Citizens & Northern Corp · NASDAQ:CZNC
Citizens & Northern — Investor Presentation (May 2021)
30 slides from Citizens & Northern's investor presentation, May 19, 2021
Slide 1: Investor Presentation May 2021
Investor Presentation May 2021
Slide 2: Caution Regarding Forward Looking Statements
CAUTION REGARDING FORWARD LOOKING STATEMENTS This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that relate to future events or the future performance of the Company. Forward-looking statements are not guarantees of perfor
Slide 3: C&N Franchise Overview
• Citizens & Northern Corporation (“C&N”) is a bank holding company with assets of approximately $2.3 billion at March 31, 2021. It was founded in 1987 and has been listed on the NASDAQ since 2005. C&N’s principal subsidiary is Citizens & Northern Bank (“C&N Bank”). • Headquartered in Wellsboro, PA,
Slide 4: Current Strategic Focus
4 Current Strategic Focus Source: Company documents •Target business segments we know and understand •Focus on sustaining the trust of our customers, employees, shareholders and communities Relationship Banking Model •Seamlessly provide value across delivery channels •Maintain high-touch point of co
Slide 5: Current Branch Footprint
5 Current Branch Footprint CZNC (29) CZNC LPO (2) County of Operation Adjacent County Cattaraugus Allegany Steuben Chemung Tompkins Schuyler Yates Ontario Livingston Tioga Susquehanna Wyoming Luzeme Jefferson Elk McKean Potter Tioga Bradford Warren Lycoming Sullivan Clinton Cameron Union Dauphin Cum
Slide 6: Strong Presence in Legacy Markets Support Expansion into Newer Markets
1) Legacy markets average based on weighted average using total FDIC deposits Source: Company documents; Financial data as of June 30, 2020 6 Strong Presence in Legacy Markets Support Our Continued Expansion into Newer, Higher Growth Markets Total Deposits ($000) 2021 Median Household Income ($) ’21
Slide 7: Experienced Management Team
7 Experienced Management Team Name Position Years of Banking Experience Years with Citizens & Northern J. Bradley Scovill President and CEO 30 6 Mark Hughes Chief Financial Officer 21 21 Shelley D'Haene Chief Digital & Payments Officer 22 22 Stan Dunsmore Chief Credit Officer 37 14 Harold (Hal) Hoos
Slide 8: Summary Statistics March 31, 2021
8 Summary Statistics March 31, 2021 Total Assets $2,334 Million Net Loans $1,603 Million PPP Loans $137.8 Million Total Deposits $1,924 Million Tangible Common Equity1 $243.8 Million Tang. Common Equity / Tang. Assets1 10.71% Tier 1 Ratio 16.08% Total Risk Based Capital 18.03% Allowance for Loan Los
Slide 9: First Quarter 2021 Highlights
• First quarter net income totaled $8.8 million, compared to $6.8 million in the preceding quarter and $4.2 million in the same quarter a year ago. • Diluted earnings per share was $0.55, up from $0.43 per share in the preceding quarter and up from $0.30 in the same quarter a year ago. • The Provisi
Slide 10: Targeted Balance Sheet Growth
10 Targeted Balance Sheet Growth Total Assets ($M) Total Deposits ($M) Total Loans and Leases ($M) Total Equity ($M) $816 $828 $1,182 $1,512 $1,477 $132 $138 2017Y 2018Y 2019Y 2020Y 2021Q1 $1,277 $1,291 $1,654 $2,107 $2,334 $132 $138 $2,239 2017Y 2018Y 2019Y 2020Y 2021Q1 $1,008 $1,034 $1,253 $1,820
Slide 11: Strong Historical Profitability
3.82 3.90 3.86 3.69 4.00 2017Y 2018Y 2019Y 2020Y 2021Q1¹ 60.51% 60.07% 60.46% 59.30% 57.62% 2017Y 2018Y 2019Y 2020Y 2021Q1¹ 1.08 1.72 1.27 0.96 1.57 1.24 1.60 1.48 1.32 2017Y 2018Y 2019Y 2020Y 2021Q1¹ $13.4 $22.0 $19.5 $19.2 $35.1 $15.4 $20.4 $22.8 $26.5 2017Y 2018Y 2019Y 2020Y 2021Q1¹ 11 Strong His
Slide 12: Diversified Revenue: Meaningful Contribution of Fee Income
12 Diversified Revenue: Meaningful Contribution of Fee Income 1) Financial Data shown on an annualized basis Source: Company documents; Financial data as of March 31, 2021 2017Y 2018Y 2019Y 2020Y 2021Q1 Trust Revenue $5,399 $5,838 $6,106 $6,321 $1,626 Brokerage and Insurance Revenue 912 1,123 1,433
Slide 13: Diversified Lending Strategy & Portfolio Composition
Nonowner- Occupied RE 38% Owner- Occupied RE 23% Commerical and Industrial 18% Multi-Family Residential 6% Political Subdivisions 6% Commercial Construction 5% Other Commercial 4% Northern Tier 48% Southeast PA 47% York, PA 2% Other 3% • Diversified strategy across lending products and geographies •
Slide 14: Paycheck Protection Program
14 Paycheck Protection Program Source: Company documents; Financial Data as of March 31, 2021 1,622 loans 654 loans $175.2m $73.0m $108,022 $111,616 $4.7m $0.2m Originated Average Loan Size (Actual) Total Funded ($M) Total Fee Income ($M) Our team focused on the PPP lending process with energy and u
Slide 15: Consistent and Well Covered Asset Quality Metrics
