 6 Office Properties and Equipment

Office properties and equipment consists of the following:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Land	$	612,727	$	612,727	$	467,727
Buildings		2,444,248		2,485,033		1,873,663
Furniture, equipment, and vehicles		3,510,660		2,548,747		1,878,932

Subtotals		6,567,635		5,646,507		4,220,322
Less - Accumulated depreciation		2,955,814		2,723,623		2,021,513

Office properties and equipment - Net	$	3,611,821	$	2,922,884	$	2,198,809

Depreciation charged to operating expense totaled $181,276, $278,032, and $256,162 for the six months ended March 31, 2006 (unaudited) and the years ended September 30, 2005 and 2004, respectively.

F-21

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 7 Intangible Assets

The carrying amounts of the core deposit intangible are as follows:

	March 31,			September 30,
	2006			2005			2004
	(unaudited)

Balance at beginning	$	2,130,949		$	348,486		$	155,687
Capitalized		0			1,877,000			217,129
Amortization		(150,779	)		(94,537	)		(24,330	)

Balance at end	$	1,980,170		$	2,130,949		$	348,486

Note 8 Goodwill

Goodwill acquired through acquisition was approximately $5,466,000 as of March 31, 2006 (unaudited) and September 30, 2005. The Company tested for impairment during the fourth quarter of fiscal year 2005 and determined there was no impairment of goodwill during 2005.

Note 9 Deposits

The composition of deposits are as follows:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Non-interest-bearing demand deposits	$	15,026,693	$	14,413,347	$	4,460,849
Interest-bearing demand deposits		5,170,866		4,901,837		6,985,799
Savings accounts		26,676,796		27,192,518		15,420,505
Money market accounts		27,512,531		30,323,395		23,628,315
Certificate accounts		113,911,214		100,638,003		77,480,794

Total deposits	$	188,298,100	$	177,469,100	$	127,976,262

F-22

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 9 Deposits (Continued)

Interest expense on deposits was as follows:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Interest-bearing demand deposits	$	14,077	$	29,686	$	31,392
Savings accounts		72,794		146,951		114,972
Money market accounts		263,053		433,141		388,939
Certificate accounts		2,017,870		2,653,281		2,269,407

Totals	$	2,367,794	$	3,263,059	$	2,804,710

The aggregate amount of time deposit accounts with individual balances greater than $100,000 was $23,582,000, $21,408,696 and $16,546,579 at March 31, 2006 (unaudited), and September 30, 2005 and 2004, respectively.

The scheduled maturities of certificate accounts are as follows:

	March 31, 2006
	(unaudited)

2007	$	61,025,835
2008		39,783,657
2009		4,202,576
2010		8,875,578
After 2010		23,568

Total	$	113,911,214

		September 30,
		2005

2006	$	60,355,259
2007		26,172,661
2008		4,748,395
2009		9,144,743
After 2009		216,945

Total	$	100,638,003

F-23

Note 10 Federal Home Loan Bank Advances

At March 31, 2006 (unaudited) and September 30, 2005, and 2004, respectively, the Company had $36,200,000, $36,200,000, and $13,500,000 in Federal Home Loan Bank variable interest rate daily advances, at 5.11% at March 31, 2006 (unaudited) and 4.09% at September 30, 2005. These advances are secured by a blanket lien consisting principally of 1- to 4-family real estate loans totaling in excess of $108,000,000. At March 31, 2006 (unaudited) and September 30, 2005, the unused portion of this open line of credit totaled approximately $72,152,000 and $46,995,000, respectively. Interest expense was $772,784, $728,618, and $84,597 for the six months ended March 31, 2006 (unaudited) and the years ended September 30, 2005 and 2004, respectively.

The Company owns stock in the Federal Home Loan Bank totaling $1,826,480, $2,094,900, and $827,700 at March 31, 2006 (unaudited) and September 30, 2005 and 2004, respectively. The stock is recorded at cost, which approximates fair value. The Company is required to hold the stock as a member of the Federal Home Loan Bank system, and transfer of the stock is substantially restricted.

As a result of the Community Plus merger, the Company has requested a redemption of stock of the Federal Home Loan Bank in Indianapolis totaling $284,900. Under the terms of the redemption agreement, the redemption may not occur until 2010 on this stock investment.

Note 11 Income Taxes

The components of the provision for income taxes are as follows:

	Six Months Ended						Years Ended
	March 31,						September 30,
	2006			2005			2005		2004
	(unaudited)

Current tax expense:
Federal	$	156,788		$	347,974		$	491,637	$	525,604
State		5,464			61,312			88,697		141,724

Total current tax expense		162,252			409,286			580,334		667,328

Deferred tax expense (benefit):
Federal		(12,000	)		(14,000	)		98,400		(99,200	)
State		26,000			3,000			5,600		(24,800	)

Total deferred tax expense (benefit)		14,000			(11,000	)		104,000		(124,000	)

Total provision for income taxes	$	176,252		$	398,286		$	684,334	$	543,328

F-24

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 11 Income Taxes (Continued)

Deferred income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company’s assets and liabilities, net of a valuation allowance for deferred tax assets not likely to be realized. The major components of net deferred tax asset (liability) are as follows:

	March 31,			September 30,
	2006			2005			2004
	(unaudited)

Deferred tax assets:
Mutual savings bank conversion costs	$	34,400		$	48,600		$	44,000
Director/officer compensation plans		536,800			568,800			274,000
Net ESOP plan		0			0			8,500
Net asset fair value adjustments		172,900			175,400			0

Deferred tax assets		744,100			792,800			326,500

Deferred tax liabilities:
Office properties and equipment		(57,800	)		(63,200	)		(42,705	)
Allowance for loan losses		(47,100	)		(23,300	)		(94,000	)
Federal Home Loan Bank stock		(73,600	)		(73,900	)		(43,200	)
Prepaids		(33,600	)		(40,100	)		0
Core deposit - Intangible		(657,500	)		(714,200	)		0
Other		0			(2,100	)		0

Deferred tax liabilities		(869,600	)		(916,800	)		(179,905	)

Net deferred tax asset (liability)		($125,500	)		($124,000	)	$	146,595

A summary of the source of differences between income taxes at the federal statutory rate and the provisions for income taxes follows:

	Six Months Ended March 31,
	2006				2005
	(unaudited)
			Percent of				Percent of
			Pretax				Pretax
	Amount		Income		Amount		Income

Tax expense at statutory rate	$	144,788		34.0	$	333,974		34.0
Increase in taxes resulting from:
State income tax		31,464		7.4		64,312		6.5

Provision for income taxes	$	176,252		41.4	$	398,286		40.5

F-25

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 11 Income Taxes (Continued)

	Years Ended September 30,
	2005				2004
			Percent of				Percent of
			Pretax				Pretax
	Amount		Income		Amount		Income

Tax expense at statutory rate	$	590,037		34.0	$	469,157		34.0
Increase in taxes resulting from:
State income tax		94,297		5.4		74,171		5.5

Provision for income taxes	$	684,334		39.4	$	543,328		39.5

Note 12 Retirement Plans

401(k) Plan

The Company sponsors a 401(k) profit sharing plan that covers substantially all employees. Employees may make pretax voluntary contributions to the plan which are matched in part by the Company. Employer matching contributions to the plan were $44,635, $73,576, and $58,036 for the six months ended March 31, 2006 (unaudited), and the years ended September 30, 2005 and 2004, respectively.

Supplemental Executive and Director Retirement Plan

On August 1, 2002, the Company adopted a Supplemental Executive and Directors’ Retirement Plan (SERP). The SERP is an unfunded, noncontributory plan under which the Company will pay supplemental pension benefits to certain key employees and directors upon retirement. Benefits are based on a formula which includes participants’ past and future earnings and years of service with the Company. Prior service costs associated with plan adoption are amortized to expense over the remaining working life of each participant.

Actuarial assumptions include assumed discount rates of 5.25% and 6% at September 30, 2005 and 2004, respectively, on benefit obligations and annual salary increases of 5%.

The accumulated benefit obligation was $2,171,454 and $1,734,481 and the accrued benefit cost was $1,219,267 and $685,883 at September 30, 2005 and 2004, respectively. The accrued benefit cost is included in the balance sheet caption “Other Liabilities.”

The accumulated benefit obligation and the accrued benefit cost as of March 31, 2006 have not been actuarially calculated. The accrued benefit cost of $1,415,893 at March 31, 2006 is included in the balance sheet caption “Other Liabilities”.

F-26

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 12 Retirement Plans (Continued)

The components of net periodic benefit cost are as follows:

	2005		2004


Beginning SERP accrued benefit cost	$	685,883	$	414,066

Service cost		64,007		56,569
Interest cost		110,288		95,235
Amortization of prior service cost		135,012		120,013
Unrecognized net loss		4,077		0

Net periodic benefit cost		313,384		271,817
Additional costs associated with merger		220,000		0

Ending SERP accrued benefit cost	$	1,219,267	$	685,883

Employee Stock Ownership Plan

The Board of Directors approved an Employee Stock Ownership Plan (ESOP) that became effective March 29, 2004. The Plan is designed to provide eligible employees the advantage of ownership of Company stock. Employees are eligible to participate in the Plan after reaching age twenty-one, completing one year of service, and working at least one thousand hours of consecutive service during the year. Contributions are allocated to eligible participants on the basis of compensation.

The ESOP borrowed $1,192,360 from the Company to finance the purchase of 119,236 shares in connection with the initial public offering. The loan is payable in annual installments over ten years at an annual interest rate equal to 5%. The loan can be prepaid without penalty. Loan payments are principally funded by cash contributions from the Company, subject to federal tax law limits.

Shares used as collateral to secure the loan are released and available for allocation to eligible employees as the principal and interest on the loan is paid. Employees become fully vested in their ESOP account after five years of service. Dividends on unallocated shares are generally applied toward payment of the loan. ESOP shares committed to be released are considered outstanding in determining earnings per share.

Contribution expense to the ESOP is based on the fair value (average stock price) of the shares scheduled to be released and totaled $76,876 and $162,400 for the six months ended March 31, 2006 (unaudited) and the year ended September 30, 2005, respectively. One-tenth of the shares are scheduled to be released each year. The cost of all unallocated shares held by the ESOP has been reflected in the consolidated balance sheets as a contra equity amount.

F-27

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 12 Retirement Plans (Continued)

The ESOP shares were as follows:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Allocated		20,866		5,962		0
Committed to be released		11,924		11,928		5,962
Unallocated		86,446		101,346		113,274

Total shares held by ESOP		119,236		119,236		119,236

Note 13 Leases

The Bank leases its administrative and data processing center located in Eau Claire, Wisconsin. The lease, which is for three years expiring in 2009, is classified as an operating lease. Monthly rent is $8,464; $8,962; and $9,294 in 2006, 2007, and 2008 through the termination date. The monthly rent includes utilities and property taxes. The Bank has one three-year renewal option on the lease. The Mondovi, Wisconsin branch, the Eau Claire training center, and the Rochester Hills, Michigan administrative offices are also rented under operating leases expiring in 2006. The Rice Lake, Wisconsin office is rented under an operating lease expiring in 2007. The Oakdale, Minnesota; Mankato, Minnesota; and Lake Orion, Michigan branches are rented under operating leases expiring in 2009, 2010, and 2012, respectively.

The rental expense for all operating leases was $155,232, $248,056, and $197,477 for the six months ended March 31, 2006 (unaudited) and the years ended September 30, 2005 and 2004, respectively.

Future minimum lease payments at September 30, 2005, by year and in aggregate under the original terms of the non-cancelable operating leases consist of the following:

2006	$	253,403
2007		221,493
2008		205,314
2009		165,762
2010		51,718

Total	$	897,690

F-28

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 14

Stock-Based Compensation Plans

Recognition and Retention Plans

On February 4, 2005, shareholders approved the Citizens Community Bancorp 2004 Recognition and Retention Plan (Recognition Plan) which authorized the Board of Directors to award up to 59,618 shares of common stock. On February 4, 2005, the Board of Directors granted 33,386 shares under the Recognition Plan to members of management and nonemployee directors. The market value of the shares awarded at the grant date amounted to $449,042 and has been recognized in the accompanying balance sheet as unearned stock-based compensation. The market value of the shares awarded is being recognized as compensation expense ratably over the five-year vesting period. During the six months ended March 31, 2006 (unaudited) and fiscal year 2005, no shares were forfeited. Compensation expense related to the Recognition Plan was $48,420 and $59,873 for the six months ended March 31, 2006 (unaudited) and the year ended September 30, 2005. During fiscal year 2004, there was no compensation expense related to the Recognition Plan.

Stock Option Plan

On February 4, 2005, shareholders approved the Citizens Community Bancorp 2004 Stock Option and Incentive Plan (Option Plan) which authorized the Board of Directors to grant up to 149,046 shares of common stock. On February 4, 2005, the Board of Directors granted 105,827 options to buy stock under the Option Plan at an exercise price of $13.45, the fair value of the stock on that date. The options vest ratably over a five-year period.

Unexercised, nonqualified stock options expire in 15 years and unexercised, incentive stock options expire in 10 years. None of the options granted were vested, exercised, or forfeited during the six months ended March 31, 2006 (unaudited) and the year ended September 30, 2005, and all options granted remain outstanding at March 31, 2006.

Activity is summarized in the following table.

	March 31,				September 30,
	2006				2005
	(unaudited)
			Weighted				Weighted
	Option		Average		Option		Average
	Shares		Price		Shares		Price

Outstanding - Beginning of year		105,827	$	13.45		0	$	0.00
Options granted		0		0.00		105,827		13.45

Outstanding - End of Year		105,827	$	13.45		105,827	$	13.45

Exercisable		0				0
Weighted average fair value of options granted			$	3.66			$	3.66
Available for future grant at year-end		43,219				43,219

F-29

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 14

Stock-Based Compensation Plans (Continued)

The following table summarizes information about Plan awards outstanding at March 31, 2006 (unaudited) September 30, 2005:

Options Outstanding and Exercisable
	March 31,		September 30,
	2006		2005
	Weighted Average
Number Outstanding	Remaining Contractual Life				Exercise Price

68,562		8.92 years		9.42 years	$	13.45
37,265		13.92 years		14.42 years	$	13.45

Note 15

Commitments and Contingencies

Financial Instruments with Off-Balance-Sheet Risk

The Company’s financial statements do not reflect various commitments and contingent liabilities which arise in the normal course of business and which involve elements of credit risk, interest rate risk, and liquidity risk. These commitments and contingent liabilities are commitments to extend credit.

A summary of the Company’s commitments and contingent liabilities follows:

	March 31,		September 30,
	2006		2005		2004
	(unaudited)

Commitments to extend credit	$	378,200	$	611,163	$	445,000
Unused lines of credit:
Real estate equity advance plan (REAP)		1,197,859		825,153		553,994
Kwik cash and lines of credit		1,715,350		1,734,116		1,656,257
MasterCard and VISA credit cards		4,891,640		4,955,968		2,874,447

Totals	$	8,183,049	$	8,126,400	$	5,529,698

F-30

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 15

Commitments and Contingencies (Continued)

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any conditions established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. A portion of the commitments is expected to be drawn upon, thus representing future cash requirements. Management evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained upon extension of credit is based on management’s credit evaluation of the customer. Collateral held varies but may include real estate and personal property. Substantial amounts of unsecured personal loans are granted by the Company. However, ongoing credit evaluations of customers are performed.

In September 2005 the Company entered into a data processing services agreement for a period of five years, and a series of purchase agreements for computer equipment and software.

Concentration of Credit Risk

The majority of the Company’s loans and commitments have been granted to customers in the Company’s local market area. The concentrations of credit by type are set forth in Note 5. Management believes the diversity of the area economy will prevent significant losses in the event of an economic downturn.

Contingencies

In the normal course of business, the Company occasionally becomes involved in various legal proceedings. In the opinion of management, any liability from such proceedings would not have a material adverse effect on the business or financial condition of the Company.

Note 16

Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital to risk-weighted assets and of Tier I capital to average assets. It is management’s opinion as of March 31, 2006 and September 30, 2005, that the Bank meets all capital adequacy requirements.

F-31

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 16

Capital Requirements (Continued)

As of March 31, 2006 (unaudited) and September 30, 2005, the most recent notification from the Office of Thrift Supervision categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Bank’s actual and regulatory capital amounts and ratios are presented in the following table:

										To Be Well-
						For Capital				Capitalized Under
	Actual					Adequacy Purposes				Action Provisions
	Amount		Ratio			Amount		Ratio		Amount		Ratio

March 31, 2006

Total capital (to risk-weighted assets)	$	19,879,000		12.1	%	$	13,170,000		> 8.0%	$	16,463,000		> 10.0%
Tier 1 capital (to risk-weighted assets)		19,251,000		11.7	%		6,585,000		> 4.0%		9,878,000		> 6.0%
Tier 1 capital (to adjusted total assets)		19,251,000		7.7	%		9,978,000		> 4.0%		12,473,000		> 5.0%
Tangible capital (to tangible assets)		19,251,000		7.7	%		3,742,000		> 1.5%		N/A		N/A

September 30, 2005

Total capital (to risk-weighted assets)	$	19,318,000		12.6	%	$	12,259,000		> 8.0%	$	15,323,000		> 10.0%
Tier 1 capital (to risk-weighted assets)		18,693,000		12.2	%		6,129,000		> 4.0%		9,194,000		> 6.0%
Tier 1 capital (to adjusted total assets)		18,693,000		7.9	%		9,495,000		> 4.0%		11,869,000		> 5.0%
Tangible capital (to tangible assets)		18,693,000		7.9	%		3,561,000		> 1.5%		N/A		N/A

September 30, 2004

Total capital (to risk-weighted assets)	$	15,281,000		14.0	%	$	8,749,000		> 8.0%	$	10,936,000		> 10.0%
Tier 1 capital (to risk-weighted assets)		14,870,000		13.6	%		4,374,480		> 4.0%		6,562,000		> 6.0%
Tier 1 capital (to adjusted total assets)		14,870,000		9.2	%		6,469,000		> 4.0%		8,086,000		> 5.0%
Tangible capital (to tangible assets)		14,870,000		9.2	%		2,426,000		> 1.5%		N/A		N/A

F-32

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 17

Fair Values of Financial Instruments

Current accounting standards require that the Company disclose estimated fair values for its financial instruments. Fair value estimates, methods, and assumptions for the Company’s financial instruments are summarized below.

Cash and Cash Equivalents

The carrying values approximate the fair values for these assets.

Securities Available for Sale

Fair values are based on quoted market prices, where available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities.

Loans

Fair value is estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type such as residential mortgage and consumer. The fair value of loans is calculated by discounting scheduled cash flows through the estimated maturity using market discount rates reflecting the credit and interest rate risk inherent in the loan. The estimate of maturity is based on the Company’s repayment schedules for each loan classification.

The methodology in determining fair value of nonaccrual loans is to average them into the blended interest rate at 0% interest. This has the effect of decreasing the carrying amount below the risk-free rate amount and, therefore, discounts the estimated fair value.

Impaired loans are measured at the estimated fair value of the expected future cash flows at the loan’s effective interest rate or the fair value of the collateral for loans which are collateral dependent. Therefore, the carrying values of impaired loans approximate the estimated fair values for these assets.

Federal Home Loan Bank Stock

Fair value for the Federal Home Loan Bank stock is based on its redeemable (carrying) value, since the market for this stock is restricted.

Deposits

The fair value of deposits with no stated maturity, such as demand deposits, savings accounts, and money market accounts, is the amount payable on demand at the reporting date. The fair value of certificate accounts is calculated by using discounted cash flows applying interest rates currently being offered on similar certificates.

Federal Home Loan Bank Advances

The fair value of FHLB advances is estimated using discounted cash flows based on the Bank’s current incremental borrowing rates for similar borrowing arrangements.

Accrued Interest

The carrying amount of accrued interest approximates its fair value.

F-33

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 17

Fair Value of Financial Instruments (Continue d)

Off-Balance-Sheet Instruments

The fair value of commitments would be estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements, the current interest rates, and the present creditworthiness of the customers. Since this amount is immaterial, no amounts for fair value are presented.

The carrying amount and estimated fair value of financial instruments were as follows:

	March 31,				September 30,
	2006				2005				2004
	(unaudited)
			Estimated				Estimated				Estimated
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value		Amount		Value

Financial assets:
Cash and cash equivalents	$	4,296,325	$	4,296,325	$	9,265,477	$	9,265,477	$	4,768,007	$	4,768,007
Securities available for sale		1,839,081		1,839,081		2,088,349		2,088,349		0		0
Loans receivable		234,323,644		227,712,348		217,930,666		214,866,681		152,376,330		155,494,000
FHLB stock		1,826,480		1,826,480		2,094,900		2,094,900		827,700		827,700
Accrued interest receivable		749,953		749,953		612,644		612,644		466,399		466,399

Financial liabilities:
Deposits		188,298,100		188,517,302		177,469,100		177,774,517		127,976,262		128,227,000
FHLB advances		36,200,000		35,658,781		36,200,000		36,200,000		13,500,000		13,500,000
Accrued interest payable		1,790		1,790		50,228		50,228		3,503		3,503

Limitations

Fair value estimates are made at a specific time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates. Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. Significant assets and liabilities that are not considered financial assets or liabilities include premises and equipment, -, and other liabilities.

In addition, the tax ramifications related to the realization of the unrealized gains or losses can have a significant effect on fair value estimates and have not been considered in the estimates.

F-34

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 18

Condensed Parent Company Only Financial Statements

The following condensed balance sheets as of March 31, 2006 (unaudited), and September 30, 2005 and 2004, and condensed statements of income and cash flows for the six months ended March 31, 2006 and 2005 (unaudited) and for the years ended September 30, 2005 and 2004 for Citizens Community Bancorp should be read in conjunction with the consolidated financial statements and the notes thereto. As explained in Note 1, Citizens Community Bancorp was formed March 29, 2004.

Balance Sheets

	March 31,		September 30,
Assets	2006		2005		2004
	(unaudited)

Cash and cash equivalents	$	2,138,413	$	2,213,867	$	3,239,230
Investment in subsidiary		26,674,971		26,288,488		15,218,787
Note receivable - ESOP		1,000,705		1,051,045		1,147,906

TOTAL ASSETS	$	29,814,089	$	29,553,400	$	19,605,923

Stockholders' Equity

TOTAL STOCKHOLDERS' EQUITY	$	29,814,089	$	29,553,400	$	19,605,923

Statement s of Income

	Six Months Ended						Years Ended
	March 31,						September 30,
	2006			2005			2005			2004
	(unaudited)

Income:
Interest and dividends	$	45,176		$	55,633		$	102,773		$	61,081

Total income		45,176			55,633			102,773			61,081

Expenses - Other		81,739			81,675			159,945			28,874

Income (loss) before provision for income taxes and equity in undistributed net income of subsidiary		(36,563	)		(26,042	)		(57,172	)		32,207

Provision (benefit) for income taxes		(6,400	)		0			(23,189	)		11,000

Income (loss) before equity in undistributed net income of subsidiary		(30,163	)		(26,042	)		(33,983	)		21,207

Equity in undistributed net income of subsidiary		279,757			610,032			1,085,053			815,338

Net income	$	249,594		$	583,990		$	1,051,070		$	836,545

F-35

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 18

Condensed Parent Company Only Financial Statements (Continued)

Statements of Cash Flows

	Six Months Ended						Years Ended
	March 31,						September 30,
	2006			2005			2005			2004
	(unaudited)

Increase (decrease) in cash and cash equivalents:
Cash flows from operating activities:
Net income	$	249,594		$	583,990		$	1,051,070		$	836,545
Adjustments to reconcile net income to net cash provided by operating activities - Equity in undistributed income of subsidiary		(279,757	)		(610,032	)		(1,085,053	)		(815,338	)

Net cash provided by (used in) operating activities		(30,163	)		(26,042	)		(33,983	)		21,207

Cash flows from investing activities:
Investment in subsidiary		0			0			0			(4,533,328	)
Loan to ESOP		0			0			0			(1,192,360	)
Principal received on ESOP loan		50,338			47,899			96,861			44,454

Net cash provided by (used in) investing activities		50,338			47,899			96,861			(5,681,234	)

Cash flows from financing activities:
Sale of common stock		0			0			0			9,048,189
Formation of CCMHC		0			0			0			(100,000	)
Purchase of treasury stock		(211	)		(894,866	)		(895,135	)		0
Cash dividends paid		(95,418	)		(97,866	)		(193,106	)		(48,932	)

Net cash provided by (used in) financing activities		(95,629	)		(992,732	)		(1,088,241	)		8,899,257

Net increase (decrease) in cash and cash equivalents		(75,454	)		(970,875	)		(1,025,363	)		3,239,230
Cash and cash equivalents at beginning		2,213,867			3,239,230			3,239,230			0

Cash and cash equivalents at end	$	2,138,413		$	2,268,355		$	2,213,867		$	3,239,230

Supplemental cash flow information:
Cash paid (received) during the period for income taxes	$	6,400		$	80			($23,189	)	$	11,000

F-36

C itizens Community Bancorp and Subsidiary

Notes to Consolidated Financial Statements

Note 19

Adoption of Plan of Conversion and Reorganization (Unaudited)

On April 20, 2006, the Board of Directors of CCMHC, the Company and the Bank adopted a Plan of Conversion and Reorganization providing for the conversion of CCMHC to stock form and the formation of a new Maryland-chartered stock holding company, Citizens Community Bancorp, Inc. (“Holding Company”). Under the Plan, the existing shares of the Company’s common stock owned by shareholders, other than CCMHC, will be converted into shares of common stock of the Holding Company (“Holding Company Common Stock”). Simultaneously, the Holding Company will conduct a stock offering that represents the 74% ownership interest of CCMHC in the Company. The Conversion will result in the Bank being wholly owned by a Maryland-chartered stock holding company that is owned by public shareholders. Shares of conversion stock will be offered in a subscription offering in descending order of priority to eligible deposit account holders, the Bank’s tax-qualified employee stock ownership plan, supplemental eligible account holders, and then to other depositors of the Bank. Any shares of the Holding Company’s common stock not sold in the subscription offering will be offered for sale to the general public, giving preference to the Bank’s market area.

Upon completion of the Conversion and Reorganization, the public will own 100% of the outstanding shares of common stock of the Holding Company. The Holding Company will own 100% of the bank. The payment of dividends from the Bank to the Holding Company will be subject to regulatory limits and in some instances, will be prohibited.

The Holding Company intends to contribute approximately 50% of the proceeds of the offering to the Bank. The balance will be retained as the Holding Company’s initial capitalization and may be used for general business purposes, including investment in securities, repurchasing shares of its common stock and paying dividends. The funds received by the Bank will be used for general business purposes, including repaying FHLB advances, originating loans and purchasing securities. They also will be used for growth through expansion of the Bank’s branch office network.

Offering costs will be deferred and deducted from the proceeds of the shares sold in the stock offering. If the offering is not completed, all costs will be charged to expense. At March 31, 2006, no costs have been incurred.

The Plan provides for the establishment, upon completion of the Conversion, of a special “liquidation account” in an amount equal to the Bank’s net worth as of the latest practicable date prior to the Conversion. Each eligible account holder and supplemental eligible account holder will be entitled to a proportionate share of this account in the event of a complete liquidation of the Bank, and only in such event. This share in the liquidation account will be reduced if the eligible account holder’s or the supplemental account holder’s deposit balance in the account falls below the amounts on the date of the holder’s eligibility and will cease if that if the deposit account is closed. The liquidation account will never be increased despite any increase in the eligible deposit balance after the Conversion and Reorganization.

As part of the Conversion, the Holding Company and Bank are authorized to adopt an equity incentive plan authorizing the issuance of stock options, stock appreciations rights and restricted stock to directors, officers and employees.

F-37

APPENDIX A

OTS Regulation 552.14 - Dissenter and Appraisal Rights.

(a) Right to demand payment of fair or appraised value. Except as provided in paragraph (b) of this section, any stockholder of a Federal stock association combining in accordance with § 552.13 of this part shall have the right to demand payment of the fair or appraised value of his stock: Provided, that such stockholder has not voted in favor of the combination and complies with the provisions of paragraph (c) of this section.

(b) Exceptions. No stockholder required to accept only qualified consideration for his or her stock shall have the right under this section to demand payment of the stock's fair or appraised value, if such stock was listed on a national securities exchange or quoted on the National Association of Securities Dealers' Automated Quotation System ("NASDAQ") on the date of the meeting at which the combination was acted upon or stockholder action is not required for a combination made pursuant to § 552.13(h)(2) of this part. "Qualified consideration" means cash, shares of stock of any association or corporation which at the effective date of the combination will be listed on a national securities exchanged or quoted on NASDAQ or any combination of such shares of stock and cash.

(c) Procedure.

(1) NOTICE. Each constituent Federal stock association shall notify all stockholders entitled to rights under this section, not less than twenty days prior to the meeting at which the combination agreement is to be submitted for stockholder approval, of the right to demand payment of appraised value of shares, and shall include in such notice a copy of this section. Such written notice shall be mailed to stockholders of record and may be part of the management's proxy solicitation for such meeting.

(2) DEMAND FOR APPRAISAL AND PAYMENT. Each stockholder electing to make a demand under this section shall deliver to the Federal stock association, before voting on the combination, a writing identifying himself or herself and stating his or her intention thereby to demand appraisal of and payment for his or her shares. Such demand must be in addition to and separate from any proxy or vote against the combination by the stockholder.

(3) NOTIFICATION OF EFFECTIVE DATE AND WRITTEN OFFER. Within ten days after the effective date of the combination, the resulting association shall;

(i) Give written notice by mail to stockholders of constituent Federal Stock associations who have complied with the provisions of paragraph (c)(2) of this section and have not voted in favor of the combination, of the effective date of the combination;

(ii) Make a written offer to each stockholder to pay for dissenting shares at a specified price deemed by the resulting association to be the fair value thereof; and

(iii) Inform them that, within sixty days of such date, the respective requirements of paragraphs (c)(5) and (6) of this section (set out in the notice) must be satisfied.

The notice and offer shall be accompanied by a balance sheet and statement of income of the association the shares of which the dissenting stockholder holds, for a fiscal year ending not more than sixteen months before the date of notice and offer, together with the latest available interim financial statements.

(4) ACCEPTANCE OF OFFER. If within sixty days of the effective date of the combination the fair value is agreed upon between the resulting association and any stockholder who has complied with the provisions of paragraph (c)(2) of this section, payment therefor shall be made within ninety days of the effective date of the combination.

(5) PETInformation Technology Inc.ON TO BE FILED IF OFFER NOT ACCEPTED. If within sixty days of the effective date of the combination the resulting association and any stockholder who has complied with the provisions of paragraph (c)(2) of this section do not agree as to the fair value, then any such stockholder may file a petition with the Office, with a copy by registered or certified mail to the resulting association, demanding a determination of the fair market value of the stock of all such stockholders. A stockholder entitled to file a petition under this section who fails to file such petition within sixty days of the effective date of the combination shall be deemed to have accepted the terms offered under the combination.

(6) STOCK CERTIFICATES TO BE NOTED. Within sixty days of the effective date of the combination, each stockholder demanding appraisal and payment under this section shall submit to the transfer agent his certificates of stock for notation thereon that an appraisal and payment have been demanded with respect to such stock and that appraisal proceedings are pending. Any stockholder who fails to submit his stock certificates for such notation shall no longer be entitled to appraisal rights under this section and shall be deemed to have accepted the terms offered under the combination.

A-1

(7) WITHDRAWAL OF DEMAND. Notwithstanding the foregoing, at any time within sixty days after the effective date of the combination, any stockholder shall have the right to withdraw his or her demand for appraisal and to accept the terms offered upon the combination.

(8) VALUATION AND PAYMENT. The Director shall, as he or she may elect, either appoint one or more independent persons or direct appropriate Staff of the Office to appraise the shares to determine their fair market value, as of the effective date of the combination, exclusive of any element of value arising from the accomplishment or expectation of the combination. Appropriate staff of the Office shall review and provide an opinion on appraisals prepared by independent persons as to the suitability of the appraisal methodology and the adequacy of the analysis and supportive data. The Director after consideration of the appraisal report and the advice of the appropriate staff shall, if he or she concurs in the valuation of the shares, direct payment by the resulting association of the appraised fair market value of the shares, upon surrender of the certificates representing such stock. Payment shall be made, together with interest from the effective date of the combination, at a rate deemed equitable by the Director.

(9) COSTS AND EXPENSES. The costs and expenses of any proceeding under this section may be apportioned and assessed by the Director as he or she may deem equitable against all or some of the parties. In making this determination the Director shall consider whether any party has acted arbitrarily, vexatiously, or not in good faith in respect to the rights provided by this section.

(10) VOTING AND DISTRIBUTION. Any stockholder who has demanded appraisal rights as provided in paragraph (c)(2) of this section shall thereafter neither be entitled to vote such stock for any purpose nor be entitled to the payment of dividends or other distributions on the stock (except dividends or other distribution payable to, or a vote to be taken by stockholders of record at a date which is on or prior to, the effective date of the combination): Provided, that if any stockholder becomes unentitled to appraisal and payment of appraised value with respect to such stock and accepts or is deemed to have accepted the terms offered upon the combination, such stockholder shall thereupon be entitled to vote and receive the distributions described above.

(11) STATUS. Shares of the resulting association into which shares of the stockholders demanding appraisal rights would have been converted or exchanged, had they assented to the combination, shall have the status of authorized and unissued shares of the resulting association.

A-2

You should rely only on the information contained in this document or to that to which we have referred you. We have not authorized anyone to provide you with information that is different. This document does not constitute an offer to sell, or the solicitation of an offer to buy, any of the securities offered hereby to any person in any jurisdiction in which an offer or solicitation would be unlawful. The affairs of Citizens Community Bancorp, Inc., of CCB and Citizens Community Federal may change after the date of this Prospectus. Delivery of this document and the sales of shares made hereunder does not mean otherwise.

[LOGO]

CITIZENS COMMUNITY BANCORP, INC.

Proposed Holding Company for

Citizens Community Federal

Up to 7,116,519 Shares of Common Stock

(Including up to 5,290,000 newly issued shares

and up to 1,826,519 shares

to be exchanged for shares of Citizens Community Bancorp)

____________________________

PROSPECTUS

____________________________

Keefe, Bruyette & Woods

____________________________

________________, 2006

Dealer Prospectus Delivery Obligation

Until the later of __________________, 2006, or 25 days after commencement of the Stock Offering, all dealers effecting transactions in these securities, whether or not participating in this distribution, may be required to deliver a prospectus. This is in addition to the obligation of the dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 24. Indemnification of Directors and Officers

Article 12, Section B of the Registrant(s Articles of Incorporation provide:
The Corporation shall indemnify (A) its directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the general laws of the State of Maryland now or hereafter in force, including the advances of expenses under the procedures and to the fullest extent permitted by law, and (B) other employees and agents to such extent as shall be authorized by the Board of Directors and permitted by law; provided, however, that except as provided in Section B with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors.

Item 25. Other Expenses of Issuance and Distribution

Set forth below is an estimate of the amount of fees and expenses (other than underwriting discounts and commissions) to be incurred in connection with the issuance of the shares.

Counsel fees and expenses	$ 200,000
Accounting fees and expenses	40,000
Appraisal preparation fees and expenses	45,000
Business plan preparation fees and expenses	20,000
Underwriting fees ⁽¹⁾ (including financial advisory fee and expenses)	595,912
Underwriter's counsel fees and expenses	45,000
Printing, postage and mailing	200,000
Registration and Filing Fees	27,232
NASDAQ Listing Fee	100,000
Stock transfer agent and certificates	25,000
Other expenses ⁽¹⁾	7,768
TOTAL	$1,305,912

_____________________
⁽¹⁾    Based on maximum of Estimated Valuation Range.

Item 26. Recent Sales of Unregistered Securities

            The Registrant is newly incorporated, solely for the purpose of acting as the holding company of Citizens Community Federal, pursuant to the Plan of Conversion and Reorganization (filed as Exhibit 2 herein), and no sales of its securities have occurred to date.

Item 27. Exhibits and Financial Statement Schedules

            See the Exhibit Index filed as part of this Registration Statement.

Item 28. Undertakings

(a)	The undersigned Registrant hereby undertakes:
	(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement to:
		(i)	Include any Prospectus required by Section 10(a)(3) of the Securities Act of 1933;
		(ii)	Reflect in the Prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and

II-1

		(iii)	Include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.
	(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
	(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(b)	Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and it will be governed by the final adjudication of such issue.

II-2

SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to belive that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned in the City of Eau Claire, State of Wisconsin, on June 30, 2006.

	CITIZENS COMMUNITY BANCORP, INC.
	By:	/s/ James G. Cooley James G. Cooley, President and Chief Executive Officer (Duly Authorized Representative)

KNOW ALL MEN BY THESE PRESENTS , that each person whose signature appears below constitutes and appoints James G. Cooley his true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all said attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

/s/ James G. Cooley James G. Cooley, President, Chief Executive Officer and Director (Duly authorized representative and Principal Executive Officer)	Date:	June 30, 2006
/s/ Richard McHugh Richard McHugh, Chairman of the Board	Date:	June 30, 2006
/s/ Thomas C. Kempen Thomas C. Kempen, Vice Chairman of the Board	Date:	June 30, 2006
/s/ Adonis E. Talmage Adonis E. Talmage, Director	Date:	June 30, 2006
/s/ Brian R. Schilling Brian R. Schilling, Director	Date:	June 30, 2006
/s/ David B. Westrate David B. Westrate, Director	Date:	June 30, 2006
/s/ John D. Zettler John D. Zettler, Chief Financial Officer and Senior Vice President (Principal Financial and Accounting Officer)	Date:	June 30, 2006

EXHIBIT INDEX

Exhibit
1.1	Engagement Letter with Keefe, Bruyette & Woods, Inc.
1.2	Form of Agency Agreement with Keefe, Bruyette & Woods, Inc.*
2.0	Plan of Conversion and Reorganization
3.1	Charter for Citizens Community Bancorp, Inc.
3.2	Bylaws of Citizens Community Bancorp, Inc.
4.0	Form of Stock Certificate of Citizens Community Bancorp, Inc.
5.0	Opinion of Silver, Freedman & Taff L.L.P. re: Legality
8.1	Opinion of Silver, Freedman & Taff L.L.P. re: Federal Tax Matters
8.2	Opinion of Wipfli, LLP re: State Tax Matters*
8.3	Letter of RP Financial LP. re: Subscription Rights

10.1	Employment Agreement with:
	a.	James G. Cooley
	b.	Johnny W. Thompson
	c.	John D. Zettler
	d.	Timothy J. Cruciani
	e.	Rebecca Johnson

10.2	Citizens Community Federal Supplemental Executive Retirement Plan
10.3	Letter Agreement re: Appraisal Services
10.4	Letter Agreement re: Business Plan
10.5	Citizens Community Bancorp 2004 Stock Option and Incentive Plan
10.6	Citizens Community Bancorp 2004 Recognition and Retention Plan
21.0	Subsidiaries of the Registrant
23.1	Consent of Silver, Freedman & Taff L.L.P. re: Legality (included in Exhibit 5.0)
23.2	Consent of Wipfli, LLP
23.3	Consent of RP Financial, LP.
24.0	Power of Attorney, included in signature pages
99.1	Appraisal Report of RP Financial, LP. (waiver requested)*
99.2	Subscription Order Form and Instructions
99.3	Additional Solicitation Material

__________________
* To be filed supplementally

EXHIBIT 1.1

K EEFE, B RUYETTE & W OODS
211 Bradenton Avenue Dublin, OH 44017 (614) 766-8400

March 30, 2006

Mr. James G. Cooley
President and Chief Executive Officer
Citizens Community Bancorp
Citizens Community Federal
Citizens Community MHC
2174 Eastridge Center
Eau Claire, WI 54701

Dear Mr. Cooley:

This proposal is in connection with Citizens Community Bancorp's ("CZWI") intention to have the mutual holding company component of its organization reorganize from a mutual to a capital stock form of organization (the "Conversion"). In order to effect the Conversion, it is contemplated that all of CZWI's common stock to be outstanding pursuant to the Conversion will be issued to a holding company (the "Company") to be formed by CZWI, and that the Company will offer and sell shares of its common stock first to eligible persons (pursuant to CZWI's Plan of Conversion) in a Subscription and Community Offering.

Keefe, Bruyette & Woods, Inc. ("KBW") will act as CZWI's and the Company's financial advisor and marketing agent in connection with the Conversion. This letter sets forth selected terms and conditions of our engagement.

1. Advisory/Conversion Services . As CZWI's and Company's financial advisor and marketing agent, KBW will provide CZWI and the Company with a comprehensive program of conversion services designed to promote an orderly, efficient, cost-effective and long-term stock distribution. KBW will provide financial and logistical advice to CZWI and the Company concerning the offering and related issues. KBW will assist in providing conversion enhancement services intended to meet the directors' objectives in the Subscription Offering and to residents of CZWI's market area, if necessary, in the Community Offering.

KBW shall provide financial advisory services to CZWI which are typical in connection with an equity offering and include, but are not limited to, overall financial analysis of the client with a focus on identifying factors which impact the valuation of the common stock and provide the appropriate recommendations for the betterment of the equity valuation.

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Mr. James G. Cooley
March 30, 2006
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Additionally, post conversion financial advisory services will include advice on shareholder relations, NASDAQ listing, dividend policy (for both regular and special dividends), stock repurchase strategy and communication with market makers. Prior to the closing of the offering, KBW shall furnish to client a Post-Conversion reference manual which will include specifics relative to these items. (The nature of the services to be provided by KBW as CZWI's and the Company's financial advisor and marketing agent are further described in Exhibit A attached hereto.)

2.    Preparation of Offering Documents . CZWI, the Company and their counsel will draft the Registration Statement, Application for Conversion, Prospectus and other documents to be used in connection with the Conversion. KBW will attend meetings to review these documents and advise you on their form and content. KBW and its counsel will draft appropriate agency agreement and related documents as well as marketing materials other than the Prospectus.

3.    Due Diligence Review . Prior to filing the Registration Statement, Application for Conversion or any offering or other documents naming KBW as CZWI's and the Company's financial advisor and marketing agent, KBW and their representatives will undertake substantial investigations to learn about CZWI's business and operations ("due diligence review") in order to confirm information provided to us and to evaluate information to be contained in CZWI's and/or the Company's offering documents. CZWI agrees that it will make available to KBW all relevant information, whether or not publicly available, which KBW reasonably requests, and will permit KBW to discuss with management the operations and prospects of CZWI. KBW will treat all material non-public information as confidential. CZWI acknowledges that KBW will rely upon the accuracy and completeness of all information received from CZWI, its officers, directors, employees, agents and representatives, accountants and counsel including this letter to serve as CZWI's and the Company's financial advisor and marketing agent.

4.    Regulatory Filings . CZWI and/or the Company will cause appropriate offering documents to be filed with all regulatory agencies including, the Securities and Exchange Commission ("SEC"), the National Association of Securities Dealers ("NASD"), Office of Thrift Supervision ("OTS") and such state securities commissioners as may be determined by CZWI.

5.    Agency Agreement . The specific terms of the conversion services, conversion offering enhancement and syndicated offering services contemplated in this letter shall be set forth in an Agency Agreement between KBW and CZWI and the Company to be executed prior to commencement of the offering, and dated the date that the Company's Prospectus is declared effective and/or authorized to be disseminated by the appropriate regulatory agencies, the SEC, the NASD, the OTS and such state securities commissioners and other regulatory agencies as required by applicable law.

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Mr. James G. Cooley
March 30, 2006
Page 3 of 5

6. Representations, Warranties and Covenants . The Agency Agreement will provide for customary representations, warranties and covenants by CZWI and KBW, and for the Company to indemnify KBW and their controlling persons (and, if applicable, the members of the selling group and their controlling persons), and for KBW to indemnify CZWI and the Company against certain liabilities, including, without limitation, liabilities under the Securities Act of 1933.

7. Fees. For the services hereunder, CZWI and/or Company shall pay the following fees to KBW at closing unless stated otherwise:


	(a)	Management Fee : A Management Fee of $30,000 payable in four consecutive monthly installments of $7,500 commencing with the signing of this letter. Such fees shall be deemed to have been earned when due. Should the Conversion be terminated for any reason not attributable to the action or inaction of KBW, KBW shall have earned and be entitled to be paid fees accruing through the stage at which point the termination occurred.
	(b)	Success Fee : A Success Fee of 1.35% of the aggregate Purchase Price of Common Stock sold in the Subscription Offering and Community Offering excluding shares purchased by Citizens Community Federal's officers, directors, or employees (or members of their immediate families) plus any ESOP, tax-qualified or stock based compensation plans (except IRA's) or similar plan created by CZWI, Citizens Community Federal or the Company for some or all of its directors or employees. The Success Fee shall be reduced by the Management Fee described in (a) above.
	(c)	Broker-Dealer Pass-Through : If any shares of the Company's stock remain available after the subscription offering, at the request of CZWI, KBW will seek to form a syndicate of registered broker-dealers to assist in the sale of such common stock on a best efforts basis, subject to the terms and conditions set forth in a selected dealers agreement. KBW will endeavor to distribute the common stock among dealers in a fashion which best meets the distribution objectives of CZWI and the Plan of Conversion. KBW will be paid a fee not to exceed 5.5% of the aggregate Purchase Price of the shares of common stock sold by them. KBW will pass onto selected broker-dealers, who assist in the syndicated community offering, an amount competitive with gross underwriting discounts charged at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than KBW shall be transmitted by KBW to such broker/dealer. The decision to utilize selected broker-dealers will be made by CZWI upon consultation with KBW. In the event, with respect to any stock purchases, fees are paid pursuant to this subparagraph 7(c), such fees shall be in lieu of, and not in addition to, payment pursuant to subparagraph 7(b).

Mr. James G. Cooley
March 30, 2006
Page 4 of 5

8.    Additional Services . KBW further agrees to provide financial advisory assistance to the Company and CZWI for a period of one year following completion of the Conversion, including formation of a dividend policy and share repurchase program, assistance with shareholder reporting and shareholder relations matters, general advice on mergers and acquisitions and other related financial matters, without the payment by the Company and CZWI of any fees in addition to those set forth in Section 7 hereof. Nothing in this Agreement shall require the Company and CZWI to obtain such services from KBW. Following this initial one year term, if both parties wish to continue the relationship, a fee will be negotiated and an agreement entered into at that time.

9.    Expenses . CZWI will bear those expenses of the proposed offering customarily borne by issuers, including, without limitation, regulatory filing fees, SEC, "Blue Sky," and NASD filing and registration fees; the fees of CZWI's accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the Conversion; the fees set forth in Section 7; and fees for "Blue Sky" legal work. If KBW incurs expenses on behalf of Client, Client will reimburse KBW for such expenses.

KBW shall be reimbursed for reasonable out-of-pocket expenses, including costs of travel, meals and lodging, photocopying, telephone, facsimile and couriers. The selection of KBW's counsel will be done by KBW, with the approval of CZWI. CZWI will reimburse KBW for the fees of its counsel which will not exceed $40,000 plus reasonable expenses. The expenses of this paragraph assume that no resolicitation will occur.

10.    Conditions . KBW's willingness and obligation to proceed hereunder shall be subject to, among other things, satisfaction of the following conditions in KBW's opinion, which opinion shall have been formed in good faith by KBW after reasonable determination and consideration of all relevant factors: (a) full and satisfactory disclosure of all relevant material, financial and other information in the disclosure documents and a determination by KBW, in its sole discretion, that the sale of stock on the terms proposed is reasonable given such disclosures; (b) no material adverse change in the condition or operations of CZWI subsequent to the execution of the agreement; and (c) no adverse market conditions at the time of offering which in KBW's opinion make the sale of the shares by the Company inadvisable.

11.    Benefit . This Agreement shall inure to the benefit of the parties hereto and their respective successors and to the parties indemnified pursuant to the terms and conditions of the Agency Agreement and their successors, and the obligations and liabilities assumed hereunder by the parties hereto shall be binding upon their respective successors provided, however, that this Agreement shall not be assignable by KBW.

12.    Definitive Agreement . This letter reflects KBW's present intention of proceeding to work with CZWI on its proposed Conversion. It does not create a binding obligation on the part

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Mr. James G. Cooley
March 30, 2006
Page 5 of 5

of CZWI, the Company or KBW except as to the agreement to maintain the confidentiality of non-public information set forth in Section 3, the payment of certain fees as set forth in Section 7(a) and 7(b) and the assumption of expenses as set forth in Section 9, all of which shall constitute the binding obligations of the parties hereto and which shall survive the termination of this Agreement or the completion of the services furnished hereunder and shall remain operative and in full force and effect. You further acknowledge that any report or analysis rendered by KBW pursuant to this engagement is rendered for use solely by the management of CZWI and its agents in connection with the Conversion. Accordingly, you agree that you will not provide any such information to any other person without our prior written consent.

KBW acknowledges that in offering the Company's stock no person will be authorized to give any information or to make any representation not contained in the offering prospectus and related offering materials filed as part of a registration statement to be declared effective in connection with the offering. Accordingly, KBW agrees that in connection with the offering it will not give any unauthorized information or make any unauthorized representation. We will be pleased to elaborate on any of the matters discussed in this letter at your convenience.

If the foregoing correctly sets forth our mutual understanding, please so indicate by signing and returning the original copy of this letter to the undersigned.

Very truly yours,

KEEFE, BRUYETTE & WOODS, INC.

By:	/s/ Douglas L. Reidel Douglas L. Reidel Managing Director
CITIZENS COMMUNITY BANCORP		CITIZENS COMMUNITY FEDERAL
By:	/s/ James G. Cooley James G. Cooley President and CEO	By:	/s/ James G. Cooley James G. Cooley President and CEO

CITIZENS COMMUNITY MHC
By:	/s/ James G. Cooley James G. Cooley President and CEO

EXHIBIT A
CONVERSION SERVICES PROPOSAL
TO CITIZENS SOUTH BANKING CORPORATION

KBW provides thrift institutions converting from mutual to stock form of ownership with a comprehensive program of conversion services designed to promote an orderly, efficient, cost-effective and long-term stock distribution. The following list is representative of the conversion services, if appropriate, we propose to perform on behalf of CZWI.

