 Investor Presentation
Investor Presentation
Sandler O'Neill + Partners, L.P.
West Coast Financial Services Conference
March 5, 2013
The Ritz-Carlton
Marina del Rey, California
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 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. www.cunb.com.
These |
 Corporate Overview
Corporate Overview
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
3 |
 Investment
Investment
Highlights
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 Bank has a
United Bank has a
footprint that spans the most
footprint that spans the most
attractive markets in Southern
attractive markets in Southern
California:
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 LPO
Former PCB
Branch
Former COSB
Branch
CUNB 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
Wells Fargo/Security Pacific –
1980s
California United Bank (1992 –
1997)
Santa Monica Bank
U.S. Bank (2001 –
2004)
California United Bank (Current) |
 Our Growth Strategy
Our Growth Strategy
11
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)
Organic
Organic
Acquisitions
Acquisitions |
 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
$500
$1,500
$2,500
$3,500
$4,500
1Q11
2Q11
3Q11
4Q11
1Q12
2Q12
3Q12
4Q12
$803
$1,046
$1,076
$1,596
$1,134
$1,627
$1,683
$3,929
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
1.52%
5.14%
0.00%
2.00%
4.00%
6.00%
4Q11
4Q12
0.15%
0.50%
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
4Q11
4Q12
ROAA
ROAE
Efficiency Ratio |
 Consistent Asset Growth
Consistent Asset Growth
16
*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
PCB
acquisition
$756
COSB
acquisition |
 Loan Growth
Loan Growth
17
$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
Q4
2012
Loan
Growth
=
$60MM
or
8% |
 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 0.00%
1.12%
1.42%
1.19%
1.05%
0.98%
1.07%
1.09%
2.55%
5.26%
4.44%
3.31%
3.18%
3.27%
2.91%
2.62%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2008
2009
2010
2011
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 -0.50%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2008
2009
2010
2011
2012
CUNB
Peer Group Avg.
0.00%
0.80%
0.49%
-0.04%
0.08%
1.01%
1.98%
1.51%
0.88%
0.90% |
 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
PCB
acquisition
$658
COSB
acquisition
Q4 2012 Non-Interest Bearing Growth = $18MM |
 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 28.4
31.1
36.9
38.4
40.3
47.8
46.2
53.5
64.5
67.5
57.6
60.9
1.31
0.87
0.64
0.47
0.47
0.33
0.70
0.45
0.19
0.12
0.24
0.24
0.0
0.3
0.6
0.9
1.2
1.5
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
2009Y
2011Y
Q2 2012
Q3 2012
Q4 2012
Peer Average (Transaction Accounts)
CUNB (Transaction Accounts)
Peer Average (Cost of Funds)
CUNB (Cost of Funds)
2010Y |
 CU
Bancorp Capital Ratios CU Bancorp Capital Ratios
25
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
Tier 1 Leverage Capital Ratio (%)
Total Risk Based Capital Ratio (%) |
 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 |
 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
(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
Subtract: Other-than-temporary impairment losses, net
|