Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — Janney's Virtual CEO Forum (February 2021)
35 slides from Citizens Community Bancorp's conference presentation, Feb 1, 2021
Slide 1: 2020 Fourth Quarter Results
Filed Pursuant to Rule 433 ExEXHIBIT 99.12015 Relating to Preliminary Prospectus Supplement Dated October __, 2015 2020 Fourth Quarter Results Citizens Community Bancorp Inc. Janneys’ Virtual CEO Forum
Slide 2: Dates and Periods Presented; 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 Improving earnings profile, leveraging infrastructure and growth to drive efficiency Strong credit metrics in CCF originated loan portfolio and improving asset quality in acquired lo
Slide 4: 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 5: Performance Objectives
Performance Objectives Increase Tangible Book and Shareholder Value Reduced NPA’s & Classified Loans to Peer Group Median Increase Operating Leverage Consistency In Culture Targeted growth in TBV of 8-10%, increase in TCE to Tangible Assets > 8% and achieve ROA and ROE in the upper half of its peer
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 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 8: CZWI operates in diverse markets
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 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 11: Return on Average Assets and Return on Average Tangible Common Equity
Return on 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 as
Slide 12: 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 13: Capital Ratios
Capital Ratios Note: TCE/TA excluding PPP loans at 12/31/2020 was 8.3%; TCE/TA excluding PPP loans at 9/30/2020 was 8.3%; TCE/TA excluding PPP loans at 6/30/2020 was 8.0%. Note: 2018 FY represents the completion of the 2018 offering of $65 million, but does not include the acquisition of United Bank
Slide 14: Asset Quality
Asset Quality Modified Q factor and added deferment factor related to the potential adverse economic impact of Covid-19 Strong credit quality on CCF originated loan portfolio Actively reducing NPAs on acquired loan portfolio Source: S&P Global Market Intelligence, company filings 14 0.07% 0.07
Slide 15: COVID-19 Related Loan Deferrals
COVID-19 Related Loan Deferrals Source: Company filings Dollars in Thousands 15 At December 31, 2020 Balance Number of Loans Commercial Deferrals Hotel Loans 51,643$ 11 Other Commercial Loans 4,817 14 Total Commercial Deferrals 56,460 25 Residential Deferrals 3,858 87 Consumer Deferrals 644 42 Total
Slide 16: Loan Portfolio
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 and commercial business loans Credit quality remains a focus in
Slide 17: Non-Owner Occupied CRE Portfolio Fundamentals
Source: Internal Company Documents Portfolio Fundamentals 57% 32% 11% Wisconsin Minnesota Other By Geography As of 12/31/2020 • Typically well seasoned investors with multiple projects, track record of success and personal financial strength (net worth/Liquidity) • Maximum LTV =<80% with recourse to
Slide 18: Owner Occupied CRE Portfolio Fundamentals
Source: Internal Company Documents 15% 12% 10% 9% 9% 7% 7% 5% 24% 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 12/31/2020 Portfolio Fundamentals 76% 16% 8% Wisconsin Minnesot
Slide 19: Multi-family Portfolio Fundamentals
Portfolio Fundamentals 57% 41% 2% Wisconsin Minnesota Other By Geography As of 12/31/2020 100% Multi-family Multi-family As of 12/31/2020 Source: Internal Company Documents • Robust housing markets in Eau Claire and Mankato markets supported by student populations at state universities, technical co
Slide 20: Commercial & Industrial Portfolio Fundamentals
83% 16% 1% Wisconsin Minnesota Other By Geography As of 12/31/2020 16% 12% 10% 10%8% 8% 7% 5% 4% 4% 4% 4% 3% 3% 2% Manufacturing Real Estate, Rental and Leasing Public Administration Transportation and Warehousing Wholesale Trade Educational Services Construction Retail Trade Administrative and Supp
Slide 21: Construction and Development Portfolio Fundamentals
Portfolio Fundamentals 23% 19% 13% 7% 7% 7% 5% 4% 3% 12% CRE Multi-family Commercial 1-4 Family Construction CRE Senior Living CRE Hospitality CRE Retail CRE Industrial/Manufacturing Other Land CRE Warehouse/Mini Storage Residential Lot Other Commercial & Development As of 12/31/2020 59%25% 16% Wisc
Slide 22: Agricultural Real Estate & Operating Loans
43% 26% 18% 13% Crop Dairy Other Farming Other Agricultural As of 12/31/2020 Portfolio Fundamentals 68% 28% 4% Wisconsin Minnesota Other By Geography As of 12/31/20 Source: Internal Company Documents • Producers required to have marketing plans to mitigate volatility of commodities • Appropriate cro
Slide 23: Hotel Loans
68% 20% 9% 3% Flagged Historic Boutique Other Wisconsin Dells Area Hotels As of 12/31/2020 Portfolio Fundamentals 51% 32% 17% Minnesota Wisconsin Illinois By Geography As of 12/31/2020 Source: Internal Company Documents • Mainly experienced multi project hoteliers and guarantors with strong personal
Slide 24: Restaurant Loans
50% 17% 11% 9% 6% 7% Culver's - Limited Service Restaurants Micro Breweries Other National Limited Services Drinking Establishments Other Restaurants As of 12/31/2020 Portfolio Fundamentals 77% 21% 2% Wisconsin Minnesota Other By Geography As of 12/31/2020 Source: Internal Company Documents • Experi
Slide 25: 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 12/31/2020 Source: S&P Global Market Intelligence, company filings Non Interest Bearing Dema
Slide 26: Appendix
Citizens Community Bancorp Inc. Appendix 26
Slide 27: Key Market Differentiators
BUSINESS MODEL CULTURE STRATEGIC GROWTH CREDIT • Serving small to mid-sized entrepreneurs • Responsive professionals • Products to compete vs. big banks, superior to smaller community banks • Experienced, energetic leadership team • Accountability for doing the right thing and getting results • Entr
Slide 28: Colleague Assistance, Safety & Readiness
28 Location & ReadinessTaking Care of Colleagues 58% 42% Staff at CCF Location Remote Staff Benefits • Emergency Sick Leave for employees diagnosed, quarantined or lost daycare for children • Permit PTO accrual for employees to go negative if additional time is needed • Appreciation Pay (monthly sti
Slide 29: Net Interest Margin Analysis
Net Interest Margin Analysis Source: S&P Global Market Intelligence, company filings (1) The increase is primarily related to higher realized non-accretable difference, included in loan interest income, due to the payoff of certain purchased credit impaired loans in the current quarter. (2) Fully ta
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 3,859$ 3,822$ 6,609$ 12,277$ 17,280$ 3,543$ 4,174$ 4,747$ 4,816$ Merger related costs (1) 701$ 1,860$ 463$ 3,880$ -$ -$ -$ -$ -$ Branch closure costs (2) 839$ 951$ 26$
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, $341,000, $350,000, $565,000 and $0 for the years ended December 31, 2020, December 31, 2019, Septe
Slide 32: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Note: All quarterly periods are annualized for net income / net income as adjusted. 32 2016 2017 2018 2019 2020 Mar-20 Jun-20 Sep-20 Dec-20 Net Income 2,573$ 2,499$ 4,283$ 9,463$ 12,725$ 10,481$ 12,343$ 13,844$ 14,202$ Net Income as adjusted 3,563$ 4,221
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-20 Jun-20 Sep-20 Dec-20 Non-interest Expense (GAAP) 20,058$ 22,878$ 29,764$ 42,686$ 43,673$ 10,731$ 11,392$ 10,724$ 10,826$ Merger related
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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