Shareholders April 17, 2020 Company & Bank Performance State - - PowerPoint PPT Presentation

Annual Meeting of Shareholders

April 17, 2020

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❖ Company & Bank Performance ❖ State of Community Banking

▪

Customer and Market Performance

▪

Education, Outreach, & Support

❖ Our Mission:

To champion community banking

Company Performance

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presented by Bill Mitchell, President & CEO

Company Earnings Performance

$4.121 million

2019 after-tax earnings, $19.67 per share

$895 thousand

March 31, 2020 after-tax earnings, $4.27 per share

$5.759 million

2018 after-tax earnings, $27.21 per share

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Company Common Stock

$4.75 per share

Dividend to common shareholders in January 2019

$14.09 per share

7.5% year-over-year increase in common stock Book Value

$14,258,000

Common dividends distributed to shareholders since 1985 $4.75 dividend paid per share in January 2020

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Company Preferred Stock

$4,896,000+

• f Preferred shares redeemed since 2015 (36.9% of total);

$4,898,000+

dividends distributed to Preferred Shareholders since the purchase from the U.S. Treasury in April 2014

$907,000+

total savings following dividend rate modification in 2016

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Company Earnings and Dividends

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Year Net Income Earnings per Share Ending Shares Dividend per share as % of Prior Net Income Ending Book Value Stock Type 1985-1989 38,765 $ 5.81 $ 6,671 15,010 $ 1.13 $ (9.21%) 28.82 $ Bank Stock

(1)

1990-1994 2,181,019 $ 177.96 $ 95,310 171,069 $ 1.48 $ 13.02% 52.03 $ Bank Stock 1995-1999 6,938,572 $ 60.68 $ 150,205 1,420,905 $

(2)

2.23 $ 21.97% 90.60 $ BHC Stock 2000-2004 12,558,265 $ 76.09 $ 182,450 3,276,764 $

(3)

3.98 $ 29.65% 152.40 $ BHC Stock 2005-2009 (1,115,351) $ (2.62) $ 199,125 4,819,456 $

(4)

5.03 $ 23.61% 119.94 $ BHC Stock 2010 (3,374,317) $ (15.51) $ 217,525 $

(6)

0.00 $ 0.00% 101.74 $ BHC Stock 2011 741,673 $ 3.41 $ 217,525 $

(6)

0.00 $ 0.00% 104.81 $ BHC Stock 2012 5,258,830 $ 24.18 $ 217,525 $

(6)

0.00 $ 0.00% 119.12 $ BHC Stock 2013 4,413,086 $ 20.29 $ 217,525 $

(6)

0.00 $ 0.00% 134.89 $ BHC Stock 2014 4,664,070 $ 21.83 $ 213,625 427,250 $

(5)

2.00 $ 9.68% 150.12 $ BHC Stock 2015 2,254,038 $ 10.55 $ 213,625 480,656 $

(5)

2.25 $ 10.31% 152.64 $ BHC Stock 2016 2,931,524 $ 13.84 $ 211,854 480,656 $

(5)

2.25 $ 21.32% 159.36 $ BHC Stock 2017 3,013,955 $ 14.23 $ 211,819 582,599 $

(5)

2.75 $ 19.87% 167.61 $ BHC Stock 2018 5,759,235 $ 27.21 $ 211,696 582,502 $

(5)

2.75 $ 19.33% 187.31 $ BHC Stock 2019 4,121,122 $ 19.67 $ 209,557 1,005,556 $

(5)

4.75 $ 17.46% 201.40 $ BHC Stock Mar-20 895,039 $ 4.27 $ 209,557 995,396 $ 4.75 $ 24.15% 201.09 $ BHC Stock 51,279,525 $ $ 14,257,819 $ $ 27.80%

Dividend per Share multiplied by Number of Shares may not reconcile due to semi-annual dividends paid and/or stock sold or redeemed during the year.

Net income reported in 2009 and forward is the holding company on a consolidated basis. Net income reported from 1985 through 2008 is bank only due to the non-material difference between bank and holding company earnings.

