Form 8-K BANC OF CALIFORNIA, INC. For: Apr 21
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): April 21, 2016
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 April 21, 2016, Banc of California, Inc. (the “Company”) issued a press release announcing 2016 first quarter financial results. The Company will host a conference call to discuss these first quarter financial results at 7:00 a.m. Pacific Time (PT) on Thursday, April 21, 2016. Interested parties may attend the conference call by dialing 888-317-6003, and referencing event code 4042337. 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 April 21, 2016. | |
| 99.2 | Banc of California, Inc. Earnings Conference Call Presentation Materials, dated April 21, 2016. | |
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. | ||||
| April 21, 2016 | /s/ James McKinney | |||
| James McKinney | ||||
| Executive Vice President and Chief Financial Officer | ||||
3
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Banc of California, Inc. Press Release, dated April 21, 2016. | |
| 99.2 | Banc of California, Inc. Earnings Conference Call Presentation Materials, dated April 21, 2016. | |
4
Exhibit 99.1
Banc of California Reports Record First Quarter Earnings
IRVINE, Calif., (April 21, 2016) – Banc of California, Inc. (NYSE: BANC) today reported record quarterly net income of $19.7 million for the first quarter of 2016, resulting in diluted earnings per share of $0.36 for the quarter.
Pre-tax income for the first quarter of 2016 was $33.0 million, an increase of 49% compared to first quarter of 2015. Net income available to common shareholders for the first quarter was $15.1 million, an increase of 30% compared to the first quarter of 2015.
Highlights for the first quarter included:
| • | Record quarterly non-interest bearing deposit growth of $278 million, or 25%. |
| • | Quarterly commercial banking segment loan and lease originations of $823 million, an increase of 66% from a year ago. |
| • | The Company’s return on average assets for the quarter was 0.9%, and its return on average tangible common equity (ROTCE) for the quarter was 14.5%. |
The Company’s consolidated assets totaled $9.6 billion at March 31, 2016, an increase of $1.4 billion, or 17%, compared to the prior quarter, and an increase of $3.5 billion, or 58%, compared to a year ago. The Company’s growth over this period has been entirely organic as Banc of California’s last acquisition occurred in 2014.
“Based on total shareholder return since the beginning of 2015, Banc of California is the #1 performing bank stock amongst Forbes’ Magazine’s list of America’s Top 100 Banks,” said Steven Sugarman, Chairman and Chief Executive Officer of Banc of California. “In the first quarter of 2016 alone, Banc of California’s 21% return outperformed the next closest bank by 7%. As all our employees are shareholders, we are proud and excited by this accomplishment. The continued strength of our financial performance showcases our strategy, focus and execution quarter-over-quarter as we are winning market share and top talent. Banc of California is a business built for the long-term.”
During the first quarter, the Company raised $81 million in common stock, raised $125 million in Perpetual, Non-Cumulative Preferred Stock and liquidated its wholly owned subsidiary PTB Property Holdings LLC. Since the end of the first quarter, the Company has redeemed its $42 million preferred stock from the Small Business Lending Fund (SBLF), redeemed $85 million of 7.50% Senior Notes, announced the sale of its wholly owned subsidiary, The Palisades Group, LLC, and increased its undrawn line of credit to $75 million.
“Banc of California has meaningfully deleveraged and simplified its balance sheet, increased its liquidity and streamlined its businesses and organizational structure during 2016,” said James McKinney, Chief Financial Officer of Banc of California. “We expect these actions will not only make us a safer and stronger financial institution, but they will be accretive to the holders of our debt, preferred stock and common stock. These actions are part of our strategy to strengthen, and increase the durability of, our balance-sheet and liquidity in advance of our growth beyond $10 billion in assets. We will continue to seek opportunities to strengthen our franchise for the benefit of all our clients and other stakeholders.”
During the quarter, Banc of California grew its recurring net interest income by $8 million, built its earning assets by $1.4 billion, and strengthened its liquidity position by $0.9 billion, while maintaining its net interest margin. These results occurred while the yield on the 10-year Treasury fell from 2.27% to 1.78%.
“We are proud that our interest rate risk controls and balance sheet management strategy enabled our bank to successfully navigate a volatile rate environment without impacting the consistency and predictability of our earnings,” Sugarman said. “The negative fair value adjustments on our mortgage servicing rights and SWAPs were offset by concurrent intra-quarter fair value gains recognized in our securities portfolio. We believe this further validates the investments we have made and continue to make in our enterprise risk analytics and controls. Our analytical approach to building our balance sheet and our business continues to support our track record of consistent, growing earnings.”
The Company will host a conference call to discuss its first quarter financial results at 7:00 a.m. Pacific Time (PT) on Thursday, April 21, 2016. Interested parties are welcome to attend the conference call by dialing 888-317-6003, and referencing event code 4042337. A live audio webcast will also be available and the webcast link will be posted on the Company’s Investor Relations website at www.bancofcal.com/investor. The slide presentation for the call will also be available on the Company’s Investor Relations 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 businesses, entrepreneurs and communities. 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 |
Banc of California, Inc.
Consolidated Statements of Financial Condition
(Dollars in thousands)
(Unaudited)
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| ASSETS | ||||||||||||||||||||
| Cash and cash equivalents |
$ | 215,012 | $ | 156,124 | $ | 378,963 | $ | 458,990 | $ | 265,402 | ||||||||||
| Time deposits in financial institutions |
1,500 | 1,500 | 1,900 | 1,900 | 1,900 | |||||||||||||||
| Securities available for sale |
1,663,711 | 833,596 | 693,219 | 487,293 | 393,586 | |||||||||||||||
| Securities held to maturity |
962,262 | 962,203 | 529,532 | 53,414 | — | |||||||||||||||
| Loans held for sale |
863,944 | 668,841 | 596,565 | 746,651 | 1,240,942 | |||||||||||||||
| Loans and leases receivable |
5,463,068 | 5,184,394 | 4,730,077 | 4,473,095 | 3,933,715 | |||||||||||||||
| Allowance for loan and lease losses |
(35,845 | ) | (35,533 | ) | (34,774 | ) | (34,787 | ) | (29,345 | ) | ||||||||||
| Federal Home Loan Bank and other bank stock |
61,146 | 59,069 | 40,643 | 34,187 | 39,844 | |||||||||||||||
| Servicing rights, net |
49,406 | 50,727 | 41,646 | 34,942 | 21,829 | |||||||||||||||
| Other real estate owned, net |
325 | 1,097 | 34 | 50 | 498 | |||||||||||||||
| Premises and equipment, net |
