Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q1 2018 Earnings Presentation
21 slides from Banc Of California's earnings presentation, Apr 27, 2018
Slide 1: 2018 First Quarter Earnings Investor Presentation
April 27, 2018 2018 First Quarter Earnings Investor Presentation Exhibit 99.2
Slide 2: Forward-looking statements
When used in this presentation and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other public stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,
Slide 3: First Quarter 2018 Highlights
Strong Organic Loan Growth Continuation of Balance Sheet Re-Mix Disciplined Expense Management Held for investment loans grew on a net basis by $271 million, or 4% QoQ (16% annualized) – Gross loan commitment originations of $867 million at an average production yield of 4.99% Originated HFI loans i
Slide 4: Strategic Asset Re-Mix Continues
Dollars in millions Total Assets1 Strategic Asset Re-Mix Continues Re-Mix of Balance Sheet Toward Core HFI Loans Through Reduced Securities & Cash Balances Q1 Strategic Balance Sheet Re-Mix Activities 1 2 3 Cash and other declined by $119 million due to lower cash balances, lower loans held for sale
Slide 5: BANC Strategic Roadmap: Scorecard
BANC Strategic Roadmap: Scorecard Building Core Earnings Power for Sustainable Growth and Returns Over the Long Term Strategy Components Tracking Guideposts Q1 Results Build Core Deposits Core Deposit Balance Growth Core deposits increased $55 million Brokered deposits declined $31 million and compl
Slide 6: Build Core Deposits: Stabilized Core Deposit Base
Dollars in millions Core deposits defined as non-brokered deposits Deposit Composition1 $207 Change 1Q vs. 4Q $31 $55 Build Core Deposits: Stabilized Core Deposit Base Core Deposits Increased by $55 Million, While Brokered & Run-off IB Deposits Declined by $238 Million BANC 2
Slide 7: Amplify Lending: Growing Loan Balances
Dollars in millions Includes Construction Gross loan commitment originations 1Q gross loan production3 of $867 million at 4.99% average production yield Loans Held for Investment1 Loans Held for Investment1 27% 25% 13% 14% 27% 28% 31% 32% +4% QoQ Amplify Lending: Growing Loan Balances Accelerated Lo
Slide 8: Interest Earning Assets and Interest Income Increasingly Driven by Core Lending
Average Interest Earning Assets End Quarterly Down Trend Interest Earning Assets and Interest Income Increasingly Driven by Core Lending Activities Net Interest Margin Components Interest Earning Assets1 Average, dollars in billions Includes loans held for sale and other interest-earning assets Doll
Slide 9: Non-Recurring Adjustments to Continuing Operations Expenses
Loss on investments in alternative energy partnerships create tax credits to offset expense incurred. Continuing operations operating expense less non-recurring adjustments. Non-GAAP measure: Reconciliation table above. Continuing operations noninterest expense excluding loss on investments in alter
Slide 10: Q1 Operating Earnings from Continuing Operations
($ in millions) Continuing Operations (reported) Q1 non-recurring adjustments1 Q1 Operating Earnings from Continuing Operations2 Q1 Operating Earnings from Continuing Operations Normalized Tax Rate at 20%2 Net interest income $ 71.4 $ 71.4 Provision for loan and lease losses 19.5 (13.9) 5.6 Total no
Slide 11: Long-Term Strategic Operating Targets
Financial Metric Long-Term Strategic Operating Targets 1Q 2018 Plan Tracking Comments Growth / Balance Sheet: - Loan Growth (HFI)¹ Mid-Teens +16% On Track - Deposit Growth (ex-brokered)2 Low-to-Mid Teens +4% Early Innings of Deposit & Treasury Management Build Out - Securities / Total Assets 15% - 2
Slide 12: Strategic Initiative Tracking – Q1 2018
Strategic Initiative Tracking – Q1 2018 Initiatives Support Strategic Roadmap and Reflect High Level Priorities to Support Plan Initiative Q1 Status Q1 Commentary Treasury Management Strategy: Sales & Products Organization Hired key sales and product leadership Expansion of TM sales professionals in
Slide 13: Asset Quality Remains Strong and Stable
Nonperforming Assets1 Asset Quality Remains Strong and Stable Disciplined Credit Culture Continues to Drive Strong Asset Quality Dollars in millions, held for investment NPAs / Equity ALLL and NPL Coverage Total Delinquent Loans / Total Loans
Slide 14: Solid Capital Ratios Exceeding Basel III Guidelines
Tangible Equity / Tangible Assets1 +8% Solid Capital Ratios Exceeding Basel III Guidelines Tier 1 Risk-Based Capital Ratio Supported by $269 Million of Preferred Equity Common Equity Tier 1 Ratio (CET1) +4% Tangible Common Equity / Tangible Assets1 +9% Tier 1 Risk-Based Capital Ratio +5% Non-GAAP me
Slide 15: Appendix
Appendix
Slide 16: Securities Portfolio
Securities Portfolio Dollars in millions Based on book value balances of rated securities, data at March 31, 2018 Dollars in billions Securities Portfolio Detail1 Security Type Book Value 4Q17 Book Value 1Q18 Q1 Change Fair Value 1Q18 Book Yield 1Q18 Duration 1Q18 Gov’t & Agency (Agency MBS) $ 493 $
Slide 17: Quarterly financial summary
All figures from Continuing Operations unless noted; dollars in millions unless noted per share or percentage. Consolidated operations; Efficiency ratio adjusted for including the pre-tax effect of investments in alternative energy partnerships . Excluding loss on investments in alternative energy p
Slide 18: Non-GAAP financial measures
This presentation contains certain financial measures determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). These measures include noninterest expense from continuing operations, operating expense from continuing operations, and diluted earnings pe
Slide 19: Non-GAAP reconciliation: noninterest expense and revenue
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Noninterest expense $ 59,812 $ 66,424 $ 79,008 $ 98,216 $ 124,615 Gain (loss) on investments in alternative energy partnerships, net 34 (3,995) (8,348) (9,761) (8,682) Adjusted noninterest expense $ 59,846 $ 62,429 $ 70,660 $ 88,455 $ 115,933 Net interest inco
Slide 20: Tangible common equity reconciliation
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Tangible common equity to tangible assets ratio Total assets $ 10,329,319 $ 10,327,852 $ 10,280,028 $ 10,365,768 $ 11,052,085 Less goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less other intangible assets (8,510) (9,353) (10,219) (11,135) (12,191) Tan
Slide 21: Return on Tangible Common Equity reconciliation
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Return on Tangible Common Equity Average total stockholders’ equity $ 1,019,961 $ 1,014,368 $ 1,005,462 $ 1,014,267 $ 1,001,784 Less average preferred stock (269,071) (269,071) (269,071) (269,071) (269,071) Less average goodwill (37,144) (37,144) (37,144) (37,