PART I |
5
|
|
ITEM 1. BUSINESS
|
5
|
|
ITEM 1A. RISK FACTORS
|
7
|
|
ITEM 1B. UNRESOLVED STAFF COMMENTS
|
11
|
|
ITEM 2. PROPERTIES
|
12 | |
ITEM 3. LEGAL PROCEEDINGS
|
15
|
|
ITEM 4. [REMOVED AND RESERVED]
|
15
|
|
PART II |
15
|
|
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES
OF EQUITY SECURITIES
|
15
|
|
ITEM 6. SELECTED FINANCIAL DATA
|
16 | |
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
18
|
|
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
|
37
|
|
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
40
|
|
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
72
|
|
ITEM 9A(T). CONTROLS AND PROCEDURES
|
72
|
|
ITEM 9B. OTHER INFORMATION
|
72
|
|
PART III |
73
|
|
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
73
|
|
ITEM 11. EXECUTIVE COMPENSATION
|
73
|
|
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER
MATTERS
|
73
|
|
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
73
|
|
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
|
74
|
|
PART IV |
74
|
|
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
|
74
|
Lease
|
Net Book Value
|
|||||
Owned or
|
Expiration
|
at September 30, 2010
|
||||
Location
|
Leased
|
Date
|
(in thousands)
|
|||
ADMINISTRATIVE OFFICES:
|
||||||
2174 EastRidge Center
|
Lease
|
April 30, 2012
|
||||
Eau Claire, WI 54701
|
||||||
BRANCH OFFICES
|
||||||
Appleton Branch (4)
|
Lease
|
January 31, 2014
|
||||
3701 E Calumet Street
|
||||||
Appleton, WI 54915
|
||||||
Black River Falls Branch (4)
|
Lease
|
January 31, 2014
|
||||
611 Highway 54 East
|
||||||
Black River Falls, WI 54615
|
||||||
Chippewa Falls Branch (2)
|
Owned
|
N/A
|
$ 328
|
|||
427 W Prairie View Road
|
||||||
Chippewa Falls, WI 54729
|
||||||
Chippewa Falls Branch (2)
|
Lease
|
January 31, 2016
|
||||
2786 Commercial Boulevard
|
||||||
Chippewa Falls, WI 54729
|
||||||
Eastside Branch
|
Owned
|
N/A
|
$ 290
|
|||
1028 N Hillcrest Parkway
|
||||||
Altoona, WI 54720
|
||||||
Fairfax Branch
|
Owned
|
N/A
|
$ 756
|
|||
219 Fairfax Street
|
||||||
Altoona, WI 54720
|
||||||
Fond du Lac Branch (4)
|
Lease
|
January 31, 2014
|
||||
377 N Rolling Meadows Dr
|
||||||
Fond du Lac, WI 54936
|
||||||
Mondovi Branch (4)
|
Lease
|
June 30, 2011
|
||||
695 E Main Street
|
||||||
Mondovi, WI 54755
|
||||||
Oshkosh Branch (4)
|
Lease
|
January 31, 2014
|
||||
351 S Washburn Street
|
||||||
Oshkosh, WI 54904
|
Lease
|
Net Book Value
|
|||||
Owned or
|
Expiration
|
at September 30, 2010
|
||||
Location
|
Leased
|
Date
|
(in thousands)
|
|||
Rice Lake Branch (4)
|
Lease
|
May 10, 2013
|
||||
2501 West Avenue
|
||||||
Rice Lake, WI 54868
|
||||||
Westside Branch
|
Owned
|
N/A
|
$ 270
|
|||
2125 Cameron Street
|
||||||
Eau Claire, WI 54703
|
||||||
Wisconsin Dells Branch (4)
|
Lease
|
January 31, 2014
|
||||
130 Commerce Street
|
||||||
Wisconsin Dells, WI 53965
|
||||||
Lake Orion Branch (1)
|
Lease
|
February 28, 2012
|
||||
688 S. LaPeer Road
|
||||||
Lake Orion, MI 48362
|
||||||
Rochester Hills Branch
|
Owned
|
N/A
|
$ 445
|
|||
310 W Tienken Road
|
||||||
Rochester Hills, MI 48306
|
||||||
Brooklyn Park Branch (4)
|
Lease
|
January 31, 2014
|
||||
8000 Lakeland Avenue
|
||||||
Brooklyn Park, MN 55445
|
||||||
Faribault Branch (4)
|
Lease
|
January 31, 2014
|
||||
150 Western Avenue
|
||||||
Faribault, MN 55021
|
||||||
Hutchinson Branch (4)
|
Lease
|
January 31, 2014
|
||||
1300 Trunk Highway 15 S
|
||||||
Hutchinson, MN 55350
|
||||||
Mankato Branch (3)
|
Lease
|
October 30,2010
|
||||
1410 Madison Ave
|
||||||
Mankato, MN 56001
|
||||||
Oakdale Branch
|
Lease
|
September 30, 2014
|
||||
7035 10
th
Street North
|
||||||
Oakdale, MN 55128
|
||||||
Red Wing Branch (4)
|
Lease
|
March 3, 2013
|
||||
295 Tyler Road S
|
||||||
Red Wing, MN 55066
|
High
|
Low
|
Cash dividends
per share
|
||||||||||
Fiscal 2010
|
||||||||||||
First Quarter (three months ended December 31, 2009)
|
$ | 4.64 | $ | 3.01 | $ | - | ||||||
Second Quarter (three months ended March 31, 2010)
|
$ | 4.83 | $ | 3.35 | $ | - | ||||||
Third Quarter (three months ended June 30, 2010)
|
$ | 5.30 | $ | 3.71 | $ | - | ||||||
Fourth Quarter (three months ended September 30, 2010)
|
$ | 4.49 | $ | 3.51 | $ | - | ||||||
Fiscal 2009
|
||||||||||||
First Quarter (three months ended December 31, 2008)
|
$ | 7.41 | $ | 5.80 | $ | 0.05 | ||||||
Second Quarter (three months ended March 31, 2009)
|
$ | 7.39 | $ | 5.85 | $ | 0.05 | ||||||
Third Quarter (three months ended June 30, 2009)
|
$ | 6.50 | $ | 5.27 | $ | 0.05 | ||||||
Fourth Quarter (three months ended September 30, 2009)
|
$ | 6.38 | $ | 4.75 | $ | 0.05 |
Year ended September 30,
(dollars in thousands, except per share data)
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Selected Results of Operations Data:
|
||||||||||||||||||||
Interest income
|
$ | 32,759 | $ | 30,940 | $ | 26,734 | $ | 19,346 | $ | 15,311 | ||||||||||
Interest expense
|
11,579 | 14,688 | 14,139 | 8,889 | 7,221 | |||||||||||||||
Net interest income
|
21,180 | 16,252 | 12,595 | 10,457 | 8,090 | |||||||||||||||
Provision for loan losses
|
6,901 | 1,369 | 721 | 470 | 251 | |||||||||||||||
Net interest income after povision for loan losses
|
14,279 | 14,883 | 11,874 | 9,987 | 7,839 | |||||||||||||||
Fees and service charges
|
1,876 | 1,640 | 1,352 | 1,262 | 1,243 | |||||||||||||||
Other gains (losses), net
|
(2,261 | ) | (7,236 | ) | - | - | 27 | |||||||||||||
Goodwill impairment
|
(5,593 | ) | - | - | - | - | ||||||||||||||
Other non-interest income
|
227 | 366 | 357 | 464 | 387 | |||||||||||||||
Non-interest income (loss)
|
(5,751 | ) | (5,230 | ) | 1,709 | 1,726 | 1,657 | |||||||||||||
Non-interest expense
|
16,574 | 14,925 | 11,101 | 10,522 | 8,741 | |||||||||||||||
Income (loss) before provision (benefit) for income taxes
|
(8,046 | ) | (5,272 | ) | 2,482 | 1,191 | 755 | |||||||||||||
Income tax provision (benefit)
|
(955 | ) | (2,089 | ) | 1,008 | 448 | 309 | |||||||||||||
Net income (loss
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 | $ | 743 | $ | 446 | ||||||||
Per Share Data: (1)
|
||||||||||||||||||||
Net income (loss) per share (basic)
(1)
|
$ | (1.39 | ) | $ | (0.59 | ) | $ | 0.24 | $ | 0.11 | $ | 0.06 | ||||||||
Net income (loss) per share (diluted)
(1)
|
$ | (1.39 | ) | $ | (0.59 | ) | $ | 0.24 | $ | 0.11 | $ | 0.06 | ||||||||
Cash dividends per common share
|
$ | - | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.20 | ||||||||||
Book value per share at end of period
|
$ | 9.75 | $ | 10.12 | $ | 11.00 | $ | 10.98 | $ | 8.03 |
Year ended September 30,
(dollars in thousands, exept per share data)
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Selected Financial Condition Data:
|
||||||||||||||||||||
Total assets
|
594,365 | 575,406 | 480,036 | 386,113 | 283,990 | |||||||||||||||
Securities available for sale
|
41,708 | 56,215 | 61,776 | 39,592 | 782 | |||||||||||||||
Total loans (net of unearned income)
|
456,232 | 442,470 | 369,710 | 320,953 | 259,302 | |||||||||||||||
Total deposits
|
476,302 | 409,311 | 297,243 | 207,734 | 186,711 | |||||||||||||||
Short-term borrowings
(2)
|
33,800 | 42,605 | 23,395 | 60,696 | 55,858 | |||||||||||||||
Other borrowings
(2)
|
64,200 | 106,805 | 110,245 | 96,446 | 61,200 | |||||||||||||||
Total shareholders' equity
|
49,877 | 55,365 | 68,476 | 78,149 | 30,082 | |||||||||||||||
Performance Ratios:
|
||||||||||||||||||||
Return on average assets
|
(1.21 | %) | (0.60 | %) | 0.34 | % | 0.22 | % | 0.17 | % | ||||||||||
Return on average total shareholders' equity
|
(13.48 | %) | (5.18 | %) | 2.00 | % | 1.09 | % | 1.50 | % | ||||||||||
Net interest margin
(3)
|
3.84 | % | 3.28 | % | 3.02 | % | 3.77 | % | 3.54 | % | ||||||||||
Net interest spread
(3)
|
||||||||||||||||||||
Average during period
|
3.70 | % | 2.98 | % | 2.44 | % | 3.07 | % | 3.28 | % | ||||||||||
End of period
|
4.39 | % | 3.53 | % | 3.31 | % | 3.05 | % | 3.11 | % | ||||||||||
Net overhead ratio
(4)
|
3.82 | % | 3.82 | % | 2.17 | % | 2.63 | % | 2.67 | % | ||||||||||
Average loan-to-average deposit ratio
|
105.32 | % | 116.97 | % | 137.7 | % | 144.65 | % | 127.9 | % | ||||||||||
Average interest-bearing assets to average interest-
bearing liabilities
|
1.07 | % | 1.10 | % | 1.17 | % | 1.24 | % | 1.09 | % | ||||||||||
Efficiency ratio
(5)
|
71.18 | % | 81.74 | % | 77.61 | % | 86.37 | % | 89.68 | % | ||||||||||
Asset Quality Ratios:
|
||||||||||||||||||||
Non-performing loans to total loans
(6)
|
1.11 | % | 1.31 | % | 0.88 | % | 0.47 | % | 0.54 | % | ||||||||||
Allowance for loan losses to:
|
||||||||||||||||||||
Total loans (net of unearned income)
|
0.91 | % | 0.44 | % | 0.32 | % | 0.29 | % | 0.32 | % | ||||||||||
Non-performing loans
|
81.53 | % | 33.25 | % | 36.62 | % | 60.92 | % | 60.07 | % | ||||||||||
Net charge-offs to average loans
|
1.03 | % | 0.16 | % | 0.13 | % | 0.13 | % | 0.09 | % | ||||||||||
Non-performing assets to total assets
|
0.93 | % | 1.12 | % | 0.68 | % | 0.43 | % | 0.63 | % | ||||||||||
Capital Ratios:
|
||||||||||||||||||||
Shareholders' equity to assets
(7)
|
8.39 | % | 9.62 | % | 14.26 | % | 20.24 | % | 10.59 | % | ||||||||||
Average equity to average assets
(7)
|
9.00 | % | 11.82 | % | 17.04 | % | 21.42 | % | 11.26 | % | ||||||||||
Tier 1 capital (leverage ratio)
(8)
|
8.9 | % | 8.9 | % | 9.6 | % | 11.5 | % | 7.2 | % | ||||||||||
Total risk-based capital
(8)
|
11.0 | % | 9.6 | % | 15.3 | % | 18.0 | % | 11.0 | % |
● |
Net interest income and net interest margin improved in 2010, as the rates paid on interest bearing liabilities decreased at a greater rate than the decrease in rates on our interest earning assets, thereby increasing our interest rate spread.
