Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — D.A. Davidson Financial Institutions Conference (May 2021)
35 slides from Citizens Community Bancorp's conference presentation, May 4, 2021
Slide 1: 2021 First Quarter Results
Filed Pursuant to Rule 433 Registration Statement No. __________ Issuer Free Writing Prospectus Dated October __, 201eXHIBIT 99.1eXExhibit 99.15 Relating to Preliminary Prospectus Supplement Dated October __, 2015 2021 First Quarter Results Citizens Community Bancorp Inc. D.A. Davidson Financial Ins
Slide 2: Cautionary Note Regarding Forward Looking Statements
DATES AND PERIODS PRESENTED Unless otherwise noted, “20YY” refers to either the corresponding fiscal year-end date or the corresponding 12-months (i.e. fiscal year) then ended. “MMM-YY” refers to either the corresponding quarter-end date, or the corresponding three-month period then ended. CAUTIONAR
Slide 3: Investment Summary
Investment Summary Diversification across geographies and industries reduces risk and enhances growth potential Strong earnings profile, leveraging infrastructure and growth to drive efficiency Improving asset quality in loan portfolios Five percent stock buyback announced November 30, 2020
Slide 4: Quarterly Change in Common Stock Outstanding & Impact of Stock Buyback
Quarterly Change in Common Stock Outstanding & Impact of Stock Buyback 4 Nasdaq: CZWI (1) Shares repurchased during the quarter – 224,481 shares at an average price of $11.42 per share (2) Shares available for repurchase under the current authorization as of March 31, 2021 are 235,000 CZWI Common St
Slide 5: Mission, Vision and Values
Values Our six main values are: integrity, commitment, innovation, collaboration, focus, and sustainability. Vision Make more possible for our customers, colleagues, communities, and shareholders! Mission Provide the best products, service, and ideas to our customers every interaction every day. Mis
Slide 6: Performance Objectives
Performance Objectives Increase Tangible Book and Shareholder Value Reduced NPA’s & Classified Loans to Peer Group Median Increase Operating Leverage Sustainable Business Practices Targeted growth in TBV of 8-10% and achieve ROA and ROE in the upper half of its peer group Reduce loan deferrals under
Slide 7: Franchise Footprint
Franchise Footprint Minnesota Wisconsin Source: S&P Global Market Intelligence 0 0 0 0 0 0 0 0 0 0 7
Slide 8: 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. May 2016 Assets: $154mm Rice Lake, WI 2 Central Bank branches February 2016 Deposits: $27mm
Slide 9: Diverse Markets in Wisconsin and Minnesota
Source: S&P Global Market Intelligence, eauclairedevelopment.com, greatermankato.com, Google Images 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
Slide 10: Net Income and Diluted EPS
Net Income and Diluted EPS Source: S&P Global Market Intelligence, company filings Net Income as Adjusted and Diluted EPS Income as Adjusted are non-GAAP financial measures, which management believes may be helpful in understanding the Company's results of operations or financial position and compar
Slide 11: Book Value and Tangible Book Value
Book Value and Tangible Book Value Source: S&P Global Market Intelligence, company filings Tangible book value per share is a non-GAAP measure which management believes may be helpful in better assessing capital adequacy. The reconciliation of Tangible book value per share can be found in the append
Slide 12: Return on Average Assets and Return on Average Tangible Common Equity
Return on average assets as adjusted, return on average tangible common equity (ROATCE) and return on average tangible common equity as adjusted are non-GAAP measures, which management believes may be helpful in better understanding the underlying business performance trends related to average asset
