Attached files
| file | filename |
|---|---|
| 8-K - 8-K - CU Bancorp | d737232d8k.htm |
| EX-2.1 - EX-2.1 - CU Bancorp | d737232dex21.htm |
| EX-99.1 - EX-99.1 - CU Bancorp | d737232dex991.htm |
 Creating the Premier Commercial Bank in Southern California
June 3, 2014
NASDAQ: CUNB
OTCQB: FENB
Exhibit 99.2 |
 Forward-Looking Statements
This
presentation
includes
forward-looking
statements
within
the
meaning
of
the
“Safe-Harbor”
provisions
of
the
Private
Securities
Litigation
Reform
Act
of
1995,
which
management
believes
are
a
benefit
to
shareholders.
These
statements
are
necessarily
subject
to
risk
and uncertainty and actual results could differ materially due to certain risk
factors, including those set forth from time to time in CU Bancorp’s
filings with the SEC. You should not place undue reliance on forward-looking statements and we undertake no obligation to
update
any
such
statements.
Specific
risks
in
this
presentation
include
whether
shareholders
approve
the
merger,
whether
the
companies
receive
regulatory
approvals,
the
timing
of
closing,
whether
the
companies
have
accurately
predicted
acquisition
and
consolidation
expenses, the timing and amount of savings from consolidation, the expected
earnings contributions of both companies and management’s ability to
effectively integrate the companies. This presentation may be deemed to be
offering or solicitation materials of CU Bancorp and 1st Enterprise Bank in connection with the
proposed merger of 1st Enterprise Bank with and into California United Bank.
Shareholders of both companies are urged to read the joint proxy
statement/prospectus that will be included in the registration statement on Form S-4, which CU Bancorp will file with the SEC in
connection with the proposed acquisition, because it will contain important
information about CU Bancorp, 1st Enterprise Bank, the acquisition and
related matters. The directors and executive officers of CU Bancorp and 1st Enterprise Bank may be deemed to be
participants in the solicitation of proxies from their respective shareholders.
Information regarding CU Bancorp and security holdings of its officers,
directors and principal shareholders can be found in CU Bancorp’s most recent Form 10-KA filed with the SEC. Information as to
both CU Bancorp and 1st Enterprise Bank and the securities holdings of their
respective officers, directors and principal shareholders will be
included
in
the
joint
proxy
statement/prospectus
when
it
is
filed
with
the
SEC.
All
documents
which
are
filed
with
the
SEC
in
connection
with
this
transaction
are
or
will
be
available
for
free,
both
on
the
SEC
web
site
(http://www.sec.gov)
and
from
CU
Bancorp
by
directing
a
request
to
CU
Bancorp
15821
Ventura
Boulevard,
Suite
100,
Encino,
California;
Attention:
Corporate
Secretary
and
from
1st
Enterprise
Bank
by
directing
a
request
to
1st
Enterprise
Bank
at
818
West
7th
Street,
Suite
220,
Los
Angeles,
CA,
Attention:
Corporate
Secretary.
Pro
forma,
projected
and
estimated
numbers
are
used
for
illustrative
purposes
only
and
are
not
forecasts,
and
actual
results
may
differ
materially.
2 |
 3
Transaction Rationale
Combination
to
create
a
$2.2
billion
“pure
play”
business
bank
in
Southern
California
Both companies have a track record of strong organic growth
Scarcity value for a business banking franchise in Southern California
Southern California offers an unparalleled opportunity for middle market business
banks Cultural similarities
Focused on small to mid-sized businesses as target clients
High quality deposit base (> 50% noninterest bearing deposits and 0.11% cost of
deposits) Conservative credit cultures and similar loan portfolio mix (> 50%
combined C&I and OO CRE) Performance driven business development philosophy
Management team comprised of veteran Southern California business bankers
Complementary strengths provide opportunities for revenue synergies
Partnership
approach
to
create
the
“best-in-class”
group
of
banking
professionals
for
the
pro
forma
company
Pro forma branch network covers the greater Los Angeles market
Leverages capital and increases liquidity
Draws on CUNB’s strong track record of transaction execution
Financially compelling projected pro forma results
Strategic
Partnership
Enhances
Value of Both
Franchises
Source: SNL Financial as of March 31, 2014 |
 Summary of
Terms Name:
CU Bancorp / California United Bank
Headquarters:
Downtown
Los
Angeles
(Current
FENB
headquarters)
Management:
Chairman
and
CEO,
David
I.
