Exhibit 99.1
Exhibit 99.1
Investor Presentation
Third Quarter 2013 Results
NASDAQ: CUNB
Forward-Looking Statements
This presentation contains certain forward-looking information about CU Bancorp and its wholly-owned subsidiary, 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 could reduce 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, accounting 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 Company’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by the Company with the SEC. The documents filed with the SEC may be obtained on the Investor Relations page of the Company’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.
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Corporate Overview
California United Bank (CUB) is a premier community-based commercial bank serving the Metropolitan Los Angeles,
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) Serving businesses, non-profit organizations, entrepreneurs and professionals Total assets of $1.35 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
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Investment Highlights
Emerging business banking franchise reaching an inflection point in profitability
Attractive low-cost core deposit base
Non-interest bearing deposits comprise 52% of total deposits at 9/30/13 Cost of deposits was 13 bps in Q3 2013
Demonstrated ability to grow both organically and through acquisitions
Experienced management team with an established track record of delivering results July 2012 acquisition of Premier Commercial Bancorp (PCB) generating increase in earnings power 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 Added to Russell Indexes in June 2013
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Strategic Geographic Locations
California United Bank has a footprint that spans the most attractive markets in Southern California:
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*
Encino
CUB Branch
CUB LPO
Former COSB Branch
Former PCB Branch
*New combined location (August 2013)
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CUB Market Overview
Large and Diverse Market
LA County would be 9th largest state in U.S. Orange County would be 31st largest state in U.S. Los Angeles is largest manufacturing center in U.S.
5-County area* accounts for 47% of California economy and would be 5th largest state in U.S.
Huge Demand for
Small- and Middle-Market Banking
Over 625,000 small- and middle-market businesses** in 5-County area
*5-County area consists of Los Angeles, Orange, Ventura, Riverside and San Bernardino Counties
**Small- and Middle-Market Businesses defined as businesses with between 1 and 499 employees
Sources: Los Angeles Economic Development Corporation and California Employment Development Department (as of 2012)
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Small- and Middle Market Businesses*
Number of Businesses in CUB Primary Markets of LA, Orange and Ventura Counties
580,000 560,000 540,000 520,000 500,000
Net additions in 3 of past 5 years Net growth of 18,000 businesses in past 5 years
551,307 550,309
542,222
532,424 514,267 2007 2008 2009 2010 2011 2012
565,874
*Small- and Middle-Market Businesses defined as businesses with between 1 and 499 employees
Source: California EDD (as of 2012)
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Why We Are Different
CUB 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 many community 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
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Our Customers
Our customer base reflects the diversity 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
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Dedicated to the Community
CUB employees are involved in their local communities Strong cultural value demonstrates that supporting the community is also good business CUB supports over 75 charities throughout Southern California financially and with volunteer hours Local advisory board members help identify worthy charitable organizations to support
“Outstanding” CRA Rating
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Experienced Management
Name Title Functional Banking Exp CUB Tenure
David Rainer President Chief Executive Officer 33 years 8 years
Chief Operating Officer and Chief
Anne Williams EVP 33 years 8 years
Credit Officer
Karen Schoenbaum EVP Chief Financial Officer 20 years 4 years
Anita Wolman EVP General Counsel 36 years 8 years
Executive Manager – Commercial and
Sam Kunianski EVP 29 years 7 years
Private Banking
Executive Manager – Real Estate and
William Sloan EVP 29 years 8 years
Santa Clarita Regional Manager
Executive Manager – SBA and Orange
Stephen Pihl EVP 26 years 1 year*
County Regional Manager
*Formerly EVP at Premier Commercial Bank, N.A.
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A History of Success
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.