114,668 | 111,539 | 34,689 | 35,229 | 78,285 | |||||||||||||||
| Goodwill |
39,244 | 39,244 | 39,244 | 31,591 | 31,591 | |||||||||||||||
| Other intangible assets, net |
17,836 | 19,158 | 20,504 | 21,905 | 23,708 | |||||||||||||||
| Deferred income tax |
7,441 | 11,341 | 13,388 | 12,081 | 14,157 | |||||||||||||||
| Income tax receivable |
— | 604 | 2,649 | 3,091 | — | |||||||||||||||
| Bank-owned life insurance investment |
100,734 | 100,171 | 99,570 | 19,201 | 19,154 | |||||||||||||||
| Other assets |
92,520 | 71,480 | 68,961 | 59,049 | 62,089 | |||||||||||||||
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| Total assets |
$ | 9,616,972 | $ | 8,235,555 | $ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | ||||||||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
| Deposits |
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| Noninterest-bearing deposits |
$ | 1,398,728 | $ | 1,121,124 | $ | 1,011,169 | $ | 867,930 | $ | 749,129 | ||||||||||
| Interest-bearing deposits |
5,438,873 | 5,181,961 | 4,410,821 | 4,184,260 | 4,112,863 | |||||||||||||||
| Deposits held for sale |
— | — | — | 52,820 | — | |||||||||||||||
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| Total deposits |
6,837,601 | 6,303,085 | 5,421,990 | 5,105,010 | 4,861,992 | |||||||||||||||
| Advances from Federal Home Loan Bank |
1,195,000 | 930,000 | 830,000 | 350,000 | 545,000 | |||||||||||||||
| Securities sold under repurchase agreements |
257,100 | — | — | — | — | |||||||||||||||
| Other borrowings |
— | — | — | — | 15,000 | |||||||||||||||
| Notes payable, net |
260,896 | 261,876 | 262,779 | 264,077 | 92,668 | |||||||||||||||
| Reserve for loss on repurchased loans |
9,781 | 9,700 | 9,098 | 9,411 | 8,432 | |||||||||||||||
| Income taxes payable |
12,303 | 1,241 | 5,939 | — | 4,488 | |||||||||||||||
| Accrued expenses and other liabilities |
176,761 | 77,248 | 83,470 | 75,502 | 55,615 | |||||||||||||||
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| Total liabilities |
8,749,442 | 7,583,150 | 6,613,276 | 5,804,000 | 5,583,195 | |||||||||||||||
| 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 | 110,873 | 110,873 | — | |||||||||||||||
| Preferred stock, Series E, 7.00% non-cumulative perpetual |
120,258 | — | — | — | — | |||||||||||||||
| Common stock |
454 | 395 | 393 | 372 | 367 | |||||||||||||||
| Common stock, class B non-voting non-convertible |
1 | 1 | — | — | — | |||||||||||||||
| Additional paid-in capital |
509,123 | 429,790 | 427,599 | 425,784 | 424,636 | |||||||||||||||
| Retained earnings |
73,179 | 63,534 | 52,277 | 45,494 | 36,880 | |||||||||||||||
| Treasury stock |
(29,070 | ) | (29,070 | ) | (29,070 | ) | (29,070 | ) | (29,798 | ) | ||||||||||
| Accumulated other comprehensive income/(loss), net |
2,835 | (2,995 | ) | 1,585 | 552 | 2,198 | ||||||||||||||
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| Total stockholders’ equity |
867,530 | 652,405 | 643,534 | 633,882 | 514,160 | |||||||||||||||
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| Total liabilities and stockholders’ equity |
$ | 9,616,972 | $ | 8,235,555 | $ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | ||||||||||
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Banc of California, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Interest and dividend income |
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| Loans, including fees |
$ | 67,144 | $ | 62,248 | $ | 60,454 | $ | 60,699 | $ | 58,155 | ||||||||||
| Securities |
16,047 | 11,163 | 5,054 | 2,119 | 1,927 | |||||||||||||||
| Dividends and other interest-earning assets |
1,049 | 788 | 1,007 | 2,026 | 698 | |||||||||||||||
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| Total interest and dividend income |
84,240 | 74,199 | 66,515 | 64,844 | 60,780 | |||||||||||||||
| Interest expense |
||||||||||||||||||||
| Deposits |
8,107 | 6,862 | 6,395 | 6,165 | 6,361 | |||||||||||||||
| Federal Home Loan Bank advances |
1,262 | 890 | 587 | 290 | 353 | |||||||||||||||
| Securities sold under repurchase agreements |
160 | 15 | 3 | — | — | |||||||||||||||
| Notes payable and other interest-bearing liabilities |
4,294 | 4,366 | 3,980 | 4,285 | 2,069 | |||||||||||||||
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| Total interest expense |
13,823 | 12,133 | 10,965 | 10,740 | 8,783 | |||||||||||||||
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| Net interest income |
70,417 | 62,066 | 55,550 | 54,104 | 51,997 | |||||||||||||||
| Provision for loan and lease losses |
321 | 1,260 | 735 | 5,474 | — | |||||||||||||||
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| Net interest income after provision for loan and lease losses |
70,096 | 60,806 | 54,815 | 48,630 | 51,997 | |||||||||||||||
| Noninterest income |
||||||||||||||||||||
| Customer service fees |
848 | 957 | 1,118 | 1,072 | 910 | |||||||||||||||
| Loan servicing (loss) income |
(5,288 | ) | 3,663 | (2,254 | ) | 2,007 | (442 | ) | ||||||||||||
| Net gain on sale of securities available for sale |
16,789 | 1,510 | 1,750 | — | (2 | ) | ||||||||||||||
| Net gain on sale of loans |
2,195 | 15,164 | 9,737 | 7,838 | 4,472 | |||||||||||||||
| Mortgage banking income |
33,684 | 30,334 | 37,015 | 39,403 | 37,933 | |||||||||||||||
| Advisory service fees |
997 | 1,942 | 2,294 | 4,435 | 1,197 | |||||||||||||||
| Loan brokerage income |
874 | 678 | 660 | 661 | 1,141 | |||||||||||||||
| Gain on sale of building |
— | — | — | 9,919 | — | |||||||||||||||
| All other income |
1,860 | 2,571 | 407 | 1,358 | 771 | |||||||||||||||
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| Total noninterest income |
51,959 | 56,819 | 50,727 | 66,693 | 45,980 | |||||||||||||||
| Noninterest expense |
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| Salaries and employee benefits |
57,183 | 54,008 | 53,215 | 56,120 | 49,771 | |||||||||||||||
| Occupancy and equipment |
11,740 | 11,200 | 10,109 | 10,325 | 9,771 | |||||||||||||||
| Professional fees |
6,212 | 4,808 | 5,261 | 6,689 | 3,435 | |||||||||||||||
| Data processing |
2,194 | 2,104 | 2,170 | 2,075 | 1,835 | |||||||||||||||
| Amortization of intangible assets |
1,322 | 1,346 | 1,401 | 1,545 | 1,544 | |||||||||||||||
| All other expenses |
10,449 | 13,193 | 9,587 | 11,166 | 9,523 | |||||||||||||||
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| Total noninterest expense |
89,100 | 86,659 | 81,743 | 87,920 | 75,879 | |||||||||||||||
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| Income before income taxes |
32,955 | 30,966 | 23,799 | 27,403 | 22,098 | |||||||||||||||
| Income tax (benefit) expense |
13,268 | 11,928 | 9,263 | 11,479 | 9,524 | |||||||||||||||
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| Net income |
19,687 | 19,038 | 14,536 | 15,924 | 12,574 | |||||||||||||||
| Preferred stock dividends |
4,575 | 3,030 | 3,040 | 2,843 | 910 | |||||||||||||||
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| Net income available to common stockholders |
$ | 15,112 | $ | 16,008 | $ | 11,496 | $ | 13,081 | $ | 11,664 | ||||||||||
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| Basic earnings per total common share |
$ | 0.36 | $ | 0.40 | $ | 0.29 | $ | 0.33 | $ | 0.30 | ||||||||||
| Diluted earnings per total common share |
$ | 0.36 | $ | 0.39 | $ | 0.29 | $ | 0.32 | $ | 0.29 | ||||||||||
Banc of California, Inc.
