Banc Of California, Inc. · NYSE:BANC
Banc Of California — First Pactrust Bancorp — Merger or Acquisition (September 2011)
51 slides from Banc Of California's merger presentation, Sep 8, 2011
Slide 1: September 2011
September 2011
Slide 2: Forward Looking Statements
Opdctrust Forward Looking Statements Forward-Looking Statements This presentation includes forwarc-looking statements within the mesning of the ‘Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actua
Slide 3: First PacTrust Bancorp, Inc.
Opactrust First PacTrust Bancorp, Inc. BANCORP, INC v First PacTrust offers investors an attractive investment opportunity — Top notch management team focused on execution and growth — Currently trading at discount to tangible book value — a significant discount to peers v First PacTrust is a profit
Slide 4: Executing on Growth
Opa ctrust ANCORPING: Executing on Growth Significant Progress Since Raising Capital in November 2010 10 011 Received esrllne andSan Marcos ommercia! Real || santa Monica and sesttsoretrta || setesanter |] COPOCHY |] covey ausns we |] aaanteneoe || Ric ceocterreand || Seaiisonkne || ,celand |I Croot
Slide 5: Overview
Executing on Growth Opdctrust Overview BANCORP, INC Community Roots ¥ OCC Regulated Institution Y Insured by the FDIC Ranking for Largest Community Bank Franchises in San Diego by Assets * ¥ Founded in 1941 with 70 years of cont operations (public since 2002) Most 4° Borner Gredie union for Rohiy In
Slide 6: CAMEL Summary as of 6/30/11
Opdctrust CAMEL Summary as of 6/30/11 BANCORP, INC CAPITAL ASSETS MANAGEMENT EARNINGS LIQUIDITY Key Metrics ¥ $13.91 Tangible Common Equity per share ¥ $160.5 million Tangible Common Equity ¥ 11.6% Tangible Common Equity (Bank) ¥ 16.0% Tier 1 Risk-Based (Bank) ¥ 17.2% Total Risk-Based (Bank) ¥ $172.
Slide 7: Growth Strategy
Oactrust Growth Strategy BANCORP, INC: Executing on Growth 1. Organic Growth 2. Traditional M&A 3. FDIC-Based M&A Y Increase market penetration within the Bank's primary footprint and expand into neighboring regions — Acquire prime branch locations from distressed sellers or the FDIC — Open new reta
Slide 8: Business Foundation - Philosophy
Executing on Growth © pdctrust Business Foundation - Philosophy BANCORP, INC Scalable Management Business Team To become the “bank of jes, high net worth dividuals, small to mid y Access to sses and their owners Capital Market Opportunity
Slide 9: Management Team
Obdctrust Management Team BANCORP, INC: Officer Greg Mitchell Richard Herrin Matt Bonaccorso Marito Domingo Chang Liu Gaylin Anderson Posi President & CEO n Chief Administrative Officer Chief Credit Officer Chief Financial Officer and Treasurer Chief Lending Officer EVP — Retail Banking v << ee Exp
Slide 10: Access to Capital
Executing on Growth Opdctrust Access to Capital BANCORP, INC: Bancorp maintains 18.2% tangible equity to total assets* Y Strong capital position made stronger through $26 FPTB: TCE to Assets o million common equity raise (completed at a 4.4% 20.0% discount to market); FPTB’s tangible common equity t
Slide 11: Impact of SBLF on Capital Accounts
6) FIRST pa BANCORP, INC: $32 million investment in First PacTrust as of 6/30/2011 would have increased consolidated total equity from $160.5 million to $192.5 million, or 21.1% of assets **. 90% of SBLF proceeds will be invested in PacTrust Bank with 10% held at Bancorp for general corporate purpos
Slide 12: Market Opportunity
Executing on Growth Opactrust Market Opportunity BANCORP, INC: Southern California Banks with Assets < $1.0 Billion* Service Area Los Angeles Service Areas ‘San Diego/Orange County Service Areas Number | Assets ($mm) | Assets/Bank ($mm) 88 $24,555,905. $14,865,761 $279,044 $256,306 Belief Rationale
Slide 13: Strong Balance Sheet
© FIRST Executing on Growth pactrust Strong Balance Sheet BANCORP,INC> Assets as of June 30, 2011 Oo Liabilities as of June 30, 2011 12
Slide 14: Scalable Business
Executing on Growth ra) Opdctrust Scalable Business BANCORP,INC> Rationale
