Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — Janney 2020 Virtual Community Bank Forum
37 slides from Citizens Community Bancorp's conference presentation, Sep 8, 2020
Slide 1: Janney 2020 Virtual Community Bank Forum: 2020 Second Quarter Results
Filed Pursuant to Rule 433 Registration Statement No. __________ Issuer Free Writing Prospectus Dated October __, 2015 Relating to Preliminary Prospectus Supplement Dated October __, 2015 Citizens Community Bancorp Inc. Janney 2020 Virtual Community Bank Forum 2020 Second Quarter Results 1
Slide 2: Cautionary Notes and Additional Disclosures
Cautionary Notes and Additional Disclosures DATES AND PERIODS PRESENTED 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 correspond
Slide 3: Investment Summary
Investment Summary . Diversification across geographies and industries reduces risk and enhances growth potential . Improving earnings profile, leveraging infrastructure and growth to drive efficiency . Strong credit metrics in CCF originated loan portfolio and improving asset quality in acquired lo
Slide 4: Mission, Vision and Values
Mission, Vision and Values Mission Provide the best products, service, and ideas to our customers every interaction every day. Vision Values Make more possible for our Our six main values are: customers, colleagues, integrity, commitment, communities, and shareholders! innovation, collaboration, foc
Slide 5: Key Market Differentiators
Key Market Differentiators • Serving small to mid-sized • Experienced, energetic entrepreneurs leadership team • Responsive professionals • Accountability for doing the right thing and getting results • Products to compete vs. big banks, superior to • Entrepreneurial spirit, smaller community banks
Slide 6: Strategic Objectives
Strategic Objectives Increase Tangible Targeted growth in TBV of 8-10%, increase in TCE to Tangible Assets Book and > 8% and achieve ROA and ROE in the upper half of its peer group Shareholder Value Reduced NPA’s & Aggressively reduce problem assets from acquired banks, manage Classified Loans to th
Slide 7: Franchise Footprint
Franchise Footprint Minnesota Wisconsin Source: S&P Global Market Intelligence 7
Slide 8: Recent Franchise Expansion
Recent Franchise Expansion CZWI has been focused on transforming the Company away from a consumer-based bank into a commercial focused operation, creating a strengthened franchise value through this process 2 Central Bank branches July 2019 February 2016 Assets: $192mm Deposits: $27mm Tomah, WI Nort
Slide 9: Market Demographics
Market Demographics CZWI operates in diverse markets within the northwestern region of Wisconsin, metro Twin Cities and the Mankato, Minnesota MSA Eau Claire: . Features a broad-based, diverse economy, which is driven by commercial, retail and medical industries Mankato: . The Mankato market also
Slide 10: Net Income and Diluted EPS
Net Income and Diluted EPS NET INCOME DILUTED EPS $12,000 $10,675 $1.20 $10,000 $9,463 $1.00 $0.96 $0.85 $8,000 $0.78 $0.80 $0.67 $0.68 $6,000 $0.58 $0.60 $4,962 $0.49 $4,221 $4,283 $0.46 $4,000 $3,563 $3,069 $0.40 $2,573 $2,499 $2,606 $2,606 $2,786 $0.28 $0.23 $0.23 $0.25 $2,000 $0.20 $0 $0.00 2016
Slide 11: Book Value and Tangible Book Value
Book Value and Tangible Book Value BOOK VALUE AND TANGIBLE BOOK VALUE PER SHARE $16.00 $13.70 $14.00 $13.36 $13.27 $12.27 $12.48 $12.45 $12.00 $11.22 $11.05 $10.31 $9.78 $9.89 $9.80 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 2016 FY 2017 FY 2018 FY 2019 FY Mar-20 Jun-20 TANGIBLE BOOK VALUE PER SHARE BOOK
Slide 12: Return on Average Assets and Return on Average Tangible Common Equity
Return on Average Assets and Return on Average Tangible Common Equity ROAA ROATCE 1.40% 20.0% 1.20% 1.00% 15.0% 0.76% 0.78% 0.80% 0.69% 0.69% 0.71% 11.0% 0.68% 10.1% 9.5% 10.0% 0.56% 0.58% 10.0% 9.0% 9.5% 0.60% 0.52% 7.2% 0.40% 0.45% 6.2% 5.6% 0.40% 0.34% 4.4% 4.3% 4.8% 5.0% 0.20% 0.00% 0.0% 2016 20
Slide 13: Efficiency Ratio and Net Interest Margin