Rainer
(current
Chairman,
President
and
CEO
of
CUNB)
Board
Composition:
8
CUNB
/
4
FENB
Ownership:
68%
CUNB
/
32%
FENB
Consideration:
1.3450
shares
of
CUNB
stock
for
each
FENB
share
100% stock consideration; fixed exchange ratio
Equivalent
to
$24.47
per
FENB
share
¹
13%
premium
to
FENB’s
last
closing
price
²
Deal
value
of
approximately
$103
million
¹
16.9x 2014 analyst EPS estimate
172%
of
tangible
book
value
per
share
³
Timing:
Expected
to
close
in
Q4
2014
1
Based on CUNB closing price of $18.19 on June 2, 2014
2
Based on FENB closing price of $21.75 on June 2, 2014
3
As of March 31, 2014
4
President, K. Brian Horton (current President of FENB)
Chief Financial Officer, Karen A. Schoenbaum (current CFO of CUNB) |
 5
Company Overviews
Established in 2005
Completed two accretive transactions
California Oaks State Bank (12/31/10)
Premier Commercial Bancorp (7/31/12)
Raised $22.0 million and $10.3 million of common
equity in 2006 and 2011, respectively
Listed on NASDAQ Capital Market in October 2012
Added to Russell 3000 Index in June 2013
12.1%
insider
ownership
¹
36.4%
institutional
ownership
¹
Established in 2006
Raised $12.5 million of common equity in 2012
Funded $16.4 million of SBLF preferred equity in
2011
17.8%
insider
ownership
²
Company Highlights
Company Highlights
1
Source: SNL Financial as of June 2, 2014
2
Source: Company information, as of May 15, 2014
Headquarters
Encino, CA
Branches
8
Total Assets ($mm)
$1,382
Gross Loans ($mm)
$946
Total Deposits ($mm)
$1,203
Noninterest Bearing Deposits (%)
54%
C&I + Own. Occ. CRE (%)
52%
NPAs / Assets (%)
0.60%
LTM Net Income to Common ($mm)
$10.3
Headquarters
Los Angeles, CA
Branches
3 + 1 LPO
Total Assets ($mm)
$776
Gross Loans ($mm)
$513
Total Deposits ($mm)
$652
Noninterest Bearing Deposits (%)
49%
C&I + Own. Occ. CRE (%)
59%
NPAs / Assets (%)
0.57%
LTM Net Income to Common ($mm)
$5.3 |
 Creating
the Premier Commercial Bank in Southern California Strategic branch locations in
growth markets with enormous potential customer base Branches offer full array of
banking services with easy freeway access and good visibility Footprint over four
Southern California counties: Los Angeles, Orange, San Bernardino and Ventura
Los
Angeles
County
is
the
largest
manufacturing
center
in
the
U.S.