Total Dividend Paid

Total Dividend Paid does not include preferred dividends. Between 1994 and 1997 preferred dividends were paid in the amount of $410,164. Between 2009 and 2019 preferred dividends were paid in the amount of $8,599,907.

Bank Performance

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presented by Chris Hill, SVP & CFO

Bank Earnings Performance

$4.184 million

2019 after-tax earnings

1.12% ROAA

Second highest among bankers’ banks in 2019 1.57% ROAA in 2017 and 0.78% through March 31, 2020 $5.760 million in 2018 and $812.2 thousand in 2020

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4,674,647 4,716,607 4,937,545 5,361,552 5,548,932 5,586,272 5,625,995 5,470,398 5,566,265 5,465,669 4,808,098 4,785,822

$0 $750,000 $1,500,000 $2,250,000 $3,000,000 $3,750,000 $4,500,000 $5,250,000 $6,000,000 $6,750,000 $7,500,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Bank Assets Safekeeping Loan Participations Sold Average Agent Federal Funds

Assets Under Management

($000’s) 10

445,502 387,791 367,367 368,545 316,713 349,104 335,794 324,192 357,089 364,805 402,964 407,047

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Loans Cash & Equivalents Term Deposits Capital Total Assets

Balance Sheet

($000’s) 11

2.5% 5.0% 7.5% 10.0% 12.5% 15.0% 17.5% 20.0% 22.5% 25.0% 27.5% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Risk Based Capital Ratio Regulatory Risk Based Ratio Common Equity Risk Based Ratio Regulatory Common Equity Ratio Tier 1 Risk Based Ratio Regulatory Tier 1 Ratio Tier 1 Leverage Ratio Regulatory Leverage Ratio Tier 1 Leverage w/o Excess Cash

Capital Ratios

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287,406 206,529 167,031 160,408 155,519 193,206 189,740 218,041 231,396 253,796 250,715 248,121

$0 $50,000 $100,000 $150,000 $200,000 $250,000 $300,000 $350,000 $400,000 $450,000 $500,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Real Estate Loans (excl. Farmland) Commercial Loans & Leases Agrucultural & Farmland Loans Bank Stock Loans Consumer Loans & Credit Cards

Loan Portfolio Mix

($000’s) 13

222.8% 85.6% 52.0% 42.6% 43.5% 69.9% 63.5% 62.8% 78.7% 71.1% 61.1% 61.4% 480.1% 303.0% 205.4% 153.2% 137.2% 174.7% 194.0% 242.7% 237.3% 242.0% 267.1% 268.4% 104.1% 67.7% 87.2% 89.6% 89.6% 93.6% 86.6% 92.9% 101.3% 93.7% 85.3% 71.7% 0% 50% 100% 150% 200% 250% 300% 350% 400% 450% 500% 550% 600% 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 CRE I Loans CRE II Loans Agricultural Loans

Commercial Real Estate & Agricultural Loan Concentrations

(as a % of Total Capital) 14

4.8% 14.4% 10.3% 4.7% 0.2% 0.1% 2.4% 2.3% 2.1% 0.2% 0.1% 0.1%

$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Non-Accrual & 90+ Days Past-Due Loans (BBW) Classified Loans (BBW) Other Real Estate Owned (BBW) Classified Loans & OREO (WSH) Non Performing Loans to Total Loans (BBW)

Asset Quality

($000’s) 15

8.55% 6.56% 4.34% 3.67% 3.46% 2.30% 2.41% 2.14% 2.02% 1.78% 1.84% 1.88%

$(4,000) $0 $4,000 $8,000 $12,000 $16,000 $20,000 $24,000 $28,000 $32,000 $36,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Q1-20 Loan Loss Reserve Loan Loss Provision Expense Net Charge-Offs Loan Loss Reserve to Total Loans

Net Charge-offs and Loan Loss Reserve

($000’s) 16

The Changing Market & Strategic Plan

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presented by Jeff Benson, SVP & COO

Market Area

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Customer and Prospect Banks

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Blue: Customer Red: Prospect

Changes in Bank Numbers & Total Assets by Asset Size

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$0-100MM $101-200MM $201-300MM $301-400MM $401-500MM $501MM-1 B $1-5B $5-10B 2013 Bank Count