Efficiency Ratio and Net Interest Margin EFFICIENCY RATIO NET INTEREST MARGIN 90% 4.00% 84% 85% 85% 79% 77% 78% 80% 75% 73% 3.80% 75% 68% 3.64% 70% 66% 66% 66% 67% 65% 3.60% 60% 3.42% 55% 3.37% 3.40% 3.31% 3.34% 50% 3.27% 45% 3.20% 40% 2016 2017 2018 2019 Mar-20 Jun-20 3.00% EFFICIENCY RATIO EFFICIE
Slide 14: Capital Ratios
Capital Ratios TANGIBLE COMMON EQUITY / TANGIBLE ASSETS LEVERAGE RATIO 20.0% 20.0% 18.0% 18.0% 16.0% 16.0% 14.0% 12.6% 14.0% 12.7% 12.0% 12.0% 9.9% 10.0% 8.5% 10.0% 8.3% 7.3% 7.7% 7.4% 8.0% 6.2% 8.0% 6.6% 6.0% 6.0% 4.0% 4.0% 2.0% 2.0% 0.0% 0.0% 2016 FY 2017 FY 2018 FY 2019 FY Jun-20 2016 FY 2017 FY
Slide 15: Asset Quality
Asset Quality . ALL AND NON-ACCRETABLE DIFF TO TOTAL LOANS Building allowance to absorb 2.50% any COVID-19 related issues 2.00% 1.49% 1.42% . Strong credit quality on CCF 1.50% 1.31% 1.31% 1.11% originated loan portfolio 1.00% . Actively reducing NPAs on 0.50% 0.00% acquired loan portfolio 2016 FY 2
Slide 16: Paycheck Protection Program
Paycheck Protection Program . Originated over $137 million in loans . Total fees collected, net of $5.2 million . Over 1,600 loans funded . Saved approximately 18,000 local jobs Source: company documents 16
Slide 17: COVID-19 Related Loan Deferrals
COVID-19 Related Loan Deferrals Dollars In Thous ands Modification T ypes Balances of Loans P&I Payments % of Total C ategory Loan C ategory Interes t O nly Modified Deferred Loans Commercial Real Estate $ 147,235 34.1% 40.5% 11.4% Agric ulture R eal E s tate $ 2,289 0.0% 1.2% 0.2% Multifamily $ 14,
Slide 18: COVID-19 Deferral Update
COVID-19 Deferral Update P&I DEFERRAL BY LENGTH OF COVID-19 Deferral Update S ummary MODIFICATION . Reviewed payment status with over 99% of all commercial modifications and borrowers remain optimistic about returning to full payment 6% 3 MONTH . 100% of borrowers on interest only have made their sc
Slide 19: Loan Portfolio
Loan Portfolio . CZWI has transformed its loan portfolio 9/30/2016 6/30/2020 through organic growth and acquisitions Consumer 4% . Change has occurred from a primarily consumer focused portfolio to a Residential diversified mix consisting of commercial CRE, C&I, Ag. & HELOC Consumer Related, C&D 12%
Slide 20: Non-Owner Occupied CRE
Non – Owner Occupied CRE Non – Owner Portfolio Characteristics 9% Occupied 4% 27% Non - Owner Occupied CRE CRE 4% 5% 5% Loan Balance Outstanding In Millions $303 5% Number of Loans 850 6% 7% 28% Average Loan Size In Thousands $356 Approximate Weighted Average LTV 55% Investor Residential Hotel Retai
Slide 21: Owner Occupied CRE
Owner Occupied CRE Owner Occupied Portfolio Characteristics 15% 20% CRE Owner Occupied 6% 7% 13% Loan Balance Outstanding In Millions $207 8% Number of Loans 427 9% 11% 11% Average Loan Size In Thousands $356 CRE Campground Restaurant Approximate Weighted Average LTV 47% Mixed Use Industrial/Manufac
Slide 22: Multi-family
Multi-family Multi-family Portfolio Characteristics - Multi-family Loan Balance Outstanding In Millions $104 100% Number of Loans 93 Average Loan Size In Millions $1.1 Approximate Weighted Average LTV 59% Approximate Weighted Average DSCR 1.77x Seasoning In Months 27 Multi-family 2019 Net Charge-Off
Slide 23: Commercial & Industrial Loans
Commercial & Industrial Loans 2% 2% 3% Commercial & 3% Industrial Portfolio Characteristics - Commercial & Industrial 4% 14% 4% 5% 12% 6% Loan Balance In Millions $110 7% 11% Number of Loans 864 8% 10% Average Loan Size In Thousands $127 8% Approximate Weighted Average DSCR 2.6 Manufacturing Public
Slide 24: Construction & Development Loans
Construction & Development Loans Commercial & 3% 3% 7% Development 3% Portfolio Characteristics - Construction & Development 4% 37% 6% Loan Balance Outstanding In Millions $110 9% Number of Loans 278 11% 17% Average Loan Size In Thousands $396 Multi-family CRE Hospitality Approximate Weighted Averag
Slide 25: Agricultural RE & Operating Loans
Agricultural RE & Operating Loans Agricultural Portfolio Characteristics - Agricultural 22% 36% Loan Balance Outstanding In Millions $116 13% Number of Loans 664 Average Loan Size In Thousands $165 29% Approximate Weighted Average DSCR 1.9x Seasoning In Months 52 Crop Dairy Other Farming Owned Land
