Consumers Bancorp, Inc. · OTC:CBKM
Consumers Bancorp — Shareholder Meeting (October 2021)
43 slides from Consumers Bancorp's shareholder meeting presentation, Oct 26, 2021
Slide 1: 2021 Fiscal Year In Review
2021 Fiscal Year In Review 2021 Annual Shareholders Meeting • October 26, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements contained in this Annual Report on Form 10-K, which are not statements of historical fact, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “may,” “continue,” “estimate,” “intend,
Slide 3: Forward-Looking Information (continued)
Forward-Looking Information (continued) sustained low market interest rates could result in a decline in the net interest margin and net interest income; changes in the level of non-performing assets and charge-offs; the effect of changes in laws and regulations (including laws and regulations conce
Slide 4: Laurie L. McClellan, Chairman of the Board
CONSUMERS Laurie L. McClellan Chairman of the Board of Directors
Slide 5: Thank You Tom Kishman
THANK YOU TOM KISHMAN Served 26 Years as Consumers National Bank Director (1995-2021) Passionate supporter of community banking Thank you for you support and guidance Best of luck on all your endeavors 5
Slide 6: Welcome
WELCOME Shawna L’Italien Partner: Harrington, Hoppe, Mitchell, LTD. Salem, Columbiana County, Ohio Michael Wheeler President & Chief Legal Officer: Patriot Software, LLC Jackson Township, Stark County, Ohio 6
Slide 7: Renee K. Wood, Chief Financial Officer
CONSUMERS Renee K. Wood Executive Vice President Chief Financial Officer
Slide 8: Steady Balance Sheet Growth
Steady Balance Sheet Growth Total Assets Total Loans $542.9 $566.4 $833.8 $740.8 $553.9 $369.2 $502.6 $318.5 2018 2019 2020 2021 2018 2019 2020 2021 CAGR: 18.4% CAGR: 21.2% Total Deposits Total Shareholders’ Equity $726.8 $69.9 $633.4 $63.2 $472.2 $51.2 $430.0 $43.8 2018 2019 2020 2021 2018 2019 202
Slide 9: Strong Earnings
Strong Earnings Net Income, ROA and ROE 13.36% 11.96% 9.67% Strong, consistent earnings 8.15% $8,988 $3,581 $5,566 $5,527 0.75% 1.07% 0.89% 1.16% Net income was positively impacted by the FY 2018 FY 2019 FY 2020 FY 2021 growth in the balance sheet and from the Net Income ROA ROE interest and fee rev
Slide 10: Net Interest Margin
NET INTEREST MARGIN 3.80% 3.74% 3.64% 3.73% 3.64% 3.62% 3.71% 3.23% LTM 6/30/18 LTM 6/30/19 LTM 6/30/20 LTM 6/30/21 Consumers Peers* *Peers are public and private commercial banks located in Ohio with assets between $500 million and $1.25 million. Source: S&P Global Market Intelligence
Slide 11: Cost of Funds Trend
COST OF FUNDS TREND 1.00% 0.91% 0.92% 0.88% 0.90% 0.90% 0.80% 0.70% 0.59% 0.60% 0.53% 0.50% 0.50% 0.38% 0.40% 0.30% 0.20% 0.10% 0.00% LTM Jun-18 LTM Jun-19 LTM Jun-20 LTM Jun-21 Consumers National Bank Peers* *Peers are public and private commercial banks located in Ohio with assets between $500 mil
Slide 12: Low-Cost Core Deposits
LOW-COST CORE DEPOSITS Total deposits of $726.8 million, or a Time, 14.8% increase from prior year SAV - 12.1% MMDA, Cost of funds of 0.38% 38.9% Loan-to-deposit ratio of 77.9% Non-interest-bearing deposits DDA, represented 31.5% of total deposits 31.5% Combined, demand deposit & NOW NOW, accounts r
