Civista Bancshares, Inc. · NASDAQ:CIVB
Civista Bancshares — First Citizens Banc — Investor Presentation (April 2014)
28 slides from Civista Bancshares's investor presentation, Apr 17, 2014
Slide 1: First Citizens Banc Corp
Exhibit 99.1 First Citizens Banc Corp
Slide 2: Cautionary Statement Regarding Forward-Looking Information
-/i\< Cautionary Statement Regarding Forward-Looking Information Comments made in this presentation include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to numerous assumptions, risks and uncertainties
Slide 3: Corporate Overview
Corporate Overview We are the 9th largest publicly traded commercial bank in the state of Ohio. We operate in 10 Ohio counties providing commercial and retail banking and wealth management. 3
Slide 4: Locations
Locations We view our operation in three regions. Region one is northern Ohio from Port Clinton to Akron. Region two is the Crawford and Richland county area. Region three is mid-Ohio from Urbana to Dublin. 4
Slide 5: Legacy Markets
Legacy Markets Within our regions we view ourselves as operating in legacy or defensive markets and growth, or offensive markets. Our legacy markets are the home town locations of Citizens and our acquisitions through the years. They would encompass Champaign, Crawford, Erie, Huron and Richland Coun
Slide 6: Growth Markets
Growth Markets Our Growth Markets are Columbus and Akron. These are areas of increasing population and vibrant economic growth. These areas weathered the recession and are coming back strong. They are the markets where we have made considerable investment in people. We have brought on experienced le
Slide 7: Commercial Loans by Market
Commercial Loans by Market You can see the results of our efforts in these more vibrant markets by the growth in commercial lending. Since the depth of the recession, we have enjoyed over $100,000,000 in commercial growth in the Akron market and over $50,000,000 in commercial growth in the Columbus
Slide 8: Total Deposits
Total Deposits As we always describe, our business is to gather deposits and make loans. At the end of the year our total deposits, our raw materials, were $920,000,000. There has been slow steady growth in the deposits since 2009 – in spite of the current interest rate environment. Our focus is on
Slide 9: Deposit Mix
Deposit Mix The results of our efforts can be seen in our deposit mix. Non-interest bearing demand, (plain old checking accounts), make up almost 25% of our deposit structure. Checking, interest checking, and savings – the lowest cost deposits – make up 75% of the mix. This is how we keep our intere
Slide 10: Total Loans
Total Loans We gather deposits and make loans. At year end our loans totaled $861 million. This is up from a low of $767 million at the bottom of the recession. We have added almost $100 million net in three years, but also remember we receive approximately $15 million a month in payments that we mu
Slide 11: Loan Mix
Loan Mix If we look at our loan mix, it is real estate based. That’s our history and that is what we know. We have diversified with more Commercial and Industrial loans, but the bulk of our lending is real estate. Commercial Real Estate lending received bad press during the recession as values dropp
Slide 12: Loan Growth
Loan Growth Looking at First Citizens in comparison with national and Midwest peer statistics for loan growth, we have enjoyed better loan growth than our Midwest peers, but lag the national statistics. While the Ohio economy has steadily recovered, there are areas of the nation that have rebounded
Slide 13: When Rates Move
When Rates Move The prime rate decreased to 3.25% in January 2008 and has not moved since. At some point rates will begin an upward trend. To protect the company from the risk of increasing rates, we actively manage our duration. The average duration of our loans and investments – that is, the avera
Slide 14: Managing Duration
Managing Duration We want to keep our asset duration less than two years. We will do this: By selling 30 year mortgages. By encouraging variable rate commercial lending. By limiting fixed rate terms to five years. By utilizing swaps for selected commercial customers. At the same time we will try to
Slide 15: Interest Expense to Earning Assets
Interest Expense to Earning Assets The cost of gathering deposits and other funding to put to work in loans and investments has always been less than our peers. Our focus on gathering deposits in less competitive rural markets and concentrating on checking and lower cost deposit accounts, results in
Slide 16: Interest Income to Earning Assets
Interest Income to Earning Assets When we put our dollars to work in loans and investments, we have historically been able to slightly outperform our peers. This comes from attention to loan rates and actively managing our investment portfolio to achieve the best return while managing the duration.
Slide 17: Net Interest Margin
Net Interest Margin Our resultant net interest margin has consistently outperformed our peers. The gap is narrowed by this low rate environment, but our process and focus works and the results are evident. 17
Slide 18: Noninterest Income
Noninterest Income For a number of years our noninterest income was less than our peers. It was difficult to generate fee income in many of our rural markets. However, with more diversification into our more vibrant markets, increased contribution of our wealth management function, and other sources
Slide 19: Wealth Management
Wealth Management We have been pleased at the growth in our wealth management function. We have surpassed $450 million in managed money which contributes approximately $2.7 million in revenue to noninterest income. 19
Slide 20: Noninterest expense
Noninterest expense Our noninterest expense has traditionally been slightly higher than peer as a result of the number of offices we operate. However, the rural offices account for our strong interest margin which has historically justified the added expense. Recent increases in noninterest expense,
Slide 21: Improved Credit Quality
Improved Credit Quality One issue from the last five years that has returned to normal has been challenged loans. You can see on this graph the continued decrease in the dollars classified as doubtful, sutstandard, and special mention. 21
Slide 22: Provision for Loan Loss
Provision for Loan Loss Where the improved credit quality has paid off is in the dollars needed for the reserve for loan loss. You can see at the height of the recession we placed almost $18 million from earnings into the reserve. I am happy to report in 2013 we placed only $1.1million. 22
Slide 23: Operating Results
Operating Results Here is the detail of our operating results for the last five years. This information is also in your annual report, but the main item I want to point out is the Net Interest Income, what we make by taking deposits and making loans and investments. Through this entire time period,
Slide 24: Strategy
Strategy You saw in the prior slide that we can consistently generate approximately $40 million in net interest income. To increase net interest income, we need to grow. Our goal is to grow the company to $2 billion in size. Increasing the size of the company will, of course, increase the net intere
Slide 25: Growth Opportunities
Growth Opportunities Organic We have the capacity and are actively pursuing growth in all of our markets. In our legacy markets we are reaching out to who we don’t already have as a customer and we are working to provide more products to existing customers. In our growth markets we are pursuing sele
Slide 26: Growth Opportunities (cont.)
Growth Opportunities (cont.) Smaller Rural Acquisitions We continue to be interested in smaller rural acquisitions that will compliment our existing business and provide lending opportunity, but more importantly, sources of low-cost deposits. Urban Acquisitions There are many smaller institutions in
Slide 27: Growth Opportunities (cont.)
Growth Opportunities (cont.) Strategic Acquisitions A strategic acquisition would be one of $500 million that would compliment our existing business and quickly bring us closer to the $2 billion goal that would leverage our infrastructure and increase profitability. Growth is the key to increasing p
Slide 28: First Citizens Banc Corp
First Citizens Banc Corp 28
First Citizens Banc — Investor Presentation (April 2014) on 6ix