Attached files
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| 8-K - 8-K - BANC OF CALIFORNIA, INC. | d13362d8k.htm |
 Third Quarter 2015
Investor Presentation
September 9, 2015
Exhibit 99.1 |
 1 1 Forward-looking Statements When used in this presentation and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”),
or other public shareholder communications, or in oral statements
made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,”
“plans,” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any
forward-looking statements, which speak only as of the date
made. These statements may relate to future financial performance, strategic plans or objectives, revenue, expense or earnings projections, or other financial items of Banc of California Inc. and its affiliates (“BANC,” the “Company,” “we,”
“us” or “our”). By their nature, these statements are subject to numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.
Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to,
the following: (i) risks that the Company’s recently
completed acquisitions, including the acquisitions of branches from Banco Popular, The Private Bank of California, CS Financial, Inc., and The Palisades Group, may disrupt current plans and operations, the potential difficulties in customer and employee retention as a result of
those transactions and the amount of the costs, fees, expenses
and charges related to those transactions; (ii) the credit risks of lending activities, which may be affected by further deterioration in real estate markets and the financial condition of borrowers, may lead to increased loan and lease delinquencies, losses and
nonperforming assets in our loan portfolio, and may result in our
allowance for loan and lease losses not being adequate to cover actual losses and require us to materially increase our loan and lease loss reserves; (iii) the quality and composition of our securities and loan portfolios; (iv) changes in general economic conditions,
either nationally or in our market areas; (v) continuation of the
historically low short-term interest rate environment, changes in the levels of general interest rates, and the relative differences between short- and long-term interest rates, deposit interest rates, our net interest margin and funding sources; (vi)
fluctuations in the demand for loans and leases, the number of
unsold homes and other properties and fluctuations in commercial and residential real estate values in our market area; (vii) results of examinations of us by regulatory authorities and the possibility that any such regulatory authority may, among other things, require us to increase
our allowance for loan and lease losses, write-down asset
values, increase our capital levels, or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings; (viii) legislative or regulatory changes that adversely affect our business, including changes in regulatory
capital or other rules; (ix) our ability to control operating
costs and expenses; (x) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; (xi) errors in our estimates in determining fair value of certain of our assets, which may result
in significant declines in valuation; (xii) the network and
computer systems on which we depend could fail or experience a security breach; (xiii) our ability to attract and retain key members of our senior management team; (xiv) costs and effects of litigation, including settlements and judgments; (xv) increased competitive
pressures among financial services companies; (xvi) changes in
consumer spending, borrowing and saving habits; (xvii) adverse changes in the securities markets; (xviii) earthquake, fire or other natural disasters affecting the condition of real estate collateral; (xix) the availability of resources to address changes in
laws, rules or regulations or to respond to regulatory actions;
(xx) inability of key third-party providers to perform their obligations to us; (xxi) changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board or their application to our business
or final audit adjustments, including additional guidance and
interpretation on accounting issues and details of the implementation of new accounting methods; (xxii) war or terrorist activities; and (xxiii) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products
and services and the other risks described in this report and
from time to time in other documents that we file with or furnish to the SEC. You should not place undue reliance on forward- looking statements, and we undertake no obligation to update any such statements to reflect circumstances or events that occur after the
date on which the forward-looking statement is made.
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 2 2 Company Overview Largest bank based in Orange County, CA Common Stock: BANC (NYSE) Preferred Stock: BANC PRC / PRD (NYSE) Senior Debt: BOCA (NYSE) Franchise $6+ billion in assets $5+ billion in annual loan originations 100+ banking locations throughout California and the West (1) 8th largest public independent California bank 15 th largest deposit franchise in Los Angeles MSA (2) Loan Offices Branches 1 Locations in California, Oregon, Arizona, Virginia, Indiana, Maryland, Colorado, Idaho, and Nevada