Slide 15: Market Beginning to Recognize Execution
Executing on Growth Opdctrust Market Beginning to Recognize Execution BANCORP, INC Relative Performance First PacTrust Bancorp, ne. - Price Change (%) é Market Cap $137.7M AvgVolume(3M) 73,854 Raa Iona vM TangibleBookValue $160.5M_Volatility 37% « u f ANN 1 al 4 \ Shares Outstanding 11,596,270 Beta
Slide 16: Market Valuation of Peers
Executing on Growth Opdctrust Market Valuation of Peers BANCORP, INC: lend Paying Banks, < $2.5b in Assets, Raised > $30m since 1/2009 Company Name State _ Stock Price ($)__TBV ($) Bank of Commerce Holi BOCH cA 3.92 475 CNB Financial Corporation CCNE Clearfield PA 13.09 831 First of Long Island Corp
Slide 17: Business Plan
6) FIRST pactrust Business Plan BANCORP, INC: ¥ Further strengthen infrastructure ¥ Grow core earnings by prudently deploying capital into CRE and C&l lending v Further improve asset quality — Performance and systems ¥ Grow core earnings by prudently deploying capital into CRE and SFR lending Y Open
Slide 18: Loans and yield
Executing on Growth Opdctrust Loans and yield BANCORP,INC> Y As of June 30, 2011 loan balance increased to . ay : Outstanding Loan Balances $670 million after consecutive quarters of {amounts in § milion /% annualized) decline $750 6.00% ¥ Launch of CRE lending platform and re-launch of SFR lending
Slide 19: Deposits and cost of deposits
Executing on Growth O)pdctrust Deposits and cost of deposits BANCORP,INC> Y As of June 30, 2011 total deposits stood at $686 Outstanding Deposit Balances million {amounts in milions/% annualized) $750 6.00% — Growth from La Jolla (de novo) branch accounted for $16 million of Q2 2011 increase ($24 mi
Slide 20: Delivering Strong Earnings While Building for Growth
Delivering Strong Earnings Opdctrust While Building for Growth BANCORP, INC Y Q2 2011 earnings of $1.5 million; $2.3 million year-to-date v Improved credit quality ¥ Improved quality of earnings — Lending platforms produced $33 million of production and strong pricing — New branches delivering organ
Slide 21: Why Invest in First PacTrust Bancorp?
Executing on Growth Opdctrust Why Invest in First PacTrust Bancorp? BANCORP, INC v First PacTrust is a profitable bank with a strong dividend — Scalable balance sheet and strong opportunities to prudently originate new loans in CRE, construction, and C&l asset classes — Quantifiable loan portfolio —
Slide 22: Appendix A: Beach Business Bank Acquisition
Opdctrust BANCORP, INC> Appendix A: Beach Business Bank Acquisition | 24
Slide 23: Transaction Overview
Executing on Growth st Opdctrust Transaction Overview Structure v¥ Whole company acquisition of Beach Business Bank Transaction Type ¥ BBBCshareholders expected to receive combination of cash and equity representing up to 1.362 million shares of First PacTrust. Terms Y Consideration of $37.4 million
Slide 24: Transaction Rationale
Executing on Growth Opdctrust Transaction Rationale Y Consistentwith First PacTrust’s stated objective of expanding its Southern California community banking business ¥ Transforms and strengthens First PacTrust by increasing scale and providing strong entry into business banking which can be execute
Slide 25: Overview of Beach Business Bank
Executing on Growth Opactrust Overview of Beach Business Bank Pro Forma Branch Map = se: Bank Name Beach Business Bank| Headquarters Manhattan Beach, CA| Date Established June 1, 2004 Depository Branches 3 Total Assets 202,709 Cash & Securities 55,134 Gross Loans Total Deposits 263,111 » x 8 g Tangi
Slide 26: Mutually Beneficial Transaction
Executing on Growth Opdctrust veo Mutually Beneficial Transaction Se 0 Benefits to First PacTrust Bancorp Benefits to Beach Business Bank v v a %& High quality deposit relationships groups Y Approximately 53% acquisition premium relative to — 90% core transaction accounts BBBC’s most recent closing
Slide 27: Summary
