Citizens Community Bancorp reported net income of $3.3 million, or $0.33 per diluted share, for the second quarter ended June 30, 2025. This is an increase from $3.2 million, or $0.32 per diluted share, in the first quarter of 2025, but a decrease from $3.7 million, or $0.35 per diluted share, in the second quarter of 2024. For the six months ended June 30, 2025, diluted earnings per share were $0.65, down from $0.75 in the prior year period.
Net interest income increased significantly by $1.7 million from the prior quarter, driven by $1.1 million of interest income from nonperforming loan payoffs and $0.4 million in purchase accretion from a loan payoff. The net interest margin expanded by 42 basis points to 3.27%. This improvement was also supported by higher asset yields and lower deposit costs.
The company recorded a provision for credit losses of $1.35 million in Q2 2025, a substantial increase from a negative provision of $0.25 million in the first quarter. This was largely due to a $9.3 million increase in 30-89 day delinquencies from three commercial real estate loan relationships and a $0.3 million impact from modestly worsening macroeconomic assumptions. Special mention loans increased by $8.2 million to $23.2 million due to one multi-family loan.
The Board of Directors authorized a new stock repurchase program on July 24, 2025, for 5% of outstanding shares, totaling 499,000 shares. This initiative aims to enhance shareholder value. Additionally, the company announced the planned redemption of its entire $15 million balance of 6.00% subordinated debentures due September 1, 2030, scheduled for September 1, 2025, to manage future interest expense.
Total assets decreased by $44.8 million to $1.735 billion, and loans receivable decreased by $7.1 million to $1.345 billion. Despite the increase in credit loss provisions, nonperforming assets decreased by $1.5 million to $13.0 million, and substandard loans decreased by $1.7 million to $17.9 million. The allowance for credit losses on loans increased to $21.3 million, representing 1.59% of total loans receivable.
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