2 FDIC SOD Report. Data as of 6/30/14 (combined BANC and Banco Popular CA branches).
* (Data as of 6/30/15 unless noted)
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 3 3 Mission & Values |
 4 4 Total Assets ($ in billions) Banc of California has been successful in growing its asset base both organically as
well as through opportunistic acquisitions since its recap in November
2010 Gateway Bancorp and Beach Business Bank, 2012
The Private Bank of California, CS Financial, and The Palisades Group,
2013 Renovation Ready and Popular Community Bank branches,
2014 All acquisitions successfully integrated into single technology
platform Consistent and disciplined asset growth since
2010 averaging approximately $1 billion annually
with
strong credit metrics $0.9 $0.9 $0.9 $0.8 $0.9 $0.9 $1.0 $1.1 $1.1 $1.7 $1.7 $2.1 $2.5 $3.7 $3.6 $4.0 $4.4 $4.5 $6.0 $6.1 $6.4 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2011 2012 2013 2014 Building California’s Bank 2015 |
 5 5 5 Corporate Priorities Scale individual business units at compelling marginal economics Organically deploy capital from 2Q offering to increase income attributable to
banking segment
Enhance management team, brand, and market position to solidify and
leverage our position as California’s Bank
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 6 6 6 Bank Platform BANKING LENDING Banc of California is committed to building the top full-service bank serving
California’s diverse private businesses, entrepreneurs, and
homeowners COMMERCIAL REAL ESTATE
MULTI-FAMILY
BUSINESS SPECIALTIES RESIDENTIAL RETAIL BANKING PRIVATE BANKING BUSINESS BANKING FINANCIAL INSTITUTIONS BANKING EXECUTIVE BANKING |
 7 7 2015 Second Quarter Summary Net Income $0.32 EPS (diluted); $0.29 prior quarter and $0.27 year ago 1.0% ROAA, 15% ROATCE Revenues Total Revenue up 23% quarter-over-quarter and 70% year-over-year Net Interest Income up 4% quarter-over-quarter and 52% year-over-year
Expenses 73% efficiency ratio (consolidated); 77% prior quarter and 85% year ago Balance Sheet $6.4 billion total assets; up 6% quarter-over-quarter and 47% year-over-year
Noninterest-bearing deposits up 18% quarter-over-quarter and 116%
year-over-year Capital
Tangible equity to tangible assets up to 9.1% from 7.6% prior
quarter $290 million of capital raised in April, not yet fully
deployed CRA
Upgraded to “Outstanding” rating
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 8 8 Profitability Trends Net Interest Income ($ in millions) 0.74% 0.70% 0.60% 0.54% 0.50% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Cost of Deposits 4.75% 4.62% 4.60% 4.59% 4.63% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Loan Yields $0.27 $0.31 $0.25 $0.29 $0.32 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 EPS (per diluted share) $35.6 $38.2 $46.3 $52.0 $54.1 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Target: 4.25 – 4.50% Target: 0.50% +52% YoY +19% YoY -3% YoY -32% YoY Met target levels |
 9 9 0.8% 1.0% 0.8% 0.9% 1.0% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 12% 13% 11% 13% 15% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 85% 82% 90% 77% 73% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3.88% 3.78% 3.82% 3.84% 3.92% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 1% 3.75 – 4.00% Financial Performance Targets 15% 70 – 75% 1 Net Interest Margin shown for Banc of California, N.A. subsidiary. Excludes Holding Company debt interest expense.