General Services

Assist management and legal counsel with the design of the transaction structure.

Analyze and make recommendations on bids from printing, transfer agent, and appraisal firms.

Assist officers and directors in obtaining Bank loans to purchase stock, if requested.

Assist in drafting and distribution of press releases as required or appropriate.

Conversion Offering Enhancement Services

Establish and manage Stock Information Center at CZWI. Stock Information Center personnel will track prospective investors; record stock orders; process and tabulate proxies of depositors; mail order confirmations; provide CZWI's senior management with daily reports; answer customer inquiries; and handle special situations as they arise.

Assign KBW's personnel to be at CZWI through completion of the Subscription and Community Offerings to manage the Stock Information Center, meet with prospective shareholders at individual and community information meetings, solicit local investor interest through a tele-marketing campaign, answer inquiries, and otherwise assist in the sale of stock in the Subscription and Community Offerings. This effort will be lead by a Principal of KBW.

Create target investor list based upon review of CZWI's depositor base.

Provide intensive financial and marketing input for drafting of the prospectus.

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Conversion Offering Enhancement Services- Continued

Prepare other marketing materials, including prospecting letters and brochures, and media advertisements.

Arrange logistics of community information meeting(s) as required.

Prepare audio-visual presentation by senior management for community information meeting(s).

Prepare management for question-and-answer period at community information meeting(s).

Attend and address community information meeting(s) and be available to answer questions.

Broker-Assisted Sales Services.

Arrange for broker information meeting(s) as required.

Prepare audio-visual presentation for broker information meeting(s).

Prepare script for presentation by senior management at broker information meeting(s).

Prepare management for question-and-answer period at broker information meeting(s).

Attend and address broker information meeting(s) and be available to answer questions.

Produce confidential broker memorandum to assist participating brokers in selling CZWI's common stock.

End.

EXHIBIT 2.0

CITIZENS COMMUNITY MHC

PLAN OF CONVERSION AND REORGANIZATION

AS ADOPTED ON APRIL 20, 2006

TABLE OF CONTENTS

Section		Page
1	Introduction	1
2	Definitions	3
3	General Procedures for the Conversion and Reorganization	9
4	Total Number of Shares and Purchase Price of Common Stock	13
5	Subscription Rights of Eligible Account Holders (First Priority)	15
6	Subscription Rights of Tax-qualified Employee Stock Benefit Plans (Second Priority)	15
7	Subscription Rights of Supplemental Eligible Account Holders (Third Priority)	16
8	Subscription Rights of Other Members (Fourth Priority)	17
9	Community Offering, Syndicated Community Offering, Public Offering and Other Offerings	17
10	Limitations on Subscriptions and Purchases of Common Stock	19
11	Timing of Subscription Offering; Manner of Exercising Subscription Rights and Order Forms	22
12	Payment for Common Stock	25
13	Account Holders in Nonqualified States or Foreign Countries	27
14	Voting Rights of Stockholders	27
15	Liquidation Account	27
16	Transfer of Deposit Accounts	29
17	Registration, Market Maker and Stock Listing	29
18	Completion of the Stock Offering	30
19	Directors and Officers of the Savings Association	30
20	Requirements for Stock Purchases by Directors and Officers Following the Conversion and Reorganization	30
21	Restrictions on Transfer of Stock	30
22	Tax Rulings or Opinions	31
23	Restrictions on Acquisitions of Stock of Holding Company	31
24	Stock Compensation Plans	32
25	Dividend and Repurchase Restrictions on Stock	33
26	Expenses, Advisors and Fees to Brokers	33
27	Effective Date	33
28	Amendment or Termination of the Plan	33
29	Interpretation of the Plan	34
30	Exhibits	34

Exhibits	Exhibits
A	Agreement and Plan of Merger by and among Citizens Community Bancorp, Citizens Community Federal and CCBC Interim One Savings Bank
B	Agreement and Plan of Merger by and among Citizens Community MHC, Citizens Community Federal and CCBC Interim Two Savings Bank
C	Agreement and Plan of Merger by and among Citizens Community Federal, Citizens Community Bancorp, Inc., and CCBC Interim Three Savings Bank
D	Articles of Incorporation of Citizens Community Bancorp, Inc.
E	Bylaws of Citizens Community Bancorp, Inc.

CITIZENS COMMUNITY MHC

PLAN OF CONVERSION AND REORGANIZATION

1.    INTRODUCTION

      On March 29, 2004, Citizens Community Federal, a federally chartered mutual savings association reorganized into the two-tiered mutual holding company form of organization. In connection with that transaction, Citizens Community Bancorp, a federally chartered stock corporation, was formed and issued 978,650 shares of its common stock to eligible depositors of Citizens Community Federal and to the Citizens Community Federal Employee Stock Ownership Plan and issued 2,063,100 shares to Citizens Community MHC, a federally chartered mutual holding company. Also, in connection with that transaction, Citizens Community Federal converted to a federally chartered stock savings association and became the wholly owned subsidiary of Citizens Community Bancorp.

      On July 1, 2005, Citizens Community Bancorp acquired Community Plus Savings Bank, Rochester Hills, Michigan, through a merger with and into Citizens Community Federal. In accordance with the merger agreement, the Company issued 705,569 additional shares to Citizens Community MHC, based on the $9.25 million independently appraised value of Community Plus Savings Bank. The members of Community Plus Savings Bank also became members of Citizens Community MHC and, as a result in accordance with OTS policy, they will be treated as if their prior membership in Community Plus Savings Bank was membership in Citizens Community MHC for priority subscription rights purposes in this Plan of Conversion and Reorganization.

      As of the date hereof, Citizens Community MHC, beneficially and of record owned 2,768,669 shares of common stock, par value $0.01 per share, of Citizens Community Bancorp, representing approximately 74.3% of the outstanding voting stock of Citizens Community Bancorp, and the remaining 955,975 shares of Citizen Community Bancorp's common stock, or 25.7%, are owned by persons other than Citizens Community MHC.

      A. Business Purpose for the Conversion and Reorganization

      The Boards of Directors of the Citizens Community MHC, Citizens Community Bancorp and Citizens Community Federal believe that a conversion of Citizens Community MHC to stock form and a reorganization of these entities are in the best interests of Citizens Community MHC and its members, Citizens Community Bancorp and its stockholders, and Citizens Community Federal. These Boards of Directors have determined that this Plan of Conversion and Reorganization equitably provides for the interests of the members of Citizens Community MHC through the granting of subscription rights and the establishment of a liquidation account. Further, these Boards of Directors determined that the conversion and reorganization are fair and equitable to the current public stockholders of Citizens Community Bancorp and would not

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adversely impact the stockholders' equity of Citizens Community Federal.

      This conversion and reorganization will provide Citizens Community Federal with a larger capital base that will enhance its ability to pursue lending and investment opportunities, as well as opportunities for growth and expansion. They also will provide a more flexible operating structure that will enable Citizens Community Federal to compete more effectively with other financial institutions and make acquisitions of other financial institutions. Finally, the conversion and reorganization have been structured to reunite the accumulated earnings and profits retained by Citizens Community MHC with the retained earnings of the Citizens Community Federal through a tax-free reorganization.

      B. Procedure for Conversion and Reorganization

      As described in more detail in Section 3 of this Plan:

	(i)	Citizens Community Bancorp will convert to an interim federal stock savings bank, which will merge with and into Citizens Community Federal.
	(ii)	Citizens Community MHC will convert to an interim federal stock savings bank, which will merge with and into Citizens Community Federal. In connection with that merger, a liquidation account will be established by Citizens Community Federal for the benefit of the members of Citizens Community MHC.
	(iii)	Citizens Community Federal will form a new first-tier subsidiary, Citizens Community Bancorp, Inc., which will be incorporated under Maryland law as a stock corporation.
	(iv)	Citizens Community Bancorp, Inc., will form an interim federal stock savings association as a wholly owned subsidiary, which will merge with and into Citizens Community Federal, and, as a result, Citizens Community Federal will become a wholly owned subsidiary of Citizens Community Bancorp, Inc. In connection therewith, each share of Citizens Community Bancorp common stock outstanding immediately before the effective time of the conversion and reorganization and held by a Minority Stockholder shall be automatically converted, without further action by the holder thereof, into, and become the right to receive, shares of Citizens Community Bancorp, Inc. common stock based on an exchange ratio described herein, plus cash in lieu of any fractional share interest. This conversion and exchange of shares will provide the current public stockholders of Citizens Community Bancorp with the same percentage ownership in Citizens Community Bancorp, Inc., as they currently have in Citizens Community Bancorp, after taking into account any regulatory adjustment for assets of and dividends waived by Citizens Community MHC and without including stock purchased in the conversion and reorganization.
	(v)	Citizens Community Bancorp, Inc., will issue and sell additional shares of its common stock in a public offerings described herein.

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      C. Approval of the Plan

      On April 20, 2006, after careful study and consideration, the Boards of Directors of Citizens Community MHC, Citizens Community Bancorp and Citizens Community Federal adopted this Plan of Conversion and Reorganization. This Plan of Conversion and Reorganization must be approved by: (i) the affirmative vote of a majority of the total number of votes eligible to be cast by the members of Citizens Community MHC; (ii) the holders of a majority of the outstanding shares of common stock of Citizens Community Bancorp eligible to vote; and (iii) the holders of at least a majority of the outstanding shares of Citizens Community Bancorp, excluding the shares owned by Citizens Community MHC. Before submitting this Plan of Conversion and Reorganization to the members of Citizens Community MHC and Citizens Community Bancorp's stockholders for consideration, this Plan must be approved by the Office of Thrift Supervision.

2.     DEFINITIONS

As used hereinafter in this Plan of Conversion and Reorganization, the terms set forth below have the following meaning:

ACTING IN CONCERT means those actions included in the definition of acting in concert in Section 574.2(c) of the Rules and Regulations of the OTS. A Person or company that acts in concert with another Person or company ("other party") also shall be deemed to be acting in concert with any Person or company who also is acting in concert with that other party, except that any Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert with its trustee or a person who serves in a similar capacity solely for the purpose of determining whether stock held by the trustee and stock held by the plan will be aggregated and participants or beneficiaries of any such Tax-Qualified Employee Stock Benefit Plan will not be deemed to be acting in concert solely as a result of their common interests as participants or beneficiaries. The determination under this Plan of whether a group is Acting in Concert shall be made solely by the Boards of Directors of the Primary Parties or Officers delegated by such Boards and may be based on any evidence upon which the Boards or such delegatees choose to rely. Directors of the Primary Parties shall not be deemed to be Acting in Concert solely as a result of their membership on any Board of one of the Primary Parties.

ACTUAL PURCHASE PRICE means the price per share at which the Common Stock is ultimately sold by the Holding Company in the Offerings in accordance with the terms hereof.

AFFILIATE means a Person who, directly or indirectly, through one or more intermediaries, controls or is controlled by or is under common control with the Person specified.

ASSOCIATE means any Person that is associated with another Person as: (i) a corporation or organization (other than the MHC, Mid-Tier Company, the Holding Company, the Savings Association or a majority-owned subsidiary of the MHC, Mid-Tier Company, the Holding Company or the Savings Association), if the Person is a director, officer or partner or beneficially owns, directly or indirectly, 10% or more of any class of equity securities

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of the corporation or organization; (ii) a trust or other estate, if the Person has a substantial beneficial interest in the trust or estate or is a trustee or fiduciary of the trust or estate; provided, however, that such term shall not include any Tax-Qualified Employee Stock Benefit Plan of the MHC, Mid-Tier Company, the Holding Company or the Savings Association in which such Person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity; and (iii) a person who is related by blood or marriage to such Person, or any relative of such spouse, and who lives in the same home as the Person or who is a director or officer of the MHC, Mid-Tier Company, the Holding Company or the Savings Association or any of their subsidiaries; and (iv) a Person acting in concert with any of the Persons or entities specified in clauses (i) through (iii). For all Persons other than Officers and directors of the Primary Parties, the Primary Parties in their sole discretion, may determine that a Person is an associate of another Person.

CODE means the Internal Revenue Code of 1986, as amended.

COMMON STOCK means the shares of common stock, par value $0.01 per share, to be issued and sold by the Holding Company in the Offerings, all pursuant to the Plan of Conversion and Reorganization. The Common Stock will not be insured by the Federal Deposit Insurance Corporation.

COMMUNITY OFFERING means the offering for sale by the Holding Company of any shares of Common Stock not subscribed for in the Subscription Offering to such Persons as may be selected by the Holding Company and the Savings Association in their sole discretion and to whom a copy of the Prospectus is delivered by or on behalf of the Holding Company.

CONTROL (including the terms "controlling," "controlled by," and "under common control with") means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

CONVERSION AND REORGANIZATION means: (i) the conversion of Mid-Tier Company to an interim federal stock association and the subsequent Mid-Tier Merger, pursuant to which Mid-Tier Company will cease to exist; (ii) the conversion of the MHC to Interim One and the subsequent MHC Merger, pursuant to which the MHC will cease to exist; (iii) the Holding Company Merger, pursuant to which the Savings Association will become a wholly owned subsidiary of the Holding Company and, in connection therewith, each share of Mid-Tier Company Common Stock outstanding immediately before the effective time thereof held by a Minority Stockholder shall automatically be converted, without further action by the holder thereof, into and become the right to receive shares of Holding Company Common Stock based on the Exchange Ratio, plus cash in lieu of any fractional share interest; and (iv) the issuance of Common Stock in the Offerings as provided herein.

DEPOSIT ACCOUNT means any withdrawable account in the Saving Association as defined in Section 561.42 of the Rules and Regulations of the OTS, including a demand account as defined in Section 561.16 of the Rules and Regulations of the OTS.

ELIGIBLE ACCOUNT HOLDER means any Person holding a Qualifying Deposit on the Eligibility Record Date for purposes of determining Subscription Rights and establishing subaccount balances in the liquidation account.

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ELIGIBILITY RECORD DATE means the date for determining Qualifying Deposits of Eligible Account Holders and is the close of business on March 31, 2005.

ESOP means a Tax Qualified Employee Stock Benefit Plan of the MHC, the Holding Company or the Savings Association, which shall acquire Common Stock in connection with the Conversion and Reorganization.

ESTIMATED PRICE RANGE means the range of the estimated aggregate pro forma market value of the total number of shares of Common Stock to be issued in the Offerings, as determined by the Independent Appraiser in accordance with Section 4 hereof.

EXCHANGE RATIO means the rate at which shares of Mid-Tier Company Common Stock will be exchanged for shares of Holding Company Common Stock held by Minority Stockholders in connection with the Holding Company Merger. The exact rate shall be determined by the MHC, Mid-Tier Company and the Savings Association to ensure that upon consummation of the Conversion and Reorganization, the Minority Stockholders will own in the aggregate the same percentage of Holding Company Common Stock to be outstanding upon completion of the Conversion and Reorganization as the percentage of Mid-Tier Company Common Stock owned by them in the aggregate immediate before the Conversion and Reorganization, after giving effect to the assets of, and any dividends waived by, the MHC, if required by the OTS, and before giving effect to: (i) cash paid in lieu of any fractional shares of Holding Company Common Stock; and (ii) shares of Common Stock purchased by the Minority Stockholders in the Offerings.

EXCHANGE SHARES means the shares of Holding Company Common Stock to be issued to the Minority Stockholders in connection with the Holding Company Merger.

FDIC means the Federal Deposit Insurance Corporation or any successor thereto.

HOLDING COMPANY means Citizen Community Bancorp, Inc., the stock corporation to be organized under the laws of the state of Maryland, that, upon completion of the Conversion and Reorganization, shall hold all of the outstanding capital stock of the Savings Association.

HOLDING COMPANY COMMON STOCK means the shares of common stock, par value $0.01 per share of the Holding Company.

HOLDING COMPANY MERGER means the merger of Interim Three with and into the Savings Association pursuant to the Agreement and Plan of Merger included as Exhibit C hereto.

INDEPENDENT APPRAISER means the appraisal advisor retained by the MHC, the Holding Company and the Savings Association to prepare an appraisal of the estimated pro forma market value of the Common Stock.

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INITIAL PURCHASE PRICE means the price per share to be paid initially by Participants for shares of Common Stock subscribed for in the Subscription Offering and by Persons for shares of Common Stock ordered in the Community Offering and/or Syndicated Community Offering.

INTERIM ONE means CCBC Interim One Savings Bank, which will be the resultant entity following the conversion of Mid-Tier Company and subsequently will be merged with and into the Savings Association.

INTERIM TWO means CCBC Interim Two Savings Bank, which will be the resultant entity following the conversion of the MHC and subsequently will be merged with and into the Savings Association.

INTERIM THREE means CCBC Interim Three Savings Bank, which will be formed as an interim federal stock savings bank and a wholly owned subsidiary of the Holding Company to effect the Holding Company Merger.

MANAGEMENT PERSON means any Officer or director of the Savings Association, the Mid-Tier Company, the MHC or the Holding Company or any Affiliate of the Savings Association, the Mid-Tier Company, the MHC or the Holding Company and any person Acting in Concert with such Officer or director.

MEMBER means any Person qualifying as a member of the MHC in accordance with its mutual charter and bylaws and the laws of the United States.

MEMBER PROXY STATEMENT means the document used to solicit approval of the Plan by Voting Members.

MHC means Citizens Community MHC, a federally chartered mutual holding company.

MHC MERGER means the merger of Interim Two, the successor to the MHC following its conversion to an interim federal stock savings bank, with and into the Savings Association, pursuant to the Agreement and Plan of Merger in Exhibit B.

MID-TIER COMPANY means Citizen Community Bancorp, an existing federally chartered stock corporation that owns all of the outstanding capital stock of the Savings Association.

MID-TIER COMPANY COMMON STOCK means the shares of common stock, par value $0.01 per share, of Mid-Tier Company.

MID-TIER MERGER means the merger of Interim One, the successor to Mid-Tier Company following its conversion to an interim federal stock savings bank, with and into the Savings Association, pursuant to the Agreement and Plan of Merger in Exhibit A.

MINORITY STOCKHOLDER means any owner of the Mid-Tier Company Common Stock, other than the MHC.

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NON-TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means the Citizens Community Bancorp 2004 Stock Option and Incentive Plan, as in effect or hereafter amended, the Citizens Community Bancorp 2004 Recognition and Retention Plan, as in effect or hereafter amended, any other stock benefit plan or any defined benefit plan or defined contribution stock benefit plan which is established for the benefit of the employees of the MHC, Mid-Tier Company, the Holding Company and/or the Savings Association and any Affiliate thereof, that is not a Tax-Qualified Employee Stock Benefit Plan.

OFFERINGS mean the offering of Common Stock to Persons in the Subscription Offering, the Community Offering and the Syndicated Community or Public Offering.

OFFICER means the president, chief executive officer, vice-president, secretary, treasurer or principal financial officer, comptroller or principal accounting officer and any other person performing similar functions with respect to any organization whether incorporated or unincorporated.

ORDER FORM means the form or forms to be provided by the Holding Company, containing all such terms and provisions as set forth in Section 11 hereof, to a Participant or other Person by which Common Stock may be ordered in the Offerings.

OTHER MEMBER means a Voting Member who is not an Eligible Account Holder or a Supplemental Eligible Account Holder.

OTS means the Office of Thrift Supervision or any successor thereto.

PARTICIPANT means any Eligible Account Holder, Tax-Qualified Employee Stock Benefit Plan, Supplemental Eligible Account Holder or Other Member.

PERSON means an individual, a corporation, a partnership, an association, a joint stock company, a limited liability company, a trust, (including IRA and KEOGH accounts) an unincorporated organization or a government or any political subdivision of a government.

PLAN and PLAN OF CONVERSION AND REORGANIZATION mean this Plan of Conversion and Reorganization as adopted by the Board of Directors of the MHC, Mid-Tier Company and Savings Association and any amendment, hereto.

PRIMARY PARTIES means the MHC, Mid-Tier Company, the Savings Association and the Holding Company.

PROSPECTUS means the one or more documents to be used in offering the Common Stock in the Offerings.

PUBLIC OFFERING means an underwritten firm commitment offering to the public through one or more underwriters.

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QUALIFYING DEPOSIT means the aggregate balance of all Deposit Accounts in the Savings Association of: (i) an Eligible Account Holder at the close of business on the Eligibility Record Date, provided such aggregate balance is not less than $50; and (ii) a Supplemental Eligible Account Holder at the close of business on the Supplemental Eligibility Record Date, provided such aggregate balance is not less than $50.

SAVINGS ASSOCIATION means Citizens Community Federal, a federal stock savings bank.

SAVINGS ASSOCIATION BENEFIT PLANS include, but are not limited to, Tax Qualified Employee Stock Benefit Plans and Non-Tax Qualified Employee Stock Benefit Plans.

SAVINGS ASSOCIATION COMMON STOCK means the common stock of the Savings Association, par value $0.01 per share, which stock is not and will not be insured by the FDIC or any other governmental authority, all of which will be held by the Holding Company.

SEC means the Securities and Exchange Commission.

SPECIAL MEETING OF MEMBERS means the Special Meeting of Voting Members called for the purpose of submitting this Plan to the Members for their approval, including any adjournments of such meeting.

SPECIAL MEETING OF STOCKHOLDERS means the Special Meeting of Stockholders of Mid-Tier Company called for the purpose of submitting this Plan to the Members for their approval, including any adjournments of such meeting.

STOCKHOLDER PROXY STATEMENT means that document used to solicit approval of the Plan by the Minority Stockholders.

SUBSCRIPTION OFFERING means the offering of the Common Stock to Participants.

SUBSCRIPTION RIGHTS mean nontransferable rights to subscribe for Common Stock granted to Participants pursuant to the terms of this Plan.

SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDER means any Person, except directors and Officers of Mid-Tier Company, the MHC or the Savings Association and their Associates, holding a Qualifying Deposit at the close of business on the Supplemental Eligibility Record Date.

SUPPLEMENTAL ELIGIBILITY RECORD DATE , if applicable, means the date for determining Supplemental Eligible Account Holders and shall be required if the Eligibility Record Date is more than 15 months prior to the date of the approval of the Conversion and Reorganization by the OTS. If applicable, the Supplemental Eligibility Record Date shall be the last day of the calendar quarter preceding OTS approval of the Conversion and Reorganization.

SYNDICATED COMMUNITY OFFERING means the offering for sale by a syndicate of broker-dealers to the general public of shares of Common Stock not purchased in the Subscription Offering and the Community Offering.

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TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLAN means the Citizens Community Federal Employee Stock Ownership Plan, as in effect or hereafter amended, and any defined benefit plan or defined contribution plan, such as an employee stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which is established for the benefit of the employees of the MHC, Mid-Tier Company, the Holding Company and/or the Savings Association and any Affiliate thereof and which, with its related trust, meets the requirements to be "qualified" under Section 401 of the Code as from time to time in effect.

VOTING MEMBER means a Person who, at the close of business on the Voting Record Date, is entitled to vote as a Member of the MHC in accordance with its mutual charter and bylaws.

VOTING RECORD DATE means the date or dates for determining the eligibility of Members and of Minority Stockholders to vote, respectively, at the Special Meeting of Members and the Special Meeting of the Stockholders.

3. GENERAL PROCEDURES FOR THE CONVERSION AND REORGANIZATION .

A. Steps for Conversion and Reorganization; Regulatory Filings

	(i)	After the Savings Association's organization of the Holding Company and the receipt of all requisite regulatory approvals, the Holding Company will form Interim Three as its wholly owned subsidiary and the Board of Directors of Interim Three shall adopt the Agreement and Plan of Merger included as Exhibit C hereto by at least a two-thirds vote. The Holding Company shall approve the Agreement and Plan of Merger in its capacity as the sole stockholder of Interim Three, and Mid-Tier Company shall approve the Agreement and Plan of Merger in its capacity as the sole stockholder of the Savings Association.
	(ii)	An application for the Conversion and Reorganization, including this Plan and all other requisite materials, shall be submitted to the OTS for approval. The MHC, Mid-Tier Company and Savings Association also will cause notice of the adoption of the Plan by the Boards of Directors of the MHC, Mid-Tier Company and the Savings Association to be given by publication in a newspaper having general circulation in each community in which an office of Savings Association is located and will cause copies of the Plan to be made available at each office of the MHC, Mid-Tier Company and the Savings Association for inspection by Members and Mid-Tier Company's stockholders. The MHC, Mid-Tier Company and the Savings Association will cause to be published, in accordance with the requirements of applicable regulations of the OTS, a notice of the filing with the OTS of an application to convert the MHC from mutual to stock form and will post the notice of the filing for the application for the Conversion and Reorganization in each of their offices.

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	(iii)	Promptly following receipt of requisite approval of the OTS, the Plan will be submitted to the Voting Members for their consideration and approval at the Special Meeting of Members. The MHC may, at its option, mail to all Voting Members, at their last known address appearing on the records of the MHC and the Savings Association, the Member Proxy Statement. Mid-Tier Company also shall mail to all such Members (as well as other Participants) a Prospectus and Order Form for the purchase of Common Stock, subject to the provisions of Section 11 hereof. In addition, all such Members will receive, or be given the opportunity to request by returning a postage-prepaid card that will be distributed with the Member Proxy Statement, letter or other written communication, a copy of the articles of incorporation and bylaws of the Holding Company.
	(iv)	Subscription Rights to purchase shares of Common Stock will be issued without payment therefor to Eligible Account Holders, the Tax-Qualified Employee Stock Benefit Plans, Supplemental Eligible Account Holders and Other Members, as set forth in Sections 5 through 8 hereof.
	(v)	Mid-Tier Company shall file a preliminary Stockholder Proxy Statement with the OTS and the SEC to seek the approval of the Plan by its stockholders. Promptly following clearance of such Stockholder Proxy Statement and the receipt of any other requisite approval of the OTS, Mid-Tier Company will mail definitive proxy materials to all Minority Stockholders as of the Voting Record Date, at their last known address appearing on the records of Mid-Tier Company, for their consideration and approval of this Plan at the Special Meeting of Stockholders. The Minority Stockholders shall have dissenters' and appraisal rights in connection with their vote on the Conversion and Reorganization to the extent required by Section 552.14 of the Rules and Regulations of the OTS, or any successor thereto.
	(vi)	The Holding Company shall submit or cause to be submitted a holding company application to the OTS for approval of the acquisition of the Savings Association. Such application also shall include an application to form Interim Three. In addition, an application to merge the MHC (following its conversion into an interim federal stock savings association) and the Savings Association, an application to merge Mid-Tier Company (following its conversion into an interim federal stock savings association) and the Savings Association and an application to merge Interim Three and the Savings Association shall be filed with the OTS, either as exhibits to the holding company application or separately. All notices required to be published in connection with such applications shall be published at the times required.
	(vii)	The Holding Company shall file a Registration Statement with the SEC to register the Holding Company Common Stock to be issued in the Conversion and Reorganization under the Securities Act of 1933, as amended, and shall register such Holding Company Common Stock under any applicable state securities laws. Upon registration and after the receipt of all required regulatory approvals, the Common Stock shall be first offered for sale in a Subscription Offering to

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		Eligible Account Holders, the Tax-Qualified Employee Stock Benefit Plans, Supplemental Eligible Account Holders, if any, and Other Members. It is anticipated that any shares of Common Stock remaining unsold after the Subscription Offering will be sold through a Community Offering, a Syndicated Community Offering and/or a Public Offering. The purchase price per share for the Common Stock shall be a uniform price determined in accordance with Section 4 hereof and shall be set forth in the Prospectus. The Holding Company shall contribute to the Savings Association an amount equal to fifty percent (50%) of the net proceeds received by the Holding Company from the sale of Common Stock.
	(viii)	All assets, rights, interests, privileges, powers, franchises and property (real, personal and mixed) of Mid-Tier Company shall be automatically transferred to and vested in the Holding Company by virtue of the Conversion and Reorganization without any deed or other document of transfer. The Holding Company, without any order or action on the part of any court or otherwise and without any document of assumption or assignment, shall hold and enjoy all of the properties, franchises and interests, including appointments, powers, designations, nominations and all other rights and interests as the agent or fiduciary in the same manner and to the same extent as such rights, franchises, interests and powers were held or enjoyed by Mid-Tier Company. The Holding Company shall be responsible for all of the liabilities, restrictions and duties of every kind and description of Mid-Tier Company immediately before the Conversion and Reorganization, including liabilities for all debts, obligations and contracts of Mid-Tier Company, matured or unmatured, whether accrued, absolute, contingent or otherwise and whether or not reflected or reserved against on balance sheets, book or accounts or records of Mid-Tier Company. By participating in the Conversion and Reorganization, the Holding Company shall have approved the Citizens Community Federal Employee Stock Ownership Plan, the Citizens Community Bancorp 2004 Stock Option and Incentive Plan and the Citizens Community Bancorp 2004 Recognition and Retention Plan, as in effect or hereafter amended, as plans of the Holding Company and shall have agreed to issue Holding Company Common Stock, in lieu of Mid-Tier Common Stock, as adjusted, to the extent appropriate, by the Exchange Ratio, pursuant to the terms of those plans.
	(ix)	The Articles of Incorporation of the Holding Company shall read in the form of Exhibit D. The Bylaws of the Holding Company shall read in the form of Exhibit E.
	(x)	The home office and branch offices of the Savings Association shall be unaffected by the Conversion and Reorganization. The executive offices of the Holding Company shall be located at the current offices of the MHC and Mid-Tier Company.
	(xi)	Each Deposit Account of the Savings Association at the effective date shall remain a Deposit Account in the Savings Association for the same amount and subject to the same terms and conditions applicable to such Deposit Account before the Conversion and Reorganization.

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      B. Votes Required for Consummation of Conversion and Reorganization

      This Plan was adopted by the Boards of Directors of the MHC, Mid-Tier Company and the Savings Association on April 20, 2006.

      This Plan is subject to the approval of the OTS and must be adopted by: (i) at least a majority of the total number of votes eligible to be cast by Voting Members at the Special Meeting of Members: (ii) holders of at least a majority of the outstanding Mid-Tier Company, other than the MHC, at the Special Meeting of Stockholders; and (iii) the MHC in its capacity as the majority stockholder of Mid-Tier Company.

      C. Consummation of Conversion and Reorganization

      The effective date of the Conversion and Reorganization shall be the date set forth in Section 27 hereof.

      Upon the effective date, the following transactions shall occur:

	(i)	The MHC shall convert from a federal mutual holding company to Interim Two bank. Mid-Tier Company shall convert into Interim One and simultaneously merge with and into the Savings Association in the Mid-Tier Merger, with the Savings Association being the surviving institution. Immediately thereafter, the MHC, as converted, shall merge with and into the Savings Association in the MHC Merger, with the Savings Association being the surviving institution. As a result of the MHC Merger and the Mid-Tier Merger: (a) the shares of Mid-Tier Company Common Stock held by the MHC (following its conversion to an interim federal stock savings association) shall be extinguished; and (b) Members of the MHC will be granted interests in the liquidation account to be established by the Savings Association pursuant to Section 15 hereof.
	(ii)	Interim Three shall merge with and into the Savings Association pursuant to the Holding Company Merger, with the Savings Association being the surviving institution. As a result of the Holding Company Merger: (a) the shares of Mid-Tier Company Common Stock held by the Savings Association shall be extinguished; (b) the shares of Mid-Tier Company Common Stock held by the Minority Stockholders shall be converted into the right to receive shares of Holding Company Common Stock based upon the Exchange Ratio, plus cash in lieu of any fractional share interest based upon the Actual Purchase Price; and (c) the shares of common stock of Interim Three held by the Holding Company shall be converted into shares of Savings Association Common Stock on a one-for-one basis, with the result that the Savings Association shall become a wholly owned subsidiary of the Holding Company. In addition, as a result of the Holding

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		Company Merger, options to purchase shares of Mid-Tier Company Common Stock that are outstanding immediately before consummation of the Conversion and Reorganization shall be converted into options to purchase shares of Holding Company Common Stock, with the number of shares subject to the option and the exercise price per share to be adjusted based upon the Exchange Ratio so that the aggregate exercise price remains unchanged, and with the duration of the option remaining unchanged.
	(iii)	The Holding Company shall sell the Common Stock in the Offerings, as provided herein.
	(iv)	The Holding Company may retain up to 50% of the net proceeds of the Offerings.

4. TOTAL NUMBER OF SHARES AND PURCHASE PRICE OF COMMON STOCK

	(i)	The aggregate price at which shares of Common Stock shall be sold in the Offerings shall be based on a pro forma valuation of the aggregate market value of the Common Stock prepared by the Independent Appraiser. The valuation shall be based on financial information relating to the Primary Parties, market, financial and economic conditions, a comparison of the Primary Parties with selected publicly held financial institutions and holding companies and with comparable financial institutions and holding companies and such other factors as the Independent Appraiser may deem to be important, including, but not limited to, the projected operating results and financial condition of the Holding Company and Savings Association. The valuation shall be stated in terms of an Estimated Price Range, the maximum of which shall be no more than 15% above the average of the minimum and maximum of such price range and the minimum of which shall be no more than 15% below such average. The valuation shall be updated during the Conversion and Reorganization as market and financial conditions warrant and as may be required by the OTS.
	(ii)	Based upon the independent valuation, the Boards of Directors of the Primary Parties shall fix the Initial Purchase Price and the number of shares of Common Stock to be offered in the Offerings. The purchase price per share for the Common Stock shall be a uniform price determined in accordance with applicable OTS rules and regulations. The Actual Purchase Price and the total number of shares of Common Stock to be issued in the Offerings shall be determined by the Boards of Directors of the Primary Parties upon conclusion of the Offerings in consultation with the Independent Appraiser and any financial advisor or investment banker retained by the Primary Parties in connection with such Offerings.
	(iii)	Subject to the approval of the OTS, the Estimated Price Range may be increased or decreased to reflect market, financial and economic conditions before

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		completion of the Conversion and Reorganization or to fill the order of the Primary Parties may increase or decrease the total number of shares of Common Stock to be issued in the Offerings to reflect any such change. Notwithstanding anything to the contrary contained in this Plan, no resolicitation of subscribers shall be required and subscribers shall not be permitted to modify or cancel their subscriptions unless the gross proceeds from the sale of the Common Stock in the Offerings are less than the minimum or more than 15% above the maximum of the Estimated Price Range set forth in the Prospectus. In the event of an increase in the total number of shares offered in the Offerings due to an increase in the Estimated Price Range, the priority of share allocation shall be as set forth in this Plan.
	(iv)	In the event that Tax-Qualified Employee Stock Benefit Plans are unable to purchase the number of shares subscribed for by such Tax-Qualified Employee Stock Benefit Plans due to an oversubscription for shares of Common Stock pursuant to Section 5 hereof, Tax- Qualified Employee Stock Benefit Plans may (unless the Tax-Qualified Employee Stock Benefit Plans elect to purchase stock subsequent to the Offerings in the open market) purchase from the Holding Company, and the Holding Company may sell to the Tax-Qualified Employee Stock Benefit Plans, such additional shares of Holding Company Common Stock necessary to fill the subscriptions of the Tax-Qualified Employee Stock Benefit Plans, provided that such additional shares may not exceed 8% of the total number of shares of Common Stock sold in the Conversion. The sale of additional shares, if necessary, will occur contemporaneously with the sale of all other Common Stock sold in the Conversion. The sale of these additional shares to Tax-Qualified Employee Stock Benefit Plans by the Holding Company is conditioned upon receipt by the Holding Company of a letter from the Independent Appraiser to the effect that such sale would not have a material effect on the Conversion and Reorganization or the Actual Purchase Price and the approval of the OTS. The ability of the Tax-Qualified Employee Stock Benefit Plans to purchase up to an additional 8% of the total number of shares of Common Stock sold in the Conversion shall not be affected or limited in any manner by the priorities or purchase limitations otherwise set forth in this Plan. Notwithstanding anything to the contrary contained in this Plan, if the final valuation of the Common Stock exceeds the maximum of the Estimated Price Range, up to 8% of the total number of shares of Common Stock sold in the Conversion and Reorganization may be sold to Tax- Qualified Stock Benefit Plans prior to filling any other orders for Common Stock from such shares in excess of the maximum of the Estimated Price Range. However, at the election of the Holding Company, the Tax-Qualified Stock Benefit Plans may, in whole or in part, fill their orders through open market purchases subsequent to the closing of the Offerings.
	(v)	Notwithstanding the foregoing, no sale of Common Stock may be consummated unless, prior to such consummation, the Independent

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		Appraiser confirms to the Primary Parties and to the OTS, that, to the best knowledge of the Independent Appraiser, nothing of a material nature has occurred which, taking into account all relevant factors, would cause the Independent Appraiser to conclude that the aggregate value of the Common Stock to be issued is incompatible with its estimate of the aggregate consolidated pro forma market value of the Holding Company and the Bank. If such confirmation is not received, the Holding Company may cancel the Offerings, extend the Offerings and establish a new estimated valuation range and/or Estimated Price Range, extend, reopen or hold a new Offering or take such other action as the OTS may permit.
	(vi)	If there is a Community Offering, Syndicated Community Offering or Public Offering of Common Stock not subscribed for in the Subscription Offering, the price per share at which the Common Stock is sold in such Community Offering, Syndicated Community Offering or Public Offering shall be equal to the purchase price at which the Common Stock is sold to Persons in the Subscription Offering. Common Stock sold in the Community Offering, Syndicated Community Offering or Public Offering will be subject to the same limitations as Common Stock sold in the Subscription Offering.

5. SUBSCRIPTION RIGHTS OF ELIGIBLE ACCOUNT HOLDERS (FIRST PRIORITY) .

	(i)	Each Eligible Account Holder shall receive, as first priority and without payment, Subscription Rights to purchase up to the greater of: (i) $500,000 of Common Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering); (b) one-tenth of 1% of the total offering of shares in the Subscription Offering; or (c) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Common Stock offered in the Subscription Offering by a fraction, of which the numerator is the amount of the Qualifying Deposits of the Eligible Account Holder and the denominator is the total amount of all Qualifying Deposits of all Eligible Account Holders, in each case subject to Section 10 hereof.
	(ii)	In the event of an oversubscription for shares of Common Stock pursuant to Section 5(i), available shares shall be allocated among subscribing Eligible Account Holders so as to permit each such Eligible Account Holder, to the extent possible, to purchase a number of shares that will make his or her total allocation equal to the lesser of the number of shares subscribed for or 100 shares. Any available shares remaining after each subscribing Eligible Account Holder has been allocated the lesser of the number of shares subscribed for or 100 shares shall be allocated among the subscribing Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the Qualifying Deposit of each such subscribing Eligible Account Holder bears to the total Qualifying Deposits of all such subscribing Eligible Account Holders whose orders are unfilled, provided that no fractional shares shall be issued.

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(iii)

Subscription Rights of Eligible Account Holders who are also directors or Officers of the Holding Company or the Savings Association and their Associates shall be subordinated to those of other Eligible Account Holders to the extent that they are attributable to increased deposits during the one-year period preceding the Eligibility Record Date.

6.     SUBSCRIPTION RIGHTS OF TAX-QUALIFIED EMPLOYEE STOCK BENEFIT PLANS (SECOND PRIORITY) .

      Tax-Qualified Employee Stock Benefit Plans shall receive, without payment, Subscription Rights to purchase in the aggregate up to 10% of the Common Stock sold in the Offerings, including any shares of Common Stock to be issued as a result of an increase in the Estimated Price Range after commencement of the Subscription Offering and before completion of the Conversion and Reorganization. The Subscription Rights granted to Tax-Qualified Employee Stock Benefit Plans shall be subject to the availability of shares of Common Stock after taking into account the shares of Common Stock purchased by Eligible Account Holders; provided, however, that if the total number of shares of Common Stock is increased to any amount greater than the number of shares representing the maximum of the Estimated Price Range as set forth in the Prospectus, the ESOP shall have a priority right to purchase any such additional shares up to an aggregate of 10% of Common Stock sold in the Offerings. Shares of Common Stock purchased by any individual plan participant in a Tax-Qualified Employee Stock Benefit Plan using funds therein pursuant to the exercise of Subscription Rights granted to such plan participant in his or her individual capacity as an Eligible Account Holder and/or Supplemental Eligible Account Holder and/or purchases by such plan participant in the Community Offering shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit Plan for purposes of calculating the maximum amount of Common Stock that Tax-Qualified Employee Stock Benefit Plans may purchase pursuant to the first sentence of this Section 6 if the individual Plan Participant controls or directs the investment authority with respect to such account or subaccount. Consistent with applicable laws and regulations and policies and practices of the OTS, the Tax-Qualified Employee Stock Benefit Plans may use funds contributed by the Holding Company or the Savings Association and/or borrowed from an independent financial institution to exercise such Subscription Rights, and the Holding Company and the Savings Association may make scheduled discretionary contributions thereto, provided that such contributions do not cause the Savings Association to fail to meet any applicable regulatory capital requirement.

      The Tax-Qualified Employee Stock Benefit Plans shall not be deemed to be an Associate or Affiliate of, or Person Acting in Concert with, any Management Person.

7.    SUBSCRIPTION RIGHTS OF SUPPLEMENTAL ELIGIBLE ACCOUNT HOLDERS (THIRD PRIORITY).

(i)

In the event that the Eligibility Record Date is more than 15 months before the date of OTS approval of the Plan, then, and only in that event, a Supplemental Eligibility Record Date shall be set and each Supplemental Eligible Account Holder shall receive, without payment, Subscription Rights to purchase up to the

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		greater of: (a) $500,000 of Common Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering); (b) one-tenth of 1% of the total offering of shares in the Subscription Offering; or (c) 15 times the product (rounded down to the next whole number) obtained by multiplying the total number of shares of Common Stock offered in the Subscription Offering by a fraction, of which the numerator is the amount of the Qualifying Deposits of the Supplemental Eligible Account Holder and the denominator is the total amount of all Qualifying Deposits of all Supplemental Eligible Account Holders, in each case subject to Section 10 hereof and the availability of shares of Common Stock for purchase after taking into account the shares of Common Stock purchased by Eligible Account Holders and Tax-Qualified Employee Stock Benefit Plans through the exercise of Subscription Rights under Sections 5 and 6 hereof.
	(ii)	In the event of an oversubscription for shares of Common Stock pursuant to Section 7(i), available shares shall be allocated among subscribing Supplemental Eligible Account Holders so as to permit each such Supplemental Eligible Account Holder, to the extent possible, to purchase a number of shares sufficient to make his or her total allocation (including the number of shares, if any, allocated in accordance with Section 5(i)) equal to the lesser of the number of shares subscribed for or 100 shares. Any remaining available shares shall be allocated among subscribing Supplemental Eligible Account Holders whose subscriptions remain unsatisfied in the proportion that the amount of their respective Qualifying Deposits bears to the total amount of the Qualifying Deposits of all such subscribing Supplemental Eligible Account Holders whose orders are unfilled, provided that no fractional shares shall be issued.

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8. SUBSCRIPTION RIGHTS OF OTHER MEMBERS (FOURTH PRIORITY) .

	(i)	Each Other Member shall receive, without payment, Subscription Rights to purchase up to the greater of (i) $500,000 of Common Stock (or such maximum purchase limitation as may be established for the Community Offering and/or Syndicated Community Offering) or (ii) one-tenth of 1% of the total offering of shares in the Subscription Offering, subject to Section 10 hereof and the availability of shares of Common Stock for purchase after taking into account the shares of Common Stock purchased by Eligible Account Holders, Tax-Qualified Employee Stock Benefit Plans and Supplemental Eligible Account Holders, if any, through the exercise of Subscription Rights under Sections 5, 6 and 7 hereof.
	(ii)	If, pursuant to this Section 8, Other Members subscribe for a number of shares of Common Stock in excess of the total number of shares of Common Stock remaining, available shares shall be allocated among subscribing Other Members so as to permit each such Other Member, to the extent possible, to purchase a number of shares which will make his or her total allocation equal to the lesser of the number of shares subscribed for or 100 shares. Any remaining available shares shall be allocated among subscribing Other Members whose subscriptions remain unsatisfied on a pro rata basis in the same proportion as each such Other Member's subscription bears to the total subscriptions of all such subscribing Other Members, provided that no fractional shares shall be issued.

9. COMMUNITY OFFERING, SYNDICATED COMMUNITY OFFERING, PUBLIC OFFERING AND OTHER OFFERINGS.

(i)

If less than the total number of shares of Common Stock offered by the Holding Company are sold in the Subscription Offering, it is anticipated that all remaining shares of Common Stock shall, if practicable, be sold in a Community Offering. Subject to the requirements set forth herein, the manner in which the Common Stock is sold in the Community Offering shall have as its objective the achievement of the widest possible distribution of such stock.

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	(ii)	In the event of a Community Offering, all shares of Common Stock that are not subscribed for in the Subscription Offering shall be offered for sale by means of a direct community marketing program, which may provide for the use of brokers, dealers or investment banking firms experienced in the sale of financial institution securities. Any available shares in excess of those not subscribed for in the Subscription Offering will be available for purchase by members of the general public to whom a Prospectus is delivered by the Holding Company or on its behalf, with preference given first to Minority Stockholders and second to natural persons and trusts of natural persons residing in the counties in which the Savings Association has an office, which persons are referred to in this Section 9 as preferred subscribers.
	(iii)	A Prospectus and Order Form shall be furnished to such Persons as the Primary Parties may select in connection with the Community Offering, and each order for Common Stock in the Community Offering shall be subject to the absolute right of the Primary Parties to accept or reject any such order in whole or in part either at the time of receipt of an order or as soon as practicable following completion of the Community Offering. Available shares will be allocated first to each preferred subscriber whose order is accepted in an amount equal to the lesser of 100 shares or the number of shares subscribed for by each such preferred subscriber, if possible. Thereafter, unallocated shares shall be allocated among the preferred subscribers whose accepted orders remain unsatisfied in the same proportion that the unfilled order bears to the total unfilled orders of all preferred subscribers whose accepted orders remain unsatisfied, provided that no fractional shares shall be issued. If there are any shares remaining after all accepted orders by preferred subscribers have been satisfied, such remaining shares shall be allocated to other members of the general public who purchase in the Community Offering, applying the same allocation described above for preferred subscribers.
	(iv)	The amount of Common Stock that any Person may purchase in the Community Offering shall not exceed $500,000 of Common Stock; provided, however, that, to the extent applicable, and subject to the preferences set forth in Section 9(ii) and (iii) of this Plan and the limitations on purchases of Common Stock set forth in this Section 9(iv) and Section 10 of this Plan, orders for Common Stock in the Community Offering shall first be filled to a maximum of 2% of the total number of shares of Common Stock sold in the Offerings and thereafter any remaining shares shall be allocated on an equal number of shares basis per order until all orders have been filled, provided no fractional shares shall be issued. The Primary Parties may commence the Community Offering concurrently with, at any time during, or as soon as practicable after the end of, the Subscription Offering, and the Community Offering must be completed within 45 days after the completion of the Subscription Offering, unless extended by the Primary Parties with any required regulatory approval.
	(v)	Subject to such terms, conditions and procedures as may be determined by the

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		Primary Parties, all shares of Common Stock not subscribed for in the Subscription Offering or ordered in the Community Offering may be sold by a syndicate of broker-dealers to the general public in a Syndicated Community Offering. Each order for Common Stock in the Syndicated Community Offering shall be subject to the absolute right of the Primary Parties to accept or reject any such order in whole or in part either at the time of receipt of an order or as soon as practicable after completion of the Syndicated Community Offering. The amount of Common Stock that any Person may purchase in the Syndicated Community Offering shall not exceed $500,000 of Common Stock; provided, however, that, to the extent applicable, and subject to the limitations on purchases of Common Stock set forth in this Section 9(v) and Section 10 of this Plan, orders for Common Stock in the Syndicated Community Offering shall first be filled to a maximum of 2% of the total number of shares of Common Stock sold in the Offerings and thereafter any remaining shares shall be allocated on an equal number of shares basis per order until all orders have been filled, provided no fractional shares shall be issued. The Primary Parties may commence the Syndicated Community Offering concurrently with, at any time during, or as soon as practicable after the end of, the Subscription Offering and/or Community Offering, and the Syndicated Community Offering must be completed within 45 days after the completion of the Subscription Offering, unless extended by the Primary Parties with any required regulatory approval.
	(vi)	The Primary Parties may sell any shares of Common Stock remaining following the Subscription Offering, Community Offering and/or the Syndicated Community Offering in a Public Offering. The provisions of Section 10 hereof shall not be applicable to the sales to underwriters for purposes of the Public Offering but shall be applicable to sales by the underwriters to the public. The price to be paid by the underwriters in such an offering shall be equal to the Actual Purchase Price less an underwriting discount to be negotiated among such underwriters and the Primary Parties, subject to any required regulatory approval or consent.
	(vii)	If, for any reason, a Syndicated Community Offering or Public Offering of shares of Common Stock not sold in the Subscription Offering and the Community Offering cannot be effected, or if any insignificant residue of shares of Common Stock is not sold in the Subscription Offering, Community Offering or Syndicated Community Offering, the Primary Parties shall use their best efforts to obtain other purchasers for such shares in such manner and upon such conditions as may be satisfactory to the OTS.

