![]() CU Bancorp Investor Presentation as of September 30, 2014 Exhibit 99.1 … a better banking experience |
![]() 2 Forward-Looking Statements This press release contains certain forward-looking information about CU Bancorp (the “Company”), 1 Enterprise Bank and the combined company after the close of the transaction 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. Forward-looking statements speak only as of the date they are made and we assume no duty to update such statements. We caution readers that a number of important factors 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 or a reduction in real estate values could cause an increase in the allowance for credit losses and a reduction in net earnings; increased competitive pressure among depository institutions; the Company’s ability to complete future acquisitions, successfully integrate such acquired entities, or achieve expected beneficial synergies and/or operating efficiencies within expected time-frames or at all; the possibility that personnel changes will not proceed as planned; the cost of additional capital is more than expected; a change in the interest rate environment reduces net interest margins; asset/liability repricing risks and liquidity risks; legal matters could be filed against the Company and could take longer or cost more than expected to resolve or may be resolved adversely to the Company; 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 and drought, may disrupt our business, impede our operations, negatively impact the values of collateral securing the Company’s loans and leases 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, including the conflicts in the Middle East; legislative or regulatory requirements or changes adversely affecting the Company’s business; changes in the securities markets; regulatory approvals for any capital activities cannot be obtained on the terms expected or on the anticipated schedule; and, other risks that are described in CU Bancorp’s public filings with the U.S. Securities and Exchange Commission (the “SEC”). Additional risks and uncertainties relating to the proposed transaction with 1st Enterprise Bank include, but are not limited to: the ability to complete the proposed transaction, including obtaining regulatory approvals and approvals by the shareholders of CU Bancorp and 1st Enterprise Bank; the length of time necessary to consummate the proposed transaction; the ability to successfully integrate the two institutions and achieve expected synergies and operating efficiencies on the expected timeframe; unexpected costs relating to the proposed transaction; and the potential impact on the institutions’ respective businesses as a result of uncertainty surrounding the proposed transaction. If any of these risks or uncertainties materializes or if any of the assumptions underlying such forward-looking statements proves to be incorrect, CU Bancorp’s results could differ materially from those expressed in, implied or projected by such forward-looking statements. CU Bancorp assumes no obligation to update such forward-looking statements. For a more complete discussion of risks and uncertainties, investors and security holders are urged to read CU Bancorp’s annual report on Form 10-K, quarterly reports on Form 10-Q and other reports filed by CU Bancorp with the SEC. The documents filed by CU Bancorp with the SEC may be obtained at CU Bancorp’s website at www.cubancorp.com or at the SEC’s website at www.sec.gov. These documents may also be obtained free of charge from CU Bancorp by directing a request to: CU Bancorp c/o California United Bank, 15821 Ventura Boulevard, Suite 100, Encino, CA 91436. Attention: Investor Relations. Telephone 818-257- 7700. st |
![]() 3 Investment Highlights ……….……………….……… Merger Overview.……………………..……………… Third Quarter Highlights……….....…………………… Appendix ....…………………….....…………………… 25 24 14 4 |
![]() 4 Investment Highlights Premier community-based business banking franchise serving large and diverse market Strong organic loan growth Attractive low-cost core deposit base Exceptional credit quality Growing visibility in the investment community November 30, 2014, merger with 1 st Enterprise Bank, creating a $2.3 billion “pure play” business bank in attractive Southern California market |