Selected Financial Data
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
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| Average balances |
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| Total assets |
$ | 8,833,176 | $ | 7,590,781 | $ | 6,681,590 | $ | 6,253,350 | $ | 5,931,426 | ||||||||||
| Total gross loans and leases |
5,995,436 | 5,531,539 | 5,271,293 | 5,254,729 | 5,139,399 | |||||||||||||||
| Investment Securities |
2,128,882 | 1,506,626 | 828,326 | 402,366 | 354,475 | |||||||||||||||
| Total interest earning assets |
8,344,167 | 7,264,341 | 6,449,862 | 5,967,200 | 5,713,766 | |||||||||||||||
| Total interest-bearing deposits |
5,332,032 | 4,685,145 | 4,314,330 | 4,078,540 | 4,085,673 | |||||||||||||||
| Total borrowings |
1,219,315 | 1,141,554 | 745,959 | 635,460 | 583,979 | |||||||||||||||
| Total interest bearing liabilities |
6,641,742 | 5,826,699 | 5,060,289 | 4,714,000 | 4,669,652 | |||||||||||||||
| Total stockholders’ equity |
762,923 | 654,106 | 645,713 | 630,547 | 517,335 | |||||||||||||||
| Profitability and other ratios |
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| Return on average assets (1) |
0.90 | % | 1.00 | % | 0.86 | % | 1.02 | % | 0.86 | % | ||||||||||
| Return on average equity (1) |
10.38 | % | 11.55 | % | 8.93 | % | 10.13 | % | 9.86 | % | ||||||||||
| Return on average tangible common equity (2) |
14.46 | % | 16.57 | % | 12.25 | % | 14.52 | % | 13.48 | % | ||||||||||
| Dividend payout ratio (3) |
33.33 | % | 30.00 | % | 41.38 | % | 36.36 | % | 40.00 | % | ||||||||||
| Net interest spread |
3.22 | % | 3.22 | % | 3.23 | % | 3.45 | % | 3.55 | % | ||||||||||
| Net interest margin (1) |
3.39 | % | 3.39 | % | 3.42 | % | 3.64 | % | 3.69 | % | ||||||||||
| Noninterest income to total revenue (4) |
42.46 | % | 47.79 | % | 47.73 | % | 55.21 | % | 46.93 | % | ||||||||||
| Noninterest income to average total assets (1) |
2.37 | % | 2.97 | % | 3.01 | % | 4.28 | % | 3.14 | % | ||||||||||
| Noninterest expense to average total assets (1) |
4.06 | % | 4.53 | % | 4.85 | % | 5.64 | % | 5.19 | % | ||||||||||
| Efficiency ratio (5) |
72.81 | % | 72.89 | % | 76.92 | % | 72.78 | % | 77.45 | % | ||||||||||
| Average held for investment loans and leases to average deposits |
79.76 | % | 86.88 | % | 86.03 | % | 79.87 | % | 81.72 | % | ||||||||||
| Average investment securities to average total assets |
24.10 | % | 19.85 | % | 12.40 | % | 6.43 | % | 5.98 | % | ||||||||||
| Average stockholders’ equity to average total assets |
8.64 | % | 8.62 | % | 9.66 | % | 10.08 | % | 8.72 | % | ||||||||||
| Allowance for loan and lease losses (ALLL) |
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| Balance at beginning of period |
$ | 35,533 | $ | 34,774 | $ | 34,787 | $ | 29,345 | $ | 29,480 | ||||||||||
| Loans and leases charged off |
(102 | ) | (718 | ) | (788 | ) | (79 | ) | (357 | ) | ||||||||||
| Recoveries |
93 | 217 | 40 | 47 | 222 | |||||||||||||||
| Transfer of loans from (to) held-for-sale |
— | — | — | — | — | |||||||||||||||
| Provision for loan and lease losses |
321 | 1,260 | 735 | 5,474 | — | |||||||||||||||
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| Balance at end of period |
$ | 35,845 | $ | 35,533 | $ | 34,774 | $ | 34,787 | $ | 29,345 | ||||||||||
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| Annualized net loan charge-offs to average total gross loans held for investment |
0.00 | % | 0.04 | % | 0.07 | % | 0.00 | % | 0.01 | % | ||||||||||
| Reserve for loss on repurchased loans |
||||||||||||||||||||
| Balance at beginning of period |
$ | 9,700 | $ | 9,098 | $ | 9,411 | $ | 8,432 | $ | 8,303 | ||||||||||
| Provision for loan repurchases |
379 | 735 | 716 | 1,573 | 1,328 | |||||||||||||||
| Change in estimates |
— | 846 | — | — | — | |||||||||||||||
| Utilization of reserve for loan repurchases |
(298 | ) | (979 | ) | (1,029 | ) | (594 | ) | (1,199 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Balance at end of period |
$ | 9,781 | $ | 9,700 | $ | 9,098 | $ | 9,411 | $ | 8,432 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) | Ratios are presented on an annualized basis. |
| (2) | Non-GAAP measure. See Non-GAAP measures section for reconciliation of the calculation. |
| (3) | Dividends declared per common share divided by basic earnings per share. |
| (4) | Total revenue is equal to the sum of net interest income before provision and noninterest income. |
| (5) | 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. |
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Asset quality information and ratios |
||||||||||||||||||||
| 30 to 89 days delinquent, excluding PCI loans |
$ | 36,022 | $ | 39,946 | $ | 48,550 | $ | 46,820 | $ | 40,641 | ||||||||||
| 90+ days delinquent, excluding PCI loans |
27,469 | 23,338 | 23,725 | 22,855 | 20,538 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent loans, excluding PCI loans |
63,491 | 63,284 | 72,275 | 69,675 | 61,179 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| PCI loans, 30 to 89 days delinquent |
44,191 | 40,291 | 17,593 | 17,351 | 16,375 | |||||||||||||||
| PCI loans, 90+ days delinquent |
9,806 | 6,894 | 6,223 | 8,648 | 6,986 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent PCI loans |
53,997 | 47,185 | 23,816 | 25,999 | 23,361 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent loans |
$ | 117,488 | $ | 110,469 | $ | 96,091 | $ | 95,674 | $ | 84,540 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total delinquent non-PCI loans to total non-PCI loans |