10. LIMITATIONS ON SUBSCRIPTIONS AND PURCHASES OF COMMON STOCK .

The following limitations shall apply to all purchases of Common Stock in the Offerings:

(i)

No Person, by himself or herself, or with an Associate or group of Persons acting

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		in concert, may subscribe for or purchase in the Offerings more than $750,000 of the Common Stock offered in the Offerings. For purposes of this paragraph, an Associate of a Person does not include a Tax-Qualified or Non-Tax Qualified Employee Stock Benefit Plan in which the person has a substantial beneficial interest or serves as a trustee or in a similar fiduciary capacity. Moreover, for purposes of this paragraph, shares held by one or more Tax-Qualified or Non-Tax Qualified Employee Stock Benefit Plans attributed to a Person shall not be aggregated with shares purchased directly by or otherwise attributable to that Person.
	(ii)	The maximum number of shares of Common Stock that may be purchased in the Conversion and Reorganization by the ESOP shall not exceed 8% and all Tax-Qualified Employee Stock Benefit Plans shall not exceed 10% of the total number of shares of Holding Company Common Stock issued in the Conversion and Reorganization, in each instance, including any shares which may be issued in the event of an increase in the maximum of the Estimated Price Range to reflect changes in market, financial and economic conditions after commencement of the Subscription Offering and before completion of the Offerings; provided, however, that purchases of Common Stock that are made by plan participants pursuant to the exercise of Subscription Rights granted to such plan participant in his or her individual capacity as a Participant or purchases by a plan participant in the Community Offering using the funds thereof held in Tax-Qualified Employee Stock Benefit Plans shall not be deemed to be purchases by a Tax-Qualified Employee Stock Benefit Plan for purposes of this Section 10(ii).
	(iv)	The number of shares of Common Stock that directors and Officers of the Primary Parties and their Associates may purchase in the aggregate in the Offerings shall not exceed 31% of the total number of shares of Common Stock sold in the Offerings, including any shares that may be issued in the event of an increase in the maximum of the Estimated Price Range to reflect changes in market, financial and economic conditions after commencement of the Subscription Offering and before completion of the Offerings.
	(v)	No Person may purchase fewer than 25 shares of Common Stock in the Offerings, to the extent such shares are available; provided, however, that if the Actual Purchase Price is greater than $20.00 per share, such minimum number of shares shall be adjusted so that the aggregate Actual Purchase Price for such minimum shares will not exceed $500.00.
	(vi)	For purposes of the foregoing limitations and the determination of Subscription Rights: (a) directors, Officers and employees of the Primary Parties or their subsidiaries shall not be deemed to be Associates or a group Acting in Concert solely as a result of their capacities as such; (b) shares purchased by Tax-Qualified Employee Stock Benefit Plans shall not be attributable to the individual trustees or beneficiaries of any such plan for purposes of determining compliance with the limitations set forth in Section 10(iv) or Section 10(v) hereof;

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		(c) Exchange Shares shall be valued at the Actual Purchase Price; and (d) shares purchased by a Tax-Qualified Employee Stock Benefit Plan pursuant to instructions of an individual in an account in such plan in which the individual has the right to direct the investment, including any plan of the Savings Association qualified under Section 401(k) of the Code, shall be aggregated and included in that individual's purchases and not attributed to the Tax-Qualified Employee Stock Benefit Plan.
	(vii)	Subject to any required regulatory approval and the requirements of applicable laws and regulations, but without further approval of the Members or Minority Stockholders, the Primary Parties may increase or decrease any of the individual or aggregate purchase limitations set forth herein to a percentage which does not exceed 5% of the total offering of shares of Holding Company Common Stock in the Conversion and Reorganization whether before, during or after the Subscription Offering, Community Offering and/or Syndicated Community Offering. If an individual purchase limitation is increased after commencement of the Subscription Offering or any other offering, the Primary Parties shall permit any Person who subscribed for the maximum number of shares of Common Stock to purchase an additional number of shares, so that such Person shall be permitted to subscribe for the then maximum number of shares permitted to be subscribed for by such Person, subject to the rights and preferences of any Person who has priority Subscription Rights. If any of the individual or aggregate purchase limitations are decreased after commencement of the Subscription Offering or any other offering, the orders of any Person who subscribed for more than the new purchase limitation shall be decreased by the minimum amount necessary so that such Person shall be in compliance with the then maximum number of shares permitted to be subscribed for by such Person.
	(viii)	The Board of Directors of the Holding Company may, in its sole discretion, increase the maximum purchase limitation referred to here up to 9.99%, provided that orders for shares exceeding 5% of the shares being offered in the Offerings shall not exceed, in the aggregate, 10% of the shares being offered in the Offerings. Requests to purchase additional shares of Common Stock under this provision will be allocated by the Board of Directors on a pro rata basis giving priority in accordance with the priority rights set forth herein.
	(ix)	The Primary Parties shall have the right to take all such action as they may, in their sole discretion, deem necessary, appropriate or advisable to monitor and enforce the terms, conditions, limitations and restrictions contained in this Section 10 and elsewhere in this Plan and the terms, conditions and representations contained in the Order Form, including, but not limited to, the absolute right (subject only to any necessary regulatory approvals or concurrences) to reject, limit or revoke acceptance of any subscription or order and to delay, terminate or refuse to consummate any sale of Common Stock that they believe might violate, or is designed to, or is any part of a plan to, evade or circumvent such terms, conditions, limitations, restrictions and representations. Depending upon market

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		and financial conditions, the Board of Directors of the Holding Company with the approval of the OTS, to the extent applicable, and without further approval of the Members, may increase or decrease any of the above purchase limitations. Any such action shall be final, conclusive and binding on all persons, and the Primary Parties and their respective Boards shall be free from any liability to any Person on account of any such action.
	(x)	Notwithstanding anything to the contrary contained in this Plan and except as may otherwise be required by the OTS, the Minority Stockholders will not have to sell any Mid-Tier Company Common Stock or be limited in receiving Exchange Shares even if their ownership of Mid-Tier Company Common Stock when converted into Exchange Shares would exceed an applicable purchase limitation; provided, however, that a Minority Stockholder who would exceed an applicable purchase limitation may be precluded from purchasing Common Stock in the Offerings.
	(xi)	For purposes of this Section 10, the directors of the Holding Company and the Savings Association shall not be deemed to be Associates or a group Acting in Concert solely as a result of their serving in such capacities.
	(xii)	Each Person purchasing Common Stock in the Offerings shall be deemed to confirm that such purchase does not conflict with the above purchase limitations. All questions concerning whether any Persons are Associates or a group Acting in Concert or whether any purchase conflicts with the purchase limitations in this Plan or otherwise violates any provision of this Plan shall be determined by the Holding Company in its sole discretion. Such determination shall be conclusive and binding on all Persons and the Holding Company may take any remedial action, including without limitation rejecting the purchase or referring the matter to the OTS for action, as in its sole discretion the Holding Company may deem appropriate.

11. TIMING OF SUBSCRIPTION OFFERING; MANNER OF EXERCISING SUBSCRIPTION RIGHTS AND ORDER FORMS .

	(i)	The Offerings shall be conducted in compliance with 12 C.F.R. Part 563g and, to the extent applicable, Form OC of the OTS. The Subscription Offering may be commenced concurrently with or at any time after the mailing of the Member Proxy Statement to Members and the Stockholder Proxy Statement to Minority Stockholders. The Subscription Offering may be closed before the Special Meeting of Members and the Special Meeting of Stockholders, provided that the offer and sale of the Common Stock shall be conditioned upon the approval of the Plan by the Voting Members at the Special Meeting of Members and by Mid-Tier Company's stockholders at the Special Meeting of Stockholders.
	(ii)	The exact timing of the commencement of the Subscription Offering shall be determined by the Primary Parties in consultation with the Independent Appraiser

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	and any financial or advisory or investment banking firm retained by them in connection with the Conversion and Reorganization. The Primary Parties may consider a number of factors, including, but not limited to, their current and projected future earnings, local and national economic conditions, and the prevailing market for stocks in general and stocks of financial institutions in particular. The Primary Parties shall have the right to withdraw, terminate, suspend, delay, revoke or modify any such Subscription Offering, at any time and from time to time, as they in their sole discretion may determine, without liability to any Person, subject to compliance with applicable securities laws and any necessary regulatory approval or concurrence.
(iii)	Promptly after the SEC has declared the Registration Statement, which includes the Prospectus, effective and all required regulatory approvals have been obtained, the Primary Parties shall, distribute or make available the Prospectus, together with Order Forms for the purchase of Common Stock, to all Participants for the purpose of enabling them to exercise their respective Subscription Rights, subject to Section 13 hereof.
(iv)	A single Order Form for all Deposit Accounts maintained with the Savings Association by an Eligible Account Holder and any Supplemental Eligible Account Holder may be furnished, irrespective of the number of Deposit Accounts maintained with the Savings Association on the Eligibility Record Date and Supplemental Eligibility Record Date, respectively. No person holding a Subscription Right may exceed any otherwise applicable purchase limitation by submitting multiple orders for Common Stock. Multiple orders are subject to adjustment, as appropriate, on a pro rata basis and deposit balances will be divided equally among such orders in allocating shares in the event of an oversubscription.
(v)	The Order Form (or accompanying instructions) used for the Subscription Offering will contain, among other things, the following:
	(a)	A clear and intelligible explanation of the subscription rights granted under the Plan to Eligible Account Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders and Other Members;
	(b)	A specified expiration date by which the Order Form must be returned to, and actually received by, the Primary Parties or their representative for purposes of exercising subscription rights, which date will be not less than 20 days after the Order Forms are mailed by the Primary Parties;
	(c)	The subscription price to be paid for each share subscribed for when the Order Form is returned;
	(d)	A statement that 25 shares is the minimum number of shares of Common Stock that may be subscribed for under the Plan;

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	(e)	A specifically designated blank space for indicating the number of shares being subscribed for;
	(f)	A set of detailed instructions as to how to complete the Order Form, including a statement as to the available alternative methods of payment for the shares being subscribed for;
	(g)	Specifically designated blank spaces for dating and signing the Order Form;
	(h)	An acknowledgement that the subscriber has received the Prospectus;
	(i)	A statement of the consequences of failing to properly complete and return the Order Form, including a statement that the subscription rights will expire on the expiration date specified on the Order Form unless such expiration date is extended by the Primary Parties, and that the subscription rights may be exercised only by delivering the Order Form properly completed and executed, to the Primary Parties or their representative by the expiration date, together with required payment of the subscription price for all shares of Common Stock subscribed for;
	(j)	A statement that the subscription rights are non-transferable and that all shares of Common Stock subscribed for upon exercise of subscription rights must be purchased on behalf of the Person exercising the subscription rights of his own account; and
	(k)	A statement that, after receipt by the Primary Parties or their representative, a subscription may not be modified, withdrawn or canceled without the consent of the Primary Parties.
(vi)	The recipient of an Order Form shall have no less than 20 days and no more than 45 days from the date of mailing of the Order Form (with the exact termination date to be set forth on the Order Form) to properly complete and execute the Order Form and deliver it to the Primary Parties. The Primary Parties may extend such period by such amount of time as they determine is appropriate. Failure of any Participant to deliver a properly executed Order Form to the Primary Parties, along with full payment (or authorization for full payment by withdrawal) for the shares of Common Stock subscribed for, within the time limits prescribed, shall be deemed a waiver and release by such person of any rights to subscribe for shares of Common Stock. Each Participant shall be required to confirm to the Primary Parties by executing an Order Form that such Person has fully complied with all of the terms, conditions, limitations and restrictions in the Plan.
(vii)	The Primary Parties shall have the absolute right, in their sole discretion and without liability to any Participant or other Person, to reject any Order Form,

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including, but not limited to, any Order Form that is: (a) improperly completed or executed; (b) not timely received; (c) not accompanied by the proper and full payment (or authorization of withdrawal for full payment) or, in the case of institutional investors in the Community Offering, not accompanied by an irrevocable order together with a legally binding commitment to pay the full amount of the purchase price at any time prior to 48 hours before the completion of the Offerings; or (d) submitted by a Person whose representations the Primary Parties believe to be false or who they otherwise believe, either alone, or Acting in Concert with others, is violating, evading or circumventing, or intends to violate, evade or circumvent, the terms and conditions of the Plan. Furthermore, if Order Forms are not delivered and are returned to the Primary Parties by the United States Postal Service or the Primary Parties are unable to locate the addressee, or are not mailed pursuant to a "no mail" order placed in effect by the account holder, the Subscription Rights of the Person to which such rights have been granted will lapse as though such Person failed to return the contemplated Order Form within the time period specified thereon. The Primary Parties may, but will not be required to, waive any irregularity on any Order Form or may require the submission of corrected Order Forms or the remittance of full payment for shares of Common Stock by such date as they may specify. The interpretation by the Primary Parties of the terms and conditions of the Order Forms shall be final and conclusive.

12. PAYMENT FOR COMMON STOCK .

(i)

Payment for shares of Common Stock subscribed for by Participants in the Subscription Offering and payment for shares of Common Stock ordered by Persons in the Community Offering shall be equal to the Initial Purchase Price multiplied by the number of shares that are being subscribed for or ordered, respectively. Such payment may be made in cash, if delivered in person, or by check, bank draft or money order at the time the Order Form is delivered, provided that checks will only be accepted subject to collection. The Primary Parties may, in their sole discretion, permit institutional investors to submit irrevocable orders together with the legally binding commitment for payment and to thereafter pay for such shares of Common Stock for which they subscribe in the Community Offering at any time prior to the 48 hours before the completion of the Conversion and Reorganization. The Primary Parties, in their sole and absolute discretion, may also elect to receive payment for shares of Common Stock by wire transfer. In addition, the Primary Parties may elect to provide Participants and/or other Persons who have a Deposit Account with the Savings Association the opportunity to pay for shares of Common Stock by authorizing the Savings Association to withdraw from such Deposit Account an amount equal to the aggregate Initial Purchase Price of such shares. Payment may also be made by a Participant using funds held for such Participant's benefit by a Savings Association Benefit Plan to the extent that such plan allows participants or any related trust established for the benefit of such participants to direct that some or all of their individual accounts or sub-accounts be invested in Common Stock. If the Actual Purchase Price is less than the Initial Purchase Price, the Primary Parties shall refund the difference to all Participants and other Persons, unless the Primary Parties choose to provide Participants and other Persons the opportunity on the Order Form to elect to have such difference applied to the purchase of additional whole shares of Common Stock. If

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		the Actual Purchase Price is more than the Initial Purchase Price, the Primary Parties shall reduce the number of shares of Common Stock ordered by Participants and other Persons and refund any remaining amount that is attributable to a fractional share interest, unless the Primary Parties chooses to provide Participants and other Persons the opportunity to increase the Actual Purchase Price submitted by them.
	(ii)	Notwithstanding the above, if the Tax-Qualified Employee Stock Benefit Plans subscribe for shares during the Subscription Offering, such plans will not be required to pay for the shares at the time they subscribe but rather may pay for such shares of Common Stock subscribed for by such plans at the Actual Purchase Price upon consummation of the Offerings, provided that, in the case of the ESOP, there is in force from the time of its subscription until the consummation of the Offerings, a loan commitment to lend to the ESOP, at such time, the aggregate price of the shares for which it subscribed. Consistent with applicable laws and regulations and policies and practices of the OTS, payment for shares of Common Stock subscribed for by Tax-Qualified Employee Stock Benefit Plans may be made with funds contributed by the Holding Company and/or funds obtained pursuant to a loan from an independent third party pursuant to a loan commitment that is in force from the time that any plan submits an Order Form until the closing of the transactions contemplated hereby.
	(ii)	If a Participant or other Person authorizes the Savings Association to withdraw the amount of the Initial Purchase Price from his or her Deposit Account, the Savings Association shall have the right to make such withdrawal or to freeze funds equal to the aggregate Initial Purchase Price upon receipt of the Order Form. Notwithstanding any regulatory provisions regarding penalties for early withdrawals from certificate accounts, the Savings Association may allow payment by means of withdrawal from certificate accounts without the assessment of such penalties. In the case of an early withdrawal of only a portion of such account, the certificate evidencing such account shall be canceled if any applicable minimum balance requirement ceases to be met. In such case, the remaining balance will earn interest at the regular passbook rate. However, where any applicable minimum balance is maintained in such certificate account, the rate of return on the balance of the certificate account shall remain the same as before such early withdrawal. This waiver of the early withdrawal penalty applies only to withdrawals made in connection with the purchase of Common Stock and is entirely within the discretion of the Primary Parties.

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	(iv)	The subscription funds will be held by the Savings Association or, in the Savings Association's discretion, in an escrow account at an unaffiliated institution. The Holding Company shall pay interest, at not less than the Savings Association's passbook rate, for all amounts paid in cash, by check, bank draft or money order to purchase shares of Common Stock in the Subscription Offering and the Community Offering from the date payment is received until the date the Conversion and Reorganization is completed or terminated.
	(v)	The Holding Company will not offer or sell any of the Common Stock proposed to be issued to any Person whose purchase would be financed by funds loaned, directly or indirectly, to the Person by the Savings Association.
	(vi)	Each share of Common Stock shall be non-assessable upon payment in full of the Actual Purchase Price.

13.     ACCOUNT HOLDERS IN NONQUALIFIED STATES OR FOREIGN COUNTRIES .

         The Primary Parties shall make reasonable efforts to comply with the securities laws of all jurisdictions in the United States in which Participants reside. However, no Participant will be offered or receive any Common Stock under the Plan if such Participant resides in a foreign country or resides in a jurisdiction of the United States with respect to which any of the following apply: (i) there are few Participants otherwise eligible to subscribe for shares under this Plan who reside in such jurisdiction; (ii) the granting of Subscription Rights or the offer or sale of shares of Common Stock to such Participants would require any of the Primary Parties or their respective directors and Officers, under the laws of such jurisdiction, to register as a broker-dealer, salesman or selling agent or to register or otherwise qualify the Common Stock for sale in such jurisdiction, or any of the Primary Parties would be required to qualify as a foreign corporation or file a consent to service of process in such jurisdiction; or (iii) such registration, qualification or filing in the judgment of the Primary Parties would be impracticable or unduly burdensome for reasons of cost or otherwise.

14.     VOTING RIGHTS OF STOCKHOLDERS .

         Following consummation of the Conversion and Reorganization, voting rights with respect to the Savings Association shall be held and exercised exclusively by the Holding Company as holder of all of the Savings Association's outstanding voting capital stock, voting rights with respect to the Holding Company shall be held and exercised exclusively by the holders of the Holding Company's voting capital stock.

15.     LIQUIDATION ACCOUNT .

(i)

At the time of the MHC Merger, the Savings Association shall establish a liquidation account in an amount equal to the greater of: (a) the retained earnings of the Savings Association as of the latest statement of financial condition

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		contained in the final offering circular utilized in connection with the Savings Association's initial mutual holding company reorganization and minority stock offering, or (b) the percentage of the outstanding shares of Mid-Tier Company Common Stock owned by the MHC before the Bank Merger, multiplied by the Mid-Tier Company's total stockholders' equity as reflected in its latest statement of financial condition contained in the final Prospectus utilized in the Conversion and Reorganization. The function of the liquidation account will be to preserve the rights of certain holders of Deposit Accounts in the Savings Association who maintain such accounts in the Savings Association following the Conversion and Reorganization in the unlikely event of a liquidation of the Savings Association subsequent to the Conversion and Reorganization.
	(ii)	The liquidation account shall be maintained for the benefit of Eligible Account Holders and Supplemental Eligible Account Holders, if any, who maintain their Deposit Accounts in the Savings Association after the Conversion and Reorganization. Each such account holder will, with respect to each Deposit Account held, have a related inchoate interest in a portion of the liquidation account balance, which interest will be referred to in this Section 15 as the "subaccount balance." All Deposit Accounts having the same social security number will be aggregated for purposes of determining the initial subaccount balance with respect to such Deposit Accounts, except as provided in Section 15(iv) hereof.
	(iii)	In the event of a complete liquidation of the Savings Association subsequent to the Conversion and Reorganization (and only in such event), each Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall be entitled to receive a liquidation distribution from the liquidation account in the amount of the then current subaccount balances for Deposit Accounts then held (adjusted as described below) before any liquidation distribution may be made with respect to the capital stock of the Savings Association. No merger, consolidation, sale of bulk assets or similar combination transaction with another FDIC-insured institution in which the Savings Association is not the surviving entity shall be considered a complete liquidation for this purpose. In any such transaction, the liquidation account shall be assumed by the surviving entity.
	(iv)	The initial subaccount balance for a Deposit Account held by an Eligible Account Holder and Supplemental Eligible Account Holder, if any, shall be determined by multiplying the opening balance in the liquidation account by a fraction, of which the numerator is the amount of the Qualifying Deposits of such account holder and the denominator is the total amount of Qualifying Deposits of all Eligible Account Holders and Supplemental Eligible Account Holders, if any. For Deposit Accounts in existence at both the Eligibility Record Date and the Supplemental Eligibility Record Date, if any, separate initial subaccount balances shall be determined on the basis of the Qualifying Deposits in such Deposit Accounts on each such record date. Initial subaccount balances shall not be increased, and shall be subject to downward adjustment as provided below.

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	(v)	If the aggregate deposit balance in the Deposit Account(s) of any Eligible Account Holder or Supplemental Eligible Account Holder, if any, at the close of business on any March 31 annual closing date, commencing on or after the effective date of the Conversion and Reorganization, is less than the lesser of: (a) the aggregate deposit balance in such Deposit Account(s) at the close of business on any other annual closing date subsequent to such record dates; or (b) the aggregate deposit balance in such Deposit Account(s) as of the Eligibility Record Date or the Supplemental Eligibility Record Date, if any, the subaccount balance for such Deposit Account(s) shall be adjusted by reducing such subaccount balance in an amount proportionate to the reduction in such deposit balance. In the event of such a downward adjustment, the subaccount balance shall not be subsequently increased, notwithstanding any subsequent increase in the deposit balance of the related Deposit Account(s). The subaccount balance of an Eligible Account Holder or Supplemental Eligible Account Holder, if any, will be reduced to zero if the Account Holder ceases to maintain a Deposit Account at the Savings Association.
	(vi)	Subsequent to the Conversion and Reorganization, the Savings Association may not pay cash dividends generally on deposit accounts and/or capital stock of the Savings Association, or repurchase any of the capital stock of the Savings Association, if such dividend or repurchase would reduce the Savings Association's regulatory capital below the aggregate amount of the then current subaccount balances for Deposit Accounts then held; otherwise, the existence of the liquidation account shall not operate to restrict the use or application of any of the net worth accounts of the Savings Association.
	(vii)	For purposes of this Section 15, a Deposit Account includes a predecessor or successor account which is held by an Account Holder with the same social security number.

16.     TRANSFER OF DEPOSIT ACCOUNTS .

         Each Deposit Account in the Savings Association at the time of the consummation of the Conversion and Reorganization shall become, without further action by the holder, a Deposit Account in the Savings Association equivalent in withdrawable amount to the withdrawal value (as adjusted to give effect to any withdrawal made for the purchase of Common Stock), and subject to the same terms and conditions (except as to voting and liquidation rights) as such Deposit Account in the Savings Association immediately preceding consummation of the Conversion and Reorganization. Holders of Deposit Accounts in the Savings Association shall not, as such holders, have any voting rights.

17.     SECURITIES REGISTRATION, MARKET MAKER, AND STOCK LISTING .

         In connection with the Conversion and Reorganization, the Holding Company shall register the Common Stock pursuant to Section 12 of the Securities Exchange Act of 1934, as

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amended, and shall undertake not to deregister such stock for a period of three years thereafter. The Holding Company also shall use its best efforts to encourage and assist a market maker to establish and maintain a market for the Common Stock and to list the Common Stock on a national or regional securities exchange or to have quotations for such stock disseminated on the Nasdaq Stock Market.

18.     COMPLETION OF THE STOCK OFFERING .

         The Offerings will be terminated if not completed within 90 days of the date of approval of the Plan by the OTS, unless the extension is approved by the OTS.

19.     DIRECTORS AND OFFICERS OF THE SAVINGS ASSOCIATION .

         Each person serving as a director or Officer of the Savings Association at the time of the adoption of the Plan of Conversion and Reorganization shall continue to serve as a director or Officer of the Savings Association for the balance of the term for which the person was elected before the adoption of the Plan of Conversion and Reorganization, and until a successor is elected and qualified. Each person serving as a director or Officer of the Mid-Tier Company at the time of the adoption of the Plan of Conversion and Reorganization shall serve as a director or Officer of the Holding Company for the balance of the term for which the person was elected before the adoption of the Plan of Conversion and Reorganization, and until a successor is elected and qualified. The number, names, business, addresses and terms of the directors of the Holding Company and the Savings Association are set forth in the Agreements and Plans of Merger included as Exhibits A, B and C hereto.

20.     REQUIREMENTS FOR STOCK PURCHASES BY DIRECTORS AND OFFICERS FOLLOWING THE CONVERSION AND REORGANIZATION .

         For a period of three years following the Conversion and Reorganization, the directors and Officers of the Holding Company and the Savings Association and their Associates may not purchase Common Stock, without the prior written approval of the OTS, except from a broker-dealer registered with the SEC. This prohibition shall not apply, however, to: (i) a negotiated transaction involving more than 1% of the outstanding Common Stock; and (ii) purchases of stock made by and held by any Tax-Qualified Employee Stock Benefit Plan (and purchases of stock made by and held by any Non-Tax-Qualified Employee Stock Benefit Plan following the receipt of stockholder approval of such plan) even if such Common Stock may be attributable to individual Officers or directors and their Associates. The foregoing restriction on purchases of Common Stock shall be in addition to any restrictions that may be imposed by federal and state securities laws.

21.     RESTRICTIONS ON TRANSFER OF STOCK .

         All shares of Common Stock that are purchased by Persons other than directors and Officers of the Holding Company or the Savings Association shall be transferable without restriction. Shares of Common Stock purchased by directors and Officers of the Holding Company or the Savings Association and their Associates on original issue from the Holding

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Company (by subscription or otherwise) pursuant to the Offerings shall be subject to the restriction that such shares shall not be sold or otherwise disposed of for value for a period of one year following the date of purchase, except for any disposition of such shares following the death of the original purchaser. The shares of Common Stock issued by the Holding Company in the Offerings to such directors and Officers shall bear the following legend giving appropriate notice of such one-year restriction:

"The shares of stock evidenced by this Certificate are restricted as to transfer for a period of one year from the date of this Certificate pursuant to Part 575 of the Rules and Regulations of the Office of Thrift Supervision. These shares may not be transferred during such one-year period without a legal opinion of counsel for the Company that said transfer is permissible under the provisions of applicable law and regulation. This restrictive legend shall be deemed null and void after one year from the date of this Certificate."

         In addition, the Holding Company shall give appropriate instructions to the transfer agent for the Holding Company with respect to the applicable restrictions relating to the transfer of restricted stock. Any shares issued at a later date as a stock dividend, stock split or otherwise with respect to any such restricted stock shall be subject to the same holding period restrictions as may then be applicable to such restricted stock. The foregoing restriction on transfer shall be in addition to any restrictions on transfer that may be imposed by federal and state securities laws.

22.     TAX RULINGS OR OPINIONS .

         Consummation of the Conversion and Reorganization is conditioned upon prior receipt by the Primary Parties of either a ruling or an opinion of counsel with respect to federal tax laws to the effect that consummation of the transactions contemplated hereby will not result in a taxable reorganization under the provisions of the applicable codes or otherwise result in any adverse tax consequences to the Primary Parties or to account holders receiving Subscription Rights before or after the Conversion and Reorganization, except in each case to the extent, if any, that Subscription Rights are deemed to have fair market value on the date such rights are issued.

23.     RESTRICTIONS ON ACQUISITION OF STOCK OF HOLDING COMPANY .

         The Articles of Incorporation of the Holding Company shall contain a provision stipulating that, for five years after the effective date of the Conversion and Reorganization, no Person, group of Persons acting in Concert and any Associates thereof may offer to acquire or acquire beneficial ownership of more than 10% of any class of equity security of the Holding Company or vote any shares of equity securities of the Holding Company held in excess

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of that 10% ownership limit; provided, however, that this restriction shall not apply to: (i) acquisitions of up to 25% by a Tax-Qualified Employee Stock Benefit Plan; (ii) purchases by underwriters in a public offering by the Holding Company; or (iii) a proposal to acquire or the acquisition of more than 10% of the Holding Company that is approved by two-thirds of the directors of the Holding Company prior to that proposal or acquisition.

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24. STOCK COMPENSATION PLANS .

	(i)	By participating in the Conversion and Reorganization, the Holding Company shall have approved adoption of the Citizens Community Federal's Employee Stock Ownership Plan, the Citizens Community Bancorp 2004 Stock Option and Incentive Plan and Citizens Community Bancorp 2004 Recognition and Retention Plan as plans of the Holding Company and shall have agreed to issue Holding Company Common Stock in lieu of Mid-Tier Company Common Stock pursuant to the terms of each such plan. As of the effective date of the Conversion and Reorganization, shares outstanding or available under these plans shall be exchanged for shares of Holding Company Stock equal to the number of shares of Mid-Tier Company Stock outstanding or available under these plans immediately prior to the effective date multiplied by the Exchange Ratio. As of the effective date of the Conversion and Reorganization, rights outstanding under these plans shall be assumed by the Holding Company and thereafter shall be rights only for shares of Holding Company Common Stock, with each such right being for a number of shares of Holding Company Common Stock equal to the number of shares of Mid-Tier Company Common Stock that were available thereunder immediately prior to the effective date multiplied by the Exchange Ratio, and the price of each such right shall be adjusted to reflect the Exchange Ratio and so that the aggregate purchase price of the rights is unaffected, but with no change in any other term or condition of such right. The Holding Company shall make appropriate amendments to these plans to reflect the adoption of the plans by the Holding Company without adverse effect upon the rights outstanding thereunder.
	(ii)	The Holding Company and the Savings Association are authorized to adopt Tax-Qualified Employee Stock Benefit Plans in connection with the Conversion and Reorganization, including without limitation an employee stock ownership plan.
	(iii)	The Holding Company and the Savings Association also are authorized to adopt new stock option plans, restricted stock grant plans and other Non-Tax-Qualified Employee Stock Benefit Plans, provided that no stock options shall be granted, and no shares of Common Stock shall be purchased, pursuant to any of such plans before the receipt of stockholder approval of such plans at either an annual or special meeting of stockholders of the Holding Company held no earlier than six months following the Conversion and Reorganization.
	(iv)	Existing, as well as any newly-created, Tax-Qualified Employee Stock Benefit Plans may purchase shares of Common Stock in the Offerings, to the extent permitted by the terms of such benefit plans and this Plan.
	(v)	The Holding Company and the Savings Association are authorized to enter into employment or severance agreements with their Officers. By participating in the Conversion and Reorganization, the Holding Company shall have approved adoption of any existing employment or severance agreements of Mid-Tier Company with its Officers.

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25. DIVIDEND AND REPURCHASE RESTRICTIONS ON STOCK .

	(i)	Following consummation of the Conversion and Reorganization, any repurchases of shares of capital stock by the Holding Company will be made in accordance with then applicable laws and regulations.
	(ii)	The Savings Association may not declare or pay a cash dividend on, or repurchase any of, its capital stock if the effect thereof would cause the regulatory capital of the Savings Association to be reduced below the amount required for the liquidation account. Any dividend declared or paid on, or repurchase of, the Savings Association's capital stock also shall be in compliance with Section 563.140 to .146 of the Rules and Regulations of the OTS, or any successor thereto.

26.     EXPENSES, ADVISORS AND FEES TO BROKERS .

         The Primary Parties shall use their best efforts to assure that expenses incurred by them in connection with the Conversion and Reorganization shall be reasonable. The Primary Parties may retain and pay for legal, financial, investment banking and other advisors to assist in connection with the Conversion and Reorganization. The Primary Parties may elect to offer to pay fees on a per share basis to securities brokers who assist purchasers of Common Stock in the Offerings.

27.     EFFECTIVE DATE .

         The effective date of the Conversion and Reorganization shall be the date on which Articles of Combination for the Mid-Tier Merger, the MHC Merger and the Holding Company Merger are filed with the OTS and effective. The Articles of Combination shall be filed after all requisite regulatory, stockholder and depositor approvals have been of obtained, all applicable waiting periods have expired and sufficient subscriptions and orders for the Common Stock have been received in the Offerings. The closing of the sale of all shares of Common Stock sold in the Offerings shall occur simultaneously on the effective date and shall be conditioned upon the prior receipt of all requisite regulatory and other approvals.

28.     AMENDMENT OR TERMINATION OF THE PLAN .

         If deemed necessary or desirable by the Board of Directors of the Primary Parties, this Plan may be substantively amended, as a result of comments from regulatory authorities or otherwise, at any time before the solicitation of proxies from Members and Mid-Tier Company's stockholders to vote on the Plan and at any time thereafter with the concurrence of the OTS. Any amendment to this Plan made after approval by the Members and Citizen Community Bancorp's stockholders with the concurrence of the OTS shall not necessitate further approval by the Members and Citizen Community Bancorp's stockholders, unless otherwise required by the OTS.

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This Plan shall terminate if the sale of all shares of Common Stock is not completed within 24 months from the earlier of the date of the Special Meeting of Stockholders and the Special Meeting of Members. Before the earlier of the Special Meeting of Stockholders and the Special Meeting of Members, this Plan may be terminated by the Boards of Directors of the Primary Parties without approval of the OTS. After the Special Meeting, the Board of Directors may terminate this Plan only with the concurrence of the OTS.

29.     INTERPRETATION OF THE PLAN .

         All interpretations of this Plan and application of its provisions to particular circumstances by a majority of each of the Boards of Directors of the Primary Parties shall be final, subject to the authority of the OTS.

30.     EXHIBITS

	A	Agreement and Plan of Merger by and among Citizens Community Bancorp, Citizens Community Federal and CCBC Interim One Savings Bank.
	B	Agreement and Plan of Merger by and among Citizens Community MHC, Citizens Community Federal and CCBC Interim Two Savings Bank.
	C	Agreement and Plan of Merger by and among Citizens Community Federal, Citizens Community Bancorp, Inc. and CCBC Interim Three Savings Bank.
	D	Articles of Incorporation of Citizens Community Bancorp, Inc.
	E	Bylaws of Citizens Community Bancorp, Inc.

36 Exhibit A

Exhibit A

Agreement and Plan of Merger
by and among Citizens Community Bancorp,
Citizens Community Federal and
CCBC Interim One Savings Bank
This Agreement and Plan of Merger, dated as of ______________________, 2006, is made by and between Citizens Community Bancorp, a federal corporation (the " Company"), Citizens Community Federal, a federal savings bank (the "Savings Association" or the "Surviving Corporation"), and CCBC Interim One Savings Bank, an interim federal savings bank ("Interim One") (collectively, the "Constituent Corporations").

WITNESSETH:
WHEREAS, Citizens Community MHC, a federal mutual holding company (the "MHC"), the Savings Association and the Mid-Tier Company have adopted a Plan of Conversion and Reorganization (the "Plan") pursuant to which: (i) the Mid-Tier Company will convert to an interim federal savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "Mid-Tier Merger"); (ii) the MHC will convert to a interim federal stock savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "MHC Merger"); (iii) the Savings Association and a newly formed interim federal savings bank will merge (the "Holding Company Merger"), pursuant to which the Savings Association will become a wholly owned subsidiary of Citizens Community Bancorp, Inc., a newly formed stock corporation (the "Holding Company"); and (iv) the Holding Company will offer shares of its common stock in the manner set forth in the Plan (collectively, the "Conversion and Reorganization"); and

WHEREAS, the Constituent Corporations desire to provide for the terms and conditions of the Mid-Tier Merger.

NOW, THEREFORE, the Constituent Corporations hereby agree as follows:

1. EFFECTIVE DATE . The Mid-Tier Merger shall become effective on the date specified in the endorsement of the Articles of Combination relating to the Mid-Tier Merger by the Secretary of the Office of Thrift Supervision (the "OTS") pursuant to 12 C.F.R. § 552.13(k), or any successor thereto (the "Effective Date").

2. THE MID-TIER MERGER AND EFFECT THEREOF . Subject to the terms and conditions set forth herein and the prior approval of the OTS of the Conversion and Reorganization and the expiration of all applicable waiting periods, the Mid-Tier Company shall convert to a interim federal savings bank and simultaneously merge with and into the Savings Association, which shall be the Surviving Corporation. Upon consummation of the Mid-Tier Merger, the Surviving Corporation shall be considered the same business and corporate entity as each of the Constituent Corporations and the Surviving Corporation shall be subject to and be deemed to have assumed all of the property, rights, privileges, powers, franchises, debts, liabilities, obligations, duties and relationships of each of the Constituent Corporations and shall

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have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property, rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. In addition, any reference to either of the Constituent Corporations in any contract or document, whether executed or taking effect before or after the Effective Date, shall be considered a reference to the Surviving Corporation, if not inconsistent with the other provisions of the contract or document; and any pending action or other judicial proceeding to which either of the Constituent Corporations is a party shall not be deemed to have abated or to have been discontinued by reason of the Mid-Tier Merger, but may be prosecuted to final judgment, order or decree in the same manner as if the Mid-Tier Merger had not occurred or the Surviving Corporation may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against it that might have been rendered for or against either of the Constituent Corporations if the Mid-Tier Merger had not occurred.

3.     COMMON STOCK OF THE SURVIVING CORPORATION; CANCELLATION AND TREATMENT OF MID-TIER COMPANY COMMON STOCK .

      (a)       On the Effective Date, each share of common stock, $0.01 par value per share, of the Savings Association issued and outstanding immediately before the Effective Date and held by the Mid-Tier Company, by virtue of the Mid-Tier Merger, shall be the common stock of the Surviving Corporation and be held by the MHC.

      (b)       At or after the Effective Date and before the Holding Company Merger, each certificate or certificates theretofore evidencing issued and outstanding shares of the Mid-Tier Company common stock held by the MHC shall be canceled, and all other such certificate or certificates, held by the Minority Stockholders shall be converted into and be exchanged for shares of common stock of the Holding Company, as provided for in the Holding Company Merger.

4.     RIGHTS OF DISSENT AND APPRAISAL . Holders of Mid-Tier Company common stock shall have dissenter or appraisal rights in connection with the Mid-Tier Merger and the Holding Company Merger to the extent required by 12 C.F.R. § 552.14, or any successor thereto.

5.     NAME OF SURVIVING CORPORATION . The name of the Surviving Corporation shall be "Citizens Community Federal."

6.     DEPOSITS . All deposit accounts of the Savings Association shall become the deposit accounts of the Surviving Corporation without change in their respective terms, interest rates, maturities, minimum required balances or withdrawal values, and the Surviving Corporation will continue to issue deposit accounts on the same basis as immediately prior to Effective Date.

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7. DIRECTORS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the number of directors of the Surviving Corporation shall be seven. The names of those persons who, upon and after the Effective Date, shall be directors of the Surviving Corporation are set forth below. Each such director shall serve for the term that expires at the annual meeting of stockholders of the Surviving Corporation in the year set forth after his respective name, and until a successor is elected and qualified.

Name	Term Expires
Richard McHugh	2008
Thomas C. Kempen	2008
James G. Cooley	2007
Brian R. Schilling	2009
Adonis E. Talmage	2007
David B. Westrate	2009
Brian P. Ashley	2009

The address of each director is 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

8. OFFICERS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the officers of the Savings Association immediately before the Effective Date shall be the officers of the Surviving Corporation. The officers of the Mid-Tier Company shall become the officers of the Holding Company, and by participating in the Conversion and Reorganization, the Holding Company shall have approved adoption of any employment or severance agreements between those officers and the Mid-Tier Company.

9. STOCK BENEFIT PLANS . By virtue of the Plan, the Mid-Tier Merger and the Holding Company Merger, participating in the Conversion and Reorganization, the Holding Company shall have approved adoption of the Citizens Community Federal's Employee Stock Ownership Plan, the Citizens Community Bancorp 2004 Stock Option and Incentive Plan and Citizens Community Bancorp 2004 Recognition and Retention Plan as plans of the Holding Company and shall have agreed to issue Holding Company Common Stock in lieu of the Mid-Tier Company Common Stock pursuant to the terms of each such plan. As of the effective date of the Conversion and Reorganization, rights outstanding under these plans shall be assumed by the Holding Company and thereafter shall be rights only for shares of common stock of the Holding Company, with each such right being for a number of shares of common stock of the Holding Company equal to the number of shares of Mid-Tier Company Common Stock that were available thereunder immediately prior to the effective date times the Exchange Ratio, as defined in the Plan, and the price of each such right shall be adjusted to reflect the Exchange Ratio and so that the aggregate purchase price of the right is unaffected, but with no change in any other term or condition of such right. The Holding Company shall make appropriate amendments to these plans to reflect the adoption of the plans by the Holding Company without adverse effect upon the rights outstanding thereunder.

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10.     OFFICES . Upon the Effective Date, all offices of the Savings Association shall be offices of the Surviving Corporation. As of the Effective Date, the home office of the Surviving Corporation shall remain at 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

11.     CHARTER AND BYLAWS . On and after the Effective Date, the Charter of the Savings Association as in effect immediately before the Effective Date shall be the Charter of the Surviving Corporation until amended in accordance with the terms thereof and applicable law, except that the Charter shall be amended to provide for the establishment of a liquidation account in accordance with applicable law and the Plan of Conversion and Reorganization. On and after the Effective Date, the Bylaws of the Savings Association as in effect immediately before the Effective Date shall be the Bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.

12.     STOCKHOLDER AND MEMBER APPROVALS . The affirmative votes of the holders of Mid-Tier Company common stock and of the Members of the MHC as set forth in the Plan of Conversion and Reorganization shall be required to approve the Plan of Conversion and Reorganization, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Company and the MHC, respectively. The approval of the Mid-Tier Company, as the sole stockholder of the Savings Association, shall be required to approve the Mid-Tier Merger, of which this Agreement and Plan of Merger is a part, on behalf of the Savings Association. The approval of the MHC, as the sole stockholder of the Mid-Tier Company, shall be required to approve the Mid-Tier Merger, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Company.

13.     DIRECTOR APPROVAL . At least two-thirds of the members of the Board of Directors of each of the Constituent Corporations have approved this Agreement and Plan of Merger.

14.     ABANDONMENT OF PLAN . This Agreement and Plan of Merger may be abandoned by either the Holding Company or the Savings Association at any time before the Effective Date in the manner set forth in the Plan of Conversion and Reorganization.

15.     AMENDMENTS . This Agreement and Plan of Merger may be amended in the manner set forth in the Plan of Conversion and Reorganization by a subsequent writing signed by the parties hereto upon the approval of the Boards of Directors of the Constituent Corporations.

16.     SUCCESSORS . This Agreement shall be binding on the successors of the Constituent Corporations.

17.     GOVERNING LAW . This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, except to the extent superseded by the laws of the United States.

IN WITNESS WHEREOF, the Constituent Corporations have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the day and year first above written.

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Attest:		CITIZENS COMMUNITY BANCORP
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CITIZENS COMMUNITY FEDERAL
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CCBC INTERIM ONE SAVINGS BANK
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer

A-5 Exhibit B

Exhibit B

Agreement and Plan of Merger
by and among Citizens Community MHC,
Citizens Community Federal and
CCBC Interim Two Savings Bank

This Agreement and Plan of Merger, dated as of ________________________, 2006, is made by and between Citizens Community MHC (the "MHC"), a federal mutual holding company, Citizens Community Federal (the "Savings Association" or the "Surviving Corporation"), a federal chartered savings association and CCBC Interim Two Savings Bank, an interim federal savings bank ("Interim Two") (collectively, the "Constituent Corporations").

WITNESSETH:
WHEREAS, the MHC, the Savings Association and Citizens Community Bancorp, a federal corporation (the "Mid-Tier Company"), have adopted a Plan of Conversion and Reorganization (the "Plan") pursuant to which: (i) the Mid-Tier Company will convert to an interim federal savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "Mid-Tier Merger"); (ii) the MHC will convert to a interim federal stock savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "MHC Merger"); (iii) the Savings Association and a newly formed interim federal savings bank will merge (the "Holding Company Merger"), pursuant to which the Savings Association will become a wholly owned subsidiary of a newly formed stock corporation (the "Holding Company"); and (iv) the Holding Company will offer shares of its common stock in the manner set forth in the Plan (collectively, the "Conversion and Reorganization"); and

WHEREAS, the MHC Merger will be effected after the Mid-Tier Merger; and

WHEREAS, the Constituent Corporations desire to provide for the terms and conditions of the MHC Merger.

NOW, THEREFORE, the Constituent Corporations hereby agree as follows:

1. EFFECTIVE DATE . The MHC Merger shall become effective on the date specified in the endorsement of the Articles of Combination relating to the MHC Merger by the Secretary of the Office of Thrift Supervision (the "OTS") pursuant to 12 C.F.R. § 552.13(k), or any successor thereto (the "Effective Date").

2. THE MHC MERGER AND EFFECT THEREOF . Subject to the terms and conditions set forth herein and the prior approval of the OTS of the Conversion and Reorganization and the expiration of all applicable waiting periods, the MHC shall convert from the mutual form to a interim federal stock savings bank and simultaneously merge with and into the Savings Association, which shall be the Surviving Corporation. Upon consummation of the MHC Merger, the Surviving Corporation shall be considered the same business and corporate entity as each of the Constituent Corporations and the Surviving Corporation shall be subject to and be

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deemed to have assumed all of the property, rights, privileges, powers, franchises, debts, liabilities, obligations, duties and relationships of each of the Constituent Corporations and shall have succeeded to all of each of their relationships, fiduciary or otherwise, as fully and to the same extent as if such property, rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. In addition, any reference to either of the Constituent Corporations in any contract or document, whether executed or taking effect before or after the Effective Date, shall be considered a reference to the Surviving Corporation, if not inconsistent with the other provisions of the contract or document; and any pending action or other judicial proceeding to which either of the Constituent Corporations is a party shall not be deemed to have abated or to have been discontinued by reason of the MHC Merger, but may be prosecuted to final judgment, order or decree in the same manner as if the MHC Merger had not occurred or the Surviving Corporation may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against it that might have been rendered for or against either of the Constituent Corporations if the MHC Merger had not occurred.

3.     COMMON STOCK OF THE SURVIVING CORPORATION; CANCELLATION OF MEMBERS' INTERESTS IN THE MHC; ESTABLISHMENT OF LIQUIDATION ACCOUNT .

      (a)       On the Effective Date, each share of common stock, $0.01 par value per share, of the Savings Association issued and outstanding immediately before the Effective Date and held by the MHC, by virtue of the MHC, shall be the common stock of the Surviving Corporation and be held by the Holding Company, as provided for in the Holding Company Merger.

      (b)       On the Effective Date, the interests in the MHC of any person, firm or entity who or which qualified as a member of the MHC in accordance with its mutual charter and bylaws and the laws of the United States before the MHC's conversion from mutual to stock form in Conversion and Reorganization ("Members") shall, by virtue of the MHC Merger, and without any action on the part of any Member, be canceled.

      (c)       On the Effective Date, the Savings Association shall establish a liquidation account on behalf of each Member as provided for in the Plan.

4.     RIGHTS OF DISSENT AND APPRAISAL ABSENT . Holders of Mid-Tier Company common stock shall not have any dissenter or appraisal rights in connection with the MHC Merger.

5.     NAME OF SURVIVING CORPORATION . The name of the Surviving Corporation shall be "Citizens Community Federal." 6. DEPOSITS. All deposit accounts of the Savings Association shall become the deposit accounts of the Surviving Corporation without change in their respective terms, interest rates, maturities, minimum required balances or withdrawal values, and the Surviving Corporation will continue to issue deposit accounts on the same basis as immediately prior to Effective Date.

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7. DIRECTORS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the number of directors of the Surviving Corporation shall be seven. The names of those persons who, upon and after the Effective Date, shall be directors of the Surviving Corporation are set forth below. Each such director shall serve for the term which expires at the annual meeting of stockholders of the Surviving Corporation in the year set forth after his respective name, and until a successor is elected and qualified.

Name	Term Expires
Richard McHugh	2008
Thomas C. Kempen	2008
James G. Cooley	2007
Brian R. Schilling	2009
Adonis E. Talmage	2007
David B. Westrate	2009
Brian P. Ashley	2009

The address of each director is 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

8.     OFFICERS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the officers of the Savings Association immediately before the Effective Date shall be the officers of the Surviving Corporation.

9.     OFFICES . Upon the Effective Date, all offices of the Savings Association shall be offices of the Surviving Corporation. As of the Effective Date, the home office of the Surviving Corporation shall remain at 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

10.     CHARTER AND BYLAWS . On and after the Effective Date, the Charter of the Savings Association as in effect immediately before the Effective Date shall be the Charter of the Surviving Corporation until amended in accordance with the terms thereof and applicable law, except that the Charter shall be amended to provide for the establishment of a liquidation account in accordance with applicable law and the Plan of Conversion and Reorganization. On and after the Effective Date, the Bylaws of the Savings Association as in effect immediately before the Effective Date shall be the Bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.

11.     STOCKHOLDER AND MEMBER APPROVALS . The affirmative votes of the holders of Mid-Tier Company common stock and of the Members as set forth in the Plan of Conversion and Reorganization shall be required to approve the Plan of Conversion and Reorganization, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Company and the MHC, respectively. The approval of the Mid-Tier Company, as the sole stockholder of the Savings Association before the Mid-Tier Merger, and the MHC, as the sole stockholder of the Savings Association after the Mid-Tier Merger, shall be required to approve the Mid-Tier Merger, on behalf of the Savings Association.

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12.     DIRECTOR APPROVAL . At least two-thirds of the members of the Board of Directors of each of the Constituent Corporations have approved this Agreement and Plan of Merger.

13.     ABANDONMENT OF PLAN . This Agreement and Plan of Merger may be abandoned by either the MHC or the Savings Association at any time before the Effective Date in the manner set forth in the Plan of Conversion and Reorganization.

14.     AMENDMENTS . This Agreement and Plan of Merger may be amended in the manner set forth in the Plan of Conversion and Reorganization by a subsequent writing signed by the parties hereto upon the approval of the Boards of Directors of the Constituent Corporations.

15.     SUCCESSORS . This Agreement shall be binding on the successors of the Constituent Corporations.

16.     GOVERNING LAW . This Agreement shall be governed by and construed in accordance with the laws of the State of Wisconsin, except to the extent superseded by the laws of the United States.

IN WITNESS WHEREOF, the Constituent Corporations have caused this Agreement and Plan of Merger to be executed by their duly authorized officers as of the day and year first above written.

Attest:		CITIZENS COMMUNITY BANCORP
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CITIZENS COMMUNITY FEDERAL
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CCBC INTERIM TWO SAVINGS BANK
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer

B-4 Exhibit C

Exhibit C

Agreement and Plan of Merger
by and among Citizens Community Federal,
Citizens Community Bancorp, Inc., and
CCBC Interim Three Savings Bank

This Agreement and Plan of Merger, dated as of ________________________, 2006, is made by and among Citizens Community Federal (the "Savings Association" or the "Surviving Corporation"), a federal savings bank; Citizens Community Bancorp, Inc., a Maryland corporation (the "Holding Company"), and CCBC Interim Three Savings Bank ("Interim Three"), an interim federal savings bank (collectively, the "Constituent Corporations").