Slide 26: Hotel Loans
Hotel Loans Hotels Portfolio Characteristics - Hotels 8% 12% Loan Balance Outstanding In Millions $109 Number of Loans 43 Average Loan Size In Millions $2.3 21% 59% Approximate Weighted Average LTV 64% Approximate DSCR - Non-Construction 1.6x 2019 Net Charge Offs 0.00% Construction Loan Balance In M
Slide 27: Restaurant Loans
Restaurant Loans 6% Restaurants 8% Portfolio Characteristics - Restaurants 9% 44% 12% Loan Balance Outstanding In Millions $42 Number of Loans 99 21% Average Loan Size In Thousands $426 Culver's - Limited Service Restaurants Approximate Weighted Average LTV 54% Lessors of RE for Restaurant use Micro
Slide 28: Deposit Composition
Deposit Composition 9/30/2016 6/30/2020 Non Interest . Focus has been on Bearing Demand transforming the deposit 8% Interest Non Interest composition to core deposits Bearing Bearing Demand CDs Demand 27% . Deposit transformation and 9% 18% CDs Interest growth has been achieved 49% Bearing through b
Slide 29: Appendix
Citizens Community Bancorp Inc. aA Appendix 29
Slide 30: Colleague Assistance, Safety & Readiness
Colleague Assistance, Safety & Readiness Taking Care of Colleagues Location & Readiness Benefits • Daily attendance & work location tracking • Emergency Sick Leave for employees of colleagues diagnosed, quarantined or lost daycare for • Readiness plan to remediate COVID children exposure at a bank f
Slide 31: Net Interest Margin Analysis
Net Interest Margin Analysis Quarter ended June 30, 2020 Quarter ended March 31, 2020 Quarter ended December 31, 2019 Interest Average Interest Average Interest Average Average Inc ome / Yie ld/ Average Inc ome / Yie ld/ Average Inc ome / Yie ld/ ($ D olla rs in Thous a nds ) Balance E xpens e R a t
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of GAAP Earnings and Core Earnings (non-GAAP): FY 2016 FY 2017 FY 2018 FY 2019 Mar-20 Jun-20 GAAP pre-tax earnings $ 3,859 $ 3,822 $ 6,609 $ 12,277 $ 3,543 $ 4,174 Merger related costs (1) $ 701 $ 1,860 $ 463 $ 3,880 $ - $ - Branch closure
Slide 33: Reconciliation of Non-GAAP Financial Measures (footnotes)
Reconciliation of Non-GAAP Financial Measures (1) Costs incurred are included as professional fees and other non-interest expense in the consolidated statement of operations and include costs of $0 and $0 for the quarters ended June 30, 2020 and March 31, 2020, respectively, and $341,000, $350,000,
Slide 34: Reconciliation of Non-GAAP Financial Measures: ROAA and ROATCE
Reconciliation of Non-GAAP Financial Measures Return on Average Assets (ROAA) as Adjusted (In thousands except R OAA and R OAA as adjusted) 2016 2017 2018 2019 Mar-20 J un-20 Net Inc ome $ 2,573 $ 2,499 $ 4,283 $ 9,463 $ 10,481 $ 12,343 Net Income as adjusted $ 3,563 $ 4,221 $ 4,962 $ 10,675 $ 10,48
Slide 35: Reconciliation of Non-GAAP Financial Measures: Efficiency Ratio
Reconciliation of Non-GAAP Financial Measures Efficiency Ratio as Adjusted (In thousands except Efficiency Ratio and Efficiency Ratio as adjusted) 2016 2017 2018 2019 Ma r-20 J un-20 Non-interest E xpense (GAAP) $ 20,058 $ 22,878 $ 29,764 $ 42,686 $ 10,731 $ 11,392 Merger related costs (701) (1,860)
Slide 36: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Strategic consolidation of community banks Areas of Potential Acquisition Opportunities . Provides scale and operating efficiencies CZWI Locations . Adds experienced and knowledgeable banking talent . Opportunity to continue commercial loan growth Potential Markets
Slide 37: Leadership Team
Leadership Team Mr. Stephen M. Bianchi, also known as Steve, has been the Chief Executive Officer and President of Citizens Community Bancorp, Inc. and Citizens Community Federal since June 24, 2016. He has been Chairman of Citizens Community Bancorp, Inc. since October 2018 and Citizens Community F
Citizens Community Bancorp — Janney 2020 Virtual Community Bank Forum on 6ix