Investor Presentation Investor Presentation February 2013 Exhibit 99.1 |
Forward-Looking Statements Forward-Looking Statements 2 This presentation contains certain forward-looking information about CU Bancorp and California United Bank (collectively the “Company”) that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. Such statements involve inherent risks and uncertainties, many of which are difficult to predict and are generally beyond the control of the Company. There are a number of important factors that could cause actual results to differ materially from those expressed in, implied or projected by, such forward-looking statements. Risks and uncertainties include but are not limited to lower than expected revenues; credit quality deterioration which could cause an increase in the allowance for loan losses and a reduction in net earnings; increased competitive pressure among depository institutions; a change in the interest rate environment which reduces interest margins; asset/liability repricing risks and liquidity risks; general economic conditions, either nationally or in the market areas in which the Company does or anticipates doing business are less favorable than expected; environmental conditions, including natural disasters, may disrupt our business, impede our operations, negatively impact the values of collateral security for the Company’s loans or impair the ability of our borrowers to support their debt obligations; the economic and regulatory effects of the continuing war on terrorism and other events of war; legislative or regulatory requirements or changes adversely affecting the Company’s business; and changes in the securities markets. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, the Company’s results could differ materially from those expressed in, implied or projected by such forward-looking statements. The Company assumes no obligation to update such forward-looking statements. For a more complete discussion of risks and uncertainties, read the Bank’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by the Bank with the FDIC and by CU Bancorp with the SEC. The documents filed with the FDIC and the SEC may be obtained at California United Bank’s website at www.cunb.com. These documents may also be obtained free of charge from CU Bancorp by directing a request to CU Bancorp, 15821 Ventura Boulevard, Suite 100, Encino, California 91436, Attention: Investor Relations. Telephone 818 257-7700. |
Corporate Overview Corporate Overview 3 California United Bank is a premier community-based California United Bank is a premier community-based commercial bank servicing the Metropolitan Los Angeles, commercial bank servicing the Metropolitan Los Angeles, Orange County and Ventura County markets Orange County and Ventura County markets Established by local business owners and entrepreneurs in 2005 Eight full-service offices in Los Angeles, San Fernando Valley, Conejo Valley, Santa Clarita Valley, Simi Valley, South Bay, and Orange County (Anaheim and Irvine/Newport Beach) Servicing businesses, non-profit organizations, entrepreneurs, professionals, and high-net worth individuals Total assets of $1.25 billion California United Bank grew total assets at a 43% CAGR and total deposits at a 51% CAGR since inception in 2005 through December 31, 2012 |
Investment Highlights Investment Highlights Emerging business banking franchise reaching an inflection point in profitability Attractive low-cost core deposit base Non-interest bearing deposits comprise 50% of total deposits at 12/31/12 Cost of deposits was 17 bps in Q4 2012 Demonstrated ability to grow both organically and through acquisitions Experienced management team with an established track record of delivering results Recent acquisition of Premier Commercial Bank (PCB) provides near-term catalyst for earnings growth Growing awareness in local markets and the investment community Surpassed $1 billion in total assets in July 2012 Transferred listing to Nasdaq Capital Market in October 2012 4 |
California California United United Bank Bank has has a a footprint footprint that that spans the most attractive markets in Southern California: in Southern California: Strategic Geographic Locations Strategic Geographic Locations Encino (2005) – Headquarters Los Angeles (2006) Santa Clarita Valley (2007) South Bay (2009) – Converted to a branch in 2010 Orange County (2010) – Loan Production Office Simi Valley (2010) – Acquired from California Oaks State Bank Thousand Oaks (2010) – Acquired from California Oaks State Bank Anaheim (2012) – Acquired from Premier Commercial Bank Irvine/Newport Beach (2012) – Acquired from Premier Commercial Bank 5 CUNB Branch CUNB LPO Former COSB Branch Former PCB Branch |
Why We Are Different Why We Are Different CUNB has been engaged in the successful practice of business banking since its inception Strong growth combined with stellar asset quality We have the ability to do larger, more complex financings than similar sized banks Formula lines of credit Asset-based lending Executive team has extensive experience building high performing banks Demonstrated ability to identify, acquire and successfully integrate banks Proven ability to attract top bankers Multiple experienced banking teams added from competitors since 2010 Local advisory boards guide the Bank in its respective business communities 6 |
