Banc Of California, Inc. · NYSE:BANC
Banc Of California — First Pactrust Bancorp — Investor Day (November 2012)
69 slides from Banc Of California's investor day presentation, Nov 9, 2012
Slide 1: Investor Day Presentation
O\oactrust BANCORP,INC* Investor Day Presentation NOVEMBER 9, 2012
Slide 2: Forward-looking Statements
Forward-looking Statements wivet used inthis present otfan elim daca filed with or furnished toh cuties and Bichange Commision (the "SEC"), in prezerelsaeas or other public shareholder paced, ommunicstions or in oral stemants male vith the approval ofan autharized will continue,” “ieanticipsted,” “e
Slide 3: Additional Information About the Proposed Merger with The Private Bank of California
Additional Information About the Proposed Merger with The Private Bank of California Opadctrust BANCORP, INC:
Slide 4: Welcome
Codctrust BANCORP,INC* Timothy Chrisman Chairman Welcome NOVEMBER 9, 2012
Slide 5: Agenda
Agenda 2012 Investor Day 9:00-10:15am 10:15-10:30am 10:30-11:45am 11:45-Noon Noon-1:00pm 1:00-2:00pm 2:00-4:00pm First PacTrust Bancorp - 3Q12 Earnings - Company Update - Initiatives Steven Sugarman, CEO Break PacTrust Bank - Strategic & Operations - Credit - Lending - Retail Robert Franko, CEO Brea
Slide 6: Steven Sugarman, Chief Executive Officer
Codctrust BANCORP,INC* Steven Sugarman Chief Executive Officer Investor Day Presentation NOVEMBER 9, 2012
Slide 7: 3Q12 Earnings
3Q12 Earnings
Slide 8: Third Quarter Results
Third Quarter Results Net Income of $9.5 million, and $9.2 million of net income available to common shareholders in Q3 Eamin gs per share of $0.79 Non-interest income increased by $18.9 million to $19.5 million in the third quarter compared to $640 thousand for the quarter ending June 30, 2012. $12
Slide 9: Third Quarter 2012 — Highlights
Third Quarter 2012 — Highlights Grew total assets by $555 million during the quarter to $1.67 billion Completed acquisition of Beach Business Bank on 7/2/12 and Gateway Business Bank on 8/17/12 Total loans grew by $479 million to $1.3 billion, and resulting in an average yield of 5.38% versus 4.63%
Slide 10: Other items
Other items Beach Acquisition Gateway Acquisition CLOSED JULY 1, 2012 CLOSED AUGUST 17, 2012 Total assets of $311 million $12.1 million bargain purchase and net income of $0.4 million gain for the quarter ended Mission Hills Mortgage September 30, 2012 Bankers contributed $6.8 million to non-interes
Slide 11: Summary
Summary Asset growth of over $555 million in Q3; total assets exceed $1.67 billion Year-to-date growth of 67% through acquisition and organic growth Closed acquisitions of Beach Business Bank and Gateway Business Bank 75 basis points expansion in Net Interest Margin primarily due to improved yields
Slide 12: Management’s Targets
Management’s Targets Mission Hills Mortgage Bankers $120 Million in Originations in October Target 80-90+ bps Net Profit Margin $5+ Million Cost Savings in 2013 $2 Million from Vendor Management $3 Million from Real Estate Rationalization e Efficiency Ratio Target 65% by YE2013 Based on Existing Bus
Slide 13: Management’s Expectations
Management’s Expectations Management expects a positive impact on core earnings and operating expenses over next several quarters as First PacTrust completes its transition to an integrated, full- service commercial bank with scalable products and services. Opdctrust BANCORP, INC
Slide 14: Company Update
Company Update
Slide 15: Strategic Plan
Strategic Plan MONETIZATION INTEGRATION SCALE $2.5 Billion in 3 Single, integrated e Sponsor / Build Years Commercial Bank scalable financial services business $5.0 Billion in 5 Strong, diverse cash Enhance investor Years flows liquidity Diverse Balance Attractive California Sheet Markets Deep depos
Slide 16: Progress to Date: Scale
Progress to Date: Scale San Marco Century City Acquisition of FPTB I The Private Bank Beach | Gateway k ofCalifornia jLaJolla Santa Business Ban Branch Monica | $2300 $904 $ioa3 $2,115 saat ae $863 | se62 $635 a2 03 [Proforma 2012 at a2 a3 oa aL a2 2010 Opdctrust Pro Forma Assets BANCORP, INC.