|
|
● |
Net interest income was $21,180 for 2010, an increase of $4,928, or 30.3% from $16,252 for 2009. Interest income increased to $32,759 from $30,940, or 5.9% from 2009 to 2010. Meanwhile, interest expense of $11,579 during 2010 decreased from $14,688, or (21.2%) during 2009.
|
|
● |
The net interest margin for 2010 was 3.84% compared to 3.28% for 2009. The 56 basis point (“bp”) increase largely resulted from a 72 bp increase in interest rate spread caused by a 30 bp decrease in the return on interest earning assets, which was more than offset by a 102 bp decrease in the cost in interest-bearing liabilities.
|
|
● |
Total loans were $456,232 at September 30, 2010, an increase of $13,762, or 3.11% from September 30, 2009. Total deposits were $476,302 at September 30, 2010, an increase of $66,991, or 16.4% from year-end 2009.
|
|
● |
Loan charge-offs increased significantly from a year ago. Net charge-offs were $4,681, an increase of $4,045 compared to $636 for 2009. Increased charge-offs, along with increases in delinquency rates and non-performing loans led to significantly increased provision for loan losses of $6,901 for 2010 compared to $1,369 for 2009. Net loan charge-offs represented 1.04% of average loans outstanding in 2010, compared to 0.16% in 2009.
|
|
● |
Non-interest income (loss), which includes valuation losses, was ($5,751) for 2010, compared to ($5,230) in 2009, an increase of $521, or 10.0%. OTTI losses on securities decreased from ($7,236) in 2009 to ($2,261) in 2010.
However, in 2010, based on the estimated enterprise value of the Company, we recorded impairment losses for the entire $5,593 balance of goodwill.
|
|
● |
Non-interest expense was $16,574, an increase of $1,649 over 2009. This was primarily a result of increases in expenses related to increased compensation and professional services costs and increased occupancy costs resulting from branch openings in 2009.
|
|
● |
We recognized tax benefits of ($955) and ($2,089) for 2010 and 2009, respectively.
|
● | The length of time, and extent to which, the fair value has been less than the amortized cost. | |
● | Adverse conditions specifically related to the security, industry or geographic area. | |
● | The historical and implied volatility of the fair value of the security. | |
● | The payment structure of the debt security and the likelihood of the issuer or underlying borrowers being able to make payments that may increase in the future. | |
● | The failure of the issuer of the security or the underlying borrowers to make scheduled interest or principal payments. | |
● | Any changes to the rating of the security by a rating agency. | |
● | Recoveries or additional declines in fair value subsequent to the balance sheet date. | |
Interest income on securities for which other-than-temporary impairment has been recognized in earnings is recognized at a rate commensurate with the expected future cash flows and amortized cost basis of the securities after the impairment. | ||
Gains and losses on the sale of securities are recorded on the trade date and determined using the specific-identification method. |
● | Obtaining individual loan level data directly from servicers and trustees, and making assumptions regarding the frequency of foreclosure, loss severity and conditional prepayment rate (both the entire pool and the loan group pertaining to the bond we hold). | |
● | Projecting cash flows based on these assumptions and stressing the cash flows under different time periods and requirements based on the class structure and credit enhancement features of the bond we hold. | |
● | Identifying various price/yield scenarios based on the Bank’s book value and valuations based on both hold-to-maturity and current free market trade scenarios. Discount rates were determined based on the volatility and complexity of the security and the yields demanded by buyers in the market at the time of the valuation. |
Year ended September 30, 2010
|
Year ended September 30, 2009
|
Year ended September 30, 2008
|
||||||||||||||||||||||||||||||||||
Average
Outstanding
Balance
|
Interest
Income/
Expense
|
Average
Yield/
Rate
|
Average
Outstanding
Balance
|
Interest
Income/
Expense
|
Average
Yield/
Rate
|
Average
Outstanding
Balance
|
Interest
Income/
Expense
|
Average
Yield/
Rate
|
||||||||||||||||||||||||||||
Average interest-earning assets:
|
||||||||||||||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 43,941 | $ | 21 | 0.05 | % | $ | 23,769 | $ | 27 | 0.11 | % | $ | 13,445 | $ | 277 | 2.06 | % | ||||||||||||||||||
Loans
|
452,696 | 29,610 | 6.54 | % | $ | 404,335 | $ | 27,007 | 6.68 | % | $ | 344,654 | $ | 23,129 | 6.71 | % | ||||||||||||||||||||
Interest-bearing deposits
|
665 | 12 | 1.80 | % | $ | 3,894 | $ | 119 | 3.06 | % | $ | 371 | $ | 7 | 1.89 | % | ||||||||||||||||||||
Securities available for sale
|
48,455 | 3,116 | 6.43 | % | $ | 57,995 | $ | 3,787 | 6.53 | % | $ | 53,417 | $ | 3,320 | 6.22 | % | ||||||||||||||||||||
FHLB stock
|
5,982 | - | 0.00 | % | $ | 5,865 | $ | - | 0.00 | % | $ | 5,420 | $ | - | 0.00 | % | ||||||||||||||||||||
Total interest earning assets
|
$ | 551,739 | $ | 32,759 | 5.94 | % | $ | 495,857 | $ | 30,940 | 6.24 | % | $ | 417,307 | $ | 26,733 | 6.41 | % | ||||||||||||||||||
Average interest-bearing liabilities:
|
||||||||||||||||||||||||||||||||||||
Savings Accounts
|
$ | 25,812 | $ | 165 | 0.64 | % | $ | 23,162 | $ | 192 | 0.83 | % | $ | 21,091 | $ | 172 | 0.82 | % | ||||||||||||||||||
Demand deposits
|
21,983 | 29 | 0.13 | % | $ | 19,805 | $ | 28 | 0.14 | % | $ | 18,711 | $ | 26 | 0.14 | % | ||||||||||||||||||||
Money Market
|
153,045 | 2,485 | 1.62 | % | $ | 81,922 | $ | 1,948 | 2.38 | % | $ | 31,711 | $ | 717 | 2.26 | % | ||||||||||||||||||||
CD's
|
209,723 | 5,202 | 2.48 | % | $ | 205,291 | $ | 7,446 | 3.63 | % | $ | 166,758 | $ | 7,716 | 4.63 | % | ||||||||||||||||||||
IRA's
|
19,270 | 503 | 2.61 | % | $ | 15,487 | $ | 544 | 3.51 | % | $ | 12,016 | $ | 507 | 4.22 | % | ||||||||||||||||||||
Total deposits
|
429,833 | 8,384 | 1.95 | % | 345,666 | 10,158 | 2.94 | % | 250,287 | 9,138 | 3.65 | % | ||||||||||||||||||||||||
FHLB Advances
|
88,173 | 3,195 | 3.62 | % | 105,169 | 4,530 | 4.31 | % | 105,699 | 5,001 | 4.73 | % | ||||||||||||||||||||||||
Total interest bearing deposits
|
$ | 518,006 | $ | 11,579 | 2.24 | % | $ | 450,835 | $ | 14,688 | 3.26 | % | $ | 355,986 | $ | 14,139 | 3.97 | % | ||||||||||||||||||
Net interest income
|
$ | 21,180 | $ | 16,252 | $ | 12,594 | ||||||||||||||||||||||||||||||
Interest rate spread
|
3.70 | % | 2.98 | % | 2.43 | % | ||||||||||||||||||||||||||||||
Net interest margin
|
3.84 | % | 3.28 | % | 3.02 | % | ||||||||||||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities
|
1.07 | 1.10 | 1.17 |
Year ended September 30,
2010 v. 2009
Increase (decrease) due to
|
Year ended September 30,
2009 v. 2008
Increase (decrease) due to
|
||||||||||||||||||||||||
Volume (1)
|
Rate (1)
|
Total
Increase/
(Decrease)
|
Volume (1) |
Rate (1)
|
Total
Increase/
(Decrease)
|
||||||||||||||||||||
Interest income: | |||||||||||||||||||||||||
Cash and cash equivalents
|
$ | 17 | $ | (23 | ) | $ | (6 | ) | $ | 149 | $ | (400 | ) | $ | (251 | ) | |||||||||
Loans receivable
|
3,174 | (571 | ) | 2,603 | $ | 3,987 | $ | (109 | ) | 3,878 | |||||||||||||||
Interest-bearing deposits
|
(61 | ) | (46 | ) | (107 | ) | $ | 91 | $ | 21 | 112 | ||||||||||||||
Securities available for sale
|
(619 | ) | (52 | ) | (671 | ) | $ | 296 | $ | 171 | 467 | ||||||||||||||
FHLB stock
|
- | - | - | $ | - | $ | - | - | |||||||||||||||||
Total interest earning assets
|
$ | 2,511 | $ | (692 | ) | $ | 1,819 | $ | 4,523 | $ | (317 | ) | $ | 4,206 |
Interest expense:
|
||||||||||||||||||||||||
Savings Accounts
|
$ | 20 | $ | (47 | ) | $ | (27 | ) | $ | 17 | $ | 3 | $ | 20 | ||||||||||
Demand deposits
|
3 | (2 | ) | 1 | 2 | - | 2 | |||||||||||||||||
Money Market
|
1,372 | (835 | ) | 537 | 1,192 | 39 | 1,231 | |||||||||||||||||
CD's
|
158 | (2,402 | ) | (2,244 | ) | 1,584 | (1,854 | ) | (270 | ) | ||||||||||||||
IRA's
|
118 | (159 | ) | (41 | ) | 131 | (94 | ) | 37 | |||||||||||||||
Total deposits
|
1,671 | (3,445 | ) | (1,774 | ) | 2,926 | (1,906 | ) | 1,020 | |||||||||||||||
FHLB Advances
|
(668 | ) | (667 | ) | (1,335 | ) | (25 | ) | (446 | ) | (471 | ) | ||||||||||||
Total interest bearing deposits
|
1,003 | (4,112 | ) | (3,109 | ) | 2,901 | (2,352 | ) | 549 | |||||||||||||||
Net interest income
|
$ | 1,508 | $ | 3,420 | $ | 4,928 | $ | 1,622 | $ | 2,035 | $ | 3,657 |
Twelve months ended
September 30,
|
Change:
|
|||||||||||||||||||
2010 | 2009 | 2008 |
2010 over
2009
|
2009 over
2008
|
||||||||||||||||
Noninterest Income (loss):
|
||||||||||||||||||||
Net impairment losses recognized in earnings
|
$ | (2,261 | ) | $ | (7,236 | ) | $ | - | (68.75 | %) | n/a | |||||||||
Goodwill impairment
|
(5,593 | ) | - | - | n/a | n/a | ||||||||||||||
Service charges on deposit accounts
|
1,514 | 1,361 | 1,069 | 11.24 | % | 27.32 | % | |||||||||||||
Insurance commissions
|
216 | 355 | 344 | (39.15 | %) | 3.20 | % | |||||||||||||
Loan fees and service charges
|
362 | 279 | 283 | 29.75 | % | (1.41 | %) | |||||||||||||
Other
|
11 | 11 | 13 | 0.00 | % | (15.38 | %) | |||||||||||||
