Banc Of California, Inc. · NYSE:BANC
Banc Of California — Merger or Acquisition (July 2023)
24 slides from Banc Of California's merger presentation, Jul 25, 2023
Slide 1: Creating the premier California business bank
Creating the premier California business bank July 25, 2023
Slide 2: Disclaimer: Cautionary Note Regarding Forward-Looking Statements
DISCLAIMER Cautionary Note Regarding Forward-Looking Statements This document contains certain forward-looking statements within the meaning of the federal securities laws with respect to the proposed transaction between Banc of California and PacWest and the proposed investment by Warburg Pincus LL
Slide 3: No Offer or Solicitation
No Offer or Solicitation This document is not a proxy statement or solicitation or a proxy, consent or authorization with respect to any securities or in respect of the proposed transaction and shall not constitute an offer to sell or a solicitation of an offer to buy the securities of Banc of Calif
Slide 4: Creating the premier business bank in California
CREATING THE PREMIER BUSINESS BANK IN CALIFORNIA Source: FactSet, S&P Global Market Intelligence; Financial data and estimates as of June 30, 2023 (1) Southern California market includes Los Angeles County and Orange County; (2) Excludes money center banks (WFC); (3) Core deposit funding defined as
Slide 5: Compelling investment thesis
Significant upside opportunities Strong community bank with differentiated funding verticals Complementary Businesses ACCRETIVE TO EPS AND TBVPS robust capital and liquidity PROFILE The Premier California relationship-focused business bank COMPELLING INVESTMENT THESIS
Slide 6: Financially and strategically compelling
FINANCIALLY AND STRATEGICALLY COMPELLING Highly earnings accretive and TBVPS accretive Optimizes and strengthens balance sheet ~$1.65–$1.80 ~$13bn Paydown of wholesale funding(3) Strong market position with significant upside opportunities 3rd Largest California headquartered bank(5) 8 Banks recentl
Slide 7: Summary of transaction terms
SUMMARY OF TRANSACTION TERMS Merger structure Banc of California, Inc. will be legal and currency acquiror Banc of California, N.A. will merge into Pacific Western Bank and take Banc of California name and brand PacWest will be accounting acquirer (Banc of California’s balance sheet will be subject
Slide 8: Opportunity to fill substantial void in California
OPPORTUNITY TO FILL SUBSTANTIAL VOID IN CALIFORNIA Six of the top fifteen mid-sized banks have left the market since 2019 Pro forma company is the 4th largest mid-sized bank in California Source: State of California, FRED, NCES, S&P Global Market Intelligence, U.S. DOT; Note: Deposit market share da
Slide 9: Intense focus on in-market relationship banking
INTENSE FOCUS ON IN-MARKET RELATIONSHIP BANKING COMMUNITY BANKING Personal Banking Savings and Investments COMMERCIAL & BUSINESS BANKING Business Banking Middle Market Banking Asset-Based Lending & Term Loans Full Stack Payment Processing Solutions Depository Services Cash Management andTreasury Man
Slide 10: Differentiated deposit and fee verticals
DIFFERENTIATED DEPOSIT AND FEE VERTICALS Continue to prioritize core deposit funding(1) HOA Banking Payments Noninterest-bearing CDs Brokered Checking Savings & MMDA $4 billion total deposits Ultra sticky, low-cost deposits proven through cycle HOA industry has 7,500+ Property Management companies N
Slide 11: Go forward strategy prioritizes relationship lending
Go forward strategy prioritizes RELATIONSHIP lending Note: Represents run-rate estimated lending verticals in 4Q 2024 Growthareas Stableportfolios Run-off / Exit SBA Equipment lending & leasing CRE Core C&I Permanent multifamily Warehouse lending Fund finance / Portfolio lending Residential / Consum
Slide 12: Repositioning creates a strong balance sheet
REPOSITIONING CREATES A STRONG BALANCE SHEET Brokered deposits BTFP Repurchase agreement FHLB Pre-close standalone paydown Source: S&P Global Market Intelligence; Note: Financial data and estimates as of June 30, 2023; Totals may not sum due to rounding (1) Repositioning includes sale of BANC single