1.33 | % | 1.42 | % | 1.66 | % | 1.66 | % | 1.66 | % | ||||||||||
| Total delinquent loans to gross loans |
2.15 | % | 2.13 | % | 2.03 | % | 2.14 | % | 2.15 | % | ||||||||||
| Non-performing loans, excluding PCI loans |
$ | 44,216 | $ | 45,129 | $ | 45,188 | $ | 42,708 | $ | 42,754 | ||||||||||
| 90+ days delinquent and still accruing loans, excluding PCI loans |
— | — | — | — | — | |||||||||||||||
| Other real estate owned |
325 | 1,097 | 34 | 50 | 498 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Non-performing assets |
$ | 44,541 | $ | 46,226 | $ | 45,222 | $ | 42,758 | $ | 43,252 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| ALLL to non-performing loans |
81.07 | % | 78.74 | % | 76.95 | % | 81.45 | % | 68.64 | % | ||||||||||
| Non-performing loans to gross loans |
0.81 | % | 0.87 | % | 0.96 | % | 0.95 | % | 1.09 | % | ||||||||||
| Non-performing assets to total assets |
0.46 | % | 0.56 | % | 0.62 | % | 0.66 | % | 0.71 | % | ||||||||||
| Troubled Debt Restructurings (TDRs) |
||||||||||||||||||||
| Performing TDRs |
$ | 15,128 | $ | 7,842 | $ | 9,378 | $ | 7,402 | $ | 7,431 | ||||||||||
| Non-performing TDRs |
2,545 | 1,970 | 2,017 | 1,937 | 1,964 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total TDRs |
$ | 17,673 | $ | 9,812 | $ | 11,395 | $ | 9,339 | $ | 9,395 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Loan and lease breakdown by ALLL evaluation type |
||||||||||||||||||||
| Originated loans and leases |
||||||||||||||||||||
| Individually evaluated for impairment |
$ | 26,565 | $ | 30,654 | $ | 31,008 | $ | 31,791 | $ | 29,301 | ||||||||||
| Collectively evaluated for impairment |
3,484,995 | 3,117,528 | 2,776,601 | 2,489,347 | 1,947,212 | |||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
3,530 | 3,629 | 1,704 | 8 | 2,818 | |||||||||||||||
| Collectively evaluated for impairment |
1,079,711 | 1,124,874 | 1,174,573 | 1,294,384 | 1,358,184 | |||||||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
9,287 | — | — | — | — | |||||||||||||||
| Collectively evaluated for impairment |
175,004 | 194,978 | 373,634 | 391,193 | 354,402 | |||||||||||||||
| Acquired with deteriorated credit quality |
683,976 | 712,731 | 372,557 | 266,372 | 241,798 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total loans |
$ | 5,463,068 | $ | 5,184,394 | $ | 4,730,077 | $ | 4,473,095 | $ | 3,933,715 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| ALLL breakdown |
||||||||||||||||||||
| Originated loans and leases |
||||||||||||||||||||
| Individually evaluated for impairment |
$ | 365 | $ | 369 | $ | 512 | $ | 686 | $ | 1,199 | ||||||||||
| Collectively evaluated for impairment |
32,202 | 32,713 | 31,419 | 31,440 | 25,474 | |||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
— | — | — | — | — | |||||||||||||||
| Collectively evaluated for impairment |
2,061 | 2,245 | 2,637 | 2,455 | 2,466 | |||||||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
||||||||||||||||||||
| Individually evaluated for impairment |
1,011 | — | — | — | — | |||||||||||||||
| Collectively evaluated for impairment |
— | — | — | — | — | |||||||||||||||
| Acquired with deteriorated credit quality |
206 | 206 | 206 | 206 | 206 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total ALLL |
$ | 35,845 | $ | 35,533 | $ | 34,774 | $ | 34,787 | $ | 29,345 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Discount on Purchased/Acquired Loans |
||||||||||||||||||||
| Acquired loans through business acquisitions - non-impaired |
$ | 20,781 | $ | 21,366 | $ | 21,759 | $ | 15,245 | $ | 16,877 | ||||||||||
| Seasoned SFR mortgage loan pools - non-impaired |
11,862 | 12,545 | 27,699 | 29,201 | 28,967 | |||||||||||||||
| Acquired with deteriorated credit quality |
66,573 | 68,372 | 41,280 | 52,394 | 53,381 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total Discount |
$ | 99,216 | $ | 102,283 | $ | 90,738 | $ | 96,840 | $ | 99,225 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Ratios |
||||||||||||||||||||
| To originated loans and leases: |
||||||||||||||||||||
| Individually evaluated for impairment |
1.37 | % | 1.20 | % | 1.65 | % | 2.16 | % | 4.09 | % | ||||||||||
| Collectively evaluated for impairment (1) |
0.92 | % | 1.05 | % | 1.13 | % | 1.26 | % | 1.31 | % | ||||||||||
| Total ALLL |
0.93 | % | 1.05 | % | 1.14 | % | 1.27 | % | 1.35 | % | ||||||||||
| To originated loans and leases and acquired loans not impaired at acquisition: |
||||||||||||||||||||
| Individually evaluated for impairment |
1.21 | % | 1.08 | % | 1.57 | % | 2.16 | % | 3.73 | % | ||||||||||
| Collectively evaluated for impairment |
0.75 | % | 0.82 | % | 0.86 | % | 0.90 | % | 0.85 | % | ||||||||||
| Total ALLL |
0.75 | % | 0.83 | % | 0.87 | % | 0.91 | % | 0.87 | % | ||||||||||
| Total ALLL and discount (2) |
1.21 | % | 1.33 | % | 1.41 | % | 1.31 | % | 1.38 | % | ||||||||||
| To total loans and leases: |
||||||||||||||||||||
| Individually evaluated for impairment |
3.49 | % | 1.08 | % | 1.57 | % | 2.16 | % | 3.73 | % | ||||||||||
| Collectively evaluated for impairment |
0.72 | % | 0.79 | % | 0.79 | % | 0.81 | % | 0.76 | % | ||||||||||
| Total ALLL |
0.66 | % | 0.69 | % | 0.74 | % | 0.78 | % | 0.75 | % | ||||||||||
| Total ALLL and discount (2) |
2.47 | % | 2.66 | % | 2.65 | % | 2.94 | % | 3.27 | % | ||||||||||
| (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. |
Banc of California, Inc.
