- --------------------------------------------------------------------------------
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
X Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
- ---- of 1934
For the quarterly period ended June 30, 1997
- ---- Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ______ to ______
Commission file number 000-22547
--------
CITIZENS COMMUNITY BANCORP, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Florida 65-0614044
- ---------------------------- ----------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
650 East Elkcam Circle
Marco Island, Florida 34145
---------------------------
(Address of Principal Executive Offices)
(941) 389-1800
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 12, 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days:
YES X NO
--- ---
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date;
Common stock, par value $.01 per share 772,950
- -------------------------------------- ----------------------------
(class) Outstanding at July 31, 1997
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<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
INDEX
Part I. Financial Information
Item 1. Financial Statements Page
Condensed Consolidated Balance Sheets -
June 30, 1997 (unaudited) and December 31, 1996.........................2
Condensed Consolidated Statements of Operations -
Three and Six Months ended June 30, 1997 and 1996 (unaudited)...........3
Condensed Consolidated Statement of Stockholders' Equity -
Six Months ended June 30, 1997 (unaudited)..............................4
Condensed Consolidated Statements of Cash Flows -
Six months ended June 30, 1997 and 1996 (unaudited).....................5
Notes to Condensed Consolidated Financial Statements (unaudited)..........6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations...............................................7-9
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders...............10
Item 6. Exhibits and Reports on Form 8-K..................................10
SIGNATURES....................................................................10
1
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
June 30, December 31,
Assets 1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 1,027,296 1,353,777
Federal funds sold 5,591,000 6,688,000
------------ ------------
Total cash and cash equivalents 6,618,296 8,041,777
Securities held to maturity 2,496,356 2,240,290
Loans receivable, net of allowance for loan losses of
$247,000 and $145,000 19,746,138 12,115,911
Premises and equipment 2,767,682 2,293,140
Accrued interest receivable and other assets 211,456 132,406
Deferred tax asset 189,100 204,000
------------ ------------
Total $ 32,029,028 25,027,524
============ ==========
Liabilities and Stockholders' Equity
Deposits:
Demand deposits 2,118,576 2,366,487
Savings and NOW deposits 12,297,307 8,670,357
Money market deposits 1,731,961 417,775
Time deposits 9,075,894 6,430,485
------------ ------------
Total deposits 25,223,738 17,885,104
Official checks 119,000 579,703
Mortgage loan payable -- 525,000
Accrued interest payable and other liabilities 110,536 73,534
------------ ------------
Total liabilities 25,453,274 19,063,341
------------ ------------
Stockholders' Equity:
Preferred stock, $.01 par value, 2,000,000 shares authorized,
none issued or outstanding -- --
Common stock, $.01 par value, 8,000,000 shares authorized,
772,800 shares issued and outstanding 7,728 7,076
Additional paid-in capital 6,908,144 6,322,086
Accumulated deficit (340,118) (364,979)
------------ ------------
Total stockholders' equity 6,575,754 5,964,183
------------ ------------
Total $ 32,029,028 25,027,524
============ ==========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
2
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Operations
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ------------------
1997 1996 1997 1996
---- ---- ---- ----
(unaudited) (unaudited)
<S> <C> <C> <C> <C>
Interest income:
Loans $ 426,922 16,222 738,078 16,437
Securities 36,020 21,553 68,966 21,553
Other interest-earning assets 126,104 118,956 237,987 159,957
--------- --------- --------- ---------
Total interest income 589,046 156,731 1,045,031 197,947
--------- --------- --------- ---------
Interest expense:
Deposits 263,876 55,995 472,377 57,827
Mortgages -- -- 9,573 7,174
--------- --------- --------- ---------
Total interest expense 263,876 55,995 481,950 65,001
--------- --------- --------- ---------
Net interest income 325,170 100,736 563,081 132,946
Provision for loan losses 42,000 6,500 102,000 6,500
--------- --------- --------- ---------
Net interest income after provision for loan losses 283,170 94,236 461,081 126,446
--------- --------- --------- ---------
Noninterest income:
Other service charges and fees 41,804 5,519 75,893 5,773
Other 22,217 -- 56,654 --
--------- --------- --------- ---------
Total noninterest income 64,021 5,519 132,547 5,773
--------- --------- --------- ---------
Noninterest expense:
Salaries and employee benefits 129,341 99,643 239,647 120,303
Occupancy and equipment 36,728 31,070 74,425 34,343
