EXHIBIT 99.2 Earnings Release Supplement Second Quarter 2022
Citizens Community Bancorp, Inc. Table of Contents Cautionary Notes and Additional Disclosures COVID‐19 Related Loan Deferrals Non‐Owner Occupied CRE Owner Occupied CRE Multi‐family Commercial & Industrial Loans Construction & Development Loans Agricultural Real Estate & Operating Loans Hotel Loans Restaurant Loans Campground Loans Credit Quality/Risk Rating Descriptions Loans by Risk Rating as of June 30, 2022 Loans by Risk Rating as of March 31, 2022 Loans by Risk Rating as of December 31, 2021 Loans by Risk Rating as of June 30, 2021 Allowance for Loan Losses Aging Analysis as of June 30, 2022, and March 31, 2022 Aging Analysis as of December 31, 2021, and June 30, 2021 Nonaccrual Loans Roll forward Other Real Estate Owned Roll forward Troubled Debt Restructurings in Accrual Status Acquired Loans – Non‐Accretable Difference and Accretable Discount Tables SBA PPP loans and SBA PPP net deferred loan fee accretion by year of origination Earnings Per Share Selected Capital Composition Highlights – Bank and Company Non‐GAAP Financial Measures Reconciliation of GAAP Net Income and Net Income as Adjusted (non‐GAAP) Key Financial Metrics Based on Net Income as Adjusted Reconciliation of Return on Average Assets as Adjusted (non‐GAAP) Reconciliation of Return on Average Equity as Adjusted (non‐GAAP) Page(s) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 21 21 22 23 24 25 26 26 27 27 27 1
Cautionary Notes and Additional Disclosures DATES AND PERIODS PRESENTED In this earnings release financial supplement, unless otherwise noted, “20YY” refers to either the corresponding fiscal year-end date or the corresponding 12-months (i.e. fiscal year) then ended. “MMM-YY” refers to either the corresponding quarter-end date, or the corresponding three-month period then ended. CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This earnings release financial supplement may contain certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements include, but are not limited to, descriptions of the financial condition, results of operations, asset and credit quality trends, profitability, projected earnings, future plans, strategies and expectations of Citizens Community Bancorp, Inc. (“CZWI” or the “Company”) and its subsidiary, Citizens Community Federal, National Association (“CCFBank”). The Company intends such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and is including this statement for purposes of complying with those safe harbor provisions. Forward-looking statements, which are based on certain assumptions of the Company, are generally identifiable by use of the words “believe,” “expect,” “estimates,” “intend,” “anticipate,” “estimate,” “project,” “on pace,” “seek,” “target,” “potential,” “focus,” “may,” “preliminary,” “could,” “should” or similar expressions. These forward-looking statements express management’s current expectations or forecasts of future events, and by their nature, are subject to risks and uncertainties. Therefore, there are a number of factors that might cause actual results to differ materially from those in such statements. These uncertainties include conditions in the financial markets and economic conditions generally; adverse impacts to the Company or CCFBank arising from the COVID-19 pandemic; acts of terrorism and political or military actions by the United States or other governments; the possibility of a deterioration in the residential real estate markets; interest rate risk; lending risk; higher lending risks associated with our commercial and agricultural banking activities; the sufficiency of loan allowances; changes in the fair value or ratings downgrades of our securities; competitive pressures among depository and other financial institutions; disintermediation risk; our ability to maintain our reputation; our ability to maintain or increase our market share; our ability to realize the benefits of net deferred tax assets; our inability to obtain needed liquidity; our ability to raise capital needed to fund growth or meet regulatory requirements; our ability to attract and retain key personnel; our ability to keep pace with technological change; prevalence of fraud and other financial crimes; cybersecurity risks; the possibility that our internal controls and procedures could fail or be circumvented; our ability to successfully execute our acquisition growth strategy; risks posed by acquisitions and other expansion opportunities, including difficulties and delays in integrating the acquired business operations or fully realizing the cost savings and other benefits; restrictions on our ability to pay dividends; the potential volatility of our stock price; accounting standards for loan losses; legislative or regulatory changes or actions, or significant litigation, adversely affecting the Company or CCFBank; public company reporting obligations; changes in federal or state tax laws; and changes in accounting principles, policies or guidelines and their impact on financial performance. Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. Such uncertainties and other risks that may affect the Company's performance are discussed further in Part I, Item 1A, “Risk Factors,” in the Company’s Form 10-K, for the year ended December 31, 2021 filed with the Securities and Exchange Commission (“SEC”) on March 2, 2022, the Company’s Form 10-Q for the quarter ended March 31, 2022, filed with the SEC on May 4, 2022 and the Company's subsequent filings with the SEC. The Company undertakes no obligation to make any revisions to the forward-looking statements contained herein or to update them to reflect events or circumstances occurring after the date hereof. NON-GAAP FINANCIAL MEASURES This earnings release financial supplement contains non-GAAP financial measures. For purposes of Regulation G, a non-GAAP financial measure is a numerical measure of the registrant's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statement of income, balance sheet or statement of cash flows (or equivalent statements) of the issuer; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. In this regard, GAAP refers to generally accepted accounting principles in the United States. Non-GAAP financial measures referred to herein include net income as adjusted, return on average equity as adjusted, and return on average assets as adjusted. Reconciliations of all non-GAAP financial measures used herein to the comparable GAAP financial measures in the appendix at the end of this presentation. 2
