Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — 2021 Hovde Group Financial Services Conference
34 slides from Citizens Community Bancorp's conference presentation, Oct 25, 2021
Slide 1: 2021 Third Quarter Results
Filed Pursuant to Rule 433 Registration Statement No. __________ Issuer Free Writing Prospectus Dated October __,Exhibit 99.1 2015 Relating to Preliminary Prospectus Supplement Dated October __, 2015 2021 Third Quarter Results Citizens Community Bancorp Inc. 2021 Hovde Group Financial Services Confe
Slide 2: Dates and Periods Presented; Cautionary Note on 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 Stable Markets Strong earnings and ROATCE profile with capacity and infrastructure to grow organically 3 Returns Asset Quality Diverse geographies and industries mitigate risk and enhance steady growth prospects Sound underwriting practices and portfolio administration have produc
Slide 4: Values, Vision, Mission; Culture & Engagement
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. Cul
Slide 5: Performance Objectives
Performance Objectives Increase Tangible Book and Shareholder Value Maintain Strong Asset Quality Metrics 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 Section 4013 of
Slide 6: Franchise Footprint
Franchise Footprint Minnesota Wisconsin Source: S&P Global Market Intelligence 0 0 0 0 0 0 0 0 0 0 6
Slide 7: Recent Franchise Expansion
Recent Franchise Expansion CZWI has successfully transformed the Company from a consumer bank to a commercial bank, which has strengthened the earnings profile and franchise value through M&A and organic growth. Total Assets Loans Receivable Total Deposits Source: S&P Global Market Intelligence
Slide 8: Diverse markets in northwestern 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 9: 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 10: Book Value, Tangible Book Value and Core Net Revenue Detail
Book Value, Tangible Book Value and Core Net Revenue Detail 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 c
Slide 11: 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 ROATCE as adjusted are non-GAAP measures, which management believes may be helpful in better understanding the underlying business performance trends related to average assets and average tangible equity. Rec
Slide 12: Efficiency Ratio, Net Interest Income and Net Interest Margin
Efficiency Ratio, Net Interest Income (NII) and Net Interest Margin (NIM) The efficiency ratio as adjusted is a non-GAAP measure, which management believes may be helpful in better understanding the underlying business performance trends related to non-interest expense. A reconciliation of the effic
Slide 13: Capital Ratios
Capital Ratios Note: 2018 FY represents the completion of the 2018 offering of $65 million, but does not include the acquisition of United Bank Source: S&P Global Market Intelligence, company filings 13 6.6% 12.7% 7.7% 7.7% 7.5% 7.5% 7.6% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0%
Slide 14: Asset Quality
Asset Quality 0.07% 0.07% 0.08% 0.08% 0.06% 0.01% 0.00% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 2017 FY 2018 FY 2019 FY 2020 FY Mar-21 Jun-21 Sep-21 NET CHARGE OFFS (NCOS)/ AVERAGE LOANS NCOS / AVERAGE LOANS 0.82% 0.89% 0.88% 1.38% 1.41% 1.43% 1.35%1.25% 1.11% 1.25% 1.55% 1.61% 1.59% 1.47% 1.53% 1.57% 1
Slide 15: COVID-19 Related Loan Deferrals
COVID-19 Related Loan Deferrals Dollars in Thousands 15 COVID-19 Deferrals Balance Number of Loans Commercial Deferrals Hotel Loans 19,191$ 2 Other Commercial Loans - - Total Commercial Deferrals 19,191 2 Residential Deferrals 1,442 12 Consumer Deferrals - - Total Deferrals 20,633$ 14 September 30,
Slide 16: Loan Portfolio
CRE, C&I, Ag. Related, C&D 90% Residential & HELOC 8% Consumer 2% 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, agricultural
Slide 17: SBA PPP Loans and Net Deferred Loan Fee Accretion
SBA PPP Loans and Net Deferred Loan Fee Accretion 17 Dollars in Millions Balance Net Deferred Fee Income Balance Net Deferred Fee Income Balance Net Deferred Fee Income SBA PPP Loans, December 31, 2020 123.7$ 3.0$ -$ -$ 123.7$ 3.0$ SBA PPP Loan Originations - - 47.5 1.8 47.5 1.8 SBA PPP Loan Forgive
Slide 18: Portfolio Fundamentals: Non-Owner Occupied CRE
