Form 8-K BANC OF CALIFORNIA, INC. For: Oct 29
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 29, 2015
BANC OF CALIFORNIA, INC.
(Exact name of Registrant as specified in its Charter)
| Maryland | 001-35522 | 04-3639825 | ||
| (State or other jurisdiction of incorporation) |
(Commission File No.) |
(IRS Employer Identification No.) | ||
| 18500 Von Karman Avenue, Suite 1100, Irvine, California | 92612 | |||
| (Address of principal executive offices) | (Zip Code) | |||
Registrant’s telephone number, including area code: (855) 361-2262
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 2.02 | Results of Operations and Financial Condition. |
On October 29, 2015, Banc of California, Inc. (the “Company”) issued a press release announcing 2015 third quarter financial results. The Company will host a conference call to discuss these third quarter financial results at 8:00 a.m. Pacific Time (PT) on Thursday, October 29, 2015. Interested parties may attend the conference call by dialing 888-317-6003, and referencing event code 9759464. A live audio webcast will be available through the webcast link to be posted on the Company’s Investor Relations website at www.bancofcal.com/investor, in addition to the slide presentation for investor review prior to the call.
Copies of the press release and presentation materials are attached to this report as Exhibits 99.1 and 99.2 and are incorporated by reference herein.
Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes 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.
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| 99.1 | Banc of California, Inc. Press Release, dated October 29, 2015. | |
| 99.2 | Banc of California, Inc. Earnings Conference Call Presentation Materials, dated October 29, 2015. | |
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BANC OF CALIFORNIA, INC. | ||||||
| October 29, 2015 | /s/ Ronald J. Nicolas, Jr. | |||||
| Ronald J. Nicolas, Jr. | ||||||
| Executive Vice President and | ||||||
| Chief Financial Officer | ||||||
3
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Banc of California, Inc. Press Release, dated October 29, 2015. | |
| 99.2 | Banc of California, Inc. Earnings Conference Call Presentation Materials, dated October 29, 2015. | |
4
Exhibit 99.1
Banc of California Reports Third Quarter Earnings
IRVINE, Calif., (October 29, 2015) – Banc of California, Inc. (NYSE: BANC) today reported net income of $14.5 million and net income available to common shareholders of $11.5 million, resulting in $0.29 per diluted common share for the quarter ended September 30, 2015.
Net income available to common shareholders for the nine months ended September 30, 2015 was $36.2 million, resulting in $0.93 per diluted common share, compared to $17.4 million, resulting in $0.63 per diluted common share for the nine months ended September 30, 2014.
Highlights for the third quarter, compared to the prior quarter, included:
| • | Record quarterly core deposit growth exceeding $500 million (net of branch sales and offsetting the reduction in brokered and treasury deposits) |
| • | Record quarterly commercial banking segment loan originations of $729 million (excludes mortgage banking originations) |
| • | Noninterest bearing deposits increased by $143 million, or 17%, quarter over quarter and now exceed $1 billion |
| • | Noninterest expenses declined by $6.2 million quarter over quarter |
| • | Continued strong and stable asset quality |
“The third quarter was highlighted by strong core deposit growth and accelerating loan originations in our commercial banking segment,” said Steven Sugarman, Chairman and Chief Executive Officer. “We are especially pleased with the growth of noninterest bearing deposits during the quarter which reflect our team’s success growing and deepening client relationships.”
The Company’s consolidated assets totaled $7.3 billion at September 30, 2015, an increase of $0.8 billion compared to the prior quarter, and an increase of $2.7 billion compared to a year ago. Return on average assets for the third quarter was 0.9%, and return on average tangible common equity was 12% for the third quarter.
“The third quarter results mark the sixth straight quarter since the reorganization of our bank’s Board of Directors and management team in which the Company has exceeded consensus earnings estimates, and we are on pace to exceed analysts’ full year 2015 consensus earnings estimates,” Mr. Sugarman continued. “The Board and executive management team have set preliminary targets for 2016 that include earnings per share growth of 15%, return on average assets of 1% and return on tangible common equity of 15%. Additionally, in light of the benefits of scale we are beginning to see throughout the business, we are lowering our efficiency ratio target for 2016 by 5% to 65-70%.”
The Company will host a conference call to discuss its third quarter financial results at 8:00 a.m. Pacific Time (PT) on Thursday, October 29, 2015. Interested parties are welcome to attend the conference call by dialing 888-317-6003, and referencing event code 9759464. A live audio webcast will also be available and the webcast link will be posted on the Company’s website under the Investors section. The slide presentation for the call will also be available on the Company’s website prior to the call.
18500 Von Karman Ave. ● Suite 1100 ● Irvine, CA 92612 ● (949) 236-5250 ● www.bancofcal.com
About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) provides comprehensive banking services to California’s diverse private businesses, entrepreneurs and homeowners. Banc of California operates over 100 offices in California and the West.
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes 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.
Source: Banc of California, Inc.
| INVESTOR RELATIONS INQUIRIES: |
MEDIA INQUIRIES: | |
| Banc of California, Inc. |
Vectis Strategies | |
| Timothy Sedabres, (855) 361-2262 |
David Herbst, (213) 973-4113 x101 | |
- 2 -
Banc of California, Inc.
Consolidated Statements of Financial Condition
(Dollars in thousands)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents |
$ | 378,963 | $ | 458,990 | $ | 265,402 | $ | 231,199 | $ | 184,985 | ||||||||||
| Time deposits in financial institutions |
1,900 | 1,900 | 1,900 | 1,900 | 1,900 | |||||||||||||||
| Securities available for sale |
693,219 | 487,293 | 393,586 | 345,695 | 310,385 | |||||||||||||||
| Securities held to maturity |
529,532 | 53,414 | — | — | — | |||||||||||||||
| Loans held for sale |
596,565 | 746,651 | 1,240,942 | 1,187,090 | 1,127,339 | |||||||||||||||
| Loans and leases receivable |
4,730,077 | 4,473,095 | 3,933,715 | 3,949,122 | 2,712,068 | |||||||||||||||
| Allowance for loan and lease losses |
(34,774 | ) | (34,787 | ) | (29,345 | ) | (29,480 | ) | (25,283 | ) | ||||||||||
| Federal Home Loan Bank and other bank stock |
40,643 | 34,187 | 39,844 | 42,241 | 35,432 | |||||||||||||||
| Servicing rights, net |
41,646 | 34,942 | 21,829 | 19,566 | 11,745 | |||||||||||||||
| Other real estate owned, net |
34 | 50 | 498 | 423 | 605 | |||||||||||||||