WITNESSETH:
WHEREAS, the MHC, the Savings Association and Citizens Community Bancorp, a federal corporation (the "Mid-Tier Company"), have adopted a Plan of Conversion and Reorganization (the "Plan") pursuant to which: (i) the Mid-Tier Company will convert to an interim federal savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "Mid-Tier Merger"); (ii) the MHC will convert to a interim federal stock savings bank and simultaneously merge with and into the Savings Association, with the Savings Association as the surviving entity (the "MHC Merger"); (iii) the Savings Association and a newly formed interim federal savings bank will merge (the "Holding Company Merger"), pursuant to which the Savings Association will become a wholly owned subsidiary of a newly formed stock corporation (the "Holding Company"); and (iv) the Holding Company will offer shares of its common stock in the manner set forth in the Plan (collectively, the "Conversion and Reorganization"); and

WHEREAS, the Savings Association will reorganize into the stock holding company structure by causing the Holding Company to become the sole stockholder of Interim Three and then merging Interim Three with and into the Savings Association in the "Holding Company Merger"; and

WHEREAS, the Holding Company is being organized by the officers of the Savings Association as a Maryland Corporation to effect the Conversion and Reorganization; and

WHEREAS, Interim Three is being organized by the officers of the Savings Association as an interim federal savings bank with the Holding Company as its sole stockholder to effect the Holding Company Merger; and

WHEREAS, the Holding Company Merger will be effected after the Mid-Tier Merger and MHC Merger; and

WHEREAS, the Constituent Corporations desire to provide for the terms and conditions of the Holding Company Merger.

NOW, THEREFORE, the Constituent Corporations hereby agree as follows:

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1.     EFFECTIVE DATE . The Holding Company Merger shall become effective on the date specified in the endorsement of the Articles of Combination relating to the Holding Company Merger by the Office of Thrift Supervision ("OTS") pursuant to 12 C.F.R. § 552.13(k), or any successor thereto (the "Effective Date").

2.     THE MERGER AND EFFECT THEREOF . Subject to the terms and conditions set forth herein and the prior approval of the OTS of the Conversion and the Reorganization, as defined in the Plan, and the expiration of all applicable waiting periods, Interim Three shall merge with and into the Savings Association, with the Savings Association as the Surviving Corporation. Upon consummation of the Holding Company Merger, the Surviving Corporation shall be considered the same business and corporate entity as each of the Constituent Corporations and thereupon and thereafter all the property, rights, powers and franchises of each of the Constituent Corporations shall vest in the Surviving Corporation and the Surviving Corporation shall be subject to and be deemed to have assumed all of the property, rights, privileges, powers, franchises, debts, liabilities, obligations and duties of each of the Constituent Corporations and shall have succeeded to all of each of their relationships, fiduciary or otherwise, fully and to the same extent as if such property, rights, privileges, powers, franchises, debts, obligations, duties and relationships had been originally acquired, incurred or entered into by the Surviving Corporation. In addition, any reference to either of the Constituent Corporations in any contract or document, whether executed or taking effect before or after the Effective Date, shall be considered a reference to the Savings Association, if not inconsistent with the other provisions of the contract or document; and any pending action or other judicial proceeding of which either of the Constituent Corporations is a party shall not be deemed to have abated or to have been discontinued by reason of the Holding Company Merger, but may be prosecuted to final judgment, order or decree in the same manner as if the Holding Company Merger had not occurred or the Surviving Corporation may be substituted as a party to such action or proceeding, and any judgment, order or decree may be rendered for or against it that might have been rendered for or against either of the Constituent Corporations if the Holding Company Merger had not occurred.

3.     CONVERSION OF MID-TIER COMPANY COMMON STOCK INTO HOLDING COMPANY COMMON STOCK; COMMON STOCK OF THE SURVIVING CORPORATION .

(a)	On the Effective Date:
	(i)	each share of Mid-Tier Company common stock issued and outstanding immediately before the effective date of the Mid-Tier Merger, excluding the shares held by the MHC and canceled in that merger, shall be converted, by virtue of the Holding Company Merger and without any action on the part of the holder thereof, into the right to receive Holding Company common stock based on the Exchange Ratio provided for in the Plan, plus the right to receive cash in lieu of any fractional share interest, as determined in accordance with Section 3(c) hereof;
	(ii)	100% of the shares of common stock, par value $0.01 per share, of Savings Association issued and outstanding immediately before the Effective Date, by virtue of the Holding Company Merger and without any

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		action on the part of the holder thereof, shall be the common stock of the Surviving Corporation and be held by the Holding Company; and
	(iii)	each share of Holding Company common stock issued and outstanding immediately before the Effective Date, if any, shall, by virtue of the Holding Company Merger and without any action on the part of the holder thereof, be canceled.
(b)	In accordance with the Plan and this Section 3, the Holding Company agrees (i) to issue shares of Holding Company common stock in accordance with the terms hereof and (ii) to cancel all previously issued and outstanding shares of Holding Company common stock upon the effectiveness of the Holding Company Merger.
(c)	Notwithstanding any other provision hereof, no fractional shares of Holding Company common stock shall be issued to holders of Mid-Tier Company common stock. In lieu thereof, the holder of shares of Mid-Tier Company common stock entitled to a fraction of a share of Holding Company common stock shall, at the time of surrender of the certificate or certificates representing such holder shares, receive an amount of cash equal to the product arrived at by multiplying such fraction of a share of Holding Company common stock by the Actual Purchase Price, as defined in the Plan. No such holder shall be entitled to dividends, voting rights or any other rights in respect of any fractional share.

4. EXCHANGE OF SHARES .

	(a)	At or after the Effective Date, each holder of a certificate or certificates theretofore evidencing issued and outstanding shares of Mid-Tier Company common stock, upon surrender of the same to an agent, duly appointed by the Holding Company (the "Exchange Agent"), shall be entitled to receive in exchange therefor certificate(s) representing the number of full shares of Holding Company common stock for which the shares of Mid-Tier Company common stock theretofore represented by the certificate or certificates so surrendered shall have been converted as provided in Section 3(a) hereof. The Exchange Agent shall mail to each holder of record of an outstanding certificate that immediately before the Effective Date evidenced shares of Mid-Tier Company common stock, and that is to be exchanged for Holding Company common stock as provided in Section 3(a) hereof, a form of letter of transmittal that shall specify that delivery shall be effected, and risk of loss and title to such certificate shall pass, only upon delivery of such certificate to the Exchange Agent advising such holder of the terms of the exchange effected by the Conversion and Reorganization and of the procedure for surrendering to the Exchange Agent such certificate in exchange for certificate or certificates evidencing Holding Company common stock.
	(b)	No holder of a certificate theretofore representing shares of Mid-Tier Company common stock shall be entitled to receive any dividends in respect of the Holding Company common stock into which such shares shall have been converted by virtue of the Conversion and Reorganization until the certificate representing such shares of Mid-Tier Company common stock is surrendered in exchange for certificates representing shares of Holding Company common stock. If dividends are declared and paid by the Holding Company in respect of Holding Company common stock after the Effective Date but before surrender of certificates representing shares of Mid-Tier Company common stock, dividends payable in respect of shares of Holding Company common stock not then issued shall accrue (without interest). Any such

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		dividends shall be paid (without interest) upon surrender of the certificates representing such shares of Mid-Tier Company common stock. The Holding Company shall be entitled, after the Effective Date, to treat certificates representing shares of Mid-Tier Company common stock as evidencing ownership of the number of full shares of Holding Company common stock into which the shares of Mid-Tier Company common stock represented by such certificates shall have been converted, notwithstanding the failure on the part of the holder thereof to surrender such certificates.
	(c)	The Holding Company shall not be obligated to deliver a certificate or certificates representing shares of Holding Company common stock to which a holder of Mid-Tier Company common stock would otherwise be entitled as a result of the Holding Company Merger until such holder surrenders the certificate or certificates representing the shares of Mid-Tier Company common stock for exchange as provided in this Section 4, or, in default thereof, an appropriate affidavit of loss and indemnification agreement and/or an indemnity bond as may be required in each case by the Holding Company. If any certificate evidencing shares of Holding Company common stock is to be issued in a name other than that in which the certificate evidencing Mid-Tier Company common stock surrendered in exchanged therefor is registered, it shall be a condition of the issuance thereof that the certificate so surrendered shall be properly endorsed and otherwise in proper form for transfer and that the person requesting such exchange pay to the Exchange Agent any transfer or other tax required by reason of the issuance of a certificate for shares of Holding Company common stock in any name other than that of the registered holder of the certificate surrendered or otherwise establish to the satisfaction of the Exchange Agent that such tax has been paid or is not payable.
	(d)	If, between the date hereof and the Effective Date, the shares of Mid-Tier Company common stock shall be changed into a different number or class of shares by reason of any reclassification, recapitalization, split-up, combination, exchange of shares or readjustment or a stock dividend thereon shall be declared with a record date within said period, the Exchange Ratio specified in Section 3(a) hereof shall be adjusted accordingly.

5.     RIGHTS OF DISSENT AND APPRAISAL . Holders of Mid-Tier Company common stock shall have dissenter or appraisal rights in connection with the Holding Company Merger and the Mid-Tier Merger to the extent required by 12 C.F.R. § 552.14, or any successor thereto.

6.     NAME OF SURVIVING CORPORATION . The name of the Surviving Corporation shall be "Citizens Community Federal."

7.     DIRECTORS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the number of directors of the Surviving Corporation shall be seven. The names of those persons who, upon and after the Effective Date, shall be directors of the Surviving Corporation are set forth below. Each such director shall serve for the term which expires at the annual meeting of stockholders of the Surviving Corporation in the year set forth after his respective name, and until a successor is elected and qualified.

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Name	Term Expires
Richard McHugh	2008
Thomas C. Kempen	2008
James G. Cooley	2007
Brian R. Schilling	2009
Adonis E. Talmage	2007
David B. Westrate	2009
Brian P. Ashley	2009

The address of each director is 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

8.     OFFICERS OF THE SURVIVING CORPORATION . Upon and after the Effective Date, until changed in accordance with the Charter and Bylaws of the Surviving Corporation and applicable law, the officers of the Savings Association immediately before the Effective Date shall be the officers of the Surviving Corporation. As of the Effective Date, the Holding Company adopts any employment or severance agreements between those officers and the Mid-Tier Company officers as agreements between those officers and the Holding Company.

9.     OFFICES . Upon the Effective Date, all offices of the Savings Association shall be offices of the Surviving Corporation. As of the Effective Date, the home office of the Surviving Corporation shall remain at 2174 EastRidge Center, Eau Claire, Wisconsin.

10.     CHARTER AND BYLAWS . On and after the Effective Date, the Charter and Bylaws of the Savings Association as in effect immediately before the Effective Date shall be the Charter and Bylaws of the Surviving Corporation until amended in accordance with the terms thereof and applicable law.

11.     SAVINGS ACCOUNTS . Upon the Effective Date, any savings accounts of Interim Three, without reissue, shall be and become savings accounts of the Surviving Corporation without change in their respective terms, including, without limitation, maturity minimum required balances or withdrawal value.

12.     STOCK COMPENSATION PLANS . By virtue of the Plan, the Mid-Tier Merger and the Holding Company Merger, the Holding Company shall have approved adoption of the Citizens Community Bancorp 2004 Stock-Option and Incentive Plan and the Citizens Community Bancorp 2004 Recognition and Retention Plan as plans of the Holding Company and shall have agreed to issue Holding Company common stock in lieu of Mid-Tier Company common stock pursuant to the terms of such plan. As of the effective date of the Conversion and Reorganization, rights outstanding under the plans shall be assumed by the Holding Company and thereafter shall be rights only for shares of Holding Company common stock, with each such right being for a number of shares of Holding Company common stock equal to the number of shares of Mid-Tier Company common stock that were available thereunder immediately before the effective date multiplied by the Exchange Ratio, as defined in the Plan, and the price of each such right shall be adjusted to reflect the Exchange Ratio and so that the aggregate purchase price of the right is unaffected, but with no change in any other term or condition of such right. The Holding Company shall make appropriate amendments to the plans to reflect the adoption of the plans by the Holding Company without adverse effect upon the rights outstanding thereunder.

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13.     STOCKHOLDER AND MEMBER APPROVALS . The affirmative votes of the holders of Mid-Tier Company common stock and of the Members as set forth in the Plan of Conversion and Reorganization shall be required to approve the Plan of Conversion and Reorganization, of which this Agreement and Plan of Merger is a part, on behalf of the Mid-Tier Company and the MHC, respectively. The approval of the Mid-Tier Company, as the sole stockholder of the Savings Association before the Mid-Tier Merger, and the MHC, as the sole stockholder of the Savings Association after the Mid-Tier Merger, shall be required to approve the Mid-Tier Merger, on behalf of the Savings Association.

14.     DIRECTOR APPROVAL . At least two-thirds of the members of the Board of Directors of each of the Constituent Corporations have approved this Agreement and Plan of Merger.

15.     REGISTRATION; OTHER APPROVALS . In addition to the approvals set forth in Sections 1, 13 and 14 hereof and in the Plan of Conversion and Reorganization, the obligations of the parties hereto to consummate the Holding Company Merger shall be subject to the Holding Company common stock to be issued hereunder in exchange for Mid-Tier Company common stock being registered under the Securities Act of 1933, as amended, and registered or qualified under applicable state securities laws, as well as the receipt of all other approvals, consents or waivers as the parties may deem necessary or advisable.

16.     ABANDONMENT OF PLAN . This Agreement and Plan of Merger may be abandoned by either the Constituent Corporations at any time before the Effective Date in the manner set forth in the Plan of Conversion and Reorganization.

17.     AMENDMENTS . This Agreement and Plan of Merger may be amended in the manner set forth in the Plan of Conversion and Reorganization by a subsequent writing signed by the parties hereto upon the approval of the Board of Directors of each of the parties hereto.

18.     SUCCESSORS . This Agreement and Plan of Merger shall be binding on the successors of the parties hereto.

19.     GOVERNING LAW . This Agreement and Plan of Merger shall be governed by and construed in accordance with the laws of the State of Wisconsin, except to the extent superseded by the laws of the United States.

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IN WITNESS WHEREOF, the Constituent Corporations hereto have caused this Plan of Merger to be duly executed on its behalf by its officers thereunto duly authorized, all as of the date first above written.

Attest:		CITIZENS COMMUNITY BANCORP
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CITIZENS COMMUNITY FEDERAL
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer
Attest:		CCBC INTERIM THREE SAVINGS BANK
Adonis E. Talmage Corporate Secretary	By:	James G. Cooley President and Chief Executive Officer

Exhibit D

ARTICLES OF INCORPORATION

OF

CITIZENS COMMUNITY BANCORP, INC.

            The undersigned, James G. Cooley, whose address is 2174 EastRidge Center, Eau Claire, Wisconsin 54701, being at least eighteen years of age, acting as incorporator, does hereby form a corporation under the general laws of the State of Maryland, having the following Articles:

ARTICLE 1. Name. The name of the corporation is Citizens Community Bancorp, Inc. (the "Corporation").

ARTICLE 2. Principal Office. The address of the principal office of the Corporation in the State of Maryland is c/o The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202.

ARTICLE 3. Purpose. The purpose for which the Corporation is formed is to engage in any lawful act or activity for which corporations may be organized under the general laws of the State of Maryland as now or hereafter in force.

ARTICLE 4. Resident Agent. The name and address of the registered agent of the Corporation in the State of Maryland is The Corporation Trust Incorporated, 300 East Lombard Street, Baltimore, Maryland 21202. Said resident agent is a Maryland corporation.

ARTICLE 5.

             A.             Capital Stock. The total number of shares of capital stock of all classes which the Corporation has authority to issue is twenty-one million (21,000,000) shares, consisting of:

                        1.            One million (1,000,000) shares of preferred stock, par value one cent ($.01) per share (the "Preferred Stock"); and

                        2.            Twenty million (20,000,000) shares of common stock, par value one cent ($.01) per share (the "Common Stock").

                        The aggregate par value of all the authorized shares of capital stock is two hundred ten thousand dollars ($210,000). Except to the extent required by governing law, rule or regulation, the shares of capital stock may be issued from time to time by the Board of Directors without further approval of the stockholders of the Corporation. The Corporation shall have the authority to purchase its capital stock out of funds lawfully available therefore, which funds shall include, without limitation, the Corporation's unreserved and unrestricted capital surplus.

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             B. Common Stock. Except as provided under the terms of any series of Preferred Stock and as limited by Section D of this Article 5, the exclusive voting power shall be vested in the Common Stock, the holders thereof being entitled to one vote for each share of such Common Stock standing in the holder's name on the books of the Corporation. Subject to any rights and preferences of any series of Preferred Stock, holders of Common Stock shall be entitled to such dividends as may be declared by the Board of Directors out of funds lawfully available therefor. Upon any liquidation, dissolution or winding up of the affairs of the Corporation, whether voluntary or involuntary, holders of Common Stock shall be entitled to receive pro rata the remaining assets of the Corporation after payment or provision for payment of all debts and liabilities of the Corporation and payment or provision for payment of any amounts owed to the holders of any series of Preferred Stock having preference over the Common Stock on distributions on liquidation, dissolution or winding up of the Corporation.

             C. Preferred Stock. The Board of Directors is hereby expressly authorized, subject to any limitations prescribed by law, to provide for the issuance of the shares of Preferred Stock in series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereof. The number of authorized shares of the Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the Common Stock, without a vote of the holders of the Preferred Stock, or of any series thereof, unless a vote of any such holders is required by law or pursuant to the terms of such Preferred Stock.

             D. Restrictions on Voting Rights of the Corporation's Equity Securities.

                        1.            Notwithstanding any other provision of the Charter, to the contrary, for a period of five years from the completion of the conversion of Citizens Community MHC from Mutual to stock form, in no event shall any record owner of any outstanding Common Stock that is Beneficially Owned, directly or indirectly, by a person who, as of any record date for the determination of stockholders entitled to vote on any matter, Beneficially Owns in excess of 10% of the then-outstanding shares of Common Stock (the "Limit"), be entitled, or permitted to any vote in respect of the shares held in excess of the Limit. The number of votes that may be cast by any record owner by virtue of the provisions hereof in respect of Common Stock Beneficially Owned by such person owning shares in excess of the Limit shall be a number equal to the total number of votes that a single record owner of all Common Stock owned by such person would be entitled to cast after giving effect to the provisions hereof, multiplied by a fraction, the numerator of which is the number of shares of such class or series Beneficially Owned by such person and owned of record by such record owner and the denominator of which is the total number of shares of Common Stock Beneficially Owned by such person owning shares in excess of the Limit. Furthermore, for a period of five years from the completion of the conversion of Citizens Community MHC from mutual to stock form, no person shall directly or indirectly Offer to acquire or acquire the Beneficial Ownership of more than 10% of any class of any equity security of the Corporation.

                        2.            The provisions of the foregoing Section D.2 of this Article 5 shall not apply to :

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                                    (a)            the acquisition of more than 10% of any class of equity security by any tax-qualified defined benefit plan or defined contribution plan of the Corporation or its subsidiaries;

                                    (b)            the purchase of shares by underwriters in connection with a public offering; or

                                    (c)            the Offer to acquire or the acquisition of more than 10% of any class of equity security of the Corporation, if such Offer to acquire or acquisition has been approved by two-thirds of those members of the Board of Directors who were directors prior to the Offer to acquire or acquisition being made.

                        3.            The following definitions shall apply to this Section D of this Article 5:

                                    (a)            An "Affiliate" of a specified Person shall mean a Person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the Person specified.

                                    (b)            "Beneficial Ownership" (including "Beneficially Owned or Owns") shall be determined pursuant to Rule 13d-3 of the General Rules and Regulations under the Securities Exchange Act of 1934 (or any successor rule or statutory provision), or, if said Rule 13d-3 shall be rescinded and there shall be no successor rule or statutory provision thereto, pursuant to said Rule 13d-3 as in effect on December 31, 2005; provided, however, that a person shall, in any event, also be deemed to Beneficially Own any Common Stock:

                                                (1)            which such Person or any of its Affiliates Beneficially Owns, directly or indirectly; or

                                                (2)      which such Person or any of its Affiliates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding (but shall not be deemed to beneficially own any voting shares solely by reason of an agreement, contract, or other arrangement with the Corporation to effect any transaction that is described in any one or more of the clauses of Section A of Article 9 hereof) or upon the exercise of conversion rights, exchange rights, warrants, or options or otherwise, or (ii) sole or shared voting or investment power with respect thereto pursuant to any agreement, arrangement, understanding, relationship or otherwise (but shall not be deemed to Beneficially Own any voting shares solely by reason of a revocable proxy granted for a particular meeting of

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stockholders, pursuant to a public solicitation of proxies for such meeting, with respect to shares of which neither such person nor any such affiliate is otherwise deemed the Beneficial Owner); or

(3) which are Beneficially Owned, directly or indirectly, by any other Person with which such first mentioned Person or any of its Affiliates acts as a partnership, limited partnership, syndicate or other group pursuant to any agreement, arrangement or understanding for the purpose of acquiring, holding, voting or disposing of any shares of capital stock of the Corporation;

and provided further, however, that (i) no director or officer of the Corporation (or any Affiliate of any such director or officer) shall, solely by reason of any or all of such directors or officers acting in their capacities as such, be deemed, for any purposes hereof, to Beneficially Own any Common Stock Beneficially Owned by any other such director or officer (or any Affiliate thereof), and (ii) neither any employee stock ownership or similar plan of the Corporation or any subsidiary of the Corporation nor any trustee with respect thereto (or any Affiliate of such trustee) shall, solely by reason of such capacity of such trustee, be deemed, for any purposes hereof, to Beneficially Own any Common Stock held under any such plan. For purposes of computing the percentage Beneficial Ownership of Common Stock of a Person, the outstanding Common Stock shall include shares deemed owned by such person through application of this subsection but shall not include any other Common Stock that may be issuable by the Corporation pursuant to any agreement, or upon exercise of conversion rights, warrants or options, or otherwise. For all other purposes, the outstanding Common Stock shall include only Common Stock then outstanding and shall not include any Common Stock which may be issuable by the Corporation pursuant to any agreement, or upon the exercise of conversion rights, warrants or options, or otherwise.

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                                    (c)       "Offer" shall mean every written offer to buy or acquire, solicitation of an offer to sell, tender offer or request or invitation for tender of, a security or interest in a security for value; provided, however, that the term "Offer" shall not include (i) inquiries directed solely to the management of the Corporation and not intended to be communicated to stockholders that are designed to elicit an indication of management's receptivity to the basic structure of a potential acquisition with respect to the amount of cash and/or securities, manner of acquisition and formula for determining price; or (ii) non-binding expressions of understanding or letters of intent with the management of the Corporation regarding the basic structure of a potential acquisition with respect to the amount of cash and/or securities, manner of acquisition and formula for determining price.

                                    (d)       A "Person" shall mean any individual, firm, corporation, or other entity.

                                    (e)      The Board of Directors shall have the power to construe and apply the provisions of this Section D and to make all determinations necessary or desirable to implement such provisions, including, but not limited to, matters with respect to: (i) the number of shares of Common Stock Beneficially Owned by any Person; (ii) whether a Person is an Affiliate of another; (iii) whether a Person has an agreement, arrangement, or understanding with another as to the matters referred to in the definition of Beneficial Ownership; (iv) the application of any other definition or operative provision of this Section D to the given facts; or (v) any other matter relating to the applicability or effect of this Section D.

                        3.      The Board of Directors shall have the right to demand that any Person who is reasonably believed to Beneficially Own Common Stock in excess of the Limit (or holds of record Common Stock Beneficially Owned by any Person in excess of the Limit) (a "Holder in Excess") supply the Corporation with complete information as to: (i) the record owner(s) of all shares beneficially owned by such Holder in Excess; and (ii) any other factual matter relating to the applicability or effect of this section as may reasonably be requested of such Holder in Excess. The Board of Directors shall further have the right to receive from any Holder in Excess reimbursement for all expenses incurred by the Board in connection with its investigation of any matters relating to the applicability or effect of this section on such Holder in Excess, to the extent such investigation is deemed appropriate by the Board of Directors as a result of the Holder in Excess refusing to supply the Corporation with the information described in the previous sentence.

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                        4.      Except as otherwise provided by law or expressly provided in this Section D, the presence, in person or by proxy, of the holders of record of shares of capital stock of the Corporation entitling the holders thereof to cast a majority of the votes (after giving effect, if required, to the provisions of this Section D) entitled to be cast by the holders of shares of capital stock of the Corporation entitled to vote shall constitute a quorum at all meetings of the stockholders, and every reference in the Charter to a majority or other proportion of capital stock (or the holders thereof) for purposes of determining any quorum requirement or any requirement for stockholder consent or approval shall be deemed to refer to such majority or other proportion of the votes (or the holders thereof) then entitled to be cast in respect of such capital stock.

                        5.      Any constructions, applications, or determinations made by the Board of Directors pursuant to this Section D in good faith and on the basis of such information and assistance as was then reasonably available for such purpose, shall be conclusive and binding upon the Corporation and its stockholders.

                        6.      In the event any provision (or portion thereof) of this Section D shall be found to be invalid, prohibited or unenforceable for any reason, the remaining provisions (or portions thereof) of this Section D shall remain in full force and effect, and shall be construed as if such invalid, prohibited or unenforceable provision had been stricken herefrom or otherwise rendered inapplicable, it being the intent of the Corporation and its stockholders that each such remaining provision (or portion thereof) of this Section D remain, to the fullest extent permitted by law, applicable and enforceable as to all stockholders, including stockholders owning an amount of stock over the Limit, notwithstanding any such finding.

            E.       Majority Vote. Notwithstanding any provision of law requiring the authorization of any action by a greater proportion than a majority of the total number of shares of all classes of capital stock or of the total number of shares of any class of capital stock, such action shall be valid and effective if authorized by the affirmative vote of the holders of a majority of the total number of shares of all classes outstanding and entitled to vote thereon, except as otherwise provided in the Charter.

ARTICLE 6. Preemptive Rights . No holder of the capital stock of the Corporation or series of stock or of options, warrants or other rights to purchase shares of any class or series of stock or of other securities of the Corporation shall have any preemptive right to purchase or subscribe for any unissued capital stock of any class or series, or any unissued bonds, certificates of indebtedness, debentures or other securities convertible into or exchangeable for capital stock of any class or series, or carrying any right to purchase stock of any class or series, except as may be established by the Board of Directors.

ARTICLE 7. Directors . The following provisions are inserted for the management of the business and the conduct of the affairs of the Corporation, and for further definition, limitation and regulation of the powers of the Corporation and of its directors and stockholders:

            A.       Management of the Corporation. The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. All powers of the Corporation may be exercised by or under the authority of the Board of Directors, except as conferred on or as reserved to the stockholders by law or by the Charter or the Bylaws of the Corporation.

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B. Number, Class and Terms of Directors; Cumulative Voting. The number of directors constituting the Board of Directors of the Corporation shall initially be six, which number may be increased or decreased in the manner provided in the Bylaws of the Corporation; provided, however, that such number shall never be less than the minimum number of directors required by the Maryland General Corporation Law (the "MGCL"), as now or hereafter in force. The directors, other than those who may be elected by the holders of any series of Preferred Stock, shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class ("Class I") to expire at the conclusion of the first annual meeting of stockholders, the term of office of the second class ("Class II") to expire at the conclusion of the annual meeting of stockholders one year thereafter and the term of office of the third class ("Class III") to expire at the conclusion of the annual meeting of stockholders two years thereafter, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election or for such shorter period of time as the Board of Directors may determine, with each director to hold office until his or her successor shall have been duly elected and qualified.

The names of the individuals who will serve as directors of the Corporation until their successors are elected and qualify are as follows:

Class	Name	Term to Expire in
I	Adonis E. Talmage	2007

I	James G. Cooley	2007

II	Richard McHugh	2008

II	Thomas C. Kempen	2008

III	Brian R. Schilling	2008

III	David B. Westrate	2008

            Stockholders shall not be permitted to cumulate their votes in the election of directors.

            C.       Vacancies. Any vacancies in the Board of Directors may be filled in the manner provided in the Bylaws of the Corporation.

            D.       Removal. Subject to the rights of the holders of any series of Preferred Stock then outstanding, any director, or the entire Board of Directors, may be removed from office at any time, but only for cause and only by the affirmative vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of capital stock of the Corporation entitled to vote generally in the election of directors (after giving effect to the provisions of Article 5 hereof) voting together as a single class.

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            E.       Stockholder Proposals and Nominations of Directors. Advance notice of stockholder nominations for the election of directors and of business to be brought by stockholders before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws of the Corporation.

ARTICLE 8. Bylaws . The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of a majority of the total number of directors the Corporation would have if there were no vacancies on the Board of Directors. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation. In addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Charter, the affirmative vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (after giving effect to the provisions of Article 5 hereof), voting together as a single class, shall be required for the adoption, amendment or repeal of any provisions of the Bylaws of the Corporation by the stockholders.

ARTICLE 9. Approval of Certain Business Combinations.

            A.      Super-majority Voting Requirement; Business Combination Defined. In addition to any affirmative vote required by law or by the Charter and except as otherwise expressly provided in this Section:

                        1.      any merger or consolidation of the Corporation or any Subsidiary with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate of an Interested Stockholder; or

                        2.      any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder, or any Affiliate of any Interested Stockholder, of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value equaling or exceeding 25% or more of the combined assets of the Corporation and its Subsidiaries; or

                        3.      the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value equaling or exceeding 25% of the combined assets of the Corporation and its Subsidiaries except pursuant to an employee benefit plan of the Corporation or any Subsidiary thereof; or

                        4.      the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or

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                        5.      any reclassification of securities (including any reverse stock split), or recapitalization of the Corporation, or any merger or consolidation of the Corporation with any of its Subsidiaries or any other transaction (whether or not with or into or otherwise involving an Interested Stockholder) that has the effect, directly or indirectly, of increasing the proportionate share of the outstanding shares of any class of equity or convertible securities of the Corporation or any Subsidiary that is directly or indirectly owned by any Interested Stockholder or any Affiliate of any Interested Stockholder (a "Disproportionate Transaction"); provided, however, that no such transaction shall be deemed a Disproportionate Transaction if the increase in the proportionate ownership of the Interested Stockholder or Affiliate as a result of such transaction is no greater than the increase experienced by the other stockholders generally;

shall require the affirmative vote of the holders of at least 80% of the voting power of the then-outstanding shares of stock of the Corporation entitled to vote in the election of directors (the "Voting Stock"), voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or by any other provisions of the Charter (including those applicable to any class or series of capital stock) or in any agreement with any national securities exchange or quotation system or otherwise.

            The term "Business Combination" as used in this Article 9 shall mean any transaction that is referred to in any one or more of paragraphs 1 through 5 of Section A of this Article 9.

            B.      Exception to Super-majority Voting Requirement. The provisions of Section A of this Article 9 shall not be applicable to any particular Business Combination, and such Business Combination shall require only the affirmative vote of the majority of the outstanding shares of capital stock entitled to vote, or such vote as is required by law or by the Charter, if, in the case of any Business Combination that does not involve any cash or other consideration being received by the stockholders of the Corporation solely in their capacity as stockholders of the Corporation, the condition specified in the following paragraph 1 is met or, in the case of any other Business Combination, all of the conditions specified in either of the following paragraphs 1 and 2 are met:

                        1.      The Business Combination shall have been approved by a majority of the Disinterested Directors.

                        2.      All of the following conditions shall have been met:

                                    (a)      The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by the holders of Common Stock in such Business Combination shall at least be equal to the higher of the following:

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                                                (i)      (if applicable) the Highest Per Share Price, including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder or any of its Affiliates for any shares of Common Stock acquired by it within the two-year period immediately prior to the first public announcement of the proposal of the Business Combination (the "Announcement Date"), or in the transaction in which it became an Interested Stockholder, whichever is higher; and

                                                (ii)      the Fair Market Value per share of Common Stock on the Announcement Date or on the date on which the Interested Stockholder became an Interested Stockholder (such latter date is referred to in this Article 9 as the "Determination Date"), whichever is higher.

                                    (b)      The aggregate amount of the cash and the Fair Market Value as of the date of the consummation of the Business Combination of consideration other than cash to be received per share by holders of shares of any class of outstanding Voting Stock other than Common Stock shall be at least equal to the highest of the following (it being intended that the requirements of this subparagraph (b) shall be required to be met with respect to every such class of outstanding Voting Stock, whether or not the Interested Stockholder has previously acquired any shares of a particular class of Voting Stock):

                                                (i)      (if applicable) the Highest Per Share Price (as hereinafter defined), including any brokerage commissions, transfer taxes and soliciting dealers' fees, paid by the Interested Stockholder for any shares of such class of Voting Stock acquired by it within the two-year period immediately prior to the Announcement Date, or in the transaction in which it became an Interested Stockholder, whichever is higher;

                                                (ii)      (if applicable) the highest preferential amount per share to which the holders of shares of such class of Voting Stock are entitled in the event of any voluntary or involuntary liquidation, dissolution or winding up of the Corporation; and

                                                (iii)      the Fair Market Value per share of such class of Voting Stock on the Announcement Date or on the Determination Date, whichever is higher.

                                    (c)      The consideration to be received by holders of a particular class of outstanding Voting Stock (including Common Stock) shall be in cash or in the same form as the Interested Stockholder has

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previously paid for shares of such class of Voting Stock. If the Interested Stockholder has paid for shares of any class of Voting Stock with varying forms of consideration, the form of consideration to be received per share by holders of shares of such class of Voting Stock shall be either cash or the form used to acquire the largest number of shares of such class of Voting Stock previously acquired by the Interested Stockholder. The price determined in accordance with Section B.2. of this Article 9 shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination of shares or similar event.

                                    (d)      After such Interested Stockholder has become an Interested Stockholder and prior to the consummation of such Business Combination: (i) except as approved by a majority of the Disinterested Directors, there shall have been no failure to declare and pay at the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding stock having preference over the Common Stock as to dividends or liquidation; (ii) there shall have been (X) no reduction in the annual rate of dividends paid on the Common Stock (except as necessary to reflect any subdivision of the Common Stock), except as approved by a majority of the Disinterested Directors, and (Y) an increase in such annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of Common Stock, unless the failure to so increase such annual rate is approved by a majority of the Disinterested Directors; and (iii) neither such Interested Stockholder nor any of its Affiliates shall have become the beneficial owner of any additional shares of Voting Stock, except as part of the transaction that results in such Interested Stockholder becoming an Interested Stockholder.

                                    (e)      After such Interested Stockholder has become an Interested Stockholder, such Interested Stockholder shall not have received the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantages provided by the Corporation, whether in anticipation of or in connection with such Business Combination or otherwise.

                                    (f)      A proxy or information statement describing the proposed Business Combination and complying with the requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provisions replacing such Act, rules or regulations) shall be mailed to stockholders of the Corporation at least 30 days prior to the consummation of such Business

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Combination (whether or not such proxy or information statement is required to be mailed pursuant to such Act or subsequent provisions).

            C.      Certain Definitions. For the purposes of this Article 9:

                        1.      A "Person" shall include an individual, a group acting in concert, a corporation, a partnership, an association, a joint venture, a pool, a joint stock company, a trust, an unincorporated organization or similar company, a syndicate or any other group or entity formed for the purpose of acquiring, holding or disposing of securities.

                        2.      "Interested Stockholder" shall mean any Person (other than the Corporation or any holding company or Subsidiary thereof) who or which:

                                    (a)      is the beneficial owner, directly or indirectly, of more than 10% of the voting power of the outstanding Voting Stock; or

                                    (b)      is an Affiliate of the Corporation and at any time within the two-year period immediately prior to the date in question was the beneficial owner, directly or indirectly, of more than 10% of the voting power of the then-outstanding Voting Stock; or

                                    (c)      is an assignee of or has otherwise succeeded to any shares of Voting Stock that were at any time within the two-year period immediately prior to the date in question beneficially owned by any Interested Stockholder, if such assignment or succession shall have occurred in the course of a transaction or series of transactions not involving a public offering within the meaning of the Securities Act of 1933.

                        3.      A Person shall be a "beneficial owner" of any Voting Stock:

                                    (a)      which such Person or any of its Affiliates or Associates (as hereinafter defined) beneficially owns, directly or indirectly within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in effect on December 31, 2003; or

                                    (b)      which such Person or any of its Affiliates or Associates has (i) the right to acquire (whether such right is exercisable immediately or only after the passage of time), pursuant to any agreement, arrangement or understanding or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise, or (ii) the right to vote pursuant to any agreement, arrangement or understanding (but neither such Person nor any such Affiliate or Associate shall be deemed to be the beneficial owner of any shares of Voting Stock solely by reason of a revocable proxy granted for a particular meeting of stockholders, pursuant to a public solicitation

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of proxies for such meeting, and with respect to which shares neither such Person nor any such Affiliate or Associate is otherwise deemed the beneficial owner); or

                                    (c)      which are beneficially owned, directly or indirectly within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as in effect on December 31, 2003, by any other Person with which such Person or any of its Affiliates or Associates has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting (other than solely by reason of a revocable proxy as described in Subparagraph (b) of this Paragraph 3) or in disposing of any shares of Voting Stock;

provided, however, that, in the case of any employee stock ownership or similar plan of the Corporation or of any Subsidiary in which the beneficiaries thereof possess the right to vote any shares of Voting Stock held by such plan, no such plan nor any trustee with respect thereto (nor any Affiliate of such trustee), solely by reason of such capacity of such trustee, shall be deemed, for any purposes hereof, to beneficially own any shares of Voting Stock held under any such plan.

                        4.      For the purpose of determining whether a Person is an Interested Stockholder pursuant to Section C.2., the number of shares of Voting Stock deemed to be outstanding shall include shares deemed owned through application of Section C.3. but shall not include any other shares of Voting Stock that may be issuable pursuant to any agreement, arrangement or understanding, or upon exercise of conversion rights, warrants or options, or otherwise.

                        5.      "Affiliate" and "Associate" shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as in effect on December 31, 2005.

                        6.      "Subsidiary" means any corporation of which a majority of any class of equity security is owned, directly or indirectly, by the Corporation; provided, however, that for the purposes of the definition of Interested Stockholder set forth in Section C.2., the term "Subsidiary" shall mean only a corporation of which a majority of each class of equity security is owned, directly or indirectly, by the Corporation.

                        7.      "Disinterested Director" means any member of the Board of Directors who is unaffiliated with the Interested Stockholder and was a member of the Board of Directors prior to the time that the Interested Stockholder became an Interested Stockholder, and any director who is thereafter chosen to fill any vacancy on the Board of Directors or who is elected and who, in either event, is unaffiliated with the Interested Stockholder, and in connection with his or her initial assumption of office is recommended for appointment or election by a majority of Disinterested Directors then on the Board of Directors.

                        8.      "Fair Market Value" means: (a) in the case of stock, the highest closing sale price of the stock during the 30-day period immediately preceding the date in question of a

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share of such stock on the Nasdaq System or any system then in use, or, if such stock is admitted to trading on a principal United States securities exchange registered under the Securities Exchange Act of 1934, Fair Market Value shall be the highest sale price reported during the 30-day period preceding the date in question, or, if no such quotations are available, the Fair Market Value on the date in question of a share of such stock as determined by the Board of Directors in good faith, in each case with respect to any class of stock, appropriately adjusted for any dividend or distribution in shares of such stock or in combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock; and (b) in the case of property other than cash or stock, the Fair Market Value of such property on the date in question as determined by the Board of Directors in good faith.

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                        9.      Reference to "Highest Per Share Price" shall in each case with respect to any class of stock reflect an appropriate adjustment for any dividend or distribution in shares of such stock or any stock split or reclassification of outstanding shares of such stock into a greater number of shares of such stock or any combination or reclassification of outstanding shares of such stock into a smaller number of shares of such stock.

                        10.      In the event of any Business Combination in which the Corporation survives, the phrase "consideration other than cash to be received" as used in Sections B.2.(a) and B.2.(b) of this Article 9 shall include the shares of Common Stock and/or the shares of any other class of outstanding Voting Stock retained by the holders of such shares.

            D.       Construction and Interpretation. A majority of the Disinterested Directors of the Corporation shall have the power and duty to determine for the purposes of this Article 9, on the basis of information known to them after reasonable inquiry: (1) whether a person is an Interested Stockholder; (2) the number of shares of Voting Stock beneficially owned by any person; (3) whether a person is an Affiliate or Associate of another; and (4) whether the assets which are the subject of any Business Combination have, or the consideration to be received for the issuance or transfer of securities by the Corporation or any Subsidiary in any Business Combination has, an aggregate Fair Market Value equaling or exceeding 25% of the combined assets of the Corporation and its Subsidiaries. A majority of the Disinterested Directors shall have the further power to interpret all of the terms and provisions of this Article 9.

            E.      Fiduciary Duty. Nothing contained in this Article 9 shall be construed to relieve any Interested Stockholder from any fiduciary obligation imposed by law.

            F.       Maryland Business Combination Statute. Notwithstanding any contrary provision of law, the provisions of Sections 3-601 through 3-604 of the MGCL, as now and hereafter in force, shall not apply to any "business combination" (as defined in Section 3-601(e) of the MGCL, as now and hereafter in force), of the Corporation.

ARTICLE 10. Evaluation of Certain Offers . The Board of Directors, when evaluating: (1) any offer of another Person (as defined in Article 9 hereof) to: (i) make a tender or exchange offer for any equity security of the Corporation; (ii) merge or consolidate the Corporation with another corporation or entity; or (iii) purchase or otherwise acquire all or substantially all of the properties and assets of the Corporation, or (2) any other actual or proposed transaction which would or may involve a change in control of the Corporation (whether by purchases of shares of stock or any other securities of the Corporation in the open market, or otherwise, tender offer, merger, consolidation, share exchange, dissolution, liquidation, sale of all or substantially all of the assets of the Corporation, proxy solicitation or otherwise), may, in connection with the exercise of its business judgment in determining what is in the best interests of the Corporation and its stockholders and in making any recommendation to the Corporation's stockholders, give due consideration to all relevant factors, including, but not limited to: (i) the economic effect, both immediate and long-term, upon the Corporation's stockholders, including stockholders, if any, who do not participate in the transaction; (ii) the social and economic effect on the present and future employees, creditors and customers of, and others dealing with, the Corporation and its subsidiaries and on the communities in which the Corporation and its subsidiaries operate or

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are located; (iii) whether the proposal is acceptable based on the historical, current or projected future operating results or financial condition of the Corporation; (iv) whether a more favorable price could be obtained for the Corporation's stock or other securities in the future; (v) the reputation and business practices of the other entity to be involved in the transaction and its management and affiliates as they would affect the employees of the Corporation and its subsidiaries; (vi) the future value of the stock or any other securities of the Corporation or the other entity to be involved in the proposed transaction; (vii) any antitrust or other legal and regulatory issues that are raised by the proposal; (viii) the business and historical, current or expected future financial condition or operating results of the other entity to be involved in the transaction, including, but not limited to, debt service and other existing financial obligations, financial obligations to be incurred in connection with the proposed transaction, and other likely financial obligations of the other entity to be involved in the proposed transaction; and (ix) the ability of the Corporation to fulfill its objectives as a financial institution holding company and on the ability of its subsidiary financial institution(s) to fulfill the objectives of a federally insured financial institution under applicable statutes and regulations. If the Board of Directors determines that any proposed transaction of the type described in clause (1) or (2) of the immediately preceding sentence should be rejected, it may take any lawful action to defeat such transaction, including, but not limited to, any or all of the following: advising stockholders not to accept the proposal; instituting litigation against the party making the proposal; filing complaints with governmental and regulatory authorities; acquiring the stock or any of the securities of the Corporation; selling or otherwise issuing authorized but unissued stock, other securities or granting options or rights with respect thereto; acquiring a company to create an antitrust or other regulatory problem for the party making the proposal; and obtaining a more favorable offer from another individual or entity. This Article 10 does not create any inference concerning factors that may be considered by the Board of Directors regarding any proposed transaction of the type described in clause (1) or (2) of the first sentence of this Article 10.

ARTICLE 11. Acquisitions of Equity Securities from Interested Persons.

            A.      Super-majority Voting Requirement. Except as set forth in Section B of this Article 11, in addition to any affirmative vote of stockholders required by law or the Charter, any direct or indirect purchase or other acquisition by the Corporation of any Equity Security of any class from any Interested Person shall require the affirmative vote of the holders of at least 80% of the Voting Stock of the Corporation that is not Beneficially Owned (for purposes of this Article 11 Beneficial Ownership shall be determined in accordance with Section D.2(b) of Article 5 hereof) by such Interested Person, voting together as a single class. Such affirmative vote shall be required notwithstanding the fact that no vote may be required, or that a lesser percentage may be specified, by law or by any other provisions of the Charter (including those applicable to any class or series of capital stock) or in any agreement with any national securities exchange or quotation system, or otherwise.

            B.      Exceptions. The provisions of Section A of this Article 11 shall not be applicable with respect to:

                        1.      any purchase or other acquisition of securities made as part of a tender or exchange offer by the Corporation or a Subsidiary (which term, as used in this Article 11, is as defined in the first clause of Section C.6 of Article 9 hereof) of the Corporation to purchase

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securities of the same class made on the same terms to all holders of such securities and complying with the applicable requirements of the Securities Exchange Act of 1934 and the rules and regulations thereunder (or any subsequent provision replacing such Act, rules or regulations);

                        2.      any purchase or acquisition made pursuant to an open market purchase program approved by a majority of the Board of Directors, including a majority of the Disinterested Directors (which term, as used in this Article 11, is as defined in Article 9 hereof); or

                        3.      any purchase or acquisition that is approved by a majority of the Board of Directors, including a majority of the Disinterested Directors, and that is made at no more than the Market Price (as hereinafter defined), on the date that the understanding between the Corporation and the Interested Person is reached with respect to such purchase (whether or not such purchase is made or a written agreement relating to such purchase is executed on such date), of shares of the class of Equity Security to be purchased.

            C.      Certain Definitions. For the purposes of this Article 11:

                        1.      The term Interested Person shall mean any Person (other than the Corporation, Subsidiaries of the Corporation, pension, profit sharing, employee stock ownership or other employee benefit plans of the Corporation and its Subsidiaries, entities organized or established by the Corporation or any of its Subsidiaries pursuant to the terms of such plans and trustees and fiduciaries with respect to any such plan acting in such capacity) that is the direct or indirect beneficial owner of 5% or more of the Voting Stock of the Corporation, and any Affiliate or Associate of any such person. For purposes of this Article 11, the terms "Affiliate" and "Associate" shall have the definitions given them in Article 9 hereof.

                        2.      The Market Price of shares of a class of Equity Security on any day shall mean the highest sale price of shares of such class of Equity Security on such day, or, if that day is not a trading day, on the trading day immediately preceding such day, on the national securities exchange or the Nasdaq System or any other system then in use on which such class of Equity Security is traded.

                        3.      The term Equity Security shall mean any security described in Section 3(a)(11) of the Securities Exchange Act of 1934, as in effect on December 31, 2005, which is traded on a national securities exchange or the Nasdaq System or any other system then in use.

                        4.      For purposes of this Article 11, all references to the term Interested Stockholder in the definition of Disinterested Director shall be deemed to refer to the term Interested Person.

ARTICLE 12. Indemnification of Directors and Officers.

            A.       Indemnification. The Corporation shall indemnify: (1) its current and former directors and officers, whether serving the Corporation or at its request any other entity, to the fullest extent required or permitted by the MGCL now or hereafter in force, including the advancement of expenses under the procedures and to the fullest extent permitted by law; and

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(2) other employees and agents to such extent as shall be authorized by the Board of Directors and permitted by law; provided, however, that, except as provided in Section B hereof with respect to proceedings to enforce rights to indemnification, the Corporation shall indemnify any such indemnitee in connection with a proceeding (or part thereof) initiated by such indemnitee only if such proceeding (or part thereof) was authorized by the Board of Directors of the Corporation.

            B.       Procedure. If a claim under Section A of this Article 12 is not paid in full by the Corporation within 60 days after a written claim has been received by the Corporation, except in the case of a claim for an advancement of expenses, in which case the applicable period shall be 20 days, the indemnitee may at any time thereafter bring suit against the Corporation to recover the unpaid amount of the claim. If successful in whole or in part in any such suit, or in a suit brought by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the indemnitee shall also be entitled to be reimbursed the expense of prosecuting or defending such suit. It shall be a defense to any action for advancement of expenses that the Corporation has not received both: (1) an undertaking as required by law to repay such advances in the event it shall ultimately be determined that the standard of conduct has not been met; and (2) a written affirmation by the indemnitee of his good faith belief that the standard of conduct necessary for indemnification by the Corporation has been met. In addition: (1) in any suit brought by the indemnitee to enforce a right to indemnification hereunder (but not in a suit brought by the indemnitee to enforce a right to an advancement of expenses) it shall be a defense that; and (2) in any suit by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking the Corporation shall be entitled to recover such expenses upon a final adjudication that, the indemnitee has not met the applicable standard for indemnification set forth in the MGCL. Neither the failure of the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) to have made a determination prior to the commencement of such suit that indemnification of the indemnitee is proper in the circumstances because the indemnitee has met the applicable standard of conduct set forth in the MGCL, nor an actual determination by the Corporation (including its Board of Directors, independent legal counsel, or its stockholders) that the indemnitee has not met such applicable standard of conduct, shall create a presumption that the indemnitee has not met the applicable standard of conduct or, in the case of such a suit brought by the indemnitee, be a defense to such suit. In any suit brought by the indemnitee to enforce a right to indemnification or to an advancement of expenses hereunder, or by the Corporation to recover an advancement of expenses pursuant to the terms of an undertaking, the burden of proving that the indemnitee is not entitled to be indemnified, or to such advancement of expenses, under this Article 12 or otherwise shall be on the Corporation.

            C.       Non-Exclusivity. The rights to indemnification and to the advancement of expenses conferred in this Article 12 shall not be exclusive of any other right which any person may have or hereafter acquire under any statute, the Charter, the Corporation's Bylaws, any agreement, any vote of stockholders or the Board of Directors, or otherwise.