Portfolio Fundamentals 55%35% 10% Wisconsin Minnesota Other By Geography As of 09/30/21 • 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 5
Slide 19: Portfolio Fundamentals: Owner Occupied CRE
26% 16% 11% 11% 11% 7% 6% 12% CRE Campground CRE Restaurant CRE Industrial/Manufacturing CRE Retail CRE Warehouse/Mini Storage CRE Mixed Use CRE Office Other Owner Occupied CRE As of 09/30/21 Portfolio Fundamentals 71% 12% 17% Wisconsin Minnesota Other By Geography As of 09/30/21 • Underwritten to <
Slide 20: Portfolio Fundamentals: Multi-family
Portfolio Fundamentals 69% 29% 2% Wisconsin Minnesota Other By Geography As of 09/30/21 100% Multi-family Multi-family As of 09/30/21 • Robust housing markets in Eau Claire and Mankato markets supported by student populations at state universities, technical colleges, and growing population and job
Slide 21: Portfolio Fundamentals: Commercial & Industrial
81% 18% 1% Wisconsin Minnesota Other By Geography As of 09/30/21 22% 11% 11% 8%7% 6% 6% 6% 4% 4% 4% 4% 3% 4% Manufacturing Public Admin Transportation and Warehousing Wholesale Trade Construction Real Estate, Rental and Leasing Agriculture Retail Trade Administrative Support Education Services Healt
Slide 22: Portfolio Fundamentals: Construction and Development
Portfolio Fundamentals 23% 19% 15% 14% 10% 7% 12% Commercial 1-4 Family Construction CRE Multi-family CRE Warehouse/Mini Storage CRE Senior Living Land CRE Campground Other Commercial & Development As of 09/30/21 50% 38% 12% Wisconsin Minnesota Other By Geography As of 09/30/21 • Underwritten to 75-
Slide 23: Portfolio Fundamentals: Agricultural Loans
38% 23% 22% 17% Crop Dairy Other Farming Other Agricultural As of 09/30/21 Portfolio Fundamentals 69% 28% 3% Wisconsin Minnesota Other By Geography As of 09/30/21 • Producers required to have marketing plans to mitigate volatility of commodities • Appropriate crop/revenue insurance and/or dairy marg
Slide 24: Portfolio Fundamentals: Hotel Loans
74% 17% 9% Flagged Historic Boutique Other Hotels As of 09/30/21 Portfolio Fundamentals 56% 30% 14% Minnesota Wisconsin Illinois By Geography As of 09/30/21 • Mainly experienced multi project hoteliers and guarantors with strong personal financial statements (net worth and liquidity) • Mainly flagge
Slide 25: Portfolio Fundamentals: Restaurant Loans
48% 18% 10% 9% 5% 4% 6% Culver's - Limited Service Restaurants Other National Limited Services Micro Breweries Drinking Establishments Bowling Centers Other Restaurants As of 09/30/21 Portfolio Fundamentals 80% 15% 5% Wisconsin Minnesota Other By Geography As of 09/30/21 • Experienced developers/ope
Slide 26: 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 09/30/2021 Source: S&P Global Market Intelligence, company filings Non Interest Bearing Dema
Slide 27: Appendix
Citizens Community Bancorp Inc. Appendix 27
Slide 28: Net Interest Margin Analysis
Net Interest Margin Analysis Source: S&P Global Market Intelligence, company filings 28 (1) Fully taxable equivalent. The average yield on tax exempt securities is computed on a tax equivalent basis using a tax rate of 21% for the quarters ended September 30, 2021, June 30, 2021, March 31, 2021, and
Slide 29: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures 29 GAAP pre-tax earnings 3,822$ 6,609$ 12,277$ 17,280$ 7,451$ 6,426$ 6,816$ Merger related costs (1) 1,860$ 463$ 3,880$ -$ -$ -$ -$ Branch closure costs (2) 951$ 26$ 15$ 165$ -$ -$ -$ Settlement proceeds (3) (283)$ -$ -$ (131)$ -$ -$ -$ FHLB borrowings p
Slide 30: 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, $0, $0, $341,000, $350,000, and $565,000 for the three months ended September 30, 2021, June 30
Slide 31: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Note: All quarterly periods are annualized for net income / net income as adjusted. 31 2016 2017 2018 2019 2020 Mar-21 Jun-21 Sep-21 Net Income 2,573$ 2,499$ 4,283$ 9,463$ 12,725$ 5,506$ 4,706$ 4,997$ Net Income as adjusted 3,563$ 4,221$ 4,962$ 10,675$ 1
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 Jun-21 Sep-21 Non-interest Expense (GAAP) 20,058$ 22,878$ 29,764$ 42,686$ 43,673$ 9,489$ 10,198$ 10,320$ Merger related costs (701) (1,8
Slide 33: Disciplined Acquisition Strategy
33 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 lo
Slide 34: 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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