| Premises and equipment, net |
34,689 | 35,229 | 78,285 | 78,685 | 67,323 | |||||||||||||||
| Goodwill |
39,244 | 31,591 | 31,591 | 31,591 | 31,591 | |||||||||||||||
| Other intangible assets, net |
20,504 | 21,905 | 23,708 | 25,252 | 10,829 | |||||||||||||||
| Deferred income tax (1) |
13,388 | 12,081 | 14,157 | 16,373 | 8,663 | |||||||||||||||
| Income tax receivable |
2,649 | 3,091 | — | — | — | |||||||||||||||
| Bank-owned life insurance investment |
99,570 | 19,201 | 19,154 | 19,095 | 19,038 | |||||||||||||||
| Other assets (1) |
68,961 | 59,049 | 62,089 | 52,545 | 41,206 | |||||||||||||||
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| Total assets |
$ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | $ | 5,971,297 | $ | 4,537,826 | ||||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits |
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| Noninterest-bearing deposits |
$ | 1,011,169 | $ | 867,930 | $ | 749,129 | $ | 662,295 | $ | 457,743 | ||||||||||
| Interest-bearing deposits |
4,410,821 | 4,184,260 | 4,112,863 | 4,009,536 | 3,173,967 | |||||||||||||||
| Deposits held for sale |
— | 52,820 | — | — | — | |||||||||||||||
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| Total deposits |
5,421,990 | 5,105,010 | 4,861,992 | 4,671,831 | 3,631,710 | |||||||||||||||
| Advances from Federal Home Loan Bank |
830,000 | 350,000 | 545,000 | 633,000 | 305,000 | |||||||||||||||
| Other borrowings |
— | — | 15,000 | — | — | |||||||||||||||
| Notes payable, net |
262,779 | 264,077 | 92,668 | 93,569 | 95,549 | |||||||||||||||
| Reserve for loss on repurchased loans |
9,098 | 9,411 | 8,432 | 8,303 | 7,045 | |||||||||||||||
| Income taxes payable |
5,939 | — | 4,488 | 56 | 2,158 | |||||||||||||||
| Accrued expenses and other liabilities |
83,470 | 75,502 | 55,615 | 61,223 | 49,653 | |||||||||||||||
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| Total liabilities |
6,613,276 | 5,804,000 | 5,583,195 | 5,467,982 | 4,091,115 | |||||||||||||||
| Commitments and contingent liabilities |
||||||||||||||||||||
| Preferred stock, Series A, non-cumulative perpetual |
31,934 | 31,934 | 31,934 | 31,934 | 31,934 | |||||||||||||||
| Preferred stock, Series B, non-cumulative perpetual |
10,000 | 10,000 | 10,000 | 10,000 | 10,000 | |||||||||||||||
| Preferred stock, Series C, 8.00% non-cumulative perpetual |
37,943 | 37,943 | 37,943 | 37,943 | 37,943 | |||||||||||||||
| Preferred stock, Series D, 7.375% non-cumulative perpetual |
110,873 | 110,873 | — | — | — | |||||||||||||||
| Common stock |
393 | 372 | 367 | 358 | 297 | |||||||||||||||
| Common stock, class B non-voting non-convertible |
— | — | — | 6 | 6 | |||||||||||||||
| Additional paid-in capital |
427,599 | 425,784 | 424,636 | 422,910 | 371,738 | |||||||||||||||
| Retained earnings (1) |
52,277 | 45,494 | 36,880 | 29,589 | 24,692 | |||||||||||||||
| Treasury stock |
(29,070 | ) | (29,070 | ) | (29,798 | ) | (29,798 | ) | (29,798 | ) | ||||||||||
| Accumulated other comprehensive income/(loss), net |
1,585 | 552 | 2,198 | 373 | (101 | ) | ||||||||||||||
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| Total stockholders’ equity |
643,534 | 633,882 | 514,160 | 503,315 | 446,711 | |||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | $ | 5,971,297 | $ | 4,537,826 | ||||||||||
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| (1) | Amounts for 2014 periods have been updated to reflect the first quarter 2015 adoption of ASU 2014-1 related to investment in low income housing tax credit. |
- 3 -
Banc of California, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | ||||||||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
| Interest and dividend income |
||||||||||||||||||||||||||||
| Loans, including fees |
$ | 60,454 | $ | 60,699 | $ | 58,155 | $ | 52,599 | $ | 44,555 | $ | 179,308 | $ | 128,162 | ||||||||||||||
| Securities |
5,054 | 2,119 | 1,927 | 1,781 | 1,460 | 9,100 | 3,377 | |||||||||||||||||||||
| Dividends and other interest-earning assets |
1,007 | 2,026 | 698 | 700 | 634 | 3,731 | 1,520 | |||||||||||||||||||||
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| Total interest and dividend income |
66,515 | 64,844 | 60,780 | 55,080 | 46,649 | 192,139 | 133,059 | |||||||||||||||||||||
| Interest expense |
||||||||||||||||||||||||||||
| Deposits |
6,395 | 6,165 | 6,361 | 6,440 | 6,165 | 18,921 | 17,971 | |||||||||||||||||||||
| Federal Home Loan Bank advances |
587 | 290 | 353 | 210 | 118 | 1,230 | 317 | |||||||||||||||||||||
| Notes payable and other interest-bearing liabilities |
3,983 | 4,285 | 2,069 | 2,099 | 2,180 | 10,337 | 5,825 | |||||||||||||||||||||
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| Total interest expense |
10,965 | 10,740 | 8,783 | 8,749 | 8,463 | 30,488 | 24,113 | |||||||||||||||||||||
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| Net interest income |
55,550 | 54,104 | 51,997 | 46,331 | 38,186 | 161,651 | 108,946 | |||||||||||||||||||||
| Provision for loan and lease losses |
735 | 5,474 | — | 4,159 | 2,780 | 6,209 | 6,817 | |||||||||||||||||||||
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| Net interest income after provision for loan and lease losses |
54,815 | 48,630 | 51,997 | 42,172 | 35,406 | 155,442 | 102,129 | |||||||||||||||||||||
| Noninterest income |
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| Customer service fees |
1,118 | 1,072 | 910 | 651 | 230 | 3,100 | 839 | |||||||||||||||||||||
| Loan servicing income |
(2,254 | ) | 2,007 | (442 | ) | 1,248 | 924 | (689 | ) | 2,951 | ||||||||||||||||||
| Net gain on sale of securities available for sale |
1,750 | — | (2 | ) | 661 | — | 1,748 | 522 | ||||||||||||||||||||
| Net gain on sale of loans |
9,737 | 7,838 | 4,472 | 3,927 | 10,260 | 22,047 | 15,901 | |||||||||||||||||||||
| Mortgage banking income |
37,015 | 39,403 | 37,933 | 25,030 | 26,943 | 114,351 | 70,400 | |||||||||||||||||||||
| Advisory service fees |
2,294 | 4,435 | 1,197 | 6,722 | 3,264 | 7,926 | 6,182 | |||||||||||||||||||||
| Loan brokerage income |
660 | 661 | 1,141 | 2,314 | 2,033 | 2,462 | 6,360 | |||||||||||||||||||||
| Gain on sale of building |
— | 9,919 | — | — | — | 9,919 | — | |||||||||||||||||||||
| All other income |
407 | 1,358 | 771 | 336 | 444 | 2,536 | 1,593 | |||||||||||||||||||||
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| Total noninterest income |
50,727 | 66,693 | 45,980 | 40,889 | 44,098 | 163,400 | 104,748 | |||||||||||||||||||||
| Noninterest expense |
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| Salaries and employee benefits |
53,215 | 56,120 | 49,771 | 47,974 | 41,094 | 159,106 | 114,905 | |||||||||||||||||||||
| Occupancy and equipment |
10,109 | 10,325 | 9,771 | 9,512 | 7,969 | 30,205 | 23,931 | |||||||||||||||||||||
| Professional fees |
5,261 | 6,689 | 3,435 | 7,096 | 4,758 | 15,385 | 12,151 | |||||||||||||||||||||
| Data processing |
2,170 | 2,075 | 1,835 | 1,884 | 1,286 | 6,080 | 3,347 | |||||||||||||||||||||
| Amortization of intangible assets |
1,401 | 1,545 | 1,544 | 1,306 | 890 | 4,490 | 2,773 | |||||||||||||||||||||
