Citizens Community Restores Profit After Credit-Loss Spike

The Tip Desk · October 26, 2026 · 3 min read

Net interest income rose $1.0 million to $14.5 million as the margin widened 15 bps and the provision collapsed to $0.13 million.

Citizens Community Bancorp (CZWI), the parent of Altoona, Wisconsin-based CCFBank N.A., reported third-quarter 2026 earnings of $5.4 million, or $0.56 a share, after a $4.2 million drop in the provision for credit losses and a 15-basis-point widening of the net interest margin.

The result reversed the second-quarter print of $1.1 million, or $0.11 a share, when a $4.33 million provision had compressed profit. The company said the third-quarter provision of $0.13 million reflected lower specific reserves and charge-offs on nonaccrual loans and lower required ACL provisions from changes in loan characteristics, offset by new loan growth.

Net interest income rose $1.0 million to $14.5 million from $13.5 million in the second quarter, after a $0.5 million increase in that prior period. The company attributed the linked-quarter gain primarily to a 15-basis-point rise in net interest margin to 3.37%, driven by a 17-basis-point increase in loan yields from repricing and new originations. A larger average balance of net interest-earning assets added $0.2 million and one extra day added $0.1 million.

Pre-provision net revenue increased 21.1% to $6.74 million from $5.56 million in the second quarter. Non-interest income rose $0.3 million to $2.9 million from $2.6 million, on higher gains on equity securities and loan servicing income. Non-interest expense increased $0.1 million to $10.6 million, which the company tied primarily to higher variable performance-based compensation as third-quarter incentive accruals reflected higher performance. The efficiency ratio improved to 61% from 65%.

Loans receivable increased $5.9 million to $1.389 billion, after $24.7 million of growth in the second quarter. The company said the increase reflected new commercial real estate and multi-family originations, partially offset by reductions in C&I, agricultural and residential loans. Total deposits decreased $17.7 million to $1.537 billion, largely from a $30.5 million seasonal drop in public deposits, partly offset by $16.0 million of commercial-deposit growth.

Asset quality remained the offsetting thread. Substandard loans increased $12.4 million to $47.6 million from $35.2 million at June 30, after a similar $12.7 million increase in the second quarter, on two special-mention migrations plus a multi-family project experiencing cash-flow reductions and an office loan listed for sale. Special mention loans decreased $6.2 million to $13.7 million. Criticized loans rose to $61.2 million. Nonperforming assets decreased modestly to $32.2 million; net charge-offs were $5 thousand. The company said the number of relationships rated special mention or substandard is concentrated in ten relationships that make up 70% of those dollars, and that it believes those problem-loan relationships represent individual company or management issues rather than a concentration or industry weakness.

The allowance for credit losses on loans increased $0.2 million to $26.1 million, or 1.88% of loans, from 1.87% at June 30. Established reserve levels for all substandard loans were described as adequate.

Tangible common equity to tangible assets rose to 9.02% from 8.96%. Book value per share was $19.91 and tangible book value $16.62. The company repurchased 70,000 shares under a new 5% authorization of 482,500 shares, leaving 412,500 remaining. On October 22, 2026, the board raised the quarterly dividend 14% to $0.12 a share from $0.105, payable November 20. Chairman, President and CEO Stephen Bianchi said the board and management continue to work with investment bankers on strategic opportunities. Amortization of intangible assets will decline in the fourth quarter as the remaining intangible is fully amortized.