1.47 1.37 0.80 1.10 1.07 2017Y 2018Y 2019Y 2020Y 2021Q1 1.09 1.12 0.83 0.69 0.72 2017Y 2018Y 2019Y 2020Y 2021Q1 15 Consistent and Well Covered Asset Quality Metrics 1) Reference GAAP to Non-GAAP reconciliation pages in appendix 2) The company had net recoveries of $17k in the first quarter of 2021,
Slide 16: COVID-19 Related Loan Deferrals By Industry
16 COVID-19 Related Loan Deferrals By Industry Source: Company documents; Financial data as of March 31, 2021 COVID Related Loan Modification # of Loans Recorded Investment Residential Mortgage 9 $1,094 Commercial 16 $24,950 Total 25 $26,044 Deferrals Remaining as of March 31, 2021 Dollars in Thousa
Slide 17: Strong Core Deposit Base
17 Strong Core Deposit Base Source: Company documents; Financial data as of March 31, 2021 • Non-time deposits of $1.6B, which represents 83% of total deposits • 0.37% cost of deposits in first quarter 2021 • Noninterest-bearing deposits were $566M, and represents 29.4% of total deposits MMDA & Savi
Slide 18: Capitalization and Sources of Liquidity
18 Capitalization and Sources of Liquidity Source: Company documents; Financial data as of March 31, 2021 • The following are sources of liquidity at the holding company: ‒ $7 million of cash as of March 31, 2021 ‒ $81 million of dividend capacity from the bank without prior regulatory approval • Su
Slide 19: Holding Company Capital Ratios
19 Holding Company Capital Ratios TCE / TA (%) Tier 1 Capital Ratio (%) Leverage Ratio (%) Total RBC Ratio (%) Source: Company Documents; Financial data are company estimates as of March 31, 2021 14.0 14.5 13.2 11.2 10.7 2017Y 2018Y 2019Y 2020Y 2021Q1 22.0 23.2 19.2 15.6 16.1 2017Y 2018Y 2019Y 2020Y
Slide 20: Bank Level Capital Ratios
20 Bank Level Capital Ratios Tier 1 Capital Ratio (%) Leverage Ratio (%) Total RBC Ratio (%) Source: Company Documents; Financial data are company estimates as of March 31, 2021 19.3 20.6 17.8 15.2 15.8 2017Y 2018Y 2019Y 2020Y 2021Q1 12.6 13.2 12.2 10.1 10.7 2017Y 2018Y 2019Y 2020Y 2021Q1 20.5 21.8
Slide 21: Conclusion
21 Conclusion 157-year-old institution with a strong market position Top-tier profitability with diversified revenue streams Balanced, granular loan portfolio with sound asset quality Stable, low-cost core deposit franchise Strong capital position to support strategic initiatives 1 2 3 4 5 Experienc
Slide 22: Appendix
Appendix 22
Slide 23: Consolidated Historical Balance Sheet
23 Consolidated Historical Balance Sheet Source: Company Documents; Financial data as of March 31, 2021 For the Year Ending, For the Quarter Ending 2018Y 2019Y 2020Y 2020Q2 2020Q3 2020Q4 2021Q1 Assets ($000) Total Cash and Cash Due from Banks 37,487 35,202 101,857 77,642 174,478 101,857 207,145 Avai
Slide 24: Consolidated Historical Income Statement
24 Consolidated Historical Income Statement Source: Company documents; Financial data as of March 31, 2021 For the Year Ending, 3/31/2021 2018Y 2019Y 2020Y 2021Q1 Net Interest Income 45,703 54,488 67,565 20,083 Provision for Loan Losses 584 849 3,913 259 Trust Revenue 5,838 6,106 6,321 1,626 Brokera
Slide 25: Investment Portfolio Characteristics
Investment Portfolio Characteristics as of March 31, 2021 25 Securities Portfolio Source: Company documents; Financial data as of March 31, 2021 Agency MBS 41% Municipalities 48% U.S Treasuries 4% US Government Agencies 7% Agency MBS Municipalities U.S Treasuries US Government Agencies • Book Value:
Slide 26: Reconciliation of GAAP to Non-GAAP Measure
26 Reconciliation of GAAP to Non-GAAP Measure Note: Core ROAA and Core ROAE shown on an annualized basis Source: Company documents; Financial data as of March 31, 2021 For the Year Ended December 31, Three Months Ended ($000s) 2017 2018 2019 2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Income Befor
Slide 27: Reconciliation of GAAP to Non-GAAP Measure
27 Reconciliation of GAAP to Non-GAAP Measure Source: Company documents; Financial data as of March 31, 2021 For the Year Ended December 31, For the Quarter Ended ($000s) 2017 2018 2019 2020 3/31/2021 Nonperforming Assets: Purchased Credit Impaired Loans $0 $0 $441 $6,841 $6,781 Other Nonaccrual Loa
Slide 28: Reconciliation of GAAP to Non-GAAP Measure
28 Reconciliation of GAAP to Non-GAAP Measure Source: Company documents; Financial data as of March 31, 2021 For the Year Ended December 31, Three Months Ended ($000s) 2017 2018 2019 2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Total Gross Loans $815,713 $827,563 $1,182,222 $1,644,209 $1,241,413 $1
Slide 29: Reconciliation of GAAP to Non-GAAP Measure: Tangible Common Equity
29 Reconciliation of GAAP to Non-GAAP Measure Source: Company documents; Financial data as of March 31, 2021 Holding Company Tangible Common Equity For the Year Ended For the Quarter Ended ($000) 12/31/2017 12/31/2018 12/31/2019 12/31/2020 6/30/2020 9/30/2020 12/31/2020 3/31/2021 Stockholders' Equit
Slide 30: Thank You
Thank You 30
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