Civista Bancshares, Inc. · NASDAQ:CIVB
Civista Bancshares — First Citizens Banc — Shareholder Meeting (April 2010)
39 slides from Civista Bancshares's shareholder meeting presentation, Apr 19, 2010
Slide 1: Annual Shareholders Meeting
First Citizens Banc Corp Annual Shareholders Meeting
Slide 2: 2009 Operating Performance
First Citizens Banc Corp 2009Operating Performance Let’s start with a look at 2009’s operating performance.
Slide 3: Net Income
First Citizens Banc CorpNet Income (CHART) If we look at net income before tax and the 2008 non-cash goodwill write-down, it has been a two year decline, and on the surface this could be discouraging. But let’s take a look at some of the factors driving this performance. First let’s add back the dol
Slide 4: Elements of Core Performance
Elements of Core Performance Margin Non-Interest Income Non-Interest Expense The core performance of the company is driven by Interest Margin and Non-Interest Income less our Non-Interest expenses.
Slide 5: Interest Margin
First Citizens Banc CorpInterest Margin (CHART) We generate interest margin by gathering deposits and making loans, or when loan demand is down, buying investments. You can see that our interest margin remains strong. While overall margins have decreased a bit for 2009 over 2008, our margin is appro
Slide 6: Non-Interest Income
First Citizens Banc CorpNon-Interest Income 2008 2009 VarianceTotal $ 9,969,000 $ 10,133,000 $ 164,000Core ItemsService Charges $ 4,779,000 $ 4,829,000 $ 50,000ATM Fees $ 1,368,000 $ 1,634,000 $ 266,000Trust Income $ 1,904,000 $ 1,588,000 $ (316,000) Our non-interest income is generated from fees an
Slide 7: Non-Interest Expense
First Citizens Banc CorpNon-Interest Expense 2008 2009 VarianceTotal $ 36,567,000 $ 35,665,000 $ (902,000)Key ItemsSalaries $ 14,388,000 $ 13,020,000 $ (1,368,000)Benefits $ 2,785,000 $ 2,611,000 $ (174,000)Equipment $ 2,285,000 $ 1,884,000 $ (401,000) Data Processing $ 1,208,000 $ 1,091,000 $ (117,
Slide 8: Peer Performance Bank Holding Companies $1-3 Billion
Peer Performance 296 Bank Holding Companies$1,000,000,000 to $3,000,000,000 There are 296 Bank Holding Companies between $1 billion and $3 billion in size which comprise our peer group for the Federal Reserve’s Bank Holding Company Performance Report.
Slide 9: Return on Assets
Return on AssetsDecember 31, 2009 Information First Citizens Banc Corp ....... .15%Peer Group......................... (.23%)The Difference is Equivalent to Approximately $ 4,200,000 in Earnings For the year 2009 our return on our assets was .15 percent. Our peer group was a negative .23 percent. Th
Slide 10: Dollars From Earnings Into Reserve For Loan Losses
Dollars From Earnings Into Reserve For Loan Losses First Citizens Banc Corp..... $ 13,300,000Peer Group....................... $ 14,000,000(Based on Peer Percentage) For the year 2009 we placed approximately $13 million from earnings into the reserve for loan loss. Using the peer percentage the amou
Slide 11: Non-Performing Loans as a Percentage of Loan Portfolio
Non-Performing Loans *As a Percentage of Loan Portfolio First Citizens Banc Corp .......... 4.63 %Peer Group............................. 4.78 %* 30 day and over delinquency plus loans not accruing interest Here are percentages on non-performing loans greater than 30 days or more past due and loans
Slide 12: It Is The Economy
It Is The Economy It is no surprise that what is happening to banks is the economy. First we had the financial crises. Then we had the onset of the recession. Now we are contending with the wake of the recession, which is unemployment.
Slide 13: Unemployment in our Market
Unemployment in our MarketJanuary 2010 Ottawa County 19.8% Huron County 18.3% Crawford County 14.5% Erie County 14.2% Richland County 13.8% Logan County 13.2% Champaign County 13.2% Summit County 11.7% Madison County 11.1% Union County 9.8% Franklin County 9.4% You can see from this map the degree o
Slide 14: Provision for Loan Loss and Ohio Unemployment Rate
Provision for Loan LossOhio Unemployment Rate (CHART) Here is a chart of the Ohio unemployment rates with a six-month lag plotted against the dollars we are placing each calendar quarter into the reserve for loan loss. You can see that the unemployment tracks very closely with the dollars we need to
Slide 15: 2009 Year End Loan Recap
First Citizens Banc Corp2009 Year End Loan Recap Year End 2009 2009 Percent Balances Charge Offs Charge Off Commercial and Agriculture $ 96,298,000 $ 1,493,000 1.6% Commercial Real Estate $ 335,652,000 $ 2,377,000 0.7% Residential Real Estate $ 314,552,000 $ 3,029,000 1.0% Real Estate Construction $
Slide 16: Short-Term Focus: Capital, Liquidity, Asset Quality
Short-Term Focus Capital Liquidity Asset Quality With that background, our short-term focus is going to continue to be on Capital, Liquidity, and Asset Quality. We remain confident that this will guide us through the recession with the least negative impact to the company. Some of the necessary acti
Slide 17: Short-Term Focus: Capital
Short-Term Focus Capital Today, capital is the hot button topic in the markets and with the regulators.
Slide 18: Tier I Capital Ratio
Tier 1 Capital Ratio (CHART) Historically, the model was to leverage your capital for growth. Five percent to six percent Tier I capital was considered the norm. Over the last 10 years we more than doubled the size of First Citizens Banc Corp by leveraging our capital to make acquisitions. Our incre
Slide 19: How Capital Levels Affect You
How Capital Levels Affect You How does this affect you?
