Citizens Community Bancorp beats earnings, shifts to quarterly payouts
EPS of $0.44 tops estimates as Wisconsin lender enhances shareholder returns with new dividend structure and share buybacks
Citizens Community Bancorp reported fourth-quarter earnings that exceeded analyst expectations, while the Wisconsin-based regional bank announced a strategic shift to quarterly dividend payments as part of a broader shareholder return enhancement initiative.
The bank holding company reported earnings of $0.44 per diluted share for the quarter ended December 31, 2025, surpassing consensus estimates of $0.37 by nearly 19%. The results represent a significant improvement from $0.37 per share in the third quarter of 2025 and $0.27 in the year-ago period.
For the full year 2025, Citizens Community Bancorp delivered earnings of $1.46 per diluted share, up from $1.34 in 2024, demonstrating steady earnings momentum despite challenging rate environment conditions that have pressured many regional lenders.
The bank's board of directors approved a quarterly dividend of $0.105 per share, replacing the previous annual dividend structure. The new quarterly payout will be payable on February 20, 2026, to shareholders of record on February 6, 2026. The move marks a departure from the company's previous "thrift-like" annual dividend policy, bringing Citizens Community Bancorp more in line with industry norms for community bank dividend practices.
Beyond the dividend shift, the bank continued its shareholder-friendly capital allocation through share repurchases. During the fourth quarter, the company repurchased approximately 250,000 shares at an average price of $15.99, representing a significant discount to the company's tangible book value of $16.23 per share. The repurchases were conducted under a 5% common stock buyback authorization of 499,000 shares approved in July 2025, with approximately 113,000 shares remaining available as of December 31.
The repurchases appear particularly timely given the bank's improving book value. Book value per share grew to $19.54 at December 31, 2025, from $18.95 in the prior quarter and $17.94 a year earlier, reflecting strong capital accumulation. Tangible book value showed even more robust growth, increasing 10.5% year-over-year to $16.23 from $14.69 at the end of 2024.
"We utilized our capital strength to enhance shareholder value early in the quarter by repurchasing approximately 250,000 shares at an average price less than tangible book value, and the Board voted to declare a quarterly dividend replacing the 'thrift like' annual dividend in prior years," said Stephen Bianchi, Chairman, President and Chief Executive Officer of Citizens Community Bancorp.
The bank's operational performance showed signs of improvement in the quarter. Total loans receivable increased by $17.3 million, or 1.3%, to reach $1.340 billion, while deposits grew by $43.5 million, or 2.9%, to $1.524 billion. The deposit growth represents a $44 million year-over-year increase, which management highlighted as evidence of successful customer base expansion efforts.
Perhaps most importantly for investors focused on the net interest margin outlook, Bianchi indicated that the bank expects continued NIM expansion in 2026. "Loan growth returned in the quarter and the pipeline looked promising entering 2026," Bianchi said. "With the improved quality of our deposit base and as loans originated during the pandemic come due for pricing adjustments, we anticipate continued NIM expansion which should result in stronger earnings."
The bank's net interest margin contracted slightly by 5 basis points to 3.15% in the fourth quarter compared to the third quarter, but represents a meaningful 36-basis-point improvement from the fourth quarter of 2024. The sequential compression occurred despite net interest income remaining relatively stable at $13.1 million.
Credit quality remained stable, with nonperforming assets flat at $16.7 million compared to the prior quarter. The bank's provision for credit losses declined to $0.20 million in the fourth quarter from $0.65 million in the third quarter, reflecting improved loan performance or a more optimistic credit outlook.
Efficiency metrics showed mixed results, with the efficiency ratio deteriorating slightly to 68% from 67% in the third quarter. However, non-interest expense decreased by $0.4 million to $10.7 million, driven by lower compensation and data processing costs.
Analysts maintain a positive outlook on the stock, with an average target price of $20.00, representing approximately 10% upside from current levels around $18.20. The company's price-to-book ratio of 0.95 suggests the shares trade at a modest discount to book value, while the trailing price-to-earnings ratio of 13.89 appears reasonable relative to the regional banking sector.
Shares of Citizens Community Bancorp have been trading near their 52-week high of $18.74, having recovered significantly from the 52-week low of $12.69. The stock is currently above its 50-day moving average of $17.53 and its 200-day moving average of $15.70, suggesting positive momentum.
Looking ahead, management's commentary regarding NIM expansion and loan growth prospects for 2026 will be closely monitored by investors. The bank's ability to maintain credit quality while growing its loan portfolio in a potentially slowing economic environment will be critical to sustaining the earnings momentum demonstrated in the fourth quarter.