Civista Bancshares, Inc. · NASDAQ:CIVB
Civista Bancshares — First Citizens Banc — Shareholder Meeting (April 2012)
50 slides from Civista Bancshares's shareholder meeting presentation, Apr 20, 2012
Slide 1: Welcome to the 25th Annual Meeting of Shareholders
Welcome to the 25 th Annual Meeting of Shareholders of First Citizens Banc Corp.
Slide 2: Forward-looking statements
gr Comments made in this presentation include “forward-looking Sloane ‘uitia naa ity ao wasn Be Reform any forward-looking statements to reflect events or circumstances after the date of this presentation, except to the extent required by law.
Slide 3: Financials
Financials
Slide 4: Total assets of the company
Here is a slide of the total assets of the company. Our loans and investments represent the bulk of our assets. When the financial crisis began, we made a conscious decision to maintain the size of the company at approximately $1,100,000,000. We wanted no wild swings in the components of the company
Slide 5: Loans of approximately $800 million
Of our 1,100,000,000 in assets, approximately $800,000,000 are loans. Through the last several years we have been able to generally maintain our loan totals, even though loan demand in Ohio has been soft and we have to replace approximately $14,000,000 a month in payments. Loan totals were down for
Slide 6: Loan growth versus Ohio
While 2.5% or $18,000,000 in loan growth may not seem like much for a $1,000,000,000 bank, we have data that shows Ohio loan growth at minus 1% to minus 3%. Given that, I am very pleased with what has been accomplished.
Slide 7: Deposits growth since 2008
Looking at our deposits, you can see the low point in 2008 when the financial crises hit a peak and customers were pulling cash out of the banking system. Since that low, we have grown approximately $100,000,000 in deposits. Again, deposits are the raw materials that we have put to work in loans and
Slide 8: Regulatory risk-based capital
This is a graph of our regulatory risk-based capital. It differs a bit from what you see in the financial statements in that it removes goodwill and intangibles and includes the portion of our trust preferred debt that can be counted as capital. You can see the increase in the risk-based capital as
Slide 9: Peer comparison of risk-based capital
In this peer comparison of risk-based capital, First Citizens is in line with its peers and we are all focused on growing capital. As a result of the financial crises, there will be a greater focus on capital levels and capital growth by both the markets and the regulators.
Slide 10: Net interest income per share
As we take our deposit dollars and put them to work in loans and investments, we generate net interest income. You can see that over the last four years our net interest income has remained stable at approximately $5.25 per share—in spite of the strong downward pressure in interest rates.
Slide 11: Interest margin: return on loans and investments
Looking at the detail of interest margin, here is the return on the dollars we have put to work in loans and investments. You can see that we are consistent with our peers. You can also see the downward pressure on rates. Our average rate has decreased from approximately 7% in 2007 to slightly less
Slide 12: Cost of gathering deposits versus peers
Here is the cost of gathering the deposits we put to work. This is our strength. Our cost of gathering dollars to put to work is consistently less than that of our peers. I cannot emphasize enough the value of this. The challenge of this interest rate environment is that we will soon hit a floor whe
Slide 13: Net interest margin above peer
Our net interest margin, the return on the assets minus the costs, has been consistently strong and consistently above peer. Our process of gathering low-cost savings and checking deposits in rural communities and putting it to work in those and in our urban markets, works. Every tenth of a percent
Slide 14: Noninterest income and wealth management
We supplement our net interest income with fees and service charges from loans, deposits, and our wealth management department. Our noninterest income has also remained stable over the last four years with a nice 4% increase for 2011. This is consistent in spite of new regulations that dampen the ba
Slide 15: Noninterest income peer comparison
In this peer comparison, our noninterest income has remained consistent and just slightly less than peer. Some of our rural markets just won’t bear the service charge levels of the more urban areas. You can see the downward pressure on both First Citizens and peer banks on fee income. This is primar
Slide 16: Total noninterest expenses
Our total noninterest expenses have remained fairly consistent over the last four years. In red you can see the portion attributed to FDIC and collection expenses. These are beginning to diminish. Though the core expenses have increased, they remain less than 2008 levels.