Slide 13: Significantly enhanced liquidity, funding and capital profile
SIGNIFICANTLY ENHANCED LIQUIDITY, FUNDING AND CAPITAL PROFILE Core deposits(1) Wholesale funding Common equity Other liabilities and preferred equity Liabilities and equity Source: S&P Global Market Intelligence; Note: Financial data as of June 30, 2023; Totals may not sum due to rounding (1) Core d
Slide 14: Combination unlocks earnings potential
COMBINATION UNLOCKS EARNINGS POTENTIAL Source: S&P Global Market Intelligence; Note: Financial data and estimates as of June 30, 2023 (1) PacWest annualized adjusted earnings available to common stockholders shown Net income, $mm Right-sized expense base and balance sheet repositioning drive earning
Slide 15: Experienced management with track record of success
EXPERIENCED MANAGEMENT WITH TRACK RECORD OF SUCCESS Joe Kauder Chief Financial Officer Bob Dyck Chief Credit Officer John Sotoodeh Chief Operating Officer Bill Black Strategy & Finance Chris Blake President & CEO of Community Banking Group Bryan Corsini Credit Executive Jared Wolff Chief Executive O
Slide 16: Extensive due diligence conducted on both banks
EXTENSIVE DUE DILIGENCE CONDUCTED ON BOTH BANKS Diligence focus areas included: Risk Management Treasury Audit Accounting & Tax Legal / Compliance Human Resources Technology & Operations Commercial Banking Retail Banking Credit Capital Deposits & Borrowings Deep Dive in Credit Substantial review of
Slide 17: Transformational partnership beneficial for all parties
TRANSFORMATIONAL PARTNERSHIP BENEFICIAL FOR ALL PARTIES Similar approach to relationship-focused community banking Complementary specialty businesses expand product offering Greater scale enables investment in technology, products and service Size of balance sheet allows bank to better serve custome
Slide 18: Appendix
APPENDIX BANC OF Wy CALIFORNIA PacWest Bancorp
Slide 19: Pro forma loan composition
PRO FORMA LOAN COMPOSITION Loans / deposits: 79% $22.3bn Note: Financial data as of June 30, 2023 (1) Fund finance included in Venture and SBA included in CRE in PacWest’s standalone loan composition; (2) Includes PacWest asset-based lending and other commercial loans;(3) Run-rate represents estimat
Slide 20: Pro forma funding composition
PRO FORMA FUNDING COMPOSITION Core deposits (excl. CDs) CDs Wholesale deposits Deposits $31.6bn $8.3bn Noninterest-bearing deposits: 30% Noninterest-bearing deposits: 22% Noninterest-bearing deposits: 36% FHLB/FRB/BTFP Other(1) Borrowings Repurchase agreement Credit linked notes Run-rate(2) Note: Fi
Slide 21: PacWest deposit base has stabilized
PACWEST DEPOSIT BASE HAS STABILIZED PacWest deposit base has stabilized and begun to grow $20.3 $27.8 Note: Financial data as of July 21, 2023 (1) Core deposits defined as non-brokered deposits Total deposits Core deposits(1) $18.9 $25.9 $bn +7.5% +7.3%
Slide 22: Key financial assumptions
KEY FINANCIAL ASSUMPTIONS Earnings Banc of California standalone projections based on consensus estimates Pro forma reflects management’s outlook for the combined company Expense base Reflects bottoms-up cost saving analysis expected to be fully phased in by 4Q 2024 Represents approximately ~$130mm
Slide 23: Purchase accounting summary
PURCHASE ACCOUNTING SUMMARY Tangible book value per share accretion Source: Company forecasts, FactSet, S&P Global Market Intelligence; Note: Financial data as of June 30, 2023; Market data as of July 24, 2023 (1) Based on expectations and assumptions as of announcement date; subject to change at tr
Slide 24: Details of balance sheet repositioning
DETAILS OF BALANCE SHEET REPOSITIONING Wholesale funding $13bn Wholesale borrowings 5.00% Weighted average cost Assets $7bn Liquid assets 3.75% Weighted average yield Note: Financial data as of June 30, 2023 Brokered deposits BTFP FHLB Repurchase agreement 5.00% 4.40% 4.10% 8.50% Yield / Cost Balanc
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