¹
Four-county
area
is
home
to
more
than
550,000
small-
to
mid-sized
businesses
–
core
of
the
Southern
CA
economy²
Solid core deposits
> 50% non-interest bearing
$100 million+ target size for branches
Diversification of loan type and customer base
C&I and Own. Occ. CRE loans represent > 50% of total loans
Typical customers represent manufacturing, distribution and services
industries
Strong leadership with deep roots in the community
Experienced teams live and work in community
Advisory boards composed of local business and civic leaders
Supporting nonprofits strengthens ties to customers and community
1
Source: LAEDC Kyser Center for Economic Research
2
Source: California Employment Development Department. Includes businesses with
1-499 workers $102
$178
$260
$379
$457
$756
$800
$1,250
$1,408
$2,158
$0
$500
$1,000
$1,500
$2,000
$2,500
2005
2006
2007
2008
2009
2010
2011
2012
2013
Q1'14
Organic Assets ($mm)
Assets Acquired in Year ($mm)
California Oaks
State
Bank acquisition
closes
($137 Million)
Premier
Commercial Bank
acquisition closes
($450 Million)
FENB acquisition
($776 Million)
CUNB Asset Growth Since Inception
6
IPO |
 7
$4.8
$6.1
$0.0
$1.0
$2.0
$3.0
$4.0
$5.0
$6.0
$7.0
$8.0
2013
2014E²
$9.8
$11.3
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
$14.0
$16.0
2013
2014E
Combination of Two Growth-Oriented Franchises
Source: SNL Financial
1
Mean analyst estimate as of June 2, 2014
2
Analyst estimate as of June 2, 2014
CUNB Performance
FENB Performance
Gross Loans ($mm)
Total Deposits ($mm)
Net Income to Common ($mm)
Gross Loans ($mm)
Total Deposits ($mm)
Net Income to Common ($mm)
26%
2013 represents 1st full year impact of PCB
16%
Noninterest bearing deposits
Interest bearing deposits
$489
$855
$933
$946
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
2011
2012
2013
Q12014
$381
$544
$632
$652
$309
$535
$600
$552
$691
$1,078
$1,232
$1,203
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
2011
2012
2013
Q12014
$215
$287
$316
$322
$282
$325
$327
$330
$497
$612
$643
$652
$0
$100
$200
$300
$400
$500
$600
$700
2011
2012
2013
Q12014
$293
$409
$505
$513
$0
$100
$200
$300
$400
$500
$600
2011
2012
2013
Q12014
Noninterest bearing deposits
Interest bearing deposits
34%
CAGR
28%
CAGR
1 |
 8
Attractive Footprint and Large Branch Size
CUNB (8 branches)
FENB (3 branches; 1 LPO)
Inland Empire:
FENB: $81 million
Downtown LA:
FENB: $331 million
Irvine/Newport Beach:
CUNB: $148 million
FENB: $240 million
Pro Forma: $388 million
Santa Clarita Valley:
CUNB: $94 million
Simi Valley:
CUNB: $14 million
Conejo Valley:
CUNB: $229 million
West LA:
CUNB: $256
million
San Fernando Valley:
CUNB: $207 million
Anaheim:
CUNB: $191 million
$100 Million+ Branches
Source: CUNB and FENB; branch deposits data as of March 31, 2014
Woodland Hills LPO
South Bay:
CUNB: $55 million
Pro forma average branch size of approx. $185
million in deposits
6 of 10 pro forma branches with deposits
greater than $100 million
Expands CUNB’s branch presence to Downtown LA
(pro forma headquarters) and Inland Empire
Branch consolidation in Irvine
Woodland Hills LPO to be consolidated into a CUNB
branch |
 9
Similar Strengths, Complementary Differences
Loan CAGR (‘09-’13) > 30%
NPAs/assets < 1.0%
C&I and Owner-Occupied CRE > 50%
Noninterest bearing deposits ~ 50%
Deep roots in local business community
Lobby level branches
Corporate suite branches
SBA lending platform
Interest rate swaps (fee income)
Advisory boards
Downtown LA financial center presence
Acquisition and integration experience
NASDAQ traded
Research analyst coverage
Pro Forma
5
1
5 |
 10
C&I
31%
CRE-
Owner
Occupied
21%
CRE-Non
Owner
Occupied
30%
C&D
6%
1-4 Family
6%
Multifamily
4%
Other
2%
Pro Forma Loans and Deposits (As of March 31, 2014)
Source: SNL Financial
Nonint-
Bear
Demand
52%
Int-Bear
Trans
9%
MMDA &
Sav.