Slide 13: Efficiency Ratio and Net Interest Margin
84% 85% 79% 73% 66% 66% 63% 77% 75% 78% 68% 66% 67% 64% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 2016 2017 2018 2019 Mar-20 Jun-20 Sep-20 EFFICIENCY RATIO EFFICIENCY RATIO EFFICIENCY RATIO AS ADJUSTED Efficiency Ratio and Net Interest Margin The efficiency ratio as adjusted is a non-GAAP measure,
Slide 14: Capital Ratios
Capital Ratios Note: TCE/TA excluding PPP loans at 03/31/2021 was 7.9%; TCE/TA excluding PPP loans at 12/31/2020 was 8.3%; Note: 2018 FY represents the completion of the 2018 offering of $65 million, but does not include the acquisition of United Bank Source: S&P Global Market Intelligence, company
Slide 15: Asset Quality
Asset Quality Modified Q factor and added deferment factor related to the potential adverse economic impact of Covid-19 Strong credit quality on CCF originated loan portfolio Actively reducing NPAs on acquired loan portfolio Source: S&P Global Market Intelligence, company filings 15 0.07% 0.07
Slide 16: COVID-19 Related Loan Deferrals
COVID-19 Related Loan Deferrals Dollars in Thousands 16 At March 31, 2021 Balance Number of Loans Commercial Deferrals Hotel Loans 48,920$ 10 Other Commercial Loans 3,891 10 Total Commercial Deferrals 52,811 20 Residential Deferrals 3,865 98 Consumer Deferrals 599 40 Total Deferrals at March 31, 202
Slide 17: Loan Portfolio
CRE, C&I, Ag. Related, C&D 85% Residential & HELOC 12% Consumer 3% Loan Portfolio CZWI has transformed its loan portfolio through organic growth and acquisitions Change has occurred from a primarily consumer focused portfolio to a diversified mix consisting of commercial real estate, agricultura
Slide 18: SBA PPP Loans and Net Deferred Loan Fee Accretion
SBA PPP Loans and Net Deferred Loan Fee Accretion 18 Dollars in Millions Balance Net Deferred Fee Income SBA PPP Loans - Round 1 124$ 3.0$ SBA PPP Loans - Round 2 - - Total SBA PPP Loans, December 31, 2020 124$ 3.0$ SBA PPP Loans - Round 1 72$ 1.3$ SBA PPP Loans - Round 2 47 1.7 Total SBA PPP Loans,
Slide 19: Non-Owner Occupied CRE Portfolio Fundamentals
Portfolio Fundamentals 57% 33% 10% Wisconsin Minnesota Other By Geography As of 03/31/21 • Typically well seasoned investors with multiple projects, track record of success and personal financial strength (net worth/Liquidity) • Maximum LTV =<80% with recourse to owners with >20% interest • Term of
Slide 20: Owner Occupied CRE Portfolio Fundamentals
15% 13% 11% 9%9% 8% 7% 5% 23% CRE Campground CRE Restaurant CRE Retail CRE Industrial/Manufacturing CRE Warehouse/Mini Storage CRE Senior Living CRE Mixed Use CRE Office Other Owner Occupied CRE As of 03/31/2021 Portfolio Fundamentals 75% 15% 10% Wisconsin Minnesota Other By Geography As of 03/31/20
Slide 21: Multi-family Portfolio Fundamentals
Portfolio Fundamentals 60% 38% 2% Wisconsin Minnesota Other By Geography As of 03/31/21 100% Multi-family Multi-family As of 03/31/21 • Robust housing markets in Eau Claire and Mankato markets supported by student populations at state universities, technical colleges, and growing population and job
Slide 22: Commercial & Industrial Portfolio Fundamentals
84% 15% 1% Wisconsin Minnesota Other By Geography As of 03/31/2021 14% 11% 11% 10% 8% 7% 7% 6% 5% 4% 4% 3% 3% 3% 4% Manufacturing Transportation and Warehousing Public Administration Wholesale Trade Real Estate, Rental and Leasing Construction Retail Trade Agriculture Administrative and Support Educ
Slide 23: Construction and Development Portfolio Fundamentals
Portfolio Fundamentals 18% 16% 14% 10% 10% 8% 7% 6% 4% 7% CRE Senior Living Commercial 1-4 Family Construction CRE Multi-family CRE Campground CRE Retail CRE Hospitality Other Land CRE Warehouse/Mini Storage Industrial/Manufacturing Other Commercial & Development As of 03/31/21 51% 32% 17% Wisconsin