COVID-19 Related Loan Deferrals Dollars in Thousands COVID‐19 Deferrals Balance Number of Loans Commercial Deferrals Hotel Loans ‐$ ‐ Other Commercial Loans ‐ ‐ Total Commercial Deferrals ‐ ‐ Residential Deferrals 363 5 Consumer Deferrals ‐ ‐ Total Deferrals 363$ 5 June 30, 2022 3
Portfolio Fundamentals 63% 32% 5% Wisconsin Minnesota Other By Geography As of 6/30/22 • Typically well seasoned investors with multiple projects, track record of success and personal financial strength (net worth/Liquidity) • Maximum LTV =<80% with recourse to owners with >20% interest • Term of 5‐10 years with 20 to 25‐year amortizations depending on property type, markets and strength and liquidity of sponsors • Minimum DSC and/or Global DSC covenant required to monitor performance ranging from 1.15x‐1.25x • Conservative underwriting approach emphasizing actual results or market data • Appropriate use of SBA 504/7a for lower cash injection or special use projects Non – Owner Occupied CRE As of 6/30/22 As of 3/31/22 $455 $466 759 758 $599 $615 Approximate Weighted Average LTV 63% 62% 2.2x 2.2x Weighted Average Seasoning In Months 25 24 0.01% 0.01% Approximate Weighted Average DSCR Trailing 12 Month Net Charge‐Offs Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Thousands Portfolio Characteristics ‐ Non‐Owner Occupied CRE 21% 21% 12% 11% 11% 8% 5% 4% 3% 4% Hotel Investor Residential CRE ‐ Retail CRE ‐ Senior Living CRE ‐ Office CRE ‐ Warehouse/Mini Storage CRE ‐ Industrial/Manufacturing CRE ‐ Campground CRE ‐ Mixed Use Other Non – Owner Occupied CRE As of 6/30/22 4
22% 16% 13%9% 9% 8% 6% 5% 12% CRE Campground CRE Restaurant CRE Industrial/Manufacturing CRE Retail CRE Mixed Use CRE Warehouse/Mini Storage CRE Senior Living CRE Office Other Owner Occupied CRE As of 6/30/22 Portfolio Fundamentals 70% 9% 21% Wisconsin Minnesota Other By Geography As of 6/30/22 • Underwritten to <80% LTV based on appraised value (<75% for Restaurant) • Term of 5‐10 years with 20‐year amortization • Recourse to owners with greater than 20% interest • DSC covenant of 1.25x on project and/or Global DSC of 1.15x • Appropriate use of SBA 504/7a for lower cash injection or special use projects • By Geography “Other” segment includes borrowers with warm climates, no income tax states Owner Occupied CRE As of 6/30/22 As of 3/31/22 $248 $223 423 426 $587 $524 Approximate Weighted Average LTV 49% 50% 2.2x 2.2x Weighted Average Seasoning In Months 28 30 0.00% 0.00% Approximate Weighted Average DSCR Trailing 12 Month Net Charge‐Offs Portfolio Characteristics ‐ Owner Occupied CRE Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Thousands 5
Portfolio Fundamentals 62% 37% 1% Wisconsin Minnesota Other By Geography As of 6/30/22 6% 41% 35% 5% 9% 4% 2022 2021 2020 2019 2018 Prior By Vintage As of 6/30/22 • Robust housing markets in Eau Claire and Mankato markets supported by student populations at state universities, technical colleges, and growing population and job markets • Multi‐family sponsors experienced owners with multi‐project portfolios • Typically underwritten to 75% LTV based on appraised value with recourse; metro markets and/or strong sponsors may warrant up to 80% LTV • Generally, term of 5‐10 years with 20 to 25‐year amortization (varies by new versus existing, size of market and sponsor strength) • Covenant for minimum DSC/Global DSC Multi-family As of 6/30/22 As of 3/31/22 $180 $179 114 113 $1.58 $1.59 67% 68% Approximate Weighted Average DSCR 1.7x 1.7x 21 20 0.00% 0.00% Approximate Weighted Average LTV Weighted Average Seasoning In Months Trailing 12 Month Net Charge‐Offs Portfolio Characteristics ‐ Multi‐family Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Millions 6
88% 11% 1% Wisconsin Minnesota Other By Geography As of 6/30/22 18% 13% 11% 10%8% 7% 7% 5% 5% 3% 3% 2% 2% 6% Manufacturing Finance and Insurance Public Admin Transportation and Warehousing Wholesale Trade Real Estate, Rental and Leasing Retail Trade Construction Agriculture Education Services Administrative Support Health Care Other Services Other Commercial & Industrial As of 6/30/22 • Highly diversified, secured loan portfolio underwritten with recourse • Lines of credit reviewed annually and may have borrowing base certificates governing line usage • Fixed asset LTV’s based on age and type of equipment; <5‐year amortization • Use of SBA Guaranty Program (Preferred Lender or General Processing) as appropriate • “Retail Trade” segment consists of Farm Supply, Franchised Hardware, Franchised Auto Parts, Franchised and Non‐franchised Auto Dealers and Repair Shops, Convenience Stores/Gas Stations Commercial & Industrial Loans As of 6/30/22 As of 3/31/22 $139 $121 707 710 $197 $170 4.3X 2.3x 29 30 0.01% 0.01% Committed Line, if collateral 58 57 Approximate Weighted Average DSCR Weighted Average Seasoning In Months Trailing 12 Month Net Charge‐Offs Portfolio Characteristics ‐ Commercial & Industrial Loan Balance In Millions Number of Loans Average Loan Size In Thousands Portfolio Fundamentals 7