35%
Time
4%
Nonint-
Bear
Demand
49%
Int-Bear
Trans
7%
MMDA &
Sav.
42%
Time
2%
Nonint-
Bear
Demand
54%
Int-Bear
Trans
10%
MMDA &
Sav.
31%
Time
5%
C&I
32%
CRE-
Owner
Occupied
22%
CRE-Non
Owner
Occupied
29%
C&D
4%
1-4 Family
8%
Multifamily
3%
Other
2%
C&I
35%
CRE-
Owner
Occupied
24%
CRE-Non
Owner
Occupied
27%
C&D
0%
1-4 Family
11%
Multifamily
1%
Other
2%
Loan portfolio
Deposit base
CUNB
FENB
Pro Forma
CUNB
FENB
Pro Forma
$946 million loans
5.24% yield on loans (Q1’14)
$513 million loans
4.13% yield on loans (Q1’14)
$1,459 million loans
4.80% yield on loans (Q1’14)
$1,203 million deposits
0.12% cost of deposits (Q1’14)
$652 million deposits
0.11% cost of deposits (Q1’14)
$1,855 million deposits
0.11% cost of deposits (Q1’14) |
 11
Key Merger Assumptions
Cost savings
Approximately 20% of FENB noninterest expense base
Anticipate that 70% of cost savings will be realized in 2015; 100% phased-in by
2016 Consolidation of FENB’s Woodland Hills LPO
Revenue synergies:
opportunities identified but none assumed
One-time
charges:
approximately
$7.9
million
pre-tax
Preferred stock:
$16.4 million of FENB SBLF preferred stock to remain outstanding
1% preferred dividend thru March 1, 2016; 9% thereafter
$0.5 million initial write-down; 4 year impact using constant yield method
(7.3%) Core
deposit
intangible:
1.1%
($7.4
million);
amortized
over
10
years
(sum-of-the-years
digits
methodology)
Loan mark:
Credit mark write-down of 1.9% of gross loans ($10.0 million)
Rate mark write-down of 0.8% of gross loans ($4.3 million)
|
 12
Financially Compelling Combination
High
single
digits
in
2015
1
>10% in 2016 with fully-phased in cost savings
~ 7% TBVPS dilution at close
~ 3.5
year
TBVPS
earn
back
2
Pro forma capital ratios at close
TCE: 8.1%
Tier I Leverage: 9.6%
Total Risk-Based Capital: 11.5%
While there are no near term plans to redeem FENB’s preferred stock, CUNB will
continually evaluate the cost and amount of capital required to support the pro forma
balance sheet
Earnings
Accretion
Tang. Book
Value Impact
Pro Forma
Capital
Position
Projected results supported by CUNB’s strong history of transaction execution and
CUNB management’s significant transaction integration experience over the
course of their careers 1
Excluding transaction expenses
2
Earn
back
period
is
defined
as
the
number
of
years
for
pro
forma
tangible
book
value
per
share
to
exceed
stand-alone
projected
tangible
book
value
per
share |
 13
Pro Forma Financial Profile
Pro
Forma
Total assets
Total loans
Total deposits
Market capitalization
Number of branches
Tang. common equity ratio
Tier I leverage ratio
Total risk-based ratio
Noninterest bearing demand (%)
Cost of deposits (Q1 2014) (%)
Nonperforming assets/total assets (%)
LTM ROAA (%)
LTM ROATCE (%)
$1.4bn
$0.9bn
$1.2bn
$204mm
2
8
9.3%
10.2%
13.0%
54%
0.12%
0.60%
0.76%
8.7%
$0.8bn
$0.5bn
$0.7bn
$84mm
2
3 + LPO
7.1%
9.5%
12.2%
49%
0.11%
0.57%
0.76%
10.1%
$2.2bn
$1.5bn
$1.9bn
10 + LPO
8.1%
3
9.6%
3
11.5%
3
0.59%
1
Based on financial information as of March 31, 2014, unless otherwise noted
2
Based on market data as of June 2, 2014
3
Projected at close
4
Projected 2016 results with fully phased-in cost savings
$298mm
2
52%
0.11%
0.9-1.1%
4
11-12%
4
1 |
 14
Uniquely Attractive Southern California Franchise
1
Market cap based on CUNB closing price on June 2, 2014; balance sheet and deposit
franchise data as of March 31, 2014 Source: SNL Financial; peer data based on
March 31, 2014 financial data Pro forma company will be 1 of 7 commercial banks
headquartered in Southern California and traded on NASDAQ or
NYSE
with
total
assets
of
$2.0
-
$10.0
billion
Pro forma Company is a uniquely attractive franchise within this
market
Business banking focus
Growth profile (balance sheet and EPS)
Stellar funding base (loan/deposit ratio, deposit composition and deposit cost)
Large branch size
Balance Sheet
Loan Portfolio
Deposit Franchise
MRQ
Non-
Avg.
