Banc Of California, Inc. · NYSE:BANC
Banc Of California — Investor Presentation (August 2018)
24 slides from Banc Of California's investor presentation, Aug 23, 2018
Slide 1: Investor Presentation
August 23, 2018 Investor Presentation Exhibit 99.1
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: Our Franchise: We Are California's Bank
Market information as of 8/14/2018. Annualized dividend yield. Financial information as of June 30, 2018. Total loans held for investment. Ticker: NYSE: BANC Market Cap: $1,013.2 million - Price Per Share: $20.00 - Dividend Yield: 2.60% Our Franchise WE ARE CALIFORNIA’S BANK Highlights California Fo
Slide 4: Business Management Team and Board of Directors
Business Management Team Name Position Officer Type Years with BANC Industry Experience Douglas H. Bowers President & CEO Section 16 Officer 1 Year 35 Years John A. Bogler Chief Financial Officer Section 16 Officer <1 Year 30 Years Jason Pendergist Head of Commercial Banking Section 16 Officer <1 Ye
Slide 5: Second Quarter Highlights
Strong Organic Loan Growth Continuation of Balance Sheet Re-Mix Disciplined Expense Management Held for investment loans grew by $105 million, or 2% QoQ (6% annualized) – Gross loan commitment originations of $765 million at an average production yield of 5.05% Sold $204 million of performing SFR/MF
Slide 6: 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 Q2 Strategic Balance Sheet Re-Mix Activities 1 2 Securities declined by $127 million, including: - Sale of $41 million of CMBS - CLO net runoff of $74 million I
Slide 7: 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 1st Half 2018 Results Build Core Deposits Core Deposit Balance Growth Core deposits increased $413 million In Q1, completed the run-off of $207
Slide 8: Build Core Deposits: Stabilized Core Deposit Base
Dollars in millions Core deposits defined as non-brokered deposits Deposit Composition1 Change 2Q18 vs. 1Q18 $332 $357 Build Core Deposits: Stabilized Core Deposit Base Core Deposits Increased by $357 Million in the Quarter, While Brokered Declined by $332 Million BANC 2
Slide 9: Amplify Lending: Growing Loan Balances
Dollars in millions Includes Construction Gross loan commitment originations YTD gross loan production3 of $1.63 billion at 5.01% average production yield Loans Held for Investment1 Loans Held for Investment1 25% 14% 28% 32% +2% Q/Q Amplify Lending: Growing Loan Balances Loan Production Efforts Driv
Slide 10: Strong Credit and Capital Are Hallmarks of BANC
Strong Credit and Capital Are Hallmarks of BANC Strong Credit Quality Coupled with Strong Capital Position NPAs/Assets1,2 Tangible Equity / Tangible Assets1,3 Peer Median: 9.4% Source: SNL Financial; Peers include US banks with assets between $9.5bn-13.0bn as of Q2 2018. Non-performing assets ex res
Slide 11: Non-Recurring Adjustments to Continuing Operations Expenses
Loss on investments in alternative energy partnerships create tax credits to offset expense incurred. Continuing operations operating expense less non-recurring adjustments. Non-GAAP measure: Reconciliation table above. Continuing operations noninterest expense excluding loss on investments in alter
Slide 12: Long-Term Strategic Operating Targets
Financial Metric Long-Term Strategic Operating Targets 1st Half 2018 Plan Tracking Comments Growth / Balance Sheet: - Loan Growth (HFI)¹ Mid-Teens +11% Loan sales temporarily slowed growth - Deposit Growth (ex-brokered)2 Low-to-Mid Teens +15% Early Innings of Deposit & Treasury Management Build Out
Slide 13: Appendix
Appendix
Slide 14: Net Interest Margin Stabilized
Net Interest Margin Stabilized Benefiting from Re-mix of Securities to Loans and Wholesale Funding to Core Deposits Net Interest Margin Components Interest Earning Assets1 Average, dollars in billions Includes loans held for sale and other interest-earning assets Dollars in millions, consolidated op
Slide 15: Operating Earnings from Continuing Operations
($ in millions) Continuing Operations (reported) Q2 adjustments1 Q2 Operating Earnings from Continuing Operations2 Normalized Tax Rate at 20%2 Net interest income $ 72.8 $ 72.8 Provision for loan and lease losses 2.7 2.7 Total noninterest income 8.1 (2.4)4 5.7 Total noninterest expense (ex-loss on i
Slide 16: 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 17: Solid Capital Ratios Exceeding Basel III Guidelines
Tangible Equity / Tangible Assets1 -1% Solid Capital Ratios Exceeding Basel III Guidelines These ratios do not reflect the impending redemption of the Series C preferred stock Common Equity Tier 1 Ratio (CET1) +1% Tangible Common Equity / Tangible Assets1 -2% Tier 1 Risk-Based Capital Ratio +1% Non-
Slide 18: Securities Portfolio Yield Benefiting from CLO Rate Reset
Securities Portfolio Yield Benefiting from CLO Quarterly Rate Reset Dollars in millions Based on book value balances of rated securities, data at June 30, 2018 Dollars in billions Securities Portfolio Detail1 Security Type Book Value 1Q18 Book Value 2Q18 Q2 Change Fair Value 2Q18 Book Yield 2Q18 Dur
Slide 19: 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 20: 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 21: Non-GAAP Reconciliation: Noninterest Expense and Earnings
(in thousands) 2Q18 1Q18 4Q17 3Q17 2Q17 Noninterest expense $ 62,554 $ 59,812 $ 66,424 $ 79,008 $ 98,216 Gain (loss) on investments in alternative energy partnerships, net (1,808) 34 (3,995) (8,348) (9,761) Adjusted noninterest expense $ 60,746 $ 59,846 $ 62,429 $ 70,660 $ 88,455 Net interest income
Slide 22: Non-GAAP Reconciliation: Tangible Common Equity
(in thousands) 2Q18 1Q18 4Q17 3Q17 2Q17 Tangible common equity to tangible assets ratio Total assets $ 10,319,280 $ 10,329,319 $ 10,327,852 $ 10,280,028 $ 10,365,768 Less goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less other intangible assets (7,683) (8,510) (9,353) (10,219) (11,135) Tang
Slide 23: Non-GAAP Reconciliation: Return on Average Tangible Common Equity
(in thousands) 1st Half 18 2Q18 1Q18 4Q17 3Q17 2Q17 Return on Average Tangible Common Equity Average total stockholders’ equity $ 1,010,355 $ 1,000,856 $ 1,019,961 $ 1,014,368 $ 1,005,462 $ 1,014,267 Less average preferred stock (269,071) (269,071) (269,071) (269,071) (269,071) (269,071) Less averag
Slide 24: Non-GAAP Reconciliation: Non-Interest Expense / Average Assets
(in millions) 1st Half 18 2Q18 1Q18 4Q17 Operating Expense (NIE) Total non-interest expense $ 122.3 $ 62.5 $ 59.8 $ 66.4 Less loss on investments in alternative energy partnerships (1.8) (1.8) 0.03 (4.0) Less non-recurring items (7.4) (6.4) (1.0) (3.3) Salaries and employee benefits 0.9 0.9 (0.3) Pr
Banc of California — Investor Presentation (August 2018) on 6ix