| All other expenses (1) |
9,587 | 11,166 | 9,523 | 10,448 | 11,357 | 30,276 | 28,145 | |||||||||||||||||||||
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| Total noninterest expense |
81,743 | 87,920 | 75,879 | 78,220 | 67,354 | 245,542 | 185,252 | |||||||||||||||||||||
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| Income before income taxes |
23,799 | 27,403 | 22,098 | 4,841 | 12,150 | 73,300 | 21,625 | |||||||||||||||||||||
| Income tax (benefit) expense (1) |
9,263 | 11,479 | 9,524 | (5,269 | ) | 903 | 30,266 | 1,530 | ||||||||||||||||||||
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| Net income |
14,536 | 15,924 | 12,574 | 10,110 | 11,247 | 43,034 | 20,095 | |||||||||||||||||||||
| Preferred stock dividends |
3,040 | 2,843 | 910 | 910 | 910 | 6,793 | 2,730 | |||||||||||||||||||||
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| Net income available to common stockholders |
$ | 11,496 | $ | 13,081 | $ | 11,664 | $ | 9,200 | $ | 10,337 | $ | 36,241 | $ | 17,365 | ||||||||||||||
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| Basic earnings per total common share |
$ | 0.29 | $ | 0.33 | $ | 0.30 | $ | 0.25 | $ | 0.31 | $ | 0.95 | $ | 0.64 | ||||||||||||||
| Diluted earnings per total common share |
$ | 0.29 | $ | 0.32 | $ | 0.29 | $ | 0.25 | $ | 0.31 | $ | 0.93 | $ | 0.63 | ||||||||||||||
| (1) | Amounts for 2014 periods have been updated to reflect the first quarter 2015 adoption of ASU 2014-1 related to investment in low income housing tax credit. |
- 4 -
Banc of California, Inc.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | ||||||||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
| Average balances |
||||||||||||||||||||||||||||
| Total assets |
$ | 6,681,590 | $ | 6,253,350 | $ | 5,931,426 | $ | 5,223,463 | $ | 4,391,523 | $ | 6,291,536 | $ | 4,053,810 | ||||||||||||||
| Total gross loans and leases |
5,271,293 | 5,254,729 | 5,139,399 | 4,534,428 | 3,829,204 | 5,222,290 | 3,559,505 | |||||||||||||||||||||
| Investment Securities |
828,326 | 402,366 | 354,475 | 310,454 | 257,067 | 530,124 | 196,446 | |||||||||||||||||||||
| Total interest earning assets |
6,449,862 | 5,967,200 | 5,713,766 | 5,033,973 | 4,228,555 | 6,046,305 | 3,887,559 | |||||||||||||||||||||
| Total interest-bearing deposits |
4,314,330 | 4,078,540 | 4,085,673 | 3,699,464 | 3,070,130 | 4,160,352 | 2,841,303 | |||||||||||||||||||||
| Total borrowings |
745,959 | 635,460 | 583,979 | 406,531 | 378,671 | 655,726 | 349,794 | |||||||||||||||||||||
| Total interest bearing liabilities |
5,060,289 | 4,714,000 | 4,669,652 | 4,105,995 | 3,448,801 | 4,816,078 | 3,191,097 | |||||||||||||||||||||
| Total stockholders’ equity |
645,713 | 630,547 | 517,335 | 487,578 | 449,392 | 598,335 | 388,474 | |||||||||||||||||||||
| Profitability and other ratios |
||||||||||||||||||||||||||||
| Return on average assets (1) |
0.86 | % | 1.02 | % | 0.86 | % | 0.77 | % | 1.02 | % | 0.91 | % | 0.66 | % | ||||||||||||||
| Return on average equity (1) |
8.93 | % | 10.13 | % | 9.86 | % | 8.23 | % | 9.93 | % | 9.62 | % | 6.92 | % | ||||||||||||||
| Dividend payout ratio (2) |
41.38 | % | 36.36 | % | 40.00 | % | 48.00 | % | 38.71 | % | 37.89 | % | 56.25 | % | ||||||||||||||
| Net interest spread |
3.23 | % | 3.45 | % | 3.55 | % | 3.49 | % | 3.41 | % | 3.40 | % | 3.57 | % | ||||||||||||||
| Net interest margin (1) |
3.42 | % | 3.64 | % | 3.69 | % | 3.65 | % | 3.58 | % | 3.57 | % | 3.75 | % | ||||||||||||||
| Noninterest income to total revenue (3) |
47.73 | % | 55.21 | % | 46.93 | % | 46.88 | % | 53.59 | % | 50.27 | % | 49.02 | % | ||||||||||||||
| Noninterest income to average total assets (1) |
3.01 | % | 4.28 | % | 3.14 | % | 3.11 | % | 3.98 | % | 3.47 | % | 3.45 | % | ||||||||||||||
| Noninterest expense to average total assets (1) |
4.85 | % | 5.64 | % | 5.19 | % | 5.94 | % | 6.08 | % | 5.22 | % | 6.11 | % | ||||||||||||||
| Efficiency ratio (4) |
76.92 | % | 72.78 | % | 77.45 | % | 89.68 | % | 81.86 | % | 75.54 | % | 86.69 | % | ||||||||||||||
| Average held for investment loans and leases to average deposits |
86.03 | % | 79.87 | % | 81.72 | % | 79.08 | % | 75.39 | % | 82.63 | % | 76.60 | % | ||||||||||||||
| Average investment securities to average total assets |
12.40 | % | 6.43 | % | 5.98 | % | 5.94 | % | 5.85 | % | 8.43 | % | 4.85 | % | ||||||||||||||
| Average stockholders’ equity to average total assets |
9.66 | % | 10.08 | % | 8.72 | % | 9.33 | % | 10.23 | % | 9.51 | % | 9.58 | % | ||||||||||||||
| Allowance for loan and lease losses (ALLL) |
||||||||||||||||||||||||||||
| Balance at beginning of period |
$ | 34,787 | $ | 29,345 | $ | 29,480 | $ | 25,283 | $ | 22,627 | $ | 29,480 | $ | 18,805 | ||||||||||||||
| Loans and leases charged off |
(788 | ) | (79 | ) | (357 | ) | (25 | ) | (312 | ) | (1,224 | ) | (898 | ) | ||||||||||||||
| Recoveries |
40 | 47 | 222 | 63 | 96 | 309 | 1,172 | |||||||||||||||||||||
| Transfer of loans from (to) held-for-sale |
— | — | — | — | 92 | — | (613 | ) | ||||||||||||||||||||
| Provision for loan and lease losses |
735 | 5,474 | — | 4,159 | 2,780 | 6,209 | 6,817 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance at end of period |
$ | 34,774 | $ | 34,787 | $ | 29,345 | $ | 29,480 | $ | 25,283 | $ | 34,774 | $ | 25,283 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Annualized net loan charge-offs to average total gross loans held for investment |
0.07 | % | 0.00 | % | 0.01 | % | 0.00 | % | 0.03 | % | 0.03 | % | -0.01 | % | ||||||||||||||
| Reserve for loss on repurchased loans |
||||||||||||||||||||||||||||
| Balance at beginning of period |
$ | 9,411 | $ | 8,432 | $ | 8,303 | $ | 7,045 | $ | 6,174 | $ | 8,303 | $ | 5,427 | ||||||||||||||
| Provision for loan repurchases |
716 | 1,573 | 1,328 | 1,149 | 1,556 | 3,617 | 3,094 | |||||||||||||||||||||
| Payment for loss reimbursement on sold loans |
(1,029 | ) | (594 | ) | (1,199 | ) | 109 | (685 | ) | (2,822 | ) | (1,476 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Balance at end of period |
$ | 9,098 | $ | 9,411 | $ | 8,432 | $ | 8,303 | $ | 7,045 | $ | 9,098 | $ | 7,045 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (1) | Ratios are presented on an annualized basis. |
| (2) | Dividends declared per common share divided by basic earnings per share. |
| (3) | Total revenue is equal to the sum of net interest income before provision and noninterest income. |
| (4) | The ratios were calculated by dividing noninterest expense by the sum of net interest income before provision for loan and lease losses and noninterest income. |
- 5 -
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| Asset quality information and ratios |
||||||||||||||||||||
| 30 to 89 days delinquent, excluding PCI loans |
$ | 48,550 | $ | 46,820 | $ | 40,641 | $ | 40,694 | $ | 35,531 | ||||||||||
| 90+ days delinquent, excluding PCI loans |
23,725 | 22,855 | 20,538 | 16,835 | 15,672 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent loans, excluding PCI loans |
72,275 | 69,675 | 61,179 | 57,529 | 51,203 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| PCI loans, 30 to 89 days delinquent |