Our Customers Our Customers Our customer base reflects the diversity Our customer base reflects the diversity of industries in Southern California of industries in Southern California Majority of customers participate in the manufacturing, distribution and services industries Typical customer has between $10 million and $60 million in annual sales (excluding SBA borrowers) Typical loan commitment ranges between $1 million and $5 million (excluding SBA loans) Majority of new customers come from larger banks Most new business generation results from warm leads provided by referral sources 7 |
Dedicated to the Community Dedicated to the Community CUNB employees are involved in their local communities Strong cultural value demonstrates that supporting the community is also good business CUNB supports over 75 charities throughout Southern California financially and with volunteer hours Utilize local advisory boards to help guide the Bank in its respective markets “Outstanding” CRA Rating 8 |
Experienced Management Experienced Management 9 *Formerly EVP at Premier Commercial Bank, N.A. Name Title Functional Banking Exp CUB Tenure David Rainer President Chief Executive Officer 32 years 7 years Anne Williams EVP Chief Operating Officer & Chief Credit Officer 32 years 7 years Karen Schoenbaum EVP Chief Financial Officer 19 years 3 years Anita Wolman EVP General Counsel 35 years 7 years Sam Kunianski EVP Executive Manager – Commercial and Private Banking 28 years 6 years William Sloan EVP Executive Manager – Real Estate and Santa Clarita Regional Manager 28 years 7 years Stephen Pihl EVP Executive Manager – SBA and Orange County Regional Manager 25 years New addition* |
A History of Success A History of Success 10 The Management Team at California United Bank has three decades of banking experience in the Southern California Market. The same Executive Team that created success at the banks below are now in charge at California United Bank. Grew to $1 billion in assets Sold to Bank of Hawaii in 1997 Sold to U.S. Bancorp in 2000 Opened in 2005 Acquired Cal Oaks State Bank December 31, 2010 Merged with Premier Commercial Bancorp July 31, 2012 $1.25 billion in total assets at December 31, 2012 California United Bank (Current) U.S. Bank (2001 – 2004) Santa Monica Bank California United Bank (1992 – 1997) Wells Fargo/Security Pacific – 1980s |
Our Growth Strategy Our Growth Strategy 11 Organic Organic Acquisitions Acquisitions De novo regional offices with strong local leadership Hire “in market” talent Offer sophisticated products/solutions Expertise in C&I and Commercial Real Estate lending Relationship-based business Distinguish by service New SBA lending expertise provided by PCB California Oaks State Bank (12/31/10) Premier Commercial Bank (7/31/12) |
Q4 2012 Highlights Q4 2012 Highlights 12 Core earnings * of $3.9 million +146% YoY Strong balance sheet growth +8% loan growth (linked quarter) +3% non-interest bearing deposit growth (linked quarter) High quality deposit base 50% non-interest bearing 17 bps cost of deposits NIM and efficiency ratio improve NIM increases 30 bps to 3.87% Efficiency ratio improves to 72% Continued pristine credit quality No charge-offs in Q4 * Core earnings reconciliation to net income provided in Appendix |
Increasing Earnings Power Increasing Earnings Power * Core earnings reconciliation to net income provided in Appendix 13 $803 $1,046 $1,076 $1,596 $1,134 $1,627 $1,683 $3,929 $500 $1,500 $2,500 $3,500 $4,500 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Core Earnings* |
Improving Operating Leverage Improving Operating Leverage 14 3Q12 operating expenses excludes $2.5 million in merger-related expenses $6 $7 $8 $9 $10 $11 $12 $13 $14 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Revenue Operating Expenses |
Impact of PCB Merger Impact of PCB Merger 15 * Core earnings reconciliation to net income provided in Appendix $1,596 $3,929 $500 $1,500 $2,500 $3,500 $4,500 4Q11 4Q12 Core Earnings* 83% 72% 50% 60% 70% 80% 90% 100% 4Q11 4Q12 Efficiency Ratio 0.15% 0.50% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 4Q11 4Q12 ROAA 1.52% 5.14% 0.00% 2.00% 4.00% 6.00% 4Q11 4Q12 ROAE |
Consistent Asset Growth Consistent Asset Growth 16 COSB acquisition *Represents the assets acquired from Premier Commercial Bancorp on July 31, 2012 $102 $178 $260 $379 $457 $638 $800 $853 $118 $397* $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2005 2006 2007 2008 2009 2010 2011 2012 CUB Organic Acquisitions $1,250 $756 PCB acquisition |
Loan Growth Loan Growth 17 Q4 2012 Loan Growth = $60MM or 8% $35 $96 $162 $232 $263 $334 $489 $600 $87 $255 $0 $100 $200 $300 $400 $500 $600 $700 $800 $900 2005 2006 2007 2008 2009 2010 2011 2012 CUB Organic Acquisitions $855 PCB acquisition $421 COSB acquisition |