Slide 24: Agricultural Real Estate & Operating Loans
41% 26% 17% 13% Crop Dairy Other Farming Other Agricultural As of 03/31/21 Portfolio Fundamentals 70% 26% 4% Wisconsin Minnesota Other By Geography As of 03/31/21 • Producers required to have marketing plans to mitigate volatility of commodities • Appropriate crop/revenue insurance and/or dairy marg
Slide 25: Hotel Loans
68% 20% 12% Flagged Historic Boutique Other Hotels As of 03/31/21 Portfolio Fundamentals 51% 32% 17% Minnesota Wisconsin Illinois By Geography As of 03/31/21 • Mainly experienced multi project hoteliers and guarantors with strong personal financial statements (net worth and liquidity) • Mainly flagg
Slide 26: Restaurant Loans
53% 16% 10% 8% 6% 7% Culver's - Limited Service Restaurants Micro Breweries Other National Limited Services Drinking Establishments Other Restaurants As of 03/31/21 Portfolio Fundamentals 79% 20% 1% Wisconsin Minnesota Other By Geography As of 03/31/21 • Experienced developers/operators of national
Slide 27: Deposit Composition
Deposit Composition Focus has been on transforming the deposit composition to core deposits Deposit transformation and growth has been achieved through both acquisitions and organic initiatives 9/30/2016 3/31/2021 Source: S&P Global Market Intelligence, company filings Non Interest Bearing Deman
Slide 28: Appendix
Citizens Community Bancorp Inc. Appendix 28
Slide 29: Net Interest Margin Analysis
Net Interest Margin Analysis Source: S&P Global Market Intelligence, company filings 29 Quarter ended March, 31 2021 Quarter ended December 31, 2020 Quarter ended September 30, 2020 Quarter ended June 30, 2020 Three months ended September 30, 2011 Interest Average Interest Average Interest Average I
Slide 30: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 30 Reconciliation of GAAP Earnings and Core Earnings (non-GAAP): GAAP pre-tax earnings 3,822$ 6,609$ 12,277$ 17,280$ 7,451$ Merger related costs (1) 1,860$ 463$ 3,880$ -$ -$ Branch closure costs (2) 951$ 26$ 15$ 165$ -$ Settlement proceeds (3) (283)$ -$
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (1) All costs incurred are presented as professional fees and other non-interest expense in the consolidated statement of operations and include costs $0, $0, $341,000, $350,000, and $565,000 for the three months ended March 31, 2021 and years ended Dece
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Note: All quarterly periods are annualized for net income / net income as adjusted. 32 2016 2017 2018 2019 2020 Mar-21 Net Income 2,573$ 2,499$ 4,283$ 9,463$ 12,725$ 22,330$ Net Income as adjusted 3,563$ 4,221$ 4,962$ 10,675$ 12,425$ 22,638$ Average asse
Slide 33: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Note: All quarterly periods are annualized for net income / net income as adjusted 33 2016 2017 2018 2019 2020 Mar-21 Non-interest Expense (GAAP) 20,058$ 22,878$ 29,764$ 42,686$ 43,673$ 9,489$ Merger related costs (701) (1,860) (463) (3,880) - - Branch C
Slide 34: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Strategic consolidation of community banks Provides scale and operating efficiencies Adds experienced and knowledgeable banking talent Opportunity to continue commercial loan growth Opportunity to drive down cost of funds Adds portfolios of seasoned loans
Slide 35: Leadership Team
Leadership Team Stephen M. Bianchi Chairman of the Board President & CEO Mr. Stephen M. Bianchi, also known as Steve, has been the Chief Executive Officer and President of Citizens Community Bancorp, Inc. and Citizens Community Federal since June 24, 2016. He has been Chairman of Citizens Community
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