Total non-interest income (loss)
|
$ | (5,751 | ) | $ | (5,230 | ) | $ | 1,709 | 9.96 | % | (406.03 | %) |
Years ended
September 30,
|
Change: | |||||||||||||||||||
2010 | 2009 | 2008 |
2010 over
2009
|
2009 over
2008
|
||||||||||||||||
Non-interest Expense:
|
||||||||||||||||||||
Salaries and related benefits
|
$ | 7,797 | $ | 7,263 | $ | 5,857 | 7.35 | % | 24.01 | % | ||||||||||
Occupancy - net
|
2,553 | 2,203 | 1,313 | 15.89 | % | 67.78 | % | |||||||||||||
Office
|
1,413 | 1,515 | 1,133 | (6.73 | %) | 33.72 | % | |||||||||||||
Data processing
|
308 | 396 | 359 | (22.22 | %) | 10.31 | % | |||||||||||||
Amortization of core deposit
|
333 | 333 | 307 | 0.00 | % | 8.47 | % | |||||||||||||
Advertising, marketing and public relations
|
173 | 242 | 148 | (28.51 | %) | 63.51 | % | |||||||||||||
FDIC premium assessment
|
943 | 962 | 176 | (1.98 | %) | 446.59 | % | |||||||||||||
Professional services
|
1,160 | 728 | 589 | 59.34 | % | 23.60 | % | |||||||||||||
Other
|
1,894 | 1,283 | 1,219 | 47.62 | % | 5.25 | % | |||||||||||||
Total non-interest expense
|
$ | 16,574 | $ | 14,925 | $ | 11,101 | 11.05 | % | 34.45 | % | ||||||||||
Non-interest expense / Average assets
|
2.83 | % | 2.83 | % | 2.56 | % |
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||||
Amount |
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
Real Estate Loans:
|
||||||||||||||||||||||||||||||||||||||||
One to four-family first mortages
|
$ | 254,821 | 55.9 | % | $ | 230,412 | 52.1 | % | $ | 193,958 | 52.5 | % | $ | 177,281 | 55.2 | % | $ | 156,235 | 60.3 | % | ||||||||||||||||||||
Second mortgages
|
7,674 | 1.7 | % | 9,639 | 2.2 | % | 10,774 | 2.9 | % | 10,461 | 3.3 | % | 9,161 | 3.5 | % | |||||||||||||||||||||||||
Multi-family and commercial
|
196 | 0.0 | % | 174 | 0.0 | % | 180 | 0.0 | % | 215 | 0.1 | % | 240 | 0.1 | % | |||||||||||||||||||||||||
Total real estate loans
|
$ | 262,691 | 57.6 | % | $ | 240,225 | 54.3 | % | $ | 204,912 | 55.4 | % | $ | 187,957 | 58.6 | % | $ | 165,636 | 63.9 | % | ||||||||||||||||||||
Consumer Loans:
|
||||||||||||||||||||||||||||||||||||||||
Automobile (1)
|
18,542 | 4.1 | % | 24,875 | 5.6 | % | 25,887 | 7.0 | % | 27,168 | 8.5 | % | 24,445 | 9.4 | % | |||||||||||||||||||||||||
Other secured personal loans (2)
|
171,135 | 37.5 | % | 172,040 | 38.9 | % | 133,181 | 36.0 | % | 100,966 | 31.5 | % | 64,384 | 24.8 | % | |||||||||||||||||||||||||
Unsecured personal loans (3)
|
4,636 | 1.0 | % | 5,655 | 1.3 | % | 5,797 | 1.6 | % | 4,610 | 1.4 | % | 4,774 | 1.8 | % | |||||||||||||||||||||||||
Total real consumer loans
|
$ | 194,313 | 42.6 | % | $ | 202,570 | 45.8 | % | $ | 164,865 | 44.6 | % | $ | 132,744 | 41.4 | % | $ | 93,603 | 36.1 | % | ||||||||||||||||||||
Gross loans
|
$ | 457,004 | $ | 442,795 | $ | 369,777 | $ | 320,701 | $ | 259,239 | ||||||||||||||||||||||||||||||
Net deferred loan costs
|
$ | (772 | ) | (0.2 | %) | $ | (325 | ) | (0.1 | %) | $ | (67 | ) | (0.0 | %) | $ | 252 | 0.1 | % | $ | 63 | 0.0 | % | |||||||||||||||||
Total loans (net of unearned income)
|
$ | 456,232 | 100.0 | % | $ | 442,470 | 100.0 | % | $ | 369,710 | 100.0 | % | $ | 320,953 | 100.0 | % | $ | 259,302 | 100.0 | % | ||||||||||||||||||||
Allowance for loan losses
|
$ | (4,145 | ) | $ | (1,925 | ) | $ | (1,192 | ) | $ | (926 | ) | $ | (835 | ) | |||||||||||||||||||||||||
Total loans receivable, net
|
$ | 452,087 | $ | 440,545 | $ | 368,518 | $ | 320,027 | $ | 258,467 |
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||||||||||||||||||||||
Amount |
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
Amount
|
Percent
|
|||||||||||||||||||||||||||||||
Fixed Rate Loans:
|
||||||||||||||||||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||||||||||||||||||
One to four-family first mortages
|
$ | 252,268 | 55.3 | % | $ | 226,856 | 51.3 | % | $ | 189,247 | 51.2 | % | $ | 170,127 | 53.0 | % | $ | 148,211 | 57.2 | % | ||||||||||||||||||||
Second mortgages
|
7,200 | 1.6 | % | 9,186 | 2.1 | % | 10,373 | 2.8 | % | 9,989 | 3.1 | % | 8,367 | 3.2 | % | |||||||||||||||||||||||||
Multi-family and commercial
|
196 | 0.0 | % | 174 | 0.0 | % | 180 | 0.0 | % | 215 | 0.1 | % | 240 | 0.1 | % | |||||||||||||||||||||||||
Total fixed rate real estate loans
|
259,664 | 56.9 | % | 236,216 | 53.4 | % | 199,800 | 54.0 | % | 180,331 | 56.2 | % | 156,818 | 60.5 | % | |||||||||||||||||||||||||
Consumer loans
|
202,570 | 164,865 | 132,744 | 93,603 | ||||||||||||||||||||||||||||||||||||
Total fixed rate loans
|
259,664 | 56.9 | % | 438,786 | 99.2 | % | 364,665 | 98.6 | % | 313,075 | 97.5 | % | 250,421 | 96.6 | % | |||||||||||||||||||||||||
Adjustable Rate Loans:
|
||||||||||||||||||||||||||||||||||||||||
Real estate
|
||||||||||||||||||||||||||||||||||||||||
One to four-family first mortages
|
2,553 | 0.6 | % | 3,556 | 0.8 | % | 4,711 | 1.3 | % | 7,154 | 2.2 | % | 8,024 | 3.1 | % | |||||||||||||||||||||||||
Second mortgages
|
474 | 0.1 | % | 453 | 0.1 | % | 401 | 0.1 | % | 472 | 0.1 | % | 794 | 0.3 | % | |||||||||||||||||||||||||
Multi-family and commercial
|
- | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | - | 0.0 | % | |||||||||||||||||||||||||
Total adjustable rate real
estate loans
|
3,027 | 0.7 | % | 4,009 | 0.9 | % | 5,112 | 1.4 | % | 7,626 | 2.4 | % | 8,818 | 3.4 | % | |||||||||||||||||||||||||
Consumer loans
|
194,313 | - | - | - | - | |||||||||||||||||||||||||||||||||||
Total adjustable rate loans
|
197,340 | 43.3 | % | 4,009 | 0.9 | % | 5,112 | 1.4 | % | 7,626 | 2.4 | % | 8,818 | 3.4 | % | |||||||||||||||||||||||||
Gross loans
|
457,004 | 442,795 | 369,777 | 320,701 | 259,239 | |||||||||||||||||||||||||||||||||||
Net deferred loan costs
|
(772 | ) | (0.2 | %) | (325 | ) | (0.1 | %) | (67 | ) | (0.0 | %) | 252 | 0.1 | % | 63 | 0.0 | % | ||||||||||||||||||||||
Total loans (net of unearned income)
|
456,232 | 100.0 | % | 442,470 | 100.0 | % | 369,710 | 100.0 | % | 320,953 | 100.0 | % | 259,302 | 100.0 | % | |||||||||||||||||||||||||
Allowance for loan losses
|
(4,145 | ) | (1,925 | ) | (1,192 | ) | (926 | ) | (835 | ) | ||||||||||||||||||||||||||||||
Total loans receivable, net
|
$ | 452,087 | $ | 440,545 | $ | 368,518 | $ | 320,027 | $ | 258,467 |
Real Estate
|
Consumer
|
|||||||||||||||||||||||||||||||||||||||||
One to Four-Family
First Mortgage
(1)
|
Second Mortgage
|
Multi-Family
and
Commercial
|
Automobile
|
Secured Personal
|
Unsecured Personal
|
Total
|
||||||||||||||||||||||||||||||||||||
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
Weighted
Average
|
||||||||||||||||||||||||||||||||||||
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
Amount
|
Rate
|
|||||||||||||||||||||||||||||
2011
(2)
|
$ | 2,649 | 3.59 | % | $ | 1,046 | 7.22 | % | $ | 196 | 5.74 | % | $ | 864 | 9.49 | % | $ | 2,286 | 6.19 | % | $ | 2,874 | 3.50 | % | $ | 9,915 | 3.50 | % | ||||||||||||||
2012
|
2,987 | 0 | 682 | 8.17 | % | - | - | 3,505 | 9.19 | % | 4,634 | 7.87 | % | 614 | 3.50 | % | 12,422 | 3.50 | % | |||||||||||||||||||||||
2013
|
808 | 0 | 987 | 8.44 | % | - | - | 6,024 | 9.12 | % | 10,484 | 8.69 | % | 467 | 3.50 | % | 18,770 | 3.50 | % | |||||||||||||||||||||||
2014-2015 | 2,900 | 0 | 1,918 | 8.36 | % | - | - | 7,629 | 8.49 | % | 31,963 | 8.50 | % | 648 | 3.50 | % | 45,058 | 3.50 | % | |||||||||||||||||||||||
2016-2017 | 2,282 | 0 | 1,110 | 8.67 | % | - | - | 387 | 7.64 | % | 23,198 | 8.26 | % | 14 | 3.50 | % | 26,991 | 3.50 | % | |||||||||||||||||||||||
2018-2032 | 81,379 | 0 | 1,571 | 7.97 | % | - | - | 133 | 7.90 | % | 98,550 | 8.20 | % | 19 | 3.50 | % | 181,652 | 3.50 | % | |||||||||||||||||||||||
2033 and
after
|
161,816 | 0 | 360 | 5.98 | % | - | - | - | - | 20 | 7.84 | % | - | - | 162,196 | 3.50 | % | |||||||||||||||||||||||||
$ | 254,821 | 5.48 | % | $ | 7,674 | 8.05 | % | $ | 196 | 5.74 | % | $ | 18,542 | 8.85 | % | $ | 171,135 | 8.26 | % | $ | 4,636 | 12.05 | % | $ | 457,004 | 6.77 | % |
Quarters ended | ||||||||||||||||||||
9/30/10
|
6/30/10
|
3/31/10
|
12/31/09
|
9/30/09
|
||||||||||||||||
Component 1 - Specific credit allocation
|
$ | 734 | 1,735 | 1,597 | 1,293 | $ | 918 | |||||||||||||
Component 2 - General and unallocated allowance
|
3,411 | 1,706 | 1,288 | 994 | 1,007 | |||||||||||||||
Allowance for loan losses
|
$ | 4,145 | $ | 3,441 | $ | 2,885 | $ | 2,287 | $ | 1,925 |
September 30,
|
||||||||||||||||||||
2010
|
2009
|
2008
|
2007
|
2006
|
||||||||||||||||
Nonperforming assets:
|
||||||||||||||||||||
Nonaccrual loans
|
$ | 5,084 | $ | 5,789 | $ | 3,255 | $ | 1,520 | $ | 1,390 | ||||||||||
Accruing loans past due 90 days or more
|
- | - | - | - | - | |||||||||||||||
Total nonperforming loans ("NPLs ")
|
5,084 | 5,789 | 3,255 | 1,520 | 1,390 | |||||||||||||||
Other real estate owned
|
372 | 562 | - | 94 | 376 | |||||||||||||||
Other collateral owned
|
76 | 74 | - | 29 | 13 | |||||||||||||||
Total nonperforming assets ("NPAs")
|
$ | 5,532 | $ | 6,425 | $ | 3,255 | $ | 1,643 | $ | 1,779 | ||||||||||
Average outstanding loan balance
|
$ | 452,696 | $ | 404,335 | $ | 344,654 | $ | 285,668 | $ | 237,553 | ||||||||||
Loans, end of year
|
456,232 | 442,470 | 369,710 | 320,953 | 259,302 | |||||||||||||||
Total assets, end of year
|
594,365 | 575,406 | 480,036 | 386,113 | 283,990 | |||||||||||||||
ALL, at beginning of year
|
1,925 | 1,192 | 926 | 835 | 803 | |||||||||||||||