Executing on Growth st Opdctrust Summary Y The acquisition of Beach Business Bankis expected to be immediately accretive to earnings Strategic Fit Represents a strategic, financial and cultural fit with First PacTrust Bancorp and Attractive Y Expands PacTrust’s Southern California footprint into key
Slide 28: Comparable Transactions
Opa were: — Comparable Executing on Growth CTrUS Transactions ; Cash Target Announce ‘Deal Value Portion Assets aee eee _Target Nam __(g (5%) ($000) Boo 6/29/2011 _ First Foundation Inc. Desert Commercial Bank. 20.1 NA 153,041 6/9/2011 SKBHC Holdings LLC Sunrise Bank 185 100.0% — 231,990 6/6/2011 __
Slide 29: Appendix B: Overview of Gateway Transaction
Opdctrust BANCORP, INC> Appendix B: Overview of Gateway Transaction | 28
Slide 30: Transaction Overview
Executing on Growth Opdctrust Transaction Overview ANCORP,INC> Structure Whole company acquisition of Gateway Bancorp and its wholly owned subsidiary Gateway Business Bank, including Mission Hills Mortgage Bankers, a division of the Bank Transaction Type Stock purchase agreement Terms Cash considera
Slide 31: Transaction Rationale
Executing on Growth Opdctrust Transaction Rationale BANCORP,INC> Y Gateway’s franchise fits within FPTB’s community banking strategy — Accelerates entry into Los Angeles County — Lakewood, CA — Marks entry into Orange County — Laguna Hills, CA — Diversifies revenue sources by adding attractive non-i
Slide 32: Expanding Our Footprint
Executing on Growth Oedctrust Expanding Our Footprint BANCORP,INC> Company Overview Pro FormaBranch Map Holding Company Name Gateway Bancorp Bank Name Gateway Business Bank Headquarters Cerritos, CA Date Established 3/10/1997 Depository Branches 2 Mortgage Offices 22 Administrative Offices 1 Total A
Slide 33: Mortgage Origination Platform
Executing on Growth Oactrust Mortgage Origination Platform BANCORP, INC: Pro Forma Map v Gateway operates as Mission Hills Mortgage Bankers with mortgage offices — Founded in 1969 — Low risk traditional retail operation — Focused on conventional conforming and FHA/VA purchase money transactions — So
Slide 34: Financial Considerations
Executing on Growth Opdctrust Financial Considerations BANCORP,INC” P&L Impact Projecting $3.0+ million of annual earnings contribution from new entity Moderate cost savings assumptions and no revenue synergies One-time deal related expenses of $1.25 million, pre-tax Consideration Structure Total co
Slide 35: Appendix C: Additional Company Information
Opdctrust BANCORP, INC> Appendix C: Additional Company Information 34
Slide 36: PacTrust Bank Pro Forma Balance Sheet
Executing on Growth Opdctrust PacTrust Bank Pro Forma Balance Sheet rr = pachust Bank [ Combined Company** Total Assets || 1,041,213 Total Assets $ 1,344,307 cash & Securities | Cash & Securities $ 256,478 sieastaais Deposits $ 1,097,138 Deposits || 193,746 Tg. Common Equity | ‘Source: SNL Financial
Slide 37: Franchise Map: Branches & Offices
Executing on Growth Opdctrust Franchise Map: Branches & Offices BANCORP,INC> Pro Forma Banking Branch Map* Pro-formamap with mortgage offices @ FPTB branch location @ Proposed FPTB branch location | @ Gateway depository branch location* @ Beach depository branch location* @ Mission Hills Mortgage of
Slide 38: Pacific Trust Bank Loan Composition
Executing on Growth Opdctrust Pacific Trust Bank Loan Composition BANCORP,INC Trust Bank’s loan portfolio consists predominantly of of the Bank’s gross loan: Loan Breakdown as of 6/30/11 Consumer 1-4 Unit Residential Balance Multifamily onsen se ON 41D $331,599,451 1-4 Unit Resi 1° TD “Green” Accts
Slide 39: Pacific Trust Bank Location of SFR Loans
Executing on Growth Opdctrust Pacific Trust Bank Location of SFR Loans BANCORP, INC: ted in highly des: in southern of Avg Bal 4. La Jolla B $104.5MM 14M 2. Pacific Beach 2 $64.5MM STs7k 3. Coronado 39 $40.3MM S1.0MM ag eee 2 $17.4NM $1.5MM ee ae 4 $12.1M $867K 6. Downtown 18 $9.1MM $506k 7-Hilleres
Slide 40: Primary Market Area Is Recovering