17,593 | 17,351 | 16,375 | 17,641 | 18,743 | |||||||||||||||
| PCI loans, 90+ days delinquent |
6,223 | 8,648 | 6,986 | 5,761 | 4,017 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent PCI loans |
23,816 | 25,999 | 23,361 | 23,402 | 22,760 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent loans |
$ | 96,091 | $ | 95,674 | $ | 84,540 | $ | 80,931 | $ | 73,963 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent non-PCI loans to total non-PCI loans |
1.66 | % | 1.66 | % | 1.66 | % | 1.55 | % | 2.08 | % | ||||||||||
| Total delinquent loans to gross loans |
2.03 | % | 2.14 | % | 2.15 | % | 2.05 | % | 2.73 | % | ||||||||||
| Non-performing loans, excluding PCI loans |
$ | 45,188 | $ | 42,708 | $ | 42,754 | $ | 38,381 | $ | 38,333 | ||||||||||
| 90+ days delinquent and still accruing loans, excluding PCI loans |
— | — | — | — | — | |||||||||||||||
| Other real estate owned |
34 | 50 | 498 | 423 | 605 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-performing assets |
$ | 45,222 | $ | 42,758 | $ | 43,252 | $ | 38,804 | $ | 38,938 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| ALLL to non-performing loans |
76.95 | % | 81.45 | % | 68.64 | % | 76.81 | % | 65.96 | % | ||||||||||
| Non-performing loans to gross loans |
0.96 | % | 0.95 | % | 1.09 | % | 0.97 | % | 1.41 | % | ||||||||||
| Non-performing assets to total assets |
0.62 | % | 0.66 | % | 0.71 | % | 0.65 | % | 0.86 | % | ||||||||||
| Troubled Debt Restructings (TDRs) |
||||||||||||||||||||
| Performing TDRs |
$ | 9,378 | $ | 7,402 | $ | 7,431 | $ | 6,346 | $ | 5,071 | ||||||||||
| Non-performing TDRs |
2,017 | 1,937 | 1,964 | 1,665 | 2,860 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total TDRs |
$ | 11,395 | $ | 9,339 | $ | 9,395 | $ | 8,011 | $ | 7,931 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
- 6 -
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| Loan and lease breakdown by ALLL evaluation type |
||||||||||||||||||||
| Originated loans and leases |
||||||||||||||||||||
| Individually evaluated for impairment |
$ | 31,008 | $ | 31,791 | $ | 29,301 | $ | 29,287 | $ | 29,030 | ||||||||||
| Collectively evaluated for impairment |
2,776,601 | 2,489,347 | 1,947,212 | 1,892,240 | 1,668,004 | |||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
1,704 | 8 | 2,818 | 4,191 | 8,004 | |||||||||||||||
| Collectively evaluated for impairment |
1,174,573 | 1,294,384 | 1,358,184 | 1,411,927 | 377,554 | |||||||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
373,634 | 391,193 | 354,402 | 364,580 | 376,575 | |||||||||||||||
| Acquired with deteriorated credit quality |
372,557 | 266,372 | 241,798 | 246,897 | 252,901 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans |
$ | 4,730,077 | $ | 4,473,095 | $ | 3,933,715 | $ | 3,949,122 | $ | 2,712,068 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| ALLL breakdown |
||||||||||||||||||||
| Originated loans and leases |
||||||||||||||||||||
| Individually evaluated for impairment |
$ | 512 | $ | 686 | $ | 1,199 | $ | 1,288 | $ | 517 | ||||||||||
| Collectively evaluated for impairment |
31,419 | 31,440 | 25,474 | 25,263 | 22,011 | |||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
— | — | — | — | 7 | |||||||||||||||
| Collectively evaluated for impairment |
2,637 | 2,455 | 2,466 | 2,906 | 2,748 | |||||||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
— | — | — | — | — | |||||||||||||||
| Acquired with deteriorated credit quality |
206 | 206 | 206 | 23 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total ALLL |
$ | 34,774 | $ | 34,787 | $ | 29,345 | $ | 29,480 | $ | 25,283 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Discount on Purchased/Acquired Loans |
||||||||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
$ | 21,759 | $ | 15,245 | $ | 16,877 | $ | 17,866 | $ | 6,512 | ||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
27,699 | 29,201 | 28,967 | 29,955 | 30,811 | |||||||||||||||
| Acquired with deteriorated credit quality |
41,280 | 52,394 | 53,381 | 55,865 | 57,961 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Discount |
$ | 90,738 | $ | 96,840 | $ | 99,225 | $ | 103,686 | $ | 95,284 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios |
||||||||||||||||||||
| To originated loans: |
||||||||||||||||||||
| Individually evaluated for impairment |
1.65 | % | 2.16 | % | 4.09 | % | 4.40 | % | 1.78 | % | ||||||||||
| Collectively evaluated for impairment (1) |
1.13 | % | 1.26 | % | 1.31 | % | 1.34 | % | 1.32 | % | ||||||||||
| Total ALLL |
1.14 | % | 1.27 | % | 1.35 | % | 1.38 | % | 1.33 | % | ||||||||||
| To originated and acquired non-impaired loans: |
||||||||||||||||||||
| Individually evaluated for impairment |
1.57 | % | 2.16 | % | 3.73 | % | 3.85 | % | 1.41 | % | ||||||||||
| Collectively evaluated for impairment |
0.86 | % | 0.90 | % | 0.85 | % | 0.85 | % | 1.21 | % | ||||||||||
| Total ALLL |
0.87 | % | 0.91 | % | 0.87 | % | 0.88 | % | 1.21 | % | ||||||||||
| Total ALLL and discount (2) |
1.41 | % | 1.31 | % | 1.38 | % | 1.42 | % | 1.53 | % | ||||||||||
| To total loans: |
||||||||||||||||||||
| Individually evaluated for impairment |
1.57 | % | 2.16 | % | 3.73 | % | 3.85 | % | 1.41 | % | ||||||||||
| Collectively evaluated for impairment |
0.79 | % | 0.81 | % | 0.76 | % | 0.77 | % | 1.02 | % | ||||||||||
| Total ALLL |
0.74 | % | 0.78 | % | 0.75 | % | 0.75 | % | 0.93 | % | ||||||||||
| Total ALLL and discount (2) |
2.65 | % | 2.94 | % | 3.27 | % | 3.37 | % | 4.45 | % | ||||||||||
| (1) | For the three months ended June 30, 2015 and March 31, 2015, the ratios included an unallocated allowance for loan and lease losses of $2.2 million and $364 thousand. Without the unallocated, the ratios are 1.17% and 1.29% for the three months ended June 30, 2015 and March 31, 2015, respectively. |
| (2) | The ratios were calculated by dividing a sum of ALLL and discounts by carrying value of loans. |
- 7 -
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| Composition of held for investment loans and leases |
||||||||||||||||||||
| Commercial real estate |
$ | 690,862 | $ | 807,146 | $ | 975,734 | $ | 999,857 | $ | 521,867 | ||||||||||
| Multi-family |
823,415 | 696,768 | 940,053 | 955,683 | 367,364 | |||||||||||||||
| Construction |
39,475 | 32,022 | 38,081 | 42,198 | 25,997 | |||||||||||||||
| Commercial and industrial |
822,690 | 771,477 | 489,229 | 490,900 | 366,416 | |||||||||||||||
| SBA |
52,985 | 56,887 | 48,254 | 36,155 | 25,729 | |||||||||||||||
| Lease financing |
162,504 | 131,189 | 102,012 | 85,749 | 72,027 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total commercial loans |
2,591,931 | 2,495,489 | 2,593,363 | 2,610,542 | 1,379,400 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Single family residential mortgage |
2,013,450 | 1,840,924 | 1,169,134 | 1,171,662 | 1,191,021 | |||||||||||||||
| Other consumer |
124,696 | 136,682 | 171,218 | 166,918 | 141,647 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total consumer loans |
2,138,146 | 1,977,606 | 1,340,352 | 1,338,580 | 1,332,668 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total gross loans and leases |