Selected Financial Data, Continued
(Dollars in thousands)
(Unaudited)
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Composition of held for investment loans and leases |
||||||||||||||||||||
| Commercial real estate |
$ | 713,693 | $ | 727,707 | $ | 690,862 | $ | 807,146 | $ | 975,734 | ||||||||||
| Multi-family |
1,021,097 | 904,300 | 823,415 | 696,768 | 940,053 | |||||||||||||||
| Construction |
68,241 | 55,289 | 39,475 | 32,022 | 38,081 | |||||||||||||||
| Commercial and industrial |
983,961 | 876,999 | 822,690 | 771,477 | 489,229 | |||||||||||||||
| SBA |
71,640 | 57,706 | 52,985 | 56,887 | 48,254 | |||||||||||||||
| Lease financing |
212,836 | 192,424 | 162,504 | 131,189 | 102,012 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total commercial loans |
3,071,468 | 2,814,425 | 2,591,931 | 2,495,489 | 2,593,363 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Single family residential mortgage |
2,282,445 | 2,255,584 | 2,013,450 | 1,840,924 | 1,169,134 | |||||||||||||||
| Other consumer |
109,155 | 114,385 | 124,696 | 136,682 | 171,218 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total consumer loans |
2,391,600 | 2,369,969 | 2,138,146 | 1,977,606 | 1,340,352 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total gross loans and leases |
$ | 5,463,068 | $ | 5,184,394 | $ | 4,730,077 | $ | 4,473,095 | $ | 3,933,715 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition percentage of held for investment loans and leases |
||||||||||||||||||||
| Commercial real estate |
13.1 | % | 14.0 | % | 14.6 | % | 18.0 | % | 24.8 | % | ||||||||||
| Multi-family |
18.7 | % | 17.4 | % | 17.4 | % | 15.6 | % | 23.9 | % | ||||||||||
| Construction |
1.2 | % | 1.1 | % | 0.8 | % | 0.7 | % | 1.0 | % | ||||||||||
| Commercial and industrial |
18.0 | % | 16.9 | % | 17.4 | % | 17.2 | % | 12.4 | % | ||||||||||
| SBA |
1.3 | % | 1.1 | % | 1.1 | % | 1.3 | % | 1.2 | % | ||||||||||
| Lease financing |
3.9 | % | 3.7 | % | 3.4 | % | 2.9 | % | 2.6 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total commercial loans |
56.2 | % | 54.2 | % | 54.7 | % | 55.7 | % | 65.9 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Single family residential mortgage |
41.8 | % | 43.6 | % | 42.7 | % | 41.2 | % | 29.7 | % | ||||||||||
| Other consumer |
2.0 | % | 2.2 | % | 2.6 | % | 3.1 | % | 4.4 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total consumer loans |
43.8 | % | 45.8 | % | 45.3 | % | 44.3 | % | 34.1 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total gross loans and leases |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition of deposits |
||||||||||||||||||||
| Noninterest-bearing checking |
$ | 1,398,728 | $ | 1,121,124 | $ | 1,011,169 | $ | 880,766 | $ | 749,129 | ||||||||||
| Interest-bearing checking |
2,052,507 | 1,697,055 | 1,458,208 | 1,002,443 | 1,032,482 | |||||||||||||||
| Money market |
1,534,492 | 1,479,931 | 1,238,180 | 1,393,751 | 1,136,562 | |||||||||||||||
| Savings |
844,177 | 823,618 | 814,230 | 843,274 | 898,483 | |||||||||||||||
| Certificates of deposit |
1,007,697 | 1,181,357 | 900,203 | 984,776 | 1,045,336 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
$ | 6,837,601 | $ | 6,303,085 | $ | 5,421,990 | $ | 5,105,010 | $ | 4,861,992 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Composition percentage of deposits |
||||||||||||||||||||
| Noninterest-bearing checking |
20.5 | % | 17.8 | % | 18.6 | % | 17.3 | % | 15.4 | % | ||||||||||
| Interest-bearing checking |
30.0 | % | 26.8 | % | 26.9 | % | 19.6 | % | 21.2 | % | ||||||||||
| Money market |
22.4 | % | 23.5 | % | 22.8 | % | 27.3 | % | 23.4 | % | ||||||||||
| Savings |
12.3 | % | 13.1 | % | 15.0 | % | 16.5 | % | 18.5 | % | ||||||||||
| Certificates of deposit |
14.8 | % | 18.8 | % | 16.7 | % | 19.3 | % | 21.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total deposits |
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||||||||||||||
| March 31, 2016 | December 31, 2015 | September 30, 2015 | ||||||||||||||||||||||||||||||||||
| Average Balance |
Interest | Yield / Cost |
Average Balance |
Interest | Yield / Cost |
Average Balance |
Interest | Yield / Cost |
||||||||||||||||||||||||||||
| Interest earning assets |
||||||||||||||||||||||||||||||||||||
| Loans held for sale and SFR mortgage |
$ | 2,144,834 | $ | 19,808 | 3.71 | % | $ | 1,903,331 | $ | 17,584 | 3.67 | % | $ | 1,966,373 | $ | 18,123 | 3.66 | % | ||||||||||||||||||
| Seasoned SFR mortgage loan pools |
876,142 | 12,710 | 5.83 | % | 858,601 | 12,098 | 5.59 | % | 689,666 | 10,901 | 6.27 | % | ||||||||||||||||||||||||
| Commercial real estate, multi-family, and construction |
1,760,646 | 19,816 | 4.53 | % | 1,638,329 | 19,006 | 4.60 | % | 1,568,975 | 17,643 | 4.46 | % | ||||||||||||||||||||||||
| Commercial and industrial, SBA, and lease financing |
1,105,971 | 13,665 | 4.97 | % | 1,020,306 | 12,754 | 4.96 | % | 914,811 | 12,125 | 5.26 | % | ||||||||||||||||||||||||
| Other consumer |
107,843 | 1,145 | 4.27 | % | 110,972 | 806 | 2.88 | % | 131,468 | 1,662 | 5.02 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Gross loans and leases |
5,995,436 | 67,144 | 4.50 | % | 5,531,539 | 62,248 | 4.46 | % | 5,271,293 | 60,454 | 4.55 | % | ||||||||||||||||||||||||
| Securities |
2,128,882 | 16,047 | 3.03 | % | 1,506,626 | 11,163 | 2.94 | % | 828,326 | 5,054 | 2.42 | % | ||||||||||||||||||||||||
| Other interest-earning assets |
219,849 | 1,049 | 1.92 | % | 226,176 | 788 | 1.38 | % | 350,243 | 1,007 | 1.14 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-earning assets |
8,344,167 | 84,240 | 4.06 | % | 7,264,341 | 74,199 | 4.05 | % | 6,449,862 | 66,515 | 4.09 | % | ||||||||||||||||||||||||
| Allowance for loan and lease losses |
(35,575 | ) | (35,894 | ) | (34,810 | ) | ||||||||||||||||||||||||||||||
| BOLI and non-interest earning assets |
524,584 | 362,334 | 266,538 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total assets |
$ | 8,833,176 | $ | 7,590,781 | $ | 6,681,590 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||||||||||||||
| Savings |
$ | 834,965 | $ | 1,572 | 0.76 | % | $ | 805,445 | $ | 1,538 | 0.76 | % | $ | 832,006 | $ | 1,575 | 0.75 | % | ||||||||||||||||||
| Interest-bearing checking |
1,900,834 | 3,244 | 0.69 | % | 1,475,461 | 2,663 | 0.72 | % | 1,282,066 | 2,273 | 0.70 | % | ||||||||||||||||||||||||
| Money market |
1,437,332 | 1,679 | 0.47 | % | 1,343,683 | 1,267 | 0.37 | % | 1,294,554 | 1,337 | 0.41 | % | ||||||||||||||||||||||||
| Certificates of deposit |
1,158,901 | 1,612 | 0.56 | % | 1,060,556 | 1,394 | 0.52 | % | 905,704 | 1,210 | 0.53 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing deposits |