Slide 17: Noninterest expense as percentage of assets
Measured as a percentage of assets, our noninterest expenses are down from 2007 and 2008. We have been slightly above our peers in non-interest expense but much of this can be attributed to the expense of our wider branch network. We have to remember that while there is added expense to this branch
Slide 18: Provision for loan losses
The item that has not been consistent and drives profitability is the provision for loan losses. These are the dollars we take from earnings and place into the reserve. In 2007, or what we look at as the last normal year, our provision was slightly more than $1,000,000. By 2010 this number had climb
Slide 19: Provision versus peers
Over the last two years we placed more into the reserves than our peers. For 2011 this difference is about $3,500,000. While many institutions use statistics to determine their reserve needs, we rely on examination of all challenged loans over $350,000 and make detailed evaluations of collateral val
Slide 20: Total reserve versus peers
While we have placed more than our peers into the reserve over the last two years, our total reserve is greater. At year end 2011 we held reserves of approximately 2.7% of loans while our peers held approximately 2%.This difference equals about $8,000,000. This is conservative, but through the finan
Slide 21: Loss reserve versus Ohio unemployment rate
One measure we chart is the amount we put away for loss reserve versus the unemployment rate in Ohio. While there is a lag in the impact of unemployment, they do track together. At year-end 2011 unemployment, while improving, still remained over 2% greater than year-end 2007. We believe that provisi
Slide 22: Summary of company strengths
We have an organization that survived the financial crises. We have an organization that can generate consistent core earnings. We have a footprint taking advantage of urban and rural market areas. We have developed a strong management and staff. We are positioned for an improving economy.
Slide 23: Where do we go from here?
oe Where do we go from here?
Slide 24: Long term goals
LONG TERM • Continue to work down the level of troubled loans • Be prepared for turn in the housing industry • Always look for efficiency improvement • Stay current with technology and product trends (you will hear more about this in a moment.) • Grow capital — for growing the company and increasing
Slide 25: Short term goals
SHORTTERM • Get rid of the TARP preferred stock • Leverage our existing commercial lending relationships and aggressively search for new commercial opportunties—that is where the activity is! • Aggressively increase the relationship level with customers through Cash Management and Wealth Management
Slide 26: Business development
Business Development To achieve our short term goals we need to focus on business development. There is increasing competition for limited opportunities. We added additional experienced lenders—people with existing relationships. We have added lending support, and we have added wealth management sup
Slide 27: Sandusky area commercial lending and wealth management staff
Our Sandusky Area Commercial Lending and Wealth Management Staff
Slide 28: American Quality Stripping
American Quality Stripping • This is a local company that started 25 years ago. They employ 30 people. • They have developed an environmentally friendly process to remove coatings from parts. • We worked with American Quality Stripping in 2007 for the installation of an oven and a new building addit
Slide 29: Bay Point
Bay Point • Here is a new development project that we are involved in at Bay Point. • Even though housing and development projects struggle this is a very successful development. • Includes the marina complex, cottages, and large waterfront homes.
Slide 30: New Washington and Shelby area commercial lending staff
Our New Washington and Shelby area Commercial Lending Staff
Slide 31: Niese Brothers Farms
Niese Brothers Farms • Have been customers of the bank since the 1970’s • Farm over 11,000 acres of corn and soybeans • They utilize the newest equipment with GPS and crop-monitoring technology.
Slide 32: Norwalk area commercial lending and wealth management staff
Our Norwalk area Commercial Lending and Wealth Management Staff
Slide 33: Welfle, Inc.
Welfle, Inc.: Company was formed in 1993 and have been CBC customers since 1997. Owned by brothers Denny & Bob Welfle. Specialize in milling (grinding) asphalt and concrete with large pavement routing machines. Located on St Rt 61, east of Norwalk (new office building constructed in 2010).
