Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q3 2018 Earnings Presentation
21 slides from Banc Of California's earnings presentation, Oct 25, 2018
Slide 1: 2018 Third Quarter Earnings Investor Presentation
October 25, 2018 2018 Third 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 stockholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,
Slide 3: Third Quarter 2018 Highlights
Strong Organic Loan Growth Continuation of Balance Sheet Re-Mix Disciplined Expense Management Held for investment loans grew by $217 million, or 3% QoQ (12% annualized) – Gross loan commitment originations of $907 million at an average production yield of 5.22% Third quarter noninterest expense tot
Slide 4: Strategic Balance Sheet Re-Mix Activities
Dollars in millions Includes $1 million negative fair value change Q3 Strategic Balance Sheet Re-Mix Activities Securities declined by $237 million, including: - Sale of $25 million of CMBS - CLO net runoff of $194 million2 Increased overall HFI loans by $217 million, or 3% from the prior quarter 1
Slide 5: BANC Strategic Roadmap: Scorecard
BANC Strategic Roadmap: Scorecard Building Core Earnings Power for Sustainable Growth and Returns Over the Long Term Strategy Components Tracking Guideposts 9 Months 2018 Results Build Core Deposits Core Deposit Balance Growth Core deposits increased $584 million In Q1, completed the run-off of $207
Slide 6: Build Core Deposits: Stabilized Core Deposit Base
Dollars in millions Core deposits defined as non-brokered deposits Deposit Composition1 $332 $357 Build Core Deposits: Stabilized Core Deposit Base Core Deposits Increased by $171 Million in the Quarter, $57 Million of which is Non-Interest Bearing BANC 2
Slide 7: Amplify Lending: Growing Loan Balances
Gross loan commitment originations Dollars in thousands CRE includes Construction Gross loan commitment originations YTD gross loan production1 of $2.54 billion at 5.09% average production yield HFI Loan Production Yields vs. Portfolio Yields2 14% 28% Amplify Lending: Growing Loan Balances Loan Prod
Slide 8: Net Interest Margin
Net Interest Margin Re-mix of Assets, Liability Funding and Deposit Strategy Underway Net Interest Margin Components Interest Earning Assets1 Average, dollars in billions Includes loans held for sale and other interest-earning assets Dollars in millions, consolidated operations Interest Income3 2
Slide 9: Normalize Expenses: Leveraging Expenses Efficiently
Loss on investments in alternative energy partnerships create tax credits to offset expense incurred. Continuing operations operating expense less non-recurring adjustments. Non-GAAP measure: Reconciliation table above. Continuing operations noninterest expense excluding loss on investments in alter
Slide 10: Focusing on Core, Sustainable Returns
Includes non-recurring items, loss on investments in alternative energy partnerships, and income tax expense required to reach a normalized rate of 20%. Non-GAAP measure: Reconciliation table above. 3 Loss on investments in alternative energy partnerships create tax credits to offset expense incurre
Slide 11: Long-Term Strategic Operating Targets
Financial Metric Long-Term Strategic Operating Targets 9 Months 2018 Plan Tracking Comments Growth / Balance Sheet: - Loan Growth (HFI)¹ Mid-Teens +12% Loan sales temporarily slowed growth - Deposit Growth (ex-brokered)2 Low-to-Mid Teens +14% Early Innings of Deposit & Treasury Management Build Out
Slide 12: Asset Quality Remains Strong
Non-performing Assets1 Asset Quality Remains Strong Disciplined Credit Culture Continues to Drive Strong Asset Quality Dollars in millions, held for investment NPAs / Equity ALLL and NPL Coverage Total Delinquent Loans / Total Loans
Slide 13: Solid Capital Ratios Exceeding Basel III Guidelines
Tangible Equity / Tangible Assets1 Solid Capital Ratios Exceeding Basel III Guidelines 3Q18 Capital Reflects Redemption of $40 million Preferred Stock Common Equity Tier 1 Ratio (CET1) Tangible Common Equity / Tangible Assets1 Tier 1 Risk-Based Capital Ratio Non-GAAP measure. Reconciliation on slide
Slide 14: Appendix
Appendix
Slide 15: Securities Portfolio
Securities Portfolio Dollars in millions Based on book value balances of rated securities, data at September 30, 2018 Dollars in billions Securities Portfolio Detail1 Security Type Book Value 2Q18 Book Value 3Q18 Q3 Change Fair Value 3Q18 Book Yield 3Q18 Duration 3Q18 Gov’t & Agency (Agency MBS) $ 4
Slide 16: BANC Fast Facts & Preferred Equity Capital Structure
All figures from Continuing Operations unless noted; dollars in millions unless noted per share or percentage. Consolidated operations; Efficiency ratio adjusted for including the pre-tax effect of investments in alternative energy partnerships . Excluding loss on investments in alternative energy p
Slide 17: Non-GAAP Financial Measures
This presentation contains certain financial measures determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). These measures include noninterest expense from continuing operations, operating expense from continuing operations, and diluted earnings pe
Slide 18: Non-GAAP Reconciliation: Adjusted Efficiency Ratio
Non-GAAP Reconciliation Adjusted Efficiency Ratio Including the Pre-tax Effect of Investments in Alternative Energy Partnerships
Slide 19: Non-GAAP Reconciliation: Tangible Common Equity to Tangible Assets
Non-GAAP Reconciliation Tangible Common Equity to Tangible Assets and Tangible Equity to Tangible Assets
Slide 20: Non-GAAP Reconciliation: Return on Average Tangible Common Equity
Non-GAAP Reconciliation Return on Average Tangible Common Equity
Slide 21: Non-GAAP Reconciliation: Non-Interest Expense / Average Assets
Non-GAAP Reconciliation Non-Interest Expense / Average Assets 1. Continuing operations noninterest expenses excluding loss on investments in alternative energy partnerships, annualized, over average consolidated assets.