Wells Fargo/Security Pacific – 1980s California United Bank (1992 – 1997)
Grew to $1 billion in assets Sold to Bank of Hawaii in 1997
Santa Monica Bank
Sold to U.S. Bancorp in 2000
U.S. Bank (2001 – 2004)
California United Bank (Current)
Opened in 2005
Acquired Cal Oaks State Bank December 31, 2010 Merged with Premier Commercial Bancorp July 31, 2012 $1.35 billion in total assets at September 30, 2013
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Our Growth Strategy
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 Leverage relationship-based approach and superior service to win customers from larger banks New SBA lending expertise provided by PCB
California Oaks State Bank (12/31/10) Premier Commercial Bank (7/31/12)
Organic
Acquisitions
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Merger Overview
Southern California’s
Preeminent Business Bank
Created 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 enables the bank to expand available services and penetrate additional markets
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Realizing Synergies from PCB
Combined breadth of products and services increasing business development capabilities throughout footprint
PCB’s award-winning SBA lending platform is being leveraged throughout CUB’s markets Improving PCB’s deposit mix and reducing funding costs
Elimination of redundancies is providing meaningful cost savings and enhancing efficiencies Greater scale is enabling better absorption of increasing regulatory compliance costs
TBV/Share Recovery
$11.00 $10.91 $10.85 $10.78
$10.60
PCB acquired $10.50 on 7/31/12
$10.37
$10.17
$10.00
6/30/2012
9/30/2012
12/31/2012
3/31/2013
6/30/2013
9/30/2013
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Shareholders of CUB Acquisitions
Well Rewarded
California Oaks State Bank – Acquisition announced August 24, 2010
From announcement through 10/29/2013, COSB shareholders rewarded with compound annual growth rate equal to 44.25% after 1,163 days
Premier Commercial Bancorp – Acquisition announced December 8, 2011
From announcement through 10/29/2013, PCBP shareholders rewarded with compound annual growth rate equal to 49.46% after 692 days
$20.00
44.25% CUNB
$18.00
CAGR 10/29/13
$16.00 $19.28
$14.00
$12.00
$10.00
$8.00
$6.00
COSB
$4.00 8/24/10
$6.00
$2.00
$0.00
$20.00
CUNB $18.00 10/29/13 $19.28 $16.00
$14.00 $12.00 $10.00
49.46% CAGR
$8.00 PCBP
12/8/11
$6.00 $9.00
$4.00
$2.00
$0.00
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2013 Highlights
(Through 9/30/13)
Core earnings increases to $13.0 million from $4.4 million
+195% YoY
Solid loan growth of 6.4%
$100 million in net organic loan growth
Offset by $45 million in loan run-off from acquired portfolios
High quality deposit growth
12% growth in non-interest bearing demand deposits
Ramp-up in SBA lending
Gain on sale of SBA loans rises to $673K from $0 last year
Continued strong credit quality
NCOs of 0.08% of average loans
Note: YoY defined as nine months ended 9/30/13 vs. nine months ended 9/30/12
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Increasing Core Earnings
2011 2012 2013
$5,500
$4,989
$4,500 $4,347 $3,929 $3,693
$3,500
($ Thousands) $2,500
$1,627 $1,683 $1,596
$1,500 $1,046
$1,134 $1,076 $803
$500
Q1 Q2 Q3 Q4
*Core earnings reconciliation to net income provided in Appendix
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Improving Operating Leverage
Revenue Operating Expenses
$15 $14 $13 $12
($ Millions) $11
$10 $9 $8 $7 $6
2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
3Q12 operating expenses excludes $2.5 million in merger-related expenses
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Impact of PCB Merger
Core Earnings*
$15,000 $13,029 $10,000
$4,444
($ Thousands) $5,000
$0
2012 2013
Efficiency Ratio
100%
90% 94% 80%
70% 68% 60% 50% 2012 2013
*Core earnings reconciliation to net income provided in Appendix
ROAA
1.00%
0.80% 0.72% 0.60% 0.38% 0.40% 0.20% 0.00% 2012 2013
ROAE
8.00% 7.17% 6.00% 4.00% 3.80% 2.00% 0.00% 2012 2013
Notes: First nine months of 2013 vs. First nine months of 2012 2012 ratios exclude $2.9 million in merger-related expense
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Consistent Asset Growth
CUB Organic Acquisitions
$1,600
$1,400 $1,346 $1,250 $1,200
PCB $397* acquisition $1,000 $800
($ Millions) $800 $756 COSB $853
$118 acquisition $600 $638 $457 $379 $400 $260 $178 $200 $102 $0
2005 2006 2007 2008 2009 2010 2011 2012 3Q13
*Represents the assets acquired from Premier Commercial Bancorp on July 31, 2012
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Loan Growth
$1,000
Q3 2013 Loan Growth = $25MM or 2.8% $910 $900 $800 $700
($ Millions) $600 $
$500 $400 COSB $87 acquisition $300 $334 $232 $200 $162 $263 $96 $100 $35 $0
2005 2006 2007 2008 2009 2010 2011 2012 3Q13
PCB acquisition
$421
$489
$855
$255
$600
Since opening 32 out of 34 quarters loan growth
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Loan Portfolio Composition
(September 30, 2013)
1-4 Multi-Family Other Family 3% 2% 7% Construction 6% C&I
32%
Non-Owner Occupied CRE
29%
Owner-Occupied CRE
21%
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Loans by Industry
(C&I and Owner-Occupied)
(September 30, 2013)
Restaurant/Food
Service Professional Svces
6% 6%
Construction Finance
6% 6% Healthcare 5% Wholesale Admin Mgmt 10% 4% Retail 4%
Other Services 3%
Manufacturing
Other 16% Transportation 4% 2% Entertainment Hotel/Lodging 1% 1% Real Estate 26%
Note: Based on NASICS codes
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NPAs/Total Assets
CUB Peer Group Avg.