Executing on Growth Opdctrust Primary Market Area Is Recovering BANCORP,INC> ary market area of San Diego has exhibited strong recovery rates in home price: San Diego County Home Prices |! 180% 160% San Diego Market 140% 120% 80% Ce are 40% 20% 0% 4 - - - - - - - - 2003 ©2004 «= «2005 «2006 «= 2007,
Slide 41: Credit quality and provision
Executing on Growth Opdctrust Credit quality and provision BANCORP,INC> v Early delinquencies at lowestlevel vs. past 4 quarters V NPLsat lowest level vs. past 5 quarters V REO increased as resolution activity matures v ALLLreflects the improvement in credit quality v ALLLas % NPL held constant Allo
Slide 42: Summary of Asset Quality Ratios
Opdctrust Summary of Asset Quality Ratios BANCORP, INC: The Company's Credit Metrics Continue to Improve Delinquencies represent 5.24% of net loans compared to 8.173 Executing on Growth 9.00% 8.00% 7.00% S00% ie. > 5.00% 4.00% 3.00% i 2.00% 1.00% 0.00% 6730/10 9/3010 2110 Batt e011 DQ/Loans 781% 7.1
Slide 43: Delinquent Mortgages
6) FIRS pa T The Company’s total delinquencies declined by $16MM or 37: ctrust Delinquent Mortgages* BANCORP, INC: % from the previous quarter. Executing on Growth $60,000,000 $50,000,000 + $40,000,000 $30,000,000 + $20,000,000 }——-_,),)§@ ——____— $10,000,000 so 630/10 9/30/10 28110 3B 630/11 =30s|
Slide 44: Non-Performing Asset Overview
Opdctrust Non-Performing Asset Overview BANCORP, INC: Consolidated* Executing on Growth The Company has $8.4 million of loan loss reserves which provide strong coverage against ion in Core NPLs The $15 mi 30,000,000 25,000,000 $15,018,818 20,000,000 56725978 15,000,000 $6,725,979 $6,725,979 10,000,0
Slide 45: Classified/Criticized Loans
Executing on Growth Opdctrust Classified/Criticized Loans BANCORP, INC: Pacific Trust Bank’s classified loans decreased in 3Q10 and 4Q10 from its peak in 2Q11 $120,000,000 $10,000,000 ‘Ey $80,000,000 $37,961,750 Total Special at Mention $60,000,000 $38,721,020] esy 600 544 Total $40,000,000 —— ‘Subs
Slide 46: Summary of Classified Loans
Executing on Growth Opdctrust Summary of Classified Loans BANCORP,INC> Most of the Compan’ Reason for SM #of ‘Balance ‘% of SM Reason for Sub ion Loans Loans lassi ion 60 Days DQ 4 $3,149,320 17% Non-Performing (90+ Days DQ) 16 $13,907,255 41% Current but past due 1 or more times in past 6 months 16
Slide 47: TDR- Pacific Trust Bank
Executing on Growth Opdctrust TDR- Pacific Trust Bank BANCORP,INC> Performing TDR are well seasoned with solid yields Weighted Payments Book Value | AvgloanSize | Avgint Rate 2 Payment 2 $687,678 $343,859 1053% 2 Payments ° WA NA N/A +3 Payments : ° N/A NIA N/A 4 Payments ° N/A WA N/A 5 Payments ° W
Slide 48: HELOC- Pacific Trust Bank
‘) Executing on Growth pdctrust HELOC- Pacific Trust Bank BANCORP.INC” Most of our “HELOCS” are FIRST TRUST DEED “GREEN” ACCOUNTS Call Report data shows $214 million of “HELOCS” which are primarily 1st TD mortgages to high net worth borrowers. ¥ 1st TD HELOCs have: — Average FICO score at originatio
Slide 49: OREO - Bancorp and Bank
6) FIRS pa BANCORP, INC: As of June 30, 2011, OREO balances totaled $15.0 million — Pacific Trust Bank holds 19 OREO assets (all single-family homes) with a net value of $7.6 million — Bancorp holds 4 OREO assets including 2 land, 1 construction and 1 SFR with an aggregate value of $7.4 million; rep
Slide 50: Non-GAAP Financial Information
Executing on Growth Odctrust Non-GAAP Financial Information BANCORP, INC This presentation contains certain financial information determined by methods other than in accordance with accounting principles generally accepted in the United States ('GAAP"). These non-GAAP financial measures include tang
Slide 51: Non-GAAP Financial Information (Continued)
6) FIRST p BANCORP,INC> ctrust Non-GAAP Financial Information (Continued) The following table presents a reconciliation of core earnings to net income (dollars in thousands): Netincome $ Less: Gain-on-saleof securities (net of tax) ‘Add: Non-core change of control payment (net of tax) ‘Add: Non-core
First Pactrust Bancorp — Merger or Acquisition (September 2011) on 6ix