Loans charged off:
|
||||||||||||||||||||
Real estate loans
|
(1,168 | ) | (40 | ) | (44 | ) | (83 | ) | (19 | ) | ||||||||||
Consumer loans
|
(3,608 | ) | (633 | ) | (448 | ) | (330 | ) | (228 | ) | ||||||||||
Total loans charged off
|
(4,776 | ) | (673 | ) | (492 | ) | (413 | ) | (247 | ) | ||||||||||
Recoveries of loans previously charged off:
|
||||||||||||||||||||
Real estate loans
|
44 | 1 | - | - | - | |||||||||||||||
Consumer loans
|
51 | 36 | 37 | 34 | 28 | |||||||||||||||
Total recoveries of loans previously charged off:
|
95 | 37 | 37 | 34 | 28 | |||||||||||||||
Net loans charged off ("NCOs")
|
(4,681 | ) | (636 | ) | (455 | ) | (379 | ) | (219 | ) | ||||||||||
Additions to ALL via provision for loan losses charged
to
operations
|
6,901 | 1,369 | 721 | 470 | 251 | |||||||||||||||
ALL, at end of year
|
$ | 4,145 | $ | 1,925 | $ | 1,192 | $ | 926 | $ | 835 | ||||||||||
Ratios:
|
||||||||||||||||||||
ALL to NCOs
|
0.89 | 3.03 | 2.62 | 2.44 | 3.81 | |||||||||||||||
NCOs to average loans
|
1.03 | % | 0.16 | % | 0.13 | % | 0.13 | % | 0.09 | % | ||||||||||
ALL to total loans
|
0.91 | % | 0.44 | % | 0.32 | % | 0.29 | % | 0.32 | % | ||||||||||
NPLs to total loans
|
1.11 | % | 1.31 | % | 0.88 | % | 0.47 | % | 0.54 | % | ||||||||||
NPAs to total assets
|
0.93 | % | 1.12 | % | 0.68 | % | 0.43 | % | 0.63 | % |
September 30, 2009, balance of OTTI related to credit losses
|
$ | 7,236 | ||
Credit portion of OTTI recognized during the year ended September 30, 2010
|
2,261 | |||
September 30, 2010, balance of OTTI related to credit losses
|
$ | 9,497 |
Amortized
Cost
|
Fair
Value
|
|||||||
September 30, 2010
|
||||||||
Residential Agency MBS
|
$ | 16,240 | $ | 16,709 | ||||
Residential Non-agency MBS
|
33,772 | 24,999 | ||||||
Totals
|
$ | 50,012 | $ | 41,708 | ||||
September 30, 2009
|
||||||||
Residential Agency MBS
|
$ | 19,535 | $ | 19,698 | ||||
Residential Non-agency MBS
|
46,777 | 36,517 | ||||||
Totals
|
$ | 66,312 | $ | 56,215 |
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
September 30, 2010:
|
||||||||||||||||||||||||
U.S. agency securities
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential mortgage-backed
securities
(non-agency)
|
- | - | 24,999 | 8,773 | 24,999 | 8,773 | ||||||||||||||||||
Total Securities
|
$ | - | $ | - | 24,999 | 8,773 | 24,999 | 8,773 | ||||||||||||||||
September 30, 2009:
|
||||||||||||||||||||||||
U.S. agency securities
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential mortgage-backed securities
(non-agency)
|
5,852 | 965 | 30,665 | 9,295 | 36,517 | 10,260 | ||||||||||||||||||
Total Securities
|
$ | 5,852 | $ | 965 | $ | 30,665 | $ | 9,295 | $ | 36,517 | $ | 10,260 |
September 30, | ||||||||||||
2010 | 2009 | |||||||||||
Amortized
Cost
|
Fair
Value
|
Amortized
Cost
|
Fair
Value
|
|||||||||
Agency
|
$ | 16,240 | $ | 16,709 | $ | 19,535 | $ | 19,698 | ||||
AAA
|
4,514 | 4,380 | 10,382 | 9,436 | ||||||||
A | 6,041 | 5,444 | 4,642 | 4,013 | ||||||||
BBB
|
4,781 | 3,538 | ||||||||||
Below investment grade
|
23,217 | 15,175 | 26,972 | 19,530 | ||||||||
Total
|
$ | 50,012 | $ | 41,708 | $ | 66,312 | $ | 56,215 |
● | The nature and history of the Company | |
● | The competitive and economic outlook, generally and within our specific markets | |
● | The book value and financial condition of our Company | |
● | Our future earnings and dividend capacity, and | |
● | The size of the block valued, and the prevailing market prices of bank stocks. |
● | Comparable Transactions - an approach based on Level 2 inputs, i.e. sale transactions of comparable banking entities. | |
● | Control Premium - an approach based on a combination of Level 1 inputs (the quoted price for CZWI shares) and Level 2 inputs (an estimated control premium based on comparable transactions). | |
● | Discounted Cash Flows – an approach based on Level 3 inputs including projections of the future operations based on management’s assumptions, experience of the independent valuation expert and analysis of publicly available sources. |
Valuation Method
|
Amounts
(in $ millions)
|
|
Comparable Transaction (Level 2)
|
$ | 56 |
Control Premium (Level 1 / Level 2)
|
39 | |
Discounted Cash Flows (Level 3)
|
55 | |
Fair Value
|
$ | 49 |
Actual
|
For Capital Adequacy
Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||
As of September 30, 2010
|
||||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$ | 56,858,000 | 11.0 | % | $ | 41,386,000 |
>=
|
8.0 | % | $ | 51,732,000 |
>=
|
10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets)
|
53,447,000 | 10.3 | % | 20,693,000 |
>=
|
4.0 | % | 31,039,000 |
>=
|
6.0 | % | |||||||||||||||
Tier 1 capital (to adjusted total assets)
|
53,447,000 | 8.9 | % | 23,941,000 |
>=
|
4.0 | % | 29,927,000 |
>=
|
5.0 | % | |||||||||||||||
Tangible capital (to tangible assets)
|
53,447,000 | 8.9 | % | 8,978,000 |
>=
|
1.5 | % |
NA
|
NA
|
|||||||||||||||||
As of September 30, 2009
|
||||||||||||||||||||||||||
Total capital (to risk weighted assets)
|
$ | 52,081,000 | 9.6 | % | $ | 43,630,000 |
>=
|
8.0 | % | $ | 54,537,000 |
>=
|
10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets)
|
51,074,000 | 9.4 | % | 21,815,000 |
>=
|
4.0 | % | 32,722,000 |
>=
|
6.0 | % | |||||||||||||||
Tier 1 capital (to adjusted total assets)
|
51,074,000 | 8.9 | % | 23,009,000 |
>=
|
4.0 | % | 28,762,000 |
>=
|
5.0 | % | |||||||||||||||
Tangible capital (to tangible assets)
|
51,074,000 | 8.9 | % | 8,628,000 |
>=
|
1.5 | % |
NA
|
NA
|
December 31,
|
March 31,
|
June 30,
|
September 30,
|
|||||||||||||
Interest income
|
$ | 8,172 | $ | 8,095 | $ | 8,263 | $ | 8,230 | ||||||||
Interest expense
|
3,193 | 2,745 | 2,750 | 2,891 | ||||||||||||
Net interest income
|
4,979 | 5,350 | 5,513 | 5,339 | ||||||||||||
Provision for loan losses
|
760 | 1,402 | 1,331 | 3,408 | ||||||||||||
Net interest income after provision for loan losses
|
4,219 | 3,948 | 4,182 | 1,931 | ||||||||||||
Non-interest income (loss)
|
19 | (24 | ) | 373 | (6,119 | ) | ||||||||||
Non-interest expense
|
3,937 | 4,045 | 4,274 | 4,318 | ||||||||||||
Income before income tax expense
|
301 | (121 | ) | 281 | (8,506 | ) | ||||||||||
Provision (benefit) for income tax
|
126 | (42 | ) | 119 | (1,158 | ) | ||||||||||
Net income (loss)
|
$ | 175 | $ | (79 | ) | $ | 162 | $ | (7,348 | ) | ||||||
Basic earnings (loss) per share
|
$ | 0.03 | $ | (0.02 | ) | $ | 0.03 | $ | (1.44 | ) | ||||||
Diluted earnings (loss) per share
|
$ | 0.03 | $ | (0.02 | ) | $ | 0.03 | $ | (1.44 | ) | ||||||
Dividends paid
|
$ | - | $ | - | $ | - | $ | - |
Year ended September 30, 2009:
|
||||||||||||||||
December 31,
|
March 31,
|
June 30,
|
September 30,
|
|||||||||||||
Interest income
|
$ | 7,391 | $ | 7,458 | $ | 7,858 | $ | 8,233 | ||||||||
Interest expense
|
3,811 | 3,701 | 3,579 | 3,597 | ||||||||||||
Net interest income
|
3,580 | 3,757 | 4,279 | 4,636 | ||||||||||||
Provision for loan losses
|
267 | 374 | 324 | 404 | ||||||||||||
Net interest income after provision for loan losses
|
3,313 | 3,383 | 3,955 | 4,232 | ||||||||||||
Non-interest income (loss)
|
477 | 476 | (6,742 | ) | 559 | |||||||||||
Non-interest expense
|
3,317 | 3,552 | 4,080 | 3,976 | ||||||||||||
Income before income tax expense
|
473 | 307 | (6,867 | ) | 815 | |||||||||||
Provision (benefit) for income tax
|
207 | 114 | (2,735 | ) | 325 | |||||||||||
Net income (loss)
|
$ | 266 | $ | 193 | $ | (4,132 | ) | $ | 490 | |||||||
Basic earnings (loss) per share
|
$ | 0.05 | $ | 0.04 | $ | (0.80 | ) | $ | 0.12 | |||||||
Diluted earnings (loss) per share
|
$ | 0.05 | $ | 0.04 | $ | (0.80 | ) | $ | 0.12 | |||||||
Dividends paid
|
$ | 0.05 | $ | 0.05 | $ | 0.05 | $ | 0.05 |
● | originating shorter-term secured consumer loans; | |
● | managing our funding needs by focusing on core deposits and reducing our reliance on brokered deposits and borrowings; | |
● | originating first mortgage loans, with a clause allowing for payment on demand after a stated period of time; | |
● | reducing non-interest expense and managing our efficiency ratio; | |
● | realigning supervision and control of our branch network by modifying their configuration, staffing, locations and reporting structure; | |
● | improving asset and collateral disposition practices; and | |
● | focusing on sound and consistent loan underwriting practices based primarily on borrowers’ debt ratios, credit score and collateral values. |
Change in Interest Rates in Basis Points ("bp")
Rate Shock in Rates (1)
|
Net Portfolio Value | Net Portfolio Value as $ of | ||||||||||||||||||
Amount | Change | Change | NPV Ratio | Change | ||||||||||||||||
(Dollars in thousands)
|
||||||||||||||||||||
+300bp | $ | 37,009 | $ | (4,541 | ) | (11 | %) | 6.37 | % | (57 | ) bp | |||||||||
+200bp | 37,699 | (3,851 | ) | (9 | %) | 6.44 | % | (51 | ) | |||||||||||
+100bp | 38,969 | (2,581 | ) | (6 | %) | 6.59 | % | (35 | ) | |||||||||||
+50bp | 39,910 | (1,641 | ) | (4 | %) | 6.71 | % | (23 | ) | |||||||||||
0bp | 41,550 | - | - | 6.94 | % | - | ||||||||||||||
-50bp | 40,140 | (1,410 | ) | (3 | %) | 6.70 | % | (24 | ) | |||||||||||
-100bp | 40,828 | (722 | ) | (2 | %) | 6.80 | % | (14 | ) |
(1)
|
Assumes an instantaneous uniform change in interest rates at all maturities.
