Private Bancorp of America, Inc. · NASDAQ:PBAM
Private Bancorp of America — Q3 2023 Earnings Presentation
24 slides from Private Bancorp of America's earnings presentation, Oct 20, 2023
Slide 1: Q3 2023 Investor Update
Private Bancorp of America, Inc. (QTCQX: PBAM) (Holding Company for CalPrivate Bank) Q3 2023 Investor Update October 20, 2023
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: Q3 2023 Results and Highlights
Q3 2023 Results and Highlights • Financial * Highlights Operational • * & Performance Highlights • 48.51% Efficiency Ratio • $8.5 million Net Income • 4.67% Net Interest Margin • $1.47 Earnings Per Diluted Share • 1.68% Return On Average Assets • $2.1 billion Assets • 19.74% Return On Average Tangib
Slide 5: Strategic Focus – 2023
Strategic Focus – 2023 • Drive organic growth through relationship‐based banking, expanding current client relationships and obtaining new ones Opportunistic Balance Sheet • Opportunistic top‐tier talent acquisition for new markets and current market expansion Growth • Broader penetration into High
Slide 6: Managing NIM in a Volatile Environment
Managing NIM in a Volatile Environment Asset Yields & Cost of Funds NIM Protection Strategy Proven Relationship Banking model allows for frequent communication and keen understanding of Client needs Strong Loan Yields • Desirable mix of Fixed, Variable and Hybrid loan types • Fixed Rate Loan Terms g
Slide 7: Strong Deposit Franchise
Strong Deposit Franchise Emphasis on deposit retention in an environment of rising deposit rates and extreme competition. Growing Customer Deposits Deposit Rate Trends 70% 6.00% 5.26% 4.99% 60% 4.52% 5.00% 3.65% 4.00% 50% 3.00% 40% 2.20% 2.18% 1.67% 1.32% 1.92% 2.00% 1.13% 1.59% 30% 1.48% 0.39% 1.23
Slide 8: Strong Liquidity & Funding Position
Strong Liquidity & Funding Position Focus on maintaining strong liquidity position and optimizing funding mix Liquid Assets Total Available Liquidity Note: Dollars in Millions 16.4% & Unused % of Uninsured $350 17.0% Liqudity Sources (000's) Deposits 13.8% 15.0% $300 12.5% 13.0% Cash, unrestricted 1
Slide 9: 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 reasonable rates of return (Contract Amount, $ in millions) Commentary • Current lending strategy targets the use of Prepayment Penalti
Slide 10: Demonstrated Organic Growth in Loans
Demonstrated Organic Growth in Loans Relationship‐based banking strategy continues to result in strong loan growth (18% YoY) and increasing yields Note: Dollars in Millions 10
Slide 11: Loan Portfolio Breakdown
Loan Portfolio Breakdown Loan Portfolio by Industry Loan Secured by Real Estate Borrower's Industry Total % of Total (by NAICS sector code) (in 000s)* Loans $1,416 Million of Loan Portfolio Secured by Real Estate (80%) Real Estate Investment/ Rental & Leasing $ 883,044 49.9% Construction/ Builders &
Slide 12: Line Utilization and 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 • 19% Compound Annual Growth Rate (CAGR) for revolving • As rates rise, income will adjust upwards on funded line amounts over last 8 quarters amount
Slide 13: SBA Lending and Shifting Market Dynamics
SBA Lending and Shifting Market Dynamics Shifting loan sales to balance sheet portfolio given softness in market and attractive loan yields, partially offset by higher prepay speeds on the SBA 7a portfolio. Approx 1/3 of 7a balances are guaranteed. SBA Originations Increasing SBA Loan Balances SBA 7
Slide 14: Interest Rate Risk Management
Interest Rate Risk Management Loans Repricing & Maturities Interest Rate Sensitivity September 30, 2023 Fixed‐Rate Loans Adjustable‐Rate Loans (incl. Hybrids) Estimated Change from 9/30/23 Baseline forecast Balance (in % of Term to Rate Balance (in % of Term to Maturity 000's) Rate Loans Adjust 000'
Slide 15: Solid Credit Risk Management Metrics
Solid Credit Risk Management Metrics High‐touch relationship‐based banking model results in superior portfolio performance Credit Commentary • Proactive SBA and Loan Portfolio Management • 4 total non‐performing loans ($5.1 million) • 1 CRE Loan with 46% LTV • 1 SBA Loan with 75% Guarantee ($285K Gu
Slide 16: Solid Credit Risk Management Metrics
Solid Credit Risk Management Metrics Proactive credit risk and loan portfolio management leading to minimal substandard assets Criticized Loans Classified Loans • Total Unsecured Criticized Loans were $0 for all periods. • Unsecured = any loans that are not secured by a real estate property or cash
Slide 17: Current Expected Credit Loss (CECL) Implementation
Current Expected Credit Loss (“CECL”) Implementation ACL Roll‐Forward CECL Adoption Jan 1, 2023 1Q'23 Change Mar 31, 2023 2Q'23 Change Jun 30, 2023 3Q'23 Change Sep 30, 2023 Dec 31, 2022 $ in thousands Impact CECL in Reserve CECL in Reserve CECL in Reserve CECL Allowance for loan losses 19,152 1,910
Slide 18: 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 Details • Increase in Professional Services
Slide 19: Strong Capital Position
Strong Capital Position Capital levels remain strong with earnings supporting growth capital needs in near term Selected CalPrivate Bank Capital Ratios * *Preliminary Tangible Book Value per Share Capital Strategy • Manage capital to achieve high levels of Return on Equity • Proven ability to add sh
Slide 20: Distinctly Different Service – 2023 NPS Score
Distinctly Different Service – 2023 NPS Score CalPrivate Bank service model is a disruptor in the banking sector. 2023 Top Banks and Service Businesses (1) CPB client satisfaction over 2x 82 CalPrivate Bank higher than U.S. Banking Industry 69 USAA (top ranked Bank) Exceptional service is our key
Slide 21: Community Outreach & Diversity
Community Outreach & Diversity Community Support • An important aspect to our company culture is community engagement • CalPrivate 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 volu
Slide 22: Technology & Innovation Differentiation
Technology & Innovation Differentiation • Added Board level expertise in technology, audit and innovation Technology & Innovation Board • Dedicated focus on digital transformation Committee • Provides oversite on roadmap, governance and budget • Enhancing focus on Cybersecurity and emerging security
Slide 23: 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 23
Slide 24: Q&A
Q&A Priv a t e B a n c o rp o f A m e ric a , I n c. (QT C Q X: P B AM ) (Holding Company for CalPrivate Bank)
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