5,332,032 | 8,107 | 0.61 | % | 4,685,145 | 6,862 | 0.58 | % | 4,314,330 | 6,395 | 0.59 | % | ||||||||||||||||||||||||
| FHLB advances |
955,659 | 1,262 | 0.53 | % | 869,457 | 890 | 0.41 | % | 476,848 | 587 | 0.49 | % | ||||||||||||||||||||||||
| Securities sold under repurchase agreements |
90,395 | 160 | 0.71 | % | 7,010 | 15 | 0.85 | % | 2,681 | 3 | 0.44 | % | ||||||||||||||||||||||||
| Long-term debt and other interest-bearing liabilities |
263,656 | 4,294 | 6.55 | % | 265,087 | 4,366 | 6.53 | % | 266,430 | 3,980 | 5.93 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
| Total interest-bearing liabilities |
6,641,742 | 13,823 | 0.84 | % | 5,826,699 | 12,133 | 0.83 | % | 5,060,289 | 10,965 | 0.86 | % | ||||||||||||||||||||||||
| Noninterest-bearing deposits |
1,230,991 | 1,037,966 | 916,670 | |||||||||||||||||||||||||||||||||
| Non-interest-bearing liabilities |
197,520 | 72,010 | 58,918 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities |
8,070,253 | 6,936,675 | 6,035,877 | |||||||||||||||||||||||||||||||||
| Total stockholders’ equity |
762,923 | 654,106 | 645,713 | |||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 8,833,176 | $ | 7,590,781 | $ | 6,681,590 | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest income/spread |
$ | 70,417 | 3.22 | % | $ | 62,066 | 3.22 | % | $ | 55,550 | 3.23 | % | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
| Net interest margin |
3.39 | % | 3.39 | % | 3.42 | % | ||||||||||||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities |
125.63 | % | 124.67 | % | 127.46 | % | ||||||||||||||||||||||||||||||
| Total deposits |
$ | 6,563,023 | $ | 8,107 | 0.50 | % | $ | 5,723,111 | $ | 6,862 | 0.48 | % | $ | 5,231,000 | $ | 6,395 | 0.49 | % | ||||||||||||||||||
| Total funding (1) |
$ | 7,872,733 | $ | 13,823 | 0.71 | % | $ | 6,864,665 | $ | 12,133 | 0.70 | % | $ | 5,976,959 | $ | 10,965 | 0.73 | % | ||||||||||||||||||
| (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. |
Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid, Continued
(Dollars in thousands)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||||||
| June 30, 2015 | March 31, 2015 | |||||||||||||||||||||||
| Average Balance |
Interest | Yield / Cost |
Average Balance |
Interest | Yield / Cost |
|||||||||||||||||||
| Interest earning assets |
||||||||||||||||||||||||
| Loans held for sale and SFR mortgage |
$ | 1,959,738 | $ | 18,984 | 3.89 | % | $ | 1,868,085 | $ | 17,477 | 3.79 | % | ||||||||||||
| Seasoned SFR mortgage loan pools |
591,460 | 9,690 | 6.57 | % | 591,724 | 9,413 | 6.45 | % | ||||||||||||||||
| Commercial real estate, multi-family, and construction |
1,848,780 | 21,552 | 4.68 | % | 1,956,830 | 22,508 | 4.66 | % | ||||||||||||||||
| Commercial and industrial, SBA, and lease financing |
697,291 | 8,871 | 5.10 | % | 572,726 | 7,239 | 5.13 | % | ||||||||||||||||
| Other consumer |
157,460 | 1,602 | 4.08 | % | 150,034 | 1,518 | 4.10 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Gross loans and leases |
5,254,729 | 60,699 | 4.63 | % | 5,139,399 | 58,155 | 4.59 | % | ||||||||||||||||
| Securities |
402,366 | 2,119 | 2.11 | % | 354,475 | 1,927 | 2.20 | % | ||||||||||||||||
| Other interest-earning assets |
310,105 | 2,026 | 2.62 | % | 219,892 | 698 | 1.29 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-earning assets |
5,967,200 | 64,844 | 4.36 | % | 5,713,766 | 60,780 | 4.31 | % | ||||||||||||||||
| Allowance for loan and lease losses |
(29,445 | ) | (29,623 | ) | ||||||||||||||||||||
| BOLI and non-interest earning assets |
315,595 | 247,283 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 6,253,350 | $ | 5,931,426 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Interest-bearing liabilities |
||||||||||||||||||||||||
| Savings |
$ | 867,532 | $ | 1,606 | 0.74 | % | $ | 945,530 | $ | 1,748 | 0.75 | % | ||||||||||||
| Interest-bearing checking |
1,012,211 | 1,996 | 0.79 | % | 1,042,895 | 2,041 | 0.79 | % | ||||||||||||||||
| Money market |
1,142,858 | 1,028 | 0.36 | % | 1,092,987 | 958 | 0.36 | % | ||||||||||||||||
| Certificates of deposit |
1,055,939 | 1,535 | 0.58 | % | 1,004,261 | 1,614 | 0.65 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
4,078,540 | 6,165 | 0.61 | % | 4,085,673 | 6,361 | 0.63 | % | ||||||||||||||||
| FHLB advances |
375,385 | 290 | 0.31 | % | 487,600 | 353 | 0.29 | % | ||||||||||||||||
| Securities sold under repurchase agreements |
— | — | — | — | — | — | ||||||||||||||||||
| Long-term debt and other interest-bearing liabilities |
260,075 | 4,285 | 6.61 | % | 96,379 | 2,069 | 8.71 | % | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
4,714,000 | 10,740 | 0.91 | % | 4,669,652 | 8,783 | 0.76 | % | ||||||||||||||||
| Noninterest-bearing deposits |
859,420 | 682,492 | ||||||||||||||||||||||
| Non-interest-bearing liabilities |
49,383 | 61,947 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
5,622,803 | 5,414,091 | ||||||||||||||||||||||
| Total stockholders’ equity |
630,547 | 517,335 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 6,253,350 | $ | 5,931,426 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income/spread |
$ | 54,104 | 3.45 | % | $ | 51,997 | 3.55 | % | ||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest margin |
3.64 | % | 3.69 | % | ||||||||||||||||||||
| Ratio of interest-earning assets to interest-bearing liabilities |
126.58 | % | 122.36 | % | ||||||||||||||||||||
| Total deposits |
$ | 4,937,960 | $ | 6,165 | 0.50 | % | $ | 4,768,165 | $ | 6,361 | 0.54 | % | ||||||||||||
| Total funding (1) |
$ | 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. |
Banc of California, Inc.
Capital Ratios
(Unaudited)
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Capital Ratios |
||||||||||||||||||||
| Banc of California, Inc. |
||||||||||||||||||||
| Total risk-based capital ratio |
13.59 | % | 11.18 | % | 12.56 | % | 14.01 | % | 11.55 | % | ||||||||||
| Tier 1 risk-based capital ratio |
13.17 | % | 10.71 | % | 12.06 | % | 13.19 | % | 10.83 | % | ||||||||||
| Common equity tier 1 capital ratio |
8.14 | % | 7.36 | % | 8.19 | % | 8.96 | % | 9.01 | % | ||||||||||
| Tier 1 leverage ratio |
9.27 | % | 8.07 | % | 8.97 | % | 9.55 | % | 7.99 | % | ||||||||||
| Banc of California, NA |
||||||||||||||||||||
| Total risk-based capital ratio |
14.03 | % | 13.45 | % | 14.93 | % | 14.86 | % | 13.58 | % | ||||||||||
| Tier 1 risk-based capital ratio |
13.42 | % | 12.79 | % | 14.19 | % | 14.04 | % | 12.86 | % | ||||||||||
| Common equity tier 1 capital ratio |
13.42 | % | 12.79 | % | 14.19 | % | 14.04 | % | 12.86 | % | ||||||||||
| Tier 1 leverage ratio |
9.44 | % | 9.64 | % | 10.53 | % | 10.26 | % | 9.49 | % | ||||||||||
Banc of California, Inc.
