Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — FIG CEO Forum 2019
28 slides from Citizens Community Bancorp's conference presentation, Jan 29, 2019
Slide 1: Exhibit 99.1 Rule 425 Filing Notice
Exhibit 99.1 Filed by Citizens Community Bancorp, Inc. Commission No. 001-33003 Pursuant to Rule 425 under the Securities Act of 1933 Subject Company: F. & M. Bancorp. of Tomah, Inc. The following presentation materials will be used by Citizens Community Bancorp, Inc. at one or more investor relatio
Slide 2: FIG CEO Forum January 30-31, 2019
Filed Pursuant to Rule 433 Registration Statement No. __________ Issuer Free Writing Prospectus Dated October __, 2015 Relating to Preliminary Prospectus Supplement Dated October __, 2015 FIG CEO Forum January 30-31, 2019 1
Slide 3: Cautionary Notes and Additional Disclosures
Cautionary Notes and Additional Disclosures CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This presentation contains 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 inc
Slide 4: Cautionary Notes and Additional Disclosures (Cont'd)
Cautionary Notes and Additional Disclosures (Cont’d) NON-GAAP FINANCIAL MEASURES These slides may contain 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
Slide 5: CZWI Focus Items
CZWI Focus Items ENHANCING THE QUANTITY AND QUALITY OF EARNINGS We are enhancing shareholder value by improving the loan and deposit mix, deepening customer relationships and strengthening other sources of revenue. EXPERTISE IN COMMERCIAL & AG BANKING We take pride in serving small and mid-sized bus
Slide 6: Key Market Differentiators
Key Market Differentiators • Serving small to mid-sized • Experienced, energetic entrepreneurs leadership team • Responsive professionals • Accountability for doing the • Products to compete vs. big right thing and getting results banks, superior to smaller • Entrepreneurial spirit, winning communit
Slide 7: Execution of Current Business Strategy
Execution of Current Business Strategy Total Loans Loans / Deposits $993 $1,000 120% $800 $733 $759 110% 103% 102% 99% 99% 99% $574 100% $600 $451 90% $400 80% $200 70% $0 60% 2015 2016 2017 2018 Dec-18 2015 2016 2017 2018 Dec-18 NPAs / Assets(1) Diluted Earnings Per Share 3.0% $1.00 2.5% $0.80 2.0%
Slide 8: Execution of Current Business Strategy
Execution of Current Business Strategy Net Income ($000) Efficiency Ratio $5,000 90.0% 83.6% 84.7% $4,500 $4,283 79.0% $4,000 80.0% 77.4% 77.9% $3,500 $2,806 $3,000 $2,573 $2,499 70.0% $2,500 $2,000 60.0% $1,500 $1,261 $1,000 50.0% $500 $0 40.0% 2015 2016 2017 2018 Dec-18 2015 2016 2017 2018 Dec-18
Slide 9: Net Income and Diluted EPS
Net Income and Diluted EPS Net Income Diluted EPS $1.00 $6,000 $5,021 $0.79 $5,000 $0.75 $0.67 $4,260 $4,260 $0.62 $4,000 $3,563 $0.54 $0.49 $0.46 $2,573 $2,499 $0.50 $3,000 $2,194 $2,000 $0.20 $1,261 $0.25 $0.12 $1,000 $0 $0.00 2016 2017 2018 Dec-18 2016 2017 2018 Dec-18 Net Income Net Income as Ad
Slide 10: Loan Portfolio
Loan Portfolio . CZWI has transformed its loan 100% portfolio through organic growth and 1-4 Family Cons & Other acquisitions 80% C&D - 1-4 Family C&D - Commercial . Change has occurred from a primarily 60% consumer focused portfolio to a Ag. Real Estate diversified mix consisting of 40% Ag. Non-RE
Slide 11: Commercial Loan Detail
Commercial Loan Detail C&D . Commercial loan portfolio well diversified 3.1% C&I . Total portfolio of $665.3 million at 12/31/2018 15.4% Non-Owner Occ. CRE 20.5% . Strong growth in all commercial loan categories Owner-Occ. CRE Investor 1-4 . Average note size is under $235 thousand 21.8% CRE 9.7% Mu
Slide 12: Deposit Composition
Deposit Composition 100% . Since 2016 FQ2, demand Demand deposit growth has significantly 80% outpaced the growth of the rest NOW & Other Trans. of the portfolio 60% MMDA & Sav . CZWI remains focused on a 40% lower cost deposit base CDs < 100k 20% CDs > 100k 0% 2017 2017 2017 2017 2018 2018 2018 201
Slide 13: Market Demographics
Market Demographics CZWI operates in diverse markets within the northwestern region of Wisconsin, metro Twin Cities and the Mankato, Minnesota MSA Eau Claire: . Features a broad-based, diverse economy, which is driven by commercial, retail and medical industries Mankato: . The Mankato market also
