Private Bancorp of America, Inc. · NASDAQ:PBAM
Private Bancorp of America — Q2 2024 Earnings Presentation
26 slides from Private Bancorp of America's earnings presentation, Jul 19, 2024
Slide 1: Q2 2024 Investor Update
(OTCQX: PBAM) (Holding Company for CalPrivate Bank) Q2 2024 Investor Update July 19, 2024
Slide 2: Disclosures
Disclosures FORWARD LOOKING STATEMENTS This presentation contains expressions of expectations, both implied and explicit, that are “forward-looking statements” within the meaning of such term in the Private Securities Litigation Reform Act of 1995. We caution you that a number of important factors c
Slide 3: Corporate Overview
Corporate Overview The CalPrivate Bank Franchise Coastal Southern California Footprint • Founded in 2006 and headquartered in La Jolla, California, Private Bancorp of America, Inc. owns and operates CalPrivate Bank, a dynamic relationship-based commercial bank Los Angeles County Beverly Hills • With
Slide 4: Consistent Focus on Shareholder Value Creation
Consistent Focus on Shareholder Value Creation Growth Oriented Strategy $ Total Assets (in Billions) • Culture of excellence in all aspects of serving Clients 19.1% 4 Yr CAGR • Growth oriented Sales and Service Teams • Consistent growth of earning assets at strong yields • Core EPS growth above 50%
Slide 5: Q2 2024 Results and Highlights
Q2 2024 Results and Highlights • Financial * Highlights Operational • * & Performance Highlights • 49.46% Efficiency Ratio • $7.8 million in Net Income • 4.48% Net Interest Margin • $1.35 Earnings Per Diluted Share • 1.40% Return On Average Assets • $2.29 billion in Assets • 15.99% Return On Average
Slide 6: Strategic Focus – 2024
Strategic Focus – 2024 • Drive organic growth through relationship-based banking, expanding current client relationships Opportunistic Balance Sheet and obtaining new ones • Opportunistic top-tier talent acquisition for new markets and current market expansion Growth • Broader penetration into High
Slide 7: Managing NIM in a Volatile Environment
Managing NIM in a Volatile Environment Loan Yields & Cost of Funds NIM Protection Strategy Proven Relationship Banking model allows for keen understanding of Clients and providing them with value Strong Loan Yields • Desirable mix of Fixed, Variable and Hybrid loan types • Fixed Rate Loan Terms gene
Slide 8: Strong Deposit Franchise
Strong Deposit Franchise Emphasis on deposit retention in an environment of higher rates and extreme competition. Focus on proactive management of exception priced deposits with an eye on the Fed and client yield alternatives Growing Customer Deposits Deposit Rate Trends • Total deposits increased $
Slide 9: Noninterest Deposit Trends
Noninterest Deposit Trends Focus is on full banking Relationships, including operating accounts. Non-interest bearing DDA balance growth that we saw during the extended low interest rate environment and unprecedented government stimulus (pandemic response) is returning to historic levels 9
Slide 10: Strong Liquidity & Funding Position
Strong Liquidity & Funding Position Focus on maintaining strong liquidity position and optimizing from a diverse funding mix Liquid Assets Total Available Liquidity Total Available % of Note: Dollars in Millions & Unused Uninsured Liqudity Sources (000's) Deposits Cash, unrestricted 154,255 16% Liqu
Slide 11: Loan Originations by Quarter
Loan Originations by Quarter Due to slower loan demand across the industry and with our Clients, we are opportunistically lending across all channels and regions at rates of return to drive higher Net Interest Income and protect NIM Loan Originations (Contract Amount, $ in millions) Commentary Key O
Slide 12: Demonstrated Organic Growth in Loans
Demonstrated Organic Growth in Loans Taking advantage of market opportunities and restricted lending by others produced increases in loan balances by 15% YoY with strong yields. $590K of nonaccrual interest recognized in 2Q’24, adjusted loan yield of 7.25%. Loan Balances Note: Dollars in Millions 12
Slide 13: Loan Portfolio Breakdown
Loan Portfolio Breakdown Loan Portfolio by Industry Loan Secured by Real Estate Total % of Total $1,589 Million of Loan Portfolio Secured by Real Estate (80%) Borrower's Industry (by NAICS sector code) (in 000s)* Loans Real Estate Investment/ Rental & Leasing $ 1,083,761 54.7% Construction/ Builders
