Banc Of California, Inc. · NYSE:BANC
Banc Of California — Investor Presentation (May 2018)
25 slides from Banc Of California's investor presentation, May 9, 2018
Slide 1: Investor Presentation
May 9, 2018 Investor Presentation Exhibit 99.1
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: Our Franchise: We Are California's Bank
Market information as of 5/7/2018. Annualized dividend yield. Financial information as of March 31, 2018. Total loans held for investment. Ticker: NYSE: BANC Market Cap: $946 million - Price Per Share: $18.70 - Dividend Yield: 2.78% Our Franchise WE ARE CALIFORNIA’S BANK Highlights California Footpr
Slide 4: Business Management Team and Board of Directors
Business Management Team Name Position Years with BANC Industry Experience Douglas H. Bowers President & CEO 1 Year 35 Years John A. Bogler Chief Financial Officer <1 Year 30 Years Jason Pendergist Head of Real Estate Banking <1 Year 17 Years Rita Dailey Head of Deposits & Treasury Management <1 Yea
Slide 5: BANC Strategic Roadmap Supported by Core Foundation
BANC Strategic Roadmap Supported by Core Foundation Focused on Core Deposits, Lending, Expense Normalization and Creating Stockholder Value Valuable Brand Great Markets Sized to Compete Strong Credit & Capital Leadership & Governance California’s Bank With a Strong Foundation Creating Stockholder Va
Slide 6: Q1 2018 Highlights
Strong Organic Loan Growth Continuation of Balance Sheet Re-Mix Disciplined Expense Management Held for investment loans grew on a net basis by $271 million, or 4% QoQ (16% annualized) – Gross loan commitment originations of $867 million at an average production yield of 4.99% Originated HFI loans i
Slide 7: Strategic Asset Re-Mix Continues
Dollars in millions Total Assets1 Strategic Asset Re-Mix Continues Re-Mix of Balance Sheet Toward Core HFI Loans Through Reduced Securities & Cash Balances Q1 Strategic Balance Sheet Re-Mix Activities 1 2 3 Cash and other declined by $119 million due to lower cash balances, lower loans held for sale
Slide 8: 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 Q1 Results Build Core Deposits Core Deposit Balance Growth Core deposits increased $55 million Brokered deposits declined $31 million and compl
Slide 9: Build Core Deposits: Stabilized Core Deposit Base
Dollars in millions Core deposits defined as non-brokered deposits Deposit Composition1 $207 Change 1Q vs. 4Q $31 $55 Build Core Deposits: Stabilized Core Deposit Base Core Deposits Increased by $55 Million, While Brokered & Run-off IB Deposits Declined by $238 Million BANC 2
Slide 10: Amplify Lending: Growing Loan Balances
Dollars in millions Includes Construction Gross loan commitment originations 1Q gross loan production3 of $867 million at 4.99% average production yield Loans Held for Investment1 Loans Held for Investment1 27% 25% 13% 14% 27% 28% 31% 32% +4% QoQ Amplify Lending: Growing Loan Balances Accelerated Lo
Slide 11: Strong Credit and Capital Are Hallmarks of BANC
Strong Credit and Capital Are Hallmarks of BANC Strong Credit Quality Coupled with Strong Capital Position NPAs/Assets1,2 Tangible Equity / Tangible Assets1,2 Peer Median: 9.2% Source: SNL Financial; Peers include US banks with assets between $9.5bn-13.0bn as of Q1 2018. Tangible Equity / Tangible A
Slide 12: Normalize Expenses
Loss on investments in alternative energy partnerships create tax credits to offset expense incurred. Continuing operations operating expense less non-recurring adjustments. Non-GAAP measure: Reconciliation table above. Continuing operations noninterest expense excluding loss on investments in alter
Slide 13: Long-Term Strategic Operating Targets
Financial Metric Long-Term Strategic Operating Targets 1Q 2018 Plan Tracking Comments Growth / Balance Sheet: - Loan Growth (HFI)¹ Mid-Teens +16% On Track - Deposit Growth (ex-brokered)2 Low-to-Mid Teens +4% Early Innings of Deposit & Treasury Management Build Out - Securities / Total Assets 15% - 2
Slide 14: Strategic Initiative Tracking – Q1 2018
Strategic Initiative Tracking – Q1 2018 Initiatives Support Strategic Roadmap and Reflect High Level Priorities to Support Plan Initiative Q1 Status Q1 Commentary Treasury Management Strategy: Sales & Products Organization Hired key sales and product leadership Expansion of TM sales professionals in
Slide 15: Appendix
Appendix
Slide 16: Interest Earning Assets and Interest Income
Average Interest Earning Assets End Quarterly Down Trend Interest Earning Assets and Interest Income Increasingly Driven by Core Lending Activities Net Interest Margin Components Interest Earning Assets1 Average, dollars in billions Includes loans held for sale and other interest-earning assets Doll
Slide 17: Q1 Operating Earnings from Continuing Operations
($ in millions) Continuing Operations (reported) Q1 non-recurring adjustments1 Q1 Operating Earnings from Continuing Operations2 Q1 Operating Earnings from Continuing Operations Normalized Tax Rate at 20%2 Net interest income $ 71.4 $ 71.4 Provision for loan and lease losses 19.5 (13.9) 5.6 Total no
Slide 18: Asset Quality Remains Strong and Stable
Nonperforming Assets1 Asset Quality Remains Strong and Stable 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 19: Solid Capital Ratios Exceeding Basel III Guidelines
Tangible Equity / Tangible Assets1 +8% Solid Capital Ratios Exceeding Basel III Guidelines Tier 1 Risk-Based Capital Ratio Supported by $269 Million of Preferred Equity Common Equity Tier 1 Ratio (CET1) +4% Tangible Common Equity / Tangible Assets1 +9% Tier 1 Risk-Based Capital Ratio +5% Non-GAAP me
Slide 20: Securities Portfolio
Securities Portfolio Dollars in millions Based on book value balances of rated securities, data at March 31, 2018 Dollars in billions Securities Portfolio Detail1 Security Type Book Value 4Q17 Book Value 1Q18 Q1 Change Fair Value 1Q18 Book Yield 1Q18 Duration 1Q18 Gov’t & Agency (Agency MBS) $ 493 $
Slide 21: Financial Summary
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 22: 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 23: Non-GAAP Reconciliation: Noninterest Expense
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Noninterest expense $ 59,812 $ 66,424 $ 79,008 $ 98,216 $ 124,615 Gain (loss) on investments in alternative energy partnerships, net 34 (3,995) (8,348) (9,761) (8,682) Adjusted noninterest expense $ 59,846 $ 62,429 $ 70,660 $ 88,455 $ 115,933 Net interest inco
Slide 24: Non-GAAP Reconciliation: Tangible Equity
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Total assets $ 10,329,319 $ 10,327,852 $ 10,280,028 $ 10,365,768 $ 11,052,085 Less goodwill (37,144) (37,144) (37,144) (37,144) (37,144) Less other intangible assets (8,510) (9,353) (10,219) (11,135) (12,191) Tangible assets $ 10,283,665 $ 10,281,355 $ 10,232,
Slide 25: Non-GAAP Reconciliation: Return on Tangible Common Equity
(in thousands) 1Q18 4Q17 3Q17 2Q17 1Q17 Average total stockholders’ equity $ 1,019,961 $ 1,014,368 $ 1,005,462 $ 1,014,267 $ 1,001,784 Less average preferred stock (269,071) (269,071) (269,071) (269,071) (269,071) Less average goodwill (37,144) (37,144) (37,144) (37,144) (39,221) Less average other
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