Portfolio Fundamentals 22% 21% 12% 10% 7% 5% 4% 3% 3% 3% 10% 1‐4 Family Multi‐Family Warehouse/Mini Campgrounds Senior Living Mixed Use Hospitality Retail Land Industrial/Manufacturing Other Commercial & Development As of 6/30/22 43% 23% 12% 9% 5% 4% 4% Wisconsin Minnesota South Dakota Iowa Michigan Florida Other By Geography As of 6/30/22 • Underwritten to 75‐80% LTV based on lesser of cost or appraised value with full recourse • Interest only typically up to 18 months (depending on project complexity and seasonal timing) followed by amortization of 15‐25 years (terms vary by property type) • Borrower equity contribution of cash/land value =>15% injected at the beginning of project (cash/land contribution) • Construction loans require 3rd party inspections and title company draws after balancing to sworn construction statement • 1‐4 residential construction centered in eastern Twin Cities and Northwest Wisconsin. Generally, 80% LTC /60%‐80% of AV. Spec building capped. Progress reporting monthly by individual home Construction & Development Loans As of 6/30/22 As of 3/31/22 Loan Balance Outstanding In Millions $115 $88 Number of Loans 138 128 Average Loan Size In Thousands $835 $687 Approximate Weighted Average LTV 60% 60% Trailing 12 Month Net Charge‐Offs 0.00% 0.00% Percent Utilized of Commitments 51% 43% Portfolio Characteristics ‐ Construction & Development 8
36% 26% 21% 17% Crop Other Farming Dairy Other Agricultural As of 6/30/22 Portfolio Fundamentals 69% 28% 3% Wisconsin Minnesota Other By Geography As of 6/30/22 • Producers required to have marketing plans to mitigate volatility of commodities • Appropriate crop/revenue insurance and/or dairy margin protection required • Maximum ag RE LTV of less than 65%; equipment LTV of less than 75% • Appropriate structuring to separate crop production cycles and to match length of loan with asset financed • Use of Farmer Mac, FSA, SBA or USDA programs to address DSC, collateral margins or working capital Agricultural Real Estate & Operating Loans As of 6/30/22 As of 3/31/22 $102 $104 539 546 $190 $191 1.9x 1.9x 32 32 0.17% ‐0.03% Approximate Weighted Average DSCR Weighted Average Seasoning In Months Trailing 12 Month Net Charge‐Offs Portfolio Characteristics ‐ Agricultural Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Thousands 9
66% 27% 7% Limited Service Full Service Other Hotels As of 6/30/22 Portfolio Fundamentals 44% 40% 16% Minnesota Wisconsin Illinois By Geography As of 6/30/22 • Mainly experienced multi project hoteliers and guarantors with strong personal financial statements (net worth and liquidity) • Mainly flagged properties • Underwriting consistent with management's conservative approach to Investor CRE, emphasizing actual results in underwriting Hotel Loans As of 6/30/22 As of 3/31/22 $97 $105 27 32 $3.6 $3.0 61% 58% 2.6x 2.5x 0.00% 0.00%Trailing 12 Month Net Charge Offs Number of Loans Approximate DSCR ‐ Non‐Construction Portfolio Characteristics ‐ Hotels Loan Balance Outstanding In Millions Average Loan Size In Millions Approximate Weighted Average LTV 10
66% 11% 7% 4% 3% 9% Culver's ‐ Limited Service Restaurants Other National Limited Services Drinking Establishments Bowling Centers Other Restaurants As of 6/30/22 Portfolio Fundamentals 70% 18% 12% Wisconsin Minnesota Other By Geography As of 6/30/22 • Experienced developers/operators of national Limited /Quick Service brands (Culver’s, Subway, Dairy Queen, McDonalds, Jimmy John’s, A&W) • Underwritten to =<80% LTV with full recourse (depending on sponsor history); 20‐year amortization with 5 to 10‐year terms • Use of SBA Guaranty Program (Preferred Lender or General Processing) as appropriate • Drinking establishments may have other collateral pledged and tend to be in smaller communities in our footprint • Lessors of RE include investor and owner‐occupied structure Restaurant Loans As of 6/30/22 As of 3/31/22 $48 $47 77 80 $619 $592 55% 56% 3.6x 3.6x 0.00% 0.00% Portfolio Characteristics ‐ Restaurants Approximate Weighted Average DSCR Trailing 12 Month Net Charge‐Offs Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Thousands Approximate Weighted Average LTV 11
7% 33% 34% 11% 4% 4% 7% 2022 2021 2020 2019 2017 2016 Prior By Vintage As of 6/30/22 Portfolio Fundamentals 32% 13% 11%9% 7% 6% 5% 5% 12% Wisconsin Ohio Maryland Pennsylvania Utah Kentucky New Jersey Iowa Other By Geography As of 6/30/22 • Experienced multi‐unit operators and owner‐occupied franchised campgrounds (typically Jellystone Park) • Grounds offer a mix of camping, RV and cabin options with recreational amenities • Park locations within reasonable proximity of metropolitan areas and/or near national and state parks • Underwritten with recourse generally with 5‐10 year terms and 20 year amortization • Use of SBA 7a and 504, or other government guaranteed loan programs as appropriate • 20+ years of history through CCF acquisition with no charge‐off history Campground Loans As of 6/30/22 As of 3/31/22 $82 $76 51 47 $1.6 $1.6 43% 40% 1.7x 1.7x 28 27 0.00% 0.00% Portfolio Characteristics ‐ Campgrounds Approximate Weighted Average DSCR Trailing 12 Month Net Charge‐Offs Loan Balance Outstanding In Millions Number of Loans Average Loan Size In Millions Approximate Weighted Average LTV Weighted Average Seasoning in Months 12
Credit Quality/Risk Ratings: Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant. Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio is presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows: 1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better. 5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future. 6 - Special Mention. A “Special Mention” loan has one or more potential weakness that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future. 7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. 8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. 9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future. 13