Slide 17: Branch Footprint
Branch Footprint November 2010 vs. Today Fst AddressLine city State ZipCode Terentia a EES 1230 Rosecrans Ave ‘Manhattan Beach ry ‘90266 7877 Ivanhoe Ave LaJolla cA ‘92037 S500 Newport Center Dr Newport Beach ca 92660 Playas de Rosatito. Aronia Source SNL Financial FIRST Note: Branches as of Septemb
Slide 18: Growth
Growth Fastest Growing Independent U.S. Banks Year-over-Year @ First PacTrusthas been successfulin growingits asset base both organically aswellas through opportunistic acquisitions since its recapitalization in 2010 Announcedacquisitions of Gateway Bancorp and Beach Business in 2011; Private Bank o
Slide 19: Integration: 2013
Integration: 2013 Transition from Thrift to Commercial Bank Merge Banks into Realize single subsidiary Einancial (one charter) Synergies Enhance Team Integrate Realize with Commercial systems and Business Bank Experience personnel Synergies Opdctrust BANCORP, INC
Slide 20: Key Metrics
Key Metrics First PacTrust is Systematically Making Changes Necessary to Complete Transition into a Commercial Bank 1961-2001 Management Credit Union Systems Credit Union Charter Credit Union Balance Sheet Credit Union Bank Board Credit Union 001-2011 Thrift Thrift Thrift Thrift Thrift 2012+ Commerc
Slide 21: Key Timeline
Key Timeline 4Q12 — Reorganization of Management and Finance Group 1Q13 — Consolidate Banks Under Single Charter 1Q13 — Integration of Beach and PacTrust 2Q13 — Currently expected completion of The Private Bank of California acquisition Opdctrust BANCORP, INC
Slide 22: Key Bank Management Additions
Key Bank Management Additions Robert Franko, CEO Lonny Robinson, CFO David Misch, CRO* Craig Naselow, Treasurer and CIO Richard Smith, Private Banking* Nick Zappia, Business Banking* Melissa Rickabaugh, BSA Melissa Lanfre, Finance Opdctrust *Subjectto completion of PBOC acquisition BANCORP, INC:
Slide 23: Diversification of Balance Sheet
Diversification of Balance Sheet Diversification of Loan & Deposit Mix Since Recapitalization ($ in millions) Loan Portfolio 2owos 2012.03 Pro Forma Total Loans & Leases: $688 Total Loans & Leases: $1,446 Deposit Composition 201004 201203Pro Forma Total Deposits: $685 Total Deposits: $1,926 Source S
Slide 24: Initiatives
Initiatives
Slide 25: Strategic Initiatives
Strategic Initiatives M&A The Palisades Group SFR Mortgage Wholesale to Retail Portfolio to For Sale Team Lift-Outs C&l Team, CRE, SBA, Warehouse, Servicing, Other Opdctrust BANCORP, INC
Slide 26: M&A: A Core Competency
M&A: A Core Competency Richard Herrin, EVP, Strategic Initiatives Gateway Business Bank Example $15.5 million purchase price Realized profits to exceed purchase price by 12/31/12 (less than 5 months after financial close) No integration surprises Opdctrust BANCORP, INC
Slide 27: M&A: A Core Competency
Codctrust BANCORP,INC* Richard Herrin Strategic Initiatives M&A: A Core Competency Gateway Business Bank Example
Slide 28: Timeline of Gateway Acquisition
Timeline of Gateway Acquisition Lead Manager Sugarman We were protected from delay with profits remaining in TeamLeader Mortgage Seabold business. Integration/Operations Herrin Regulatory Mitchell Legal Sugarman Nov 10 April May 11 Jun-Nov 11 Nov il May 12-Aug 12 Augi2 =SPC! =™SPC- = Deal = Integrat
Slide 29: Bid Process
Bid Process Responsible Party Lead Deal Manager Sugarman Sugarman sugatman attorney Wachtell Wachtel Wachtell FASia1R Marshall & stevens Marshall & stevens Matshall& stevens biligence Lead Herrin Herrin Herrin Credit Review Bonaccorso Bonaccorso Bonaccorso Deposit Review Anderson anderson anderson c
Slide 30: Merger & Acquisition Framework
Merger & Acquisition Framework Contains 22 distinct categories — Covering 13 Business Areas 1088 varied inputs for extensive document gathering & planning process Mapit ee [ease fsa Policies & Procedures fees * Organization Plan/Retention = = ue. seas Marketing Branding Items eo, - Weekend Conversio
Slide 31: Generating Key Metrics ($ in Millions)
