Citizens Community Bancorp, Inc. · NASDAQ:CZWI
Citizens Community Bancorp — FIG's 24th Community Bank CEO Forum 2019
27 slides from Citizens Community Bancorp's conference presentation, Sep 18, 2019
Slide 1: Citizens Community Bancorp Inc. - FIG's 24th Community Bank CEO Forum 2019
Filed Pursuant to Rule 433 Registration Statement No. __________ Issuer Free Writing Prospectus Dated October __, 2015 Relating to Preliminary Prospectus Supplement Dated October __, 2015 Citizens Community Bancorp Inc. FIG’s 24th Community Bank CEO Forum 2019 Second Quarter 1
Slide 2: Cautionary Notes and Additional Disclosures
Cautionary Notes and Additional Disclosures CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements inc
Slide 3: Cautionary Notes and Additional Disclosures (Cont'd)
Cautionary Notes and Additional Disclosures (Cont’d) Additional Information and Where to Find It This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any j
Slide 4: CZWI Focus Items
CZWI Focus Items ENHANCING THE QUANTITY AND QUALITY OF EARNINGS We are enhancing shareholder value by improving the loan and deposit mix, deepening customer relationships and strengthening other sources of revenue. EXPERTISE IN COMMERCIAL & AG BANKING We take pride in serving small and mid-sized bus
Slide 5: Key Market Differentiators
Key Market Differentiators • Serving small to mid-sized • Experienced, energetic entrepreneurs leadership team • Responsive professionals • Accountability for doing the • Products to compete vs. big right thing and getting results banks, superior to smaller • Entrepreneurial spirit, winning communit
Slide 6: Execution of Current Business Strategy
Execution of Current Business Strategy Total Loans Loans/Deposits $1,200 120% $993 $1,020 $1,020 $1,000 110% 103% 102% $759 99% 99% 99% 100% $800 $733 100% $574 $600 90% $400 80% $200 70% 60% $0 2016 2017 2018 Dec-18 Mar-19 Jun-19 2016 2017 2018 Dec-18 Mar-19 Jun-19 (1) NPA / Assets Diluted Earnings
Slide 7: Execution of Current Business Strategy
Execution of Current Business Strategy Net Income($000) Efficiency Ratio $5,000 90.0% 83.6% 84.7% $4,283 $4,107 79.0% 77.9% 79.8% $4,000 80.0% $3,000 $2,573 $2,499 70.0% 61.3% $2,000 60.0% $1,261 $953 $1,000 50.0% $0 40.0% 2016 2017 2018 Dec-18 Mar-19 Jun-19 2016 2017 2018 Dec-18 Mar-19 Jun-19 (1) (
Slide 8: Net Income and Diluted EPS
Net Income and Diluted EPS Net Income Diluted EPS $6,000 $1.00 $5,021 $0.79 $5,000 $4,283 $4,260 $4,107 $0.75 $0.67 $4,000 $0.62 $3,563 $0.54 $0.49 $0.46 $3,000 $2,573 $2,499 $2,575 $0.50 $2,194 $0.37 $2,000 $1,723 $1,261 $0.20 $0.23 $953 $0.25 $0.16 $0.12 $1,000 $0.09 $0 $0.00 2016 2017 2018 Dec-18
Slide 9: 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 10: Commercial Loan Detail
Commercial Loan Detail . Commercial loan portfolio well diversified . Total portfolio of $746.7 million at 06/30/2019 . Strong growth in all commercial loan categories . Average note size is under $270 thousand ($M) Mar-19 Jun-19 C&D $42.4 $52.1 Non-Owner Occ. CRE 145.8 147.9 Investor 1-4 CRE 84.1 8
Slide 11: Deposit Composition
Deposit Composition . June 2019 Quarter reflects the sale of $34.1 million of Michigan Branch deposits. Deposit Composition - Quarter Lookback ($000) 2017 FQ3 2017 FQ4 2018 FQ1 2018 FQ2 2018 FQ3 2018 FQ4 Dec-18 Mar-19 Jun-19 Demand $98,804 $221,761 $226,889 $230,559 $232,319 $225,420 $309,691 $332,6
Slide 12: Market Demographics
Market Demographics CZWI operates in diverse markets within the northwestern region of Wisconsin, metro Twin Cities and the Mankato, Minnesota MSA Eau Claire: . Features a broad-based, diverse economy, which is driven by commercial, retail and medical industries Mankato: . The Mankato market also
Slide 13: Net Interest Margin Analysis
Net Interest Margin Analysis Quarter ended June 30, 2019 Quarter ended March 31, 2019 Interest Average Interest Average Average Income/ Yield/ Average Income/ Yield/ ($ Dollars in Thousands) Balance Expense Rate Balance Expense Rate Average interest earning assets: Cash and cash equivalents $ 30,076