            D.       Insurance. The Corporation may maintain insurance, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or another corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss, whether or not the Corporation would have the power to indemnify such person against such expense, liability or loss under the MGCL.

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            E.       Miscellaneous. The Corporation shall not be liable for any payment under this Article 12 in connection with a claim made by any indemnitee to the extent such indemnitee has otherwise actually received payment under any insurance policy, agreement, or otherwise, of the amounts otherwise indemnifiable hereunder. The rights to indemnification and to the advancement of expenses conferred in Sections A and B of this Article 12 shall be contract rights and such rights shall continue as to an indemnitee who has ceased to be a director or officer and shall inure to the benefit of the indemnitee's heirs, executors and administrators.

            Any repeal or modification of this Article 12 shall not in any way diminish any rights to indemnification or advancement of expenses of such director or officer or the obligations of the Corporation arising hereunder with respect to events occurring, or claims made, while this Article 12 is in force.

ARTICLE 13. Limitation of Liability. An officer or director of the Corporation, as such, shall not be liable to the Corporation or its stockholders for money damages, except: (A) to the extent that it is proved that the person actually received an improper benefit or profit in money, property or services for the amount of the benefit or profit in money, property or services actually received; (B) to the extent that a judgment or other final adjudication adverse to the person is entered in a proceeding based on a finding in the proceeding that the person's action, or failure to act, was the result of active and deliberate dishonesty and was material to the cause of action adjudicated in the proceeding; or (C) to the extent otherwise provided by the MGCL. If the MGCL is amended to further eliminate or limit the personal liability of officers and directors, then the liability of officers and directors of the Corporation shall be eliminated or limited to the fullest extent permitted by the MGCL, as so amended.

            Any repeal or modification of the foregoing paragraph by the stockholders of the Corporation shall not adversely affect any right or protection of a director or officer of the Corporation existing at the time of such repeal or modification.

ARTICLE 14. Amendment of the Charter . The Corporation reserves the right to amend or repeal any provision contained in the Charter in the manner prescribed by the MGCL, including any amendment altering the terms or contract rights, as expressly set forth in the Charter, of any of the Corporation's outstanding stock by classification, reclassification or otherwise, and all rights conferred upon stockholders are granted subject to this reservation; provided, however, that, notwithstanding any other provision of the Charter or any provision of law which might otherwise permit a lesser vote or no vote, but in addition to any vote of the holders of any class or series of the stock of the Corporation required by law or by the Charter, the affirmative vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (after giving effect to the provisions of Article 5), voting together as a single class, shall be required to amend or repeal this Article 14, Section C, D or E of Article 5, Article 7, Article 8, Article 9, Article 11, Article 12 or Article 13.

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IN WITNESS WHEREOF, I have signed these Articles of Incorporation, acknowledging the same to be my act, on ____________, 2006.

Witness:

Adonis E. Talmage

James G. Cooley

Consent of Resident Agent

THE UNDERSIGNED hereby consents to act as resident agent in Maryland for the entity named in the attached instrument.

The Corporation Trust Incorporated

By:
Printed Name:
Its:

D-20 Exhibit E

Exhibit E

Effective Date ___________, 2006.

CITIZENS COMMUNITY BANCORP, INC.

BYLAWS

ARTICLE I - STOCKHOLDERS

Section 1. ANNUAL MEETING

The annual meeting of the stockholders of Citizens Community Bancshares, Inc. (the "Corporation") shall be held each year at such place, on such date, and at such time during the 31-day period beginning on the 31st in January of each year as the Board of Directors shall fix, in their discretion. The business to be transacted at the annual meeting shall include the election of directors, consideration of the report of the President, and any other business properly brought before the meeting in accordance with Corporation's Charter and Bylaws. Failure to hold an annual meeting does not invalidate the Corporation(s existence or affect any otherwise valid corporate act.

Section 2. SPECIAL MEETINGS

A special meeting of the stockholders of the Corporation may be called at any time and place for any purpose(s) by the President or by the Board of Directors pursuant to a resolution adopted by a majority of the total number of directors that the Corporation would have if there were no vacancies on the Board of Directors. A special meeting of the stockholders shall be called by the Secretary of the Corporation upon the written request of the holders of a majority of all shares outstanding and entitled to vote on the business to be transacted at such meeting. Such written request shall state the purpose or purposes of the meeting and the matters proposed to be acted upon at the meeting and shall be delivered at the principal office of the Corporation addressed to the President or the Secretary. The Secretary shall inform the stockholders who make the request of the reasonably estimated cost of preparing and mailing a notice of the meeting and, upon payment of these costs to the Corporation, notify each stockholder entitled to notice of the meeting. The Board of Directors shall have the sole power to fix: (a) the record date for determining stockholders entitled to request a special meeting of stockholders and the record date for determining stockholders entitled to notice of and to vote at the special meeting; and (b) the date, time and place of the special meeting and the means of remote communication, if any, by which stockholders and proxy holders may be considered present in person and may vote at the special meeting. Notwithstanding the previous sentence, the Secretary of the Corporation shall not be obligated to call a special meeting of the stockholders requested by stockholders for

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the purpose of taking any action that is non-binding or advisory in nature. Business transacted at any special meeting shall be confined to the purpose(s) stated in the notice of such meeting.

Section 3. NOTICE OF MEETING; WAIVER OF NOTICE

Not less than 10 days nor more than 90 days before each stockholders' meeting, the Secretary shall give to each stockholder entitled to vote at or to notice of such meeting, notice in writing or by electronic transmission stating the place, date and time of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and may vote at the meeting, and, in the case of a special meeting, the purpose(s) for which the meeting is called. Notice is given to a stockholder when it is personally delivered to the stockholder, left at the stockholder(s usual place of business, mailed to the stockholder at his or her address as it appears on the records of the Corporation, or transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. If the Corporation has received a request from a stockholder that notice not be sent by electronic transmission, the Corporation may not provide notice to the stockholder by electronic transmission. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if such person, before or after the meeting, delivers a written waiver or waiver by electronic transmission that is filed with the records of the stockholders( meetings or is present at the meeting in person or by proxy. Notwithstanding the foregoing provisions, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be equivalent to notice. Attendance of a person entitled to notice at a meeting, in person or by proxy, shall constitute a waiver of notice of such meeting, except when such person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of the adjourned meeting is more than 120 days after the record date for which the meeting was originally noticed or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity with this Section 3.

As used in these Bylaws, the term (electronic transmission( shall have the meaning given to such term by Section 1-101(k-1) of the Maryland General Corporation Law (the (MGCL() or any successor provision.

Section 4. QUORUM

At any meeting of stockholders, the holders of a majority of the shares of the stock entitled to vote at the meeting, present in person or by proxy (after giving effect to the provisions of Article 5 of the Charter), shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Unless the Charter of the Corporation provides otherwise, where a separate vote by a class or classes is required, a majority of the shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.

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If a quorum fails to attend any meeting, the chairman of the meeting or the holders of a majority of the shares of stock entitled to vote who are represented in person or by proxy may, in accordance with Section 3 of this Article I, adjourn the meeting to any place, date and time. The stockholders present at a duly organized meeting may continue to transact business until adjournment, notwithstanding the withdrawal of stockholders to leave less than a quorum.

Section 5. ORGANIZATION AND CONDUCT OF BUSINESS

The Chairman of the Board of the Corporation or, in his or her absence, the President of the Corporation, or in his or her absence such person as the Board of Directors may have designated or, in the absence of such a person, such person as may be chosen by the holders of a majority of the shares entitled to vote who are present, in person or by proxy, shall call to order any meeting of the stockholders and act as chairman of the meeting. In the absence of the Secretary of the Corporation, the secretary of the meeting shall be such person as the chairman appoints. The chairman of any meeting of stockholders shall determine the order of business and the procedure at the meeting, including such regulation of the manner of voting and the conduct of discussion as seem to him or her in order.

Section 6. ADVANCE NOTICE PROVISIONS FOR BUSINESS TO BE TRANSACTED
AT ANNUAL MEETINGS AND ELECTIONS OF DIRECTORS

(a) At any annual meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting: (i) as specified in the Corporation's notice of meeting; (ii) by or at the direction of the Board of Directors; or (iii) by any stockholder of the Corporation who is entitled to vote with respect thereto and who complies with the notice procedures set forth in this Section 6(a). For business to be properly brought before an annual meeting by a stockholder, pursuant to clause (iii) of the immediately preceding sentence, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such business must otherwise be a proper matter for action by stockholders.

To be timely, a stockholder's notice must be delivered or mailed to and received at the principal executive office of the Corporation by not later than the close of business on the 90th day prior to the first anniversary of the date of the preceding year's annual meeting and not earlier than the close of business on the 120th day prior to the first anniversary of the date of the preceding year's annual meeting; provided, however, that in the event the annual meeting is the first annual meeting of stockholders of the Corporation, notice by the stockholder to be timely must be so received by not later than the close of business on the 90th day prior to and not earlier than the close of business on the 120th day prior to February 22, 2007, provided, further, that in the event that the date of the annual meeting is advanced by more than 20 days, or delayed by more than 60 days, from the anniversary date of the preceding year's annual meeting (or, in the case of the first annual meeting of stockholders of the Corporation from February 22, 2007), notice by the stockholder to be timely must be so received not earlier than the close of business on the 120th day prior to the date of such annual meeting and not later than the close of business on the later of: (i) the 90th day prior to the date of such annual meeting; or (ii) the 10th day following the first to occur of the day on which notice of the date of the annual meeting was mailed or otherwise transmitted or the day on which public announcement of the date of the annual meeting was first made by the Corporation. No adjournment or postponement of a meeting of stockholders shall commence a new period for the giving of notice hereunder.

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A stockholder's notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address of the stockholder proposing such business, as they appear on the Corporation's books, and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class and number of shares of the Corporation's capital stock that are beneficially owned or of record by such stockholder and beneficial owner; (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 6(a). The Chairman of the Board or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 6(a) and, if he or she should so determine, he or she shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted.

At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting in accordance with Article I, Section 2.

(b) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only: (i) by or at the direction of the Board of Directors; or (ii) by any stockholder of the Corporation who: (A) is a stockholder of record on the date of giving the notice provided for in this Section 6(a) and on the record date for the determination of stockholders entitled to vote at such meeting, and (B) complies with the notice procedures set forth in Section 6(a). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered or mailed to and received at the principal executive office of the Corporation not less than ninety (90) days prior to the date of the meeting; provided, however, that if less than one hundred (100) days' notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or otherwise transmitted or the day on which public announcement of the date of the meeting was first made by the Corporation, whichever shall first occur. Such stockholder's notice must be in writing and shall set forth: (i) as to each person whom such stockholder proposes to nominate for election as a director, all information relating to such person that is required to be disclosed in connection with solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the (Exchange Act(), or any successor rule or regulation; and (ii) as to the stockholder giving the notice: (A) the name and address of such stockholder as they appear on the Corporation's books and of the beneficial owner, if any, on whose behalf the nomination is made; (B) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder and such beneficial owner; (C) a description of all arrangements or understandings between such

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stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder; (D) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and (E) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Regulation 14A under the Exchange Act or any successor rule or regulation. Such notice must be accompanied by a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this Section 6(b). The officer of the Corporation or other person presiding at the meeting shall, if the facts so warrant, determine that a nomination was not made in accordance with such provisions and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

(c) For purposes of subsections (a) and (b) of this Section 6, the term (public announcement( shall mean disclosure in a press release reported by a nationally recognized news service, in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission or on a website maintained by the Corporation.

Section 7. VOTING

Unless the Charter of the Corporation provides for a greater or lesser number of votes per share or limits or denies voting rights, each outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders; however, a share is not entitled to be voted if any installment payable on it is overdue and unpaid. In all elections for directors, directors shall be determined by a plurality of the votes cast, and except as otherwise required by law or as provided in the Charter of the Corporation, all other matters voted on by stockholders shall be determined by a majority of the votes cast on the matter.

A stockholder may vote the stock the stockholder owns of record either in person or by proxy. A stockholder may sign a writing authorizing another person to act as proxy. Signing may be accomplished by the stockholder or the stockholder(s authorized agent signing the writing or causing the stockholder(s signature to be affixed to the writing by any reasonable means, including facsimile signature. A stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, an authorization for the person to act as the proxy to the person authorized to act as proxy or to any other person authorized to receive the proxy authorization on behalf of the person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization. The authorization may be transmitted by a telegram, cablegram, datagram, electronic mail or any other electronic or telephonic means. Unless a proxy provides otherwise, it is not valid more than 11 months after its date. A proxy is revocable by a stockholder at any time without condition or qualification unless the proxy states that it is irrevocable and the proxy is coupled with an interest. A proxy may be made irrevocable for as long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy or another general interest in the Corporation or its assets or liabilities.

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Section 8. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING

Except as provided in the following sentence, any action required or permitted to be taken at a meeting of stockholders may be taken without a meeting if a unanimous consent which sets forth the action is given in writing or by electronic transmission by each stockholder entitled to vote on the matter and is filed in paper or electronic format with the records of stockholder meetings. Unless the Charter of the Corporation requires otherwise, the holders of any class of the Corporation's stock other than common stock, entitled to vote generally in the election of directors, may take action or consent to any action by delivering a consent in writing or by electronic transmission of the stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting of the stockholders if the Corporation gives notice of the action so taken to each stockholder not later than ten days after the effective time of the action.

Section 9. CONDUCT OF VOTING

The Board of Directors shall, in advance of any meeting of stockholders, appoint one or more persons as inspectors of election, to act at the meeting or any adjournment thereof and make a written report thereof, in accordance with applicable law. At all meetings of stockholders, the proxies and ballots shall be received, and all questions touching the qualification of voters and the validity of proxies and the acceptance or rejection of votes shall be decided or determined by the inspector of elections. All voting, including on the election of directors but excepting where otherwise required by law, may be by a voice vote; provided, however, that upon demand therefor by a stockholder entitled to vote or his or her proxy or the chairman of the meeting, a written vote shall be taken. Every written vote shall be taken by ballot, each of which shall state the name of the stockholder or proxy voting and such other information as may be required under the procedure established for the meeting. Every vote taken by ballot shall be counted by an inspector or inspectors appointed by the chairman of the meeting. No candidate for election as a director at a meeting shall serve as an inspector at such meeting.

Section 10. CONTROL SHARE ACQUISITION ACT

Notwithstanding any other provision of the Charter of the Corporation or these Bylaws, Title 3, Subtitle 7 of the MGCL (or any successor statute) shall not apply to any acquisition by any person of shares of stock of the Corporation. This Section 10 may be repealed, in whole or in part, at any time, whether before or after an acquisition of Control Shares (as defined in Section 3-701(d) of the MGCL, or any successor provision) and, upon such repeal, may, to the extent provided by any successor bylaw, apply to any prior or subsequent Control Share Acquisition (as defined in Section 3-701(d) of the MGCL, or any successor provision).

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ARTICLE II - BOARD OF DIRECTORS
Section 1. GENERAL POWERS, NUMBER AND TERM OF OFFICE

The business and affairs of the Corporation shall be managed under the direction of the Board of Directors. The number of directors of the Corporation shall, by virtue of the Corporation's election made hereby to be governed by Section 3-804(b) of the MGCL, be fixed from time to time exclusively by vote of the Board of Directors; provided, however, that such number shall never be less than the minimum number of directors required by the MGCL now or hereafter in force. The Board of Directors shall annually elect a Chairman of the Board and a President from among its members and shall designate, when present, either the Chairman of the Board or the President to preside at its meetings. The Board of Directors may exercise all the powers of the Corporation, except those conferred on or reserved to the stockholders by statute or by the Charter or the Bylaws. The Board may adopt such rules and regulations for the conduct of their meetings and the management of the Corporation as they may deem proper, however, these rules and regulations may not be inconsistent with these Bylaws, the Charter and with the Maryland General Corporation Law. Action may be taken by the Board of Directors without a meeting if a unanimous consent that sets forth the action is given in writing or by electronic transmission by each member of the Board of Directors and filed in paper or electronic form with the minutes of proceedings of the Board of Directors. The directors, other than those who may be elected by the holders of any series of preferred stock, shall be divided into three classes, as nearly equal in number as reasonably possible, with the term of office of the first class to expire at the first annual meeting of stockholders, the term of office of the second class to expire at the annual meeting of stockholders one year thereafter and the term of office of the third class to expire at the annual meeting of stockholders two years thereafter, with each director to hold office until his or her successor shall have been duly elected and qualified. At each annual meeting of stockholders, commencing with the first annual meeting, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election or for such shorter period of time as the Board of Directors may determine, with each director to hold office until his or her successor shall have been duly elected and qualified.

Section 2. VACANCIES AND NEWLY CREATED DIRECTORSHIPS

By virtue of the Corporation's election made hereby to be subject to Section 3-804(c) of the MGCL, any vacancies in the Board of Directors resulting from an increase in the size of the Board of Directors or the death, resignation or removal of a director may be filled only by the affirmative vote of a majority of the remaining directors in office, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred and until a successor is elected and qualifies. No decrease in the number of directors constituting the Board of Directors shall shorten the term of any incumbent director.

Section 3. REGULAR MEETINGS

Regular meetings of the Board of Directors shall be held at such dates, such times and such places or by means of remote communication as shall have been designated by the Board of Directors and publicized among all directors. A notice of each regular meeting shall not be required. Any regular meeting of the Board of Directors may adjourn from time to time

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to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting other than by announcement.

Section 4. SPECIAL MEETINGS

Special meetings of the Board of Directors may be called by one-third of the directors then in office (rounded up to the nearest whole number) or by the President and shall be held at such place, on such date and at such time as those calling the meeting shall fix.

Notice of the date, time and place of each such special meeting of the Board of Directors shall be given to each director. Notice is given to a director when it is delivered personally to him or her, left at his or her residence or usual place of business, or sent by telephone, telegraph, facsimile or electronic transmission at least 24 hours before the time of the meeting, or in the alternative, when it is mailed to his or her address as it appears on the records of the Corporation, at least 72 hours before the time of the meeting. Any director may waive notice of any special meeting either before or after the holding thereof by written waiver filed with the records of the meeting. The attendance of a director at a meeting shall constitute a waiver of notice of such meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any special meeting of the Board of Directors need be specified in the notice or waiver of notice of such meeting. Any special meeting of the Board of Directors may adjourn from time to time to reconvene at the same or some other place, and no notice need be given of any such adjourned meeting other than by announcement.

Section 5. TELEPHONIC MEETINGS

Members of the Board of Directors, or of any committee thereof, may participate in a meeting of such Board or committee by means of a conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this Section 5 shall constitute presence in person at such meeting.

Section 6. QUORUM

At any meeting of the Board of Directors, a majority of the total number of directors shall constitute a quorum for the transaction of business, but if less than such quorum is present at a meeting, a majority of the directors present may adjourn the meeting without further notice or waiver thereof.

Section 7. POWERS

All powers of the Corporation may be exercised by or under the authority of the Board of Directors, except as conferred on or reserved to the stockholders by law or by the Corporation(s Charter or these Bylaws. Consistent with the foregoing, the Board of Directors shall have, among other powers, the unqualified power:

(a) To declare dividends from time to time in accordance with law;

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            (b)    To purchase or otherwise acquire any property, rights or privileges on such terms as it shall determine;

            (c)    To authorize the creation, making and issuance, in such form as it may determine, of written obligations of every kind, negotiable or non-negotiable, secured or unsecured, and to do all things necessary in connection therewith;

            (d)    To remove any officer of the Corporation with or without cause, and from time to time to devolve the powers and duties of any officer upon any other person for the time being;

            (e)    To confer upon any officer of the Corporation the power to appoint, remove and suspend subordinate officers, employees and agents;

            (f)    To adopt from time to time such stock, option, stock purchase, bonus or other compensation plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine;

            (g)    To adopt from time to time such insurance, retirement, and other benefit plans for directors, officers, employees and agents of the Corporation and its subsidiaries as it may determine; and

            (h)    To adopt from time to time regulations, not inconsistent with these Bylaws, for the management of the Corporation's business and affairs.

Section 8. RESIGNATION

A director may resign at any time by giving written notice to the President or the Secretary of the Corporation. Unless otherwise specified in the notice, the resignation shall take effect upon receipt thereof by the Board or such officer, and the acceptance of the resignation shall not be necessary to make it effective.

Section 9. COMPENSATION

By resolution of the Board of Directors, a fixed sum and expenses, if any, for attendance at each regular or special meeting of the Board of Directors or of committees thereof, and other compensation for their services as such or on such committees, may be paid to directors, as may compensation for such other services as a director may render to the Corporation.

Section 10. PRESUMPTION OF ASSENT

A director of the Corporation who is present at a meeting of the Board of Directors at which action on any corporate matter is taken shall be presumed to have assented to such action unless such director announces his dissent at the meeting and either: (a) such director's dissent is entered in the minutes of the meeting; (b) such director files his written dissent to such action with the secretary of the meeting before the adjournment thereof; or (c) such director forwards his written dissent within 24 hours after the meeting is adjourned, by certified mail, return receipt requested, bearing a postmark from the United States Postal Service, to the secretary of the meeting or the Secretary of the Corporation. Such right to dissent shall not apply to a director who voted in favor of such action or failed to make his dissent known at the meeting.

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Section 11. COMMITTEES

The Board of Directors, by a vote of a majority of the Board of Directors, may from time to time designate committees of the Board, with such lawfully delegable powers and duties as it thereby confers, to serve at the pleasure of the Board and shall, for these committees and any others provided for herein, elect a director(s) to serve as the member(s), designating, if it desires, other directors as alternate members who may replace any absent or disqualified member at any meeting of the committee. Any such committee, to the extent provided in the resolution of the Board of Directors, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; provided, however, that any such committee shall have no power or authority with reference to: (a) declaring dividends or distributions on stock; (b) issuing stock other than as authorized by the Board of Directors; (c) recommending to the stockholders any action that requires stockholder approval; (d) amending the Bylaws, or (e) approving a merger or share exchange that does not require stockholder approval. In the absence or disqualification of any member of any committee and any alternate member in his or her place, the member(s) of the committee present at the meeting and not disqualified from voting, whether or not he or she or they constitute a quorum, may by unanimous vote appoint another member of the Board of Directors to act at the meeting in the place of the absent or disqualified member.

Each committee may determine the procedural rules for meeting and conducting its business and shall act in accordance therewith, except as otherwise provided herein or required by law. Adequate provision shall be made for notice to members of all meetings. The quorum requirements for each such committee shall be a majority of the members of such committee unless otherwise determined by the Board of Directors by a majority vote of the Board of Directors which such quorum determined by a majority of the Board may be one-third of such members and all matters considered by such committees shall be determined by a majority vote of the members present. Action may be taken by any committee without a meeting if all members thereof consent thereto in writing, and the writing or writings are filed with the minutes of the proceedings of such committee.

ARTICLE III - OFFICERS
Section 1. EXECUTIVE AND OTHER OFFICERS

(a) The Board of Directors as soon as may be practicable after the annual meeting of stockholders shall choose a Chairman of the Board, President, one or more Vice Presidents, a Secretary and a Treasurer and from time to time may choose such other officers as it may deem proper. Any number of offices may be held by the same person, except that no person may concurrently serve as both President and Vice President of the Corporation.

(b) The term of office of all officers shall be until the next annual election of officers and until their respective successors are chosen, but any officer may be removed from office at any time by the affirmative vote of a majority of the authorized number of directors then constituting the Board of Directors.

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(c) All officers chosen by the Board of Directors shall each have such powers and duties as generally pertain to their respective offices, subject to the specific provisions of this Article III. Such officers shall also have such powers and duties as from time to time may be conferred by the Board of Directors or by any committee thereof.

Section 2. CHAIRMAN OF THE BOARD OF DIRECTORS

The Chairman of the Board of Directors of the Corporation shall act in a general executive capacity and, subject to the direction of the Board of Directors, shall have general responsibility for the supervision of the policies and affairs of the Corporation and the effective administration of the Corporation's business.

Section 3. PRESIDENT AND CHIEF EXECUTIVE OFFICER

The President and Chief Executive Officer shall be the principal executive officer of the Corporation. Subject to the provisions of these Bylaws and to the direction of the Board of Directors, he or she shall have the responsibility for the general management and control of the business and affairs of the Corporation and shall perform all duties and have all powers that are commonly incident to the office of the president or that are delegated to him or her by the Board of Directors. He or she shall have power to sign all contracts, agreements and other instruments of the Corporation that are authorized and shall have general supervision and direction of all of the other officers, employees and agents of the Corporation.

Section 4. VICE PRESIDENT(S)

The Vice President(s) shall perform the duties of the President in his or her absence or during his or her inability to act. In addition, the Vice President(s) shall perform the duties and exercise the powers usually incident to their respective offices and/or such other duties and powers as may be properly assigned to them by the Board of Directors, the Chairman of the Board or the President. A Vice President(s) may be designated as Executive Vice President, Senior Vice President or any other designation specified by the Board of Directors.

Section 5. SECRETARY

The Secretary, and any Assistant Secretaries designated by the Board of Directors, shall: (a) keep the minutes of the meetings of the stockholders, of the Board of Directors and of any committees of the Board of Directors; (b) see that all notices are duly given in accordance with the provisions of the Bylaws or as required by law; (c) witness all documents on behalf of the Corporation, the execution of which is duly authorized, see that the corporate seal is affixed where such document is required to be under its seal, and, when so affixed, may attest the same; and (d) in general, shall perform all duties incident to the office of a secretary of a corporation and such other duties as may be assigned by the Board of Directors or the President.

Section 6. TREASURER

The Treasurer shall have charge of all monies and securities of the Corporation, other than monies and securities of any division of the Corporation that has a treasurer or financial officer appointed by the Board of Directors, and shall keep regular books of account. The funds of the Corporation shall be deposited in the name of the Corporation by the Treasurer with such banks

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or trust companies or other entities as the Board of Directors shall designate. The Treasurer shall sign or countersign such instruments as require his or her signature, shall perform all such duties and have all such powers as are usually incident to such office and/or such other duties and powers as are properly assigned to him or her by the Board of Directors, the Chairman of the Board or the President, and may be required to give bond for the faithful performance of his or her duties in such sum and with such surety as may be required by the Board of Directors.

Section 7. SUBORDINATE OFFICERS

The Corporation may have such subordinate officers as the Board of Directors may deem desirable. Each such officer shall hold office for such period and perform such duties as the Board of Directors, the President or the committee or officer designated pursuant to these Bylaws may prescribe.

Section 8. ACTION WITH RESPECT TO SECURITIES OF OTHER CORPORATIONS

Stock of other corporations or associations, registered in the name of the Corporation, may be voted by the President, a Vice-President, or a proxy appointed by either of them. The Board of Directors, however, may by resolution appoint some other person to vote such shares, in which case such person shall be entitled to vote such shares upon the production of a certified copy of such resolution.

ARTICLE IV - STOCK
Section 1. CERTIFICATES FOR STOCK

Each stockholder shall be entitled to certificates that represent and certify the shares of stock he or she holds in the Corporation. Each stock certificate shall include on its face the name of the Corporation, the name of the stockholder and the class of stock and number of shares represented by the certificate and be in such form, not inconsistent with law or with the Charter, as shall be approved by the Board of Directors or any officer(s) designated for such purpose by resolution of the Board of Directors. Each stock certificate shall be signed by the President or the Chairman of the Board, and countersigned by the Secretary, an Assistant Secretary, the Treasurer or an Assistant Treasurer. Each certificate shall be sealed with the actual corporate seal or a facsimile of it or in any other form and the signatures on each certificate may be either manual or facsimile signatures. Each stock certificate also shall include on its face or back: (a) a statement of any restrictions on transferability and a statement of the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation is authorized to issue, of the differences in the relative rights and preferences between the shares of each series of preferred stock which the Corporation is authorized to issue, to the extent they have been set, and of the authority of the Board of Directors to set the relative rights and preferences of subsequent series of preferred stock; or (b) a statement which provides in substance that the Corporation will furnish a full statement of such information to any stockholder on request and without charge. Such request may be made to the Secretary or to the Corporation's transfer agent. Upon the issuance of uncertificated shares of capital stock, the Corporation shall send the stockholder a written statement of the same information required above on stock certificates. A certificate is valid and may be issued whether or not an officer who signed it is still an officer of the Corporation when it is issued.

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Section 2. TRANSFERS

The Board of Directors shall have power and authority to make such rules and regulations as it may deem expedient concerning the issue, transfer and registration of certificates of stock, and may appoint transfer agents and registrars thereof. The duties of transfer agent and registrar may be combined.

Section 3. RECORD DATE AND CLOSING OF TRANSFER BOOKS

In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than 90 nor less than 10 days before the date of such meeting, nor more than 90 days before any other action. The transfer books may not be closed for a period longer than 20 days. In the case of a meeting of stockholders, the closing of the transfer books shall be at least 10 days before the date of the meeting.

Section 4. STOCK LEDGER

The Corporation shall maintain a stock ledger that contains the name and address of each stockholder and the number of shares of stock of each class registered in the name of each stockholder. The stock ledger may be in written form or in any other form that can be converted within a reasonable time into written form for visual inspection. The original or a duplicate of the stock ledger shall be kept at the offices of a transfer agent for the particular class of stock, within or without the State of Maryland, or, if none, at the principal office or the principal executive offices of the Corporation in the State of Maryland.

Section 5. CERTIFICATION OF BENEFICIAL OWNERS

The Board of Directors may adopt by resolution a procedure by which a stockholder of the Corporation may certify in writing to the Corporation that any shares of stock registered in the name of the stockholder are held for the account of a specified person other than the stockholder.

Section 6. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES

The Board of Directors of the Corporation may determine the conditions for issuing a new stock certificate in place of one that is purportedly alleged to have been lost, stolen or destroyed, or the Board of Directors may delegate such power to any officer(s) of the Corporation. In its discretion, the Board of Directors or such officer(s) may refuse to issue such new certificate except upon the order of a court having jurisdiction in the premises.

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ARTICLE V - MISCELLANEOUS
Section 1. FACSIMILE SIGNATURES

In addition to the provisions for use of facsimile signatures elsewhere specifically authorized in these Bylaws, facsimile signatures of any officer or officers of the Corporation may be used whenever and as authorized by the Board of Directors or a committee thereof.

Section 2. CORPORATE SEAL

The Board of Directors may provide a suitable seal, bearing the name of the Corporation, which shall be in the charge of the Secretary. The Board of Directors may authorize one or more duplicate seals and provide for the custody thereof. If the Corporation is required to place its corporate seal to a document, it is sufficient to meet the requirement of any law, rule, or regulation relating to a corporate seal to place the word ((seal)( adjacent to the signature of the person authorized to sign the document on behalf of the Corporation.

Section 3. ANNUAL STATEMENT OF AFFAIRS

The President or chief accounting officer shall prepare annually a full and correct statement of the affairs of the Corporation, to include a balance sheet and a financial statement of operations for the preceding fiscal year. The statement of affairs shall be submitted at the annual meeting of the stockholders and, within 20 days after the meeting, placed on file at the Corporation(s principal office.

Section 4. BOOKS AND RECORDS

The Corporation shall keep correct and complete books and records of its accounts and transactions and minutes of the proceedings of its stockholders and Board of Directors and of any committee when exercising any of the powers of the Board of Directors. The books and records of the Corporation may be in written form or in any other form that can be converted within a reasonable time into written form for visual inspection. Minutes shall be recorded in written form but may be maintained in the form of a reproduction. The original or a certified copy of these Bylaws shall be kept at the principal office of the Corporation.

Section 5. RELIANCE UPON BOOKS, REPORTS AND RECORDS

Each director, each member of any committee designated by the Board of Directors, and each officer and agent of the Corporation shall, in the performance of his or her duties, in addition to any protections conferred upon him or her by law, be fully protected in relying in good faith upon the books of account or other records of the Corporation and upon such information, opinions, reports or statements presented to the Corporation by any of its officers or employees, or committees of the Board of Directors so designated, or by any other person as to matters which such director, committee member, officer or agent reasonably believes are within such other person's professional or expert competence and who has been selected with reasonable care by or on behalf of the Corporation.

Section 6. FISCAL YEAR

The fiscal year of the Corporation shall be as fixed by the Board of Directors.

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Section 7. TIME PERIODS

In applying any provision of these Bylaws which requires that an act be done or not be done a specified number of days prior to an event or that an act be done during a period of a specified number of days prior to an event, calendar days shall be used, the day of the doing of the act shall be excluded and the day of the event shall be included.

Section 8. CHECKS, DRAFTS, ETC.

All checks, drafts and orders for the payment of money, notes and other evidences of indebtedness, issued in the name of the Corporation, shall, unless otherwise provided by resolution of the Board of Directors, be signed by the President, a Vice-President, an Assistant Vice-President, the Treasurer or an Assistant Treasurer.

Section 9. MAIL

Any notice or other document that is required by these Bylaws to be mailed shall be deposited in the United States mails, postage prepaid.

Section 10. CONTRACTS AND AGREEMENTS

To the extent permitted by applicable law, and except as otherwise prescribed by the Charter or these Bylaws, the Board of Directors may authorize any officer, employee or agent of the Corporation to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation. Such authority may be general or confined to specific instances. A person who holds more than one office in the Corporation may not act in more than one capacity to execute, acknowledge, or verify an instrument required by law to be executed, acknowledged, or verified by more than one officer.

ARTICLE VII AMENDMENTS
These Bylaws may be adopted, amended or repealed as provided in the Charter of the Corporation.

E-15 End.

EXHIBIT 3.1

Class	Name	Term to Expire in
I	Adonis E. Talmage	2007

I	James G. Cooley	2007

II	Richard McHugh	2008

II	Thomas C. Kempen	2008

III	Brian R. Schilling	2008

III	David B. Westrate	2008

ARTICLE 8. Bylaws . The Board of Directors is expressly empowered to adopt, amend or repeal the Bylaws of the Corporation. Any adoption, amendment or repeal of the Bylaws of the Corporation by the Board of Directors shall require the approval of a majority of the total number of directors the Corporation would have if there were no vacancies on the Board of Directors. The stockholders also shall have power to adopt, amend or repeal the Bylaws of the Corporation. In addition to any vote of the holders of any class or series of stock of the Corporation required by law or by the Charter, the affirmative vote of the holders of at least 80% of the voting power of all of the then-outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors (after giving effect to the provisions of Article 5 hereof), voting together as a single class, shall be required for the adoption, amendment or repeal of any provisions of the Bylaws of the Corporation by the stockholders.

ARTICLE 9. Approval of Certain Business Combinations.

            A.      Super-majority Voting Requirement; Business Combination Defined. In addition to any affirmative vote required by law or by the Charter and except as otherwise expressly provided in this Section:

                        1.      any merger or consolidation of the Corporation or any Subsidiary with (a) any Interested Stockholder or (b) any other corporation (whether or not itself an Interested Stockholder) which is, or after such merger or consolidation would be, an Affiliate of an Interested Stockholder; or

                        2.      any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions) to or with any Interested Stockholder, or any Affiliate of any Interested Stockholder, of any assets of the Corporation or any Subsidiary having an aggregate Fair Market Value equaling or exceeding 25% or more of the combined assets of the Corporation and its Subsidiaries; or

                        3.      the issuance or transfer by the Corporation or any Subsidiary (in one transaction or a series of transactions) of any securities of the Corporation or any Subsidiary to any Interested Stockholder or any Affiliate of any Interested Stockholder in exchange for cash, securities or other property (or a combination thereof) having an aggregate Fair Market Value equaling or exceeding 25% of the combined assets of the Corporation and its Subsidiaries except pursuant to an employee benefit plan of the Corporation or any Subsidiary thereof; or

                        4.      the adoption of any plan or proposal for the liquidation or dissolution of the Corporation proposed by or on behalf of any Interested Stockholder or any Affiliate of any Interested Stockholder; or

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IN WITNESS WHEREOF, I have signed these Articles of Incorporation, acknowledging the same to be my act, on ____________, 2006.

Witness:

Adonis E. Talmage

James G. Cooley

Consent of Resident Agent

THE UNDERSIGNED hereby consents to act as resident agent in Maryland for the entity named in the attached instrument.

The Corporation Trust Incorporated

By:
Printed Name:
Its:

20 End.

EXHIBIT 3.2

Effective Date: June 27, 2006.

the purpose of taking any action that is non-binding or advisory in nature. Business transacted at any special meeting shall be confined to the purpose(s) stated in the notice of such meeting.

Section 3. NOTICE OF MEETING; WAIVER OF NOTICE

Not less than 10 days nor more than 90 days before each stockholders' meeting, the Secretary shall give to each stockholder entitled to vote at or to notice of such meeting, notice in writing or by electronic transmission stating the place, date and time of the meeting, the means of remote communication, if any, by which stockholders and proxy holders may be deemed to be present in person and may vote at the meeting, and, in the case of a special meeting, the purpose(s) for which the meeting is called. Notice is given to a stockholder when it is personally delivered to the stockholder, left at the stockholder(s usual place of business, mailed to the stockholder at his or her address as it appears on the records of the Corporation, or transmitted to the stockholder by an electronic transmission to any address or number of the stockholder at which the stockholder receives electronic transmissions. If the Corporation has received a request from a stockholder that notice not be sent by electronic transmission, the Corporation may not provide notice to the stockholder by electronic transmission. Notwithstanding the foregoing provisions, each person who is entitled to notice waives notice if such person, before or after the meeting, delivers a written waiver or waiver by electronic transmission that is filed with the records of the stockholders( meetings or is present at the meeting in person or by proxy. Notwithstanding the foregoing provisions, a written waiver of notice, signed by the person entitled to notice, whether before or after the time stated therein, shall be equivalent to notice. Attendance of a person entitled to notice at a meeting, in person or by proxy, shall constitute a waiver of notice of such meeting, except when such person attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened.

When a meeting is adjourned to another place, date or time, written notice need not be given of the adjourned meeting if the place, date and time thereof are announced at the meeting at which the adjournment is taken; provided, however, that if the date of the adjourned meeting is more than 120 days after the record date for which the meeting was originally noticed or if a new record date is fixed for the adjourned meeting, written notice of the place, date and time of the adjourned meeting shall be given in conformity with this Section 3.

As used in these Bylaws, the term (electronic transmission( shall have the meaning given to such term by Section 1-101(k-1) of the Maryland General Corporation Law (the "MGCL") or any successor provision.

Section 4. QUORUM

At any meeting of stockholders, the holders of a majority of the shares of the stock entitled to vote at the meeting, present in person or by proxy (after giving effect to the provisions of Article 5 of the Charter), shall constitute a quorum for all purposes, unless or except to the extent that the presence of a larger number may be required by law. Unless the Charter of the Corporation provides otherwise, where a separate vote by a class or classes is required, a majority of the shares of such class or classes, present in person or represented by proxy, shall constitute a quorum entitled to take action with respect to that vote on that matter.

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A stockholder's notice to the Secretary shall set forth as to each matter such stockholder proposes to bring before the annual meeting: (i) a brief description of the business desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting; (ii) the name and address of the stockholder proposing such business, as they appear on the Corporation's books, and of the beneficial owner, if any, on whose behalf the proposal is made; (iii) the class and number of shares of the Corporation's capital stock that are beneficially owned or of record by such stockholder and beneficial owner; (iv) a description of all arrangements or understandings between such stockholder and any other person or persons (including their names) in connection with the proposal of such business by such stockholder and any material interest of such stockholder in such business; and (v) a representation that such stockholder intends to appear in person or by proxy at the annual meeting to bring such business before the meeting. Notwithstanding anything in these Bylaws to the contrary, no business shall be brought before or conducted at an annual meeting except in accordance with the provisions of this Section 6(a). The Chairman of the Board or other person presiding over the annual meeting shall, if the facts so warrant, determine and declare to the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 6(a) and, if he or she should so determine, he or she shall so declare to the meeting and any such business so determined to be not properly brought before the meeting shall not be transacted.

At any special meeting of the stockholders, only such business shall be conducted as shall have been brought before the meeting in accordance with Article I, Section 2.

(b) Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors of the Corporation. Nominations of persons for election to the Board of Directors of the Corporation may be made at a meeting of stockholders at which directors are to be elected only: (i) by or at the direction of the Board of Directors; or (ii) by any stockholder of the Corporation who: (A) is a stockholder of record on the date of giving the notice provided for in this Section 6(a) and on the record date for the determination of stockholders entitled to vote at such meeting, and (B) complies with the notice procedures set forth in Section 6(a). Such nominations, other than those made by or at the direction of the Board of Directors, shall be made by timely notice in writing to the Secretary of the Corporation. To be timely, a stockholder's notice shall be delivered or mailed to and received at the principal executive office of the Corporation not less than ninety (90) days prior to the date of the meeting; provided, however, that if less than one hundred (100) days' notice or prior disclosure of the date of the meeting is given or made to stockholders, notice by the stockholder to be timely must be so received not later than the close of business on the 10th day following the day on which such notice of the date of the meeting was mailed or otherwise transmitted or the day on which public announcement of the date of the meeting was first made by the Corporation, whichever shall first occur. Such stockholder's notice must be in writing and shall set forth: (i) as to each person whom such stockholder proposes to nominate for election as a director, all information relating to such person that is required to be disclosed in connection with solicitations of proxies for election of directors, or is otherwise required, in each case pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or any successor rule or regulation; and (ii) as to the stockholder giving the notice: (A) the name and address of such stockholder as they appear on the Corporation's books and of the beneficial owner, if any, on whose behalf the nomination is made; (B) the class or series and number of shares of capital stock of the Corporation which are owned beneficially or of record by such stockholder and such beneficial owner; (C) a description of all arrangements or understandings between such

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stockholder and each proposed nominee and any other person or persons (including their names) pursuant to which the nomination(s) are to be made by such stockholder; (D) a representation that such stockholder intends to appear in person or by proxy at the meeting to nominate the persons named in its notice; and (E) any other information relating to such stockholder that would be required to be disclosed in a proxy statement or other filings required to be made in connection with solicitations of proxies for election of directors pursuant to Regulation 14A under the Exchange Act or any successor rule or regulation. Such notice must be accompanied by a written consent of each proposed nominee to be named as a nominee and to serve as a director if elected. No person shall be eligible for election as a director of the Corporation unless nominated in accordance with the provisions of this Section 6(b). The officer of the Corporation or other person presiding at the meeting shall, if the facts so warrant, determine that a nomination was not made in accordance with such provisions and, if he or she should so determine, he or she shall so declare to the meeting and the defective nomination shall be disregarded.

(c) For purposes of subsections (a) and (b) of this Section 6, the term "public announcement" shall mean disclosure in a press release reported by a nationally recognized news service, in a document publicly filed or furnished by the Corporation with the Securities and Exchange Commission or on a website maintained by the Corporation.

Section 7. VOTING

Unless the Charter of the Corporation provides for a greater or lesser number of votes per share or limits or denies voting rights, each outstanding share of stock, regardless of class, is entitled to one vote on each matter submitted to a vote at a meeting of stockholders; however, a share is not entitled to be voted if any installment payable on it is overdue and unpaid. In all elections for directors, directors shall be determined by a plurality of the votes cast, and except as otherwise required by law or as provided in the Charter of the Corporation, all other matters voted on by stockholders shall be determined by a majority of the votes cast on the matter.

A stockholder may vote the stock the stockholder owns of record either in person or by proxy. A stockholder may sign a writing authorizing another person to act as proxy. Signing may be accomplished by the stockholder or the stockholder(s authorized agent signing the writing or causing the stockholder(s signature to be affixed to the writing by any reasonable means, including facsimile signature. A stockholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, an authorization for the person to act as the proxy to the person authorized to act as proxy or to any other person authorized to receive the proxy authorization on behalf of the person authorized to act as the proxy, including a proxy solicitation firm or proxy support service organization. The authorization may be transmitted by a telegram, cablegram, datagram, electronic mail or any other electronic or telephonic means. Unless a proxy provides otherwise, it is not valid more than 11 months after its date. A proxy is revocable by a stockholder at any time without condition or qualification unless the proxy states that it is irrevocable and the proxy is coupled with an interest. A proxy may be made irrevocable for as long as it is coupled with an interest. The interest with which a proxy may be coupled includes an interest in the stock to be voted under the proxy or another general interest in the Corporation or its assets or liabilities.

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EXHIBIT 4.0

NUMBER
CUSIP
COMMON STOCK

CITIZENS COMMUNITY BANCORP, INC. INCORPORATED UNDER THE LAWS OF THE STATE OF MARYLAND

This Certifies that

is the owner of

FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE OF

CITIZENS COMMUNITY BANCORP, INC. (the "Corporation"), a Maryland corporation. The shares represented by this certificate are transferable only on the stock transfer books of the Corporation by the holder of record hereof, or by his duly authorized attorney or legal representative, upon the surrender of this certificate properly endorsed. This certificate is not valid until countersigned and registered by the Transfer Agent and Registrar. This security is not a deposit or account and is not federally insured or guaranteed.

IN WITNESS WHEREOF, the Corporation has caused this certificate to bear the facsimile signatures of its duly authorized officers and to be sealed with the facsimile of its corporate seal.

DATED

Johnny W. Thompson
Assistant Secretary

James G. Cooley
President and Chief Executive Officer

[Seal]

Back of Certificate

The Corporation will furnish to any stockholder on request and without charge a full statement of the designations and any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the stock of each class which the Corporation is authorized to issue, of the differences in the relative rights and preferences between the shares of each series of a preferred or special class in series which the Corporation is authorized to issue, to the extent they have been set, and of the authority of the Board of Directors to set the relative rights and preferences of subsequent series of a preferred or special class of stock. Such request may be made to the Secretary of the Corporation.

Keep this certificate in a safe place. If it is lost, stolen, or destroyed, the Corporation may require a bond of indemnity as a condition to the issuance of a replacement certificate.

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

UNIF GIFT MIN ACT		Custodian		UNIF GIFT MIN ACT		Custodian
	(Cust)		(Minor)		(Cust)		(Minor)

								TEN COM - as tenants in common
Under Uniform Gift to Minors Act -		(State)		Under Uniform Gift to Minors Act -		(State)		TEN ENT = as tenants by the entireties JT TEN - as joint tneants with right of survivorship and not as tenants in common
								Additional abbreviations may also be used though not in the above list.

For Value Received, _______________________________________ hereby sell, assign and transfer unto ___________________________________

________________________________________________________________________________________________________________________
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

____________________________Shares of Common Stock represented by the within certificate, and do hereby irrevocably constitute and appoint

_____________________________________________ Attorney to transfer the said shares on the books of the within named Corporation with full

power of substitution in the premises.

___________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

Dated ________________________________________________

NOTICE: THE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

EXHIBIT 5.0

SILVER, FREEDMAN & TAFF, L.L.P.

June 30, 2006

VIA EDGAR

Board of Directors
Citizens Community Bancorp, Inc.
2174 EastRidge Center
Eau Claire, Wisconsin 54701

Members of the Board of Directors:

            We have acted as special counsel to Citizens Community Bancorp, Inc., a Maryland corporation (the "Holding Company"), in connection with the preparation and filing with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended, of the Registration Statement on Form SB-2 (the "Registration Statement"), relating to the issuance of up to 7,116,519 shares of the Holding Company's common stock, par value $.01 per share (the "Common Stock"), in connection with the conversion and reorganization of Citizens Community MHC from the mutual to the stock form of organization. The shares of common stock of Citizens Community Bancorp, Inc. to be sold represent the 74% ownership interest in Citizens Community Bancorp, a federally chartered mid-tier stock holding company, which is currently owned by Citizens Community MHC, a federally chartered mutual holding company. The remaining 26% ownership interest in Citizens Community Bancorp is currently owned by public stockholders and will be exchanged for shares of Citizens Community Bancorp, Inc.'s common stock based on an Exchange Ratio, which is dependent upon the number of shares of Citizens Community Bancorp, Inc. common stock sold in the Stock Offering.

            The Conversion and the offering of the shares of Common Stock for sale to the public are being made in accordance with the Plan of Conversion and Reorganization (the "Plan"). In this regard, we have examined the Charter and Bylaws of the Holding Company, resolutions of the Board of Directors of the Bank and the Holding Company, the Plan and such other documents and matters of law as we deemed appropriate for the purpose of this opinion.

            Based upon the foregoing, we are of the opinion as of the date hereof that the Common Stock has been duly and validly authorized, and when issued in accordance with the terms of the Plan, and upon the receipt of the consideration required thereby, will be legally issued, fully paid and non-assessable.

            We hereby consent to the filing of this opinion as an exhibit to the Holding Company's Registration Statement and to the references to Silver, Freedman & Taff, L.L.P. under the heading "Legal and Tax Opinions" in the Prospectus contained in the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended or the rules and regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

/s/ Silver, Freedman & Taff, L.L.P.

SILVER, FREEDMAN & TAFF, L.L.P.

EXHIBIT 8.1

Law Offices
Silver, Freedman & Taff, L.L.P.
A Limited Liability Partnership Including Professional Corporations

TELECOPIER NUMBER
(202) 337-5502

1700 WISCONSIN AVENUE, N.W.
WASHINGTON, D.C. 20007
(202) 295-4500
WWW.SFTLAW.COM

WRITER'S DIRECT DIAL #
(202) 295-4503

June 30, 2006

Board of Directors
Citizens Community MHC
Citizens Community Bancorp
Citizens Community Federal
2174 EastRidge Center
Eau Claire, Wisconsin 54701

Ladies and Gentlemen:

You have asked our opinion regarding certain federal income tax consequences of the proposed transactions (collectively, the "Conversion and Reorganization"), more fully described below, pursuant to which Citizens Community MHC ("MHC") will convert to the stock form of organization and Citizens Community Bancorp, Inc., a Maryland Corporation, ("Holding Company') will become the owner of 100 percent of the stock of Citizens Community Federal, a federal stock savings association ("Savings Association"). We are rendering this opinion pursuant to Section 22 of the Plan of Conversion and Reorganization (the "Plan") adopted by the Board of Directors of MHC, Savings Association and Citizens Community Bancorp, a federally chartered stock corporation that currently owns 100 percent of the stock of the Savings Association, ("Mid-Tier Company") on April 20, 2006. All capitalized terms used but not defined in this letter shall have the meanings assigned to them in the Plan.