Market
Total
Loans /
C&I+
CRE
Cost of
Interest
Branch
Cap.
Assets
Deposits
OO CRE
NOO
Deposits
Bearing
Deposits
Company
($mm)
($bn)
(%)
(%)
(%)
(%)
(%)
($mm)
CVB Financial Corp.
1,566
6.9
67
30
39
0.10
53
104
BBCN Bancorp Inc.
1,228
6.7
97
49
44
0.52
27
105
Opus Bank
850
4.0
107
19
10
0.52
18
49
Banc of California Inc.
328
4.0
77
12
12
0.76
14
173
Wilshire Bancorp Inc.
801
3.6
98
42
44
0.51
30
81
Hanmi Financial Corp.
691
3.1
91
51
38
0.52
33
93
Pro Forma CUNB
1
298
2.2
79
54
29
0.11
52
185 |
 Uniquely
Attractive Southern California Franchise “Pure play”
business banking franchise on both sides of the balance sheet
Source: SNL Financial as of March 31, 2014
C&I + Owner Occ. CRE (% of Total)
Non Owner Occ. CRE (% of Total)
MRQ Cost of Deposits
Noninterest Bearing Deposits (% of Total)
39%
44%
10%
12%
44%
38%
29%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
CVBF
BBCN
OPB
BANC
WIBC
HAFC
Pro
Forma
CUNB
30%
49%
19%
12%
42%
51%
54%
0%
10%
20%
30%
40%
50%
60%
CVBF
BBCN
OPB
BANC
WIBC
HAFC
Pro
Forma
CUNB
0.10%
0.52%
0.52%
0.76%
0.51%
0.52%
0.11%
0.00%
0.10%
0.20%
0.30%
0.40%
0.50%
0.60%
0.70%
0.80%
CVBF
BBCN
OPB
BANC
WIBC
HAFC
Pro
Forma
CUNB
53%
27%
18%
14%
30%
33%
52%
0%
10%
20%
30%
40%
50%
60%
CVBF
BBCN
OPB
BANC
WIBC
HAFC
Pro
Forma
CUNB
15 |
 16
Benefits to All Stakeholders
Scarcity value of $2.2 billion asset SoCal business banking platform
Financially compelling projected pro forma results
Enhanced trading liquidity with larger pro forma market capitalization
Broadened investor base
Shared high standard for the quality of customer service
Expanded footprint and market reach
Larger lending base
Broader product offerings
Partnership approach to forming pro forma management team
Partnership of both boards of directors with strong ties to community
Branch consolidation in Irvine
Shareholders
Customers
Employees |
 17
David I. Rainer
Chairman, President & CEO
(818) 257-7700
drainer@cunb.com
Karen A. Schoenbaum
Executive VP & CFO
(818) 257-7700
kschoenbaum@cunb.com
John C. Black
CEO
(213) 430-7070
jblack@1stenterprisebank.com
David C. Holman
Chairman
(949) 399-5075
dholman@1stenterprisebank.com |