![]() 5 Premier Business Banking Franchise $1.5 billion in assets, achieved by experienced management team in nine years, through organic growth and two successful acquisitions 17 th largest publicly-owned bank by assets in combined Los Angeles, Orange and Ventura counties* 280 th largest publicly-owned bank by assets in U.S.* Asset CAGR of 39% since inception in 2005 through 12/31/13 Footprint includes eight branches covering L.A., Orange, Ventura and San Bernardino counties *Source: SNL Financial |
![]() 6 LA Basin is Robust Market Source: The World Bank and Center for the Continuing Study of the California Economy The LA Basin is the 16 th largest economy in the world; it includes Los Angeles, Orange, Riverside, San Bernardino and Ventura counties Rank in World Country 2013 GDP in $billions 14 South Korea 1,305 15 Mexico 1,261 LA Basin 995 16 Indonesia 868 17 Turkey 820 18 Netherlands 800 19 Saudi Arabia 745 20 Switzerland 650 . . . 53 San Diego 191 |
![]() 7 Sophisticated Relationship Management Team offers Solutions for Small- and Medium-Sized Businesses Sophisticated relationship management team offers personalized and responsive service focused on small- and medium-sized businesses in Los Angeles, Orange and Ventura counties Los Angeles County is the largest manufacturing center in the U.S. and would be 9 th largest state in U.S. L.A. County expected to add more than 150,000 jobs over the next two years; June 2014 unemployment rate of 7.8% projected to fall to 7.2% by end of 2015* Orange County would be 31 st largest state in U.S. Orange County unemployment rate is 5.1% as of September 2014** Three-county area is home to more than 532,000 small- and middle-market business** (defined as employing 1 to 499 workers) *Source: Forecast by Beacon Economics, February 2014; actual unemployment rate from Bureau of Labor and Statistics (BLS) **Source: County data from Los Angeles Economic Development Corporation and California EDD, as of 2012; actual unemployment rate from BLS |
![]() 8 Franchise Growth Strategies Organic Growth Offer expertise in C&I and commercial real estate lending to small and middle- market businesses Provide customers with sophisticated products and solutions Leverage relationship-based banking approach and superior service SBA lending platform expertise acquired with Premier Commercial Bank Continue recruiting “in market” talent from competitors Growth by Merger/Acquisition Strong management team experienced with successful, accretive acquisitions California Oaks State Bank (12/31/10) Premier Commercial Bank (7/31/12) 1 st Enterprise Bank (11/30/14) |
![]() 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* *Combined location (August 2013) 9 CUB Branch Former COSB Branch Former PCB Branch California United Bank has a footprint that spans the most attractive markets in Southern California: |
![]() COSB Loan Growth $35 $96 $162 $232 $263 $334 $489 $600 $933 $979 $0 $200 $400 $600 $800 $1,000 $1,200 2005 2006 2007 2008 2009 2010 2011 2012 2013 3Q14 CUB Organic Acquisitions $855 $421 PCB acquisition Loan Growth from 3Q13 = $69MM or 8% $87 $255 acquisition 10 |
![]() 11 Strong Credit Quality Trend Continues CUB credit quality at Sept. 30, 2014: Total nonaccrual loans of $4.4 million or 0.44% of total loans NPAs to total assets of 0.30% NPAs at lowest level in five years Net recoveries year to date of $227 thousand Net recoveries in first three quarters of 2014 Peer group includes California banks or bank holding companies with total assets between $1.0-2.0 billion; source: SNL. NPAs to total assets Net charge-offs 0.80% 0.49% -0.04% 0.08% 0.12% - 0.02% 2.20% 1.50% 0.94% 0.82% 0.21% -0.50% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 2009 2010 2011 2012 2013 3Q14 CUB Peer Group Avg. 1.12% 1.42% 1.19% 1.09% 0.68% 0.30% 4.94% 4.19% 3.06% 2.31% 1.89% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 2009 2010 2011 2012 2013 3Q14 CUB Peer Group Avg. |
