EX-99.2 3 d20338dex992.htm EX-99.2

EX-99.2

2015 Second Quarter Earnings

July 30, 2015

Investor Presentation

Exhibit 99.2

1

1

Forward-looking Statements

When used in this presentation and in documents filed with or furnished to the Securities and Exchange Commission (the “SEC”), or other public shareholder

communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases “believe,” “will,” “should,” “will likely result,”

“are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” or similar expressions are intended to identify “forward-looking statements” within

the meaning of the Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on any forward-looking statements, which speak

only as of the date made. These statements may relate to future financial performance, strategic plans or objectives, revenue, expense or earnings projections, or

other financial items of Banc of California Inc. and its affiliates (“BANC,” the “Company,” “we,” “us” or “our”). By their nature, these statements are subject to

numerous uncertainties that could cause actual results to differ materially from those anticipated in the statements.

Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to, the following: (i) risks that the

Company’s recently completed acquisitions, including the acquisitions of branches from Banco Popular, The Private Bank of California, CS Financial, Inc., and The

Palisades Group, may disrupt current plans and operations, the potential difficulties in customer and employee retention as a result of those transactions and the

amount of the costs, fees, expenses and charges related to those transactions; (ii) the credit risks of lending activities, which may be affected by further deterioration in

real estate markets and the financial condition of borrowers, may lead to increased loan and lease delinquencies, losses and nonperforming assets in our loan portfolio,

and may result in our allowance for loan and lease losses not being adequate to cover actual losses and require us to materially increase our loan and lease loss

reserves; (iii) the quality and composition of our securities and loan portfolios; (iv) changes in general economic conditions, either nationally or in our market areas; (v)

continuation of the historically low short-term interest rate environment, changes in the levels of general interest rates, and the relative differences between short-

and long-term interest rates, deposit interest rates, our net interest margin and funding sources; (vi) fluctuations in the demand for loans and leases, the number of

unsold homes and other properties and fluctuations in commercial and residential real estate values in our market area; (vii) results of examinations of us by regulatory

authorities and the possibility that any such regulatory authority may, among other things, require us to increase our allowance for loan and lease losses, write-down

asset values, increase our capital levels, or affect our ability to borrow funds or maintain or increase deposits, which could adversely affect our liquidity and earnings;

(viii) legislative or regulatory changes that adversely affect our business, including changes in regulatory capital or other rules; (ix) our ability to control operating costs

and expenses; (x) staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associate

charges; (xi) errors in our estimates in determining fair value of certain of our assets, which may result in significant declines in valuation; (xii) the network and

computer systems on which we depend could fail or experience a security breach; (xiii) our ability to attract and retain key members of our senior management team;

(xiv) costs and effects of litigation, including settlements and judgments; (xv) increased competitive pressures among financial services companies; (xvi) changes in

consumer spending, borrowing and saving habits; (xvii) adverse changes in the securities markets; (xviii) earthquake, fire or other natural disasters affecting the

condition of real estate collateral; (xix) the availability of resources to address changes in laws, rules or regulations or to respond to regulatory actions; (xx) inability of

key third-party providers to perform their obligations to us; (xxi) changes in accounting policies and practices, as may be adopted by the financial institution regulatory

agencies or the Financial Accounting Standards Board or their application to our business or final audit adjustments, including additional guidance and interpretation

on accounting issues and details of the implementation of new accounting methods; (xxii) war or terrorist activities; and (xxiii) other economic, competitive,

governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this report and from time

to time in other documents that we file with or furnish to the SEC. You should not place undue reliance on forward-looking statements, and we undertake no obligation

to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

2

2015 Second Quarter Summary

Net Income

$0.32 EPS (diluted); $0.29 prior quarter and $0.27 year ago

1.0% ROAA, 15% ROATCE

Revenues

Total

Revenue

up

23%

quarter-over-quarter

and

70%

year-over-year

Net Interest Income up 4% quarter-over-quarter and 52% year-over-year

Expenses

73% efficiency ratio (consolidated); 77% prior quarter and 85% year ago

Balance

Sheet

$6.4 billion total assets; up 6% quarter-over-quarter and 47% year-over-year

Noninterest-bearing deposits up 18% quarter-over-quarter and 116% year-over-year

Capital

Tangible equity to tangible assets up to 9.1% from 7.6% prior quarter

$290 million of capital raised in April, not yet fully deployed

CRA

Upgraded to “Outstanding” rating

3

3

0.8%

1.0%

0.8%

0.9%

1.0%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

12%

13%

11%

13%

15%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

85%

82%

90%

77%

73%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

3.88%

3.78%

3.82%

3.84%

3.92%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

1%

3.75 –

4.00%

Financial Performance Targets

15%

70 –

75%

1 Net Interest Margin shown for Banc of California, N.A. subsidiary. Excludes Holding Company debt interest expense.

Stated Year-End 2015 Run Rate Targets

ROAA

ROATCE

Net Interest Margin

Efficiency

Ratio

Met target levels

1

4

Income Statement

2Q 2015

Prior

Quarter

Prior Year

Net Interest

Income

$54.1

$52.0

$35.6

Noninterest Income

66.7

46.0

35.4

Total Revenue

120.8

98.0

70.9

Expenses

(87.9)