183 115 63 22 15 32 20 1

2017 Bank Count

110 104 54 38 11 34 20 1

2018 Bank Count

98 97 56 35 15 34 24 2

2019 Bank Count

91 87 52 36 16 37 21 3

YOY Change in Bank #'s

7 10 4 1 1 3 3 1

3 Yr Change in Bank #'s

19 17 2 2 5 3 1 2

6 Yr Change in Bank #'s

92 28 11 14 1 5 1 2

2013 - 2019 Asset Change

$5 Billion $4 Billion $2.5 Billion $5.2 Billion $340MM $5 Billion $3 Billion $13 Billion 5 Bank / 16% 1 Banks / 5% 2 Banks

*Industrial and special purpose banks eliminated

CHANGES in BANK NUMBERS and TOTAL ASSETS by ASSET SIZE

AZ, CO, ID, NE, NM, UT, WY Combined* TOTAL ASSETS $11.5 Billion Total Assets $5.5 Billion Total Assets 131 Banks / 36% 15 Banks / 41%

Active Customers by Asset Size

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$0-100MM 20% $101-200MM 26% $201-300MM 19% $301-400MM 11% $401-500MM 5% $501MM-1B 11% $1-5B 6% >$5B 2%

Strategic Plan

How does BBW stay relevant?

▪ Banks are getting larger and needs are evolving ▪ The industry continues to consolidate ▪ Technology – we haven’t seen anything yet! ▪ Core systems continue to take core business from us Multiple tasks to accomplish

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4 principal objectives

BBW created a plan for 2019-2021 to meet community bank needs

Strategic Plan Focused on Modernizing in 2020

▪ Rolling out BRIDGE, the replacement for BIDS, our

• n-line banking platform for banks, mid-2020

▪ Adding more efficient options to process domestic and foreign wires through Bankers’ Bank of the West ▪ Establishing connections for community banks to access new payment rails

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2020 is a year for customer-facing technology improvements

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Education, Outreach, & Support

presented by Jeff Benson, SVP & COO

Loan Officer Training

• Held in October
• 12th consecutive year
• 30 attendees
• Dr. David Kohl on Ag
• Held in November
• 5th consecutive year
• 19 banks

WesPay Webinars

• Offered 6 sessions
• 75 banks participated
• ≈ 3 users per bank

2019 Educational Efforts

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Payments

• 60 attendees
• from 37 banks

Info Security

• 58 attendees
• from 45 banks

2019 Hosted Conferences

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Payments Topics

• Payments Revolution
• Future Proofing Your Business
• Advancing the Path to Faster Payments

Security

• Vendor Management
• IT Examination Points of Discussion
• FFIEC Guidelines

2020 Webinar Series

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2020 Educational Efforts

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BSA Training

• Led by a veteran educator with

extensive BSA experience

• Engages bankers to evaluate

process, assess risks, discuss best practices

Ag Lending Webinar

• Date: ahead of renewals
• Led by Dr. David Kohl
• Recorded to encourage

sharing within the bank

WesPay Webinars

• 5 sessions in 2020 led by

professional educators with deep payments expertise

• Efficient training delivery

Loan Officer Training

• Oct. 9-10 in Denver
• Delivering strategies & skills

for commercial lenders

• Interactive two-day seminar

2019 Outreach

627 Total Visits

to Active and Prospect banks

Peer-to-Peer

Facilitated events in Colorado and Nebraska

522 Bank Visits

Active banks visited at least one time 144 Active banks visited more than once

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Support of Banking Associations

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Mission:

To champion community banking

Core Values:

People - The well-being and success of the people People - who make up our bank and the people we serve. Integrity – Our rule of conduct: Do the right thing. Progress - Change that drives success.

Vision:

A future in which community banks enable people, local economies and communities to flourish. presented by Bill Mitchell, President & CEO

Questions?

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Director Appreciation

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presented by Bill Mitchell, President & CEO

Dave Ochsner

➢ Representing Nebraska ➢ 2014-2020 ➢ Continuing on as Director Emeritus – Past Chairman

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Thank you for supporting Your Bankers’ Bank!

You can find me at: bmitchell@bbwest.com (303) 313-8122

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