Generating Key Metrics ($ in Millions) P&L Impact Consideration Structure Other Considerations At Announcement Projecting $3.0+ million of annual earnings contribution from new entity Moderate cost savings assumptions and no revenue synergies One-time deal related expenses of $1.25 million, pre-tax
Slide 32: MHMB Originations and Revenue by Month
MHMB Originations and Revenue by Month During escrow and following close, we fat rease production and revenues Origination $in Millions Revenue $350 $18 $300 - ~ $16 S14 $250 4 $12 $200 eH g1so - $8 + $6 S100 es $50 ¢ go} te = $0 02-2011 03-2011 04-2011 aa- 2012 02-2012 03-2012 mmm Originstions Reve
Slide 33: Bank Acquisitions
Bank Acquisitions ¢000's) {Data as of June 30, 2012) Total Assets Total Loans Beach Business Bank $311,945 $241,185 Gateway Business Bank $1siago $127,860 TOTAL $493,385 $369,045 '000'5) Mission Hills Mortgage Bankers 9/30/2012 9/30/2011 Variance Total Originations $818,321 $556,300 47% Total Origin
Slide 34: Creating Value through M&A
Creating Value through M&A Financially and strategically compelling Responsive to seller needs Legal protections for financial, strategic Expandscapabilities and product suite Miircotisrantcoances Ability to grow with economics of scale Near-term earnings, impact Meet operational and compliance chal
Slide 35: David R. Misch, CEO, The Private Bank of California
Codctrust BANCORP,INC* David R. Misch CEO, The Private Bank of California Investor Day Presentation NOVEMBER 9, 2012
Slide 36: Background
Background Founded in 2005 Roots in West LA Three Business Lines Private Banking Business Banking Entertainment Service Model Know You and Your Business (“Your Money. Your Business. Your Bank.”) Tailored Solutions Single Point of Contact with Team Support Opdctrust BANCORP, INC
Slide 37: Results
Results* © Total Assets e Total Deposits @ DDA Plus NOW ® Overall Cost of Funds e@ Loan / Deposit Ratio @ Strong Credit Metrics * Financial results, as of September 30, 2012 Opdctrust BANCORP, INC
Slide 38: Why This Makes Sense for The Private Bank and First PacTrust
Why This Makes Sense for The Private Bank and First PacTrust: Scale Broader Products Career Paths and Earnings Potential Culture and Strategic Fit Opdctrust BANCORP, INC
Slide 39: Risk Management Approach
Risk Management Approach Strategic Alignment Clear, Well-Defined Parameters Risk/ Return Mentality Accountability People, People, People BOTTOM LINE: Risk as Conscience; Risk as Partner FIRST Opdctrust BANCORP, INC
Slide 40: California Market Share
California Market Share First PacTrust Peer Group | 2012 Deposit Ranking ($ in millions) California Market Totai Institution Ha city Branches Deposits Mit. Shr Rank _Assete Deposits CVE Financial Core, Ontario 4 Sarit 070% 8 e612 sari Fac est Bancore Les Angeles ee 400 048 2 5298 sere Westamerica Ba
Slide 41: Today’s Takeaways
Today’s Takeaways 1Q13 Application to Change Charter Management expects a positive impact on core Strong profitability from Mission Hills earnings and Mortgage Bankers operating expenses over next several quarters as First 2Q13 PBOC Closing Target $5 Million of Increased P/L in 2013 from Cost Saves
Slide 42: Q&A
Q&A
Slide 43: Robert Franko, President
Codctrust BANCORP,INC* Robert Franko President Investor Day Presentation NOVEMBER 9, 2012
Slide 44: History in the Making
History in the Making $200 MM ™ Commercial Opdctrust BANCORP, INC
Slide 45: Choice of Charter
Choice of Charter PacTrust Bank OCC Thrift Charter gle Comme: Bank Charter Business Beach Bank CHOICE OF: E ~as DFI- FDIC Charter OCC Commercial Bank DFI— FDIC DFI— Federal Reserve The Private Bank of California $ ° 3 DFI-FDIC Charter Opdctrust BANCORP, INC
Slide 46: Goals for 2013
Goals for 2013 Commercial Bank Transition Single Charter Rationalize Cost Structure Target 65% Efficiency Ratio Best Athlete Philosophy Appropriate Headcount in Each Area Focus Our Real Estate Strategy Make Efficient Use of Technology Relationship-Focused Business Build True Franchise Value with Rec
Slide 47: Any Questions?
