Citizens Community Bancorp, Inc. (NASDAQ:CZWI), established in 2004 and based in Eau Claire, Wisconsin, offers banking services to businesses, consumers, and agricultural operators in Wisconsin and Minnesota.
Despite the current low dividend yield, CZWI is considered a dividend growth stock with sufficient dividend coverage and is trading below tangible book value. The company has been profitable over the past decade, indicating that recent declines in profitability may be temporary.
Citizens Community is a small bank with a market cap of $114.7 million and operates 23 branches in Wisconsin and Minnesota. The bank generates revenue from interest and fees on loans, dividends from investments, and non-interest income.
The loan portfolio, which makes up a significant portion of the revenue, is mainly composed of real estate loans, with a concentration in fixed-rate loans. The credit quality of the portfolio appears solid, with low percentages of Special Mention and Substandard loans.
Over the last decade, CZWI has shown steady revenue and earnings per share growth. Despite a slight decline in net income in 2023, the bank has managed to maintain healthy capital ratios and liquidity.
Currently, CZWI pays an annual dividend of $0.32 per share, with a low payout ratio and a history of annual dividend increases. The stock price has declined but offers a low price-to-earnings ratio and price-to-book ratio, indicating potential value for investors.
While there are risks associated with the geographical concentration of the loan portfolio and potential interest rate pressures, CZWI presents a compelling investment opportunity with a wide margin of safety. Overall, CZWI is considered a buy for investors looking for long-term growth potential.