Below is a breakdown of loans by risk rating as of June 30, 2022: 1 to 5 6 7 8 9 TOTAL Originated Loans: Commercial/Agricultural real estate: Commercial real estate $ 583,783 $ 6,084 $ 6,134 $ — $ — $ 596,001 Agricultural real estate 55,382 406 1,535 — — 57,323 Multi-family real estate 175,684 280 — — — 175,964 Construction and land development 113,974 — 43 — — 114,017 C&I/Agricultural operating: Commercial and industrial 112,171 10,448 1,494 — — 124,113 Agricultural operating 18,230 52 2,005 — — 20,287 Residential mortgage: Residential mortgage 63,266 — 2,441 — — 65,707 Purchased HELOC loans 3,419 — — — — 3,419 Consumer installment: Originated indirect paper 12,651 — 85 — — 12,736 Other consumer 7,416 — 56 — — 7,472 Originated loans before SBA PPP loans $ 1,145,976 $ 17,270 $ 13,793 $ — $ — $ 1,177,039 SBA PPP loans — — — — — — Total originated loans $ 1,145,976 $ 17,270 $ 13,793 $ — $ — $ 1,177,039 Acquired Loans: Commercial/Agricultural real estate: Commercial real estate $ 104,436 $ — $ 2,480 $ — $ — $ 106,916 Agricultural real estate 17,581 — 2,903 — — 20,484 Multi-family real estate 3,965 — — — — 3,965 Construction and land development 1,035 — 136 — — 1,171 C&I/Agricultural operating: Commercial and industrial 14,647 4 238 — — 14,889 Agricultural operating 4,125 — 57 — — 4,182 Residential mortgage: Residential mortgage 21,798 — 1,070 — — 22,868 Consumer installment: Other consumer 310 — 3 — — 313 Total acquired loans $ 167,897 $ 4 $ 6,887 $ — $ — $ 174,788 Total Loans: Commercial/Agricultural real estate: Commercial real estate $ 688,219 $ 6,084 $ 8,614 $ — $ — $ 702,917 Agricultural real estate 72,963 406 4,438 — — 77,807 Multi-family real estate 179,649 280 — — — 179,929 Construction and land development 115,009 — 179 — — 115,188 C&I/Agricultural operating: Commercial and industrial 126,818 10,452 1,732 — — 139,002 Agricultural operating 22,355 52 2,062 — — 24,469 Residential mortgage: Residential mortgage 85,064 — 3,511 — — 88,575 Purchased HELOC loans 3,419 — — — — 3,419 Consumer installment: Originated indirect paper 12,651 — 85 — — 12,736 Other consumer 7,726 — 59 — — 7,785 Gross Loans Before SBA PPP Loans $ 1,313,873 $ 17,274 $ 20,680 $ — $ — $ 1,351,827 SBA PPP loans — — — — — — Gross loans $ 1,313,873 $ 17,274 $ 20,680 $ — $ — $ 1,351,827 Less: Unearned net deferred fees and costs and loans in process (2,338) Unamortized discount on acquired loans (2,634) Allowance for loan losses (16,825) Loans receivable, net $ 1,330,030 14
Below is a breakdown of loans by risk rating as of March 31, 2022: 1 to 5 6 7 8 9 TOTAL Originated Loans: Commercial/Agricultural real estate: Commercial real estate $ 569,560 $ 659 $ 5,070 $ — $ — $ 575,289 Agricultural real estate 50,111 784 1,788 — — 52,683 Multi-family real estate 175,186 285 — — — 175,471 Construction and land development 86,869 — 128 — — 86,997 C&I/Agricultural operating: Commercial and industrial 108,370 48 4 — — 108,422 Agricultural operating 18,792 68 5,160 — — 24,020 Residential mortgage: Residential mortgage 57,145 — 2,730 — — 59,875 Purchased HELOC loans 3,487 — — — — 3,487 Consumer installment: Originated indirect paper 14,396 — 112 — — 14,508 Other consumer 7,772 — 70 — — 7,842 Originated loans before SBA PPP loans $ 1,091,688 $ 1,844 $ 15,062 $ — $ — $ 1,108,594 SBA PPP loans 2,071 — — — — 2,071 Total originated loans $ 1,093,759 $ 1,844 $ 15,062 $ — $ — $ 1,110,665 Acquired Loans: Commercial/Agricultural real estate: Commercial real estate $ 111,371 $ — $ 3,114 $ — $ — $ 114,485 Agricultural real estate 18,424 — 4,609 — — 23,033 Multi-family real estate 4,016 — — — — 4,016 Construction and land development 729 — 154 — — 883 C&I/Agricultural operating: Commercial and industrial 12,342 5 253 — — 12,600 Agricultural operating 4,501 — 236 — — 4,737 Residential mortgage: Residential mortgage 23,507 — 1,391 — — 24,898 Consumer installment: Other consumer 346 — 3 — — 349 Total acquired loans $ 175,236 $ 5 $ 9,760 $ — $ — $ 185,001 Total Loans: Commercial/Agricultural real estate: Commercial real estate $ 680,931 $ 659 $ 8,184 $ — $ — $ 689,774 Agricultural real estate 68,535 784 6,397 — — 75,716 Multi-family real estate 179,202 285 — — — 179,487 Construction and land development 87,598 — 282 — — 87,880 C&I/Agricultural operating: Commercial and industrial 120,712 53 257 — — 121,022 Agricultural operating 23,293 68 5,396 — — 28,757 Residential mortgage: Residential mortgage 80,652 — 4,121 — — 84,773 Purchased HELOC loans 3,487 — — — — 3,487 Consumer installment: Originated indirect paper 14,396 — 112 — — 14,508 Other consumer 8,118 — 73 — — 8,191 Gross Loans Before SBA PPP Loans $ 1,266,924 $ 1,849 $ 24,822 $ — $ — $ 1,293,595 SBA PPP loans 2,071 — — — — 2,071 Gross loans $ 1,268,995 $ 1,849 $ 24,822 $ — $ — $ 1,295,666 Less: Unearned net deferred fees and costs and loans in process (2,223) Unamortized discount on acquired loans (3,267) Allowance for loan losses (16,818) Loans receivable, net $ 1,273,358 15