![]() Quality Deposit Growth $60 $116 $191 $246 $346 $545 $691 $800 $1,232 $1,262 $113 $278 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 2005 2006 2007 2008 2009 2010 2011 2012 2013 3Q14 CUB Organic Acquisitions $1,078 PCB acquisition $658 COSB acquisition Non - Interest Bearing Grew $89MM from 3Q13 12 |
![]() Growing Visibility in the Investment Community Surpassed $1 billion in assets in July 2012 Transferred listing to Nasdaq Capital Market in October 2012 (CUNB) 43% institutional ownership per 3Q14 13-f filings 11.2 million shares outstanding at 9/30/14 $219 million market cap at 11/25/14 Added to Russell Indexes in June 2013 Analyst coverage by five Wall Street brokerage firms Year to date CUNB has outperformed the KBW Bank Index (BKX), ABA NASDAQ Bank Index (ABAQ), the Russell 2000 Index (RUT), and is just about even with the NASDAQ Composite (NASDAQ). 13 |
![]() 14 Merger is a Great Fit of People and Culture Blending the best of two high performing organizations Complementary branch locations and customer-first cultures fit like a glove Brings together some of the top bankers and banking support staff in Southern California Larger organization provides increased opportunities for continued professional growth |
![]() Merger with 1 st Enterprise Bank Has Attractive Footprint and Large Branch Size CUNB (8 branches) FENB (3 branches; 1 LPO) Inland Empire: FENB: $76 million Downtown LA: FENB: $312 million Irvine/Newport Beach: CUNB: $147 million FENB: $290 million Pro Forma: $437 million Santa Clarita Valley: CUNB: $77 million Simi Valley: CUNB: $12 million West LA: San Fernando Valley: CUNB: $235 million Anaheim: CUNB: $199 million $100 Million+ Branches Woodland Hills LPO South Bay: CUNB: $69 million Conejo Valley: CUNB: $219 million Source: CUNB and FENB; branch deposits data as of Sept. 30, 2014 CUNB: $279 million 15 |
![]() 16 Summary of Merger Terms Name: CU Bancorp / California United Bank Headquarters: Downtown Los Angeles (Current FENB headquarters) Management: Chairman and CEO, David I. Rainer (current Chairman, President and CEO of CUNB) Board Composition: 8 CUNB / 4 FENB Ownership: 68% CUNB / 32% FENB Consideration: 1.3450 shares of CUNB stock for each FENB share 100% stock consideration; fixed exchange ratio Equivalent to $26.27 per FENB share 4 13% premium to FENB’s last closing price 2 Deal value of approximately $103 million 1 16.9x 2014 analyst EPS estimate 172% of tangible book value per share 3 Timing: Closed on November 30, 2014 1 Based on CUNB closing price of $18.19 on June 2, 2014 2 Based on FENB closing price of $21.75 on June 2, 2014 3 As of March 31, 2014 4 Based on CUNB closing price of $19.53 on November 25, 2014 President, K. Brian Horton (current President of FENB) |
![]() Noninterest bearing deposits Interest bearing deposits Noninterest bearing deposits Interest bearing deposits Combination of Two Growth-Oriented Franchises Source: SNL Financial 1 Mean analyst estimate as of June 2, 2014 2 Analyst estimate as of June 2, 2014 1 Gross Loans ($mm) CUNB Performance Net Income to Common ($mm) FENB Performance Total Deposits ($mm) Gross Loans ($mm) Total Deposits ($mm) Net Income to Common ($mm) $9.8 $11.3 $0.0 $2.0 $4.0 $6.0 $8.0 $10.0 $12.0 $14.0 $16.0 2013 2014E $4.8 $6.1 $0.0 $1.0 $2.0 $3.0 $4.0 $5.0 $6.0 $7.0 $8.0 2013 2014E² 26% 16% 17 |
![]() 18 Pro Forma Financial Profile 1 Based on financial information as of Sept. 30, 2014, unless otherwise noted 2 Based on market data as of Nov. 3, 2014 3 Projected at close 4 Source: SNL Financial 5 Projected 2016 results with fully phased-in cost savings $324mm 2 0.9-1.1% 5 11-12% 5 Total assets $1.5bn $0.8bn $2.3bn Total loans $1.0bn $0.6bn $1.6bn Total deposits $1.3bn $0.7bn $2.0bn Market capitalization $222mm 2 $102mm 2 Number of branches 8 3 + LPO 10 + LPO Tang. common equity ratio 9.3% 7.3% 8.1% 3 Tier I leverage ratio 10.1% 9.5% 9.6% 3 Total risk-based ratio 12.8% 11.4% 11.5% 3 Cost of deposits (Q3 2014) (%) 0.11% 0.12% 0.11% Nonperforming assets/total assets (%) 0.30% 0.00% 0.19% LTM Core ROAA (%) 0.80% 4 0.86% 4 LTM ROATCE (%) 8.3% 4 10.8% 4 Pro Forma 1 |