Professional fees 20,821 14,723 23,821 29,401
Office supplies and expense 7,023 18,825 12,684 47,565
Other 123,002 70,231 203,290 85,189
--------- --------- --------- ---------
Total noninterest expense 316,915 234,492 553,867 316,801
--------- --------- --------- ---------
Earnings (loss) before income taxes (benefit) 30,276 (134,737) 39,761 (184,582)
Income taxes (benefit) 11,400 (50,500) 14,900 (69,200)
--------- --------- --------- ---------
Net earnings (loss) $ 18,876 (84,237) 24,861 (115,382)
========= ========= ========= =========
Earnings (loss) per share $ .02 (.13) .03 (.18)
========= ========= ========= =========
Dividends per share $ -- -- -- --
========= ========= ========= =========
Weighted-average number of shares outstanding 772,800 670,000 756,079 628,762
========= ========= ========= =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statement of Stockholders' Equity
For the Six-Month Period Ended June 30, 1997
Additional Total
Preferred Common Paid-In Accumulated Stockholders'
Stock Stock Capital Deficit Equity
----- ----- ------- ------- ------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1996 $-- 7,076 6,322,086 (364,979) 5,964,183
Common stock issuance (unaudited) -- 652 586,058 -- 586,710
Net earnings for the six months
ended June 30, 1997 (unaudited) -- -- -- 24,861 24,861
------- --------- --------- --------- ---------
Balance at June 30, 1997 (unaudited) $-- 7,728 6,908,144 (340,118) 6,575,754
===== ========= ========= ========= =========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
<TABLE>
<CAPTION>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Condensed Consolidated Statements of Cash Flows
Six Months Ended
June 30,
1997 1996
---- ----
(unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ 24,861 (115,382)
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation 36,682 15,375
Provision for loan losses 102,000 6,500
Provision (credit) for deferred income taxes 14,900 (69,200)
Net amortization of loan fees, premiums and discounts 18,527 --
Increase in accrued interest receivable and other assets (79,050) (83,926)
Increase (decrease) in accrued interest payable and
other liabilities 37,002 (2,252)
----------- -----------
Net cash provided by (used in) operating activities 154,922 (248,885)
----------- -----------
Cash flows from investing activities:
Purchase of securities held to maturity (750,000) (3,728,758)
Maturities of securities held to maturity 500,000 --
Net increase in loans (7,756,820) (1,634,044)
Purchase of premises and equipment (511,224) (452,777)
----------- -----------
Net cash used in investing activities (8,518,044) (5,815,579)
----------- -----------
Cash flows from financing activities:
Net increase in noninterest-bearing demand,
savings and NOW deposits 4,693,225 6,079,260
Net increase in time deposits 2,645,409 2,364,090
Net decrease in official checks (460,703) --
Repayment of advances from organizers -- (239,000)
Payment of stock offering costs -- (39,328)
Redemption of preferred stock -- (21,000)
Sale of common stock 586,710 6,030,000
Payment of mortgage payable (525,000) (593,806)
----------- -----------
Net cash provided by financing activities 6,939,641 13,580,216
Net (decrease) increase in cash and cash equivalents (1,423,481) 7,515,752
Cash and cash equivalents at beginning of period 8,041,777 42,366
----------- -----------
Cash and cash equivalents at end of period $ 6,618,296 7,558,118
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 464,128 51,263
=========== ===========
Income taxes $ -- --
=========== ===========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements (unaudited)
(1) General. Citizens Community Bancorp, Inc. (the "Holding Company") was
incorporated on May 24, 1995. The Holding Company owns 100% of the
outstanding common stock of Citizens Community Bank (the "Bank") and 100% of
Citizens Financial Corp. (the "Citizens Financial") (collectively the
"Company"). The Holding Company was organized simultaneously with the Bank
and its primary business is the ownership and operation of the Bank and
Citizens Financial. The Bank is a Florida state-chartered commercial bank
and is insured by the Federal Deposit Insurance Corporation. The Bank opened
for business on March 8, 1996 and provides community banking services to
businesses and individuals in Collier County, Florida. Citizens Financial
was formed and commenced business as a mortgage broker in 1997. The
Company's fiscal year ends December 31.
(2) Loan Impairment and Loan Losses. No loans were identified as impaired at
June 30, 1997 or 1996. The activity in the allowance for loan losses is as
follows:
For the Six
Months Ended
June 30,
1997 1996
---- ----
Balance, beginning of period $145,000 --
Provision charged to earnings 102,000 6,500
-------- --------
Balance, end of period $247,000 6,500
======== ========
(3) Earnings (Loss) Per Common Share. Earnings (loss) per common share were
computed by dividing the net earnings (loss) for the period by the
weighted-average number of shares outstanding. The effect of the outstanding
warrants was not material.