Below is a breakdown of loans by risk rating as of December 31, 2021: 1 to 5 6 7 8 9 TOTAL Originated Loans: Commercial/Agricultural real estate: Commercial real estate $ 572,724 $ 667 $ 5,004 $ — $ — $ 578,395 Agricultural real estate 50,834 1,267 271 — — 52,372 Multi-family real estate 173,760 290 — — — 174,050 Construction and land development 75,146 — 3,467 — — 78,613 C&I/Agricultural operating: Commercial and industrial 107,798 57 82 — — 107,937 Agricultural operating 23,935 764 1,503 — — 26,202 Residential mortgage: Residential mortgage 60,754 — 3,101 — — 63,855 Purchased HELOC loans 3,706 — 165 — — 3,871 Consumer installment: Originated indirect paper 15,818 — 153 — — 15,971 Other consumer 8,404 — 69 — — 8,473 Originated loans before SBA PPP loans $ 1,092,879 $ 3,045 $ 13,815 $ — $ — $ 1,109,739 SBA PPP loans 8,755 — — — — 8,755 Total originated loans $ 1,101,634 $ 3,045 $ 13,815 $ — $ — $ 1,118,494 Acquired Loans: Commercial/Agricultural real estate: Commercial real estate $ 116,839 $ 1,314 $ 1,917 $ — $ — $ 120,070 Agricultural real estate 21,051 — 5,072 — — 26,123 Multi-family real estate 4,299 — — — — 4,299 Construction and land development 735 172 — — — 907 C&I/Agricultural operating: Commercial and industrial 13,931 5 294 — — 14,230 Agricultural operating 4,936 — 450 — — 5,386 Residential mortgage: Residential mortgage 25,869 — 1,266 — — 27,135 Consumer installment: Other consumer 398 — 3 — — 401 Total acquired loans $ 188,058 $ 1,491 $ 9,002 $ — $ — $ 198,551 Total Loans: Commercial/Agricultural real estate: Commercial real estate $ 689,563 $ 1,981 $ 6,921 $ — $ — $ 698,465 Agricultural real estate 71,885 1,267 5,343 — — 78,495 Multi-family real estate 178,059 290 — — — 178,349 Construction and land development 75,881 172 3,467 — — 79,520 C&I/Agricultural operating: Commercial and industrial 121,729 62 376 — — 122,167 Agricultural operating 28,871 764 1,953 — — 31,588 Residential mortgage: Residential mortgage 86,623 — 4,367 — — 90,990 Purchased HELOC loans 3,706 — 165 — — 3,871 Consumer installment: Originated indirect paper 15,818 — 153 — — 15,971 Other consumer 8,802 — 72 — — 8,874 Gross Loans Before SBA PPP Loans $ 1,280,937 $ 4,536 $ 22,817 $ — $ — $ 1,308,290 SBA PPP loans 8,755 — — — — 8,755 Gross loans $ 1,289,692 $ 4,536 $ 22,817 $ — $ — $ 1,317,045 Less: Unearned net deferred fees and costs and loans in process (2,482) Unamortized discount on acquired loans (3,600) Allowance for loan losses (16,913) Loans receivable, net $ 1,294,050 16
Below is a breakdown of loans by risk rating as of June 30, 2021: 1 to 5 6 7 8 9 TOTAL Originated Loans: Commercial/Agricultural real estate: Commercial real estate $ 419,278 $ 506 $ 781 $ — $ — $ 420,565 Agricultural real estate 41,425 378 1,122 — — 42,925 Multi-family real estate 113,491 299 — — — 113,790 Construction and land development 86,108 — 3,478 — — 89,586 C&I/Agricultural operating: Commercial and industrial 77,758 16 3,009 — — 80,783 Agricultural operating 21,261 22 1,731 — — 23,014 Residential mortgage: Residential mortgage 69,549 — 3,416 — — 72,965 Purchased HELOC loans 4,715 — 234 — — 4,949 Consumer installment: Originated indirect paper 20,196 — 181 — — 20,377 Other consumer 10,250 — 46 — — 10,296 Originated loans before SBA PPP loans $ 864,031 $ 1,221 $ 13,998 $ — $ — $ 879,250 SBA PPP loans 74,925 — — — — 74,925 Total originated loans $ 938,956 $ 1,221 $ 13,998 $ — $ — $ 954,175 Acquired Loans: Commercial/Agricultural real estate: Commercial real estate $ 124,647 $ 10,876 $ 3,974 $ — $ — $ 139,497 Agricultural real estate 24,576 — 5,164 — — 29,740 Multi-family real estate 7,401 — — — — 7,401 Construction and land development 961 202 39 — — 1,202 C&I/Agricultural operating: Commercial and industrial 19,391 9 301 — — 19,701 Agricultural operating 4,482 — 411 — — 4,893 Residential mortgage: Residential mortgage 31,782 — 1,999 — — 33,781 Consumer installment: Other consumer 644 — 4 — — 648 Total acquired loans $ 213,884 $ 11,087 $ 11,892 $ — $ — $ 236,863 Total Loans: Commercial/Agricultural real estate: Commercial real estate $ 543,925 $ 11,382 $ 4,755 $ — $ — $ 560,062 Agricultural real estate 66,001 378 6,286 — — 72,665 Multi-family real estate 120,892 299 — — — 121,191 Construction and land development 87,069 202 3,517 — — 90,788 C&I/Agricultural operating: Commercial and industrial 97,149 25 3,310 — — 100,484 Agricultural operating 25,743 22 2,142 — — 27,907 Residential mortgage: Residential mortgage 101,331 — 5,415 — — 106,746 Purchased HELOC loans 4,715 — 234 — — 4,949 Consumer installment: Originated indirect paper 20,196 — 181 — — 20,377 Other consumer 10,894 — 50 — — 10,944 Gross Loans Before SBA PPP Loans $ 1,077,915 $ 12,308 $ 25,890 $ — $ — $ 1,116,113 SBA PPP loans 74,925 — — — — 74,925 Gross loans $ 1,152,840 $ 12,308 $ 25,890 $ — $ — $ 1,191,038 Less: Unearned net deferred fees and costs and loans in process (5,133) Unamortized discount on acquired loans (4,347) Allowance for loan losses (16,845) Loans receivable, net $ 1,164,713 17
Allowance for Loan Losses (in thousand, except ratios) June 30, 2022 and Three Months Ended March 31, 2022 and Three Months Ended December 31, 2021 and Three Months Ended June 30, 2021 and Three Months Ended Allowance for loan losses (“ALL”), at beginning of period $ 16,818 $ 16,913 $ 16,832 $ 16,860 Loans charged off: Commercial/Agricultural real estate (122) (35) — (51) C&I/Agricultural operating (247) (63) — (7) Residential mortgage (56) (12) — — Consumer installment (16) (9) (5) (15) Total loans charged off (441) (119) (5) (73) Recoveries of loans previously charged off: Commercial/Agricultural real estate 3 3 18 1 C&I/Agricultural operating 9 10 62 33 Residential mortgage 25 1 1 3 Consumer installment 11 10 5 21 Total recoveries of loans previously charged off: 48 24 86 58 Net loans charged off (“NCOs”) (393) (95) 81 (15) Additions to ALL via provision for loan losses charged to operations 400 — — — ALL, at end of period $ 16,825 $ 16,818 $ 16,913 $ 16,845 Average outstanding loan balance $ 1,328,661 $ 1,304,141 $ 1,271,956 $ 1,186,439 Ratios: NCOs (annualized) to average loans 0.12 % 0.03 % (0.03) % 0.01 % 18