6.00%
5.26%
5.00%
4.44%
4.00%
3.31%
3.18% 3.27%
3.00% 2.91%
2.55% 2.62%
2.01%
2.00% 1.88%
1.42% 1.19% 1.37% 1.12% 1.05% 1.07% 1.09% 1.07% 1.06% 1.16% 0.98%
1.00%
0.00%
0.00%
2008 2009 2010 2011 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13
Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$2.0 billion
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NCOs/Avg. Loans
CUB Peer Group Avg.
2.50%
2.00% 1.98%
2013 YTD NCOs = 0.08%
1.51%
1.50%
1.01%
1.00% 0.88% 0.90% 0.80%
0.50% 0.49%
0.27%
0.24% 0.14% 0.19% -0.04% 0.08% 0.00% 0.00%
0.00% 0.01%
2008 2009 2010 2011 2012 1Q13 2Q13 3Q13 -0.50%
Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$2.0 billion
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Quality Deposit Growth
CUB Organic Acquisitions
$1,400
$1,200 Q3 2013 Non-Interest Bearing Growth = $39MM $1,176 $1,078 $1,000 PCB $278 acquisition $800 $691 $800 $658 COSB $600 $113 acquisition $545 $400 $346 $246 $191 $200 $116 $60 $0 2005 2006 2007 2008 2009 2010 2011 2012 3Q13
$ Millions
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Deposit Composition
(September 30, 2013)
CDs
5.8%
MM and Savings 31.4%
Non-Int. Bearing Demand 51.8%
Interest Bearing Transaction 11.0%
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Transaction Accounts and Cost of Funds
70 2.00 2.0
65 64
60 63
61 62 58
1.59
1.5
(%) 50 51 1.31 54
48
46 46 46
44
Deposits 40
40 (%) Total 0.87 37 1.0
/ Funds 30
31 of
28 0.64
27 Cost Accounts 20 0.70
0.47 0.5
0.33 0.28
0.45 0.33
0.24
10 0.24 0.27
Transaction 0.19 0.17
0.19
0.19
0 0.0
2008Y 2009Y 2010Y 2011Y Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
Peer Average (Transaction Accounts) CUB (Transaction Accounts) Peer Average (Cost of Funds) CUB (Cost of Funds)
Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$2.0 billion
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CU Bancorp Capital Ratios
Tier 1 Leverage Capital Ratio (%) Total Risk Based Capital Ratio (%)
12%
11.01% 10% 9.80%
8%
6%
5.00% 4%
2%
0%
CUNB Peer Group FDIC Well Avg. Capitalized
20%
16.63% 15% 12.47%
10.00% 10%
5%
0%
CUNB Peer Group FDIC Well Avg. Capitalized
Peer Group includes public banks or bank holding companies in California with total assets between $1.0-$2.0 billion
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Shifting from Growth to High Performance
Continue realizing synergies from the merger with PCB
Continue attracting high performing bankers
Further penetrate existing footprint
Enhance efficiencies as we continue to scale
Expand non-interest income through increased SBA loan production and sales
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Contact Information
For more information, please contact: Karen Schoenbaum, CFO
(818) 257-7700 kschoenbaum@cunb.com
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Appendix
Reconciliation of Core Earnings to Net Income (Loss)
3Q13 2Q13 1Q13 4Q12 3Q12 2Q12 1Q12 4Q11 3Q11 2Q11 1Q11
Net Income (Loss) 2,477 2,321 2,155 1,628(932) 525 506 306 601 312 248
Add back: Provision for income tax expense (benefit) 1,239 1,515 1,366 1,166(453) 502 450 181 454 242 270
Add back: Provision for loan losses 631 1,153 134 867 521 380 781 467 194
Subtract: Gain on sale of securities, net 5 6 69 144
Subtract: Other-than-temporary impairment losses, net (65)(30)(30)(30)(130)(19)(70)(45)
Add back: Merger related expenses 43 203 2,517 190 148 198 8 24 190
Core Earnings 4,347 4,989 3,693 3,929 1,683 1,627 1,134 1,596 1,076 1,046 803
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