Citizens Community Bancorp, Inc.

What they do

The Company is a bank holding company regulated by the OCC and the Federal Reserve that holds the stock of Citizens Community Federal N.A., a federally chartered national bank. The Bank serves businesses, agricultural operators and consumers through 21 full-service branches, primarily in the Chippewa Valley Region of Wisconsin and the Twin Cities and Mankato markets in Minnesota. Lending is focused on individual consumers and small commercial borrowers, and total gross loans were $1.343 billion at December 31, 2025.

Revenue drivers

• Commercial and agricultural real estate loans — The largest loan category at $1.074 billion of the $1.343 billion gross loan portfolio at December 31, 2025, generating interest income and fees from commercial borrowers and agricultural operators.
• C&I and agricultural operating loans — $139.3 million of gross loans at December 31, 2025, providing working capital and operating credit to small commercial and agricultural borrowers.
• Residential mortgage and consumer lending — Residential mortgages of $123.8 million and consumer installment loans of $6.2 million at December 31, 2025, plus home equity lines-of-credit, and also a source of gain-on-sale income.
• Non-interest income activities — Includes gains on sale of loans (SBA and mortgage), gains on equity securities, deposit fee income and loan fees and service charges; non-interest income rose about $1.0 million in 2025 versus 2024.

Recent performance

Full-year 2025 net income was $14.42 million, or $1.46 per diluted share, versus $13.75 million, or $1.34, in 2024. Net interest income rose $4.7 million in 2025 on lower liability costs and higher asset yields, partly offset by a smaller balance sheet. The company recorded a $1.950 million provision for credit losses in 2025, largely from higher reserves on individually evaluated loans, compared with a $3.175 million negative provision in 2024. Results weakened in the second quarter of 2026: net income was $1.1 million, or $0.11 per diluted share, versus $3.3 million, or $0.33, a year earlier. Six-month 2026 net income was $4.9 million, or $0.50 per diluted share, versus $6.5 million, or $0.65, in the first half of 2025.

Strategy

Management executed a balance sheet optimization strategy in 2025, running off non-strategic loan relationships and using the proceeds to reduce all borrowings at the Bank and cut wholesale deposits. Second-quarter 2026 net interest income benefited from lower deposit costs and the September 2025 subordinated debt redemption. The company continues to emphasize commercial, agricultural and consumer community banking within its Wisconsin and Minnesota markets. It also cites acquisition growth as part of its strategy while noting integration and cost-savings risks.

Risks

• Geographic concentration — Operations are concentrated in Wisconsin and Minnesota, so regional economic conditions directly affect loan repayment, collateral values and deposit funding.
• Commercial and agricultural credit risk — The portfolio is heavily weighted to commercial/agricultural real estate ($1.074 billion of $1.343 billion gross loans at year-end 2025), and the company recorded a $1.950 million provision in 2025 tied to credit quality and individually evaluated loan reserves.
• Inflation and interest rate risk — Management notes inflation raises non-interest expenses and pressures borrowers' repayment capacity, while rate changes affect the liability-sensitive balance sheet and net interest income.
• Allowance adequacy and earnings volatility — Results swung from a $3.175 million negative provision in 2024 to a $1.950 million provision in 2025, and second-quarter 2026 net income fell to $1.1 million from $3.3 million a year earlier.

Outlook

Management links second-quarter 2026 net interest income growth to lower deposit costs, the September 2025 subordinated debt redemption and higher portfolio yields. It flags the risk factors set out in the 2025 10-K and the 10-Q, including inflation, geopolitical tensions, interest rate and lending risk and allowance sufficiency. The company makes no obligation to update forward-looking statements and gives no specific numeric guidance in the excerpts provided.