Citizens Financial Services, Inc. · NASDAQ:CZFS
Citizens Financial Services — Q3 2023 Earnings Presentation
28 slides from Citizens Financial Services's earnings presentation, Nov 1, 2023
Slide 1: Investor Presentation 3rd Quarter 2023 Financial Information
INVESTOR PRESENTATION 3RD QUARTER 2023 FINANCIAL INFORMATION
Slide 2: Legal Disclosures: Forward-Looking Statements (p. 1 of 2)
Legal Disclosures Forward-Looking Statements (p. 1 of 2) We have made forward-looking statements in this document, and in documents that we incorporate by reference, that are subject to risks and uncertainties. Forward-looking statements include information concerning possible or assumed future resu
Slide 3: Legal Disclosures: Forward-Looking Statements (p. 2 of 2)
Legal Disclosures Forward-Looking Statements (p. 2 of 2) •The agricultural economy is subject to extreme swings in both the costs of resources and the prices received from the sale of products as a result of weather, government regulations, international trade agreements and consumer tastes, which c
Slide 4: About Citizens Financial Services, Inc.
ABOUT CITIZENS FINANCIAL SERVICES, INC. 4
Slide 5: Company Profile
Company Profile Financial Highlights Company Overview Headquarters Mansfield, PA Assets: $3.0B Founded 1872 Chartered 1932 Ticker NASDAQCM: CZFS Gross Loans: $2.2B Market Cap (1) $264.0 (2) Branches 43 (2) Employees 389 Deposits: $2.3B Institutional Ownership 23.42% 3 Mo. ADTV 18,272 YTD Core ROAA(3
Slide 6: Financial Highlights
Financial Highlights 2023Q3 2023Q3 vs. 2023Q2 Highlights Profitability Balance Sheet Credit Diluted Core Net Interest Margin Total Assets NPAs / Assets Ratio EPS EPS(1) 0.46% 3.29% $3.0B $1.61 $1.67 vs. 3.17% 2.3% Growth vs. 0.47% Net Core ROAA Core ROAA(1) Total Loans and Leases NPLs / Gross Loans
Slide 7: Experienced Leadership
Experienced Leadership Executive Management Mr. Randall E. Black, also known as Randy, serves as Director at Federal Reserve Bank of Philadelphia. Mr. Black has been the Chief Executive Officer of Citizens Financial Services, Inc. and First Citizens National Bank since April 20, 2004. Mr. Black is P
Slide 8: Experienced Leadership Cont'd
Experienced Leadership Cont’d Executive Management Mr. Mickey L. Jones, also known as Mick, CPA, serves as the Chief Operating Officer of Citizens Financial Services, Inc. April 2010 and has been its Director since February 18, 2020. Mr. Jones served as the Chief Financial Officer of Citizens Financ
Slide 9: A Recognized High Performer
A Recognized High Performer For the past 16 years, Citizens Financial Services, Inc. has been ranked one of the top 100 best performing community banks in the nation with assets less than $2 billion. This ranking is based on a 3-year ROAE. Our 2012 performance ranked us as number ONE in the nation.
Slide 10: Investment Highlights
Investment Highlights ▪ Long history of creating shareholder value and operating successfully ▪ Tenured management with strong track record of operating high value companies ▪ Experienced, disciplined and prudent acquirer ▪ Strong geographic diversification presents opportunities ▪ Steady record of
Slide 11: Business & Financial Highlights
BUSINESS & FINANCIAL HIGHLIGHTS 11
Slide 12: Key Financial Highlights
Key Financial Highlights Top Tier Consolidated CITIZENS FINANCIAL SERVICES, INC. - CZFS For the Twelve Months Ended For the Quarter Ended In $000s except for per share data 12/31/2020 12/31/2021 12/31/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Balance Sheet Total Assets $1,891,674 $2,143,863 $2,3
Slide 13: Liquidity Position and Sources
Liquidity Position and Sources Liquidity Well-Managed to Cover Short-Term Needs September 30, 2023 Liquidity Sources $ in Thousands Cash and Cash Equivalents $47,478 FHLB Borrowing Capacity Remaining 706,600 Brokered Deposits Capacity 362,062 FRB Borrowing Capacity 55,000 Total $1,171,140 Investment
Slide 14: Strong Capital Positions
Strong Capital Positions Well Prepared with Strong Capital Reserves $3 00 12 . 00 % 10.19% 9.13% 9.23% 10 . 00 % 7.67% 8.77% 8.64% 9.18% 9.11% 8.51% 8.76% 7.18% $2 50 7.28% 9.04% 8.00% 8.39% 9.07% 7.32% 7.34% 6.87% 7.15% 6.06% 6.00% 6.81% $2 00 4.00% $ in Millions $176 $182 2.00% $1 50 0.00% $138 -2
Slide 15: Deposit Mix