Non-GAAP Measures
(Dollars in thousands, except per share data)
(Unaudited)
Non-GAAP performance measure:
Tangible equity to tangible assets and Tangible common equity to tangible assets ratios 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 and tangible common equity is calculated by subtracting preferred stock from tangible 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:
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Tangible common equity to tangible assets ratio |
||||||||||||||||||||
| Total assets |
$ | 9,616,972 | $ | 8,235,555 | $ | 7,256,810 | $ | 6,437,882 | $ | 6,097,355 | ||||||||||
| Less goodwill |
(39,244 | ) | (39,244 | ) | (39,244 | ) | (31,591 | ) | (31,591 | ) | ||||||||||
| Less other intangible assets |
(17,836 | ) | (19,158 | ) | (20,504 | ) | (21,905 | ) | (23,708 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible assets |
$ | 9,559,892 | $ | 8,177,153 | $ | 7,197,062 | $ | 6,384,386 | $ | 6,042,056 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity |
$ | 867,530 | $ | 652,405 | $ | 643,534 | $ | 633,882 | $ | 514,160 | ||||||||||
| Less goodwill |
(39,244 | ) | (39,244 | ) | (39,244 | ) | (31,591 | ) | (31,591 | ) | ||||||||||
| Less other intangible assets |
(17,836 | ) | (19,158 | ) | (20,504 | ) | (21,905 | ) | (23,708 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible equity |
810,450 | 594,003 | 583,786 | 580,386 | 458,861 | |||||||||||||||
| Less preferred stock |
(311,008 | ) | (190,750 | ) | (190,750 | ) | (190,750 | ) | (79,877 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Tangible common equity |
$ | 499,442 | $ | 403,253 | $ | 393,036 | $ | 389,636 | $ | 378,984 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total stockholders’ equity to total assets |
9.02 | % | 7.92 | % | 8.87 | % | 9.85 | % | 8.43 | % | ||||||||||
| Tangible equity to tangible assets |
8.48 | % | 7.26 | % | 8.11 | % | 9.09 | % | 7.59 | % | ||||||||||
| Tangible common equity to tangible assets |
5.22 | % | 4.93 | % | 5.46 | % | 6.10 | % | 6.27 | % | ||||||||||
| Common stock outstanding |
43,907,587 | 38,002,267 | 37,751,445 | 35,647,476 | 35,063,199 | |||||||||||||||
| Class B non-voting non-convertible common stock outstanding |
91,066 | 37,355 | — | — | 11 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total common stock outstanding |
43,998,653 | 38,039,622 | 37,751,445 | 35,647,476 | 35,063,210 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Minimum number of shares issuable under purchase contracts (1) |
253,155 | 601,299 | 828,246 | 2,883,892 | 2,984,367 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total common stock outstanding and shares issuable under purchase contracts |
44,251,808 | 38,640,921 | 38,579,691 | 38,531,368 | 38,047,577 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) Purchase contracts relating to the tangible equity units |
||||||||||||||||||||
| Tangible common equity per common stock |
$ | 11.35 | $ | 10.60 | $ | 10.41 | $ | 10.93 | $ | 10.81 | ||||||||||
| Book value per common stock |
$ | 12.65 | $ | 12.14 | $ | 11.99 | $ | 12.43 | $ | 12.39 | ||||||||||
| Tangible common equity per common stock and shares issuable under purchase contracts |
$ | 11.29 | $ | 10.44 | $ | 10.19 | $ | 10.11 | $ | 9.96 | ||||||||||
| Book value per common stock and shares issuable under purchase contracts |
$ | 12.58 | $ | 11.95 | $ | 11.74 | $ | 11.50 | $ | 11.41 | ||||||||||
Banc of California, Inc.
Non-GAAP Measures, Continued
(Dollars in thousands, except per share data)
(Unaudited)
| Three Months Ended | ||||||||||||||||||||
| March 31, 2016 |
December 31, 2015 |
September 30, 2015 |
June 30, 2015 |
March 31, 2015 |
||||||||||||||||
| Return on tangible common equity |
||||||||||||||||||||
| Average total stockholders’ equity |
$ | 762,923 | $ | 654,106 | $ | 645,713 | $ | 630,547 | $ | 517,335 | ||||||||||
| Less average preferred stock |
(260,959 | ) | (190,750 | ) | (190,750 | ) | (182,233 | ) | (79,877 | ) | ||||||||||
| Less average goodwill |
(39,244 | ) | (39,244 | ) | (31,674 | ) | (31,591 | ) | (31,591 | ) | ||||||||||
| Less average other intangible assets |
(18,601 | ) | (19,877 | ) | (21,320 | ) | (23,032 | ) | (24,720 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Average tangible common equity |
$ | 444,119 | $ | 404,235 | $ | 401,969 | $ | 393,691 | $ | 381,147 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income |
$ | 19,687 | $ | 19,038 | $ | 14,536 | $ | 15,924 | $ | 12,574 | ||||||||||
| Less preferred stock dividends |
(4,575 | ) | (3,030 | ) | (3,040 | ) | (2,843 | ) | (910 | ) | ||||||||||
| Add tax-effected amortization of intangible assets (1) |
859 | 875 | 911 | 1,004 | 1,004 | |||||||||||||||
| Add tax-effected impairment on intangible assets (1) |
— | — | — | 168 | — | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Net income available to common stockholders |
$ | 15,971 | $ | 16,883 | $ | 12,407 | $ | 14,253 | $ | 12,668 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| (1) Utilized a 35% effective tax rate |
||||||||||||||||||||
| Return on average equity |
10.38 | % | 11.55 | % | 8.93 | % | 10.13 | % | 9.86 | % | ||||||||||
| Return on average tangible common equity |
14.46 | % | 16.57 | % | 12.25 | % | 14.52 | % | 13.48 | % | ||||||||||
 April 21, 2016
2016 First Quarter Earnings
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 acquisitions and dispositions, including the acquisitions of branches from Banco Popular, The Private Bank of California,
and CS Financial, Inc., and the acquisition and disposition of
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. |
 2 2 $6.5 $7.9 $26.5 $104.3 $132.5 FY 2012 FY 2013 FY 2014 FY 2015 1Q16 $1.7 $3.6 $6.0 $8.2 $9.6 YE 2012 YE 2013 YE 2014 YE 2015 1Q16 Banc of California Franchise Value Accelerating $9.6 billion in Assets Record $278 million noninterest- bearing deposit growth in 1Q16 All organic growth since YE2014 CAGR +71% CAGR +113% 1 #1 Total Shareholder Return of all banks on 2016 Forbes Top 100 Banks List from January 1, 2015 to March 31, 2016
2 Dollars in billions 3 Dollars in millions
14.5% ROATCE 1Q16
0.9% ROAA 1Q16
#1 Performing Bank Stock Since YE2014
Pretax Income 3 Total Assets 2 Banc of California winning market share and top talent Annualized 1 |
 3 3 $0.29 $0.32 $0.29 $0.39 $0.36 1Q15 2Q15 3Q15 4Q15 1Q16 $22.1 $27.4 $23.8 $31.0 $33.0 1Q15 2Q15 3Q15 4Q15 1Q16 0.9% 1.0% 0.9% 1.0% 0.9% 1Q15 2Q15 3Q15 4Q15 1Q16 13% 15% 12% 17% 14% 1Q15 2Q15 3Q15 4Q15 1Q16 1 Diluted 2 Dollars in millions 3 Return on Assets and Return on Tangible Common Equity based on average assets and average tangible common equity,
respectively, over stated time periods Track-Record of
Compelling, Sustainable Financial Results Eighth Straight Quarter
Exceeding Analyst Estimates Pretax Income
2 Earnings per Share 1 Return on Tangible Common Equity 3 Return on Assets 3 |
 4 4 Banc of California has successfully attracted key employees and teams from
New York and Canadian-based competitors
L.A.’s ‘bank to the stars,’ City National Bank, now under Canadian ownership CIT to buy OneWest Bank for more reliable
funding source
S.F. loses another HQ as
Union Bank’s parent moves to New York California Banking Landscape Increasingly Attractive California Clients and Employees Expressing Preference for California’s Bank |
 2016 capital deployment and growth focused on Commercial Banking
segment Mortgage Banking segment impacted by negative valuation
marks on MSR portfolio during 1Q16 Sale of The Palisades Group,
which represented the Financial Advisory Segment, is expected to close in 2Q16. Sale will end reporting of this segment and retains $20+ million in upside to be realized over the next several
years, subject to certain performance-related conditions.