Slide 13: Securities Portfolio Distribution
SECURITIES PORTFOLIO DISTRIBUTION U.S. Gov't Sponsored Entities & Securities portfolio yield was 2.41% for the 2021 Agencies, fiscal year Other Debt, 7.3% 0.2% Projected weighted average life of 5.4 years as of June 30, 2021 All mortgage-backed securities and collateralized mortgage obligations are
Slide 14: Sources of Revenue
Sources of Revenue Fee Income Net Interest Income Fee Income / Operating Revenue 17.59% 17.96% 14.38% 19.71% Fee income represents a strong source of revenue as $26,583 the balance sheet continues $21,484 to grow $15,886 $17,389 $3,391 $4,268 $4,703 $4,466 2018 2019 2020 2021 Total mortgage originat
Slide 15: Efficiency Ratio & NIE / Average Assets
Efficiency Ratio & NIE / Average Assets Efficiency Ratio Non-Int. Exp. / Average Assets 2.97% 2.99% 2.86% Efficiency Ratio improved to its lowest level in FY 2.51% 2021 due to the significant growth in earnings 71.8% 70.5% 67.0% 61.5% FY 2018 FY 2019 FY 2020 FY 2021 Non-interest expense to average a
Slide 16: Nonperforming Assets / Total Assets
NONPERFORMING ASSETS/TOTAL ASSETS 0.38% 0.37% 0.40% 0.35% 0.32% 0.29% 0.30% 0.25% 0.22% 0.21% 0.20% 0.16% 0.14% 0.15% 0.10% 0.05% 0.00% LTM Jun-18 LTM Jun-19 LTM Jun-20 LTM Jun-21 Consumers Peers* *Peers are public and private commercial banks located in Ohio with assets between $500 million and $1.
Slide 17: Net Charge-offs / Average Loans
NET CHARGE-OFFS / AVERAGE LOANS 0.13% 0.15% 0.08% 0.07% 0.10% 0.03% 0.05% -0.01% 0.01% 0.02% 0.00% LTM Jun-18 LTM Jun-19 LTM Jun-20 LTM Jun-21 -0.05% Fiscal 2019 Reflects a net recovery of $807,000 -0.10% from a charge-off recorded in the 2017 fiscal year -0.15% Zero OREO at Fiscal YE 2015 - 2021 -0
Slide 18: Allowance for Loan Losses
Allowance for Loan Losses Allowance / Loans Allowance for loan losses was 1.14% 1.14% as of June 30, 2021, and 1.25% of loans excluding PPP loans 1.07% 1.05% 1.03% Strong reserve levels reflect potential credit stress in future periods due to uncertain economic conditions $318,509 $369,175 $542,861
Slide 19: 12 Month Stock Price Change
12 Month Stock Price Change Market Price (10-15-2021) $22.57 Book Value / Share (9-30-2021) $23.34 Fiscal 2021 EPS $2.98 LTM EPS (Through 09-30-2021) $3.06 Annualized Dividend Yield 2.66%
Slide 20: Ralph J. Lober II, President & CEO
CONSUMERS Ralph J. Lober Il President Chief Executive Officer
Slide 21: Total Loan Balance Trend
TOTAL LOAN BALANCE TREND Total loans increased $22.1 million, or 4.0% over fiscal 2020 2021 $50.70 $517 Non-PPP loan balances increased $37 million, or 7.9% in 2020 $479 fiscal 2021 $66.60 Core loan balances have more than doubled in the last five years 2019 $0.00 $369 Core loan Growth: 15.1% CAGR o
Slide 22: Loan Production
LOAN PRODUCTION Production Trend by Type Net of PPP, Total loan production increased to $264 million; or 2021 $38 $101 $125 $47 59% over fiscal 2020 2020 $14 $70 $82 $67 Total production including PPP was 2019 $14 $46 $96 CAGR-- $311 million; 33% over fiscal 2020 Excluding 2018 $10 $32 $70 PPP: Cons
Slide 23: Mortgage Production