The Conversion and Reorganization will be effected, pursuant to the Plan, as follows:

	1.	Savings Association will form Holding Company as a first tier subsidiary.
	2.	Holding Company will form Interim Three, a federal interim stock savings bank, as a first tier subsidiary.
	3.	MHC will convert to Interim Two, a federal interim stock savings bank.
	4.	Mid-Tier Company will convert to Interim One, a federal interim stock savings bank, and simultaneously merge with and into the Savings Association (the "Mid-Tier Merger"). In the Mid-Tier Merger, Interim Two (formerly MHC) will receive, and the Minority Stockholders shall constructively receive, in each case in exchange for their shares of Interim One common stock (i.e. Mid-Tier Company Common Stock), shares of common stock in the Savings Association, representing identical ownership to their previous ownership of Interim One (formerly Mid-Tier Company). All shares of Mid-Tier Common Stock owned by Interim Two (formerly MHC) will be, and all shares of Mid-Tier Common Stock owned by the Minority Stockholders shall be deemed to be, extinguished in the Mid-Tier Merger.

June 30, 2006
Page 2

	5.	Interim Two (formerly MHC) will merge with and into Savings Association (the "MHC Merger"). In the MHC Merger, the shares of Savings Association common stock held by Interim Two (formerly MHC) will be cancelled in exchange for interests granted to Eligible Account Holders and Supplemental Account Holders in the liquidation account to be established by Savings Association pursuant to Section 15 of the Plan.
	6.	Interim Three will merger with and into Savings Association (the "Holding Company Merger"). In the Holding Company Merger, (a) Savings Association common stock constructively received by the Minority Stockholders in the Mid-Tier Merger will be converted into shares of Holding Company Common Stock (and cash in lieu of any fractional share interest) based upon the Exchange Ratio, which is designed to assure that the Minority Stockholders will own in the aggregate after completion of the Conversion and Reorganization the same percentage of Holding Common Stock as the percentage of Mid-Tier Company Common Stock owned by them immediately prior to the Mid-Tier Merger, and before giving effect to: (1) cash paid in lieu of any fractional shares of Holding Company Common Stock, and (ii) shares of Common Stock purchased by Minority Stockholders in the Offerings; and (b) Interim Three common stock held by Holding Company will be converted into shares of common stock of Savings Association, resulting in Holding Company owning 100 percent of the stock of Savings Association.
	7.	Holding Company will issue Common Stock in the Offerings.

In connection with the opinions expressed below, we have examined and relied upon originals, or copies certified or otherwise identified to our satisfaction, of the Plan, the Prospectus, in the form to be initially filed with the SEC, and of such corporate records of the Primary Parties as we have deemed appropriate. We have also relied, without independent verification, upon the factual representations of the Primary Parties included in a Tax Representation Letter dated June 30, 2006. We have assumed that such representations are true and that the Primary Parties as well as Interim Three will act in accordance with the Plan, and that the Plan and all documents entered into to effect the transactions contemplated by the Plan have been duly adopted or approved by all required action and that each of the mergers described above will be consummated as a statutory merger resulting in the consequences described above. We express no opinion concerning the effects, if any, of variations from the foregoing.

In issuing the opinions set forth below, we have referred solely to existing provisions of the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed Treasury Regulations thereunder, current administrative rulings, notices, procedures and court decisions. Such laws, regulations, administrative rulings, notices and procedures and court decisions are subject to change at any time. Any such change could affect the continuing validity of the opinions set forth below. This opinion is as of the date hereof, and we disclaim any obligation to advise you of any change after the date hereof.

June 30, 2006
Page 3

Based upon and subject to the foregoing, it is our opinion for federal income tax purposes, as follows:

	1.	The conversion of MHC from a federal mutual holding company to a federal interim stock savings institution will qualify as a "reorganization" under Section 368(a)(1)(F) of the Code, and no gain or loss will be reorganized by MHC or Interim Two by reason of such conversion.
	2.	The conversion of Mid-Tier Company from a federal stock holding company to a federal interim stock savings institution will qualify as a "reorganization" under Section 368(a)(1)(F) of the Code, and no gain or loss will be recognized by Mid-Tier Company or Interim One by reason of such conversion.
	3.	Each of the Mid-Tier Merger and MHC Merger will qualify as a "reorganization" under Section 368(a)(1)(A) of the Code; Interim One (formerly Mid-Tier Company) or Interim Two (formerly MHC), as applicable, and Savings Association will be a party to a "reorganization" as described in Section 368(b) of the Code; and no gain or loss will be recognized by any party to the Mid-Tier Merger or the MHC Merger or any of their respective stockholders and equity holders by reason of such merger, including the receipt of an interest in the liquidation account of Savings Association by Eligible Account Holders and Supplemented Eligible Account Holders.
	4.	The Holding Company Merger will qualify as a "reorganization" under 368(a)(1)(A) of the Code by virtue of Section 368(a)(2)(E) of the Code; each of Interim Three, Savings Association and Holding Company will be a party to a "reorganization" as described in Section 368(b) of the Code; and no gain or loss will be recognized by Interim Three, Savings Association, Holding Company, or the Minority Stockholder by reason of such merger.
	5.	Each Minority Stockholder's aggregate tax basis in the shares of Holding Company Common Stock received in the Holding Company Merger will be the same as the aggregate tax basis of his shares of Mid-Tier Company Stock constructively surrendered and exchanged in the Mid-Tier Merger, before giving effect to any payment of cash in lieu of a fractional share interest in Holding Company Stock.
	6.	No income will be recognized by Holding Company on the distribution of Subscription Rights unless the issuance of the Subscription Rights results in gain to recipients thereof. It is more likely than not that no income will be recognized by Holding Company on the distribution of Subscription Rights.
	7.	It is more likely than not that the fair market value of the Subscription Rights is zero. Thus, it is more likely than not that no gain will be recognized by Eligible Account Holders, Supplemental Account Holders or other Members upon their receipt of Subscription Rights. Gain, if any, realized by the aforesaid account holders and members will not exceed the fair market value of the Subscription Rights received. If gain is recognized by account holders and members upon the distribution to them of Subscription Rights, the Holding Company could also recognize income on the distribution of Subscription Rights. No gain will be recognized by the recipients of Subscription Rights or Holding Company upon the exercise of Subscription Rights.

June 30, 2006
Page 4

	8.	No gain will be recognized by Holding Company upon the issuance of Common Stock in exchange for cash in the Offerings.
	9.	The holding period for shares of Common Stock purchased pursuant to the exercise of Subscription Rights shall begin on the date of completion of the Offerings; and the holding period for other shares of Common Stock purchased in the Offerings will begin on the date of purchase.

Our opinions in paragraphs 6 and 7 are based upon the conclusion that the Subscription Rights have a fair market value of zero, which is supported by the letter issued to you by RP Financial, LC. dated June 16, 2006 in connection with the Offerings. Independent of the letter referred to in the preceding sentence, we believe that the Subscription Rights do not have any market value because they are granted without cost to recipients, are non-transferable, of short duration, and only entitle recipients to purchase Common Stock at the same price to be paid by the general public in the Community Offering or Public Offering. Although the Internal Revenue Service will not issue rulings on whether the Subscription Rights have a market value, we are not aware of the Internal Revenue Service claiming or asserting in any similar transaction that subscription rights of the type described above have any market value. Since there are no definitive judicial or administrative precedents or official Internal Revenue Service or Treasury position or guidance on this matter, our opinions in paragraphs 6 and 7 are reasoned conclusions instead of absolute conclusions. More likely than not means that there is a greater than fifty percent likelihood that our conclusions are correct.

We hereby consent to the filing of this opinion as an exhibit to Holding Company's regulatory filings and applications seeking approval of the stock issuance from the OTS and to Holding Company's Registration Statement on Form SB-2 as filed with the SEC.

	Sincerely, SILVER, FREEDMAN & TAFF, L.L.P.
	BY:	/s/ Barry P. Taff

EXHIBIT 8.3

RP ^® FINANCIAL, LC.

Financial Services Industry Consultants

June 30, 2006

Boards of Directors
Citizens Community MHC
Citizens Community Bancorp, Inc.
Citizens Community Federal
2174 EastRidge Center
Eau Claire, Wisconsin 54701

Re:	Plan of Conversion Citizens Community MHC Citizens Community Bancorp Citizens Community Federal

Members of the Boards of Directors:

All capitalized terms not otherwise defined in this letter have the meanings given such terms in the Plan of Conversion (the "Plan") adopted by the Board of Directors of Citizens Community MHC (the "Mutual Holding Company") Citizens Community Bancorp (the "Company") and Citizens Community Federal (the "Bank"). The Plan provides for the conversion of the Mutual Holding Company into the capital stock form of organization. Pursuant to the Plan, the Mutual Holding Company will be merged into the Bank and the Mutual Holding Company will no longer exist. The Company, which owns 100 percent of the Bank, will be succeeded by a new Maryland corporation named "Citizens Community Bancorp, Inc." Pursuant to the Plan, the Company will sell shares of common stock in an offering that will represent the ownership interest in the Company now owned by the Mutual Holding Company.

We understand that in accordance with the Plan, subscription rights to purchase shares of common stock in the Company are to be issued to: (1) Eligible Account Holders; (2) the Employee Plans; (3) Supplemental Eligible Account Holders; and (4) Other Members. Based solely upon our observation that the subscription rights will be available to such parties without cost, will be legally non-transferable and of short duration, and will afford such parties the right only to purchase shares of common stock at the same price as will be paid by members of the general public in the community offering, but without undertaking any independent investigation of state or federal law or the position of the Internal Revenue Service with respect to this issue, we are of the belief that, as a factual matter:

	(1)	the subscription rights will have no ascertainable market value; and,
	(2)	the price at which the subscription rights are exercisable will not be more or less than the pro forma market value of the shares upon issuance.

Changes in the local and national economy, the legislative and regulatory environment, the stock market, interest rates, and other external forces (such as natural disasters or significant world events) may occur from time to time, often with great unpredictability and may materially impact the value of thrift stocks as a whole or the Company's value alone. Accordingly, no assurance can be given that persons who subscribe to shares of common stock in the subscription offering will thereafter be able to buy or sell such shares at the same price paid in the subscription offering.

Sincerely,
RP FINANCIAL, LC.

Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210
Arlington, VA 22209
www.rpfinancial.com

Telephone:
Fax No.:
Toll-Free No.:
E-Mail:

(703) 528-1700
(703) 528-1788
(866) 723-0594
mail@rpfinancial.com

EXHIBIT 10.1 a

             WHEREAS, the Employee is currently serving as President and Chief Executive Officer of the Bank; and

             WHEREAS, the Board of Directors believes it is in the best interests of the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Bank; and

             WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;

             NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:

             1. Definitions .

             (a) The term "Commencement Date" means the date on which the Bank becomes a federal mutual savings bank.

             (b) The term "Date of Termination" means the earlier of (1) the date upon which the Bank gives notice to the Employee of the termination of the Employee's employment with the Bank or (2) the date upon which the Employee ceases to serve as an employee of the Bank.

             (c) The term "Involuntary Termination" means the Bank's termination of the employment of Employee without the Employee's express written consent, and shall include a material diminution of or interference with the Employee's duties, responsibilities and benefits as President and Chief Executive Officer of the Bank, including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 35 mile radius from the Bank's headquarters office as of the date hereof; (2) a material demotion of the Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which, such personnel are to report to the Employee, other than as part of a Bank-wide reduction in staff; (4) a material adverse change in the Employee's salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Bank; and (5) a material permanent increase in the required hours of work or the workload of the Employee. The term "Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

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             (d) The terms "Termination for Cause" and "Terminated for Cause" mean termination of the employment of the Employee because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. The Employee shall not be deemed to have been Terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee's counsel, to be heard before the Board), stating that in the good faith opinion of the Board the Employee has engaged in conduct described in the preceding sentence and specifying the particulars thereof in detail.

             2. Term; Termination of Prior Employment Agreement . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms. Upon this Agreement becoming effective, the President's Employment Contract between Citizens Community Federal Credit Union and the Employee, entered into June 30, 1998 and subsequently extended, shall terminate automatically with no obligation thereunder to the Employee on the part of the Bank (or its predecessor) except for accrued but unpaid salary and benefits.

             3. Employment . The Employee is employed as President and Chief Executive Officer of the Bank. As such, the Employee shall render administrative and management services as are customarily performed by persons situated in similar executive capacities, and shall have such other powers and duties of an officer of the Bank as the Board of Directors may prescribe from time to time. The Employee shall devote his full business time and attention to his employment under this Agreement.

             4. Compensation .

             (a) Salary . The Bank agrees to pay the Employee during the term of this Agreement the salary established by the Board of Directors, which shall be $165,438 per year, the amount of which shall increase by seven percent on each January 1 during the term of this Agreement; provided that the last increase pursuant to this sentence shall occur on January 1, 2005. The Employee's salary shall be payable in regular increments in accordance with the Bank's payroll practices and subject to customary withholding. The amount of the Employee's salary shall be reviewed annually by the Board of Directors during the term of this Agreement. Adjustments in salary or other compensation

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shall not limit or reduce any other obligation of the Bank under this Agreement. The Employee's salary in effect from time to time during the term of this Agreement shall not thereafter be reduced.

             (b) Discretionary Bonuses . The Employee shall be entitled to participate in an equitable manner with all other executive officers of the Bank in discretionary bonuses as authorized and declared by the Board of Directors to its executive employees. No other compensation provided for in this Agreement shall be deemed a substitute for the Employee's right to participate in such bonuses when and as declared by the Board of Directors.

             (c) Expenses . The Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in performing services under this Agreement in accordance with the policies and procedures applicable to the executive officers of the Bank, provided that the Employee accounts for such expenses as required under such policies and procedures.

             5. Benefits .

             (a) Participation in Retirement and Employee Benefit Plans . The Employee shall be entitled to participate in all plans relating to pension, thrift, profit-sharing, group life insurance, medical and dental coverage, education, cash bonuses, and other retirement or employee benefits or combinations thereof, in which the Bank's full time employees generally participate.

             (b) Sick Leave and Fringe Benefits . In the event of termination of this Agreement due to the Employee's disability or death, the Bank shall pay the Employee (or his legal successors) the amount of his salary for any accrued but unused sick leave. The Employee shall be eligible to participate in, and receive benefits under the Bank's sick leave plan and any other fringe benefit plans which are or may become applicable to the Bank's executive officers.

             (c) Automobile . Consistent with its past practices, the Bank shall provide the Employee with the use of a Bank automobile.

             (d) Club Membership . The Bank shall pay membership dues and related fees and expenses for the Employee's membership in an appropriate club or clubs approved by the Board of Directors, to be used for ordinary and necessary business purposes of the Bank.

             6. Vacations; Leave . The Employee shall be entitled to at least 25 days of annual paid vacation, to be taken in accordance with the policies established by the Bank's Board of Directors, and to voluntary leave of absence, with or without pay, from time to time at such times and upon such conditions as the Board of Directors may determine in its discretion.

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             7. Termination of Employment .

             (a) Involuntary Termination . The Board of Directors may terminate the Employee's employment at any time, but, except in the case of Termination for Cause, termination of employment shall not prejudice the Employee's right to compensation or other benefits under this Agreement. In the event of Involuntary Termination, (1) the Bank shall pay to the Employee during the remaining term of this Agreement the Employee's salary at the annual rate in effect immediately prior to the Date of Termination, payable in such manner and at such times as such salary would have been payable to the Employee if he had continued to be employed under this Agreement, and (2) the Bank shall continue to provide to the Employee during the remaining term of this Agreement the same group health benefits and other group insurance and group retirement benefits as he would have received if he had continued to be employed under this Agreement, to the extent that the Bank can do so under the terms of applicable plans as are maintained by the Bank for the benefit of its executive officers from time to time during the remaining term of this Agreement.

             (b) Termination for Cause . In the event of Termination for Cause, the Bank shall pay the Employee the Employee's salary through the Date of Termination, and the Bank shall have no further obligation to the Employee under this Agreement.

             (c) Voluntary Termination . The Employee's employment may be voluntarily terminated by the Employee at any time upon 90 days' written notice to the Bank or such shorter period as may be agreed upon between the Employee and the Board of Directors of the Bank. In the event of such voluntary termination, the Bank shall be obligated to continue to pay to the Employee the Employee's salary and benefits only through the Date of Termination, at the time such payments are due, and the Bank shall have no further obligation to the Employee under this Agreement.

             (d) Death; Disability . In the event of the death of the Employee while employed under this Agreement and prior to any termination of employment, the Employee's estate, or such person as the Employee may have previously designated in writing, shall be entitled to receive from the Bank the salary of the Employee through the last day of the calendar month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then current disability plan, if any, or if the Employee is otherwise unable to serve as President and Chief Executive Officer, the Bank shall be entitled to terminate this Agreement except for its obligation to provide disability insurance under Section 5(b) during the portion of the term of this Agreement that would remain but for such termination, the Employee shall be entitled to receive benefits at least equivalent to those under the group and other disability income benefits of the type, if any, then provided by the Bank for executive officers generally.

             (e) Temporary Suspension or Prohibition . If the Employee is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion

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(i) pay the Employee all or part of the compensation withheld while its obligations under this Agreement were suspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

             (f) Permanent Suspension or Prohibition . If the Employee is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

             (g) Default of the Bank . If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but this provision shall not affect any vested rights of the contracting parties.

             (h) Termination by Regulators . All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank: (1) by the Director of the Office of Thrift Supervision (the "Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by any such action.

             8. Certain Reduction of Payments by the Bank .

             (a) Notwithstanding any other provision of this Agreement, if the value and amounts of benefits under this Agreement, together with any other amounts and the value of benefits received or to be received by the Employee in connection with a change in control would cause any amount to be nondeductible for federal income tax purposes pursuant to Section 280G of the Code, then amounts and benefits under this Agreement shall be reduced (not less than zero) to the extent necessary so as to maximize amounts and the value of benefits to the Employee without causing any amount to become nondeductible pursuant to or by reason of such Section 280G. The Employee shall determine the allocation of such reduction among payments and benefits to the Employee.

             (b) Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and any regulations promulgated thereunder.

             9. Non-Disclosure and Non-Competition . The provisions of this Section 9 shall survive termination of this Agreement.

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             (a) Non-Disclosure of Confidential Information . During the term of this Agreement and thereafter, the Employee shall not disclose confidential information of the Bank to anyone except as permitted by the Bank or under compulsion of law.

             (b) Non-Competition . In the event that the Employee terminates his employment by the Bank during the term of this Agreement, or in the event that after termination, or the expiration of the term, of this Agreement, the Employee voluntarily terminates his employment with the Bank after the Bank has offered to continue to employ him with the same salary and benefits as would have applied under this Agreement, then for a period of one year after he ceases to be employed by the Bank, the Employee shall not, directly or indirectly, as a director employee or consultant, provide services to any bank, savings association or credit union, or mortgage or consumer lender, with an office within a 50 mile radius of Eau Claire, Wisconsin.

             10. No Mitigation . The Employee shall not be required to mitigate the amount of any salary or other payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits after the Date of Termination or otherwise.

             11. Attorneys Fees . In the event the Bank exercises its right of Termination for Cause, but it is determined by a court of competent jurisdiction or by an arbitrator pursuant to Section 18 that cause did not exist for such termination, or if in any event it is determined by any such court or arbitrator that the Bank has failed to make timely payment of any amounts owed to the Employee under this Agreement, the Employee shall be entitled to reimbursement for all reasonable costs, including attorneys' fees, incurred in challenging such termination or collecting such amounts. Such reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under this Agreement.

             12. No Assignments .

             (a) This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that the Bank shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank, by an assumption agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession or assignment had taken place. Failure of the Bank to obtain such an assumption agreement prior to the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall entitle the Employee to compensation from the Bank in the same amount and on the same terms as the compensation pursuant to Section 7(a) hereof. For purposes of implementing the provisions of this Section 12(a), the date on which any such succession becomes effective shall be deemed the Date of Termination.

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             (b) This Agreement and all rights of the Employee hereunder shall inure to the benefit of and be enforceable by the Employee's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to the Employee hereunder if the Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Employee's devisee, legatee or other designee or if there is no such designee, to the Employee's estate.

             13. Notice . For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the Bank at its home office, to the attention of the Board of Directors with a copy to the Secretary of the Bank, or, if to the Employee, to such home or other address as the Employee has most recently provided in writing to the Bank.

             14. Amendments . No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.

             15. Headings . The headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

             16. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

             17. Governing Law . This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the State of Wisconsin.

             18. Arbitration . Except with respect to a breach of alleged or threatened breach of Section 9 of this Agreement by the Employee, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

CITIZENS COMMUNITY FEDERAL

/s/ Richard McHugh

By: Richard McHugh
Its: Chairman

Employee

/s/ James G. Cooley

James G. Cooley

8 End.

EXHIBIT 10.1 b

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 13th day of April , 2002, by and between Citizens Community Federal (hereinafter referred to as the "Bank") and Johnny Thompson (the "Employee").

WHEREAS, the Employee will serve as Senior Vice-President / Chief Administrative Officer of the Bank; and

WHEREAS, the Board of Directors believes it is in the best interests of the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Bank; and

WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:

1. Definitions .

(a) The term "Commencement Date" means the first date of employment.

(b) The term "Date of Termination" means the earlier of (1) the date upon which the Bank gives notice to the Employee of the termination of the Employee's employment with the Bank or (2) the date upon which the Employee ceases to serve as an employee of the Bank.

(c) The term "Involuntary Termination" means the Bank's termination of the employment of Employee without the Employee's express written consent, and shall include a material diminution of or interference with the Employee's duties, responsibilities and benefits as Senior Vice-President / Chief Administrative Officer of the Bank, including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 35 mile radius from the Bank's headquarters office as of the date hereof; (2) a material demotion of the Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which, such personnel are to report to the Employee, other than as part of a Bank-wide reduction in staff; (4) a material adverse change in the Employee's salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Bank; and (5) a material permanent increase in the required hours of work or the workload of the Employee. The term "Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

2. Term . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.

3. Employment . The Employee is employed as Senior Vice-President / Chief Administrative Officer of the Bank. As such, the Employee shall render administrative and management services as are customarily performed by persons situated in similar executive capacities, and shall have such other powers and duties of an officer of the Bank as the Board of Directors may prescribe from time to time. The Employee shall devote his full business time and attention to his employment under this Agreement.

4. Compensation .

(a) Salary . The Bank agrees to pay the Employee during the term of this Agreement the salary established by the Board of Directors, which shall be $99,750 per year, the amount of which shall increase by five percent on each January 1 during the term of this Agreement. The Employee's salary shall be payable in regular increments in accordance with the Bank's payroll practices and subject to customary withholding. The amount of the Employee's salary shall be reviewed annually by the Board of Directors during the term of this Agreement. Adjustments in salary or other compensation shall not limit or reduce any other obligation of the Bank under this Agreement. The Employee's salary in effect from time to time during the term of this Agreement shall not thereafter be reduced.

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5. Benefits .

(a) Participation in Retirement and Employee Benefit Plans . The Employee shall be entitled to participate in all plans relating to pension, thrift, profit-sharing, group life insurance, medical and dental coverage, education, cash bonuses, and other retirement or employee benefits or combinations thereof, in which the Bank's full time employees generally participate.

(b) Club Membership . The Bank shall pay membership dues and related fees and expenses for the Employee's membership in an appropriate club or clubs approved by the President and Chief Executive Officer of the Bank, to be used for ordinary and necessary business purposes of the Bank.

6. Vacations; Leave . The Employee shall be entitled to 4 paid vacation weeks annually, and to voluntary leave of absence, with or without pay, from time to time at such times and upon such conditions as the Board of Directors may determine in its discretion.

7. Termination of Employment .

(a) Involuntary Termination . The Board of Directors may terminate the Employee's employment at any time, but, except in the case of Termination for Cause, termination of employment shall not prejudice the Employee's right to compensation or other benefits under this Agreement. In the event of Involuntary Termination, (1) the Bank shall pay to the Employee during the remaining term of this Agreement the Employee's salary at the annual rate in effect immediately prior to the Date of Termination, payable in such manner and at such times as such salary would have been payable to the Employee if he had continued to be employed under this Agreement, and (2) the Bank shall continue to provide to the Employee during the remaining term of this Agreement the same group health benefits and other group insurance and group retirement benefits, to the extent that the Bank can do so under the terms of applicable plans, as are maintained by the Bank for the benefit of its executive officers from time to time during the remaining term of this Agreement.

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(d) Death; Disability . In the event of the death of the Employee while employed under this Agreement and prior to any termination of employment, the Employee's estate, or such person as the Employee may have previously designated in writing, shall be entitled to receive from the Bank the salary of the Employee through the last day of the calendar month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then current disability plan, if any, or if the Employee is otherwise unable to serve as Senior Vice-President / Chief Administrative Officer, the Employee shall be entitled to receive group and other disability income benefits of the type, if any, then provided by the Bank for executive officers generally.

(e) Temporary Suspension or Prohibition . If the Employee is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay the Employee all or part of the compensation withheld while its obligations under this Agreement were suspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

(f) Permanent Suspension or Prohibition . If the Employee is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

(g) Default of the Bank . If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but this provision shall not affect any vested rights of the contracting parties.

(h) Termination by Regulators . All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank: (1) by the Director of the Office of Thrift Supervision (the "Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by any such action.

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8. Certain Reduction of Payments by the Bank .

(a) Notwithstanding any other provision of this Agreement, if the value and amounts of benefits under this Agreement, together with any other amounts and the value of benefits received or to be received by the Employee in connection with a change in control would cause any amount to be nondeductible for federal income tax purposes pursuant to Section 280G of the Code, then amounts and benefits under this Agreement shall be reduced (not less than zero) to the extent necessary so as to maximize amounts and the value of benefits to the Employee without causing any amount to become nondeductible pursuant to or by reason of such Section 280G. The Employee shall determine the allocation of such reduction among payments and benefits to the Employee.

(b) Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and any regulations promulgated thereunder.

9. Non-Disclosure and Non-Competition . The provisions of this Section 9 shall survive termination of this Agreement.

(b) Non-Competition . In the event that the Employee terminates his employment by the Bank during the term of this Agreement, or in the event that after termination, or the expiration of the term, of this Agreement, the Employee voluntarily terminates his employment with the Bank after the Bank has offered to continue to employ him with the same salary and benefits as would have applied under this Agreement, then for a period of one year after he ceases to be employed by the Bank, the Employee shall not, directly or indirectly, as a director, employee or consultant, provide services to any bank, savings association or credit union, or other mortgage or consumer lender with an office within Eau Claire or Chippewa Counties, Wisconsin.

10. No Mitigation . The Employee shall not be required to mitigate the amount of any salary or other payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits after the Date of Termination or otherwise.

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including attorneys' fees, incurred in challenging such termination or collecting such amounts. Such reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under this Agreement.

12. No Assignments .

(a) This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that the Bank shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank, by an assumption agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession or assignment had taken place. Failure of the Bank to obtain such an assumption agreement prior to the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall entitle the Employee to compensation from the Bank in the same amount and on the same terms as the compensation pursuant to Section 7(a) hereof. For purposes of implementing the provisions of this Section 12(a), the date on which any such succession becomes effective shall be deemed the Date of Termination.

13. Notice . For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the Bank at its home office, to the attention of the Board of Directors with a copy to the Secretary of the Bank, or, if to the Employee, to such home or other address as the Employee has most recently provided in writing to the Bank.

14. Amendments . No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.

15. Headings . The headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

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16. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

17. Governing Law . This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the State of Wisconsin.

18. Arbitration . Except with respect to a breach of alleged or threatened breach of Section 9 of this Agreement by the Employee, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

CITIZENS COMMUNITY FEDERAL

/s/ James G. Cooley

By: James G. Cooley
Its: C.E.O.

Employee

/s/ Johnny Thompson

Johnny Thompson

EXHIBIT 10.1 c

EMPLOYMENT AGREEMENT

             THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 31st day of December, 2001, by and between Citizens Community Federal (hereinafter referred to as the "Bank") and John D. Zettler (the "Employee").

             WHEREAS, the Employee is currently serving as Executive Vice President of the Bank; and

             WHEREAS, the Board of Directors believes it is in the best interests of the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Bank; and

             WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;

             NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:

             1. Definitions .

             (a) The term "Commencement Date" means the date on which the Bank becomes a federal mutual savings bank.

             (b) The term "Date of Termination" means the earlier of (1) the date upon which the Bank gives notice to the Employee of the termination of the Employee's employment with the Bank or (2) the date upon which the Employee ceases to serve as an employee of the Bank.

             (c) The term "Involuntary Termination" means the Bank's termination of the employment of Employee without the Employee's express written consent, and shall include a material diminution of or interference with the Employee's duties, responsibilities and benefits as Executive Vice President of the Bank, including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 35 mile radius from the Bank's headquarters office as of the date hereof; (2) a material demotion of the Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which, such personnel are to report to the Employee, other than as part of a Bank-wide reduction in staff; (4) a material adverse change in the Employee's salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Bank; and (5) a material permanent increase in the required hours of work or the workload of the Employee. The term "Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

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             (d) The terms "Termination for Cause" and "Terminated for Cause" mean termination of the employment of the Employee because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. The Employee shall not be deemed to have been Terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee's counsel, to be heard before the Board), stating that in the good faith opinion of the Board the Employee has engaged in conduct described in the preceding sentence and specifying the particulars thereof in detail.

             2. Term; Termination of Prior Employment Agreement . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms. Upon this Agreement becoming effective, the Employment Contract between Citizens Community Federal Credit Union and the Employee, entered into August 6, 1998 and subsequently extended, shall terminate automatically with no obligation thereunder to the Employee on the part of the Bank (or its predecessor) except for accrued but unpaid salary and benefits.

             3. Employment . The Employee is employed as Executive Vice President of the Bank. As such, the Employee shall render administrative and management services as are customarily performed by persons situated in similar executive capacities, and shall have such other powers and duties of an officer of the Bank as the Board of Directors may prescribe from time to time. The Employee shall devote his full business time and attention to his employment under this Agreement.

             4. Compensation .

             (a) Salary . The Bank agrees to pay the Employee during the term of this Agreement the salary established by the Board of Directors, which shall be $99,228 per year, the amount of which shall increase by seven percent on each January 1 during the term of this Agreement; provided that the last increase pursuant to this sentence shall occur on January 1, 2005. The Employee's salary shall be payable in regular increments in accordance with the Bank's payroll practices and subject to customary withholding. The amount of the Employee's salary shall be reviewed annually by the Board of Directors during the term of this Agreement. Adjustments in salary or other compensation shall not limit or reduce any other obligation of the Bank under this

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Agreement. The Employee's salary in effect from time to time during the term of this Agreement shall not thereafter be reduced.

             (b) Expenses . The Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in performing services under this Agreement in accordance with the policies and procedures applicable to the executive officers of the Bank, provided that the Employee accounts for such expenses as required under such policies and procedures.

             5. Benefits .

             (a) Participation in Retirement and Employee Benefit Plans . The Employee shall be entitled to participate in all plans relating to pension, thrift, profit-sharing, group life insurance, medical and dental coverage, education, cash bonuses, and other retirement or employee benefits or combinations thereof, in which the Bank's full time employees generally participate.

             (b) Club Membership . The Bank shall pay membership dues and related fees and expenses for the Employee's membership in an appropriate club or clubs approved by the President and Chief Executive Officer of the Bank, to be used for ordinary and necessary business purposes of the Bank.

             (c) Automobile . Consistent with past practice, the Bank shall provide the Employee with the use of a Bank automobile.

             6. Vacations; Leave . The Employee shall be entitled to annual paid vacation in accordance with the policies established by the Bank's Board of Directors, and to voluntary leave of absence, with or without pay, from time to time at such times and upon such conditions as the Board of Directors may determine in its discretion.

             7. Termination of Employment .

             (a) Involuntary Termination . The Board of Directors may terminate the Employee's employment at any time, but, except in the case of Termination for Cause, termination of employment shall not prejudice the Employee's right to compensation or other benefits under this Agreement. In the event of Involuntary Termination, (1) the Bank shall pay to the Employee during the remaining term of this Agreement the Employee's salary at the annual rate in effect at the Date of Termination, payable in such manner and at such times as such salary would have been payable if he had continued to be employed under this Agreement, and (2) the Bank shall continue to provide to the Employee during the remaining term of this Agreement the same group health benefits and other group insurance and group retirement benefits, to the extent that the Bank can do so under the terms of applicable plans, as are maintained by the Bank for the benefit of its executive officers from time to time during the remaining term of this Agreement.

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             (b) Termination for Cause . In the event of Termination for Cause, the Bank shall pay the Employee the Employee's salary through the Date of Termination, and the Bank shall have no further obligation to the Employee under this Agreement.

             (c) Voluntary Termination . The Employee's employment may be voluntarily terminated by the Employee at any time upon 90 days' written notice to the Bank or such shorter period as may be agreed upon between the Employee and the Board of Directors of the Bank. In the event of such voluntary termination, the Bank shall be obligated to continue to pay to the Employee the Employee's salary and benefits only through the Date of Termination, at the time such payments are due, and the Bank shall have no further obligation to the Employee under this Agreement.

             (d) Death; Disability . In the event of the death of the Employee while employed under this Agreement and prior to any termination of employment, the Employee's estate, or such person as the Employee may have previously designated in writing, shall be entitled to receive from the Bank the salary of the Employee through the last day of the calendar month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then current disability plan, if any, or if the Employee is otherwise unable to serve as Executive Vice President, the Employee shall be entitled to receive group and other disability income benefits of the type, if any, then provided by the Bank for executive officers generally.

             (e) Temporary Suspension or Prohibition . If the Employee is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay the Employee all or part of the compensation withheld while its obligations under this Agreement were suspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

             (f) Permanent Suspension or Prohibition . If the Employee is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

             (g) Default of the Bank . If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but this provision shall not affect any vested rights of the contracting parties.

             (h) Termination by Regulators . All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank: (1) by the Director of the Office of Thrift Supervision (the "Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters into

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an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by any such action.

             8. Certain Reduction of Payments by the Bank .

             (a) Notwithstanding any other provision of this Agreement, if the value and amounts of benefits under this Agreement, together with any other amounts and the value of benefits received or to be received by the Employee in connection with a change in control would cause any amount to be nondeductible for federal income tax purposes pursuant to Section 280G of the Code, then amounts and benefits under this Agreement shall be reduced (not less than zero) to the extent necessary so as to maximize amounts and the value of benefits to the Employee without causing any amount to become nondeductible pursuant to or by reason of such Section 280G. The Employee shall determine the allocation of such reduction among payments and benefits to the Employee.

             (b) Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and any regulations promulgated thereunder.

             9. Non-Disclosure and Non-Competition . The provisions of this Section 9 shall survive termination of this Agreement.

             (a) Non-Disclosure of Confidential Information . During the term of this Agreement and thereafter, the Employee shall not disclose confidential information of the Bank to anyone except as permitted by the Bank or under compulsion of law.

             (b) Non-Competition . In the event that the Employee terminates his employment by the Bank during the term of this Agreement, or in the event that after termination, or the expiration of the term, of this Agreement, the Employee voluntarily terminates his employment with the Bank after the Bank has offered to continue to employ him with the same salary and benefits as would have applied under this Agreement, then for a period of one year after he ceases to be employed by the Bank, the Employee shall not, directly or indirectly, as a director, employee or consultant, provide services to any bank, savings association or credit union, or other mortgage or consumer lender with an office within Eau Claire or Chippewa Counties, Wisconsin.

             10. No Mitigation . The Employee shall not be required to mitigate the amount of any salary or other payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits after the Date of Termination or otherwise.

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             11. Attorneys Fees . In the event the Bank exercises its right of Termination for Cause, but it is determined by a court of competent jurisdiction or by an arbitrator pursuant to Section 18 that cause did not exist for such termination, or if in any event it is determined by any such court or arbitrator that the Bank has failed to make timely payment of any amounts owed to the Employee under this Agreement, the Employee shall be entitled to reimbursement for all reasonable costs, including attorneys' fees, incurred in challenging such termination or collecting such amounts. Such reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under this Agreement.

             12. No Assignments .

             (a) This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that the Bank shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank, by an assumption agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession or assignment had taken place. Failure of the Bank to obtain such an assumption agreement prior to the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall entitle the Employee to compensation from the Bank in the same amount and on the same terms as the compensation pursuant to Section 7(a) hereof. For purposes of implementing the provisions of this Section 12(a), the date on which any such succession becomes effective shall be deemed the Date of Termination.

             (b) This Agreement and all rights of the Employee hereunder shall inure to the benefit of and be enforceable by the Employee's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to the Employee hereunder if the Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Employee's devisee, legatee or other designee or if there is no such designee, to the Employee's estate.

             13. Notice . For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the Bank at its home office, to the attention of the Board of Directors with a copy to the Secretary of the Bank, or, if to the Employee, to such home or other address as the Employee has most recently provided in writing to the Bank.

             14. Amendments . No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.

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             15. Headings . The headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

             16. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

             17. Governing Law . This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the State of Wisconsin.

             18. Arbitration . Except with respect to a breach of alleged or threatened breach of Section 9 of this Agreement by the Employee, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.

             IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

             THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

CITIZENS COMMUNITY FEDERAL

/s/ James G. Cooley

By: James G. Cooley
Its: CEO

Employee

/s/ John D. Zettler

John D. Zettler

7 End.

EXHIBIT 10.1 d

EMPLOYMENT AGREEMENT
             THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 21st day of January, 2002, by and between Citizens Community Federal (hereinafter referred to as the "Bank") and Timothy J. Cruciani (the "Employee").

             WHEREAS, the Employee is currently serving as Vice President-Operations of the Bank; and

             WHEREAS, the Board of Directors believes it is in the best interests of the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Bank; and

             WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;

             NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:

             1. Definitions .

                           (a) The term "Commencement Date" means the date on which the Bank becomes a federal mutual savings bank.

                           (b) The term "Date of Termination" means the earlier of (1) the date upon which the Bank gives notice to the Employee of the termination of the Employee's employment with the Bank or (2) the date upon which the Employee ceases to serve as an employee of the Bank.

                           (c) The term "Involuntary Termination" means the Bank's termination of the employment of Employee without the Employee's express written consent, and shall include a material diminution of or interference with the Employee's duties, responsibilities and benefits as Vice President-Operations of the Bank, including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 35 mile radius from the Bank's headquarters office as of the date hereof; (2) a material demotion of the Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which, such personnel are to report to the Employee, other than as part of a Bank-wide reduction in staff; (4) a material adverse change in the Employee's salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Bank; and (5) a material permanent increase in the required hours of work or the workload of the Employee. The term "Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

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                           (d) The terms "Termination for Cause" and "Terminated for Cause" mean termination of the employment of the Employee because of the Employee's personal dishonesty, incompetence, willful misconduct, breach of a fiduciary duty involving personal profit, intentional failure to perform stated duties, willful violation of any law, rule, or regulation (other than traffic violations or similar offenses) or final cease-and-desist order, or material breach of any provision of this Agreement. The Employee shall not be deemed to have been Terminated for Cause unless and until there shall have been delivered to the Employee a copy of a resolution, duly adopted by the affirmative vote of not less than a majority of the entire membership of the Board of Directors at a meeting of the Board called and held for such purpose (after reasonable notice to the Employee and an opportunity for the Employee, together with the Employee's counsel, to be heard before the Board), stating that in the good faith opinion of the Board the Employee has engaged in conduct described in the preceding sentence and specifying the particulars thereof in detail.

             2. Term; Termination of Prior Employment Agreement . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms. Upon this Agreement becoming effective, the Employment Contract between Citizens Community Federal Credit Union and the Employee, entered into January 4, 2000 and subsequently extended, shall terminate automatically with no obligation thereunder to the Employee on the part of the Bank (or its predecessor) except for accrued but unpaid salary and benefits.

             3. Employment . The Employee is employed as Vice President-Operations of the Bank. As such, the Employee shall render administrative and management services as are customarily performed by persons situated in similar executive capacities, and shall have such other powers and duties of an officer of the Bank as the Board of Directors may prescribe from time to time. The Employee shall devote his full business time and attention to his employment under this Agreement.

             4. Compensation .

                           (a) Salary . The Bank agrees to pay the Employee during the term of this Agreement the salary established by the Board of Directors, which shall be $72,854 per year, the amount of which shall increase by five percent on each January 1 during the term of this Agreement; provided that the last increase pursuant to this sentence shall occur on January 1, 2005. The Employee's salary shall be payable in regular increments in accordance with the Bank's payroll practices and subject to customary withholding. The amount of the Employee's salary shall be reviewed annually by the Board of Directors during the term of this Agreement. Adjustments in salary or other compensation shall not limit or reduce any other obligation of the Bank under this Agreement. The Employee's salary in effect from time to time during the term of this Agreement shall not thereafter be reduced.

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                           (b) Expenses . The Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in performing services under this Agreement in accordance with the policies and procedures applicable to the executive officers of the Bank, provided that the Employee accounts for such expenses as required under such policies and procedures.

             5. Benefits .

                           (a) Participation in Retirement and Employee Benefit Plans . The Employee shall be entitled to participate in all plans relating to pension, thrift, profit-sharing, group life insurance, medical and dental coverage, education, cash bonuses, and other retirement or employee benefits or combinations thereof, in which the Bank's full time employees generally participate.

                           (b) Club Membership . The Bank shall pay membership dues and related fees and expenses for the Employee's membership in an appropriate club or clubs approved by the President and Chief Executive Officer of the Bank, to be used for ordinary and necessary business purposes of the Bank.

                           (c) Automobile . Consistent with past practice, the Bank shall provide the Employee with the use of a Bank automobile.

             6. Vacations; Leave . The Employee shall be entitled to annual paid vacation in accordance with the policies established by the Bank's Board of Directors, and to voluntary leave of absence, with or without pay, from time to time at such times and upon such conditions as the Board of Directors may determine in its discretion.

             7. Termination of Employment .

                           (a) Involuntary Termination . The Board of Directors may terminate the Employee's employment at any time, but, except in the case of Termination for Cause, termination of employment shall not prejudice the Employee's right to compensation or other benefits under this Agreement. In the event of Involuntary Termination, (1) the Bank shall pay to the Employee during the remaining term of this Agreement the Employee's salary at the annual rate in effect immediately prior to the Date of Termination, payable in such manner and at such times as such salary would have been payable to the Employee if he had continued to be employed under this Agreement, and (2) the Bank shall continue to provide to the Employee during the remaining term of this Agreement the same group health benefits and other group insurance and group retirement benefits, to the extent that the Bank can do so under the terms of applicable plans, as are maintained by the Bank for the benefit of its executive officers from time to time during the remaining term of this Agreement.

                           (b) Termination for Cause . In the event of Termination for Cause, the Bank shall pay the Employee the Employee's salary through the Date of Termination, and the Bank shall have no further obligation to the Employee under this Agreement.

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                           (c) Voluntary Termination . The Employee's employment may be voluntarily terminated by the Employee at any time upon 90 days' written notice to the Bank or such shorter period as may be agreed upon between the Employee and the Board of Directors of the Bank. In the event of such voluntary termination, the Bank shall be obligated to continue to pay to the Employee the Employee's salary and benefits only through the Date of Termination, at the time such payments are due, and the Bank shall have no further obligation to the Employee under this Agreement.

                           (d) Death; Disability . In the event of the death of the Employee while employed under this Agreement and prior to any termination of employment, the Employee's estate, or such person as the Employee may have previously designated in writing, shall be entitled to receive from the Bank the salary of the Employee through the last day of the calendar month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then current disability plan, if any, or if the Employee is otherwise unable to serve as Vice President-Operations, the Employee shall be entitled to receive group and other disability income benefits of the type, if any, then provided by the Bank for executive officers generally.

                           (e) Temporary Suspension or Prohibition . If the Employee is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank's obligations under this Agreement shall be suspended as of the date of service, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion (i) pay the Employee all or part of the compensation withheld while its obligations under this Agreement were suspended and (ii) reinstate in whole or in part any of its obligations which were suspended.

                           (f) Permanent Suspension or Prohibition . If the Employee is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank under this Agreement shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.

                           (g) Default of the Bank . If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations under this Agreement shall terminate as of the date of default, but this provision shall not affect any vested rights of the contracting parties.

                           (h) Termination by Regulators . All obligations under this Agreement shall be terminated, except to the extent determined that continuation of this Agreement is necessary for the continued operation of the Bank: (1) by the Director of the Office of Thrift Supervision (the "Director") or his or her designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (2) by the Director or his or her designee, at the time the Director or his or her designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by any such action.

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             8. Certain Reduction of Payments by the Bank .

                           (a) Notwithstanding any other provision of this Agreement, if the value and amounts of benefits under this Agreement, together with any other amounts and the value of benefits received or to be received by the Employee in connection with a change in control would cause any amount to be nondeductible for federal income tax purposes pursuant to Section 280G of the Code, then amounts and benefits under this Agreement shall be reduced (not less than zero) to the extent necessary so as to maximize amounts and the value of benefits to the Employee without causing any amount to become nondeductible pursuant to or by reason of such Section 280G. The Employee shall determine the allocation of such reduction among payments and benefits to the Employee.

                           (b) Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and any regulations promulgated thereunder.

             9. Non-Disclosure and Non-Competition . The provisions of this Section 9 shall survive termination of this Agreement.

                           (a) Non-Disclosure of Confidential Information . During the term of this Agreement and thereafter, the Employee shall not disclose confidential information of the Bank to anyone except as permitted by the Bank or under compulsion of law.

                           (b) Non-Competition . In the event that the Employee terminates his employment by the Bank during the term of this Agreement, or in the event that after termination, or the expiration of the term, of this Agreement, the Employee voluntarily terminates his employment with the Bank after the Bank has offered to continue to employ him with the same salary and benefits as would have applied under this Agreement, then for a period of one year after he ceases to be employed by the Bank, the Employee shall not, directly or indirectly, as a director, employee or consultant, provide services to any bank, savings association or credit union, or other mortgage or consumer lender with an office within Eau Claire or Chippewa Counties, Wisconsin.

             10. No Mitigation . The Employee shall not be required to mitigate the amount of any salary or other payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits after the Date of Termination or otherwise.

             11. Attorneys Fees . In the event the Bank exercises its right of Termination for Cause, but it is determined by a court of competent jurisdiction or by an arbitrator pursuant to Section 18 that cause did not exist for such termination, or if in any event it is determined by any such court or arbitrator that the Bank has failed to make timely payment of any amounts owed to the Employee under this Agreement, the Employee shall be entitled to reimbursement for all reasonable costs, including attorneys' fees, incurred in challenging such termination or collecting such amounts. Such

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reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under this Agreement.

             12. No Assignments .

                           (a) This Agreement is personal to each of the parties hereto, and neither party may assign or delegate any of its rights or obligations hereunder without first obtaining the written consent of the other party; provided, however, that the Bank shall require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Bank, by an assumption agreement in form and substance satisfactory to the Employee, to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Bank would be required to perform it if no such succession or assignment had taken place. Failure of the Bank to obtain such an assumption agreement prior to the effectiveness of any such succession or assignment shall be a breach of this Agreement and shall entitle the Employee to compensation from the Bank in the same amount and on the same terms as the compensation pursuant to Section 7(a) hereof. For purposes of implementing the provisions of this Section 12(a), the date on which any such succession becomes effective shall be deemed the Date of Termination.

                           (b) This Agreement and all rights of the Employee hereunder shall inure to the benefit of and be enforceable by the Employee's personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die while any amounts would still be payable to the Employee hereunder if the Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Employee's devisee, legatee or other designee or if there is no such designee, to the Employee's estate.

             13. Notice . For the purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered or sent by certified mail, return receipt requested, postage prepaid, to the Bank at its home office, to the attention of the Board of Directors with a copy to the Secretary of the Bank, or, if to the Employee, to such home or other address as the Employee has most recently provided in writing to the Bank.

             14. Amendments . No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.

             15. Headings . The headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

             16. Severability . The provisions of this Agreement shall be deemed severable and the invalidity or unenforceability of any provision shall not affect the validity or enforceability of the other provisions hereof.

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             17. Governing Law . This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the State of Wisconsin.

             18. Arbitration . Except with respect to a breach of alleged or threatened breach of Section 9 of this Agreement by the Employee, any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator's award in any court having jurisdiction.

             IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

             THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

CITIZENS COMMUNITY FEDERAL

/s/ James G. Cooley

By: James G. Cooley
Its: CEO

Employee

/s/ Timothy J. Cruciani

Timothy J. Cruciani

7 End.

EXHIBIT 10.1 e

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT ("Agreement") is made and entered into as of this 22 day of January , 2002, by and between Citizens Community Federal (hereinafter referred to as the "Bank") and Rebecca Johnson (the "Employee").

WHEREAS, the Employee is currently serving as Vice President-MIC/Accounting; and

WHEREAS, the Board of Directors believes it is in the best interests of the Bank to enter into this Agreement with the Employee in order to assure continuity of management of the Bank; and

WHEREAS, the Board of Directors has approved and authorized the execution of this Agreement with the Employee to take effect as stated in Section 2 hereof;

NOW, THEREFORE, in consideration of the foregoing and of the respective covenants and agreements of the parties herein, it is AGREED as follows:

1. Definitions .

(a) The term "Commencement Date" means the date of the contract.

(c) The term "Involuntary Termination" means the Bank's termination of the employment of Employee without the Employee's express written consent, and shall include a material diminution of or interference with the Employee's duties, responsibilities and benefits as Vice President-MIC/Accounting; including (without limitation) any of the following actions unless consented to in writing by the Employee: (1) a change in the principal workplace of the Employee to a location outside of a 35 mile radius from the Bank's headquarters office as of the date hereof; (2) a material demotion of the Employee; (3) a material reduction in the number or seniority of other Bank personnel reporting to the Employee or a material reduction in the frequency with which, or in the nature of the matters with respect to which, such personnel are to report to the Employee, other than as part of a Bank-wide reduction in staff; (4) a material adverse change in the Employee's salary, perquisites, benefits, contingent benefits or vacation, other than as part of an overall program applied uniformly and with equitable effect to all members of the senior management of the Bank; and (5) a material permanent increase in the required hours of work or the workload of the Employee. The term "Involuntary Termination" does not include Termination for Cause or termination of employment due to retirement, death, disability or suspension or temporary or permanent prohibition from participation in the conduct of the Bank's affairs under Section 8 of the Federal Deposit Insurance Act ("FDIA").