Slide 14: 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 2016 Acquisition of 2 Central Bank branches in Northwestern WI: $27.1 million deposits 2016
Slide 15: Branch Locations as of July 1, 2019
Branch Locations as of July 1, 2019 CZWI Locations Source: S&P Global Market Intelligence 15
Slide 16: Transaction Highlights
Transaction Highlights • Transaction adds an adjacent market to CZWI’s Wisconsin presence with Tomah branch locations that are attractively located nearby CZWI’s Eau Claire and Osseo markets • Transaction provides CZWI with a stable, modestly priced deposit base for organic growth opportunities • Up
Slide 17: Transaction Rationale
Transaction Rationale . Straightforward follow-on acquisition to United Bank with stable deposits concentrated in one market . Strategic Accelerates pro forma franchise growth in total assets and deposits . Consistent with CZWI’s strategy of “re-formulating” its loan and Rationale deposit compositio
Slide 18: Transaction Terms
Transaction Terms F. & M. Bancorp of Tomah Transaction Value $24 million Consideration 85% Cash, 15% Stock Price/TBV 105.80% Price/LTM EPS(1) 16.0x Closed July 1, 2019 Conversion July 15, 2019 (1) Based on normalized net income available to common of $1.3 million for the twelve months ended 9/30/18
Slide 19: Pro Forma Loans
Pro Forma Loans CZWI F. & M. ProForma Composition Composition Composition Loan Type ($000) % of Total Loan Type ($000) % of Total Loan Type ($000) % of Total Constr & Dev 62,605 6.1% Constr & Dev 2,274 1.7% Constr & Dev 64,879 5.6% 1-4 Family Residential 147,191 14.3% 1-4 Family Residential 17,951 1
Slide 20: Pro Forma Deposits
Pro Forma Deposits CZWI F. & M. ProForma Composition Composition Composition Deposit Type ($000) % of Total Deposit Type ($000) % of Total Deposit Type ($000) % of Total Non Interest Bearing 319,199 31.4% Non Interest Bearing 23,912 16.1% Non Interest Bearing 343,111 29.5% NOW & Other Trans 920 0.1%
Slide 21: Pro Forma Balance Sheet
Pro Forma Balance Sheet Dollars in thousands, except per share data Pro Forma Balance Sheet: Fair Value M&A CZWI (1) F. & M. Bancorp Pro Forma Adjustments Adjustments 6/30/19 6/30/19 Cash and equivalents $ 52,988 $ 16,750 $ - $ (24,758) G $ 44,980 Securities 171,308 39,739 - - $ 211,047 Total loans
Slide 22: Pro Forma Balance Sheet Footnotes
Pro Forma Balance Sheet Footnotes A) Preliminary 2.5% credit mark (increase from original of 2.2% due to higher Tomah ALLL and change in property values; 0.6% interest rate mark; 3.1% total loan mark B) Reversal of existing F. & M. allowance for loan losses C) Preliminary deferred tax liability rela
Slide 23: Disciplined Acquisition Strategy
Disciplined Acquisition Strategy Areas of Potential Acquisition Opportunities Duluth Superior Rice Lake Eau Claire Minneapolis Wausau St. Paul Mankato Mason City La Crosse Winona Rochester Source: FIG Partners, S&P Global Market Intelligence 23
Slide 24: Appendix
Citizens Community Bancorp Inc. aA Appendix
Slide 25: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Reconciliation of GAAP Earnings and Core Earnings (non-GAAP): FY 2017 FY 2018 Dec-18 Mar-19 Jun-19 GAAP pre-tax earnings $ 3,822 $ 6,609 $ 1,822 $ 1,275 $ 5,607 Merger related costs (1) 1,860 463 1,057 659 206 Branch closure costs (2) 951 26 12 15 - Sett
Slide 26: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures (1) Costs incurred are included as data processing, advertising, marketing and public relations, professional fees, compensation and other non-interest expense in the consolidated statement of operations and include costs of $160,000, $119,000 and $461,0
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Return on Average Tangible Common Equity (ROATCE) (In thousands except ROATCE) 2016 2017 2018 Dec-18 Mar-19 Jun-19 Common Equity $ 64,544 $ 73,483 $ 135,847 138,187 138,380 143,749 Less: Goodwill (4,663) (10,444) (10,444) (31,474) (31,474) (32,430) Less:
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