Any Questions?
Slide 48: Gaylin D. Anderson, Consumer Bank
Codctrust BANCORP,INC* Gaylin D. Anderson Chief Retail Banking Officer, PacTrust Bank Consumer Bank NOVEMBER 9, 2012
Slide 49: Increasing Strength of Deposit Franchise
Increasing Strength of Deposit Franchise Significant progress transitioning depositbase to commercial bank PacTrust Bank — From Jan 2011 transaction balances improved from 42% to 55% PacTrust Bank — $1.076 billion with 55% in transaction accounts Beach Business Bank — $257 Million with 88% in transa
Slide 50: Cost of Deposits - WAR
Cost of Deposits - WAR Consolidated cost of deposits: 0.600% 0.43% PacTrust 0.56% 0.500% 0.56% 0.43% Beach 0.47% 0.400% PBOC 0.16% 0.300% Since Jan 2011, the bank has reduced overall costby .18 bps resulting in interest expense savings over $1.9 million dollars. 0.200% 0.100% 0.000% Pac Trust Beach
Slide 51: Increasing Number and Size of Accounts
Increasing Number and Size of Accounts 60,000 Deposit franchise includes over 48,000 accounts, 82% transaction —_ 50,000 At PacTrustthe average account size has doubled to $6196 in 40,000 consumer and $25,191 for Business 30,000 PacTrust added 4,055 checking accounts in the last 21 months of 20,000
Slide 52: Growing Fee Income
Growing Fee Income Projected combined $1.9 million in service charge fee income for 2012 (pro forma) Increase of over 15% over 2010 for PacTrust PacTrust debit card revenue projected at $545 thousand - 35% increase over 2011 $2,500 $2,000 $1,500 $1,000 $500 $0 $In Thousands $1,928 $1,528 $545 ay $25
Slide 53: Growing Fee Income — Loan Referrals
Growing Fee Income — Loan Referrals » Initiated Beta test and roll-out of lending products in retail branches in Sept 2012. Highly successful: $32 million of SFR mortgage volume $8 million of C&l volume $13 million of CRE Mortgage and CRE roll out to BBB & PBOC soon $35 $30 $25 $20 $15 $10 $5 $0 $In
Slide 54: Building the Platform (Distribution)
Building the Platform (Distribution) Jan June December June December June 8 locations 10 locations 11 locations 18 locations 17 locations 24 locations + PrimarilySan + Feb2011—openedta Oct 2011—opened = Mar2012 — opened = Aug2012—acquired + Potenttialirvine Diego and Jollabranch Century Citybranch S
Slide 55: Building the Platform (Product-Technology)
Building the Platform (Product-Technology) 11 Product/Service Categories 28 Product/Service Categories 44 Product/Service Categories Nov 2011 — Rebuilt Consumer/Business Deposit Products Feb 2012 - Consumer Online Banking Enhancement Mar 2012 — Correspondent Banking Apr 2012 — Enhanced Person-to-Per
Slide 56: Chang Liu, Lending
Codctrust BANCORP,INC* Chang Liu Chief Lending Officer, PacTrust Bank Lending NOVEMBER 9, 2012
Slide 57: First PacTrust Loan Portfolio
First PacTrust Loan Portfolio January 1, 2011 othertoany FPTB & PBOC iam is hos cai/sea cRE- Owner exer oe as Cased ee 6% 16 Multifamily 2 7% Thrift airs Commercial 13% Residential Bank eae CRE Investors 18% Pro Forma FPTB ['000's) 1/1/2011 00's) cluding PBOC) Residential Mortgage $602,596 Residenti
Slide 58: Source of Growth
Source of Growth (/000's) $1,800,000 $1,600,000 $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0 dan 2011 *Proforma with PBOC Acquisition -PBOC ‘Acquisition = Gateway. Acquisition jeach Sep 2012 Total loans increased over 100% with PBOC from January 1, 2011 to September 30, 20