|
Assets
|
September 30, 2010
|
September 30, 2009
|
||||||
Cash and cash equivalents
|
$ | 72,438 | $ | 43,191 | ||||
Other interest-bearing deposits
|
- | 2,458 | ||||||
Securities available-for-sale (at fair value)
|
41,708 | 56,215 | ||||||
Federal Home Loan Bank stock
|
5,787 | 6,040 | ||||||
Loans receivable
|
456,232 | 442,470 | ||||||
Allowance for loan losses
|
(4,145 | ) | (1,925 | ) | ||||
Loans receivable - net
|
452,087 | 440,545 | ||||||
Office properties and equipment - net
|
7,216 | 8,029 | ||||||
Accrued interest receivable
|
1,977 | 2,179 | ||||||
Intangible assets
|
816 | 1,148 | ||||||
Goodwill
|
- | 5,593 | ||||||
Other assets
|
12,336 | 10,008 | ||||||
TOTAL ASSETS
|
$ | 594,365 | $ | 575,406 |
Liabilities and Stockholders' Equity
|
September 30, 2010
|
September 30, 2009
|
||||||
Liabilities:
|
||||||||
Deposits
|
$ | 476,302 | $ | 409,311 | ||||
Federal Home Loan Bank advances
|
64,200 | 106,805 | ||||||
Other liabilities
|
3,986 | 3,925 | ||||||
Total liabilities
|
544,488 | 520,041 | ||||||
Stockholders' equity:
|
||||||||
Common stock - 5,113,258 and 5,471,780 shares, respectively
|
51 | 55 | ||||||
Additional paid-in capital
|
53,823 | 56,877 | ||||||
Retained earnings
|
1,130 | 8,221 | ||||||
Unearned ESOP shares
|
- | (3,070 | ) | |||||
Unearned deferred compensation
|
(1 | ) | (23 | ) | ||||
Accumulated other comprehensive loss
|
(5,126 | ) | (6,695 | ) | ||||
Total stockholders' equity
|
49,877 | 55,365 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
|
$ | 594,365 | $ | 575,406 | ||||
See accompanying notes to consolidated financial statements.
|
|
||||||||||||||||||||||||||||||||
Common
Stock
Shares
Amount
|
Additional
Paid-in
Capital
|
Retained
Earnings
|
Unearned
ESOP
Shares
|
Unearned Compensation |
Accumulated
Other Comprehensive
Income (loss)
|
Total
Equity
|
||||||||||||||||||||||||||
Balance, October 1, 2007
|
7,118,205 | $ | 71 | $ | 69,934 | $ | 12,420 | $ | (3,877 | ) | $ | (207 | ) | $ | (192 | ) | $ | 78,149 | ||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net income
|
1,474 | 1,474 | ||||||||||||||||||||||||||||||
Amortization of unrecognized prior service costs and net
gains/losses, net of tax
|
102 | 102 | ||||||||||||||||||||||||||||||
Net unrealized gain on available for sale securities, net of tax
|
(2,696 | ) | (2,696 | ) | ||||||||||||||||||||||||||||
Change for realized losses on securities available for sale for
|
||||||||||||||||||||||||||||||||
OTTI write-down, net of tax
|
- | |||||||||||||||||||||||||||||||
Total comprehensive loss
|
(1,120 | ) | ||||||||||||||||||||||||||||||
Common stock repurchased
|
(890,300 | ) | (9 | ) | (7,846 | ) | (7,855 | ) | ||||||||||||||||||||||||
Stock option expense
|
71 | 71 | ||||||||||||||||||||||||||||||
Committed ESOP shares
|
461 | 461 | ||||||||||||||||||||||||||||||
Appreciation in fair value of ESOP shares
|
22 | 22 | ||||||||||||||||||||||||||||||
Cancellation of unvested restricted stock
|
(910 | ) | 11 | (11 | ) | - | ||||||||||||||||||||||||||
Amortization of restricted stock
|
92 | 92 | ||||||||||||||||||||||||||||||
Cash dividends ($0.20 per share)
|
(1,344 | ) | (1,344 | ) | ||||||||||||||||||||||||||||
Balance, September 30, 2008
|
6,226,995 | 62 | 62,192 | 12,550 | (3,416 | ) | (126 | ) | (2,786 | ) | 68,476 | |||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net loss
|
(3,183 | ) | (3,183 | ) | ||||||||||||||||||||||||||||
Pension curtailment, net of tax
|
194 | 194 | ||||||||||||||||||||||||||||||
Amortization of unrecognized prior service costs and net
gains/losses, net of tax
|
(144 | ) | (144 | ) | ||||||||||||||||||||||||||||
Net unrealized gain on available for sale securities, net of tax
|
(8,662 | ) | (8,662 | ) | ||||||||||||||||||||||||||||
Change for realized losses on securities available for sale for
|
||||||||||||||||||||||||||||||||
OTTI write-down, net of tax
|
4,703 | 4,703 | ||||||||||||||||||||||||||||||
Total comprehensive loss
|
(7,092 | ) | ||||||||||||||||||||||||||||||
Common stock repurchased
|
(749,520 | ) | (7 | ) | (5,253 | ) | (5,260 | ) | ||||||||||||||||||||||||
Stock option expense
|
48 | 48 | ||||||||||||||||||||||||||||||
Committed ESOP shares
|
346 | 346 | ||||||||||||||||||||||||||||||
Depreciation in fair value of ESOP shares
|
(70 | ) | (70 | ) | ||||||||||||||||||||||||||||
Cancellation of unvested restricted stock
|
(5,695 | ) | (40 | ) | 40 | - | ||||||||||||||||||||||||||
Amortization of restricted stock
|
63 | 63 | ||||||||||||||||||||||||||||||
Cash dividends ($0.20 per share)
|
(1,146 | ) | (1,146 | ) | ||||||||||||||||||||||||||||
Balance, September 30, 2009
|
5,471,780 | 55 | 56,877 | 8,221 | (3,070 | ) | (23 | ) | (6,695 | ) | 55,365 | |||||||||||||||||||||
Comprehensive loss:
|
||||||||||||||||||||||||||||||||
Net loss
|
(7,091 | ) | (7,091 | ) | ||||||||||||||||||||||||||||
Amortization of unrecognized prior service costs and net
gains/losses, net of tax
|
(12 | ) | (12 | ) | ||||||||||||||||||||||||||||
Net unrealized gain on available for sale securities, net of tax
|
215 | 215 | ||||||||||||||||||||||||||||||
Change for realized losses on securities available for sale for
|
||||||||||||||||||||||||||||||||
OTTI write-down, net of tax
|
1,366 | 1,366 | ||||||||||||||||||||||||||||||
Total comprehensive loss
|
(5,522 | ) | ||||||||||||||||||||||||||||||
Stock option expense
|
12 | 12 | ||||||||||||||||||||||||||||||
Termination of ESOP
|
(358,502 | ) | (4 | ) | (3,066 | ) | 3,070 | - | ||||||||||||||||||||||||
Forfeiture of unvested shares
|
(20 | ) | - | |||||||||||||||||||||||||||||
Amortization of restricted stock
|
22 | 22 | ||||||||||||||||||||||||||||||
Balance, September 30, 2010
|
5,113,258 | $ | 51 | $ | 53,823 | $ | 1,130 | $ | - $ | (1 | ) | $ | (5,126 | ) | $ | 49,877 | ||||||||||||||||
See Accompanying notes to consolidated financial statements.
|
CITIZENS COMMUNITY BANCORP, INC.
|
||||||||||||
Consolidated Statements of Cash Flows - Audited
|
||||||||||||
Years Ended September 30, 2010, 2009 and 2008
(in thousands, except per share data)
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss) attributable to common stockholders
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 | ||||
Adjustments to reconcile net loss to net cash provided
by operating activities:
|
||||||||||||
Net securities amortization
|
(379 | ) | (341 | ) | (274 | ) | ||||||
Provision for depreciation
|
1,122 | 959 | 533 | |||||||||
Provision for loan losses
|
6,901 | 1,369 | 721 | |||||||||
Impairment on mortgage-backed securities
|
2,261 | 7,236 | 0 | |||||||||
Impairment on goodwill
|
5,593 | 0 | 0 | |||||||||
Amortization of core deposit intangible
|
332 | 333 | 307 | |||||||||
Amortization of restricted stock
|
22 | 63 | 92 | |||||||||
Provision for stock options
|
12 | 48 | 71 | |||||||||
Benefit for deferred income taxes
|
(1,054 | ) | (631 | ) | (184 | ) | ||||||
ESOP contribution benefit in excess of shares released
|
0 | (70 | ) | 22 | ||||||||
Increase in accrued interest receivable and other assets
|
(1,337 | ) | (1,908 | ) | (682 | ) | ||||||
Decrease (increase) in other liabilities
|
49 | (97 | ) | 288 | ||||||||
Total adjustments
|
13,522 | 6,961 | 894 | |||||||||
Net cash provided by operating activities
|
6,431 | 3,778 | 2,368 | |||||||||
Cash flows from investing activities:
|
||||||||||||
Purchase of Federal Home Loan Bank stock
|
0 | (253 | ) | (965 | ) | |||||||
Purchase securities available for sale
|
0 | (20,004 | ) | (31,839 | ) | |||||||
Net (increase) decrease in interest-bearing deposits
|
2,458 | (2,087 | ) | 0 | ||||||||
Proceeds from principal repayments on securities available for sale
|
14,418 | 12,580 | 5,780 | |||||||||
Proceeds from sale of FHLB stock
|
253 | 0 | 0 | |||||||||
Net increase in loans
|
(18,393 | ) | (73,987 | ) | (49,162 | ) | ||||||
Net capital expenditures
|
(306 | ) | (3,070 | ) | (2,555 | ) | ||||||
Net cash received from branch acquisition
|
0 | 0 | 17,509 | |||||||||
Net cash used in investing activities
|
(1,570 | ) | (86,821 | ) | (61,232 | ) | ||||||
Cash flows from financing activities:
|
||||||||||||
Net increase (decrease) in borrowings
|
(42,605 | ) | (3,440 | ) | 13,799 | |||||||
Net increase in deposits
|
66,991 | 112,068 | 71,115 | |||||||||
Repurchase shares of common stock
|
0 | (5,260 | ) | (7,855 | ) | |||||||
Reduction in unallocated shares held by ESOP
|
0 | 346 | 461 | |||||||||
Cash dividends paid
|
0 | (1,146 | ) | (1,344 | ) | |||||||
Net cash provided by financing activities
|
24,386 | 102,568 | 76,176 | |||||||||
Net increase in cash and cash equivalents
|
29,247 | 19,525 | 17,312 | |||||||||
Cash and cash equivalents at beginning of year
|
43,191 | 23,666 | 6,354 | |||||||||
Cash and cash equivalents at end of year
|
$ | 72,438 | $ | 43,191 | $ | 23,666 | ||||||
Supplemental cash flow information:
|
||||||||||||
Cash paid during the year for:
|
||||||||||||
Interest on deposits
|
$ | 8,382 | $ | 10,155 | $ | 9,137 | ||||||
Interest on borrowings
|
3,316 | 4,594 | 4,991 | |||||||||
Income taxes
|
851 | 925 | 1,312 | |||||||||
Supplemental noncash disclosure:
|
||||||||||||
Transfers from loans to foreclosed properties
|
$ | 456 | $ | 641 | $ | 315 |
Fair
Value
|
Quoted Prices in Active Markets
for Identical Instruments
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant Unobservable
Inputs
(Level 3)
|
|||||||||||||
September 30, 2010:
Securities available for sale:
|
||||||||||||||||
U.S. Agency securities
|