Aging Analysis (in thousands) 30-59 Days Past Due and Accruing 60-89 Days Past Due and Accruing Greater Than 89 Days Past Due and Accruing Total Past Due and Accruing Nonaccrual Loans Total Past Due Accruing and Nonaccrual Loans Current Total Loans June 30, 2022 Commercial/Agricultural real estate: Commercial real estate $ — $ — $ — $ — $ 5,275 $ 5,275 $ 697,642 $ 702,917 Agricultural real estate 78 — — 78 3,169 3,247 74,560 77,807 Multi-family real estate — — — — — — 179,929 179,929 Construction and land development — — — — 43 43 115,145 115,188 C&I/Agricultural operating: Commercial and industrial 7 8 — 15 211 226 138,776 139,002 Agricultural operating 146 — — 146 555 701 23,768 24,469 Residential mortgage: Residential mortgage 1,032 668 712 2,412 1,122 3,534 85,041 88,575 Purchased HELOC loans — — — — — — 3,419 3,419 Consumer installment: Originated indirect paper 13 — — 13 41 54 12,682 12,736 Other consumer 54 3 2 59 18 77 7,708 7,785 Total $ 1,330 $ 679 $ 714 $ 2,723 $ 10,434 $ 13,157 $ 1,338,670 $ 1,351,827 March 31, 2022 Commercial/Agricultural real estate: Commercial real estate $ 1,996 $ — $ — $ 1,996 $ 5,503 $ 7,499 $ 682,275 $ 689,774 Agricultural real estate 895 — — 895 3,454 4,349 71,367 75,716 Multi-family real estate — — — — — — 179,487 179,487 Construction and land development — — — — 129 129 87,751 87,880 C&I/Agricultural operating: Commercial and industrial — — — — 284 284 120,738 121,022 SBA PPP loans — — — — — — 2,071 2,071 Agricultural operating 1,645 — — 1,645 1,064 2,709 26,048 28,757 Residential mortgage: Residential mortgage 1,444 392 398 2,234 1,334 3,568 81,205 84,773 Purchased HELOC loans — — — — — — 3,487 3,487 Consumer installment: Originated indirect paper 39 — — 39 60 99 14,409 14,508 Other consumer 38 3 — 41 30 71 8,120 8,191 Total $ 6,057 $ 395 $ 398 $ 6,850 $ 11,858 $ 18,708 $ 1,276,958 $ 1,295,666 19
Aging Analysis (Continued) (in thousands) 30-59 Days Past Due and Accruing 60-89 Days Past Due and Accruing Greater Than 89 Days Past Due and Accruing Total Past Due and Accruing Nonaccrual Loans Total Past Due Accruing and Nonaccrual Loans Current Total Loans December 31, 2021 Commercial/Agricultural real estate: Commercial real estate $ 36 $ — $ — $ 36 $ 5,374 $ 5,410 $ 693,055 $ 698,465 Agricultural real estate 498 4 — 502 3,490 3,992 74,503 78,495 Multi-family real estate — — — — — — 178,349 178,349 Construction and land development — — — — — — 79,520 79,520 C&I/Agricultural operating: Commercial and industrial — 32 — 32 298 330 121,837 122,167 SBA PPP loans — — — — — — 8,755 8,755 Agricultural operating 1,123 — — 1,123 993 2,116 29,472 31,588 Residential mortgage: Residential mortgage 1,471 487 156 2,114 1,268 3,382 87,608 90,990 Purchased HELOC loans 117 — — 117 165 282 3,589 3,871 Consumer installment: Originated indirect paper 38 27 — 65 55 120 15,851 15,971 Other consumer 58 10 4 72 22 94 8,780 8,874 Total $ 3,341 $ 560 $ 160 $ 4,061 $ 11,665 $ 15,726 $ 1,301,319 $ 1,317,045 June 30, 2021 Commercial/Agricultural real estate: Commercial real estate $ 480 $ — $ — $ 480 $ 1,027 $ 1,507 $ 558,555 $ 560,062 Agricultural real estate 5 — — 5 3,716 3,721 68,944 72,665 Multi-family real estate — — — — — — 121,191 121,191 Construction and land development — — — — — — 90,788 90,788 C&I/Agricultural operating: Commercial and industrial 175 — — 175 313 488 99,996 100,484 SBA PPP loans — — — — — — 74,925 74,925 Agricultural operating 287 — — 287 1,163 1,450 26,457 27,907 Residential mortgage: Residential mortgage 979 673 536 2,188 1,534 3,722 103,024 106,746 Purchased HELOC loans 117 94 — 211 234 445 4,504 4,949 Consumer installment: Originated indirect paper 113 14 5 132 63 195 20,182 20,377 Other consumer 41 33 2 76 25 101 10,843 10,944 Total $ 2,197 $ 814 $ 543 $ 3,554 $ 8,075 $ 11,629 $ 1,179,409 $ 1,191,038 20
Nonaccrual Loans Roll forward (in thousands) Quarter Ended June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Balance, beginning of period $ 11,858 $ 11,665 $ 11,706 $ 8,075 $ 8,678 Additions 1,918 720 428 4,859 863 Acquired nonaccrual loans — — — — — Charge offs (437) (15) (1) (24) (58) Transfers to OREO (65) — (19) — — Return to accrual status — (51) (30) — (696) Payments received (2,830) (461) (422) (1,202) (712) Other, net (10) — 3 (2) — Balance, end of period $ 10,434 $ 11,858 $ 11,665 $ 11,706 $ 8,075 Other Real Estate Owned Roll forward (in thousands) Quarter Ended June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Balance, beginning of period $ 1,360 $ 1,406 $ 2 $ 129 $ 57 Loans transferred in 65 — 46 — — Branch properties transferred in — — 1,360 — 79 Sales — (45) — (124) (5) Write-downs — — — — — Other, net 2 (1) (2) (3) (2) Balance, end of period $ 1,427 $ 1,360 $ 1,406 $ 2 $ 129 Troubled Debt Restructurings in Accrual Status (in thousands, except number of modifications) June 30, 2022 March 31, 2022 December 31, 2021 June 30, 2021 Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Number of Modifications Recorded Investment Troubled debt restructurings: Accrual Status Commercial/Agricultural real estate 10 $ 2,049 10 $ 2,085 11 $ 4,618 14 $ 4,841 C&I/Agricultural Operating 4 1,182 2 608 3 649 6 3,804 Residential mortgage 36 2,915 35 2,924 36 2,681 40 3,040 Consumer installment 3 17 5 28 6 36 7 51 Total loans 53 $ 6,163 52 $ 5,645 56 $ 7,984 67 $ 11,736 21