2. Term; Termination of Prior Employment Agreement . The term of this Agreement shall be a period of three years commencing on the Commencement Date, subject to earlier termination as provided herein. Beginning on the first anniversary of the Commencement Date, and on each anniversary thereafter, the term of this Agreement shall be extended for a period of one year in addition to the then-remaining term, provided that (1) the Bank has not given notice to the Employee in writing at least 90 days prior to such anniversary that the term of this Agreement shall not be extended further; and (2) prior to such anniversary, the Board of Directors of the Bank explicitly reviews and approves the extension. Reference herein to the term of this Agreement shall refer to both such initial term and such extended terms.

3. Employment . The Employee is employed as Vice President-MIC/Accounting. As such, the Employee shall render administrative and management services as are customarily performed by persons situated in similar executive capacities, and shall have such other powers and duties of an officer of the Bank as the Board of Directors may prescribe from time to time. The Employee shall devote his full business time and attention to his employment under this Agreement.

4. Compensation .

(a) Salary . The Bank agrees to pay the Employee during the term of this Agreement the salary established by the Board of Directors, which shall be $62,000 per year, the amount of which shall increase by five percent on each January 1 during the term of this Agreement; provided that the last increase pursuant to this sentence shall occur on January 1, 2005. The Employee's salary shall be payable in regular increments in accordance with the Bank's payroll practices and subject to customary withholding. The amount of the Employee's salary shall be reviewed annually by the Board of Directors during the term of this Agreement. Adjustments in salary or other compensation shall not limit or reduce any other obligation of the Bank under this Agreement. The Employee's salary in effect from time to time during the term of this Agreement shall not thereafter be reduced.

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5. Benefits .

6. Vacations; Leave . The Employee shall be entitled to annual paid vacation in accordance with the policies established by the Bank's Board of Directors, and to voluntary leave of absence, with or without pay, from time to time at such times and upon such conditions as the Board of Directors may determine in its discretion.

7. Termination of Employment .

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event of such voluntary termination, the Bank shall be obligated to continue to pay to the Employee the Employee's salary and benefits only through the Date of Termination, at the time such payments are due, and the Bank shall have no further obligation to the Employee under this Agreement.

(d) Death; Disability . In the event of the death of the Employee while employed under this Agreement and prior to any termination of employment, the Employee's estate, or such person as the Employee may have previously designated in writing, shall be entitled to receive from the Bank the salary of the Employee through the last day of the calendar month in which the Employee died. If the Employee becomes disabled as defined in the Bank's then current disability plan, if any, or if the Employee is otherwise unable to serve as Vice President-MIC/Accounting, the Employee shall be entitled to receive group and other disability income benefits of the type, if any, then provided by the Bank for executive officers generally.

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8. Certain Reduction of Payments by the Bank .

(b) Any payments made to the Employee pursuant to this Agreement, or otherwise, are subject to and conditioned upon their compliance with 12 U.S.C. 1828(k) and any regulations promulgated thereunder.

9. Non-Disclosure and Non-Competition . The provisions of this Section 9 shall survive termination of this Agreement.

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reimbursement shall be in addition to all rights to which the Employee is otherwise entitled under this Agreement.

12. No Assignments .

14. Amendments . No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties, except as herein otherwise provided.

15. Headings . The headings used in this Agreement are included solely for convenience and shall not affect, or be used in connection with, the interpretation of this Agreement.

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17. Governing Law . This Agreement shall be governed by the laws of the United States to the extent applicable and otherwise by the laws of the State of Wisconsin.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first above written.

THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION WHICH MAY BE ENFORCED BY THE PARTIES.

CITIZENS COMMUNITY FEDERAL

/s/ James G. Cooley

By: James G. Cooley
Its: C.E.O.

Employee

/s/ Rebecca Johnson

Rebecca Johnson

EXHIBIT 10.2

CITIZENS COMMUNITY FEDERAL
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

CITIZENS COMMUNITY FEDERAL
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

EFFECTIVE AUGUST 1, 2002

Purpose

The purpose of the Plan is to provide supplemental retirement benefits to a select group of employees who contribute materially to the continued growth, development and future business success of Citizens Community Federal. The Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA.

ARTICLE I
Definitions

For purposes of the Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings:

	"Annual Benefit" shall mean with respect to any Participant, an annual benefit equal to the percent of the Participant's Final Average Compensation set forth in a Participant's Plan Agreement, times the number of the Participant's Years of Credited Service set forth in a Participant's Plan Agreement, calculated through the last day of the month in which the Participant experiences a Termination of Employment. A Participant's Annual Benefit shall not exceed the maximum Annual Benefit set forth in his Plan Agreement.
	"Bank" shall mean Citizens Community Federal, a federally chartered savings bank, and any successor to all or substantially all of the assets or business of the Bank.
	"Beneficiary" shall mean one or more persons, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under the Plan upon the death of a Participant.
	"Beneficiary Designation Form" shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Bank or the Committee to designate one or more Beneficiaries.
	"Board" shall mean the board of directors of the Bank.
	"Change in Control" shall mean the first to occur of any of the following events:

(a)

An acquisition of control of the Bank within the meaning of the Home Owners' Loan Act of 1933 and 12 C.F.R. Part 574.4(a) as in effect on the date hereof that is not subject to rebuttal;

	(b)	Any event that would be required to be reported in response to Item 1 of the current report on Form 8-K, as in effect on the date hereof, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act") if the Exchange Act were applicable to the Bank;
	(c)	Any "person" (as that term is used in Section 13 and 14(d)(2) of the Exchange Act) becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act), directly or indirectly, of 25% or more of the Bank's outstanding securities entitled to vote in the election of directors;
	(d)	Individuals who are members of the Board on the date hereof (each the " Incumbent Board ") cease for any reason to constitute at least a majority thereof, provided that any person becoming a member of the Board subsequent to the date hereof whose election was approved by a vote of at least three-quarters of the members comprising the Incumbent Board, or whose nomination for election by the Bank's stockholders (or members in the case of the Bank in mutual form) was approved by the nominating committee serving under the Incumbent Board shall be considered a member of the incumbent Board;
	(e)	The sale of all or substantially all of the assets of the Bank, excluding transfers to entities that are within a "controlled group of corporations" (as defined in Code Section 1563) in which the Bank is the parent corporation; or
	(f)	A reorganization, merger, consolidation or similar transaction involving the Bank in which either the Bank is not the resulting entity or the Bank is the resulting entity but the stockholders of such entity immediately prior to such transaction do not own at least 60% of the voting securities of such entity immediately following the completion of such transaction.

	The term "Change in Control" does not include (i) the formation of a mutual holding company by the Bank; (ii) the reorganization of the Bank to a stock institution (whether or not in holding company form); (iii) an acquisition of securities by an employee benefit plan of the Bank; or (iv) an acquisition of securities of the Bank (or its holding company) in consideration for a contribution of capital to the Bank (or its holding company).
	"Claimant" shall have the meaning set forth in Section 14.1.
	"Code" shall mean the Internal Revenue Code 1986, as it may be amended from time to time.
	"Committee" shall mean the committee described in Article12.
	"Compensation" shall mean the annual cash compensation relating to services performed by a Participant for the Bank during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding fringe benefits, stock options, other stock based compensation, relocation expenses, non-monetary awards, and automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Participant's gross income). Compensation shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of the Bank and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by the Bank; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Participant.

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	"Employee" shall mean a person who is classified as an employee of the Bank.
	"Equivalent Actuarial Value" shall mean, unless otherwise specified in the Plan Agreement, a benefit of equivalent value to another form of benefit, computed on the basis of an interest rate factor of 7 percent per annum.
	"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time.
	"Final Average Compensation" shall mean the amount determined by dividing by two the Participant's Compensation during the two Plan Years (whether or not consecutive) in the five Plan Year period immediately prior to his Termination of Employment (or if Termination of Employment occurs during the month of December then including the Plan Year in which Termination of Employment occurs) that results in the largest total.
	"Monthly Benefit " shall mean one twelfth (1/12) of the Participant's Annual Benefit.
	"Normal Retirement Date" shall mean the later of (1) the date of the Participant's Termination of Employment or (2) the Participant's attainment of age sixty-five (65).
	"Participant" shall mean any Employee (i) who is selected to participate in the Plan, (ii) who signs a Plan Agreement and a Beneficiary Designation Form and (iii) whose signed Plan Agreement and Beneficiary Designation Form are accepted by the Bank or the Committee. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an Annual Benefit under the Plan, even if he or she has an interest in the Participant's benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce.
	"Payout Period" shall mean the number of consecutive months set forth as the Payout Period in a Participant's Plan Agreement, commencing on the first day of the calendar month next following the Participant's Normal Retirement Date, except as otherwise provided in Section 3.2(a).
	"Plan" shall mean this Supplemental Executive Retirement Plan, which shall be evidenced by this instrument and by each Plan Agreement, as they may be amended from time to time.

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	"Plan Agreement" shall mean a written agreement, as may be amended from time to time, which is entered into by and between the Bank and a Participant. Should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Bank shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. The terms of any Plan Agreement may be different for any Participant, and any Plan Agreement may limit the benefits otherwise provided under the Plan.
	"Plan Year" shall mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year.
	"Termination of Employment" shall mean the severing of employment with the Bank for any reason.
	"Trust" shall mean any trust established between the Bank and the trustee named therein to provide benefits hereunder, as amended from time to time.
	"Years of Credited Service" shall mean the total number of Plan Years (or fraction thereof determined on a months basis) taken into account under a Participant's Plan Agreement for purposes of calculating such Participant's Annual Benefit.

ARTICLE 2
Selection, Enrollment, Eligibility

2.1	Selection by Committee . Participation in the Plan shall be limited to a select group of management and highly compensated Employees, as determined by the Committee in its sole discretion from time to time. From that group, the Committee shall select, in its sole discretion, Employees to participate in the Plan.
2.2	Enrollment Requirements . As a condition to participation, each selected Employee shall complete, execute and return to the Bank or the Committee a Plan Agreement and a Beneficiary Designation Form. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary or appropriate.
2.3	Eligibility; Commencement of Participation . Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in the Plan and required by the Committee, including returning all required documents to the Bank or the Committee, that Employee shall commence participation in the Plan on the date his Plan Agreement is executed by the Bank.
2.4	Termination of Participation . If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to (i) cease further benefit accruals hereunder and/or (ii) immediately distribute in a single lump sum the Equivalent Actuarial Value of the Monthly Benefits for the Payout Period, determined as if the Participant experienced a Termination of Employment, and terminate the Participant's participation herein.

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ARTICLE 3
Benefits

3.1	Benefits. Upon a Participant's Normal Retirement Date, the Bank shall pay the Monthly Benefit to him during the Payout Period.
3.2	Death Benefits.

	(a)	If the Participant dies before having commenced receiving benefits under Section 3.1, the Monthly Benefit shall be paid to his Beneficiary for the Payout Period, commencing on the first day of the month following the date the Participant dies.
	(b)	If the Participant dies after he has commenced receiving benefits under Section 3.1, then the Bank shall pay to his Beneficiary the Monthly Benefit during the remainder of the Payout Period.

3.3	Acceleration of Benefits; Lump Sum Payments . The Committee may accelerate the payment of a Participant's Monthly Benefits at such time and in such manner as the Committee may determine, in which case the accelerated benefit shall be equal to the Equivalent Actuarial Value of such unpaid Monthly Benefits.
3.4	Tax Withholding from Distributions . The Bank, or the trustee of the Trust, shall withhold from any payments made to a Participant all federal, state and local income, employment and other taxes required to be withheld by the Bank, or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Bank and the trustee of the Trust.
3.5	Restriction on Benefits . Notwithstanding anything contained in this Article 3 to the contrary, the obligations of the Bank to a Participant under the Plan are subject to the regulatory restrictions set forth in Article 7.

ARTICLE 4
In-Service Withdrawals and Distributions

No in-service withdrawals or distributions are permitted under the Plan.

ARTICLE 5
Vesting

Unless otherwise provided in the Participant's Plan Agreement, the Participant shall be fully vested in his Monthly Benefit at all times.

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ARTICLE 6
Participant Contributions

Participant contributions are neither permitted nor required under the Plan.

ARTICLE 7
Regulatory Provisions

The obligations of the Bank to a Participant under the Plan are subject to the following restrictions:

7.1	Temporary Suspension or Prohibition . If a Participant is suspended and/or temporarily prohibited from participating in the conduct of the Bank's affairs by a notice served under Section 8(e)(3) or (g)(1) of the Federal Deposit Insurance Act ("FDIA"), 12 U.S.C. § 1818(e)(3) and (g)(1), the Bank's obligations to such Participant under the Plan shall be suspended as of the date of service of such notice, unless stayed by appropriate proceedings. If the charges in the notice are dismissed, the Bank may in its discretion reinstate in whole or in part any of its obligations which were suspended.
7.2	Permanent Suspension or Prohibition . If a Participant is removed and/or permanently prohibited from participating in the conduct of the Bank's affairs by an order issued under Section 8(e)(4) or (g)(1) of the FDIA, 12 U.S.C. § 1818(e)(4) and (g)(1), all obligations of the Bank to such Participant under the Plan shall terminate as of the effective date of the order, but vested rights of the contracting parties shall not be affected.
7.3	Default . If the Bank is in default (as defined in Section 3(x)(1) of the FDIA), all obligations of the Bank to Participants and Beneficiaries under the Plan shall terminate as of the date of default, but this provision shall not affect any vested rights of the contracting parties.
7.4	Termination by Regulators . All obligations of the Bank to Participants and Beneficiaries under the Plan shall be terminated, except to the extent determined that continuation of the Plan is necessary for the continued operation of the Bank: (i) by the Director of the Office of Thrift Supervision (the "OTS Director") or his designee, at the time the Federal Deposit Insurance Corporation enters into an agreement to provide assistance to or on behalf of the Bank under the authority contained in Section 13(c) of the FDIA; or (ii) by the OTS Director or his designee, at the time the OTS Director or his designee approves a supervisory merger to resolve problems related to operation of the Bank or when the Bank is determined by the OTS Director to be in an unsafe or unsound condition. Any rights of the parties that have already vested, however, shall not be affected by any such action.
7.5	Other Regulatory Restrictions on Payment . Notwithstanding anything herein to the contrary, (1) any payments made by the Bank under the Plan shall be subject to and conditioned upon compliance with 12 U.S.C. § 1828(k) and any regulations promulgated thereunder and (2) payments contemplated to be made by the Bank under the Plan shall not be immediately payable to the extent such payments are barred or prohibited by an action or order issued by the Office of Thrift Supervision or the Federal Deposit Insurance Corporation.

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ARTICLE 8
Funding

8.1

Funding Generally . The Bank's obligations under the Plan shall be an unfunded and unsecured promise to pay. The Bank shall not be obligated under any circumstances to fund in advance its obligations under the Plan, and when the benefit amount is paid it shall be expensed out of the Bank's general assets.

8.2

Option to Fund Informally . Notwithstanding Section 8.1, the Bank may, at its sole option, or by agreement, informally fund its obligations under the Plan in whole or in part, provided, however, that in no event shall such informal funding be construed to create any trust fund, escrow account or other security for any Participant or Beneficiary with respect to the payment of any benefit under the Plan, other than as permitted by Internal Revenue Service and Department of Labor rules and regulations for unfunded supplemental retirement plans.

ARTICLE 9
Beneficiary Designation

9.1	Beneficiary . Each Participant shall have the right, at any time, to designate his Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan upon the death of the Participant. The Beneficiary designated under the Plan may be the same as or different from the Beneficiary designated under any other plan of the Bank in which the Participant participates.
9.2	Beneficiary Designation: Change; Spousal Consent . A Participant shall designate his Beneficiary by completing and signing the Beneficiary Designation Form and returning it to the Bank or the Committee. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee's rules and procedures, as in effect from time to time. If the Participant names someone other than his spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant's spouse and returned to the Bank or the Committee. Upon the acceptance by the Bank or the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Bank or the Committee prior to his death.
9.3	Acknowledgment . No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Bank or the Committee.
9.4	No Beneficiary Designation . If a Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease a Participant or die prior to complete distribution of the Participant's benefits, then a Participant's designated Beneficiary shall be deemed to be his surviving spouse. If a Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant's estate.

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9.5	Doubt as to Beneficiary . If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to the Plan, the Committee shall have the right, exercisable in its discretion, to cause the Bank to withhold such payments until this matter is resolved to the Committee's satisfaction.
9.6	Discharge of Obligations . The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge the Bank and the Committee from all further obligations under the Plan with respect to the Participant.

ARTICLE 10
Leave of Absence

If a Participant is authorized by the Bank for any reason to take a leave of absence from employment with the Bank, such Participant shall continue to be considered employed by the Bank during such leave of absence (and therefore not to have experienced a Termination of Employment) and service during the leave of absence shall be credited for purposes of determining the Participant's Years of Credited Service.

ARTICLE 11
Termination, Amendment or Modification

11.1

Termination. Although the Bank anticipates that it will continue as a sponsor of the Plan for an indefinite period of time, there is no guarantee that it will continue as a sponsor of the Plan or will not terminate its sponsorship of the Plan at any time in the future. Accordingly, the Bank reserves the right to terminate its sponsorship of the Plan at any time with respect to any or all of its Participants, by action of the Board. Upon termination of sponsorship of the Plan by the Bank, the Annual and Monthly Benefit of each affected Participant shall be determined as if he had experienced a Termination of Employment on the date Plan sponsorship is terminated. Monthly Benefits shall be paid to affected Participants as follows: Prior to a Change in Control, the Bank shall have the right, in its sole discretion, to pay the Equivalent Actuarial Value of the Monthly Benefits for the Payout Period in a lump sum; otherwise payments shall be made as provided for in Article 3. After a Change in Control, the Bank shall be required to pay the Equivalent Actuarial Value of the Monthly Benefits for the Payout Period in a lump sum. If the Bank terminates its sponsorship of the Plan, the Plan shall terminate. The termination of sponsorship of the Plan or the termination of the Plan shall not adversely affect any Participant or Beneficiary who has become entitled to the payment of any benefits under the Plan as of the date of termination; provided, however, that the Bank shall have the right to accelerate payments without a premium or prepayment penalty by paying the Equivalent Actuarial Value of the remaining benefits in a lump sum.

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11.2

Amendment . The Bank may, at any time, amend or modify the Plan in whole or in part by action of the Board; provided, however, that no amendment or modification shall be effective to decrease or restrict the value of a Participant's Annual Benefit determined at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification; provided, however, that the Bank shall have the right to accelerate payments without a premium or prepayment penalty by paying the Equivalent Actuarial Value of the unpaid Monthly Benefits in a lump sum.

11.3

Effect of Payment . The full payment of the applicable benefit under the Plan shall completely discharge all obligations to a Participant and his designated Beneficiaries under the Plan.

ARTICLE 12
Administration

12.1	Committee Duties . The Plan shall be administered by a Committee which shall consist of the Board, or such committee as the Board shall appoint. Members of the Committee may be Participants under the Plan. The Committee shall also have the discretion and authority to (i) make, amend, interpret, and enforce all appropriate rules and regulations for the administration of the Plan and (ii) decide or resolve any and all questions including interpretations of the Plan, as may arise in connection with the Plan. Any individual on the Committee who is a Participant shall not vote or act on any matter relating solely to himself. When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a Participant or the Bank.
12.2	Agents . In the administration of the Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to the Bank.
12.3	Binding Effect of Decisions . The decision or action of the Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
12.4	Indemnity of Committee . The Bank shall indemnify and hold harmless the members of the Committee, and any person to whom the duties of the Committee may be delegated, against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to the Plan, except in the case of gross misconduct by the Committee or any of its members or any such delegate.
12.5	Information . To enable the Committee to perform its functions, the Bank shall supply full and timely information to the Committee as the Committee may reasonably request.

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ARTICLE 13
Other Benefits and Agreements

The benefits provided for a Participant or a Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program sponsored by the Bank. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided therein.

ARTICLE 14
Claims Procedures

14.1

Presentation of Claim . Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a "Claimant") may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant.

14.2

Notification of Decision . The Committee shall consider a Claimant's claim within a reasonable time, and shall notify the Claimant in writing:

	(a)	that the Claimant's requested determination has been made, and that the claim has been allowed in full; or
	(b)	that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant:

		(i)	the specific reason(s) for the denial of the claim, or any part of it;
		(ii)	specific reference(s) to pertinent provisions of the Plan upon which such denial was based;
		(iii)	a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and
		(iv)	an explanation of the claim review procedure set forth in Section 14.3 below.

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14.3

Review of a Denied Claim . With 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant's duly authorized representative):

	(a)	may review pertinent documents;
	(b)	may submit written comments or other documents; and/or
	(c)	may request a hearing, which the Committee, in its sole discretion, may grant.

14.4

Decision on Review . The Committee shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee's decision must be rendered within 120 days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain:

	(a)	specific reasons for the decision;
	(b)	specific reference(s) to the pertinent Plan provisions upon which the decision was based; and
	(c)	such other matters as the Committee deems relevant.

14.5	Legal Action . A Claimant's compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under the Plan.

ARTICLE 15
Trust

15.1	Establishment of the Trust . The Bank may establish the Trust upon such terms as it deems appropriate.
15.2	Interrelationship of the Plan and the Trust . The provisions of the Plan including a Participant's Plan Agreement shall govern the rights of such Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Bank, Participants and the creditors of the Bank to the assets transferred to the Trust. The Bank shall at all times remain liable to carry out its obligations under the Plan.
15.3	Investment of Trust Assets . The trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable trust agreement.

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15.4	Distributions From the Trust . The Bank's obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust and any such distribution shall reduce the Bank's obligations under the Plan.

ARTICLE 16
Miscellaneous

16.1	Status of Plan . The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that "is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees" within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent.
16.2	Unsecured General Creditor. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Bank. For purposes of the payment of benefits under the Plan, any and all assets of the Bank shall be, and remain the general, unpledged and unrestricted assets of such entity. The Bank's obligation under the Plan shall be merely of an unfunded and unsecured promise to pay money in the future.
16.3	Liability . The Bank's liability for the payment of benefits shall be defined only by the Plan including a Participant's Plan Agreement. The Bank shall have no obligation to a Participant under the Plan except as expressly provided in the Plan including such Participant's Plan Agreement.
16.4	Nonassignability . Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance allowed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise.
16.5	Not a Contract of Employment . The terms and conditions of the Plan including a Participant's Plan Agreement shall not be deemed to constitute a contract of employment between the Bank and a Participant. Nothing in the Plan shall be deemed to give a Participant the right to be retained in the service of the Bank or to interfere with the right of the Bank to discipline or discharge such Participant at any time.

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16.6	Furnishing Information . A Participant or his Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to, taking such physical examinations as the Committee may deem necessary.
16.7	Terms . Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply.
16.8	Captions . The captions of the articles, sections and paragraphs of the Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions.
16.9	Governing Law . Subject to ERISA, the provisions of the Plan shall be construed and interpreted according to the internal laws of the State of Wisconsin without regard to its conflicts of laws and principles.
16.10	Notice . Any notice or filing required or permitted to be given to the Committee under the Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below.

		Director of Human Resources Citizens Community Federal 2174 Eastridge Center Eau Claire, Wisconsin 54701

	Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Any notice or filing required or permitted to be given to a Participant under the Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of such Participant.

16.11	Successors. The provisions of the Plan shall bind and inure to the benefit of the Bank and its successors and assigns and the Participant and the Participant's designated Beneficiaries.
16.12	Spouse's Interest. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner including, but not limited to, such spouse's will, nor shall such interest pass under the laws of intestate succession.

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16.13	Validity . In case any provision of the Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but the Plan shall be constructed and enforced as if such illegal or invalid provision had never been inserted herein.
16.14	Incompetent . If the Committee determines in its discretion that a benefit under the Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount
16.15	Court Order . The Committee is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant's benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion shall have the right, notwithstanding any election made by the Participant, to immediately distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to that spouse or former spouse.
16.16	Distribution in the Event of Taxation . If, for any reason, all or any portion of a Participant's benefits under the Plan becomes taxable to the Participant prior to receipt, a Participant may petition the Committee for a distribution of that portion of his benefit that has become taxable. Upon the grant of such a petition, which grant shall not be unreasonably withheld (and, after a Change in Control, shall be granted), the Bank shall distribute to the Participant immediately available funds in an amount equal to the taxable portion of his benefit (which amount shall not exceed such Participant's Equivalent Actuarial Value of his unpaid Monthly Benefits). If the petition is granted, the tax liability distribution shall be made within 90 days of the date when the Participant's petition is granted. Such a distribution shall affect and reduce the benefits to be paid under the Plan.
16.17	Insurance . The Bank, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may apply for and procure insurance on the life of any Participant, in such amounts and in such forms as it may choose. The Bank or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. No Participant shall have any interest whatsoever in any such policy or policies, and a Participant shall at the request of the Bank submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Bank has applied for insurance.

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16.18

Legal Fees To Enforce Rights After Change in Control . The Bank is aware that upon the occurrence of a Change in Control, the Board (which might then be composed of new members) or stockholders of the Bank, or of any successor corporation, might then cause or attempt to cause Bank, or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Bank to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Bank or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder, or, if the Bank or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Bank irrevocably authorizes such Participant to retain counsel of his choice at the expense of the Bank to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Bank or any director, officer, stockholder or other person affiliated with the Bank or any successor thereto in any jurisdiction.

15 END

EXHIBIT 10.3

RP ^® FINANCIAL, LC.
Financial Services Industry Consultants

June 1, 2006 Mr. James G. Cooley
President and Chief Executive Officer
Citizens Community Bancorp
2174 Eastridge Center
Eau Claire, Wisconsin 54701

Dear Mr. Cooley:

This letter sets forth the agreement between Citizens Community Federal and Citizens Community Bancorp (collectively the "Company"), a subsidiary of Citizens Community MHC, Eau Claire, Wisconsin (the "MHC"), and RP ^® Financial, LC. ("RP Financial") for independent appraisal services pertaining to the mutual-to-stock conversion of the MHC to a fully-converted basis. The specific appraisal services to be rendered by RP Financial include those described below.

Description of Appraisal Services

In conjunction with preparing the appraisal report, RP Financial will conduct a financial due diligence, including on-site interviews of senior management and reviews of historical and pro forma financial information and other documents and records, to gain insight into the operations, financial condition, profitability, market area, risks and various internal and external factors of the Company, all of which will be considered in estimating the pro forma market value of the Company in accordance with the applicable federal guidelines. RP Financial will prepare a detailed written valuation report of the Company that will be fully consistent with applicable federal regulatory guidelines and standard pro forma valuation practices. The appraisal report will include an analysis of the Company's financial condition and operating results, as well as an assessment of the Company's interest rate risk, credit risk and liquidity risk. The appraisal report will describe the Company's business strategies, market area, prospects for the future and the intended use of proceeds. A peer group analysis relative to certain publicly-traded thrifts will be conducted for the purpose of determining appropriate valuation adjustments for the Company relative to the peer group.

We will review pertinent sections of the Company's prospectus and hold discussions with representatives of the Company and MHC to obtain necessary data and information for the appraisal report, including the impact of key deal elements on the pro forma market value, such as dividend policy, use of proceeds and reinvestment rate, tax rate, offering expenses, characteristics of stock plans, and the structure of any contribution to a charitable foundation immediately following the offering if applicable.

Washington Headquarters
Rosslyn Center 1700 North Moore Street, Suite 2210 Arlington, VA 22209 E-Mail: wpommerening@rpfinancial.com	Direct: (703) 647-6546 Telephone: (703) 528-1700 Fax No.: (703) 528-1788 Toll-Free No.: (866) 723-0594

Mr. James G. Cooley
June 1, 2006
Page 2

The appraisal report will establish a midpoint pro forma market value in accordance with the applicable federal regulatory requirements. The appraisal report may be periodically updated throughout the conversion process as appropriate. There will be at least one updated valuation that would be prepared at the time of the closing of the stock offering. RP Financial agrees to deliver the original appraisal report and subsequent updates, in writing, to the Company at the above address in conjunction with the filing of the regulatory conversion applications. Subsequent updates will be filed promptly as certain events occur which would warrant the preparation and filing of such valuation updates pursuant to federal guidelines. Further, RP Financial agrees to perform such other services as are necessary or required in connection with the regulatory review of the appraisal and respond to the regulatory comments, if any, regarding the valuation appraisal and subsequent updates. RP Financial expects to formally present the appraisal report, including the appraisal methodology, peer group selection and assumptions, to the Board of Directors for review.

Fee Structure and Payment Schedule

The Company agrees to pay RP Financial fees for preparation and delivery of the original appraisal report and subsequent appraisal updates as shown in the detail below, plus reimbursable expenses. Payment of these fees shall be made according to the following schedule:

$5,000 upon execution of the letter of agreement engaging RP Financial's appraisal services;
$25,000 upon delivery and filing with the regulators of the completed original appraisal report; and
$5,000 upon delivery of each subsequent appraisal update report. There will be at least one appraisal update report, to be filed upon completion of the offering.

The Company will reimburse RP Financial for reasonable out-of-pocket expenses incurred in preparation of the valuation within 30 days after receipt of a detailed billing statement or invoice therefore. Such out-of-pocket expenses will likely include travel, printing, telephone, facsimile, shipping, reasonable counsel fees, computer and data services. RP Financial will agree to limit reimbursable expenses in connection with this appraisal engagement, subject to written authorization from the Company to exceed such level.

In the event the Company shall, for any reason, discontinue the proposed transaction prior to delivery of the completed original appraisal report set forth above and payment of the corresponding progress payment fees, the Company agrees to compensate RP Financial according to RP Financial's standard billing rates for consulting services based on accumulated and verifiable time expenses, not to exceed the respective fee caps noted above, after applying full credit to the initial retainer fee towards such payment, together with reasonable out of pocket

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Mr. James G. Cooley
June 1, 2006
Page 3

expenses subject to the cap on such expenses as set forth above. RP Financial's standard billing rates range from $75 per hour for research associates to $350 per hour for managing directors.

If during the course of the proposed transaction, unforeseen events occur so as to materially change the nature or the work content of the services described in this contract, the terms of said contract shall be subject to renegotiation by the Company and RP Financial. Such unforeseen events shall include, but not be limited to, material changes in the conversion regulations, appraisal guidelines or processing procedures as they relate to conversion appraisals, material changes in management or procedures, operating policies or philosophies, and excessive delays or suspension of processing of conversion applications by the regulators such that completion of the conversion transaction requires the preparation by RP Financial of a new appraisal.

Covenants, Representations and Warranties

The Company and RP Financial agree to the following:

1.      The Company agrees to make available or to supply to RP Financial such information with respect to its business and financial condition as RP Financial may reasonably request in order to provide the aforesaid valuation. Such information heretofore or hereafter supplied or made available to RP Financial shall include: annual financial statements, periodic regulatory filings and material agreements, debt instruments, off balance sheet assets or liabilities, commitments and contingencies, unrealized gains or losses and corporate books and records. All information provided by the Company to RP Financial shall remain strictly confidential (unless such information is otherwise made available to the public), and if the conversion is not consummated or the services of RP Financial are terminated hereunder, RP Financial shall promptly return to the Company the original and any copies of such information.

2.      The Company represents and warrants to RP Financial that any information provided to RP Financial does not and will not, to the best of the Company's knowledge, at the times it is provided to RP Financial, contain any untrue statement of a material fact or in response to informational requests by RP Financial fail to state a material fact necessary to make the statements therein not false or misleading in light of the circumstances under which they were made.

3.      (a)      The Company agrees that it will indemnify and hold harmless RP Financial, any affiliates of RP Financial, the respective members, officers, agents and employees of RP Financial or their successors and assigns who act for or on behalf of RP Financial in connection with the services called for under this agreement (hereinafter referred to as "RP Financial"), from and against any and all losses, claims, damages and liabilities (including, but not limited to, reasonable attorneys fees, and all losses and expenses in connection with claims under the federal securities laws) attributable to (i) any untrue statement or alleged untrue statement of a material fact contained in the financial statements or other information furnished or otherwise provided by the Company to RP Financial, either orally or in writing; (ii) the omission or alleged omission of a

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Mr. James G. Cooley
June 1, 2006
Page 4

material fact from the financial statements or other information furnished or otherwise made available by the Company to RP Financial; or (iii) any action or omission to act by the Company, or the Company's respective officers, directors, employees or agents, which action or omission is undertaken in bad faith or is negligent. The Company will be under no obligation to indemnify RP Financial hereunder if a court determines that RP Financial was negligent or acted in bad faith with respect to any actions or omissions of RP Financial related to a matter for which indemnification is sought hereunder.

      (b)      RP Financial shall give written notice to the Company of such claim or facts within thirty days of the assertion of any claim or discovery of material facts upon which RP Financial intends to base a claim for indemnification hereunder, including the name of counsel that RP Financial intends to engage in connection with any indemnification related matter. In the event the Company elects, within seven days of the receipt of the original notice thereof, to contest such claim by written notice to RP Financial, the Company shall not be obligated to make payments under Section 3(c), but RP Financial will be entitled to be paid any amounts payable by the Company hereunder within five days after the final non-appealable determination of such contest either by written acknowledgement of the Company or a decision of a court of competent jurisdiction or alternative adjudication forum, unless it is determined in accordance with Section 3(c) hereof that RP Financial is not entitled to indemnity hereunder. If the Company does not so elect to contest a claim for indemnification by RP Financial hereunder, RP Financial shall (subject to the Company's receipt of the written statement and undertaking under Section 3(c) hereof) be paid promptly and in any event within thirty days after receipt by the Company of detailed billing statements or invoices for which RP Financial is entitled to reimbursement under Section 3(c) hereof.

      (c)      Subject to the Company's right to contest under Section 3(b) hereof, the Company shall pay for or reimburse the reasonable expenses, including reasonable attorneys' fees, incurred by RP Financial in advance of the final disposition of any proceeding within thirty days of the receipt of such request if RP Financial furnishes the Company: (1) a written statement of RP Financial's good faith belief that it is entitled to indemnification hereunder; (2) a written undertaking to repay the advance if it ultimately is determined in a final, nonappealable adjudication of such proceeding that it or he is not entitled to such indemnification; and (3) a detailed invoice of the expenses for which reimbursement is sought.

      (d)      In the event the Company does not pay any indemnified loss or make advance reimbursements of expenses in accordance with the terms of this agreement, RP Financial shall have all remedies available at law or in equity to enforce such obligation.

This agreement constitutes the entire understanding of the Company and RP Financial concerning the subject matter addressed herein, and such contract shall be governed and construed in accordance with the laws of the Commonwealth of Virginia. This agreement may not be modified, supplemented or amended except by written agreement executed by both parties.

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Mr. James G. Cooley
June 1, 2006
Page 5

The Company and RP Financial are not affiliated, and neither the Company nor RP Financial has an economic interest in, or is held in common with, the other and has not derived a significant portion of its gross revenues, receipts or net income for any period from transactions with the other. RP Financial represents and warrants that it is not aware of any fact or circumstance that would cause it not to be "independent" within the meaning of the conversion regulations of the Office of Thrift Supervision or otherwise prohibit or restrict in anyway RP Financial from serving in the role of independent appraiser for the Company.

* * * * * * * * * * * Please acknowledge your agreement to the foregoing by signing as indicated below and returning to RP Financial a signed copy of this letter, together with the initial retainer fee of $5,000.

Sincerely,

William E. Pommerening
Chief Executive Officer and
Managing Director

Agreed To and Accepted By:

James G. Cooley _______________________________________
President and Chief Executive Officer

Upon Authorization by the Board of Directors For:

Citizens Community Bancorp,
subsidiary of Citizens Community MHC
Eau Claire, Wisconsin

Date Executed: _______________________________________

End.

EXHIBIT 10.4

F ELDMAN F INANCIAL A DVISORS, I NC.

1725 K S TREET, NW * SUITE 205
W ASHINGTON, DC 20006
(202) 467-6862 * FAX (202) 467-6963

May 31, 2006

Confidential

Board of Directors
Citizens Community Bancorp
2174 Eastridge Center
Eau Claire, Wisconsin 54701

Members of the Board:

This letter agreement ("Agreement") describes the terms under which Feldman Financial Advisors, Inc. ("Feldman Financial") will assist Citizens Community Bancorp ("Citizens") with the business plan ("Business Plan") to be submitted to regulators in conjunction with Citizens' second stage stock offering. The services we will provide and our fees for this proposal are explained in this Agreement.

Description of Engagement

Under Citizens' direction, we will prepare the text to be submitted in support of the Business Plan. We will prepare demographic, economic, or geographic data needed for the Business Plan. The Business Plan that we will provide will include the text and other information as required. We also will provide the financial projections and other financial information for the Business Plan. Our preparation of the Busines Plan will be based on information Citizens provides to us regarding Citizens' future business. After submission of the Business Plan and, as part of our service under this Agreement, we will be available to provide additional services in relation to the Business Plan, including assisting with preparation of your responses to questions or comments from the regulators while the regulators evaluate the Business Plan. Citizens will be responsible for final approval of the Business Plan and other information before submission to applicable regulators.

Fees and Expenses

Our professional fee for assisting with the deveopment and submission of the Business Plan will be $20,000, payable in two installments: (i) $5,000 retainer fee due upon acceptance and execution of this Agreement; (ii) $15,000 due upon filing the Business Plan with the applicable regulators. If, after submission of the Business Plan, further services are required of Feldman Financial by Citizens with respect to the Business Plan, Feldman Financial will perform such services at our hourly rates that correspond ot the attached fee schedule. This work, if required, will be capped at $5,000. In addition, we will invoice you for actual out-of-pocket expenses for data purchases, copying, express mail, travel, and other costs incurred in connection with providing the professional consulting services under this Agreement. Out-of-pocket expenses will not exceed $1,500 wihout Citizen's prior approval.

F ELDMAN F INANCIAL A DVISORS, I NC.

Board of Directors
Citizens Community Bancorp
May 31, 2006
Page 2

Termination

Citizens may terminate this Agreement at any time by providing notice of such termination to Feldman Financial. The "Termination Date" shall be either: (i) the date oral notice of such termination is provided to Feldman Financial, as long as written notice is received within three business days thereafter, or (ii) if oral notice is not provided, the date Feldman Financial receives the written notice of termination.

In the event of termination prior to submission of the Business Plan, Citizens will pay Feldman Financial for all time incurred in preparing the Business Plan through the Termination Date at an hourly rate that corresponds with the aforementioned fee schedule. Such charges shall not exceed $20,000. In addition, Citizens will pay Feldman Financial for all expenses incurred through the Termination Date.

Financial Information and Confidentiality

Citizens will use its best efforts to assure Feldman Financial that Citizens will provide such information as Feldman Financial may reasonably request to prepare the Business Plan. Citizens acknowledges that in performing services hereunder, Feldman Finacial will be relying on the information furnished by Citizens, and Citizens further acknowledges that Feldman Finacial will not independently verify the accuracy and completeness of such information.

Citizens agrees that the intended use of the Business Plan is only for submission with the appropriate regulatory authorities and for other internal purposes. Citizens will not use the product of Feldman Financial's services under this Agreement in any other manner, including references within a proxy statement or offering circular, without the express written consent of Feldman Financial.

Feldman Financial agrees to hold in confidence all information Citizens provides pursuant to this Agreement, other than information which is or becomes publicly available, unless such disclosure is approved by Citizens or otherwise requried by law. Similarly, Citizens agrees to hold in confidence all information provided by Feldman Financial pursuant to this Agreement, other than information that is or becomes publicly available, unless such disclosure is approved by Feldman Financial or otherwise requried by law.

Sole Terms of Agreement

This Agreement embodies the sole terms of agreement between Citizens and Feldman Financial with respect to the engagement of Feldman Financial to prepare the Business Plan. This Agreement can be modified only if such modification is stated in writing and signed by both Citizens and Feldman Financial.

* * *

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F ELDMAN F INANCIAL A DVISORS, I NC.

Board of Directors
Citizens Community Bancorp
May 31, 2006
Page 3

To indicate your acceptance of the terms in this Agreement, please sign below and return one original of this letter to me with a check for $5,000, such payment to be credited as the retainer fee.

Sincerely,

Feldman Financial Advisors, Inc.

/s/ Trent R. Feldman

Trent R. Feldman
President

Attachment

AGREED AND ACCEPTED BY:

CITIZENS COMMUNITY BANCORP

By:	/s/ James G. Cooley
Title:	CEO
Date:	6-12-06

Attachment

F ELDMAN F INANCIAL A DVISORS, I NC.

1725 K S TREET, NW * SUITE 205
W ASHINGTON, DC 20006
(202) 467-6862 * FAX (202) 467-6963

S CHEDULE OF P ROFESSIONAL F EES AND E XPENSES

P ROFESSIONAL F EES

Feldman Financial Advisors, Inc.'s hourly billing rates for professional services are shown below. Actual time expended for depositions and courtroom testimony is billed at twice the stated hourly rate.

Title	Hourly Rate

President	$325

Principal	$275

Director	$275

Senior Vice President	$225

Vice President	$200

Research Staff	$100

R EIMBURSABLE E XPENSES

Out-of-pocket expenses (including, but not limited to, transportation, lodging and meals, express and regular mail, document delivery services, purchase of data or reference materials, color photocopying, and telephone/fax) are billed without mark-up. The charge for in-house duplication of documents is $0.20 per page.

End.

EXHIBIT 10.5

CITIZENS COMMUNITY BANCORP
2004 Stock Option and Incentive Plan

             1.              Plan Purpose . The purpose of the Plan is to promote the long-term interests of the Corporation and its stockholders by providing a means for attracting and retaining directors, advisory directors and employees of the Corporation and its Affiliates.

             2.              Definitions . The following definitions are applicable to the Plan:

                          "Affiliate" -- means any "parent corporation" or "subsidiary corporation" of the Corporation, as such terms are defined in Section 424(e) and (f), respectively, of the Code.

                          "Award" -- means the grant by the Committee of an Incentive Stock Option, a Non-Qualified Stock Option, a Right, or any combination thereof, as provided in the Plan.

                        "Award Agreement" -- means the agreement evidencing the grant of an Award made under the Plan.

                        "Board" -- means the board of directors of the Corporation.

                        "Cause" -- means Termination of Service by reason of personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure to perform stated duties or gross negligence.

                          "Code" -- means the Internal Revenue Code of 1986, as amended.

                          "Committee" -- means the Committee referred to in Section 3 hereof.

                          "Corporation" -- means Citizens Community Bancorp and any successor thereto.

                          "Financial Institution" - means Citizens Community Federal or any successor entity.

                        "Incentive Stock Option" -- means an option to purchase Shares granted by the Committee which is intended to qualify as an incentive stock option under Section 422(b) of the Code. Unless otherwise set forth in the Award Agreement, any Option which does not qualify as an Incentive Stock Option for any reason shall be deemed ab initio to be a Non-Qualified Stock Option.

                         "Market Value" -- means, as of any applicable date, the value of a Share determined as follows:

                        (i)            If the Shares are listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Market Value of a Share shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on the Composite Tape or other comparable reporting system for the exchange or market on the applicable date, or if the applicable date is not a trading day, on the trading day immediately preceding the applicable date;

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                        (ii)            If the Shares are not traded on a national securities exchange but are traded on the over-the-counter market, if sales prices are not regularly reported for the Shares for the trading day referred to in clause (i), and if bid and asked prices for the Shares are regularly reported, the mean between the bid and the asked price for the Shares at the close of trading in the over-the-counter market on the applicable date, or if the applicable date is not a trading day, on the trading day immediately preceding the applicable date; and

                        (iii)            In the absence of such markets for the Shares, the Market Value shall be determined in good faith by the Committee.

                          "Non-Qualified Stock Option" -- means an option to purchase Shares granted by the Committee which does not qualify, for any reason, as an Incentive Stock Option.

                          "Option" -- means an Incentive Stock Option or a Non-Qualified Stock Option.

                          "OTS" -- means the Office of Thrift Supervision of the Department of the Treasury or any successor administrative agency.

                        "Participant" -- means any director, advisory director or employee of the Corporation or any Affiliate who is selected by the Committee to receive an Award.

                          "Plan" -- means this Citizens Community Bancorp 2004 Stock Option and Incentive Plan.

                          "Related" -- means (i) in the case of a Right, a Right which is granted in connection with, and to the extent exercisable, in whole or in part, in lieu of, an Option or another Right and (ii) in the case of an Option, an Option with respect to which and to the extent a Right is exercisable, in whole or in part, in lieu thereof.

                          "Right" -- means a stock appreciation right with respect to Shares granted by the Committee pursuant to the Plan.

                          "Shares" -- means the shares of common stock of the Corporation.

                          "Termination of Service" -- means cessation of service, for any reason, whether voluntary or involuntary, so that the affected individual is not either (i) an employee of the Corporation or any Affiliate for purposes of an Incentive Stock Option, or (ii) a director, advisory director or employee of the Corporation or any Affiliate for purposes of any other Award.

             3.              Administration . The Plan shall be administered by a Committee consisting of two or more members of the Board, each of whom (i) shall be an "outside director," as defined under Section 162(m) of the Code and the Treasury regulations thereunder, and (ii) shall be a "non-employee director," as defined under Rule 16(b) of the Securities Exchange Act of 1934 or any similar or successor provision. The members of the Committee shall be appointed by the Board. Except as limited by the express provisions of the Plan or by resolutions adopted by the Board, the Committee shall have sole and complete authority and discretion to (i) select Participants and grant Awards; (ii) determine the number of Shares to be subject to types of Awards generally, as well as to individual Awards granted under the Plan; (iii) determine the terms and conditions upon which Awards shall be granted under the Plan; (iv) prescribe the form and terms of Award Agreements; (v) establish from time to time regulations for the administration of the Plan; and (vi) interpret the Plan and make all determinations deemed necessary or advisable for the administration of the Plan.

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             A majority of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the Committee without a meeting, shall be acts of the Committee.

             4.              Shares Subject to Plan .

                        (a) Subject to adjustment by the operation of Section 6, the maximum number of Shares with respect to which Awards may be made under the Plan is 149,046. As long as the Plan is subject to the requirements of the OTS regulations, no Participant shall receive Awards under the Plan that represent in the aggregate more than 25% of the Shares with respect to which Awards may be made under the Plan, and directors who are not employees of the Corporation or any Affiliate shall not receive Awards that represent, for any one such director, more than 5%, or, for all such directors in the aggregate, more than 30% of the Shares with respect to which Awards may be made under the Plan. The Shares with respect to which Awards may be made under the Plan may be either authorized and unissued Shares or previously issued Shares reacquired and held as treasury Shares. Shares which are subject to Related Rights and Related Options shall be counted only once in determining whether the maximum number of Shares with respect to which Awards may be granted under the Plan has been exceeded. An Award shall not be considered to have been made under the Plan with respect to any Option or Right which terminates, and new Awards may be granted under the Plan with respect to the number of Shares as to which such termination has occurred.

                        (b) During any calendar year, no Participant may be granted Awards under the Plan with respect to more than 37,262 Shares, subject to adjustment as provided in Section 6.

            5.             Awards .

                        (a) Options. The Committee is hereby authorized to grant Options to Participants with the following terms and conditions and with such additional terms and conditions not inconsistent with the provisions of the Plan and the requirements of applicable law and OTS regulations as the Committee shall determine, including the granting of Options in tandem with other Awards under the Plan:

                                    (i)             Exercise Price. The exercise price per Share for an Option shall be determined by the Committee; provided, however, that such exercise price shall not be less than 100% of the Market Value of a Share on the date of grant of such Option.

                                    (ii)             Option Term. The term of each Option shall be fixed by the Committee, but shall be no greater than 10 years in the case of an Incentive Stock Option or 15 years in the case of a Non-Qualified Stock Option.

                                    (iii)             Time and Method of Exercise. Except as provided in subsection (c) below, the Committee shall determine the time or times at which an Option may be exercised in whole or in part and the method or methods by which, and the form or forms (including, without limitation, cash, Shares, other Awards or any combination thereof, having a fair market value on the exercise date equal to the relevant exercise price) in which, payment of the exercise price with respect thereto may be made or deemed to have been made.

                                    (iv)             Incentive Stock Options. Incentive Stock Options may be granted by the Committee only to employees of the Corporation or its Affiliates. No more than 149,046 shares may be granted as Incentive Stock Options.

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                                    (v)             Termination of Service. Unless otherwise determined by the Committee and set forth in the Award Agreement evidencing the grant of the Option, upon Termination of Service of the Participant for any reason other than for Cause, all Options then currently exercisable shall remain exercisable for the lesser of (A) three years following such Termination of Service or (B) until the expiration of the Option by its terms. Upon Termination of Service for Cause, all Options not previously exercised shall immediately be forfeited.

                        (b)              Rights. A Right shall, upon its exercise, entitle the Participant to whom such Right was granted to receive a number of Shares or cash or combination thereof, as the Committee in its discretion shall determine, the aggregate value of which (i.e., the sum of the amount of cash and/or Market Value of such Shares on date of exercise) shall equal (as nearly as possible, it being understood that the Corporation shall not issue any fractional Shares) the amount by which the Market Value per Share on the date of such exercise shall exceed the exercise price of such Right, multiplied by the number of Shares with respect to which such Right shall have been exercised. A Right may be Related to an Option or may be granted independently of any Option as the Committee shall from time to time in each case determine. In the case of a Related Option, such Related Option shall cease to be exercisable to the extent of the Shares with respect to which the Related Right was exercised. Upon the exercise or termination of a Related Option, any Related Right shall terminate to the extent of the Shares with respect to which the Related Option was exercised or terminated.

                        (c)             Additional Terms of Awards.

                                    (i)             Vesting . As long as the Plan is subject to the requirements of the OTS regulations, every Award granted pursuant to this Plan shall vest, beginning not earlier than the one-year anniversary of the date on which the Plan is approved by the shareholders of the Corporation, in annual installments of not more than 20%, and the vesting of an Award shall not be accelerated except in the event of the Participant's death or disability or in connection with a change in control (as set forth in Section 8 of the Plan).