+35% 77% 78% 91% 90% 100% 1Q15 2Q15 3Q15 4Q15 1Q16 Commercial Banking $52.0 $54.1 $55.6 $62.1 $70.4 1Q15 2Q15 3Q15 4Q15 1Q16 Commercial Banking Segment Driving Earnings Strength Mortgage Banking Segment Profits Expected to Accelerate in 2Q/3Q 1 Dollars in millions 2 Business Segment Pretax Income inclusive of intra-company allocations ; excludes
unallocated Corporate / Other interest expense. Mortgage Banking
and Financial Advisory segments reported negative pre-tax income after allocated intra-company expenses for 1Q16. High quality earnings resulting in low earnings volatility with strong financial results
Pretax Income by Business Segment
Net Interest Income
$18.5 $24.7 $25.3 $31.9 $43.8 1 2 5 |
 Noninterest Expense and Productivity
Investments in Scalable Platform Yielding Positive Results
1 Includes Mortgage Banking-related commissions, bonus and loan-related expenses
6 Assets / FTE Noninterest Expense ($ in millions) 1 ($ in millions) Efficiency Ratio -15% $58.3 $64.7 $63.4 $67.9 $70.4 $17.6 $20.6 $17.5 $16.1 $16.5 $2.6 $0.8 $2.7 $2.2 $75.9 $87.9 $81.7 $86.7 $89.1 1Q15 2Q15 3Q15 4Q15 1Q16 Base Volume-Related Acquisition/Non-core $3.3 $3.6 $3.5 $4.0 $4.0 $4.1 $4.4 $4.8 $5.7 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 86% 92% 88% 75% 73% FY 2012 FY 2013 FY 2014 FY 2015 1Q16 |
 7 7 ($ in billions) Deposit Growth Driven by Deepening Client Relationships Non-Interest Bearing Deposit Growth Evidence of Strengthening Relationships
$4.9 $5.1 $5.4 $6.3 $6.8 1Q15 2Q15 3Q15 4Q15 1Q16 $0.7 $0.9 $1.0 $1.1 $1.4 1Q15 2Q15 3Q15 4Q15 1Q16 +41% +87% Noninterest-bearing Deposits Total Deposits ($ in billions) Record quarterly noninterest-bearing deposit growth of $278 million |
 $495 $629 $729 $914 $823 1Q15 2Q15 3Q15 4Q15 1Q16 Commercial Banking Segment Loan Production Strong Commercial Banking Loan Production On Track to Achieve 2016 Target for Total Annual Loan Production ($ in millions) +66% Commercial Banking segment yield of 4.2% on new loans in 1Q16 Mortgage Banking Segment production over $1 billion in 1Q Management guidance for 2016 total loan production of over $8 billion with approximately $2.5 billion from Commercial Banking Segment 8 |
 5.1% 5.8% 6.4% 7.0% 1.5% 1.5% 1.5% 1.5% 6.6% 7.3% 7.9% 8.5% 2016 2017 2018 2019 9.0% 9.0% 8.2% 7.4% 8.1% 1.8% 4.2% 3.9% 3.3% 5.1% 10.8% 13.2% 12.1% 10.7% 13.2% 1Q15 2Q15 3Q15 4Q15 1Q16 Common Equity Tier 1 (CET1) Additional Tier 1 Capital Ratios Continue to Exceed Basel III Guidelines Capital Structure Focused on Total Tier 1 Eligible Capital BASEL III Capital Requirements BANC Capital Ratios 9 |
 Asset Quality Remains Strong and Stable
1Q 2015 2Q 2015 3Q 2015 4Q 2015 1Q 2016 % Change YoY NPAs / Assets 0.71% 0.66% 0.62% 0.56% 0.46% (35%) NPAs / Equity 8.4% 6.7% 7.0% 7.1% 5.1% (39%) ALLL / NPLs 69% 81% 77% 79% 81% 17% ALLL / Total Loans 0.75% 0.78% 0.74% 0.69% 0.66% (12%) ALLL and Discount / Total Loans 3.27% 2.94% 2.65% 2.66% 2.47% (24%) 10 |
 11 11 Implications for BANC Reduction in debit card interchange revenue FDIC Fees/Surcharge Durbin Amendment Stress Testing (DFAST) Consumer Financial Protection Bureau (CFPB) Addition of CFPB as regulator Focused on consumer protection and UDAAP compliance Required annual stress testing covering credit, PPNR, liquidity and capital Revised assessment framework for FDIC insurance assessment fees Regulatory Changes Threshold for qualifying banks based on prior year-end balance sheet.
Limited current debit card revenue; Durbin impact as a tax on future
growth
Credit risk analytics team already in place running stress testing of
portfolio
BANC has run enterprise stress testing program for the 2+ years
Limited expenses projected for DFAST compliance; primarily related to
one time items
Robust compliance risk assessment and program in place today with
comprehensive compliance testing
Likely to result in increased budget for examination and regulatory
expenses
De minimis ongoing impact from large bank FDIC assessment formula
Limited impact from FDIC special assessment passed in 2015 which is
expected to sunset in 2018. Impacts only deposits in excess of
$10 billion with an estimated surcharge of 4.5 bps.
BANC Well-Prepared to Cross $10 Billion in Assets
Organic Growth Continues to be Highly Accretive Inclusive of Regulatory
Considerations Board and Governance
Additional Board and Governance Policies and
Responsibilities under multiple regulations
Increased Board and Governance responsibilities will increase Board,
Enterprise risk and governance responsibilities and require
increased resources and budget during transition
period |
 Accelerating Results Under Current Leadership
Platform and Infrastructure Investments Leading to Increased Long-term Value
Creation 1
Dollars in billions 2 Dollars in
millions 3 Diluted 4
Normalized to assume full 40% tax rate 12
Deposits Earnings per Share Assets 4 2016 Guidance ($3) Annualized $0.9 $1.0 $1.7 $3.6 $6.0 $8.2 $9.6 2010 2011 2012 2013 2014 2015 1Q16 $0.6 $0.8 $1.3 $2.9 $4.7 $6.3 $6.8 2010 2011 2012 2013 2014 2015 1Q16 $3.9 $6.5 $7.9 $26.5 $104.3 $132.5 2010 2011 2012 2013 2014 2015 1Q16 $(0.31) $(0.15) $1.60+ $0.35 $0.39 $0.41 $1.34 2010 2011 2012 2013 2014 2015 1 1 3 Pretax Income 2 |
 13 13 2016 Guidance Implies Continued Outperformance Maintaining ROATCE and ROAA with Strong Balance Sheet Growth To Yield 15%+ EPS Growth in 2016
Metric FY 2016 ROATCE 15% ROAA 1%+ Efficiency Ratio 65% - 70% Total Assets $10 - $11 billion Earnings Per Share $1.60+ Management expects total assets to exceed $10 billion during 2016 based on current
market conditions
Management expects to be subject to DFAST requirements beginning in
2018 1
Excluding expenses related to capital transactions
Q2 redemption of senior notes is expected to result in $2 -$3 million of
expenses related to capital transactions during the period
1 |