Consumers Bancorp, Inc. · OTC:CBKM
Consumers Bancorp — Shareholder Meeting (October 2020)
34 slides from Consumers Bancorp's shareholder meeting presentation, Oct 29, 2020
Slide 1: 2020 Fiscal Year In Review
2020 Fiscal Year In Review 2020 Annual Shareholders Meeting • October 29, 2020
Slide 2: Forward-Looking Information
Forward-Looking Information This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). The words “may,” “continue,” “estimate,” “intend,” “plan,” “seek,” “will,” “believe,” “project,” “expect,” “anticipate” and similar
Slide 3: Forward-Looking Information (continued)
Forward-Looking Information (continued) (Consumers’ wholly-owned bank subsidiary) customers; unanticipated difficulties or expenditures relating to the merger; legal proceedings, including those that may be instituted against Consumers, its board of directors, its executive officers and others; any
Slide 4: Laurie L. McClellan, Chairman of the Board
CONSUMERS Laurie L. McClellan Chairman of the Board of Directors
Slide 5: Ralph J. Lober and Renee K. Wood
CONSUMERS Bancor p inc. Ralph J. Lober President Chief Executive Officer Renee K. Wood Executive Vice President Chief Financial Officer
Slide 6: Steady Balance Sheet Growth
Steady Balance Sheet Growth Total Assets Total Loans $740.8 $542.9 $553.9 $457.9 $502.6 $369.2 $318.5 $272.9 2017 2018 2019 2020 2017 2018 2019 2020 CAGR: 17.4% CAGR: 25.8% Total Deposits Total Shareholders’ Equity $633.4 $63.2 $472.2 $51.2 $430.0 $43.5 $43.8 $374.5 2017 2018 2019 2020 2017 2018 201
Slide 7: Strong Earnings
Strong Earnings Net Income, ROA and ROE 11.96% 9.67% Fiscal year 2020: 8.15% 6.89% $5,566 $5,527 o Strong, consistent earnings $3,581 $2,994 1.07% o Incudes a significant increase in loan 0.67% 0.75% 0.89% loss provision expense due to FY 2017 FY 2018 FY 2019 FY 2020 deterioration in the economic en
Slide 8: Net Interest Margin
NET INTEREST MARGIN 3.77% 3.74% 3.70% 3.65% 3.64% 3.73% 3.64% 3.59% LTM 6/30/17 LTM 6/30/18 LTM 6/30/19 LTM 6/30/20 Consumers Peers* *Peers are public and private commercial banks located in Ohio with assets between $400 million and $1.25 million. Source: S&P Global Market Intelligence
Slide 9: Cost of Funds Trend
COST OF FUNDS TREND 1.20% 1.01% 0.97% 1.00% 0.88% 0.91% 0.80% 0.62% 0.53% 0.53% 0.60% 0.38% 0.40% 0.20% 0.00% LTM Jun-17 LTM Jun-18 LTM Jun-19 LTM Jun-20 Consumers National Bank Peers* *Peers are public and private commercial banks located in Ohio with assets between $400 million and $1.25 million.