Acquired loans represent much of the reduction in non-performing loans and classified loans. The table below shows the changes in the Bank’s non-accretable difference on purchased credit impaired loans. The second table below shows the changes in the Bank’s accretable loan discount which was established at each acquisition. The Bank has transferred the non-accretable difference on purchased credit impaired loans to accretable discount as collateral coverage improved sufficiently, due to a combination of principal paydowns and/or improving collateral positions. This transferred non-accretable difference to accretable discount is accreted over the remaining maturity of the loan or until payoff, whichever is shorter. Non-accretable difference: (in thousands) June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Non-accretable difference, beginning of period $ 509 $ 653 $ 686 $ 823 $ 966 Additions to non-accretable difference for acquired purchased credit impaired loans — — — — — Non-accretable difference realized as interest from payoffs of purchased credit impaired loans (70) (26) (2) (8) (37) Transfers from non-accretable difference to accretable discount (29) (86) (31) (129) (106) Non-accretable difference used to reduce loan principal balance — (32) — — — Non-accretable difference, end of period $ 410 $ 509 $ 653 $ 686 $ 823 The table below provides the changes in accretable discount for acquired loans. Accretable discount: (in thousands) June 30, 2022 March 31, 2022 December 31, 2021 September 30, 2021 June 30, 2021 Accretable discount, beginning of period $ 2,758 $ 2,947 $ 3,380 $ 3,524 $ 3,683 Additions to accretable discount for acquired performing loans — — — — — Accelerated accretion from payoff of certain purchased credit impaired loans with transferred non-accretable difference (308) (11) (200) (12) — Transfers from non-accretable difference to accretable discount 29 86 31 129 106 Scheduled accretion (255) (264) (264) (261) (265) Accretable discount, end of period $ 2,224 $ 2,758 $ 2,947 $ 3,380 $ 3,524 22
The table below lists the SBA PPP loans and net deferred loan fee accretion balances related to 2020 and 2021 SBA PPP loan originations: 2020 Originations 2021 Originations Total Balance Net Deferred Fee Income Balance Net Deferred Fee Income Balance Net Deferred Fee Income SBA PPP loans, January 1, 2021 $ 123,702 $ 2,991 $ — $ — $ 123,702 $ 2,991 2021 SBA PPP loan originations — — 47,467 1,770 47,467 1,770 Less: 2021 SBA PPP loan forgiveness and fee accretion (52,238) (1,706) — (44) (52,238) (1,750) SBA PPP loans, March 31, 2021 71,464 1,285 47,467 1,726 118,931 3,011 2021 SBA PPP loan originations — — 8,323 1,715 8,323 1,715 Less: 2021 SBA PPP loan forgiveness and fee accretion (50,057) (977) (2,272) (332) (52,329) (1,309) SBA PPP loans, June 30, 2021 21,407 308 53,518 $ 3,109 74,925 3,417 2021 SBA PPP loan originations — — 64 9 64 9 Less: 2021 SBA PPP loan forgiveness and fee accretion (18,286) (279) (25,402) (1,599) (43,688) (1,878) SBA PPP Loans, September 30, 2021 3,121 29 28,180 1,519 31,301 1,548 2021 SBA PPP loan originations — — — — — — Less: 2021 SBA PPP loan forgiveness and fee accretion (993) (25) (21,553) (1,226) (22,546) (1,251) SBA PPP Loans, December 31, 2021 2,128 4 6,627 293 8,755 297 Less: 2022 SBA PPP loan forgiveness and fee accretion (886) (3) (5,798) (255) (6,684) (258) SBA PPP loans, March 31, 2022 1,242 1 829 38 2,071 39 Less: 2022 SBA PPP loan forgiveness and fee accretion (1,242) (1) (829) (38) (2,071) (39) SBA PPP loans, June 30, 2022 $ — $ — $ — $ — $ — $ — 23
On November 30, 2020, the Board of Directors adopted a share repurchase program, pursuant to which Citizens Community Bancorp, Inc. was authorized to repurchase 557 thousand shares of its common stock, or approximately 5% of the outstanding shares on that date. Repurchases made during the quarter ended September 30, 2021, used all remaining shares authorized under this share repurchase program. On July 23, 2021, the Board of Directors adopted a new share repurchase program, pursuant to which Citizens Community Bancorp, Inc. is authorized to repurchase 532,962 shares of its common stock, or approximately 5% of the outstanding shares on that date. Under this new share repurchase program, no shares were repurchased during the quarter ended June 30, 2022 and approximately 18 thousand shares were repurchased during the quarter ended March 31, 2022. As of June 30, 2022, there were 10.5 million shares outstanding and an additional 354 thousand shares could be repurchased under the program. Earnings Per Share (Amounts in thousands, except per share data) Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Basic Net income attributable to common shareholders $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,212 Weighted average common shares outstanding 10,530 10,527 10,778 10,528 10,879 Basic earnings per share $ 0.41 $ 0.45 $ 0.44 $ 0.86 $ 0.94 Diluted Net income attributable to common shareholders $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,212 Weighted average common shares outstanding 10,530 10,527 10,778 10,528 10,879 Add: Dilutive stock options outstanding 12 14 12 13 8 Average shares and dilutive potential common shares 10,542 10,541 10,790 10,541 10,887 Diluted earnings per share $ 0.41 $ 0.45 $ 0.44 $ 0.86 $ 0.94 Common stock issued and outstanding 10,530 10,527 10,696 10,530 10,696 24
CITIZENS COMMUNITY FEDERAL N.A. Selected Capital Composition Highlights June 30, 2022 (unaudited) March 31, 2022 (unaudited) December 31, 2021 (audited) June 30, 2021 (unaudited) To Be Well Capitalized Under Prompt Corrective Action Provisions Tier 1 leverage ratio (to adjusted total assets) 11.4% 11.1% 10.0% 9.7% 5.0% Tier 1 capital (to risk weighted assets) 13.2% 13.7% 12.2% 13.5% 8.0% Common equity tier 1 capital (to risk weighted assets) 13.2% 13.7% 12.2% 13.5% 6.5% Total capital (to risk weighted assets) 14.3% 14.9% 13.4% 14.7% 10.0% CITIZENS COMMUNITY BANCORP, INC. Selected Capital Composition Highlights June 30, 2022 (unaudited) March 31, 2022 (unaudited) December 31, 2021 (audited) June 30, 2021 (unaudited) For Capital Adequacy Purposes Tier 1 leverage ratio (to adjusted total assets) 8.2% 8.0% 7.9% 7.5% 4.0% Tier 1 capital (to risk weighted assets) 9.6% 9.9% 9.7% 10.4% 6.0% Common equity tier 1 capital (to risk weighted assets) 9.6% 9.9% 9.7% 10.4% 4.5% Total capital (to risk weighted assets) 15.1% 15.8% 13.1% 14.2% 8.0% 25