(75.9)

(60.3)

Pre-Tax,

Pre-Provision Income

32.9

22.1

10.6

Provision

5.5

0.0

2.1

Pre-Tax

Income

27.4

22.1

8.5

Tax

Benefit (Expense)

(11.5)

(9.5)

(0.4)

Net Income

15.9

12.6

8.1

Preferred Dividends

(2.8)

(0.9)

(0.9)

Net Income Available

to            

Common

$13.1

$11.7

$7.2

Diluted Earnings Per Share

$0.32

$0.29

$0.27

ROAA

1.0%

0.9%

0.8%

ROATCE

14.5%

13.5%

12.0%

($ in millions except per share data)

*

Figures may not foot due to rounding.

**  39.2 million average shares outstanding for 2Q  2015 fully diluted EPS calculation.

209%

97%

26%

49%

27%

19%

5

5

Business Segment Contribution

($ in millions)

* Figures may not foot due to rounding.

Pre-Tax Income

2Q 2015

1Q 2015

B/(W)

% Business

Segment

Income

% QoQ

Growth

Business Segments

Banking

$23.7

$15.9

$7.8

66%

80%

Mortgage Banking

10.3

9.6

0.7

29%

7%

Financial

Advisory /

Asset Management

1.9

0.6

1.3

5%

13%

Business

Segment Total

$35.9

$26.1

$9.8

Corporate / Other

(8.4)

(4.1)

(4.3)

Consolidated

$27.4

$22.1

$5.3

6

6

Profitability Trends

Net Interest Income

($ in millions)

0.74%

0.70%

0.60%

0.54%

0.50%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Cost

of Deposits

4.75%

4.62%

4.60%

4.59%

4.63%

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Loan Yields

$0.27

$0.31

$0.25

$0.29

$0.32

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

EPS

(per diluted share)

$35.6

$38.2

$46.3

$52.0

$54.1

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Target:

4.25

–

4.50%

Target:

0.50%

+52% YoY

+19% YoY

-3% YoY

-32% YoY

7

7

$26.1

$26.9

$25.0

$37.9

$39.4

$3.0

$10.3

$3.9

$4.5

$7.8

$1.8

$3.3

$6.7

$1.2

$4.4

$4.4

$3.6

$5.2

$2.4

$5.1

$35.4

$44.1

$40.9

$46.0

$66.7

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Mortgage Banking

Gain on Sale of Loans

Advisory Service Fees

All Other

Building Sale (gross)

Noninterest Income

Noninterest Income

($ in millions)

* Figures may not foot due to rounding.

$56.8

8

$798

$1,009

$1,258

$297

$240

$290

$188

$202

$297

$44

$52

$42

$1,327

$1,504

$1,887

4Q 2014

1Q 2015

2Q 2015

Mortgage Banking

Jumbo Mortgage

Commercial

Consumer / Other

Loan Originations & Loan Sales

*    Consumer / Other includes HELOC, Consumer, Construction and Rehab, & CS Financial

**  Commercial includes  C&I, CRE, Multifamily, SBA, Leases, & Warehouse Lending

Loan Originations

($ in millions)

$769

$922

$1,209

$194

$188

$167

$7

$45

$228

$969

$1,156

$1,604

4Q 2014

1Q 2015

2Q 2015

Mortgage Banking

Jumbo Mortgage

Commercial

Loan Sales

($ in millions)

9

9

$2.6

$3.3

$3.6

$3.5

$4.0

$4.0

$4.1

4Q 2013

1Q 2014

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

$46.0

$48.9

$48.0

$51.8

$58.8

$58.3

$64.7

$11.3

$8.7

$12.3

$13.2

$13.5

$17.6

$20.6

$2.4

$5.9

$2.6

4Q 2013

1Q 2014

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Base

Volume-Related

Acquisition/Non-core

Noninterest Expense

($ in millions)

Assets / FTE

($ in millions)

Noninterest Expense and Productivity

$60.3

$67.4

1

$78.2

1 Includes Mortgage Banking-related commissions, bonus and loan-related expenses.    

$75.9

$87.9

2

$44

$58

$58

$64

$59

$64

$76

4Q 2013

1Q 2014

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Revenue / FTE

($ in thousands)