MORTGAGE PRODUCTION Commitments Units 4% 4% 8% 17% 50% 32% 56% 29% Commercial Commercial Secondary Market Portfolio, Conventional Secondary Market Portfolio, Conventional Real Estate Portfolio, Construction Portfolio, Bridge Portfolio, Construction Portfolio, Bridge Farm Lead Source ($) Purchase-Ref
Slide 24: High-Quality & Diversified Loan Portfolio
HIGH-QUALITY & DIVERSIFIED LOAN PORTFOLIO Portfolio Composition (000) Commercial RE $29,571, 5.21% 6% $22,904, 4.03% $149,132, $52,341, 9.22% 26.26% 38% 56% Commercial Commercial $100,830, 17.76% Real Estate Owner-Occ Non-Owner Occ Construction Farm $567.8 Million Balanced Portfolio $213,106, 1-4 Fa
Slide 25: Diversified Commercial Loan Portfolio
DIVERSIFIED COMMERCIAL LOAN PORTFOLIO Top Ten Industries (Million) Real Estate Leasing $132.1 Agriculture $53.4 Manufacturing $45.4 Commercial Commercial Other Services $29.5 Real Estate Professional $22.3 Healthcare Farm & Social $22.1 Assistance Agriculture Construction Manufacturing Wholesale Tra
Slide 26: Market Area
MARKET AREA Deposit Consumers Market Deposit Distribution by Market Deposits Share ($000) ($000) County 2% Carroll $418,033 $95,661 22.88% 12% Columbiana (2) $1,992,683 $258,441 12.97% Jefferson $1,129,766 $90,455 8.01% Commercial Commercial Stark $9,470,752 $369,596 3.90% 44% Real Estate 31% Summit
Slide 27: Market Area
MARKET AREA Actively solicit business in twenty counties in Ohio, Pennsylvania, and West Virginia Consumers ranks 20th of 61 institutions operating in the twenty-county market area Total market area deposit growth: 8.5% Commercial Commercial Consumers Growth: 31.16% (14.7%, net of Real Estate acquir
Slide 28: Banking Locations
BANKING LOCATIONS 21 Full services offices One Loan Production Office (Wayne County) Commercial Commercial Real Estate The Green Office (southern Summit County) opened in April Farm 2021 Green fills the gap between the existing Jackson, Fairlawn, and Hartville locations. Consumers is the only commun
Slide 29: Wellsville & Calcutta Branch Acquisition
WELLSVILLE & CALCUTTA BRANCH ACQUISITION Acquisition strengthens our Columbiana County market presence Compliment our Jefferson County markets Commercial Provides access to western PA and Commercial northern WV markets Real Estate Acquired $103 million in deposits and $48 million in earning assets F
Slide 30: New Salem, Ohio Office
NEW SALEM, OHIO OFFICE Commercial Commercial Real Estate Farmwith a smaller, more Replaced mechanically obsolete building efficient space that enhances the customer experience Higher visibility in key northern Columbiana County market $67.7 million deposit branch in $579 million deposit market. Cont
Slide 31: Paycheck Protection Program
PAYCHECK PROTECTION PROGRAM # of $ (000) Loans Size Distribution Less than $25 K 963 $12,054 74, 5% 16, 1% 138, 9% $25 - $49 199 $7,011 $50 - $99 164 $11,257 164, 10% $100 - $249 138 $22,096 $250 - $499 57 $20,316 $500 - $999 17 $12,357 $1.0M - $1.99 11 $15,950 1162, 75% $2.0 million or more 5 $12,7
Slide 32: Paycheck Protection Program
PAYCHECK PROTECTION PROGRAM Non-Ohio, $3.1, $82.7 million (75%) in six 3% core counties. Carroll, $10.3, 9% Other Ohio, $25.4, Columbiana, 22% $12.2, 11% 97% of disbursements were to Ohio entities Jefferson, $4.7, 4% Wayne, $2.2, 2% Loans made in 39 Ohio counties Summit, $12.4, Loans made in 10 stat