Stated Year-End 2015 Run Rate Targets
ROAA ROATCE Net Interest Margin 1 Efficiency Ratio Met target levels |
 10 10 Business Segment Contribution ($ in millions) * Figures may not foot due to rounding. Pre-Tax Income 2Q 2015 1Q 2015 B/(W) % Business Segment Income % QoQ Growth Business Segments Banking $23.7 $15.9 $7.8 66% 80% Mortgage Banking 10.3 9.6 0.7 29% 7% Financial Advisory / Asset Management 1.9 0.6 1.3 5% 13% Business Segment Total $35.9 $26.1 $9.8 Corporate / Other (8.4) (4.1) (4.3) Consolidated $27.4 $22.1 $5.3 |
 11 11 DDA 17% NOW 20% Savings 17% Money Market 27% CDs 19% Deposit Portfolio $0.41 $0.46 $0.66 $0.75 $0.88 $2.9 $3.2 $4.0 $4.1 $4.2 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Noninterest-bearing Deposits Interest-bearing Deposits $5.1 $3.3 $3.6 $4.7 $4.9 Total Deposits ($ in billions) Deposit Mix (6/30/15 period end balance) 0.54% 0.60% 0.70% 0.74% Cost of Deposits: 0.50% 116% 44% CAGR * All Balances Period-End. |
 12 12 $455 $464 $613 $639 $960 $567 $548 $1,042 $1,014 $839 $234 $367 $956 $940 $697 $1,213 $1,191 $1,172 $1,169 $1,841 $1,096 $1,127 $1,187 $1,241 $747 $134 $142 $167 $171 $137 $3,698 $3,839 $5,136 $5,175 $5,220 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Business CRE & Construction Multifamily SF Residential Held for sale Other Loan Portfolio Business 21% CRE 19% MF 16% SFR 41% Other 3% HFI Loan Mix (6/30/15 period end balance) Total Loans (HFS / HFI) ($ in millions) 4.63% 4.59% 4.60% 4.62% 4.75% Average Loan Yield: 1 1 Includes C&I, SBA & Leasing * All Balances Period-End. |
 13 13 Capital Position 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Banc of California, Inc. Tangible Equity to Tangible Assets (TE/TA) 9.1% 9.0% 7.5% 7.6% 9.1% Common Equity Tier 1 Capital Ratio (CET1) n/a n/a n/a 9.0% 9.0% Tier 1 Leverage Ratio 9.9% 9.3% 8.6% 8.0% 9.6% Tier 1 Risk-based Capital Ratio 14.1% 14.0% 10.5% 10.8% 13.2% Total Risk-based Capital Ratio 15.2% 15.0% 11.3% 11.6% 14.0% Tangible Book Value per share, non-GAAP $11.44 $11.33 $10.53 $10.81 $10.93 Tangible Book Value per share, adjusted 1 $9.66 $9.88 $9.64 $9.96 $10.11 Banc of California, N.A. Tier 1 Leverage Ratio 9.7% 9.8% 9.2% 9.5% 10.3% Tier 1 Risk-based Capital Ratio 13.8% 14.8% 11.3% 12.9% 14.0% Total Risk-based Capital Ratio 14.9% 15.8% 12.0% 13.6% 14.9% 1 Tangible equity per common stock and shares issuable under purchase contracts. Represents the effect on TBV/share including
conversion of TEUs to common shares |
 14 14 $22.6 $25.3 $29.5 $29.3 $34.8 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 ($0.3) $0.2 $n/m $0.1 n/m 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 0.96% 0.86% 0.65% 0.71% 0.66% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 Asset Quality NPAs / Assets 54% 66% 77% 69% 81% 2Q 2014 3Q 2014 4Q 2014 1Q 2015 2Q 2015 ALLL / NPLs Net Charge Offs (recoveries) ($ in millions) ALLL ($ in millions) |
 15 15 15 Top Public Independent Banks Headquartered in California by Assets ($ in billions) BANC is the 8th largest public independent California bank Proven ability to attract and grow low cost retail deposits Proven ability to build a scalable and diverse commercial lending platform
Proven M&A capabilities
Compelling economic model with scalable platform
A Top California Bank at an Attractive Entry Point
$53 $40 $34 $30 $17 $12 $8 $7 $6 $6 $6 $6 $5 $5 $4 $- $10 $20 $30 $40 $50 FRC SIVB CYN EWBC PACW CATY CVBF BBCN BANC OPB BOFI FMBL WABC WIBC HAFC Source: SNL Financial. Financial data as 6/30/15. |