![]() 19 Uniquely Attractive Southern California Franchise 1 Market cap based on CUNB closing price on Nov. 4, 2014; balance sheet and deposit franchise data as of Sept. 30, 2014 Source: SNL Financial; peer data based on Sept. 30, 2014 financial data Business banking focus Growth profile (balance sheet and EPS) Stellar funding base (loan/deposit ratio, deposit composition and deposit cost) Large branch size Balance Sheet Loan Portfolio Deposit Franchise Company Market Cap. ($mm) Total Assets ($bn) Loans/ Deposits (%) C&I + OO CRE (%) CRE NOO (%) MRQ Cost of Deposits (%) Non- Interest Bearing (%) CVB Financial Corp. 1,518 7.4 64 30 41 0.09 53 121 BBCN Bancorp, Inc. 1,160 6.9 99 48 44 0.54 27 107 Opus Bank 861 4.7 106 20 15 0.57 17 54 Banc of California, Inc. 333 4.4 75 13 10 0.70 13 120 Wilshire Bancorp, Inc. 723 3.7 99 41 45 0.53 29 83 Hanmi Financial Corporation 672 3.1 92 51 39 0.50 36 75 Pro Forma CUNB 324 2.3 79 55 29 0.11 53 177 Avg. Branch Deposits ($mm) 1 Pro forma company will be 1 of 7 commercial banks headquartered in Southern California and traded on NASDAQ or NYSE with total assets of $2.0 - $10.0 billion Pro forma Company is a uniquely attractive franchise within this market |
![]() 20 Benefits to all Stakeholders Scarcity value of $2.3 billion asset SoCal business banking platform Financially compelling projected pro forma results Enhanced trading liquidity with larger pro forma market capitalization Broadened investor base Shared high standard for the quality of customer service Expanded footprint and market reach Larger lending base Broader product offerings Partnership approach to forming pro forma management team Partnership of both boards of directors with strong ties to community Branch consolidation in Irvine Shareholders Customers Employees |
![]() 21 Third Quarter 2014 Highlights Net income of $2.55 million, 2.9% increase from $2.48 million in 3Q13 Core net income of $3.2 million, 28% increase from $2.5 million in 3Q13 Core EPS of $0.28, 22% increase from $0.23 in 3Q13 Continued strong credit quality NPAs to total assets of 0.30% Net recoveries of $29 thousand in 3Q14 |
![]() 22 2014 Highlights For the Nine Months Ended Income Statement 2014 2013 % change EPS $0.70 $0.66 6% Net income 7,601 6,953 9% Core net income 8,729 6,996 25% Balance Sheet, as of September 30, 2014 2013 Total loans 978,800 909,642 8% Total deposits 1,262,947 1,176,349 7% Total loans increased $69 million or 8%, from 3Q13 Total deposits increased $87 million or 7%, from 3Q13 Non-interest bearing deposits increased $89 million or 15%, from 3Q13 |
![]() 23 Improving Operating Leverage *3Q12 operating expenses excludes $2.5 million in merger-related expenses; 2Q14 excludes $497 thousand in merger-related expenses; 3Q14 excludes $631 thousand in merger-related expenses. $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 Revenue Operating Expenses |
![]() 24 CU Bancorp is Well Capitalized by All Regulatory Ratios Regulatory Ratios "Well Capitalized" 3Q14 Tier 1 Leverage 5% 10.12% Tier 1 Risk-based Capital 6% 11.88% Total Risk-based Capital 10% 12.83% |
![]() 25 Appendix |
![]() 26 Reconciliation of Non-GAAP Measures Core Net Income (Unaudited) The Company utilizes the term Core Net Income, a non-GAAP financial measure. CU Bancorp’s management believes Core Net Income is useful because it is a measure utilized by management and market analysts to understand the effects of merger expenses and provides an alternative view of the Company’s performance over time and in comparison to the Company’s competitors. Core net income should not be viewed as a substitute for net income. A reconciliation of CU Bancorp’s Net Income to Core Net Income is presented in the tables below for the periods indicated: (Dollars in thousands except per share data) Nine Months Ended September 30, 2014 September 30, 2013 Net Income $ 7,601 $ 6,953 Add back: Merger related expenses 1,128 43 Core Net Income $ 8,729 $ 6,996 Three Months Ended September 30, 2014 September 30, 2013 Net Income $ 2,549 $ 2,477 Add back: Merger related expenses 631 – Core Net Income $ 3,180 $ 2,477 Diluted Average Shares Outstanding 11,190,000 10,848,000 Diluted Earnings Per Share $ 0.23 $ 0.23 Diluted Core Earnings Per Share* $ 0.28 $ 0.23 *Diluted Core Earnings Per Share: Annualized core net income/diluted average shares outstanding |