Slide 10: Low Cost Core Deposits
LOW COST CORE DEPOSITS o Total deposits of $633.4 million, or a SAV - 34.1% increase from prior year Time, MMDA, 18.2% o Cost of funds of 0.91% 36.1% o Loan-to-deposit ratio of 85.7% o Non-interest-bearing deposits represented 30% of total deposits o Combined, demand deposit & NOW accounts represent
Slide 11: Securities Portfolio Distribution
SECURITIES PORTFOLIO DISTRIBUTION U.S. Gov't U.S. Sponsored o Securities portfolio yield was 2.76% for Treasury, Entities & the 2020 fiscal year 0.9% Agencies, 7.3% o Projected weighted average life of 4.0 years as of June 30, 2020 o All mortgage-backed securities and collateralized mortgage obligat
Slide 12: Sources of Revenue
Sources of Revenue Fee Income Net Interest Income Fee Income / Operating Revenue 18.35% 19.71% Overview 17.96% 17.59% o Fee income represents a strong source of revenue $21,484 as the balance sheet $15,886 $17,389 continues to grow $14,459 $3,250 $3,391 $4,268 $4,703 o Total mortgage 2017 2018 2019
Slide 13: Efficiency Ratio & NIE / Average Assets
Efficiency Ratio & NIE / Average Assets Efficiency Ratio Non-Int. Exp. / Average Assets 3.04% 2.99% Overview 2.97% o 2020 incudes $827 2.86% thousand of pre-tax merger expenses 73.0% 71.8% 70.5% 67.0% FY 2017 FY 2018 FY 2019 FY 2020 o Continued improvement in efficiency ratio expected with greater s
Slide 14: Nonperforming Assets/Total Assets
NONPERFORMING ASSETS/TOTAL ASSETS 0.43% 0.45% 0.39% 0.38% 0.40% 0.33% 0.35% 0.28% 0.30% 0.25% 0.22% 0.20% 0.16% 0.14% 0.15% 0.10% 0.05% 0.00% LTM Jun-17 LTM Jun-18 LTM Jun-19 LTM Jun-20 Consumers Peers* *Peers are public and private commercial banks located in Ohio with assets between $400 million a
Slide 15: Net Charge-offs / Average Loans
NET CHARGE-OFFS / AVERAGE LOANS 0.40% 0.40% o Fiscal 2019 Reflects a net recovery of $807,000 o Average net charge-offs over last 0.30% four fiscal years: $83,750 o Zero OREO at Fiscal YE 2015 - 2020 0.20% 0.11% 0.07% 0.07% 0.06% 0.10% 0.02% -0.01% 0.00% LTM Jun-17 LTM Jun-18 LTM Jun-19 LTM Jun-20 -
Slide 16: Allowance for Loan Losses
Allowance for Loan Losses Allowance / Loans 1.13% Overview o Allowance for loan losses was 1.05% as of June 30, 1.07% 2020 and 1.19% of loans 1.05% excluding PPP loans 1.03% o Strong reserve levels reflect expectation of $272,867 $318,509 $369,175 $542,861 deteriorating economic 2017 2018 2019 2020
Slide 17: 12 Month Stock Price Change
12 Month Stock Price Change Market Price (10-28-2020) $16.35 Book Value / Share (9-30-2020) $21.61 Fiscal 2020 EPS $1.92 LTM EPS (Through 09-30-2020) $2.12 Annualized Dividend Yield (10/28/20) 3.55%
Slide 18: Total Loan Balance Trend
TOTAL LOAN BALANCE TREND 2020 Growth: TOTAL LOANS PPP: $67 Million 2020 $546 Organic: $61 Million Acquisition: $49 Million 2019 $369 Total: $177 Million 2018 $319 Fiscal 2020 organic growth, was 2017 $273 16.5%, with limited fourth quarter activity 2016 $256 FYE Loan Balances reflect $3.8 2015 $229
Slide 19: High-Quality & Diversified Loan Portfolio
HIGH-QUALITY & DIVERSIFIED LOAN PORTFOLIO Commercial RE Portfolio Composition (000) 11% $21,377, 3.91% $21,526, 3.94% $124,013, $45,418, 8.31% 22.70% 35% 54% Commercial Commercial Real Estate Owner-Occ Non-Owner Occ Construction • Farm $546.4 Million Balanced Portfolio $152,030, • 1-4 Family increas
Slide 20: Loan Production
LOAN PRODUCTION Production Trend by Type o Net of PPP, Total loan production increased to 2020 $14 $70 $82 $67 $167 million; or 7% over fiscal 2019 2019 $14 $46 $96 o Total production including PPP was $234 million; 50% 2018 $10 $32 $70 over fiscal 2019 CAGR: Excl. PPP: 22.72% o Consumer & Non-PPP 2
Slide 21: Market Area
MARKET AREA • $25.5 Billion Deposit Market • Five County Market Growth: 13.23% • Consumers Growth: 17.81% • 50% of Held in Stark County • Commercial loan activity influences deposit growth Market Size Market Share Carroll $387,983 21.34% Deposit Distribution by Columbiana $1,806,113 7.39% County 3%