Slide 14: Net Interest Margin Analysis
Net Interest Margin Analysis Quarter ended December 31, 2018 Quarter ended September 30, 2018 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ ($ Dollars in Thousands) Balance Expense Rate Balance Expense Rate Average interest earning assets: Cash and cash equivalents
Slide 15: 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 2016 Acquisition of 2 Central Bank branches in Northwestern WI: $27.1 million deposits 2016
Slide 16: Pro Forma Map
Pro Forma Map CZWI Locations (1) F. & M. Bancorp Locations (1) Includes acquisition of United Bank Source: S&P Global Market Intelligence 15
Slide 17: Transaction Highlights
Transaction Highlights • Transaction adds an adjacent market to CZWI’s Wisconsin presence with Tomah branch locations that are attractively located nearby CZWI’s Eau Claire and Osseo markets • Transaction provides CZWI with a stable, modestly priced deposit base for organic growth opportunities • At
Slide 18: Transaction Rationale
Transaction Rationale . Straightforward follow-on acquisition to United Bank with stable deposits concentrated in one market . Strategic Accelerates pro forma franchise growth in total assets and deposits . Consistent with CZWI’s strategy of “re-formulating” its loan and Rationale deposit compositio
Slide 19: Transaction Terms
Transaction Terms F. & M. Bancorp of Tomah Transaction Value(1) $21.6 million Consideration 85% Cash, 15% Stock Price/TBV 105.8% Price/LTM EPS(2) 16.0x Customary regulatory and F. & M. Bancorp of Required Approvals Tomah shareholder approval Expected Closing Q2 2019 (1) Based on 216,546 F. & M. Banc
Slide 20: Pro Forma Loans
Pro Forma Loans(1) CZWI(1) F. & M. Bancorp Combined Ag Real Ag Real Ag Real Consr & Estate C&D Estate Ag Estate C&D Ag C&D Other 4.0% 2.7% 1-4 Fam Ag 3.8% 2.5% 3.8% 3.3% 8.9% 3.4% 1.2% 14.0% 8.1% C&I 1-4 Fam HELOC Consr & 20.1% 24.2% Consr& 0.7% Other 1-4 Fam Other 10.3% 25.7% 11.6% OwnOcc C&I C&I C
Slide 21: Pro Forma Deposits
Pro Forma Deposits(1) CZWI(1) F. & M. Bancorp Combined Now & Now & other Other Time> Time > Trans Non Int. Time> Non Int. Trans $100k $100k Non Int. 2.1% Bearing $100K Bearing 4.5% 13.3% Bearing 9.1% 15.5% 12.7% 15.4% Time< 15.5% $100k 16.5% Time < Time < NOW & Other $100k $100k 20.8% 21.5% Trans 19
Slide 22: Pro Forma Balance Sheet
Pro Forma Balance Sheet Pro Forma Balance Sheet: Fair Value M&A CZWI (1) F. & M. Bancorp Pro Forma Adjustments Adjustments 9/30/18 9/30/18 Cash and equivalents $ 96,874 $ 7,075 $ - $ (22,467) G $ 81,482 Securities 130,814 41,860 - - $ 172,674 Total loans held for investment 958,881 138,248 (7,250) A
Slide 23: Pro Forma Balance Sheet Footnotes
Pro Forma Balance Sheet Footnotes A) 2.2% credit mark; 3.0% interest rate mark; 5.2% total loan mark B) Reversal of existing F. & M. reserves C) 20% mark on OREO D) DTA created from fair value adjustment E) 0.3% mark on deposits F) 1.7% mark on borrowings G) Cash consideration + options cash out + $
Slide 24: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Strategic consolidation of community banks Areas of Potential Acquisition Opportunities . Provides scale and operating efficiencies . Adds experienced and knowledgeable banking talent CZWI Locations . Opportunity to continue commercial loan growth F. & M. Locations
Slide 25: Appendix
Citizens Community Bancorp Inc. wa Appendix
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of GAAP Net Income and Net Income as Adjusted (non-GAAP): FY2016 FY2017 FY2018 Dec-18 (Dollars in Thousands, except share data) GAAP earnings before income taxes $ 3,859 $ 3,822 $ 6,609 $ 1,822 Merger related costs (1) 701 1,860 463 1,057
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (1) Costs incurred are included as data processing, advertising, marketing and public relations, professional fees and other noninterest expense in the consolidated statement of operations. (2) Branch closure costs include severance pay recorded in compe
Slide 28: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Return on Average Tangible Common Equity (ROATCE) (In thousands except ROATCE) 2016 2017 2018 Dec-18 Common Equity $ 64,544 $ 73,483 $ 135,847 138187 Less: Goodwill (4,663) (10,444) (10,444) (30,933) Less: Core Deposit and other intangibles (5,449) (5,44