$57.6

$57.3

10

Balance Sheet

2Q 2015

Prior Quarter

Prior Year

Cash and Deposits in Financial Institutions

$        461

$        267

$        260

Securities

541

394

233

Loans Held for Sale

747

1,241

1,096

Loans Held for Investment

4,473

3,934

2,602

ALLL

(35)

(29)

(23)

All Other Assets

251

291

218

Total Assets

$     6,438

$     6,097

$     4,386

Noninterest-bearing Deposits

$        868

$        749

$        408

Interest-bearing Deposits

4,184

4,113

2,939

Deposits Held for Sale

53

--

--

Deposits

5,105

4,862

3,347

FHLB Advances / Other Borrowings

350

560

450

Notes Payable

264

93

96

All Other Liabilities

85

69

53

Total Liabilities

5,804

5,583

3,947

Equity

634

514

439

Total Liabilities and Equity

$     6,438

$     6,097

$     4,386

($ in millions, period ending balances)

* Figures may not foot due to rounding.

72%

47%

53%

14%

6%

5%

11

Deposit Portfolio

$0.41

$0.46

$0.66

$0.75

$0.88

$2.9

$3.2

$4.0

$4.1

$4.2

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Noninterest-bearing Deposits

Interest-bearing Deposits

$5.1

$3.3

$3.6

$4.7

$4.9

Total Deposits

($ in billions)

Deposit Mix

(6/30/15 period end balance)

0.54%

0.60%

0.70%

0.74%

Cost of

Deposits:

0.50%

116%

44%

CAGR

CDs

19%

DDA

17%

NOW

20%

Savings

17%

Money

Market

27%

* All Balances  Period-End.

12

12

$455

$464

$613

$639

$960

$567

$548

$1,042

$1,014

$839

$234

$367

$956

$940

$697

$1,213

$1,191

$1,172

$1,169

$1,841

$1,096

$1,127

$1,187

$1,241

$747

$134

$142

$167

$171

$137

$3,698

$3,839

$5,136

$5,175

$5,220

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Business

Commercial Real Estate & Construction

Multifamily

Single Family Residential

Held for sale

Other

Loan Portfolio

Total Loans (HFS/HFI)

($ in millions)

1

1 Includes C&I, SBA & Leasing

* All Balances Period-End.

13

13

Capital Position

2Q 2014

3Q 2014

4Q 2014

1Q 2015

2Q 2015

Banc of California, Inc.

Tangible Equity

to Tangible Assets (TE/TA)

9.1%

9.0%

7.5%

7.6%

9.1%

Common Equity Tier 1 Capital

Ratio (CET1)

n/a

n/a

n/a

9.0%

9.0%

Tier 1 Leverage Ratio

9.9%

9.3%

8.6%

8.0%

9.6%

Tier 1 Risk-based Capital Ratio

14.1%

14.0%

10.5%

10.8%

13.2%

Total Risk-based Capital Ratio

15.2%

15.0%

11.3%

11.6%

14.0%

Tangible

Book

Value

per

share,

non-GAAP

$11.44

$11.33

$10.53

$10.81

$10.93

Tangible Book Value per share, adjusted

$9.66

$9.88

$9.64

$9.96

$10.11

Banc of California, N.A.

Tier 1 Leverage Ratio

9.7%

9.8%

9.2%

9.5%

10.3%

Tier 1 Risk-based Capital Ratio

13.8%

14.8%

11.3%

12.9%

14.0%

Total Risk-based Capital Ratio

14.9%

15.8%

12.0%

13.6%

14.9%

1

1

Tangible equity per common stock and shares issuable under purchase contracts. Represents the effect on TBV/share including conversion of  TEUs to common shares

14

2Q 2014

3Q

2014

4Q 2014

1Q 2015

2Q 2015

Total Loans (HFI + HFS)

$3.7 bln

$3.8 bln

$5.1 bln

$5.2 bln

$5.2 bln

Delinquent non-PCI

loans to total non-PCI

loans

2.69%

2.08%

1.55%

1.66%

1.66%

NPAs

/ Assets

0.96%

0.86%

0.65%

0.71%

0.66%

NPAs / Equity

9.6%

8.7%

7.7%

8.4%

6.7%

Net

Charge Offs (recoveries)

$(0.3)

$0.2

n/m

$0.1

n/m

Provision

for Loan Losses

$2.1

$2.8

$4.2

$0.0

$5.5

ALLL ($)

$22.6

$25.3

$29.5

$29.3

$34.8

ALLL to Originated

Loans

1.34%

1.33%

1.38%

1.35%

1.27%

ALLL / NPLs

54%

66%

77%

69%

81%

Asset Quality

($ in millions unless otherwise noted)