Non-GAAP Financial Measures This earnings supplement contains non-GAAP financial measures, such as net income as adjusted and net income as adjusted per share, which management believes may be helpful in understanding the Company’s results of operations or financial position and comparing results over different periods. Net income as adjusted and net income as adjusted per share are non-GAAP measures that eliminate the impact of certain expenses such as acquisition and branch closure costs and related data processing termination fees, legal costs, severance pay, accelerated depreciation expense and lease termination fees, the gain on sale of branch deposits and fixed assets and the net impact of the Tax Cuts and Jobs Act of 2017, which management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. Merger related charges represent expenses to either satisfy contractual obligations of acquired entities without any useful benefit to the Company or to convert and consolidate customer records onto the Company platforms. These costs are unique to each transaction based on the contracts in existence at the merger date. Where non-GAAP financial measures are used, the comparable GAAP financial measure, as well as the reconciliation to the comparable GAAP financial measure, can be found in this earnings supplement. These disclosures should not be viewed as a substitute for operating results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other banks and financial institutions. Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP) (in thousands, except per share data) Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 GAAP pretax income $ 5,777 $ 6,212 $ 6,426 $ 11,989 $ 13,877 FHLB borrowings prepayment fee (1) — — — — 102 Pretax income as adjusted (2) 5,777 6,212 6,426 11,989 13,979 Provision for income tax on net income as adjusted (3) 1,411 1,506 1,720 2,917 3,692 Net income as adjusted (non-GAAP) (2) $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,287 GAAP diluted earnings per share, net of tax $ 0.41 $ 0.45 $ 0.44 $ 0.86 $ 0.94 FHLB borrowings prepayment fee — — — — 0.01 Diluted earnings per share, as adjusted, net of tax (non-GAAP) $ 0.41 $ 0.45 $ 0.44 $ 0.86 $ 0.95 Average diluted shares outstanding 10,541,905 10,541,306 10,789,843 10,541,121 10,887,409 (1) FHLB borrowings prepayment fee resulted from the early termination of $8 million in FHLB borrowings at a weighted average rate of 2.19% and weighted average maturity of 8.75 months included in other non-interest expense in the consolidated statement of operations. (2) Net income as adjusted is a non-GAAP measure that management believes enhances the market’s ability to assess the underlying business performance and trends related to core business activities. (3) Provision for income tax on net income as adjusted is calculated at our effective tax rate for each respective period presented. 26
The following table reports key financial metric ratios based on a net income as adjusted basis: Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 Ratios based on net income as adjusted (non- GAAP): Return on average assets as adjusted2 (annualized) 0.99 % 1.09 % 1.10 % 1.04 % 1.22 % Return on average equity as adjusted3 (annualized) 10.63 % 11.38 % 11.63 % 11.00 % 12.87 % Reconciliation of Return on Average Assets as Adjusted (non-GAAP) (in thousands, except ratios) Three Months Ended Twelve Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 GAAP earnings after income taxes $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,212 Net income as adjusted after income taxes (non- GAAP) (1) $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,287 Average assets $ 1,764,517 $ 1,750,114 $ 1,716,394 $ 1,754,722 $ 1,694,505 Return on average assets (annualized) 0.99 % 1.09 % 1.10 % 1.04 % 1.22 % Return on average assets as adjusted (non-GAAP) (annualized) 0.99 % 1.09 % 1.10 % 1.04 % 1.22 % (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP) Reconciliation of Return on Average Equity as Adjusted (non-GAAP) (in thousands, except ratios) Three Months Ended Six Months Ended June 30, 2022 March 31, 2022 June 30, 2021 June 30, 2022 June 30, 2021 GAAP earnings after income taxes $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,212 Net income as adjusted after income taxes (non- GAAP) (1) $ 4,366 $ 4,706 $ 4,706 $ 9,072 $ 10,287 Average equity $ 164,737 $ 167,746 $ 162,361 $ 166,348 $ 161,186 Return on average equity (annualized) 10.63 % 11.38 % 11.63 % 11.00 % 12.78 % Return on average equity as adjusted (non-GAAP) (annualized) 10.63 % 11.38 % 11.63 % 11.00 % 12.87 % (1) See Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP) 1Net income as adjusted and net income as adjusted per share are non-GAAP financial measures that management believes enhances investors’ ability to better understand the underlying business performance and trends related to core business activities. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP)”. 2Return on average assets as adjusted is a non-GAAP measure that management believes enhances investors’ ability to better understand the underlying business performance and trends relative to average assets. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of Return on Average Assets as Adjusted (non-GAAP)”. 3Return on average equity as adjusted is a non-GAAP measure that management believes enhances investors’ ability to better understand the underlying business performance and trends relative to average equity. For a detailed reconciliation of GAAP to non-GAAP results, see the accompanying financial table “Reconciliation of Return on Average Equity as Adjusted (non-GAAP)”. 27