Slide 33: Paycheck Protection Program: Industry Distribution
PAYCHECK PROTECTION PROGRAM INDUSTRY DISTRIBUTION Customer Distribution Number of Loans Total Loan Amount Manufacturing 101 6.5% $21.1 18.5% Construction 173 11.1% $14.1 12.4% 564, 36% 549, 35% Healthcare & 81 5.2% $11.7 10.3% Social Services Professional & 96 6.2% $9.4 8.3% Technical 441, 29% Accom
Slide 34: Changing Behaviors
CHANGING BEHAVIORS Electronic Transactions The pandemic accelerated FY 2021 FY 2020 Increase customers acceptance and use of electronic transactions Unique Internet & Mobile 4,354 3,793 15% Users Continue to promote availability and convenience Avg. Monthly Internet & 23,094 17,867 29% Mobile Transa
Slide 35: COVID-19 Impact
Balance Sheet / Liquidity •Rapid balance sheet growth •PPP •Stimulus •Excess Liquidity •Decreasing Leverage & Capital ratios Income •PPP fees has had a positive impact on income and margin •Immediately flattened the yield curve •Rapid decrease in funding costs Credit •Reduced commercial line usages
Slide 36: Building the Future
BUILDING THE FUTURE Continued investments in technologies & facilities Expand commercial, Staff Development & that enhance the customer residential, and consumer Succession experience, promote data business development security, and improve internal processes Commercial Commercial Develop credit, Re
Slide 37: Community Banking Model
COMMUNITY BANKING MODEL Local Shareholders & Capital Local Dividends Local Deposits Engaged Technology Local Bankers Local Directors & Management Local Lending & Strong Local Community Communities Investments Local Employment & Economic Growth
Slide 38: Local Leadership: Board of Directors
BOARD OF DIRECTORS LOCAL LEADERSHIP Laurie McClellan, Chairman Retired, Consumers National Bank 1987 Minerva, Ohio John Furey, Vice Chairman Retired, Furey’s Wheel World 1995 Malvern, Ohio Bradley Goris Managing Member Goris Properties 2011 Alliance, Ohio Richard Kiko, Jr. President & Chairman, Cole
Slide 39: Thank You Tom Kishman
THANK YOU TOM KISHMAN Served 26 Years as Consumers National Bank Director (1995-2021) Passionate supporter of community banking Thank you for you support and guidance Best of luck on all your endeavors 39
Slide 40: Welcome
WELCOME Shawna L’Italien Partner: Harrington, Hoppe, Mitchell, LTD. Salem, Columbiana County, Ohio Michael Wheeler President & Chief Legal Officer: Patriot Software, LLC Jackson Township, Stark County, Ohio 40
Slide 41: Experienced Community Bankers: Management Team
MANAGEMENT TEAM EXPERIENCED COMMUNITY BANKERS Years with Industry Company Experience Average Management Ralph J. Lober President & CEO 14 31 Consumers Tenure: 11 Years Scott E. Dodds EVP, Senior Loan Officer 7 35 Average Industry Renee K. Wood EVP, Chief Financial Officer 16 27 Experience: 24 Years
Slide 42: 2022 First Quarter
2022 FIRST QUARTER $2.66 Million Earnings / 11% increases over FYTD 2021 $.88 Earnings per Share/ $.08 (10%) over FYTD 2021 $10.7 million (7.5 %annualized) increase in total Loans $122.3 million (16.8%) increase in deposits Total Loan Delinquency: .35% Net Charge-off (Recovery) Ratio: (0.01%) Nonper
Slide 43: 2021 Shareholders Meeting
2021 SHAREHOLDERS MEETING 43
Consumers Bancorp — Shareholder Meeting (October 2021) on 6ix