Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q4 2022 Earnings Presentation
29 slides from Banc Of California's earnings presentation, Jan 24, 2023
Slide 1: Investor Presentation Q4 2022
www.bancofcal.com Investor Presentation Q4 2022
Slide 2: Forward Looking Statements
2 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Forward Looking Statements When used in this report and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), in press releases or other pu
Slide 3: Executive Management Team
3 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Executive Management Team Together Since 2019; Track Record of Strong Performance At Larger Institutions Jared Wolff (Joined 2019), President and Chief Executive Officer A veter
Slide 4: Banc of California at a glance
4 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. 14.8%(1) Adjusted FY2022 ROTCE $7.1 Billion Total Loans (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation. 4Q22 capital ratio
Slide 5: BANC is a Compelling Value Proposition Against Top Peers
5 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. ~2/3 of loans backed by residential real estate and a robust 1.28% loan loss reserve Positioned to Deliver Through an Economic Downturn Potential for Diversified Earnings Stream
Slide 6: BANC Aims to be the Hub of the Financial Services Ecosystem
6 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. BANC Aims to be the Hub of the Financial Services Ecosystem for our Clients Focus on Core Business Banking and Serving SMID Size Businesses that Power our Markets COMMUNITY BANK
Slide 7: Executing On Planned Strategic Initiatives
7 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Executing On Planned Strategic Initiatives Phase One 2019-2020 Building the Foundation(1) • Improved deposit mix Noninterest bearing deposits increased to ~40% of total deposi
Slide 8: Fourth Quarter and FY 2022 Results Continued to Strengthen the Franchise
8 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Fourth Quarter and FY 2022 Results Continued to Strengthen the Franchise (1) Denotes a non-GAAP financial measure; see “Non-GAAP Reconciliation” slides at end of presentation. (
Slide 9: Delivering on our Strategic Transformation Plan
9 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. (1) FY2019 includes a $35.1 million pre-tax provision for credit losses due to the charge-off of a single loan and FY2022 includes a $31.3 million pre-tax reversal of credit los
Slide 10: Strong Current Performance Against Top NIB Deposit Peers
10 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Peers with >35% NIB Deposits trade for an avg. of 2.0x TBVPS and 10.6x 2023E EPS Strong Current Performance Against Top NIB Deposit Peers BANC(1) Peers(2) 2% -12% 2022 TBVPS Ch
Slide 11: Overview of Deepstack Technologies Acquisition
11 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Overview of Deepstack Technologies Acquisition Provides Banc of California with proprietary payments software solution and entrance into payment processing space for business
Slide 12: Deepstack Technologies - A Full Suite of Payments Capabilities
12 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Owning the technology that powers payment processing offers clients same day visibility into their receivables when they have their merchant settlement account at BANC, providi
Slide 13: Owning the Payment Tech Stack and a Direct to Merchant Software Solution
13 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Owning the Payment Tech Stack and a Direct to Merchant Software Solution Provides BANC with Compelling Economics Illustrative: $100 Transaction Value with a 250 bps Credit Card
Slide 14: Consistent Growth in Commercial Noninterest-Bearing Deposits
14 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Consistent Growth in Commercial Noninterest-Bearing Deposits (NIB) and Number of Accounts 9,920 10,945 11,270 11,444 11,644 14,244 14,292 14,300 14,541 14,497 2019Y 2020Y 1Q21
Slide 15: Strong Margin and Earning Asset Yield
15 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Strong Margin and Earning Asset Yield 3.09% 0.51% 0.09% 1.02% 3Q20 4.04% 3.38% 0.36% 0.09% 0.89% 4Q20 3.78% 3.19% 0.28% 0.08% 0.83% 3.81% 3.27% 0.23% 0.07% 0.77% 2Q21 3.73% 3.2
Slide 16: Strong and Growing Profitability
16 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Strong and Growing Profitability FY2020 FY2021 $106.3 $22.1 FY2022 $16.8 $61.4 $128.4 Adjusted Net Income Available to Common ($ millions)(1) $0.33 $1.15 $1.74 $0.36 FY2020 FY2
Slide 17: Protection of Tangible Book Value
17 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. In 2022, we realized growth in TBV per common share(1), as a result of good earnings and prudent balance sheet management, which more than offset negative AOCI marks, dividends
Slide 18: Solid Asset Quality
18 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Solid Asset Quality (1) SFR average LTV is 57% as of 4Q22. (2) The NPL ratio related to BANC originated loans is 0.49% when PMB’s NPLs of $21.6 million and PMB acquired loans o
Slide 19: Robust Capital Base
19 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Robust Capital Base 4Q21 1Q22 2Q22 3Q22 4Q22 Common Equity Tier 1(1) 11.31% 11.40% 11.29% 11.43% 11.88% Tier 1 Risk-based Capital(1) 12.55% 11.40% 11.29% 11.43% 11.88% Leverage
Slide 20: 2022 Strategic Goals
20 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. 2022 Strategic Goals We delivered on what we said we would do in our Q4 2021 Investor Presentation • Redeemed Series E preferred stock in 1Q22 for annualized savings of $6.9 mi
Slide 21: 2023 Strategic Goals
21 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. 2023 Strategic Goals • Continued focus on noninterest-bearing deposits, credit quality, robust capital and tangible book value growth • Build highly-differentiated payment busi
Slide 22: Appendix
22 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Appendix
Slide 23: Steady Increase in Pre-tax Pre-provision Profitability
23 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Steady Increase in Pre-tax Pre-provision Profitability Adjusted Pre-tax Pre-provision (PTPP) Income(1) $16.0 $13.2 $12.2 $18.9 0.65% 0.83% 0.98% 1.25% 1.06% 1.35% 1.39% 1.55% 1
Slide 24: Non-GAAP Financial Information
24 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Financial Information This presentation contains certain financial measures determined by methods other than in accordance with U.S. generally accepted accounting prin
Slide 25: Non-GAAP Reconciliation
25 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Reconciliation (1) Non-GAAP measure. (2) Ratio presented on an annualized basis. (Dollars in thousands) 4Q22 3Q22 4Q21 FY2022 FY2021 FY2020 FY2019 Net interest income
Slide 26: Non-GAAP Reconciliation
26 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Reconciliation (1) Non-GAAP measure. (2) Ratio presented on an annualized basis. (Dollars in thousands) 4Q22 3Q22 4Q21 FY2022 FY2021 FY2020 FY2019 Adjusted Noninterest
Slide 27: Non-GAAP Reconciliation
27 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Reconciliation (1) Non-GAAP measure. (Dollars in thousands) 4Q22 3Q22 4Q21 FY2020 FY2019 Tangible Common Equity to Tangible Assets Ratio Total assets $ 9,197,016 $ 9,3
Slide 28: Non-GAAP Reconciliation
28 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Reconciliation (1) Non-GAAP measure. (2) Tax impact of adjustments shown at a statutory tax rate of 29.6%. (Dollars in thousands) 4Q22 3Q22 4Q21 FY2022 FY2021 FY2020 F
Slide 29: Non-GAAP Reconciliation
29 © 2022 Banc of California, N.A., a wholly owned subsidiary of Banc of California, Inc. All rights reserved. Member FDIC. Non-GAAP Reconciliation (1) Net income and adjusted net income for the year ended December 31, 2022 includes a $31.3 million pre-tax reversal of credit losses due to the recove