(4) Regulatory Capital. The Bank is required to maintain certain minimum
regulatory capital requirements. The following is a summary at June 30 1997
of the regulatory capital requirements and the Bank's capital on a
percentage basis:
Ratios of Regulatory
the Bank Requirement
Total capital to risk-weighted assets 24.37% 8.00%
Tier I capital to risk-weighted assets 23.12% 4.00%
Tier I capital to total assets - leverage ratio 13.21% 4.00%
6
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of Operations
Comparison of June 30, 1997 and December 31, 1996
Liquidity and Capital Resources
The Company's primary source of cash during the six months ended June 30,
1997 was from net deposit inflows of $7.3 million. Cash was used primarily
for loan originations. At June 30, 1997, the Company had outstanding
commitments to originate loans of $4.0 million. It is expected that these
requirements will be funded from the source described above. At June 30,
1997, the Bank exceeded its regulatory liquidity requirements.
The following table shows selected ratios for the periods ended or at the
dates indicated:
Six Months
Ended Year Ended
June 30, December 31,
1997 1996
---- ----
Average equity as a percentage
of average assets 19.70% 26.16%
Equity to total assets at end of period 20.53% 23.83%
Return on average assets (1) .15% (2.71)%
Return on average equity (1) .78% (10.35)%
Noninterest expense to average assets (1) 3.40% 7.24%
Nonperforming loans and foreclosed
real estate to total assets at end
of period --% --%
(1) Annualized for the six months ended June 30, 1997.
7
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Comparison of the Three-Month Periods Ended June 30, 1997 and 1996
Results of Operations:
General. Net earnings for the three months ended June 30, 1997 were $18,900 or
$.02 per share compared to a net loss of $(84,200) or $(.12) per share for
the three months ended June 30, 1996. This increase in the Company's net
earnings was primarily due to an increase in net interest income, partially
offset by an increase in the provision for loan loss and an increase in
noninterest expense due to the overall growth of the Bank.
Interest Income and Expense. Interest income increased by $432,300 from
$156,700 for the three months ended June 30, 1996 to $589,000 for the three
months ended June 30, 1997. Interest income on loans increased $410,700 due
to an increase in the average loan portfolio balance for the three months
ended June 30, 1997 to $18.3 million compared to $761,000 million during the
1996 period coupled with an increase in the weighted-average yield from 8.5%
in 1996 to 9.3% in 1997. Interest on securities increased $14,500 due to an
increase in the average securities portfolio during the three months ended
June 30, 1997 to $2.4 million from $1.6 million during 1996 as well as an
increase in the weighted-average yield from 5.3% in 1996 to 6.0% in 1997.
Interest on other interest-earning assets increased $7,100 due to a increase
in the average balance of such assets from 1996 to 1997 partially offset by
a decrease in the weighted-average yield from 6.4% in 1996 to 5.6% in 1997.
Interest expense on deposit accounts increased to $263,900 for the three
months ended June 30, 1997 from $56,000 for the three months ended June 30,
1996. Interest expense increased primarily because of an increase in the
average balance from 1996 to 1997. The average balance for the three months
ended June 30, 1997 was $28.0 million compared to $2.8 million during 1996.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type of
lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Company's market areas, and other factors related to the
collectibility of the Company's loan portfolio. The provision for the three
months ended June 30, 1997 and 1996 was $42,000 and $6,500, respectively.
Management believes the balance in the allowance for loan losses of $247,000
at June 30, 1997 is adequate.
Noninterest Expense. Total noninterest expense increased $82,400 to $316,900
for the three months ended June 30, 1997 from $234,500 for the three months
ended June 30, 1996, primarily due to an increase in employee compensation
and benefits of $29,700 as well as an increase in other noninterest expense
of $52,800 due to overall growth of the Company.
Provision for Income Taxes. The income tax provision for the three months
ended June 30, 1997 was $11,400 (an effective rate of 37.7%) compared to a
tax benefit $(50,500) (an effective rate of 37.5%) for the comparable 1996
period.
8
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
Comparison of the Six-Month Periods Ended June 30, 1997 and 1996
Results of Operations:
General. Net earnings for the six months ended June 30, 1997 were $24,900 or
$.03 per share compared to a net loss of $(115,400) or $(.18) per share for
the six months ended June 30, 1996. This increase in the Company's net
earnings was primarily due to an increase in net interest income, partially
offset by an increase in noninterest expenses and an increase in the
provision for loan losses.