$ | 16,709 | $ | - | $ | 16,709 | $ | - | ||||||||
Non-agency mortgage-backed securities
|
24,999 | - | - | 24,999 | ||||||||||||
Total
|
$ | 41,708 | $ | - | $ | 16,709 | $ | 24,999 | ||||||||
September 30, 2009:
|
||||||||||||||||
U.S. Agency securities
|
$ | 19,698 | $ | - | $ | 19,698 | $ | - | ||||||||
Non-agency mortgage-backed securities
|
36,517 | - | - | 36,517 | ||||||||||||
Total
|
$ | 56,215 | $ | - | $ | 19,698 | $ | 36,517 |
Fair
Value
|
Quoted Prices in Active Markets
for Identical Instruments
(Level 1)
|
Significant
Other
Observable
Inputs
(Level 2)
|
Significant Unobservable
Inputs
(Level 3)
|
|||||||||||||
September 30, 2010:
|
||||||||||||||||
Foreclosed assets
|
$ | 448 | $ | - | $ | - | $ | 448 | ||||||||
Loans restructured in a troubled debt restructuring
|
3,179 | - | - | 3,178 | ||||||||||||
Total
|
$ | 448 | $ | - | $ | - | $ | 448 | ||||||||
September 30, 2009:
|
||||||||||||||||
Foreclosed assets
|
$ | 636 | $ | - | $ | - | $ | 636 | ||||||||
Loans restructured in a troubled debt restructuring
|
1,020 | - | - | 1,020 | ||||||||||||
Total
|
$ | 636 | $ | - | $ | - | $ | 636 |
2010
|
2009
|
|||||||
Balance beginning of year
|
$ | 36,517 | $ | 61,233 | ||||
Total gains or losses (realized/unrealized):
|
||||||||
Included in earnings
|
(2,261 | ) | (7,236 | ) | ||||
Included in other comprehensive loss
|
1,487 | (6,251 | ) | |||||
Purchases, sales, issuances, and settlements, net
|
(10,744 | ) | (11,229 | ) | ||||
Balance end of year
|
$ | 24,999 | $ | 36,517 |
September 30, | ||||||||||||||||
2010
|
2009
|
|||||||||||||||
Carrying
Amount
|
Estimated
Fair
Value
|
Carrying
Amount
|
Estimated
Fair
Value
|
|||||||||||||
Financial assets :
|
||||||||||||||||
Cash and cash equivalents
|
$ | 72,438 | $ | 72,438 | $ | 43,191 | $ | 43,191 | ||||||||
Interest-bearing deposits
|
- | - | 2,458 | 2,458 | ||||||||||||
Securities available for sale
|
41,708 | 41,708 | 56,215 | 56,215 | ||||||||||||
Loans receivable
|
452,087 | 477,039 | 440,545 | 449,666 | ||||||||||||
FHLB stock
|
5,787 | 5,787 | 6,040 | 6,040 | ||||||||||||
Accrued interest receivable
|
1,977 | 1,977 | 2,179 | 2,179 | ||||||||||||
Financial liabilities:
|
||||||||||||||||
Deposits
|
476,302 | 482,337 | 409,311 | 413,511 | ||||||||||||
Borrowed funds
|
64,200 | 68,290 | 106,805 | 112,009 | ||||||||||||
Accrued interest payable
|
$ | 232 | $ | 232 | $ | 351 | $ | 351 |
Description of Securities |
Amortized
Cost
|
Gross
Unrealized
Gains
|
Gross
Unrealized
Losses
|
Estimated
Fair Value
|
||||||||||||
2010
|
||||||||||||||||
U.S. Agency securities
|
$ | 16,240 | $ | 469 | $ | - | $ | 16,709 | ||||||||
Non-agency mortgage-backed securities
|
33,772 | - | 8,773 | 24,999 | ||||||||||||
Total temporarily impaired
|
$ | 50,012 | $ | 469 | $ | 8,773 | $ | 41,708 | ||||||||
2009
|
||||||||||||||||
U.S. Agency securities
|
$ | 19,535 | $ | 163 | $ | - | $ | 19,698 | ||||||||
Non-agency mortgage-backed securities
|
46,777 | - | 10,260 | 36,517 | ||||||||||||
Total temporarily impaired
|
$ | 66,312 | $ | 163 | $ | 10,260 | $ | 56,215 |
Amortized
Cost
|
Estimated
Fair Value
|
|||||||
Due after one year through five years
|
$ | 69 | $ | 69 | ||||
Due after five years through ten years
|
$ | 141 | $ | 151 | ||||
Due after ten years
|
16,030 | 16,489 | ||||||
Subtotals
|
16,240 | 16,709 | ||||||
Mortgage-backed securities
|
33,772 | 24,999 | ||||||
Total securities available for sale
|
$ | 50,012 | $ | 41,708 |
Less than 12 Months
|
12 Months or More
|
Total
|
||||||||||||||||||||||
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
Fair
Value
|
Unrealized
Losses
|
|||||||||||||||||||
September 30, 2010:
|
||||||||||||||||||||||||
U.S. agency securities
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential mortgage-backed
securities (non-agency)
|
- | - | 24,999 | 8,773 | 24,999 | 8,773 | ||||||||||||||||||
Total Securities
|
$ | - | $ | - | $ | 24,999 | $ | 8,773 | $ | 24,999 | $ | 8,773 | ||||||||||||
September 30, 2009:
|
||||||||||||||||||||||||
U.S. agency securities
|
$ | - | $ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||||
Residential mortgage-backed
securities (non-agency)
|
5,852 | 965 | 30,665 | 9,295 | 36,517 | 10,260 | ||||||||||||||||||
Total Securities
|
$ | 5,852 | $ | 965 | $ | 30,665 | $ | 9,295 | $ | 36,517 | $ | 10,260 |
September 30, 2010 | September 30, 2009 | |||||||||||||||
Amortized
Cost
|
Estimated
Fair Value
|
Amortized
Cost
|
Estimated
Fair Value
|
|||||||||||||
JP Morgan Trust
|
$ | 7,885 | $ | 5,705 | $ | 10,232 | $ | 8,242 | ||||||||
Wells Fargo MBS
|
11,718 | 8,790 | 15,736 | 13,155 | ||||||||||||
Total securities available for sale
|
$ | 19,603 | $ | 14,495 | $ | 25,968 | $ | 21,397 |
Year ended September 30,
|
||||||||
2010 | 2009 | |||||||
Beginning balance of the amount of OTTI related to credit losses
|
$ | 7,236 | $ | - | ||||
Credit portion of OTTI on securities for which OTTI was not
previously recognized
|
2,276 | 7,236 | ||||||
Cash payments received on a security in excess of the security's book
value adjusted for previously recognized
credit portion of OTTI
|
(15 | ) | - | |||||
Ending balance of the amount of OTTI related to credit losses
|
$ | 9,497 | $ | 7,236 |
2010
|
2009
|
||||||||
Real estate loans:
|
|||||||||
First mortgages - 1 to 4-family
|
$ | 254,821 | $ | 230,412 | |||||
Multifamily and commercial
|
196 | 174 | |||||||
Second mortgages
|
7,674 | 9,639 | |||||||
Total real estate loans
|
262,691 | 240,225 | |||||||
Consumer loans:
|
|||||||||
Automobile
|
18,542 | 24,875 | |||||||
Secured personnal
|
171,135 | 172,040 | |||||||
Unsecured personal
|
4,636 | 5,655 | |||||||
Total consumer loans
|
194,313 | 202,570 | |||||||
Gross loans
|
457,004 | 442,795 | |||||||
Less:
|
|||||||||
Deferred loan origination fees, net of costs
|
(772 | ) | (325 | ) | |||||
Allowance for loan losses
|
(4,145 | ) | (1,925 | ) | |||||
Loans receivable, net
|
$ | 452,087 | $ | 440,545 |
September 30,
|
||||||||
2010 | 2009 | |||||||
Balance - beginning of year
|
$ | 48 | $ | 36 | ||||
New loan originations
|
- | 27 | ||||||
Repayments
|
(15 | ) | (15 | ) | ||||
Balance - end of year
|
$ | 33 | $ | 48 |
September 30,
|
||||||||
|
2010
|
2009 | ||||||
Impaired loans with no allocated allowance for loan loss
|
$ | 5,876 | $ | 3,436 | ||||
Impaired loans with allocated allowance for loan loss
|
2,581 | 3,373 | ||||||
Allowance allocated to impaired loans
|
734 | $ | 918 |
For the year ended September 30, | ||||||||||
2010 |
2009
|
2008 | ||||||||
Average impaired loans during the year
|
$ | 2,197 | 510 | $ | - | |||||
Interest income recognized during impairment
|
30 | - | - | |||||||
Cash-basis interest recognized
|
26 | - | $ | - |
2010
|
2009
|
|||||||
Nonaccrual loans (1)
|
$ | 5,084 | $ | 5,789 | ||||
Total non performing loans (2)
|
$ | 5,084 | $ | 5,789 |
2010
|
2009
|
2008
|
||||||||||
Balance at beginning of year
|
$ | 1,925 | $ | 1,192 | $ | 926 | ||||||
Provision charged to operations
|
6,901 | 1,369 | 721 | |||||||||
Loans charged off
|
(4,776 | ) | (673 | ) | (492 | ) | ||||||
Recoveries
|
95 | 37 | 37 | |||||||||
Balance at end of year
|
$ | 4,145 | $ | 1,925 | $ | 1,192 |
2010
|
2009
|
|||||||
Land
|
$ | 653 | $ | 695 | ||||
Buildings
|
$ | 2,833 | $ | 2,825 | ||||
Furniture, equipment, and vehicles
|
9,671 | 9,466 | ||||||
Subtotals
|
13,157 | 12,986 | ||||||
Less - Accumulated depreciation
|
(5,941 | ) | (4,957 | ) | ||||
Office properties and equipment - net
|
$ | 7,216 | $ | 8,029 |
2010 |
2009
|
|||||||
Balance at beginning of year
|
$ | 5,593 | $ | 5,593 | ||||
Accumulated impairment losses at beginning of year
|
$ | - | $ | - | ||||
Impairment losses recognized during the year
|
(5,593 | ) | - | |||||
Balance at end of year
|
$ | - | $ | 5,593 |
2010
|
2009
|
|||||||
Balance at beginning of year
|
$ | 1,148 | $ | 1,481 | ||||
Capitalized
|
- | - | ||||||
Amortization
|
(332 | ) | (333 | ) | ||||
Balance at end of year
|
$ | 816 | $ | 1,148 |
2011
|
$ | 333 | ||
2012
|
209 | |||
2013
|
57 | |||
2014
|
57 | |||
2015
|
57 | |||
After 2015
|
103 | |||
Total
|
$ | 816 |
2010
|
2009
|
|||||||
Non-interest-bearing demand deposits
|
$ | 15,925 | $ | 14,943 | ||||
Interest-bearing demand deposits
|
5,279 | 4,788 | ||||||
Savings accounts
|
31,269 | 26,387 | ||||||
Money market accounts
|
155,315 | 146,709 | ||||||
Certificate accounts
|
268,514 | 216,484 | ||||||
Total deposits
|
$ | 476,302 | $ | 409,311 | ||||
Brokered certificates of deposit included above:
|
$ | 297 | $ | 9,845 |
2011
|
$ | 154,989 | ||
2012
|
40,704 | |||
2013
|
55,455 | |||
2014
|
17,276 | |||
2015
|
90 | |||
After 2015
|
- | |||
Total
|
$ | 268,514 |
Year of Maturity
|
2010
|
Weighted
Average
Rate
|
2009
|
Weighted
Average
Rate
|
||||||||||||
2010
|
$ | - | - | $ | 35,400 | 4.01 | % | |||||||||
2011
|
33,800 | 4.12 | % | 33,800 | 4.12 | % | ||||||||||
2012
|
16,000 | 4.46 | % | 16,000 | 4.46 | % | ||||||||||
2013
|
6,750 | 3.99 | % | 6,750 | 3.99 | % | ||||||||||
2014
|
6,150 | 4.45 | % | 6,150 | 4.45 | % | ||||||||||
After 2014
|
1,500 | 4.05 | % | 1,500 | 4.05 | % | ||||||||||
Total fixed maturity
|
$ | 64,200 | $ | 99,600 | ||||||||||||
Advances with amortizing principal
|
- | 7,205 | 0.36 | % | ||||||||||||
Total
|
$ | 64,200 | $ | 106,805 |
Fiscal Year Ended September 30,
|
||||||||||||
2010
|
2009
|
2008 | ||||||||||
Net unrealized gain (loss) on securities available for sale,
net of tax expense (benefit) of $116 in 2010, ($4,664) in
2009, and ($1,453) in 2008.