$ | 4,730,077 | $ | 4,473,095 | $ | 3,933,715 | $ | 3,949,122 | $ | 2,712,068 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition percentage of held for investment loans and leases |
||||||||||||||||||||
| Commercial real estate |
14.6 | % | 18.0 | % | 24.8 | % | 25.3 | % | 19.2 | % | ||||||||||
| Multi-family |
17.4 | % | 15.6 | % | 23.9 | % | 24.2 | % | 13.5 | % | ||||||||||
| Construction |
0.8 | % | 0.7 | % | 1.0 | % | 1.1 | % | 1.0 | % | ||||||||||
| Commercial and industrial |
17.4 | % | 17.2 | % | 12.4 | % | 12.4 | % | 13.5 | % | ||||||||||
| SBA |
1.1 | % | 1.3 | % | 1.2 | % | 0.9 | % | 0.9 | % | ||||||||||
| Lease financing |
3.4 | % | 2.9 | % | 2.6 | % | 2.2 | % | 2.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total commercial loans |
54.7 | % | 55.7 | % | 65.9 | % | 66.1 | % | 50.8 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Single family residential mortgage |
42.7 | % | 41.2 | % | 29.7 | % | 29.7 | % | 44.0 | % | ||||||||||
| Other consumer |
2.6 | % | 3.1 | % | 4.4 | % | 4.2 | % | 5.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total consumer loans |
45.3 | % | 44.3 | % | 34.1 | % | 33.9 | % | 49.2 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total gross loans and leases |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition of deposits |
||||||||||||||||||||
| Noninterest-bearing checking |
$ | 1,011,169 | $ | 880,766 | $ | 749,129 | $ | 662,295 | $ | 457,743 | ||||||||||
| Interest-bearing checking |
1,458,208 | 1,002,443 | 1,032,482 | 1,054,828 | 779,704 | |||||||||||||||
| Money market |
1,238,180 | 1,393,751 | 1,136,562 | 1,074,432 | 769,291 | |||||||||||||||
| Savings |
814,230 | 843,274 | 898,483 | 985,646 | 932,133 | |||||||||||||||
| Certificates of deposit |
900,203 | 984,776 | 1,045,336 | 894,630 | 692,839 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
$ | 5,421,990 | $ | 5,105,010 | $ | 4,861,992 | $ | 4,671,831 | $ | 3,631,710 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition percentage of deposits |
||||||||||||||||||||
| Noninterest-bearing checking |
18.6 | % | 17.3 | % | 15.4 | % | 14.2 | % | 12.6 | % | ||||||||||
| Interest-bearing checking |
26.9 | % | 19.6 | % | 21.2 | % | 22.6 | % | 21.5 | % | ||||||||||
| Money market |
22.8 | % | 27.3 | % | 23.4 | % | 23.0 | % | 21.2 | % | ||||||||||
| Savings |
15.0 | % | 16.5 | % | 18.5 | % | 21.1 | % | 25.6 | % | ||||||||||
| Certificates of deposit |
16.7 | % | 19.3 | % | 21.5 | % | 19.1 | % | 19.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
- 8 -
Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| September 30, 2015 | June 30, 2015 | March 31, 2015 | ||||||||||||||||||||||||||||||||||
| Average | Yield | Average | Yield | Average | Yield | |||||||||||||||||||||||||||||||
| Balance | Interest | / Cost | Balance | Interest | / Cost | Balance | Interest | / Cost | ||||||||||||||||||||||||||||
| Interest earning assets |
||||||||||||||||||||||||||||||||||||
| Loans held for sale and SFR mortgage |
$ | 1,966,373 | $ | 18,123 | 3.66 | % | $ | 1,959,738 | $ | 18,984 | 3.89 | % | $ | 1,868,085 | $ | 17,477 | 3.79 | % | ||||||||||||||||||
| Seasoned SFR mortgage loan pools |
689,666 | 10,901 | 6.27 | % | 591,460 | 9,690 | 6.57 | % | 591,724 | 9,413 | 6.45 | % | ||||||||||||||||||||||||
| Commercial real estate, multi-family, and construction |
1,568,975 | 17,643 | 4.46 | % | 1,848,780 | 21,552 | 4.68 | % | 1,956,830 | 22,508 | 4.66 | % | ||||||||||||||||||||||||
| Commercial and industrial, SBA, and lease financing |
914,811 | 12,125 | 5.26 | % | 697,291 | 8,871 | 5.10 | % | 572,726 | 7,239 | 5.13 | % | ||||||||||||||||||||||||
| Other consumer |
131,468 | 1,662 | 5.02 | % | 157,460 | 1,602 | 4.08 | % | 150,034 | 1,518 | 4.10 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Gross loans and leases |
5,271,293 | 60,454 | 4.55 | % | 5,254,729 | 60,699 | 4.63 | % | 5,139,399 | 58,155 | 4.59 | % | ||||||||||||||||||||||||
| Securities |
828,326 | 5,054 | 2.42 | % | 402,366 | 2,119 | 2.11 | % | 354,475 | 1,927 | 2.20 | % | ||||||||||||||||||||||||
| Other interest-earning assets |
350,243 | 1,007 | 1.14 | % | 310,105 | 2,026 | 2.62 | % | 219,892 | 698 | 1.29 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-earning assets |
6,449,862 | 66,515 | 4.09 | % | 5,967,200 | 64,844 | 4.36 | % | 5,713,766 | 60,780 | 4.31 | % | ||||||||||||||||||||||||
| Allowance for loan and lease losses |
(34,810 | ) | (29,445 | ) | (29,623 | ) | ||||||||||||||||||||||||||||||
| BOLI and non-interest earning assets |
266,538 | 315,595 | 247,283 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 6,681,590 | $ | 6,253,350 | $ | 5,931,426 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||||||||||||||
| Savings |
$ | 832,006 | $ | 1,575 | 0.75 | % | $ | 867,532 | $ | 1,606 | 0.74 | % | $ | 945,530 | $ | 1,748 | 0.75 | % | ||||||||||||||||||
| Interest-bearing checking |
1,282,066 | 2,273 | 0.70 | % | 1,012,211 | 1,996 | 0.79 | % | 1,042,895 | 2,041 | 0.79 | % | ||||||||||||||||||||||||
| Money market |
1,294,554 | 1,337 | 0.41 | % | 1,142,858 | 1,028 | 0.36 | % | 1,092,987 | 958 | 0.36 | % | ||||||||||||||||||||||||
| Certificates of deposit |
905,704 | 1,210 | 0.53 | % | 1,055,939 | 1,535 | 0.58 | % | 1,004,261 | 1,614 | 0.65 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing deposits |
4,314,330 | 6,395 | 0.59 | % | 4,078,540 | 6,165 | 0.61 | % | 4,085,673 | 6,361 | 0.63 | % | ||||||||||||||||||||||||
| FHLB advances |
476,848 | 587 | 0.49 | % | 375,385 | 290 | 0.31 | % | 487,600 | 353 | 0.29 | % | ||||||||||||||||||||||||
| Long-term debt and other interest-bearing liabilities |
269,111 | 3,983 | 5.87 | % | 260,075 | 4,285 | 6.61 | % | 96,379 | 2,069 | 8.71 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing liabilities |
5,060,289 | 10,965 | 0.86 | % | 4,714,000 | 10,740 | 0.91 | % | 4,669,652 | 8,783 | 0.76 | % | ||||||||||||||||||||||||
| Noninterest-bearing deposits |
916,670 | 859,420 | 682,492 | |||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities |
58,918 | 49,383 | 61,947 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities |
6,035,877 | 5,622,803 | 5,414,091 | |||||||||||||||||||||||||||||||||
| Total stockholders’ equity |
645,713 | 630,547 | 517,335 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 6,681,590 | $ | 6,253,350 | $ | 5,931,426 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income/spread |
$ | 55,550 | 3.23 | % | $ | 54,104 | 3.45 | % | $ | 51,997 | 3.55 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest margin |
3.42 | % | 3.64 | % | 3.69 | % | ||||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities |
127.46 | % | 126.58 | % | 122.36 | % | ||||||||||||||||||||||||||||||
| Total deposits |
$ | 5,231,000 | $ | 6,395 | 0.49 | % | $ | 4,937,960 | $ | 6,165 | 0.50 | % | $ | 4,768,165 | $ | 6,361 | 0.54 | % | ||||||||||||||||||
| Total funding (1) |
$ | 5,976,959 | $ | 10,965 | 0.73 | % | $ | 5,573,420 | $ | 10,740 | 0.77 | % | $ | 5,352,144 | $ | 8,783 | 0.67 | % | ||||||||||||||||||
| (1) | Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
- 9 -
Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid, Continued