Slide 59: CRE Portfolio: Organic Build
CRE Portfolio: Organic Build 2011 2011 YE funding totaled $91.5 million Reviewed Termsheet 2012 CRE September 2012 YTD funding totals $103.9 million Currently we have 21 term sheets issued totaling $84.2 million in the pipeline \ ‘\ j $103 Million Closed y 4 Anticipate YE 2012 funding of $160 millio
Slide 60: Multifamily Portfolio: Purchased
Multifamily Portfolio: Purchased Total Balance $76,444,000 Total # of loans 63 Average loan size $1,213,397 WAC* 5.04% WAM 08/26/23 Stressed DSCR™* 1.63x Average LTV 54% *Net of discountipremium Based an 6.5% interest rate and 25-year amortization schedule Total apartment loan portfolio purchase of
Slide 61: Peer Bank Comparison
Peer Bank Comparison ((000's) iConsumerLoans $1,800,000 Other loans $1,600,000 $1,400,000 mesidential Mortgage multifamily $1,200,000 MCRE-Owner Occupied $4,000,000 CRE- Investor $800,000 $600,000 mce/SBA $400,000 $200,000 $0 First PacTrust eancnre PacificMercantile Bank First California Bank Califo
Slide 62: Matt Bonaccorso, Credit Risk Management
Codctrust BANCORP,INC* Matt Bonaccorso Chief Credit Officer, PacTrust Bank Credit Risk Management NOVEMBER 9, 2012
Slide 63: Credit Risk Management
Credit Risk Management 2010 2011 2012 = New = Began origination = Bank began to offer management and on CRE and small commercial initial capital resumed SFR leasing credits and lending during other C&I credits, 2011 including SBA Going forward, the focus for the Credit Risk Management Group will be
Slide 64: Portfolio Pro forma 9/30/12
Portfolio Pro forma 9/30/12 Loan Typ. PRO FORMA TOTALS Balance % Tot COMMERCIAL Commercial and Industrial $ 210,519,625 12.69% Commercial Real Estate 435,114,516 26.20% Multifamily 98,085,124 5.91% SBA 128,265,578 7.73% Other 11114116 0.67% Tot: $883,098,960 53.25% CONSUMER 14 Family $78,521,639 45.
Slide 65: Portfolio Delinquency Summary 9/30/12
Portfolio Delinquency Summary 9/30/12 Total Delinquencies (60+) Count —_% Total Balance % Total COMMERCIAL Commercial and Industrial 6 0.13% $201,812 0.02% Commercial Real Estate 4 0.09% 1,100,702 0.08% Multifamily 0 0 SBA i 0.24% 7,767,663 0.59% Other 0 ° Commercial Total: 21 0.47% $9,070,177 0.68%
Slide 66: Residential Loan Portfolio PTB Organic
Residential Loan Portfolio PTB Organic Count UPB% of UPB Performing 997 $556,296,614 60+ Days Delinquent 9 2,940,276 1006 $ 559,236,890 Top 10Cities Count Principal San Diego 382 168,323,919 Lalolla 73 93,370,763 Coronado 35 35,662,400 Los Angeles 32 33,439,686 RanchoSantaFe 18 21,241,501 Chula Vist
Slide 67: OREO — Bancorp and Bank (PTB)
OREO — Bancorp and Bank (PTB) As of September 30, 2012, OREO balances totaled $8.7 million Pacific Trust Bank holds 7 OREO Assets including 5 Single Family homes and 2 assets secured by Land with an aggregate value of $2.8 Million, representing 32% of total OREO. Bancorp holds 5 OREO assets includin
Slide 68: Panel Discussion
Panel Discussion
Slide 69: Investor Day Presentation
O\oactrust BANCORP,INC* Investor Day Presentation NOVEMBER 9, 2012
First Pactrust Bancorp — Investor Day (November 2012) on 6ix