Citizens Financial Services, Inc. · NASDAQ:CZFS
Citizens Financial Services — Merger or Acquisition (October 2022)
20 slides from Citizens Financial Services's merger presentation, October 2022
Slide 1: Investor Presentation: Strategic Acquisition of HV Bancorp, Inc.
INVESTOR PRESENTATION: STRATEGIC ACQUISITION OF HV BANCORP, INC.
Slide 2: Legal Disclosures
Legal Disclosures Forward-Looking Statements This presentation contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about CZFS and HVBC and their industry involve substantial risks and uncertainties. Statements other
Slide 3: Legal Disclosures
Legal Disclosures Additional Information and Where to Find it In connection with the proposed transaction, CZFS expects to file with the SEC a registration statement on Form S-4 that will include a proxy statement of HVBC that also constitutes a prospectus of CZFS (the “proxy statement/prospectus”),
Slide 4: Overview of HV Bancorp, Inc.
Overview of HV Bancorp, Inc. HVBC is the holding Company of Huntingdon Balance Sheet Valley Bank, which was founded in 1871 as a Total Assets $570,647 mutual institution and converted to a stock institution in 2017 Total Loans $391,338 Total Deposits $481,510 HVBC is led by Travis Thompson, the Chai
Slide 5: First Citizens & Huntingdon Valley
First Citizens & Huntingdon Valley Combination of Like-Minded Institutions Headquarters: Mansfield, PA Doylestown, PA Executive Management: Randall E. Black Travis J. Thompson Assets: $2.2B $570.6M Loans: $1.6B $391.3M Deposits: $1.9B $481.5M Loans / Deposits (%): 84.9% 81.3% LTM ROAA (%): 1.31% 0.4
Slide 6: Compelling Strategic Rationale
Compelling Strategic Rationale Creating Scale and Enhancing Shareholder Value • Pro forma Company approaching $3B in assets – immediate loan growth of ~$400M(1) • Addition of experienced and talented pool of community banking leaders • Presents strong market entrance into Southeastern Pennsylvania m
Slide 7: First Citizens & Huntingdon Valley
First Citizens & Huntingdon Valley Combination of Like-Minded Institutions Community-oriented banks providing exceptional levels of service and driving high levels of performance for shareholders Community-Focused Institution Attentive to Customers Disciplined Lending Practices Entrepreneur Sales Cu
Slide 8: Transaction Overview
Transaction Overview • Citizens Financial Services, Inc. (“CZFS”) , parent of Frist Citizens Community Bank Transaction (“FCCB”), will acquire 100% of HV Bancorp, Inc.’s (“HVBC”) outstanding common stock • 80% stock / 20% cash Consideration Mix • Subject to shareholder election • $30.50 per share in
Slide 9: Pro Forma Institution – A Premier Community Bank
Pro Forma Institution – A Premier Community Bank $236M $329M $2.8B $2.0B $2.4B Tier 1 Market Assets Loans Deposits Capital Cap.(1) $35.6M 436 44 4 18 Combined Team Locations States Counties Annual Members Earnings(2) (1) Based upon market data as of October 18, 2022 (2) Combined annual earnings = HV
Slide 10: Combined Group of Talented Bankers
Combined Group of Talented Bankers Banker Community Bank Experience Years CZFS CEO since 2004 Started his banking career at CZFS in 1993 Penn State Board of Trustees 30 Director of the Federal Reserve Bank of Philadelphia Randall Black Pennsylvania Bankers Association Board - 2nd Vice Chai
Slide 11: HV Bancorp, Inc. – A Transformational Story
HV Bancorp, Inc. – A Transformational Story • Huntingdon Valley Bank was formed in 1871 as a mutual bank - 150+ year legacy • HVBC executed a successful stock conversion in 2017 and has been executing a transformation strategy to create a strong commercial bank since the conversion • Loans and depos
Slide 12: Complementary Loan & Deposit Mix
Complementary Loan & Deposit Mix Pro Forma C&D C&D 4.5% 1-4 Family 6.3% 1-4 Family Res. Ag. Res. 47.1% 17.6% 20.3% HELOC Consr & Loan Composition Ag. 1.7% Other 1-4 Family 22.2% 5.8% Res. 25.8% $1.6B Owner - $0.4B $2.0B C&D HELOC C&I Total Occ CRE 11.6% 13.6% Total 0.6% 6.3% Total Consr & Owner - Ot
Slide 13: Extends Presence in Highly Attractive Southeastern PA
Extends Presence in Highly Attractive Southeastern PA Highly-Ranked Pro Forma Attractive Pro Forma Deposit Market Share Branch Franchise Footprint Southeastern PA Region June 30, 2022 Under 2022 $10B Deposits Market Rank Rank Institution Branches ($000) Share (%) 15 4 Republic First Bancorp, Inc. (P
Slide 14: Demographically Accretive Acquisition
Demographically Accretive Acquisition Southeastern PA Observations CZFS MSA Projected Growth Trends • Southeastern Pennsylvania region encompasses some of Weighted ‘27 Pop. Growth Weighted ‘27 HHI Growth the most desirable counties in the Commonwealth of Pennsylvania 2.6% 10.4% • With higher educati
Slide 15: Successful Track Record of Prudent Acquisitions
Successful Track Record of Prudent Acquisitions CZFS Acquisitions since January 1, 2015 Transaction: FNB of MidCoast Community Total Recent Whole Fredericksburg Bancorp, Inc. HV Bancorp, Inc. Bank Acquisitions Fredericksburg, Wilmington, Doylestown, Geography: -- PA DE PA Date Closed: 12/11/2015 4/1
Slide 16: Acquisitions Driving CZFS Shareholder Return
Acquisitions Driving CZFS Shareholder Return CZFS Stock Performance since January 1, 2015 80% Acquisition of MidCoast Community Acquisition of FNB of Bancorp, Inc. Fredericksburg Completion Date: 60% Completion Date: 04/17/2020 12/11/2015 Total Return: 39% Total Return: 65% Total 40% Return: 46% 20%
Slide 17: Key Financial Assumptions
Key Financial Assumptions • Identified $6.6 million in cost savings, 30% cost savings rate based upon Targeted Cost HVBC’s LTM noninterest expense as of June 30, 2022 Savings: • 75% expected to be phased-in in first 12 months post-close; 100% phased-in thereafter • $6.9 million total loan credit mar
Slide 18: Transaction Impact
Transaction Impact Pro Forma Financial Impact Pro Forma Financial Impact (Excl. HVBC AOCI) > 8% ~5.8% > 6% ~4.5% 2023 EPS TBVPS 2023 EPS TBVPS Accretion Dilution Accretion Dilution > 10% ~2.7 years > 9% ~2.5 years 2024 EPS TBV 2024 EPS TBV Accretion Payback Period(1) Accretion Payback Period(1) > 20
Slide 19: Building the “Better Experience Bank”
Building the “Better Experience Bank” 19
Slide 20: Transaction Summary
Transaction Summary • Strategic and offensive transaction to create the premier community banking franchise in its markets • Extraordinary depth of community banking expertise, experience and leadership at the executive level • Pushes the combined institution clearly into a stronger market cap class
Citizens Financial Services — Merger or Acquisition (October 2022) on 6ix