Slide 14: Total Revolving Lines of Credit
Total Revolving Lines of Credit Total Revolving Lines of Credit $ in millions Revolving Line of Credit $ Line Utilization Overview Utilization & Rates • 13% Compound Annual Growth Rate (CAGR) for revolving • Use of floors on variable lines to mitigate NIM compression line amounts over last 8 quarter
Slide 15: SBA Lending and Shifting Market Dynamics
SBA Lending and Shifting Market Dynamics Optimizing SBA loan sales versus balance sheet portfolio based on secondary market conditions and loan yields. Approx 1/3 of on balance sheet SBA 7a balances are guaranteed. SBA Originations Increasing SBA Loan Balances SBA 7(a) Loan Sales & Premiums SBA 7(a)
Slide 16: Interest Rate Risk Management
Interest Rate Risk Management Loans Repricing & Maturities Interest Rate Sensitivity June 30, 2024 Fixed-Rate Loans Adjustable-Rate Loans (incl. Hybrids) Estimated Change from 6/30/24 Balance (in % of Balance (in % of Baseline forecast Term to Maturity 000's) Rate Loans Term to Rate Adjust 000's) Ra
Slide 17: Solid Credit Risk Management Metrics
Solid Credit Risk Management Metrics Proactive credit risk and loan portfolio management leading to minimal substandard assets and improving credit metrics Criticized Loans Classified Loans • Reduction of $9.7M in Criticized Loan balances in Q2’24 • Unsecured = any loans that are not secured by a re
Slide 18: Solid Credit Risk Management Metrics
Solid Credit Risk Management Metrics High-touch relationship-based banking model results in superior portfolio performance Credit Commentary (in thousands) • Proactive SBA and Loan Portfolio Management • 1 total non-performing loans ($2.5 million) • 1 unsecured C&I loan ($1.5 million ACL reserve) 18
Slide 19: Current Expected Credit Loss (“CECL”) Implementation
Current Expected Credit Loss (“CECL”) Implementation ACL Roll-Forward 3Q'23 4Q'23 1Q'24 2Q'24 Jun 30, 2023 Change in Sep 30, 2023 Change in Dec 31, 2023 Change in Mar 31, 2024 Change in Jun 30, 2024 $ in thousands CECL Reserve CECL Reserve CECL Reserve CECL Reserve CECL Allowance for loan losses 22,
Slide 20: Expenses and Operational Efficiency
Expenses and Operational Efficiency Ongoing focus on improving operating leverage through technology and process improvement initiatives while adding talent and improving capabilities and offerings to our Clients Non-interest Expenses Non-interest Expense & Efficiency Details • The decrease in the e
Slide 21: Strong Capital Position
Strong Capital Position Strong build of capital ratios through 2023 & 2024, even with sustained balance sheet growth and no planned dividends Select CalPrivate Bank Capital Ratios * *Preliminary Tangible Book Value per Share Capital Strategy • Manage capital to achieve strong levels of Return on Equ
Slide 22: Distinctly Different Service – 2023 NPS Score
Distinctly Different Service – 2023 NPS Score CalPrivate Bank's premium service model is a disruptor in the banking sector. Our Distinctively Different Service continues to differentiate us in the markets we serve. tm 2023 Top Banks and Service Businesses (1) CPB client satisfaction over 2x 82 CalPr
Slide 23: Community Outreach & Diversity
Community Outreach & Diversity Community Support • An important aspect to our company culture is community engagement • CalPrivate Bank donates to non-profit organizations across a wide range of community groups from Los Angeles to San Diego • Employee contributions are matched • Team members donate
Slide 24: Technology & Innovation Differentiation
Technology & Innovation Differentiation •Investment in technology is a competitive necessity •Enables improved performance by providing improved Client Experience, Technology Principles expansion of the Client base and increased productivity •Helps address regulatory pressure related to managing ope
Slide 25: Management Contacts
Management Contacts Rick Sowers President & Chief Executive Officer o. 424.303.4894 c. 310.569.3635 e. rsowers@calprivate.bank Cory Stewart EVP & Chief Financial Officer c. 206.293.3669 e. cstewart@calprivate.bank 25
Slide 26: Q&A
Q& A (OTCQX: P B A M ) (Holding Company for CalPrivate Bank)
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