Citizens Community Bancorp, Inc. (Nasdaq: CZWI) reported third-quarter 2026 earnings of $5.4 million, or $0.56 per diluted share, a significant jump from $1.1 million and $0.11 per diluted share in the second quarter of 2026. The parent company of CCFBank N.A. also announced a 14% increase in its quarterly dividend to $0.12 per share, a move that underscores the board's confidence in the bank's improving capital position and operational performance.
The profit surge was driven primarily by a sharp decline in the provision for credit losses, which fell to $0.13 million from $4.33 million in the prior quarter. This reduction was attributed to lower specific reserves and charge-offs on nonaccrual loans, as well as changes in loan characteristics, though these savings were partially offset by the impact of new loan growth. Net interest income also contributed to the bottom line, rising $1.0 million to $14.5 million compared to the second quarter of 2026.
Stephen Bianchi, Chairman, President, and CEO of Citizens Community Bancorp, noted that the results reflected continued execution of the strategic plan. He highlighted that loan originations outpaced a modest increase in payoffs, leading to a 15 basis point expansion in the net interest margin to a higher level due to repricing and new production. Bianchi stated that non-interest income was 10% higher than the previous quarter, largely due to gains on equity securities and loan servicing, while expenses were controlled aside from higher variable performance-based compensation.
For the nine months ended September 30, 2026, the company reported earnings of $10.3 million, or $1.06 per diluted share, compared to $10.1 million and $1.02 per diluted share in the same period last year. Pre-provision net revenue increased 23.6% over the nine-month period to $17.7 million from $14.3 million a year earlier, driven largely by higher net interest income.
Capital metrics strengthened during the quarter, with tangible common equity as a percent of tangible assets rising to 9.02% from 8.96% at the end of June 2026. Book value per share increased to $19.91 from $19.83 in June, while tangible book value per share reached $16.62. Bianchi noted that growth in capital through earnings helped absorb unrealized losses in the securities portfolio, nudging the tangible capital ratio upward.
The company continued to address asset quality issues, with net charge-offs at $5,000 and criticized loans increasing at a slower rate to $61.2 million. Bianchi indicated that the problem loan relationships are concentrated in ten accounts representing 70% of the special mention and substandard risk-rated dollars, which management views as individual company issues rather than industry weakness. The board authorized the repurchase of 70,000 shares in the quarter under an authorization announced in early September.
Non-interest expense increased slightly to $10.6 million from $10.5 million in the prior quarter, primarily due to higher incentive accruals reflecting improved performance and a one-time data processing increase. However, expenses decreased by $0.4 million compared to the third quarter of 2025, mainly due to lower data processing costs and reduced credit quality expenses.