Interest Income and Expense. Interest income increased by $847,100 from
$197,900 for the six months ended June 30, 1996 to $1,045,000 for the six
months ended June 30, 1997. Interest income on loans increased $721,600 due
to an increase in the average loan portfolio balance for the six months
ended June 30, 1997 to $16.2 million compared to $.4 million during the 1996
period and an increase in the weighted-average yield from 8.5% in 1996 to
9.4% in 1997. Interest on securities increased $47,400 due to an increase in
the average securities portfolio during the six months ended June 30, 1997
to $2.3 million from $.8 million during 1996 and an increase in the
weighted-average yield from 5.3% in 1996 to 6.00% in 1997. Interest on other
interest-earning assets increased $78,000 primarily due to an increase in
the average balance of these assets from 1996 to 1997 partially offset by a
decrease in the weighted-average yield from 6.4% in 1996 to 5.4% in 1997.
Interest expense on deposit accounts increased to $472,400 for the six
months ended June 30, 1997 from $57,800 for the six months ended June 30,
1996. Interest expense increased primarily because of an increase in the
average balance from 1996 to 1997. The average balance for the six months
ended June 30, 1997 was $25.7 million compared to $2.8 million during 1996.
Provision for Loan Losses. The provision for loan losses is charged to
earnings to bring the total allowance to a level deemed appropriate by
management and is based upon historical experience, the volume and type of
lending conducted by the Company, industry standards, the amount of
nonperforming loans, general economic conditions, particularly as they
relate to the Company's market areas, and other factors related to the
collectibility of the Company's loan portfolio. The provision increased from
$6,500 for the six months ended June 30, 1996 to $102,000 for the six months
ended June 30, 1997. The increase was deemed appropriate by management due
to the growth in the loan portfolio in 1997.
Noninterest Expense. Total noninterest expense increased $237,100 to $553,900
for the six months ended June 30, 1997 from $316,800 for the six months
ended June 30, 1996, primarily due to an increase in employee compensation
and benefits of $119,300, and an increase in other noninterest expense of
$118,100 due to the overall growth of the Company.
Provision for Income Taxes. The income tax provision for the six months ended
June 30, 1997 was $14,900 (an effective rate of 37.5%) compared to benefit
of $(69,200) (an effective rate of 37.5%) for the comparable 1996 period.
9
<PAGE>
CITIZENS COMMUNITY BANCORP, INC. AND SUBSIDIARY
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Company was held on April 29, 1997 for
the purpose of electing directors. Pursuant to the charter and bylaws, four
directors are elected each for a three-year term by the holders of Common Stock.
A total of 622,974 shares of Common Stock were represented at the meeting. All
of management's nominees for director were elected with the following vote:
Shares
Voted For "Withheld"
--------- ----------
Diane M. Beyer 622,274 700
Joel M. Cox, Sr. 622,974 0
James S. Hagedorn 622,274 700
W. Terrell Upson 622,274 700
Ratification of the Appointment of Hacker, Johnson, Cohen & Grieb as independent
auditors with the vote as follows:
Shares
Voted For "Withheld" Against
--------- ---------- -------
602,674 20,200 100
The following directors' term of office continued after the meeting:
Thomas Garrison Stephen McLauglin
Paul janssens - Lens Dennis Lynch
Richard Storm, Jr. Jack Wolf
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit (numbered in accordance with Item 601 of Regulation S-B)
27. Financial Data Schedule
(b) There were no reports on Form 8-K filed for the three months ended
June 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CITIZENS COMMUNITY BANCORP, INC.
(Registrant)
Date: July , 1997 By: /s/ Richard Storm, Jr.
------------ -----------------------
Richard Storm, Jr.,
Chairman of the Board
and Chief Executive Officer
Date: July , 1997 By: /s/ Stephen A. McLaughlin
------------ --------------------------
Stephen A. McLaughlin,
Secretary and Treasurer
(Chief Accounting Officer)
10
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,027
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5,591
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 2,496
<INVESTMENTS-MARKET> 2,497
<LOANS> 19,993
<ALLOWANCE> 247
<TOTAL-ASSETS> 32,029
<DEPOSITS> 25,224
<SHORT-TERM> 0
<LIABILITIES-OTHER> 230
<LONG-TERM> 0
0
0
<COMMON> 8
<OTHER-SE> 6,568
<TOTAL-LIABILITIES-AND-EQUITY> 32,029
<INTEREST-LOAN> 738
<INTEREST-INVEST> 69
<INTEREST-OTHER> 238
<INTEREST-TOTAL> 1,045
<INTEREST-DEPOSIT> 472
<INTEREST-EXPENSE> 10
<INTEREST-INCOME-NET> 563
<LOAN-LOSSES> 102
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 554
<INCOME-PRETAX> 40
<INCOME-PRE-EXTRAORDINARY> 40
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
<YIELD-ACTUAL> 7.8
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 145
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 247
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