Slide 22: Banking Locations
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Slide 23: COVID-19 Response
COVID-19 RESPONSE Marketing, Risk, Audit Information Technology / Bus Resumption • Customer communication (ongoing) • Branch signage • Pandemic Response Team convened: February • Monitored & communicated fraud trends • Executed Plan @ Pandemic Level March 4th • Transition to remote work March 9 (con
Slide 24: Paycheck Protection Program
PAYCHECK PROTECTION PROGRAM Customer Distribution INDUSTRY DISTRIBUTION $ % Paychecks Payrolls 128, 21% (Million) (Million) 268, 44% Manufacturing $14.0 20.4% 1,510 $67.5 Healthcare & $9.7 14.2% 1,404 $46.9 211, 35% Social Assistance Loan Deposit Only New Customer Construction $7.6 11.1% 598 $36.6 P
Slide 25: Paycheck Protection Program
PAYCHECK PROTECTION PROGRAM Other, Ohio, $5.2, 8% Non-Ohio, $0.2, 0% Carroll, $6.6, 10% o $52.1 million Wayne, $1.7, 2% (76%) in six core Tuscarawas, $1.9, 3% Cuyahoga, $2.8, 4% counties. o 99.7% of originations were in Ohio Summit, $6.7, 10% Columbiana, $7.1, 10% Jefferson, $2.3, 3% Mahoning, $2.0,
Slide 26: Payment Deferral Modification Program
PAYMENT DEFERRAL MODIFICATION PROGRAM Accounts Prior with Modification; % of 1-90 Day 2-90 Day Deferrals currently 30 Days Total 3/31/20 Deferral Deferral that have + Past Due Portfolio Resumed Payments Commercial 219 $66.4 52 $9.6 271 $76.0 23.1% 268 / 271 0 / $0 Mortgage & 49 $4.3 8 $.77 57 $4.8 5
Slide 27: COVID-19 Impact
COVID-19 IMPACT Balance Sheet / Income Credit Lessons Learned Liquidity • Inflated balance • Margin • Slowed loan • Prior business sheet compression pipeline in the resumption • PPP advances • PPP short-term— planning & testing funded to DDA • Yield Curve appears to be proved critical accounts norma
Slide 28: Peoples National Bank of Mount Pleasant Merger
PEOPLES NATIONAL BANK OF MOUNT PLEASANT MERGER • $10 million transaction closed on January 2, 2020 • System Conversion: February 15, 2020 • Balance sheet at closing: Loans: $55.3 million Securities: $4.1 million Deposits: $60.9 million Goodwill: $836 thousand • Book value: • Prior to Tx close: $19.6
Slide 29: Building the Future
BUILDING THE FUTURE • Loan Production • Commercial • Mortgage • Consumer • Counter margin compression through scale • Increase market presence in six primary and contingent counties • Consolidate systems • Technology and data security • Contactless debit cards • Staff development • Credit emphasis
Slide 30: Community Banking Model
COMMUNITY BANKING MODEL Local Shareholders & Capital Local Dividends Local Deposits Investments: Engaged Local Products, Bankers Technology, & Infrastructure Local Lending & Strong Local Community Communities Investments Local Directors & Management Support Local Civic Strong, Growing & Community En
Slide 31: Local Leadership: Board of Directors
BOARD OF DIRECTORS LOCAL LEADERSHIP Laurie McClellan, Chairman Retired, Consumers National Bank 1987 Minerva, Ohio John Furey, Vice Chairman Retired, Furey’s Wheel World 1995 Malvern, Ohio Bradley Goris Managing Member Goris Properties 2011 Alliance, Ohio David Johnson CEO, Summitville Tiles & Presi
Slide 32: Experienced Community Bankers: Management Team
MANAGEMENT TEAM EXPERIENCED COMMUNITY BANKERS Years with Industry Company Experience o Average Ralph J. Lober President & CEO 13 30 Management Scott E. Dodds EVP, Senior Loan Officer 6 34 Consumers Tenure: 10 Years Renee K. Wood EVP, Chief Financial Officer 15 26 o Average Industry Hillary A. Johnst
Slide 33: 2021 First Quarter
2021 FIRST QUARTER $2.4 Million Earnings / 60% increases over FYTD 2020 14.74% Return on Equity / 332 BP over FYTD 2020 1.29% Return on Assets / 22 BP over FYTD 2020 Efficiency Ratio: 60.49% $19.3 million (14.2%) increase in total Loans Net Charge-off Ratio: 0.03% Nonperforming Loans: 0.24% 33
Slide 34: 2020 Shareholders Meeting
2020 SHAREHOLDERS MEETING 34
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