0001367859-26-000017
SEC filingCitizens Community Bancorp, Inc. reported net income of $14.4 million for FY 2025, an increase from $13.75 million in FY 2024. Diluted earnings per share were $1.46, up from $1.34. The improvement was driven by a $4.7 million increase in net interest income to $51.2 million, primarily due to lower short-term interest rates reducing liability costs and higher asset yields, partially offset by a smaller balance sheet. Non-interest income increased by $1.0 million to $11.1 million, led by higher gains on equity securities and loan sales. Non-interest expense rose modestly by 1.5% to $42.9 million. The company recorded a $1.95 million provision for credit losses, compared to a $3.175 million reversal in 2024. Total assets grew to $1.78 billion, with cash increasing significantly to $118.9 million. The return on average assets was 0.82% and return on average equity was 7.89%.
Citizens Community Bancorp reported net income of $14.42 million for FY 2025, compared to $13.75 million in FY 2024, representing a 4.9% increase. Diluted earnings per share rose to $1.46 from $1.34. The company's return on average assets improved to 0.82% from 0.76%, while return on average equity was 7.89% compared to 7.84% in the prior year. Net interest income increased by $4.7 million to $51.2 million, driven primarily by lower short-term interest rates benefiting the company's liability-sensitive balance sheet, higher asset yields, and partially offset by a smaller balance sheet. The net interest margin expanded to 3.12% from 2.73%. Non-interest income grew by $1.04 million to $11.14 million, with gains on equity securities turning positive at $234K versus a loss of $856K in 2024, and gain on sale of loans increasing by 31.99% to $2.93 million.
The company's total interest and dividend income was $87.63 million, with interest and fees on loans contributing $77.5 million and interest on cash and investments providing $10.13 million. Interest expense totaled $36.45 million, with interest on deposits at $33.1 million and interest on other borrowed funds at $3.33 million. Non-interest income components included service charges on deposit accounts ($1.76M), interchange income ($2.19M), loan servicing income ($2.37M), gain on sale of loans ($2.93M), loan fees and service charges ($676K), net gains on equity securities ($234K), and other income ($993K). The increase in gain on sale of loans was split between higher SBA loans sold and mortgage gains, with about two-thirds due to higher SBA loans sold.
Net interest margin improved significantly to 3.12% from 2.73% in 2024, largely due to lower liability costs of 0.36%. The interest rate spread widened to 2.53% from 2.09%. Operating margin (income before taxes to total revenue) was 19.9%. The effective tax rate decreased to 17.3% from 21.2% due to an increase in tax credits, partially from a 2025 purchased tax credit investment. Non-interest expense increased by 1.5% to $42.94 million, with compensation and related benefits rising 5.0% to $23.88 million due to higher incentive compensation and merit increases, partially offset by decreases in other expenses including lower SBA recourse expense.
Net cash from operating activities was $11.69 million, while investing activities generated $45.71 million primarily from proceeds from securities and loan portfolio shrinkage. Financing activities provided $11.28 million. Total assets increased to $1.78 billion, with cash and cash equivalents surging to $118.85 million from $50.17 million. Loans receivable decreased to $1.34 billion with an allowance for credit losses of $22.4 million (1.67% coverage). Total deposits grew to $1.52 billion. Stockholders' equity reached $187.94 million, up from $179.08 million, including net income of $14.42 million and a decrease in unrealized loss on available-for-sale securities of $3.95 million net of tax. The company repurchased 385,252 shares for $6.06 million and paid dividends of $3.60 million.
The company implemented a balance sheet optimization strategy in 2025 resulting in runoff of non-strategic loan relationships, with proceeds used to reduce borrowings and wholesale deposits. Management noted continued improving economic conditions in their markets, with unemployment rates below the national average in their two largest population centers. The company faces risks including interest rate sensitivity, credit quality deterioration, competitive pressures, cybersecurity threats, and economic conditions in Wisconsin and Minnesota markets. The annual inflation rate as of December 2025 was 2.7% measured by consumer price index. The company maintains a 5% share repurchase program with 113,000 shares remaining available as of December 31, 2025.