|
$ | 215 | $ | (8,662 | ) | $ | (2,696 | ) | ||||
Reclassification adjustment for losses realized in income,
net of tax expense of $736 in 2010, $2,533 in 2009, and
$-0- in 2008
|
1,366 | 4,703 | ||||||||||
Pension liability adjustments, net of tax expense (benefit)
of ($4) in 2010, $33 in 2009, and $68 in 2008
|
(12 | ) | 50 | 102 | ||||||||
Other Comprehensive loss
|
$ | 1,569 $ | (3,909 | ) | $ | (2,594 | ) | |||||
The components of accumulated other comprehensive loss,
net of income taxes:
|
||||||||||||
Net unrealized gain (loss) on securities available for sale,
net of tax expense (benefit) of ($3,322) in 2010, ($3,534)
in 2009, and ($1,402) in 2008.
|
$ | (4,982 | ) $ | (6,563 | ) $ | (2,605 | ) | |||||
Pension liability adjustments, net of tax expense (benefit) of
($96) in 2010, ($88) in 2009, and ($121) in 2008
|
(144 | ) | (132 | ) | (181 | ) | ||||||
Accumulated other comprehensive loss
|
$ | (5,126 | ) $ | (6,695 | ) $ | (2,786 |
Actual
|
For Capital Adequacy
Purposes
|
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
|
||||||||||||||||||||||||
Amount
|
Ratio
|
Amount
|
Ratio
|
Amount
|
Ratio
|
|||||||||||||||||||||
As of September 30, 2010
|
||||||||||||||||||||||||||
Total capital (to risk weighted assets )
|
$ | 56,858,000 | 11.0 | % | $ | 41,386,000 |
>=
|
8.0 | % | $ | 51,732,000 |
>=
|
10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets)
|
53,447,000 | 10.3 | % | 20,693,000 |
>=
|
4.0 | % | 31,039,000 |
>=
|
6.0 | % | |||||||||||||||
Tier 1 capital (to adjusted total assets)
|
53,447,000 | 8.9 | % | 23,941,000 |
>=
|
4.0 | % | 29,927,000 |
>=
|
5.0 | % | |||||||||||||||
Tangible capital (to tangible assets)
|
53,447,000 | 8.9 | % | 8,978,000 |
>=
|
1.5 | % |
NA
|
NA
|
|||||||||||||||||
As of September 30, 2009
|
||||||||||||||||||||||||||
Total capital (to risk weighted assets )
|
$ | 52,081,000 | 9.6 | % | $ | 43,630,000 |
>=
|
8.0 | % | $ | 54,537,000 |
>=
|
10.0 | % | ||||||||||||
Tier 1 capital (to risk weighted assets)
|
51,074,000 | 9.4 | % | 21,815,000 |
>=
|
4.0 | % | 32,722,000 |
>=
|
6.0 | % | |||||||||||||||
Tier 1 capital (to adjusted total assets)
|
51,074,000 | 8.9 | % | 23,009,000 |
>=
|
4.0 | % | 28,762,000 |
>=
|
5.0 | % | |||||||||||||||
Tangible capital (to tangible assets)
|
51,074,000 | 8.9 | % | 8,628,000 |
>=
|
1.5 | % |
NA
|
NA
|
Contract or Notional
Amount at September 30,
|
||||||||
2010 |
2009
|
|||||||
Commitments to extend credit - Fixed rate 4.00%
- 8.90% in 2010,
a
nd 4.25% - 10.25% in 2009
|
$ | 1,655 | $ | 2,569 | ||||
Unused lines of credit:
|
||||||||
Real estate equity advance plan (REAP)
|
734 | 615 | ||||||
Kwik cash and lines of credit
|
1,423 | 2,299 | ||||||
MasterCard and VISA credit cards
|
4,969 | 5,210 | ||||||
Totals
|
$ | 8,781 | $ | 10,693 |
2011
|
$ | 1,079 | ||
2012
|
990 | |||
2013
|
843 | |||
2014
|
431 | |||
2015
|
112 | |||
After 2015
|
35 | |||
Total
|
$ | 3,490 |
2010
|
2009
|
2008
|
||||||||||
Beginning accrued benefit cost
|
$ | 2,431 | $ | 2,444 | $ | 2,149 | ||||||
Service cost
|
3 | 19 | 54 | |||||||||
Interest cost
|
132 | 166 | 158 | |||||||||
Amortization of prior service costs
|
1 | 49 | 91 | |||||||||
Net periodic benefit cost
|
136 | 234 | 303 | |||||||||
Benefits paid
|
(19 | ) | (15 | ) | (8 | ) | ||||||
Curtailment and settlement
|
- | (232 | ) | - | ||||||||
Ending accrued benefit cost
|
$ | 2,548 | $ | 2,431 | $ | 2,444 |
|
2010
|
2009
|
2008 | |||||||||
Change in benefit obligation:
|
||||||||||||
Projected benefit obligation, beginning of year
|
$ | 2,654 | $ | 2,751 | $ | 2,627 | ||||||
Service cost
|
3 | 19 | 54 | |||||||||
Interest cost
|
132 | 166 | 158 | |||||||||
Curtailment and settlement
|
- | (585 | ) | - | ||||||||
Actuarial loss (gain)
|
17 | 318 | (80 | ) | ||||||||
Benefits paid
|
(19 | ) | (15 | ) | (8 | ) | ||||||
Projected benefit obligation, end of year
|
$ | 2,787 | $ | 2,654 | $ | 2,751 | ||||||
Change in plan assets:
|
||||||||||||
Plan as sets at fair value, beginning of year
|
$ | - | $ | - | $ | |||||||
Actual return on plan assets
|
- | - | ||||||||||
Company contributions
|
19 | 15 | 8 | |||||||||
Benefits paid
|
(19 | ) | (15 | ) | (8 | ) | ||||||
Plan as sets at fair value, end of year
|
$ | - | $ | - | $ | - |
2010
|
2009
|
2008
|
||||||||||
Benefit obligation actuarial assumptions:
|
||||||||||||
Discount Rate
|
4.75 | % | 5.00 | % | 6.25 | % | ||||||
Rate of compensation increase
|
N/A | N/A | 5.00 | % | ||||||||
Net pension cost actuarial assumption
|
||||||||||||
Discount rate
|
5.00 | % | 6.25 | % | 6.00 | % | ||||||
Expected long-term rate of return on plan assets
|
N/A | N/A | N/A | |||||||||
Rate of compensation increase
|
N/A | 5.00 | % | 5.00 | % |
2011
|
$ | 22 | ||
2012
|
119 | |||
2013
|
269 | |||
2014
|
270 | |||
2015
|
273 | |||
2016-2020
|
1,389 |
2005
|
||||
Dividend yield
|
1 | % | ||
Risk-free interest rate
|
4 | % | ||
Weighted average expected life (years)
|
10 | |||
Expected volatility
|
16 | % |
2010 | 2009 | 2008 | ||||||||||
Current tax provision/(benefit) | ||||||||||||
Federal | $ | 694 | $ | (1,145 | ) | 894 | ||||||
State | 8 | (313 | ) | 298 | ||||||||
702 | (1,458 | ) | 1,192 | |||||||||
Deferred tax benefit | ||||||||||||
Federal | (1,341 | ) | (505 | ) | (140 | ) | ||||||
State | (316 | ) | (126 | ) | (44 | ) | ||||||
(1,657 | ) | (631 | ) | (184 | ) | |||||||
Total | $ | (955 | ) | $ | (2,089 | ) | $ | 1,008 |
2010
|
2009
|
2008
|
||||||||||||||||||||||
Tax expense at statutory Rate
|
$ | (2,735 | ) | 34.00 | % | $ | (1,794 | ) | 34.00 | % | $ | 844 | 34.00 | % | ||||||||||
State income taxes net of exception
|
(131 | ) | 5.37 | % | (295 | ) | 5.60 | % | 164 | 6.60 | % | |||||||||||||
Goodwill impairment
|
1,901 | (27.37 | %) | - | - | |||||||||||||||||||
Other permanent differences
|
10 | 0.13 | % | - | - | |||||||||||||||||||
Total
|
$ | (955 | ) | 11.87 | % | $ | (2,089 | ) | 39.60 | % | $ | 1,008 | 40.60 | % |
Income |
2010
|
2009
|
||||||
Deferred tax assets:
|
||||||||
Allowance for loan losses
|
$ | 1,632 | $ | 530 | ||||
Deferred loan costs/fees
|
250 | 54 | ||||||
Director/officer compensation plans
|
1,206 | 1,178 | ||||||
Net unrealized loss on securities available for sale
|
3,321 | 3,534 | ||||||
Impairment loss
|
1,338 | - | ||||||
Other
|
173 | 74 | ||||||
Deferred tax assets
|
$ | 7,920 | $ | 5,370 | ||||
Deferred tax liabilities:
|
||||||||
Office properties and equipment
|
(1,085 | ) | (37 | ) | ||||
Federal Home Loan Bank stock
|
(67 | ) | (67 | ) | ||||
Core deposit intangible
|
(157 | ) | (365 | ) | ||||
481a adjustment
|
(144 | ) | - | |||||
Other
|
(140 | ) | (147 | ) | ||||
Deferred tax liabilities
|
(1,593 | ) | (483 | ) | ||||
Net deferred tax assets
|
$ | 6,327 | $ | 4,887 |
2010
|
2009
|
2008
|
||||||||||
Basic
|
||||||||||||
Net income (loss)
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 | ||||
Weighted average common shares outstanding
|
5,119,807 | 5,365,122 | 6,225,270 | |||||||||
Basic earnings (loss) per share
|
$ | (1.39 | ) | $ | (0.59 | ) | $ | 0.24 | ||||
Diluted
|
||||||||||||
Net income (loss)
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 | ||||
Weighted average common shares outstanding for basic earnings per share
|
5,119,807 | 5,365,122 | 6,225, 270 | |||||||||
Add: Dilutive stock options outstanding
|
$ | - | $ | - | $ | 17,370 | ||||||
Average shares and dilutive potential common shares
|
5,119,807 | 5,365,122 | 6,242,640 | |||||||||
Diluted earnings (loss) per share
|
$ | (1.39 | ) | $ | (0.59 | ) | $ | 0.24 | ||||
Additional common stock option shares that have not been included due to their antidilutive
effect
|
113,915 | 113,915 | 185,110 |
2010
|
2009
|
|||||||
ASSETS
|
||||||||
Cash and cash equivalents
|
$ | 740 $ | 943 | |||||
Investment in subsidiary
|
$ | 49,137 $ | 51,120 | |||||
Note receivable - ESOP
|
- | 3,302 | ||||||
Total assets
|
$ | 49,877 $ | 55,365 | |||||
STOCKHOLDERS' EQUITY
|
||||||||
Total stockholders' equity
|
$ | 49,877 $ | 55,365 |
STATEMENT OF OPERATIONS
|
||||||||||||
2010
|
2009
|
2008
|
||||||||||
Income - interest and dividends | $ | - | $ | 128 | $ | 189 | ||||||
Expenses - other
|
325 | 459 | 454 | |||||||||
Loss before provision for income taxes and equity in
undistributed net income
(loss) of subsidiary
|
(325 | ) | (331 | ) | (265 | ) | ||||||
Benefit for income taxes
|
(110 | ) | (140 | ) | (121 | ) | ||||||
Loss before equity in undistributed net income (loss) of
subsidiary
|
(215 | ) | (191 | ) | (144 | ) | ||||||
Equity in undistributed net income (loss) of subsidiary
|
(6,876 | ) | (2,992 | ) | 1,618 | |||||||
Net income (loss)
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 |
STATEMENT OF CASH FLOWS
|
||||||||||||
2010 | 2009 | 2008 | ||||||||||
Increase (decrease) in cash and cash equivalents:
|
||||||||||||
Cash flows from operating activities:
|
||||||||||||
Net income (loss)
|
$ | (7,091 | ) | $ | (3,183 | ) | $ | 1,474 | ||||
Provision for stock options
|
$ | 12 | $ | 48 | $ | 71 | ||||||
Adjustments to reconcile net income to net cash
provided by operating activities - Equity in
undistributed (income) loss of subsidiary
|
6,876 | 2,992 | (1,618 | ) | ||||||||
Net cash provided by (used in) operating activities
|
(203 | ) | (143 | ) | (73 | ) | ||||||
Cash flows from investing activities:
|
||||||||||||
Investment in subsidiary
|
- | (7,573 | ) | - | ||||||||
Loan to ESOP
|
- | - | - | |||||||||
Principal received on ESOP loan
|
- | 311 | 396 | |||||||||
Net cash provided by (used in) investing activities
|
- | (7,262 | ) | 396 | ||||||||
Cash flows from financing activities:
|
||||||||||||
Sale of common stock
|
- | - | - | |||||||||
Repurchase shares of common stock
|
- | (5,260 | ) | (7,855 | ) | |||||||
Stock options exercised
|
- | - | - | |||||||||
Cash dividends paid
|
- | (1,146 | ) | (1,344 | ) | |||||||
Net cash provided by (used in) financing activities
|
- | (6,406 | ) | (9,199 | ) | |||||||
Net increase (decrease) in cash and cash equivalents
|
(203 | ) | (13,811 | ) | (8,876 | ) | ||||||
Cash and cash equivalents at beginning of year
|
943 | 14,754 | 23,630 | |||||||||
Cash and cash equivalents at end of year
|
$ | 740 | $ | 943 | $ | 14,754 |
● | Identification and reporting of impaired loans. At September 30, 2010, we identified several loans that should have been previously identified and reported as troubled debt restructurings (“TDRs”), and thus impaired. | |
● | Assessment of classified and impaired loans. At September 30, 2010, management determined that its assessment of collateral values on classified and impaired loans needed to be modified to more accurately reflect collateral values in our current operating environment. |
Plan Category
|
Number of
Common Shares
to Be Issued
Upon Exercise of
Outstanding Options,
Warrants and Rights
|
Weighted-average
Exercise Price of
Outstanding Options,
Warrants and Rights
|
Number of
Common Shares
Available for
Future Issuance
Under Equity
Compensation Plans
|
|||||||||
Equity compensation plans approved by security holders
|
113,915 | $ | 7.04 | 807,205 | ||||||||
Equity compensation plans not approved by security holders
|
- | $ | - | - | ||||||||
Total
|
113,915 | $ | 7.04 | 807,205 |
Consolidated Balance Sheets as of September 30, 2010, and 2009
|
Consolidated Statements of Operations for the Years Ended September 30, 2010, 2009 and 2008
|
Consolidated Statements of Changes in Stockholders’ Equity For the Years Ended September 30, 2010, 2009 and 2008