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||
| December 31, 2014 | September 30, 2014 | |||||||||||||||||||||||
| Average | Yield | Average | Yield | |||||||||||||||||||||
| Balance | Interest | / Cost | Balance | Interest | / Cost | |||||||||||||||||||
| Interest earning assets |
||||||||||||||||||||||||
| Loans held for sale and SFR mortgage |
$ | 1,778,112 | $ | 16,741 | 3.74 | % | $ | 1,757,890 | $ | 16,979 | 3.83 | % | ||||||||||||
| Seasoned SFR mortgage loan pools |
606,879 | 9,605 | 6.28 | % | 675,083 | 11,753 | 6.91 | % | ||||||||||||||||
| Commercial real estate, multi-family, and construction |
1,486,406 | 17,993 | 4.80 | % | 827,934 | 9,592 | 4.60 | % | ||||||||||||||||
| Commercial and industrial, SBA, and lease financing |
523,194 | 6,192 | 4.70 | % | 451,992 | 5,060 | 4.44 | % | ||||||||||||||||
| Other consumer |
139,837 | 2,068 | 5.87 | % | 116,305 | 1,171 | 3.99 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gross loans and leases |
4,534,428 | 52,599 | 4.60 | % | 3,829,204 | 44,555 | 4.62 | % | ||||||||||||||||
| Securities |
310,454 | 1,781 | 2.28 | % | 257,067 | 1,460 | 2.25 | % | ||||||||||||||||
| Other interest-earning assets |
189,091 | 700 | 1.47 | % | 142,284 | 634 | 1.77 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-earning assets |
5,033,973 | 55,080 | 4.34 | % | 4,228,555 | 46,649 | 4.38 | % | ||||||||||||||||
| Allowance for loan and lease losses |
(26,105 | ) | (23,266 | ) | ||||||||||||||||||||
| BOLI and non-interest earning assets |
215,595 | 186,234 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 5,223,463 | $ | 4,391,523 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||
| Savings |
$ | 960,253 | $ | 1,963 | 0.81 | % | $ | 953,925 | $ | 2,215 | 0.92 | % | ||||||||||||
| Interest-bearing checking |
937,623 | 2,078 | 0.88 | % | 745,635 | 2,037 | 1.08 | % | ||||||||||||||||
| Money market |
964,414 | 841 | 0.35 | % | 681,576 | 673 | 0.39 | % | ||||||||||||||||
| Certificates of deposit |
837,174 | 1,558 | 0.74 | % | 688,994 | 1,240 | 0.71 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
3,699,464 | 6,440 | 0.69 | % | 3,070,130 | 6,165 | 0.80 | % | ||||||||||||||||
| FHLB advances |
307,859 | 210 | 0.27 | % | 276,739 | 118 | 0.17 | % | ||||||||||||||||
| Long-term debt and other interest-bearing liabilities |
98,672 | 2,099 | 8.44 | % | 101,932 | 2,180 | 8.48 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
4,105,995 | 8,749 | 0.85 | % | 3,448,801 | 8,463 | 0.97 | % | ||||||||||||||||
| Noninterest-bearing deposits |
577,623 | 448,825 | ||||||||||||||||||||||
| Non-interest-bearing liabilities |
52,267 | 44,505 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
4,735,885 | 3,942,131 | ||||||||||||||||||||||
| Total stockholders’ equity |
487,578 | 449,392 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 5,223,463 | $ | 4,391,523 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income/spread |
$ | 46,331 | 3.49 | % | $ | 38,186 | 3.41 | % | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest margin |
3.65 | % | 3.58 | % | ||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities |
122.60 | % | 122.61 | % | ||||||||||||||||||||
| Total deposits |
$ | 4,277,087 | $ | 6,440 | 0.60 | % | $ | 3,518,955 | $ | 6,165 | 0.70 | % | ||||||||||||
| Total funding (1) |
$ | 4,683,618 | $ | 8,749 | 0.76 | % | $ | 3,897,626 | $ | 8,463 | 0.88 | % | ||||||||||||
| (1) | Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
- 10 -
Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid, Continued
(Dollars in thousands)
(Unaudited)
| Nine Months Ended | ||||||||||||||||||||||||
| September 30, 2015 | September 30, 2014 | |||||||||||||||||||||||
| Average | Yield | Average | Yield | |||||||||||||||||||||
| Balance | Interest | / Cost | Balance | Interest | / Cost | |||||||||||||||||||
| Interest earning assets |
||||||||||||||||||||||||
| Loans held for sale and SFR mortgage |
$ | 1,931,759 | $ | 54,584 | 3.78 | % | $ | 1,583,494 | $ | 45,527 | 3.84 | % | ||||||||||||
| Seasoned SFR mortgage loan pools |
624,642 | 30,004 | 6.42 | % | 708,814 | 36,548 | 6.89 | % | ||||||||||||||||
| Commercial real estate, multi-family, and construction |
1,790,108 | 61,703 | 4.61 | % | 749,350 | 26,501 | 4.73 | % | ||||||||||||||||
| Commercial and industrial, SBA, and lease financing |
729,529 | 28,234 | 5.17 | % | 409,624 | 16,367 | 5.34 | % | ||||||||||||||||
| Other consumer |
146,252 | 4,783 | 4.37 | % | 108,223 | 3,219 | 3.98 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gross loans and leases |
5,222,290 | 179,308 | 4.59 | % | 3,559,505 | 128,162 | 4.81 | % | ||||||||||||||||
| Securities |
530,124 | 9,100 | 2.30 | % | 196,446 | 3,377 | 2.30 | % | ||||||||||||||||
| Other interest-earning assets |
293,891 | 3,731 | 1.70 | % | 131,608 | 1,520 | 1.54 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-earning assets |
6,046,305 | 192,139 | 4.25 | % | 3,887,559 | 133,059 | 4.58 | % | ||||||||||||||||
| Allowance for loan and lease losses |
(31,312 | ) | (21,089 | ) | ||||||||||||||||||||
| BOLI and non-interest earning assets |
276,543 | 187,340 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 6,291,536 | $ | 4,053,810 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||
| Savings |
$ | 881,273 | $ | 4,929 | 0.75 | % | $ | 970,348 | $ | 7,156 | 0.99 | % | ||||||||||||
| Interest-bearing checking |
1,113,267 | 6,309 | 0.76 | % | 666,926 | 5,552 | 1.11 | % | ||||||||||||||||
| Money market |
1,177,538 | 3,324 | 0.38 | % | 600,818 | 1,948 | 0.43 | % | ||||||||||||||||
| Certificates of deposit |
988,274 | 4,359 | 0.59 | % | 603,211 | 3,315 | 0.73 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
4,160,352 | 18,921 | 0.61 | % | 2,841,303 | 17,971 | 0.85 | % | ||||||||||||||||
| FHLB advances |
446,571 | 1,230 | 0.37 | % | 254,322 | 317 | 0.17 | % | ||||||||||||||||
| Long-term debt and other interest-bearing liabilities |
209,155 | 10,337 | 6.61 | % | 95,472 | 5,825 | 8.16 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
4,816,078 | 30,488 | 0.85 | % | 3,191,097 | 24,113 | 1.01 | % | ||||||||||||||||
| Noninterest-bearing deposits |
820,385 | 431,160 | ||||||||||||||||||||||
| Non-interest-bearing liabilities |
56,738 | 43,079 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
5,693,201 | 3,665,336 | ||||||||||||||||||||||
| Total stockholders’ equity |
598,335 | 388,474 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 6,291,536 | $ | 4,053,810 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income/spread |
$ | 161,651 | 3.40 | % | $ | 108,946 | 3.57 | % | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest margin |
3.57 | % | 3.75 | % | ||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities |
125.54 | % | 121.83 | % | ||||||||||||||||||||
| Total deposits |
$ | 4,980,737 | $ | 18,921 | 0.51 | % | $ | 3,272,463 | $ | 17,971 | 0.73 | % | ||||||||||||
| Total funding (1) |
$ | 5,636,463 | $ | 30,488 | 0.72 | % | $ | 3,622,257 | $ | 24,113 | 0.89 | % | ||||||||||||
| (1) | Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding. |
- 11 -
Banc of California, Inc.