                                    (ii)             Regulatory Action. Plan Participants that are executive officers or directors must exercise or forfeit their Awards in the event the Financial Institution becomes critically undercapitalized (as defined in 12 C.F.R. §565.4 or any successor law or regulation), is subject to an OTS enforcement action, or receives a capital directive under 12 C.F.R. §565.7 or any successor law or regulation.

            6.              Adjustments Upon Changes in Capitalization . In the event of any change in the outstanding Shares subsequent to the effective date of the Plan by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or any change in the corporate structure or Shares of the Corporation, the maximum aggregate number and class of shares and exercise price of the Award, if any, as to which Awards may be granted under the Plan and the number and class of shares and exercise price of the Award, if any, with respect to which Awards have been granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Except as otherwise provided in the Plan, any Award which is adjusted as a result of this Section 6 shall be subject to the same terms and conditions as the original Award.

             7.              Effect of Merger on Options or Rights . In the case of any merger, consolidation or combination of the Corporation (other than a merger, consolidation or combination in which the Corporation is the continuing corporation and which does not result in the outstanding Shares being converted into or exchanged for different securities, cash or other property, or any combination thereof), any Participant to whom an Option or Right has been granted shall have the additional right (subject to the provisions of the Plan and any limitation applicable to such Option or Right), thereafter and during the term of each such Option or Right, to receive upon exercise of any such Option or Right an amount equal

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to the excess of the fair market value on the date of such exercise of the securities, cash or other property, or combination thereof, receivable upon such merger, consolidation or combination in respect of a Share over the exercise price of such Right or Option, multiplied by the number of Shares with respect to which such Option or Right shall have been exercised. Such amount may be payable fully in cash, fully in one or more of the kind or kinds of property payable in such merger, consolidation or combination, or partly in cash and partly in one or more of such kind or kinds of property, all in the discretion of the Committee.

             8.              Effect of Change in Control . Each of the events specified in the following clauses (i) through (iii) of this Section 8 shall be deemed a "change in control": (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial owner of shares of the Corporation with respect to which 25% or more of the total number of votes for the election of the Board may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Corporation shall cease to constitute a majority of the Board, or (iii) the stockholders of the Corporation shall approve an agreement providing either for a transaction in which the Corporation will cease to be an independent publicly owned corporation or for a sale or other disposition of all or substantially all the assets of the Corporation. If a tender offer or exchange offer for Shares (other than such an offer by the Corporation) is commenced, or if a change in control shall occur, unless the Committee shall have otherwise provided in the Award Agreement, all Options and Rights granted and not fully exercisable shall become exercisable in full; provided, however, that no Option or Right which has previously been exercised or otherwise terminated shall become exercisable.

             9.              Assignments and Transfers . No Incentive Stock Option granted under the Plan shall be transferable other than by will or the laws of descent and distribution. Any other Award shall be transferable by will, the laws of descent and distribution, a "domestic relations order," as defined in Section 414(p)(1)(B) of the Code, or a gift to any member of the Participant's immediate family or to a trust for the benefit of one or more of such immediate family members. During the lifetime of an Award recipient, an Award shall be exercisable only by the Award recipient unless it has been transferred as permitted hereby, in which case it shall be exercisable only by such transferee. For the purpose of this Section 9, a Participant's "immediate family" shall mean the Participant's spouse, children and grandchildren.

             10.              Employee Rights Under the Plan . No person shall have a right to be selected as a Participant nor, having been so selected, to be selected again as a Participant, and no employee or other person shall have any claim or right to be granted an Award under the Plan or under any other incentive or similar plan of the Corporation or any Affiliate. Neither the Plan nor any action taken thereunder shall be construed as giving any employee any right to be retained in the employ of the Corporation or any Affiliate.

             11.              Delivery and Registration of Stock . The Corporation's obligation to deliver Shares with respect to an Award shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Participant to whom the Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933 or any other federal, state or local securities legislation. It may be provided that any representation requirement shall become inoperative upon a registration of the Shares or other action eliminating the necessity of such representation under such Securities Act or other securities legislation. The Corporation shall not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange on which Shares may then be listed and (ii) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation, as the Committee shall determine to be necessary or advisable.

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             12.              Withholding Tax . The Corporation shall have the right to deduct from all amounts paid in cash with respect to the exercise of a Right under the Plan any taxes required by law to be withheld with respect to such cash payments. Where a Participant or other person is entitled to receive Shares pursuant to the exercise of an Option or Right pursuant to the Plan, the Corporation shall have the right to require the Participant or such other person to pay the Corporation the amount of any taxes which the Corporation is required to withhold with respect to such Shares, or, in lieu thereof, to retain, or sell without notice, a number of such Shares sufficient to cover the amount required to be withheld. All withholding decisions pursuant to this Section 12 shall be at the sole discretion of the Committee or the Corporation.

             13.              Amendment or Termination .

                        (a)            Except to the extent prohibited by OTS regulations, the Board may amend, alter, suspend, discontinue, or terminate the Plan without the consent of shareholders or Participants, except that any action will be subject to the approval of the Corporation's shareholders if, when and to the extent that shareholder approval is necessary or required for purposes of any applicable federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, or if the Board, in its discretion, determines to seek shareholder approval.

                        (b)            Except to the extent prohibited by OTS regulations, the Committee may waive any conditions of or rights of the Corporation or modify or amend the terms of any outstanding Award. The Committee may not, however, amend, alter, suspend, discontinue or terminate any outstanding Award without the consent of the Participant or holder thereof, except as otherwise provided in this Plan.

             14.              Effective Date and Term of Plan . The Plan shall become effective upon the later of its adoption by the Board or its approval by the shareholders of the Corporation. It shall continue in effect for a term of fifteen years thereafter unless sooner terminated under Section 13 of this Plan.

6 End.

EXHIBIT 10.6

CITIZENS COMMUNITY BANCORP

2004 Recognition and Retention Plan

             1.              Plan Purpose . The purpose of the Plan is to promote the long-term interests of the Corporation and its stockholders by providing a means for attracting and retaining directors, advisory directors and employees of the Corporation and its Affiliates.

             2.              Definitions . The following definitions are applicable to the Plan:

             "Affiliate" -- means any "parent corporation" or "subsidiary corporation" of the Corporation, as such terms are defined in Section 424(e) and (f), respectively, of the Code.

             "Award" -- means the grant by the Committee of Restricted Stock, as provided in the Plan.

            "Award Agreement" -- means the agreement evidencing the grant of an Award made under the Plan.

            "Board" -- means the board of directors of the Corporation.

            "Code" -- means the Internal Revenue Code of 1986, as amended.

             "Committee" -- means the Committee referred to in Section 3 hereof.

             "Corporation" -- means Citizens Community Bancorp.

            "Financial Institution" - means Citizens Community Federal or any successor entity.

            "OTS" - means the Office of Thrift Supervision of the Department of the Treasury or any successor administrative agency.

             "Participant" -- means any director, advisory director or employee of the Corporation or any Affiliate who is selected by the Committee to receive an Award.

             "Plan" -- means this Citizens Community Bancorp 2004 Recognition and Retention Plan.

             "Restricted Period" -- means the period of time selected by the Committee for the purpose of determining when restrictions are in effect under Section 5 hereof with respect to Restricted Stock awarded under the Plan.

            "Restricted Stock" -- means Shares awarded to a Participant by the Committee pursuant to Section 5 hereof.

            "Shares" -- means the shares of common stock of the Corporation.

             "Termination of Service" -- means cessation of service, for any reason, whether voluntary or involuntary, so that the affected individual is not a director, advisory director or employee of the Corporation or any Affiliate. Service shall not be considered to have ceased in the case of sick leave,

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military leave or any other leave of absence approved by the Corporation or any Affiliate or in the case of transfers between payroll locations of the Corporation or between the Corporation, its subsidiaries or its successor.

             3.              Administration . The Plan shall be administered by a Committee consisting of two or more members of the Board, each of whom (i) shall be an "outside director," as defined under Section 162(m) of the Code and the Treasury regulations thereunder, and (ii) shall be a "non-employee director," as defined under Rule 16(b) of the Securities Exchange Act of 1934 or any similar or successor provision. The members of the Committee shall be appointed by the Board. Except as limited by the express provisions of the Plan or by resolutions adopted by the Board, the Committee shall have sole and complete authority and discretion to (i) select Participants and grant Awards; (ii) determine the number of Shares to be subject to types of Awards generally, as well as to individual Awards granted under the Plan; (iii) determine the terms and conditions upon which Awards shall be granted under the Plan; (iv) prescribe the form and terms of Award Agreements; (v) establish from time to time regulations for the administration of the Plan; and (vi) interpret the Plan and make all determinations deemed necessary or advisable for the administration of the Plan.

             A majority of the Committee shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by a majority of the Committee without a meeting, shall be acts of the Committee.

             4.              Shares Subject to Plan . Subject to adjustment by the operation of Section 6, the maximum number of Shares with respect to which Awards may be made under the Plan is 59,618. The Shares with respect to which Awards may be made under the Plan may be either authorized and unissued Shares or previously issued Shares reacquired and held as treasury Shares. An Award shall not be considered to have been made under the Plan with respect to Restricted Stock which is forfeited, and new Awards may be granted under the Plan with respect to the number of Shares as to which such forfeiture has occurred.

            5.             Terms and Conditions of Restricted Stock . The Committee is hereby authorized to grant Awards of Restricted Stock to Participants with the following terms and conditions and with such additional terms and conditions as the Committee shall determine:

                        (a)            At the time of an Award of Restricted Stock, the Committee shall establish for each Participant a Restricted Period, during which or at the expiration of which, as the Committee shall determine and provide in the Award Agreement, the Shares awarded as Restricted Stock shall no longer be subject to restriction. Subject to any such other terms and conditions as the Committee shall provide, Shares of Restricted Stock may not be sold, assigned, transferred, pledged or otherwise encumbered by the Participant, except as hereinafter provided, during the Restricted Period. Except for these restrictions, and subject to paragraph (c) of this Section 5 and Section 6 hereof, the Participant as owner of such Shares shall have all the rights of a stockholder.

                                    No director who is not an employee of the Corporation shall be granted Awards with respect to more than 5% of the total Shares subject to the Plan. All non-employee directors of the Corporation, in the aggregate, may not be granted Awards with respect to more than 30% of the total Shares subject to the Plan, and no individual shall be granted Awards with respect to more than 25% of the total Shares subject to the Plan. No Awards shall begin vesting earlier than one year from the date the Plan is ratified by stockholders of the Corporation, no Awards shall vest at a rate in excess of 20% per year beginning from the date of grant, and such vesting shall not be accelerated except in the event of the Participant's death or disability, or in connection with a change in control (as set forth in Section 8 of this Plan).

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                                    Subject to compliance with OTS regulations, the Committee shall have the authority, in its discretion, to accelerate the time at which any or all of the restrictions shall lapse with respect thereto, or to remove any or all of such restrictions, whenever it may determine that such action is appropriate by reason of changes in applicable tax or other laws or other changes in circumstances occurring after the commencement of such Restricted Period.

                        (b)            If a Participant incurs a Termination of Service for any reason (other than death, disability or in connection with a change in control), all Shares of Restricted Stock awarded to such Participant and which at the time of such Termination of Service are subject to the restrictions imposed pursuant to paragraph (a) of this Section 5 shall upon such Termination of Service be forfeited and returned to the Corporation. If a Participant incurs a Termination of Service by reason of death or disability, the Restricted Period with respect to the Participant's Restricted Stock then still subject to restrictions shall thereupon lapse.

                        (c)            Each certificate in respect of Shares of Restricted Stock awarded under the Plan shall be registered in the name of the Participant and deposited by the Participant, together with a stock power endorsed in blank, with the Corporation and shall bear the following (or a similar) legend:

                                  The transferability of this certificate and the Shares of stock represented hereby are subject to the terms and conditions (including forfeiture) contained in the Citizens Community Bancorp 2004 Recognition and Retention Plan. Copies of such Plan are on file in the office of the Secretary of Citizens Community Bancorp, 2174 EastRidge Center, Eau Claire, Wisconsin 54701.

                        (d)            At the time of any Award, the Participant shall enter into an Award Agreement with the Corporation in a form specified by the Committee, agreeing to the terms and conditions of the Award and such other matters as the Committee, in its sole discretion, shall determine.

                        (e)            Upon the lapse of the Restricted Period, the Corporation shall redeliver to the Participant (or where the relevant provision of paragraph (b) of this Section 5 applies in the case of a deceased Participant, to his legal representative, beneficiary or heir) the certificate(s) and stock power deposited with it pursuant to paragraph (c) of this Section 5, and the Shares represented by such certificate(s) shall be free of the restrictions imposed pursuant to paragraph (a) of this Section 5.

            6.              Adjustments Upon Changes in Capitalization . In the event of any change in the outstanding Shares subsequent to the effective date of the Plan by reason of any reorganization, recapitalization, stock split, stock dividend, combination or exchange of shares, merger, consolidation or any change in the corporate structure or Shares of the Corporation, the maximum aggregate number and class of shares as to which Awards may be granted under the Plan and the number and class of shares with respect to which Awards have been granted under the Plan shall be appropriately adjusted by the Committee, whose determination shall be conclusive. Any Award which is adjusted as a result of this Section 6 shall be subject to the same restrictions as the original Award, and the certificate[s] or other instruments representing or evidencing such Restricted Stock shall be legended and deposited with the Corporation in the manner provided in Section 5(c) hereof.

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             7.              Assignments and Transfers . During the Restricted Period, no Award nor any right or interest of a Participant in any instrument evidencing an Award may be assigned, encumbered or transferred other than by will, the laws of descent and distribution or pursuant to a "domestic relations order," as defined in Section 414(p)(1)(B) of the Code.

             8.              Effect of Change in Control . Each of the events specified in the following clauses (i) through (iii) of this Section 8 shall be deemed a "change in control": (i) any third person, including a "group" as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, shall become the beneficial owner of shares of the Corporation with respect to which 25% or more of the total number of votes for the election of the Board may be cast, (ii) as a result of, or in connection with, any cash tender offer, merger or other business combination, sale of assets or contested election, or combination of the foregoing, the persons who were directors of the Corporation shall cease to constitute a majority of the Board, or (iii) the stockholders of the Corporation shall approve an agreement providing either for a transaction in which the Corporation will cease to be an independent publicly owned corporation or for a sale or other disposition of all or substantially all the assets of the Corporation. If a tender offer or exchange offer for Shares (other than such an offer by the Corporation) is commenced, or if a change in control shall occur, unless the Committee shall have otherwise provided in the Award Agreement, any Restricted Period with respect to Restricted Stock theretofore awarded to such Participant shall lapse and all Shares awarded hereunder as Restricted Stock shall become fully vested in the Participant to whom such Shares were awarded; provided, however, that no Award which has previously been forfeited shall become vested.

             9.              Employee Rights Under the Plan . No person shall have a right to be selected as a Participant nor, having been so selected, to be selected again as a Participant, and no employee or other person shall have any claim or right to be granted an Award under the Plan or under any other incentive or similar plan of the Corporation or any Affiliate. Neither the Plan nor any action taken thereunder shall be construed as giving any employee any right to be retained in the employ of the Corporation or any Affiliate.

             10.              Delivery and Registration of Stock . The Corporation's obligation to deliver Shares with respect to an Award shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Participant to whom such Shares are to be delivered, in such form as the Committee shall determine to be necessary or advisable to comply with the provisions of the Securities Act of 1933 or any other federal, state or local securities legislation. It may be provided that any representation requirement shall become inoperative upon a registration of the Shares or other action eliminating the necessity of such representation under such Securities Act or other securities legislation. The Corporation shall not be required to deliver any Shares under the Plan prior to (i) the admission of such Shares to listing on any stock exchange on which Shares may then be listed and (ii) the completion of such registration or other qualification of such Shares under any state or federal law, rule or regulation, as the Committee shall determine to be necessary or advisable.

             11.              Withholding Tax . Upon the termination of the Restricted Period with respect to any Shares of Restricted Stock (or at any such earlier time, if any, that an election is made by the Participant under Section 83(b) of the Code, or any successor provision thereto, to include the value of such Shares in taxable income), the Corporation shall have the right to require the Participant or other person receiving such Shares to pay the Corporation the amount of any taxes which the Corporation is required to withhold with respect to such Shares, or, in lieu thereof, to retain or sell without notice, a sufficient number of Shares held by it to cover the amount required to be withheld. The Corporation shall have the right to deduct from all dividends paid with respect to Shares of Restricted Stock the amount of any taxes which the Corporation is required to withhold with respect to such dividend payments.

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             12.              Amendment or Termination .

                        (a)            Except to the extent prohibited by OTS regulations, the Board may amend, alter, suspend, discontinue, or terminate the Plan without the consent of shareholders or Participants, except that any such action will be subject to the approval of the Corporation's shareholders if, when and to the extent such shareholder approval is necessary or required for purposes of any applicable federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Shares may then be listed or quoted, or if the Board, in its discretion, determines to seek such shareholder approval.

                        (b)            Except to the extent prohibited by OTS regulations, the Committee may waive any conditions of or rights of the Corporation or modify or amend the terms of any outstanding Award. The Committee may not, however, amend, alter, suspend, discontinue or terminate any outstanding Award without the consent of the Participant or holder thereof, except as otherwise provided herein.

             13.              Effective Date and Term of Plan . The Plan shall become effective upon the later of its adoption by the Board or its approval by the shareholders of the Corporation. It shall continue in effect for a term of fifteen years thereafter unless sooner terminated under Section 12 of this Plan.

5 End.

EXHIBIT 21

Parent	Subsidiary	Percentage of Ownership	State of Incorporation or Organization


Citizens Community Bancorp, Inc.	Citizens Community Federal	100%	Maryland

Citizens Community Federal	N/A		United States

EXHIBIT 23.2

Wipfli LLP
515 West Prairie View Road Chippewa Falls, WI 54729
PO Box 608
Chippewa Falls, WI 54729-0608
715.723.2888
fax 715.723.0697
www.wipfli.com

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Citizens Community Bancorp
Eau Claire, Wisconsin

We consent to the use in this Registration Statement on Form SB-2 filed with the Securities and Exchange Commission and Form AC and Form H-(e)1-S filed with the Office of Thrift Supervision of our report dated May 5, 2006 on the financial statements of Citizens Community Bancorp for the years ended September 30, 2005 and 2004. We also consent to the references to us under the headings "Federal and State Tax Consequences of the Conversion", "Legal and Tax Opinions", and "Experts" in this Registration Statement on Form SB-2 and Form AC and H-(e)1-S.

Wipfli LLP
Eau Claire, Wisconsin
June 30, 2006

EXHIBIT 23.3

RP ^® FINANCIAL, LC.

Financial Services Industry Consultants

June 30, 2006

Board of Directors
Citizens Community MHC
Citizens Community Bancorp, Inc.
Citizens Community Federal
2174 EastRidge Center
Eau Claire, Wisconsin 54701

Members of the Boards of Directors:

We hereby consent to the use of our firm's name in the Form AC Application for Conversion and in the Form SB-2 Registration Statement, and any amendments thereto, for Citizens Community Bancorp, Inc. We also hereby consent to the inclusion of, summary of and references to our Appraisal and our statement concerning subscription rights in such filings including the prospectus of Citizens Community Bancorp, Inc.

Sincerely,
RP FINANCIAL, LC.

Washington Headquarters
Rosslyn Center
1700 North Moore Street, Suite 2210
Arlington, VA 22209
www.rpfinancial.com

Telephone:
Fax No.:
Toll-Free No.:
E-Mail:

(703) 528-1700
(703) 528-1788
(866) 723-0594
mail@rpfinancial.com

EXHIBIT 99.2

Back of Form

Stock Order Form Instructions

Stock Order Form Instructions:

Stock Information Center
219 Fairfax Street
Altoona, WI 54720
(715) xxx-xxxx

Hours of Operation:
Monday: 11:00 a.m. to 5:00 p.m.
Tuesday-Thursday: 8:30 a.m. to 5:00 p.m.
Friday: 8:30 a.m. to 3:30 p.m

All subscription orders are subject to the provisions of the Plan of Conversion and Reorganization.

Items 1 and 2 - Fill in the number of shares that you wish to purchase and the total payment due. The amount due is determined by multiplying the number of shares ordered by the subscription price of $10.00 per share. The minimum purchase is $250 or 25 shares of common stock. The maximum individual purchase is $500,000 or 50,000 shares of common stock. The maximum purchase for any person and their associates, or persons acting in concert, is $750,000 or 75,000 shares of the common stock sold in the offering. For additional information on purchase limitations, see "The Conversion-Limitations on Purchases of Shares" in the prospectus.

Item 3 - Payment for shares may be made by check or money order payable to Citizens Community Bancorp, Inc. DO NOT MAIL CASH. Your funds will earn interest at our regular passbook rate until the stock offering is completed.

To pay by withdrawal from a savings account or certificate of deposit at Citizens Community Federal, insert the account number(s) and the amount(s) you wish to withdraw from each account. If more than one signature is required for a withdrawal, all signatories must sign in the signature box at the bottom of the Stock Order and Certification Form. To withdraw from an account with checking privileges, please write a check. Citizens Community Federal will waive any applicable penalties for early withdrawal from a certificate of deposit account(s). A hold will be placed on the account(s) for the amount(s) you indicate to be withdrawn, which means that you may not withdraw these funds. Payments will remain in the account(s) earning their respective rate of interest until the stock offering closes.

Item 4 - Please check this box if you are a director, officer or employee of Citizens Community Federal, or an immediate family member residing in such person's household.

Item 5 - Please check the appropriate box to tell us the earliest of the dates that applies to you, or if not applicable, if you are a current stockholder of Citizens Community Bancorp, member of the local community or the general public.

Item 6 - The stock transfer industry has developed a uniform system of shareholder registrations that we will use in the issuance of Citizens Community Bancorp, Inc. common stock. Please complete this section as fully and accurately as possible, and be certain to supply your social security or tax I.D. number(s) and your daytime and evening phone numbers. We will need to call you if we cannot execute your order as given. If you have any questions regarding the registration of your stock, please consult your legal advisor or call the Stock Information Center at (715) ___-____. Subscription rights are not transferable. If you are an eligible or supplemental eligible account holder, to protect your priority over other purchasers as described in the prospectus, you must take ownership in at least one of the account holder's names.

Item 7 - Please review the preprinted qualifying account number(s) information. The account number(s) listed may not be all of your account numbers. You should list any other qualifying accounts that you may have or had with Citizens Community Federal in the box located under the heading "Additional Qualifying Accounts." These may appear on other Stock Order Forms you have received. For example, if you are ordering stock in just your name, you should list all of your deposit accounts as of the earliest date that you were a depositor. Similarly, if you are ordering stock jointly with another depositor, you should list all deposit accounts under which either of you are owners, i.e., individual accounts, joint accounts, etc. If you are ordering stock in your minor child's or grandchild's name under the Uniform Transfer to Minor's Act and/or the Uniform Gift to Minors Act , the minor must have had a deposit account on one of the two dates and you should list only their account number(s). If you are ordering stock through a corporation, you need to list just that corporation's deposit accounts, as your individual account(s) do not qualify. Failure to list all of your qualifying accounts may result in the loss of part or all of your subscription rights.

NOTE: The order form is to be received (not postmarked) at the Citizens Community Bancorp, Inc. Stock Information Center located at 219 Fairfax Street, Altoona, Wisconsin 54720 by September __, 2006 at 12:00 p.m., Eau Claire, Wisconsin time.

Please be sure to sign the Certification Form on the back of the Stock Order Form.

(See reverse side for Stock Ownership Guide)

Stock Ownership Guide

Stock Ownership Guide:

Stock Information Center
219 Fairfax Street
Altoona, WI 54720
(715) xxx-xxxx

Hours of Operation:
Monday: 11:00 a.m. to 5:00 p.m.
Tuesday-Thursday: 8:30 a.m. to 5:00 p.m.
Friday: 8:30 a.m. to 3:30 p.m

Individual - The stock is to be registered in an individual's name only. You may not list beneficiaries for this ownership.

Joint Tenants - Joint tenants with rights of survivorship identifies two or more owners. When stock is held by joint tenants with rights of survivorship, ownership automatically passes to the surviving joint tenant(s) upon the death of any joint tenant. You may not list beneficiaries for this ownership.

Tenants in Common - Tenants in common may also identify two or more owners. When stock is to be held by tenants in common, upon the death of one co-tenant, ownership of the stock will be held by the surviving co-tenant(s) and by the heirs of the deceased co-tenant. All parties must agree to the transfer or sale of shares held by tenants in common. You may not list beneficiaries for this ownership.

Individual Retirement Account - Individual retirement account ("IRA") holders may make stock purchases from their deposits through a prearranged "trustee-to-trustee" transfer. Stock may only be held in a self-directed IRA. IRAs at Citizens Community Federal are not self-directed. Please contact your broker or self-directed IRA provider as quickly as possible to explore this option. Establishing a self-directed IRA and completing a "trustee-to-trustee" transfer can frequently require several days' time.

Registration for IRAs:

On Name Line 1 - list the name of the broker or trust department followed by CUST or TRUSTEE.
On Name Line 2 - FBO (for benefit of) YOUR NAME IRA a/c#.
Address will be that of the broker/trust department to where the stock certificate will be sent.
The social security/tax I.D. number(s) will be either yours or your trustees, as they direct .
Please list your phone numbers.

Uniform Gift and Transfer To Minors Acts - For residents of Wisconsin and many states, stock may be held in the name of a custodian for the benefit of a minor under the Uniform Transfer to Minors Act . For residents in other states, stock may be held in a similar type of ownership under the Uniform Gift to Minors Act of the individual state. For either form of ownership, the minor is the actual owner of the stock with the adult custodian being responsible for the investment until the child reaches legal age. Only one custodian and one minor may be designated.

Instructions: On the first name line, print the first name, middle initial and last name of the minor, with the abbreviation followed by the notation UTMA-WI or UGMA-Other State. Print the first name, middle initial and last name of the custodian on the second name line followed by abbreviation "CUST." List only the minor's social security number .

Partnership/Corporation - Corporations/partnerships may purchase stock. Please provide the corporation/partnership's legal name and Tax I.D. number. To have depositor rights, the corporation/partnership must have an account in its legal name. Please contact the Stock Information Center to verify depositor rights and purchase limitations.

Trust - Generally, fiduciary relationships (such as trusts, estates, guardianships, etc.) are established under a form of trust agreement or pursuant to a court order. Without a legal document establishing a fiduciary relationship, your stock may not be registered in a fiduciary capacity.
Instructions: On the first name line, print the first name, middle initial and last name of the fiduciary if the fiduciary is an individual. If the fiduciary is a corporation, list the corporate title on the first name line. Following the name, print the fiduciary title such as trustee, executor, personal representative, etc. On the second name line, print the name of the maker, donor or testator or the name of the beneficiary. Following the name, indicate the type of legal document establishing the fiduciary relationship (agreement, court order, etc.). In the blank after "Under Agreement Dated," fill in the date of the document governing the relationship. The date of the document need not be provided for a trust created by a will.

(See reverse side for Stock Order Form Instructions) End.

EXHIBIT 99.3

Read This First
Office of Thrift Supervision Guidance for Accountholders

Your financial institution is in the process of selling stock to the public, in either a mutual-to-stock conversion or a stock issuance by a subsidiary of a mutual holding company. As an accountholder at this institution, you have certain priority subscription rights to purchase stock in the offering. These priority subscription rights are non-transferable. If you subscribe for stock, you will be asked to sign a statement that the purchase is for your own account, and that you have no agreement or understanding regarding the subsequent sale or transfer of any shares you receive.

On occasion, unscrupulous people attempt to persuade accountholders to transfer subscription rights, or to purchase shares in the offering based on the understanding that the shares will subsequently be transferred to others. Such arrangements violate federal regulations. If you participate in these schemes, you are breaking the law and may be subject to prosecution. If someone attempts to persuade you to participate in such a scheme, please contact Office of Thrift Supervision (OTS) at (202) 906-6202. OTS is very interested in ensuring that the prohibitions on transfer of subscription rights are not violated.

How will you know if you are being approached illegally? Typically, a fraudulent opportunist will approach you and offer to "loan" you money to purchase a significant amount of stock in the offering. In exchange for that "loan" you most likely will be asked either to transfer control of any stock purchased with that money to an account the other person controls, or sell the stock and give the majority of the profits to the other person. You may be told, untruthfully, that there is no risk to you, that the practice is common, and even if you are caught, that your legal expenses will be covered.

On the back of this page is a list of some key concepts that you should keep in mind when considering whether to participate in a mutual-to-stock conversion or stock issuance by a mutual holding company subsidiary. If you have questions, please contact the stock information center listed elsewhere in the literature you are receiving. Alternatively, you can contact us at: ombudsman@ots.treas.gov .

Next Pageg

What Investors Need to Know

Key concepts for investors to bear in mind when considering whether to participate in a conversion offering, or a stock offering by a subsidiary of a mutual holding company, include the following:

Know the Rules - By law, accountholders cannot sell or transfer their priority subscription rights, or the stock itself, prior to the completion of a financial institution's conversion. Moreover, accountholders cannot enter into agreements or arrangements to sell or transfer either their subscription rights or the underlying conversion stock.

"Neither a Borrower nor a Lender Be" - If someone offers to lend you money so that you can participate - or participate more fully - in a conversion, be extremely wary. Be even more wary if the source of the money is someone you do not know. The loan agreement may make you unable to certify truthfully that you are the true holder of the subscription rights and the true purchaser of the stock and that you have no agreements regarding the sale or transfer of the stock.

Watch Out for Opportunists - The opportunist may tell you that he or she is a lawyer - or a consultant or a professional investor or some similarly impressive tale - who has experience with similar mutual conversion transactions. The opportunist may go to extreme lengths to assure you that the arrangement you are entering into is legitimate. They might tell you that they have done scores of these transactions and that this is simply how they work. Or they might downplay the warnings or restrictions in the prospectus or order form, telling you that "everyone" enters into such agreements or that the deal they are offering is legitimate. They may also tell you that you have no risk in the transaction. The cold, hard truth is that these are lies, and if you participate, you are breaking the law.

Get the Facts from the Source - If you have any questions about the securities offering, ask the savings bank or savings association for more information. If you have any doubts about a transaction proposed to you by someone else, ask the financial institution whether the proposed arrangement is proper. You may be able to find helpful resources on the institution's website or by visiting a branch office.

The bottom line for investors is always to remember that if an opportunity sounds too good to be true, it probably is too good to be true.

Letter to Depositors and Friends

To Depositors and Friends
Of Citizens Community Federal

Keefe, Bruyette & Woods, Inc., a member of the National Association of Securities Dealers, Inc., is assisting Citizens Community Bancorp, Inc., the proposed holding company for Citizens Community Federal, in offering shares of its common stock in a subscription offering pursuant to its Plan of Conversion and Reorganization.

At the request of Citizens Community Bancorp, Inc., we are enclosing materials explaining this process and your options, including an opportunity to invest in the shares of Citizens Community Bancorp, Inc. common stock being offered to certain depositors and borrowers of Citizens Community Federal and other persons until 12:00 p.m., Eau Claire, Wisconsin Time, on September __, 2006. Please read the enclosed offering materials carefully, including the prospectus, for a complete description of the stock offering. Citizens Community Bancorp, Inc. has asked us to forward these documents to you in view of certain requirements of the securities laws in your state.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

Very truly yours,

Keefe, Bruyette & Woods, Inc.

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Members

Dear Member:

We are pleased to announce that Citizens Community MHC is converting to stock form and Citizens Community Federal is reorganizing as a wholly-owned subsidiary of a newly-formed stock holding company. In conjunction with the conversion, Citizens Community Bancorp, Inc. will serve as the new holding company for Citizens Community Federal and is offering shares of common stock in a subscription offering and community offering to certain depositors and borrowers of Citizens Community Federal, to Citizens Community Federal's Employee Stock Ownership Plan, to current stockholders of Citizens Community Bancorp. and to members of the general public in accordance with Citizens Community MHC's Plan of Conversion and Reorganization.

To accomplish the conversion, we need your participation in an important vote. Enclosed is a proxy statement describing the Plan of Conversion and Reorganization and your voting and subscription rights. The Plan of Conversion and Reorganization has been approved by the Office of Thrift Supervision ("OTS") and now must be approved by you. OTS approval does not constitute a recommendation or endorsement. YOUR VOTE IS VERY IMPORTANT.

Enclosed, as part of the proxy material, is your proxy card. This proxy card should be signed and returned to us prior to the special meeting of members on ____________, 2006. Please take a moment to sign the enclosed proxy card TODAY and return it to us in the postage-paid envelope provided. FAILURE TO VOTE HAS THE SAME EFFECT AS VOTING AGAINST THE PLAN OF CONVERSION AND REORGANIZATION.

Our Board of Directors believes that the conversion is in the best interests of our members and the existing public stockholders. Please remember:

Your deposit accounts at Citizens Community Federal will continue to be insured up to the maximum legal limit by the Federal Deposit Insurance Corporation (the "FDIC").
There will be no change in the balance, interest rate or maturity of any deposit or loan accounts because of the conversion.
You have a right, but no obligation, to buy stock before it is offered to the general public.
Like all stock, stock issued in this offering will not be insured by the FDIC.

Enclosed are materials describing the stock offering, including a Prospectus. We urge you to read the Prospectus carefully before submitting your Stock Order and Certification Form. If you are interested in purchasing common stock, we must receive your Stock Order and Certification Form and payment prior to 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Friends

Dear Friend:

We are pleased to announce that Citizens Community MHC is converting to stock form and Citizens Community Federal is reorganizing as a wholly-owned subsidiary of a newly-formed stock holding company. In conjunction with the conversion, Citizens Community Bancorp, Inc. will serve as the new holding company for Citizens Community Federal and is offering shares of common stock in a subscription offering and community offering to certain depositors and borrowers of Citizens Community Federal, to Citizens Community Federal's Employee Stock Ownership Plan, to current stockholders of Citizens Community Bancorp and to members of the general public in accordance with Citizens Community MHC's Plan of Conversion and Reorganization.

Because we believe you may be interested in learning more about Citizens Community Bancorp common stock as a potential investment, we are sending you the following materials that describe the stock offering. Please read these materials carefully before you submit a Stock Order and Certification Form.

PROSPECTUS : This document provides detailed information about our operations and the proposed stock offering.
STOCK ORDER AND CERTIFICATION FORM : This form is used to purchase stock by returning it with your payment in the enclosed business reply envelope. The deadline for ordering stock is 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

We are pleased to offer you this opportunity to become a stockholder of Citizens Community Bancorp, Inc.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Stockholders #1

(Stockholder Letter REGISTERED HOLDERS - Letter 1- Citizens Community Bancorp, Inc. letterhead)

Dear Stockholder:

We are pleased to announce that Citizens Community MHC is converting to stock form and Citizens Community Federal is reorganizing as a wholly-owned subsidiary of a newly-formed stock holding company. In conjunction with the conversion, Citizens Community Bancorp, Inc. will serve as the new holding company for Citizens Community Federal and is offering shares of common stock in a subscription offering and community offering to certain depositors and borrowers of Citizens Community Federal, to Citizens Community Federal's Employee Stock Ownership Plan, to current stockholders of Citizens Community Bancorp and to members of the general public in accordance with Citizens Community MHC's Plan of Conversion and Reorganization.

To accomplish the conversion, we need your participation in an important vote. Enclosed is a proxy statement describing the Plan of Conversion and Reorganization and your voting and subscription rights. The Plan of Conversion and Reorganization has been approved by the Office of Thrift Supervision ("OTS") and now must be approved by you. OTS approval does not constitute a recommendation or endorsement. YOUR VOTE IS VERY IMPORTANT.

Enclosed, as part of the proxy material, is your proxy card. This proxy card should be signed and returned to us prior to the special meeting of stockholders on _____________, 2006. Please take a moment to sign the enclosed proxy card TODAY and return it to us in the postage-paid envelope provided. FAILURE TO VOTE HAS THE SAME EFFECT AS VOTING AGAINST THE PLAN OF CONVERSION AND REORGANIZATION.

We have enclosed the following materials which will help you learn more about investing in Citizens Community Bancorp common stock. Please read and review the materials carefully before making an investment decision.

PROSPECTUS

STOCK ORDER AND CERTIFICATION FORM : This form is used to purchase stock by signing and returning it with your payment in the enclosed business reply envelope. The deadline for ordering stock is 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

We are inviting our customers, existing stockholders, and community members to become charter stockholders of Citizens Community Bancorp, Inc. Through this offering you have the opportunity to buy stock directly from Citizens Community Bancorp, Inc. without paying a commission or fee.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

We are pleased to offer you this opportunity to become a stockholder of Citizens Community Bancorp, Inc.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Stockholders #2

(Stockholder Letter STREET HOLDERS for PROXY mailing -letter 2- Citizens Community Bancorp, Inc. letterhead)

Dear Stockholder:

We are pleased to announce that Citizens Community MHC is converting to stock form and Citizens Community Federal is reorganizing as a wholly-owned subsidiary of a newly-formed stock holding company. In conjunction with the conversion, Citizens Community Bancorp, Inc. will serve as the new holding company for Citizens Community Federal and is offering shares of common stock in a subscription offering and community offering to certain depositors and borrowers of Citizens Community Federal, to Citizens Community Federal's Employee Stock Ownership Plan, to current stockholders of Citizens Community Bancorp and to members of the general public in accordance with Citizens Community MHC's Plan of Conversion and Reorganization.

To accomplish the conversion, we need your participation in an important vote. Enclosed is a proxy statement describing the Plan of Conversion and Reorganization and your voting and subscription rights. The Plan of Conversion and Reorganization has been approved by the Office of Thrift Supervision ("OTS") and now must be approved by you. OTS approval does not constitute a recommendation or endorsement. YOUR VOTE IS VERY IMPORTANT.

Enclosed, as part of the proxy material, is your proxy card. This proxy card should be signed and returned prior to the special meeting of shareholders on ________________, 2006. Please take a moment to sign the enclosed proxy card TODAY and return it in the postage-paid envelope provided. Please note that your broker may allow you to deliver your voting instructions via the telephone or the internet. FAILURE TO VOTE HAS THE SAME EFFECT AS VOTING AGAINST THE PLAN OF CONVERSION AND REORGANIZATION.

We have enclosed a prospectus which will help you learn more about investing in Citizens Community Bancorp, Inc. common stock. Please read and review the materials carefully before making an investment decision.

PROSPECTUS

STOCK ORDER AND CERTIFICATION FORM : This form is used to purchase stock by signing and returning it with your payment by 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006. You may obtain a Stock Order and Certification Form from your broker or by contacting the Stock Information Center.

We are inviting our customers, existing stockholders, and community members to become charter stockholders of Citizens Community Bancorp, Inc. Through this offering you have the opportunity to buy stock directly from Citizens Community Bancorp, Inc. without paying a commission or fee.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Stockholders #3

(Stockholder Letter Street holders for ORDER FORM MAILING - letter 3- Citizens Community Bancorp, Inc. Letterhead)

Dear Stockholder:

Under separate cover, we forwarded to you information regarding the Plan of Conversion and Reorganization of Citizens Community Federal and Citizens Community MHC and the concurrent offering of common stock of Citizens Community Bancorp, Inc.

As a result of certain requirements, we could not forward a Stock Order and Certification Form with the other packet of materials. It is enclosed herein along with a copy of the prospectus.

The deadline for ordering Citizens Community Bancorp, Inc. common stock is at 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Letter to Prospective Investors

Dear Prospective Investor:

We are pleased to announce that Citizens Community MHC is converting to stock form and Citizens Community Federal is reorganizing as a wholly-owned subsidiary of a newly-formed stock holding company. In conjunction with the conversion, Citizens Community Bancorp, Inc. will serve as the new holding company for Citizens Community Federal and is offering shares of common stock in a subscription offering and community offering to certain depositors and borrowers of Citizens Community Federal, to Citizens Community Federal's Employee Stock Ownership Plan, to current stockholders of Citizens Community Bancorp and to members of the general public in accordance with Citizens Community MHC's Plan of Conversion and Reorganization.

We have enclosed the following materials that will help you learn more about our stock offering. Please read and review the materials carefully before you submit a Stock Order and Certification Form.

PROSPECTUS : This document provides detailed information about our operations and the proposed stock offering.
STOCK ORDER AND CERTIFICATION FORM : This form is used to purchase stock by returning it with your payment in the enclosed business reply envelope. The deadline for ordering stock is 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

We invite our customers, local community members, and the general public to become stockholders of Citizens Community Bancorp, Inc. Through this offering you have the opportunity to buy stock directly from Citizens Community Bancorp, Inc., without paying a commission or fee.

Should you have additional questions regarding the conversion or the stock offering, please call us at (715) ___-____. Stock Information Center hours are Monday (11:00 a.m. to 5:00 p.m.), Tuesday-Thursday (8:30 a.m. to 5:00 p.m.), Friday (8:30 a.m. to 3:30 p.m.), or stop by the Stock Information Center located at 219 Fairfax Street, Altoona, WI 54720.

Sincerely,

James G. Cooley
President and Chief Executive Officer

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Proxy Gram #1

PROXY GRAM

PLEASE VOTE TODAY...

We recently sent you a proxy statement and related materials regarding a proposal to convert Citizens Community MHC to stock form and reorganize Citizens Community Federal as a subsidiary of a newly-formed holding company.

Your vote on the Plan of Conversion and Reorganization has not yet been received.

Voting for the conversion does not obligate you to purchase stock and will not affect your accounts at Citizens Community Federal or your FDIC insurance.

Not Returning Your Proxy Cards has the Same Effect as Voting
"Against" the Conversion.

Your Board of Directors Unanimously Recommends a Vote "FOR" the Conversion.

Your Vote Is Important To Us!

Please sign the enclosed proxy card and return it in the postage-paid envelope provided TODAY ! If you received more than one proxy card, please be sure to sign and return all cards you received.

Thank you,

James G. Cooley
President and Chief Executive Officer

If you have already mailed your proxy card(s), please accept our thanks and disregard this notice.
For further information call (715) xxx-xxxx.

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED BY CITIZENS COMMUNITY BANCORP, INC, CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP., THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

Proxy Gram #2

[Citizens Community Bancorp, Inc. Logo]
PLEASE VOTE TODAY...

We recently sent you a proxy statement and related materials regarding a proposal to convert Citizens Community MHC to stock form and reorganize Citizens Community Federal as a subsidiary of a newly-formed holding company.

Your vote on the Plan of Conversion and Reorganization has not yet been received.
Voting for the conversion does not obligate you to purchase stock and will not affect your accounts or loans at Citizens Community Federal or your FDIC insurance.
Not returning your proxy cards has the same effect as voting "against" the conversion.
Your Board of Directors unanimously recommends a vote "FOR" the conversion.

Our Reasons for the Corporate Change

Structure our business in a form that will provide access to capital markets
Support future lending and operational growth
Enhance our ability to attract and retain qualified directors and management through stock-based compensation plans
Support future branching activities and/or the acquisition of other financial institutions or financial services companies or their assets
Create a more liquid and active market than currently exists for Citizens Community Bancorp common stock
Increase our capital, which will make us stronger

Your Vote Is Important To Us!
Please vote and sign the enclosed proxy card and return it in the postage-paid envelope provided TODAY ! If you received more than one proxy card, please be sure to vote, sign and return all cards you received.

Thank you,

James G. Cooley
President and Chief Executive Officer

If you have already mailed your proxy card(s), please accept our thanks and disregard this notice.
For further information call (715) xxx-xxxx

The Board of Directors of Citizens Community Federal, Citizens Community Bancorp and Citizens Community MHC (the "MHC") unanimously adopted a Plan of Conversion and Reorganization (the "Plan") to convert the MHC to stock form and reorganize Citizens Community Federal as a wholly-owned subsidiary of a newly-formed corporation named Citizens Community Bancorp, Inc. (the "Conversion").

This brochure answers some of the most frequently asked questions about the Plan and about your opportunity to invest in Citizens Community Bancorp, Inc.

Investment in the shares of common stock involves certain risks. For a discussion of these risks, other factors and a complete description of the stock offering, investors are urged to read the accompanying Prospectus, especially the discussion under the heading "Risk Factors."

Why is Citizens Community MHC converting to the stock holding company structure?

Structure our business in a form that will provide access to capital markets;
Support future lending and operational growth;
Enhance our ability to attract and retain qualified directors and management through stock-based compensation plans;
Support future branching activities and/or the acquisition of other financial institutions or financial services companies or their assets;
Create a more liquid and active market than currently exists for Citizens Community Bancorp's common stock; and
Increase our capital, which will make us stronger.

Will the Plan affect any of my deposit accounts or loans?

No. The Plan will not affect the balance or terms of any savings account or loan, and your deposits will continue to be federally insured by the Federal Deposit Insurance Corporation (the "FDIC") to the maximum legal limit. Your savings account is not being converted to stock.

Who is eligible to purchase stock in the subscription offering and direct community offering?

Certain depositors and borrowers of Citizens Community Federal as of certain dates, the Bank's Employee Stock Ownership Plan, certain members of the general public and Citizens Community Bancorp's stockholders, subject to the priorities described in the Prospectus.

How many shares of stock are being offered and at what price?

Citizens Community Bancorp, Inc. is offering up to___________ shares of common stock, subject to adjustment up to ___________shares, at a price of $10.00 per share.

I am an existing stockholder. How will my stock be treated?

The outstanding public shares of common stock will be exchanged for shares of common stock of the new company. Depending upon how many shares are sold in the offering, each public share of common stock will be converted into _______ to _____ shares of the new company's common stock.

How many shares may I buy?

The minimum order is 25 shares. No person may purchase more than 50,000 shares of common stock. No person with associates or persons acting in concert, may purchase more than 75,000 shares of common stock sold in the offering.

Do members have to buy shares of stock?

No. However, if a member of the MHC is also a current public stockholder, his or her existing shares

of stock will be converted automatically into shares of the new company's common stock.

How do I order shares?

You must complete the enclosed Stock Order and Certification Form. Instructions for completing your Stock Order and Certification Form are contained in this packet. Your order must be received by 12:00 p.m., Eau Claire, Wisconsin time, on September __, 2006.

How may I pay for my shares?

First, you may pay by check, cash or money order. Interest will be paid by Citizens Community Federal on these funds at the current passbook rate from the day the funds are received until the completion or termination of the Conversion. Second, you may authorize us to withdraw funds from your Citizens Community Federal account or certificate of deposit for the amount of funds you specify for payment. You will not have access to these funds from the day we receive your order until completion or termination of the Conversion. Citizens Community Federal will waive any early withdrawal penalties on certificate of deposit accounts used to purchase stock.

Can I purchase shares using funds in my Citizens Community Federal IRA account?

Federal regulations do not permit the purchase of common stock in connection with the stock issuance from your existing Citizens Community Federal IRA account. In order to utilize the funds in your Citizens Community Federal IRA account for the purchase of Citizens Community Bancorp, Inc. common stock, you must execute a trustee-to-trustee transfer with a self-directed IRA provider. Please contact your broker or self-directed IRA provider as soon as possible if you want to explore this option.

Will the stock be insured?

No. Like any other stock, Citizens Community Bancorp, Inc.'s shares of common stock will not be insured.

Will dividends be paid on the stock?

After the conversion, Citizens Community Bancorp, Inc. intends to pay a regular dividend, however, there can be no assurance as to the precise amount or frequency of the dividend. The payment of a dividend will depend on a number of factors including our capital requirements, our financial condition and results of operations, tax considerations, statutory and regulatory limitations, industry standards, and general economic conditions. No assurance can be given that we will pay dividends in the future.

How will the stock be traded?

We have applied for approval from Nasdaq to have Citizens Community Bancorp, Inc.'s common stock quoted on the Nasdaq National Market under the symbol "CZWI".

Must I pay a commission?

No. You will not be charged a commission or fee on the purchase of shares of common stock in the Conversion.

Should I vote?

Yes. Your vote is very important! We recommend a vote "FOR" the Plan. A failure to vote has the same effect as a vote against the Plan. Also, your voting for the Plan does not obligate you to buy stock in the Conversion.

PLEASE VOTE, SIGN AND RETURN ALL PROXY CARDS AT YOUR EARLIEST CONVENIENCE!

Why did I get several proxy cards?

If you have more than one account, you could receive more than one proxy card for the MHC's Special Meeting of Members, depending on the ownership structure of your accounts. If you own shares of common stock of Citizens Community Bancorp in more than one account, you could receive more than one proxy card for the Special Meeting of Stockholders.

How many votes do I have?

Your proxy card(s) show(s) the number of votes you have. Every depositor member of the MHC

(depositor of Citizens Community Federal) entitled to vote may cast one vote for each $100, or fraction thereof, on deposit at Citizens Community Federal as of the voting record date, up to a maximum of 1,000 votes. Each stockholder will also be entitled to cast one vote for each share held as of the voting record date.

May I vote in person at the special meeting of members and/or the meeting of stockholders?

Yes, but we would still like you to sign and mail your proxy today. If you decide to revoke your proxy you may do so by giving notice at the appropriate meeting.

FOR ADDITIONAL INFORMATION YOU MAY CALL OUR STOCK INFORMATION CENTER.

Citizens Community Bancorp, Inc.
Stock Information Center
(715) xxx-xxxx
219 Fairfax Street
Altoona, WI 54720

Hours:

Monday: 11:00 a.m. to 5:00 p.m.

Tuesday-Thursday: 8:30 a.m. to 5:00 p.m.

Friday: 8:30 a.m. to 3:30 p.m.

STOCK OFFERING
QUESTIONS AND ANSWERS

(LOGO)

Citizens Community Bancorp, Inc.
(The Proposed Holding Company for Citizens Community Federal)

THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED OR GUARANTEED BY CITIZENS COMMUNITY BANCORP, INC., CITIZENS COMMUNITY FEDERAL, CITIZENS COMMUNITY MHC, CITIZENS COMMUNITY BANCORP, THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY. THIS IS NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY COMMON STOCK. THE OFFER IS MADE ONLY BY THE PROSPECTUS.

End.