Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q2 2017 Earnings Presentation
18 slides from Banc Of California's earnings presentation, Jul 26, 2017
Slide 1: 2017 Second Quarter Earnings Investor Presentation
July 26, 2017 2017 Second 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 shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,
Slide 3: Second Quarter 2017 Highlights
Re-Positioned & De-Risked the Balance Sheet Transitioned BHL Offices & Loan Officers Reduced Expense Run-Rate Securities declined by $383 million from the first quarter, driven by sales of $294 million of longer duration agency MBS, $120 million of private label non-agency MBS and $17 million of cor
Slide 4: Balance Sheet Decline Driven by Re-Positioning Activities
Dollars in millions Includes HFS and HFI loan sales Total Assets1 Balance Sheet Decline Driven by Re-Positioning Activities Total Assets Declined by $686 million from Q1 as Loan Production was Offset by Loan and Security Sales Sold select securities to de-risk securities portfolio, including: -$294
Slide 5: Second Quarter Net Loan Growth Muted By Loan Sales
Dollars in millions Total 2Q17 held for investment loan balance before sales and transfers Loans Held for Investment1 Second Quarter Net Loan Growth Muted By Loan Sales Net HFI Loan Production Partly Offsets Loan Sales and Balance Sheet Re-Positioning Actions Net HFI loans, excluding sales, and tran
Slide 6: Loan Balances Increasing Driven by Commercial Lending
Loan Balances Increasing Driven by Commercial Lending Held for Investment Loan Mix Continues Trend Toward Increasing High Quality Revenue Streams Dollars in millions Dollars in billions Includes Construction Re-mixing Loan Portfolio Toward Increased Commercial Loan Balances Loans Held for Investment
Slide 7: Reduction of Brokered Deposits Drove Lower Deposit Balances
Dollars in millions Average cost of deposits Deposit Composition1 Reduction of Brokered Deposits Drove Lower Deposit Balances Re-Positioning Balance Sheet through Reduction of Brokered Deposits Reduced brokered deposits by $576 million Focused on maintaining and increasing core deposit base; up $23
Slide 8: Lower Earning Asset Level Drives Lower Interest Income
Dollars in millions, consolidated operations Dollars in billions Interest Earning Assets Declined by $0.9 billion since YE2016 Interest Income1 Average Interest Earning Assets2 Loan Production Yields Above Portfolio Yields in Q2 Positive Commercial Loan Interest Income Highlight in Q2 Lower Earning
Slide 9: Demonstrating Expense Management & Optimization
Demonstrating Expense Management & Optimization Disciplined Cost Management & Organization Consolidation Results in Significant Expense Savings Actions Completed Achieved organizational consolidation through headcount reduction, department consolidation and role elimination Eliminated corporate auto
Slide 10: Reducing Expense Run-Rates Through Efficiency Actions
Reducing Expense Run-Rates Through Efficiency Actions Continued Expense and Efficiency Actions Planned Noninterest Expense Run-Rate2 Non-GAAP measure: Non-GAAP disclosure on slide 17 Dollars in millions Loss on investments in alternative energy partnerships create tax credits to offset expense incur
Slide 11: Q2 Operating Earnings for Continuing Operations
($ in millions) Continuing Operations (reported) Q2 non-recurring adjustments1 Q2 Operating Earnings for Continuing Operations2 Net interest income $ 75.5 $ 75.5 Provision for loan and lease losses 2.5 2.5 Total noninterest income 5.7 5.7 Total noninterest expense (ex-loss on investments in alternat
Slide 12: Asset Quality Remains Strong and Stable
NPAs/Equity Nonperforming Assets1 ALLL and NPL Coverage Total Delinquent Loans/Total Loans -75% -76% Asset Quality Remains Strong and Stable Disciplined Credit Culture Continues to Drive Strong Asset Quality Dollars in millions
Slide 13: Solid Capital Ratios Exceeding Basel III Guidelines
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) Tier 1 Risk-Based Capital Ratio No Capital Raise Required to Execute on Strategic Plan for 2017 & 2018 Basel III Minimum 7% Basel III Mi
Slide 14: The Only Mid-Sized Bank Focused Exclusively on CA
Rank Name Total Assets1 Focus 1 Wells Fargo & Company $ 1,930,871 National 2 First Republic Bank 80,978 National High Net Worth 3 SVB Financial Group 46,413 National Technology Sector Focused 4 East West Bancorp, Inc. 35,918 U.S./China Focused 5 PacWest Bancorp 22,247 National Specialty 6 Cathay Gen
Slide 15: Core Foundation in Place to Support Growth of BANC Franchise
Core Foundation in Place to Support Growth of BANC Franchise Banc of California Already Has Many Foundational Supports in Place to Support Franchise Growth Drive Disciplined Growth: Increase loans and deposits, grow asset base Go Forward Strategy 1 2 3 Sustainable Strategy: Building a bank with a mo
Slide 16: Appendix
Appendix
Slide 17: Nonperforming Assets Ratio Remains Near Top of Peer Group
NPAs/Assets2 Peer group figures contain the most recently available public data as of 7/22/17; HOPE shows metrics from 12/31/2016 Source: SNL Financial; Non-performing assets excludes restructured loans Nonperforming Assets Ratio Remains Near Top of Peer Group Continued Focus on Maintaining Strong A
Slide 18: Non-GAAP Disclosure
This presentation contains certain financial measures determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP), including operating expense for continuing operations, operating earnings for continuing operations and operating earnings per common share