Loan Portfolio Composition Loan Portfolio Composition (December 31, 2012) (December 31, 2012) 18 C&I 31% Owner- Occupied CRE 21% Non-Owner Occupied CRE 29% Construction 6% 1-4 Family 7% Multi-Family 4% Other 2% |
Loans by Industry Loans by Industry (C&I and Owner-Occupied) (C&I and Owner-Occupied) (December 31, 2012) (December 31, 2012) 19 Admin Mgmt 4% Construction 6% Education 1% Entertainment 2% Finance 7% Healthcare 6% Information 1% Manufacturing 15% Other Services 3% Professional Svces 7% Real Estate 25% Restaurant/Lodging 6% Retail 4% Transportation 2% Wholesale 11% |
NPAs/Total Assets NPAs/Total Assets 20 Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$1.5 billion (peer data unavailable for Q4 2012) 1.24% 1.12% 1.10% 1.19% 1.05% 0.98% 1.07% 1.09% 4.90% 4.12% 3.54% 3.31% 3.18% 3.27% 3.11% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 CUNB Peer Group Avg. |
NCOs/Avg. Loans NCOs/Avg. Loans 21 Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$1.5 billion -0.04% -0.01% 0.49% 0.01% -0.08% 0.08% 1.22% 0.76% 1.41% 0.75% 0.63% 0.99% -0.20% 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% FY2011 1Q12 2Q12 3Q12 4Q12 FY2012 CUNB Peer Group Avg. |
Strong Deposit Growth Strong Deposit Growth 22 $60 $116 $191 $246 $346 $545 $691 $800 $113 $278 $0 $200 $400 $600 $800 $1,000 $1,200 2005 2006 2007 2008 2009 2010 2011 2012 CUB Organic Acquisitions $1,078 $658 Q4 2012 Non-Interest Bearing Growth = $18MM PCB acquisition COSB acquisition |
Deposit Composition Deposit Composition (December 31, 2012) (December 31, 2012) 23 Non-Int. Bearing Demand 50.4% Interest Bearing Transaction 10.5% MM and Savings 31.6% CDs 7.5% |
Transaction Accounts and Cost of Funds Transaction Accounts and Cost of Funds 24 Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$1.5 billion (peer data unavailable for Q4 2012) 32.2 29.5 26.8 28.4 31.1 36.9 38.4 40.3 35.7 29.1 51.4 46.2 53.5 64.5 67.5 57.6 60.9 2.44 2.87 2.00 1.31 0.87 0.64 0.47 0.47 2.33 2.80 1.59 0.70 0.45 0.19 0.12 0.24 0.24 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 2006Y 2007Y 2008Y 2009Y 2010Y 2011Y Q2 2012 Q3 2012 Q4 2012 Peer Median (Transaction Accounts) CUNB (Transaction Accounts) Peer Median (Cost of Funds) CUNB (Cost of Funds) |
CU Bancorp Capital Ratios CU Bancorp Capital Ratios 25 Tier 1 Leverage Capital Ratio (%) Total Risk Based Capital Ratio (%) Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$1.5 billion (peer group data as of September 30, 2012) 9.13% 11.30% 5.00% 0% 2% 4% 6% 8% 10% 12% CUNB Peer Group Avg. FDIC Well Capitalized 12.35% 16.04% 10.00% 0% 5% 10% 15% 20% CUNB Peer Group Avg. FDIC Well Capitalized |
Merger Overview Merger Overview 26 Creates one of Los Angeles/Orange County’s largest independent commercial banking franchises focused exclusively in the market Partnered two of Southern California’s strongest commercial banks; strengthening the franchise for long-term earnings growth and value creation The critical mass of a larger institution will enable the bank to expand available services and penetrate additional markets The transaction will be beneficial for stakeholders in both organizations: creating value for shareholders, employees, customers, and the Southern California communities Southern California’s Preeminent Business Bank |
Merger of Two Attractive Franchises Merger of Two Attractive Franchises 27 Low Cost Deposits C&I Lending Expertise Attractive Locations Strong Credit Quality Experienced Management Team SBA Expertise Real Estate Lending Expertise Attractive Orange County Market Strong Credit Quality Experienced Management Team |
An Abundance of Synergies An Abundance of Synergies 28 Combined breadth of products and services will increase business development capabilities throughout footprint PCB’s award-winning SBA lending platform will be leveraged throughout CUB’s markets Improving PCB’s deposit mix and reducing funding costs Elimination of redundancies will provide meaningful cost savings and enhance efficiencies Greater scale will enable better absorption of increasing regulatory compliance costs |
Shifting from Growth Shifting from Growth to High Performance to High Performance 29 Capture synergies from PCB merger Expand non-interest income through increased SBA loan production and sales Continue attracting high performing bankers Further penetrate existing footprint Enhance efficiencies as we continue to scale |
Contact Information Contact Information 30 For more information, please contact: Karen Schoenbaum, CFO (818) 257-7700 kschoenbaum@cunb.com |
Appendix Appendix 31 Reconciliation of Core Earnings to Net Income (Loss) 4Q12 3Q12 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11 Net Income (Loss) 1,628 (932) 525 506 306 601 312 248 Add back: Provision for income tax expense (benefit) 1,166 (453) 502 450 181 454 242 270 Add back: Provision for loan losses 867 521 380 - 781 - 467 194 Subtract: Gain on sale of securities, net - - - - - 6 69 144 Subtract: Other-than-temporary impairment losses, net (65) (30) (30) (30) (130) (19) (70) (45) Add back: Merger related expenses 203 2,517 190 148 198 8 24 190 Core Earnings 3,929 1,683 1,627 1,134 1,596 1,076 1,046 803 |