Capital Ratios
(Unaudited)
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 (1) | 2014 | 2014 | ||||||||||||||||
| Capital Ratios |
||||||||||||||||||||
| Banc of California, Inc. |
||||||||||||||||||||
| Total risk-based capital ratio: |
12.56 | % | 14.01 | % | 11.55 | % | 11.28 | % | 14.97 | % | ||||||||||
| Tier 1 risk-based capital ratio: |
12.06 | % | 13.19 | % | 10.83 | % | 10.54 | % | 14.03 | % | ||||||||||
| Common equity tier 1 capital ratio (1) |
8.19 | % | 8.96 | % | 9.01 | % | N/A | N/A | ||||||||||||
| Tier 1 leverage ratio: |
8.97 | % | 9.55 | % | 7.99 | % | 8.57 | % | 9.28 | % | ||||||||||
| Banc of California, NA |
||||||||||||||||||||
| Total risk-based capital ratio: |
14.93 | % | 14.86 | % | 13.58 | % | 12.04 | % | 15.75 | % | ||||||||||
| Tier 1 risk-based capital ratio: |
14.19 | % | 14.04 | % | 12.86 | % | 11.29 | % | 14.8 | % | ||||||||||
| Common equity tier 1 capital ratio (1) |
14.19 | % | 14.04 | % | 12.86 | % | N/A | N/A | ||||||||||||
| Tier 1 leverage ratio: |
10.53 | % | 10.26 | % | 9.49 | % | 9.17 | % | 9.8 | % | ||||||||||
| (1) | From the first quarter of 2015, BASEL III common equity tier 1 capital ratio is required. |
- 12 -
Banc of California, Inc.
Non-GAAP Measures
(Dollars in thousands, except per share data)
(Unaudited)
Non-GAAP performance measure:
Tangible common equity to tangible assets ratio and return on average tangible common equity are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles (“GAAP”). These non-GAAP measures are used by management in the analysis of Banc of California, Inc.’s capital strength and performance of businesses. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders’ equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total stockholders’ equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Banc of California, Inc. This disclosure should not be viewed as a substitution for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
The following tables reconcile this non-GAAP performance measures to the GAAP performance measures for the periods indicated:
| September 30, | June 30, | March 31, | December 31, | September 30, | ||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | ||||||||||||||||
| Tangible common equity to tangible assets ratio |
||||||||||||||||||||
| Total assets |
$ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | $ | 5,971,297 | $ | 4,537,826 | ||||||||||
| Less goodwill |
(39,244 | ) | (31,591 | ) | (31,591 | ) | (31,591 | ) | (31,591 | ) | ||||||||||
| Less other intangible assets |
(20,504 | ) | (21,905 | ) | (23,708 | ) | (25,252 | ) | (10,829 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible assets |
$ | 7,197,062 | $ | 6,384,386 | $ | 6,042,056 | $ | 5,914,454 | $ | 4,495,406 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity |
$ | 643,534 | $ | 633,882 | $ | 514,160 | $ | 503,315 | $ | 446,711 | ||||||||||
| Less preferred stock |
(190,750 | ) | (190,750 | ) | (79,877 | ) | (79,877 | ) | (79,877 | ) | ||||||||||
| Less goodwill |
(39,244 | ) | (31,591 | ) | (31,591 | ) | (31,591 | ) | (31,591 | ) | ||||||||||
| Less other intangible assets |
(20,504 | ) | (21,905 | ) | (23,708 | ) | (25,252 | ) | (10,829 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible common equity |
$ | 393,036 | $ | 389,636 | $ | 378,984 | $ | 366,595 | $ | 324,414 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity to total assets |
8.87 | % | 9.85 | % | 8.43 | % | 8.43 | % | 9.84 | % | ||||||||||
| Tangible common equity to tangible assets |
5.46 | % | 6.10 | % | 6.27 | % | 6.20 | % | 7.22 | % | ||||||||||
| Common stock outstanding |
37,751,445 | 35,647,476 | 35,063,199 | 34,190,740 | 28,023,701 | |||||||||||||||
| Class B non-voting non-convertible common stock outstanding |
— | — | 11 | 609,195 | 602,783 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total common stock outstanding |
37,751,445 | 35,647,476 | 35,063,210 | 34,799,935 | 28,626,484 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Minimum number of shares issuable under purchase contracts (1) |
828,246 | 2,883,892 | 2,984,367 | 3,215,538 | 4,198,425 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total common stock outstanding and shares issuable under purchase contracts |
38,579,691 | 38,531,368 | 38,047,577 | 38,015,473 | 32,824,909 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) Purchase contracts relating to the tangible equity units |
| |||||||||||||||||||
| Tangible common equity per common stock |
$ | 10.41 | $ | 10.93 | $ | 10.81 | $ | 10.53 | $ | 11.33 | ||||||||||
| Book value per common stock |
$ | 11.99 | $ | 12.43 | $ | 12.39 | $ | 12.17 | $ | 12.81 | ||||||||||
| Tangible equity per common stock and shares issuable under purchase contracts |
$ | 10.19 | $ | 10.11 | $ | 9.96 | $ | 9.64 | $ | 9.88 | ||||||||||
| Book value per common stock and shares issuable under purchase contracts |
$ | 11.74 | $ | 11.50 | $ | 11.41 | $ | 11.14 | $ | 11.18 | ||||||||||
- 13 -
Banc of California, Inc.