Slide 20: Capital: Retain Earnings or Pay Dividends
Capital Retain In Capital Dividends Increase Book Value of Stock Cash In Your Pocket Earnings When we have earnings, we can either pay out the earnings in dividends, which is cash in your pocket, or we can retain the earnings as additional capital. Retention of earnings increases capital ratios and
Slide 21: Balancing Retained Earnings and Dividends
Capital Earnings We Will Need to Balance Retained Earnings and Dividends Retain In Capital Dividends A strong dividend policy and the accumulation of capital are conflicting goals. Because of the intense regulatory and market pressure to accumulate and preserve capital, there will need to be a balan
Slide 22: Short-Term Focus: Liquidity
Short-Term Focus Liquidity The lack of liquidity, which is the ability to access ready cash, will bring down a bank quicker than bad loans. The lack of liquidity contributed heavily to the demise of National City Bank.
Slide 23: Loans to Deposit Ratio
Loans to Deposit Ratio (CHART) This graph shows how much of the deposits we gather are put to work in loans. The more deposits you put to work in loans, the more money you make. But, the more deposits you put to work in loans, the less liquidity you have. Historically, a bank could borrow funds very
Slide 24: Immediate Liquidity
Immediate LiquidityMarch 31, 2010 Percentage of Demand and Savings Deposits Day to Day Operating Liquidity Day to Day Operating Liquidity Day to Day Operating Liquidity Day to Day Operating Liquidity Day to Day Operating Liquidity Day to Day Operating Liquidity Federal Home Loan Borrowing Capacity F
Slide 25: Short-Term Focus: Asset Quality
Short-Term Focus Asset Quality Working through challenged loans is absorbing significant time, energy, and financial resources of the company.
Slide 26: Reserves to Total Loans, 90-Day and Non-Accrual Loans
Reserves to Total Loans90-Day and Non-Accrual Loans (CHART) A major component of managing asset quality is making certain we are placing adequate reserves aside. Reserves are used to cushion potential loan losses and are used to absorb actual loan write offs. Unfortunately in today’s markets, collat
Slide 27: More than the Current Recession: Long Term Issues
It is more than the Current Recession There Are Long Term ISSUES While we have been dealing with the immediate issues caused by this recession, there are underlying issues which have impacted and will continue to impact the company. These issues all stem from employment issues in Ohio.
Slide 28: US and Ohio Employment Growth
US and Ohio Employment GrowthJanuary 1990 - July 2009(Seasonally Adjusted) From 1992 up until 9/11, Ohio enjoyed increasing employment. During periods of increasing employment, or job creation, business was strong, profits were strong, and growth was easy. It was a good time for businesses and banks
Slide 29: Erie County Payrolls 2000 through 2008
Erie County Payrolls 2000 through 2008 (CHART) We can look at this on a smaller scale by looking at Erie County, which is our largest market and fairly reflective of most of our markets. In the year 2000 we had 10,075 manufacturing jobs with an annual payroll of over $500 million. By 2008 this numbe
Slide 30: Where Do We Go From Here?
Where Do We Go From Here? Where do we go from here?
Slide 31: Long-Term Focus: Gather Deposits & Make Loans
Long-Term Focus Do What We Do Best Gather Deposits & Make Loans We are going to continue to do what we do best, which is gathering deposits and making loans. We are not investment bankers, we are not venture capitalists, we are not hedge fund operators. We are simply community bankers, again we gath
Slide 32: Long-Term Focus: Interest Margin vs Peer
Long-Term Focus FCBC PeerInterest Income 5.45% 5.35% Earning AssetsInterest Expense 1.45% 1.84% Earning Assets _______ _______ Margin 4.00% 3.51%December 2009 Uniform Bank Performance Report Here again are the results of our efforts in just plain old banking — our interest margin relative to our pee
Slide 33: Long-Term Focus: Take Advantage of Opportunities
Long-Term Focus Take Advantage of Opportunities Lending Opportunities Staffing Opportunities Fallout From BIG BANK Issues FDIC Opportunities While there are a lot of challenges today there are also a lot of opportunities. There are many good solid commercial loan customers who have been neglected by
Slide 34: Long-Term Focus: Adapt To The World We Live In
Long-Term Focus Adapt To The World WeLive In Twenty years ago we were a blue collar bank. Our largest customer base was the people who worked in manufacturing. The manufacturing jobs averaged $50,000 in salary. These people had discretionary money. They purchased new homes, remodeled homes, purchase
Slide 35: Long-Term Focus: Accept What We Cannot Control
Long-Term Focus Accept what we cannot control Stock Market Interest Rates Unemployment As we look to the future, we all have to understand and accept that there are things we cannot control. We cannot control the stock market or the attitude of the market for small bank stocks. We cannot control int
Slide 36: Corporate Growth and Development of Core Earnings
Long-Term Focus Our Corporate Growth and OurDevelopment of Core EarningsDuring the Last 10 Years of Dramatic Changes in our MarketsDemonstrates Our Ability to Adapt We believe our growth and development of core earnings during the last 10 years, 10 years of dramatic changes in our markets, demonstra
Slide 37: Net Income
First Citizens Banc CorpNet Income (CHART) Again, this can be seen in the trends of our core earnings.
Slide 38: Questions
? Questions First Citizens Banc CorpAnnual Shareholder Meeting I would like to take this time to address any questions you may have.
Slide 39: Annual Shareholders Meeting
First Citizens Banc Corp Annual Shareholders Meeting
First Citizens Banc — Shareholder Meeting (April 2010) on 6ix