Slide 34: Urbana area commercial lending and wealth management staff
Our Urbana area Commercial Lending and Wealth Management Staff
Slide 35: Ultra-Met
Ultra-Met • We had the opportunity to provide financing and cash management for Ultra Met. • Ultra Met supplies premium-quality blanks to toolmakers and fabricators. • From their inception in 1965 Ultra-Met is the leading independent. • American manufacturer of custom-molded tungsten carbide product
Slide 36: Akron area commercial lending staff
Our Akron area Commercial Lending Staff We are looking for an additional lender in this market and also a wealth management representative.
Slide 37: Hospitality Restaurants
Hospitality Restaurants • High end restaurant group of 7 locations offering a variety of dining experiences. • Blue Pointe Grille—Cleveland—High-end Seafood • Cabin Club—Westlake—High-end Steakhouse • Salmon Dave’s Pacific Grille—Rocky River—High end Seafood • Delmonico’s Steakhouse—Independence—Hig
Slide 38: Grubb and Ellis Breakfast
Grubb and Ellis Breakfast In January we co-hosted a real estate forecast event with Grubb & Ellis, one of the major real estate companies in the Cleveland area. This was a very positive event and has led to a number of referral opportunities. It comes back to relationships and referrals.
Slide 39: Dublin area commercial lending and wealth management staff
Our Dublin area Commercial Lending and Wealth Management staff
Slide 40: Premium Beverage Supply, Ltd
Premium Beverage Supply, Ltd • A distributor of micro-brewed beers and premium beverages. • The company has exclusive Ohio distribution rights for over 500 products. • They currently represent about 30 brewers and 6 importers. • These products are sold and carried in virtually every major grocery ch
Slide 41: Mayco Colors
Mayco Colors • One of the world’s leading producers of ceramic products for hobbyists, potters, artists, schools and producers of fine ceramic table and giftware. • The company was founded in 1951 and today produces all of its products at its 75,000 square foot plant in Milliard, Ohio. • They have a
Slide 42: Columbus market financing opportunities
Here are two financing opportunities we have in the Columbus market. On the left is the Belmont Building office complex and the right are Class A apartments that cater to Ohio State students. This is adjacent to the OSU campus and near the South Campus Gateway development. This is a $150,000,000 dev
Slide 43: Kingsdale Center retail financing
This is a retail center located in the heart of Upper Arlington. We participated $5,000,000 of a $35,000,000 project that was centered around a 112,000 square foot Giant Eagle grocery store in what is known as the Kingsdale Center. Participations allow us to work with other community banks to take a
Slide 44: The banking world is changing quickly
The banking world is changing quickly and we have to change with it.
Slide 45: Online banking as preferred channel
According to a 2011 American Banker’s Association Survey, online banking is the preferred banking channel with 62% of respondents choosing online banking compared to 20% choosing a branch or 8% an ATM. Over 14,000 customers are enrolled in our NetTeller Online Banking service today. While Mobile Ban
Slide 46: Smartphone and mobile banking adoption
In fact, smartphone users increased over 50% in 2011 from 63 million subscribers to 98 million. Today over 40% of U.S. households have smartphones. As we look at the adoption of mobile banking adoption we find-14% of mobile users utilize mobile banking More financial institutions are offering mobile
Slide 47: Mobile banking service launch
Last April we launched our mobile banking service. Today there are over 1,200 users—approximately 9% of our online banking customers. In keeping up with advanced technology, there are other new and improved banking services that are on the horizon.
Slide 48: Planned website, online account opening and new services
A redesigned website is planned to launch in the third quarter of this year. We have been listening to our customers and plan a number of improvements. Also planned for later this year is on line account opening. According to a research study, one in four consumers have attempted to open a bank acco
Slide 49: Multi-channel banking with local relationships
In our ad campaigns we will stress that advanced technology will continue to shape the way our customers choose to access their bank accounts. From face-to-face branch banking to ATMs, the internet and now mobile banking, consumers look for the convenience of using multiple channels to bank, when, w
Slide 50: First Citizens Shareholders Meeting
First Citizens Shareholders Meeting Moving You Ahead
First Citizens Banc — Shareholder Meeting (April 2012) on 6ix