Non-GAAP Measures, Continued
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||
| September 30, | June 30, | March 31, | December 31, | September 30, | September 30, | September 30, | ||||||||||||||||||||||
| 2015 | 2015 | 2015 | 2014 | 2014 | 2015 | 2014 | ||||||||||||||||||||||
| Return on tangible common equity |
||||||||||||||||||||||||||||
| Average total stockholders’ equity |
$ | 645,713 | $ | 630,547 | $ | 517,335 | $ | 487,578 | $ | 449,392 | $ | 598,335 | $ | 388,474 | ||||||||||||||
| Less average preferred stock |
(190,750 | ) | (182,233 | ) | (79,877 | ) | (79,877 | ) | (79,877 | ) | (151,360 | ) | (79,877 | ) | ||||||||||||||
| Less average goodwill |
(31,674 | ) | (31,591 | ) | (31,591 | ) | (33,129 | ) | (32,209 | ) | (31,619 | ) | (32,056 | ) | ||||||||||||||
| Less average other intangible assets |
(21,320 | ) | (23,032 | ) | (24,720 | ) | (13,611 | ) | (10,634 | ) | (23,012 | ) | (11,108 | ) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Average tangible common equity |
$ | 401,969 | $ | 393,691 | $ | 381,147 | $ | 360,961 | $ | 326,672 | $ | 392,344 | $ | 265,433 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| Net income |
$ | 14,536 | $ | 15,924 | $ | 12,574 | $ | 10,110 | $ | 11,247 | $ | 43,034 | $ | 20,095 | ||||||||||||||
| Less preferred stock dividends |
(3,040 | ) | (2,843 | ) | (910 | ) | (910 | ) | (910 | ) | (6,793 | ) | (2,730 | ) | ||||||||||||||
| Add tax-effected amortization of intangible assets (1) |
911 | 1,004 | 1,004 | 849 | 579 | 2,919 | 1,802 | |||||||||||||||||||||
| Add tax-effected impairment on intangible assets (1) |
— | 168 | — | 31 | — | 168 | — | |||||||||||||||||||||
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| Net income available to common stockholders |
$ | 12,407 | $ | 14,253 | $ | 12,668 | $ | 10,080 | $ | 10,916 | $ | 39,328 | $ | 19,167 | ||||||||||||||
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| Return on average equity |
8.93 | % | 10.13 | % | 9.86 | % | 8.23 | % | 9.93 | % | 9.62 | % | 6.92 | % | ||||||||||||||
| Return on average tangible common equity |
12.25 | % | 14.52 | % | 13.48 | % | 11.08 | % | 13.26 | % | 13.40 | % | 9.65 | % | ||||||||||||||
- 14 -
 2015 Third Quarter Earnings
October 29, 2015
Investor Presentation
Exhibit 99.2 |
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 associated 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.
Banc of California 8th largest public independent California bank $7.3 billion in assets 100+ banking locations throughout California and the West Total Assets ($ in billions) Net Income ($ in millions) +858% +331% We are committed to building the top full-service bank empowering California’s diverse private businesses, entrepreneurs and homeowners $57.51 1YTD 2015 annualized
Third Quarter Highlights $0.29 diluted EPS; 0.9% ROAA; 12% ROATCE Record quarterly core deposit growth exceeding $500 million1 Average deposit balance per account increased 14% quarter-over-quarter Noninterest bearing deposits increased 17% quarter-over-quarter Record quarterly commercial banking segment loan originations exceeding $725 million2 Noninterest expenses reduced by $6.2 million quarter-over-quarter Asset quality remains strong and stable Net of branch sales and offsetting reduction in brokered and treasury balances Excluding mortgage banking originations Banc of California franchise delivers sixth straight quarter of strong financial performance
Strong and Accelerating Financial Results Growth Continues to be Accretive to Earnings, EPS, ROAA and ROATCE $1.24 2015 YTD Annualized $98.0 Dollars in millions Return on Assets and Return on Tangible Common Equity based on average assets and average tangible common equity, respectively, over stated time periods. Earnings per Share Pretax Income1 Return on Assets2 Return on Tangible Common Equity2
On Track to Meet Management’s 2015 Guidance Six Straight Quarters Above Consensus EPS Estimates Stated Year-End 2015 Run Rate Targets 1% 15% 1 Dollars in millions Return on Assets and Return on Tangible Common Equity based on average assets and average tangible common equity, respectively, over stated time periods. Earnings per Share Pretax Income1 Return on Assets2 Return on Tangible Common Equity2
Commercial Banking Segment Drives Profitability $20+ Million Increase in Quarterly Commercial Banking Pre-Tax Income since Popular Acquisition 1Business Segment Total; excludes Corporate / Other segment 3Q 2015 Pre-Tax Income by Business Segment1 Net interest income has grown 45% year-over-year Record new core deposits in 3Q 2015 Record commercial banking segment loan originations in 3Q 2015 $31.5 $35.8 $26.2 $9.6 Commercial Banking Segment Total Pre-Tax Income1
Noninterest Expense ($ in millions) Assets / FTE ($ in millions) Noninterest Expense and Productivity Investments in Scalable Platform Yielding Positive Results $67.4 $78.2 1 $75.9 1Includes Mortgage Banking-related commissions, bonus and loan-related expenses. $87.9 $81.7
Deposit Growth Driven by Deepening Client Relationships Winning Market Share Through Higher Per Account Core Deposit Balances $5.4 $3.6 $4.7 $4.9 $5.1 Total Deposits ($ in billions) 121% 39% 19% 13% 14% 15% 17% 81% 87% 86% 85% 83% Net deposit balances increased by $317 million by increasing average account size by 14%, to >$83,000 Noninterest bearing deposits now totaling over $1 billion and 19% of total deposits Reduced Treasury and Brokered deposit balances by >$200 million Cost of Deposits: 0.50% 0.54% 0.60% 0.70% 0.49% Annual Growth Rate Noninterest-bearing Interest-bearing
Accelerating Commercial Banking Loan Originations On pace to meet 2015 guidance for total annual originations of $7+ billion Commercial Banking Segment Gross Loan Originations ($ in millions) Business loan and lease balances now exceed CRE and Multifamily loan categories (1) New commercial banking segment origination yields over 4.3%, a quarter over quarter increase of 6bps Mortgage Banking Segment originations of $1.1 billion in 3Q $5.2 billion of total originations YTD 1Business loans include C&I, SBA and Leasing balances.
Asset Quality Remains Strong and Stable Strengthening Credit Metrics Resulting in Increased ALLL / NPL Coverage Ratio 3Q 2014 4Q 2014 1Q 2015 2Q 2015 3Q 2015 % Change YoY NPAs / Assets 0.86% 0.65% 0.71% 0.66% 0.62% (28%) NPAs / Equity 8.7% 7.7% 8.4% 6.7% 7.0% (20%) ALLL / NPLs 66% 77% 69% 81% 77% + 17% 3Q 20151 ALLL Detail by Loan Type Loan Balance Discount ALLL ($) ALLL / Loans (%) ALLL + Discount / Loans (%) Originated Loans $2,807.6 --- $31.9 1.14% 1.14% Acquired Loans (Gateway, Beach, PBOC) 314.2 7.6 2.6 0.82% 3.24% BPOP Acquired 876.3 17.1 0.3 0.03% 1.98% Purchased Loans (Seasoned SFR Pools) 732.0 66.0 --- --- 9.02% Total $4,730.1 $90.7 $34.8 0.74% 2.65% 1Dollars in millions unless otherwise noted
Year-End and 2016 Preliminary Guidance Metric YE 2015 FY 2016 Earnings Per Share $1.15+ 15%+ YoY Total Assets $8.0 - $8.5 billion 15%+ YoY ROAA1 1%+ 1%+ ROATCE1 15%+ 15%+ Efficiency Ratio1 70% - 75% 65% - 70% 1Year-end Exit Run-Rate 2015; assumed launch point for FY2016 guidance