|
Consolidated Statements of Cash Flows For the Years Ended September 30, 2010, 2009 and 2008
|
Notes to Consolidated Financial Statements
|
3.1
|
Articles of Incorporation of the Registrant. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)
|
3.2
|
Bylaws of the Registrant. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)
|
10.1+
|
Citizens Community Bancorp, Inc. 2004 Stock Option Plan. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)
|
10.2+
|
Citizens Community Bancorp, Inc. 2004 Recognition and Retention Plan. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)
|
10.3+
|
Citizens Community Bancorp, Inc. Supplemental Executive Retirement Plan. (Filed as an exhibit to the Company’s registration statement filed on June 30, 2006 (File No. 333-135527) pursuant to Section 5 of the Securities Act of 1933 and incorporated herein by reference.)
|
10.4
|
Citizens Community Bancorp, Inc. Tax Allocation Agreement. (Filed as an exhibit to the Company’s annual report on Form 10-KSB for the fiscal year ended September 30, 2004 and incorporated herein by reference.)
|
10.5+
|
Citizens Community Bancorp, Inc. 2008 Equity Incentive Plan. (Filed as an exhibit to the Company’s Proxy Statement on Schedule 14A for its 2008 Annual Meeting of Stockholders and incorporated herein by reference.)
|
10.6+
|
Employment Agreement by and between Edward H. Schaefer and Citizens Community Federal dated effective as of July 1, 2010. (Filed as Exhibit 99.1 to the Company’s current report on Form 8-K dated as of June 25, 2010 and incorporated herein by reference.)
|
10.7+ |
Form of Restricted Stock Grant Agreement under the Citizens Community Bancorp, Inc. 2004 Recognition and Retention Plan.
|
10.8+ | Form of Incentive Stock Option Agreement under the Citizens Community Bancorp, Inc. 2004 Stock Option and Incentive Plan. |
14
|
Citizens Community Bancorp, Inc. Code of Conduct and Ethics.
|
16
|
Letter Regarding Change in Auditors (filed as Exhibit 99.1 to the current report on Form 8-K dated and filed with the Securities and Exchange Commission on March 31, 2010).
|
21
|
Subsidiaries of the Company as of September 30, 2010.
|
23.1
|
Consent of Independent Registered Public Accounting Firm (Baker Tilly Virchow Krause, LLP).
|
23.2
|
Consent of Independent Registered Public Accounting Firm (Wipfli, LLP).
|
31.1
|
Rule 13a-15(e) Certification of the Company’s Chief Executive Officer
|
31.2 |
Rule 13a-15(e) Certification of the Company’s Principal Financial and Accounting Officer
|
32.1*
|
Certification of Chief Executive Officer and Principal Financial and Accounting Officer pursuant to 18 U.S.C. Section 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
*
|
This certification is not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.
|
CITIZENS COMMUNITY BANCORP, INC.
|
|||
Date:
|
December 23, 2010
|
By: /
s/ Edward H. Schaefer
|
|
Edward H. Schaefer
Chief Executive Officer
|
|||
Date:
|
December 23, 2010
|
By:
/s/ Rebecca L. Johnson
|
|
Rebecca L. Johnson
Principal Financial and Accounting Officer
|
|||
By:
|
/s/ Richard McHugh
|
December 23, 2010
|
|
Richard McHugh
Chairman of the Board
|
|||
By:
|
/s/ Edward H. Schaefer
|
December 23, 2010
|
|
Edward H. Schaefer
Chief Executive Officer
(Principal Executive Officer)
|
|||
By:
|
/s/ Thomas C. Kempen
|
December 23, 2010
|
|
Thomas C. Kempen
Vice Chairman of the Board
|
|||
By:
|
/s/ Brian R. Schilling
|
December 23, 2010
|
|
Brian R. Schilling
Director and Treasurer
|
|||
By:
|
/s/ David B. Westrate
|
December 23, 2010
|
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David B. Westrate
Director
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By:
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/s/ Timothy A. Nettesheim
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December 23, 2010
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Timothy A. Nettesheim
Director
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By:
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/s/ Rebecca L. Johnson
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December 23, 2010
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Rebecca L. Johnson
Controller
(Principal Financial Officer and Principal Accounting Officer)
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This Code of Business Conduct and Ethics (“Code”) is intended to deter wrongdoing and promote: | ||
● | Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; | |
● | Full, fair, accurate, timely and understandable disclosure in documents the Corporation files with, or submits to, the SEC and in all public communications made by the Corporation; | |
● | Compliance with applicable governmental laws, rules and regulations; | |
● | Prompt internal reporting to designated persons of violations of the Code; and | |
● | Accountability for adherence to the Code. |
Timothy J. Cruciani
Citizens Community Bancorp, Inc.
2174 Eastridge Center
Eau Claire, Wisconsin 54701
office: (715) 836-9994 ext. 118
cell: (715) 828-3822
e-mail: TCruc@citizenscommunityfederal.net
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PART II
PRINCIPLES AND STANDARDS OF CONDUCT
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● | The identity of customers and potential customers and their personal, business and financial information; | |
● | Non-public business and financial information of the Corporation; personal information regarding any employee of the Corporation; | |
● | Personal or non-public business information regarding any supplier, vendor or agent of the Corporation; | |
● | Information related to, including the identity of, potential candidates for mergers and acquisitions; | |
● | Information regarding the Corporation’s sales strategies, plans or proposals; | |
● | Information related to computer software programs, whether proprietary or standard; | |
● | Information related to documentation systems, information databases, customized hardware or other information systems and technological developments; | |
● | Manuals, processes, policies, procedures, compositions, opinion letters, ideas, innovations, inventions, formulas and other proprietary information belonging to the Corporation or related to the Corporation’s activities; | |
● | Security information, including without limitation, policies and procedures, passwords, personal identification numbers (PINs) and electronic access keys; | |
● | Communications by, to and from regulatory agencies; and | |
● | Certain communications with or from attorneys for the Corporation, whether internal or external. |
● | Proposals or plans for mergers and acquisitions; | |
● | Earnings estimates or results, whether for the month, quarter or year; | |
● | Changes in dividends; | |
● | Significant new product innovation, development or implementation; | |
● | Major litigation, adverse regulatory proceeding or material threat of either event; | |
● | Significant operational issues, including changes in non-performing assets; | |
● | Significant expansion of operations, whether geographic or otherwise, or the curtailment of current or future planned operations; and | |
● | Any other information which, if known, would likely influence the decisions of investors. |
1.
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Gifts based on a family relationship or gifts of a reasonable value based on a personal relationship where that relationship is the obvious motivating factor for the gift;
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2.
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Advertising or promotional material with a value of less than $100;
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3.
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Gifts with a value of less than $100 related to commonly recognized events such as a promotion, religious holiday, wedding or retirement;
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4.
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Acceptance of customary hospitality (business luncheons, dinners, golf outings, ball games, etc.) where it is directly related to Corporation activities and provided that the expense would be paid for by the Corporation if not paid for by another party. Any entertainment beyond that scope or of a frequent nature (more than twice a year by the same party) must be pre-authorized by the Chief Executive Officer;
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5.
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Discounts or rebates on merchandise or services that do not exceed those available to other customers of the merchant; or
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6.
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Awards for recognition of service or accomplishment from civic, charitable, educational or religious organizations.
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1.
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No false, misleading or artificial entries shall be made on corporate books, records and reports for any reason.
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2.
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No undisclosed or unrecorded corporate funds or assets shall be established for any purpose.
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3.
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No payments from corporate funds or other assets shall be approved or be made with the intention or understanding that any part of such payment will be used for any purpose other than that described by the documents supporting the payment. All payments must be supported with appropriately approved purchase orders, invoices or receipts, expense reports or other customary documents, all in accordance with established policy.
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Citizens Community Bancorp, Inc. and Subsidiaries
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Name of Subsidiary (a)
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Percentage of Ownership
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Jurisdiction or State of
Incorporation
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Citizens Community Federal
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100 | % |
Federal (U.S.)
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I, Edward H. Schaefer, certify that:
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1)
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I have reviewed this annual report on Form 10-K of Citizens Community Bancorp, Inc.;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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I, Rebecca L. Johnson, certify that:
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1)
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I have reviewed this annual report on Form 10-K of Citizens Community Bancorp, Inc.;
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2)
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3)
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4)
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c)
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d)
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5)
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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