Deposit Mix Deposit Mix Analysis Time Deposits < Time Deposits > $100k $100k Composition 8.5% 7.6% Deposit Type ($000) % of Total Non Interest Bearing 401,822 17.2% Non Int. Bearing 17.2% NOW & Other Trans 123,988 5.3% MMDA & Sav 1,436,044 61.4% Time Deposits < $100k 199,668 8.5% MMDA & Sav NOW Acct
Slide 16: Loan Portfolio Mix
Loan Portfolio Mix Loan Type Analysis % of Total Total Loans Loans Industry Outstanding Outstanding Constr & Dev $175,321 7.8% Agriculture 1-4 Family Residential $531,789 23.5% Commercial & Consr & Other & Farm 15.8% Constr Industrial & Dev 7.7% 7.8% 5.6% Home Equity $30,923 1.4% Owner - Occ CRE $21
Slide 17: History of Successful Growth
History of Successful Growth Total Asset Growth since 2000 ($000) 3,000,000 Date Transaction $2,959,216 10/27/2000 Acquired 6 Soverign Bancorp, Inc. Branches 12/31/2003 $7.5M Debt Capital Raise 6/4/2004 Acquired 2 Legacy Bank Branches 2,500,000 12/17/2005 Acquired 1 Fulton Savings Bank Branch 11/21/
Slide 18: Outperforming the Competition
Outperforming the Competition CZFS is a top performer among its peers, with key metrics above peer medians MD, NY & PA PA Banks PA NASDAQ NASDAQ Banks Listed Banks $1.0B - $3.0B $1.0B – $4.0B MRQ Core ROAA(1): 1.06% 0.87% 0.87% 0.82% MRQ Core ROATCE(1): 14.94% 11.40% 11.60% 12.10% MRQ Efficiency: 59
Slide 19: Consistent & Attractive Returns
Consistent & Attractive Returns Historical Core ROAA & ROATCE 1.59% 1.75% 20 . 00 % 1.34% 1.37% 1.40% 1.29% 1.29% 1.50% 1.06% 1.05% 1.09% 1.25% 18.62% 1.00% 16.65% 0.75% 16.44% 16.24% 16.31% 15 . 00 % 0.50% 0.25% Core ROATCE (%) Core ROAA (%) 13.60% 13.56% 0.00% 12.79% 12.85% -0. 2 5% 10 . 00 % -0.
Slide 20: Evaluating Core Tangible Book Value
Evaluating Core Tangible Book Value CORE TANGIBLE BOOK VALUE BUILDUP $232.9M $17.7M $175.5M $36.6M Note: Financial data as of September 30, 2023 20
Slide 21: Focus on Agriculture Lending
Focus on Agriculture Lending September 30, 2023 A LEADING AGRICULTURAL LENDER FARM & AG BUSINESS LINE 700 50.0 ▪ Ag team has over 350 years of experience 698.6 49.8 697.2 49.6 695.8 49.4 694.4 49.2 693 49.0 691.6 48.8 690.2 48.6 688.8 48.4 687.4 48.2 686 48.0 684.6 47.8 683.2 47.6 681.8 47.4 680.4 4
Slide 22: History of Strong Asset Quality
History of Strong Asset Quality Historical NPAs/Assets Trends NCOs/Avg Loans: 0.02% 0.06% 0.03% 0.00% 0.03% 0.05% 1.58% 1.52% 1.00% 1.02% 0.94% 0.73% 0.66% 0.51% 0.46% 0.46% 0.41% 0.32% 2018 2019 2020 2021 2022 2023YTD NPAs/Assets NPAs/Assets (excl. TDRs) Note: 2023YTD data as of September 30, 2023
Slide 23: Successful Track Record of Prudent Acquisitions
Successful Track Record of Prudent Acquisitions CZFS Acquisitions since January 1, 2015 Transaction: Total Whole Bank FNB of MidCoast Community Acquisitions since Fredericksburg Bancorp, Inc. HV Bancorp, Inc. January 1, 2015 Fredericksburg, Wilmington, Doylestown, Geography: -- PA DE PA Date Closed:
Slide 24: Appendix
APPENDIX FIRST CITIZENS COMMUNITY BANK
Slide 25: Key Financial Highlights: Bank-Level Regulatory Data
Key Financial Highlights Bank-Level Regulatory Data FIRST CITIZENS COMMUNITY BANK For the Twelve Months Ended Quarters Ended In $000s except for per share data 12/31/2020 12/31/2021 12/31/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Balance Sheet Total Assets $1,889,015 $2,140,937 $2,329,851 $2,329
Slide 26: Non-GAAP Reconciliation
Non-GAAP Reconciliation For the Quarter For the Dollars in thousands, except per share data Ended, Year To 12/31/2015 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 6/30/2023 9/30/2023 9/30/2023 Net income $11,626 $12,638 $13,025 $18,034 $19,490 $25,103 $29,118 $29,060
Slide 27: Non-GAAP Reconciliation
Non-GAAP Reconciliation For the Twelve Months Ended, For the Quarter Ended, Dollars in thousands 12/31/2020 12/31/2021 12/31/2022 12/31/2022 3/31/2023 6/30/2023 9/30/2023 Total common equity $194,259 $212,492 $200,147 $200,147 $213,238 $263,228 $262,686 Total intangible assets 32,022 31,830 31,674 3
Slide 28: Non-GAAP Reconciliation
Non-GAAP Reconciliation For the Twelve Months Ended, Dollars in thousands 12/31/2007 12/31/2010 12/31/2013 12/31/2016 12/31/2019 Total common equity $48,528 $68,690 $92,056 $123,268 $154,774 Total intangible assets 8,893 10,288 10,256 22,501 24,001 Tangible common equity $39,635 $58,402 $81,800 $100
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