Banc of California, Inc. Reports First Quarter 2024 Financial Results with Improved Profitability and Strengthened Balance Sheet
- Significant increase in net interest income by $88.1 million, reflecting benefits of balance sheet repositioning
- Net interest margin increased by 109 basis points to 2.78%
- Noninterest expenses declined by over $41 million to $210.5 million
- Strong capital ratios above regulatory thresholds, with a total risk-based capital ratio of 16.43%
- Book value per share increased to $17.18, and tangible book value per share increased to $15.07
- None.
Insights
The reported earnings per share (EPS) of $0.17 and adjusted EPS of $0.19, alongside a strengthened balance sheet, signal a positive financial performance for Banc of California. The increase in net interest income by 58% and expansion in the net interest margin by 109 basis points reflect effective balance sheet management and improved earning asset yields, which are critical metrics for evaluating a bank's profitability.
From a financial standpoint, careful consideration should be given to the provision for credit losses which has changed from the previous quarter. While there's a modest increase in the allowance for credit losses to 1.26%, the quality of loans will be an area to monitor closely, especially in the context of loans secured by office properties which contributed to this rise.
Furthermore, the reported high liquidity levels and strong capital ratios are reassuring, suggesting that the bank is well-positioned to manage potential risks and regulatory requirements. However, the decline in total deposits and a significant decrease in cash and cash equivalents need monitoring as they may affect the bank's liquidity position in the long term.
Examining the asset quality, the increase in delinquent loans from 0.57% to 0.93% of total loans and leases, coupled with the uptick in nonperforming assets from 0.21% to 0.44% of total assets, warrants attention. Such shifts may be indicative of emerging risks in the loan portfolio, particularly with the mention of office and retail property loans.
Despite these concerns, the coverage ratio of the allowance for credit losses to nonperforming loans stands at 219%, which provides a substantial buffer against potential losses. Nonetheless, the underlying factors driving the increases in delinquencies and nonperforming loans should be scrutinized for their implications on future credit performance.
Observing market trends, the bank's pivot towards noninterest-bearing deposits, now making up 27% of total deposits, may be an effort to lower funding costs and improve the deposit mix, which is a strategic move considering the competitive banking landscape. Such a transformation can be attractive to investors as it improves operational efficiency.
However, the reduction in the securities portfolio and the overall decrease in total assets raise questions about the strategic direction and growth prospects. Investors might value the bank's capital strength and profitability, but could also be concerned about the potential for growth and the bank's approach to managing investments in a fluctuating interest rate environment.
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Banc of California, Inc. (NYSE: BANC) (“Banc of California”), the parent company of wholly-owned subsidiary Banc of California (the “Bank”), today reported financial results for the first quarter ended March 31, 2024. The Company recorded net earnings available to common and equivalent stockholders of
First quarter highlights include:
-
Net interest income increased by
$88.1 million 58% , in the first quarter to$239.1 million -
Net interest margin of
2.78% , an increase of 109 basis points from1.69% in the fourth quarter. -
The average total cost of deposits decreased by 28 basis points to
2.66% for the first quarter compared to2.94% in the fourth quarter. -
Improved overall deposit mix, with noninterest-bearing deposits increasing over
$59 million 26% at December 31, 2023 to27% at March 31, 2024. -
Noninterest expenses declined by over
$41 million $210.5 million -
High liquidity levels, with available on-balance sheet liquidity and unused borrowing capacity of
$16.8 billion -
Allowance for credit losses of
1.26% at March 31, 2024, up from1.22% at December 31, 2023, after a first quarter provision for credit losses of$10.0 million -
Net charge-offs of
$1.2 million -
Strong capital ratios well above the regulatory thresholds for "well capitalized" banks at March 31, 2024, including an estimated
16.43% Total risk-based capital ratio,12.41% Tier 1 capital ratio,10.12% CET1 capital ratio, and9.14% Tier 1 leverage ratio. -
Book value per share increased to
$17.18 $15.07
(1) |
Non-GAAP measure; refer to section 'Non-GAAP Measures' |
Jared Wolff, President & CEO of Banc of California, commented, “Our first full quarter results as a combined company reflect strong execution on the key initiatives that will lead to achieving the profitability targets we set for the fourth quarter of 2024. We began to realize the benefits of the balance sheet repositioning following the closing of the merger and generated a significantly higher level of net interest income and significantly lower operating expenses. Our deposit gathering engine generated an increase in noninterest-bearing deposits during the first quarter, which contributed to a lower average cost of deposits and the expansion in our net interest margin.”
Mr. Wolff continued, “We are positioned with a strong balance sheet that has good levels of capital, liquidity, and loan loss reserves, and a stable loan portfolio. While remaining disciplined and conservative in new loan originations, core loans grew
INCOME STATEMENT HIGHLIGHTS
| Three Months Ended | |||||||||||
March 31, |
|
December 31, |
|
March 31, |
|||||||
| Summary Income Statement |
|
2024 |
|
|
|
2023 |
|
|
|
2023 |
|
| (In thousands) | |||||||||||
| Total interest income | $ |
488,750 |
|
$ |
467,240 |
|
$ |
517,788 |
|
||
| Total interest expense |
|
249,602 |
|
|
316,189 |
|
|
238,516 |
|
||
| Net interest income |
|
239,148 |
|
|
151,051 |
|
|
279,272 |
|
||
| Provision for credit losses |
|
10,000 |
|
|
47,000 |
|
|
3,000 |
|
||
| (Loss) gain on sale of loans |
|
(448 |
) |
|
(3,526 |
) |
|
2,962 |
|
||
| Loss on sale of securities |
|
- |
|
|
(442,413 |
) |
|
- |
|
||
| Other noninterest income |
|
34,264 |
|
|
45,537 |
|
|
33,429 |
|
||
| Total noninterest income (loss) |
|
33,816 |
|
|
(400,402 |
) |
|
36,391 |
|
||
| Total revenue |
|
272,964 |
|
|
(249,351 |
) |
|
315,663 |
|
||
| Goodwill impairment |
|
- |
|
|
- |
|
|
1,376,736 |
|
||
| Acquisition, integration and reorganization costs |
|
- |
|
|
111,800 |
|
|
8,514 |
|
||
| Other noninterest expense |
|
210,518 |
|
|
251,838 |
|
|
187,753 |
|
||
| Total noninterest expense |
|
210,518 |
|
|
363,638 |
|
|
1,573,003 |
|
||
| Earnings (loss) before income taxes |
|
52,446 |
|
|
(659,989 |
) |
|
(1,260,340 |
) |
||
| Income tax expense (benefit) |
|
14,310 |
|
|
(177,034 |
) |
|
(64,916 |
) |
||
| Net earnings (loss) |
|
38,136 |
|
|
(482,955 |
) |
|
(1,195,424 |
) |
||
| Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
||
| Net earnings (loss) available to common and equivalent stockholders | $ |
28,189 |
|
$ |
(492,902 |
) |
$ |
(1,205,371 |
) |
||
Net Interest Income
Q1-2024 vs Q4-2023
Net interest income increased by
Average interest-earning assets decreased by
The average yield on interest-earning assets increased by 45 basis points to
The average yield on loans and leases increased by 41 basis points to
The average total cost of funds decreased by 66 basis points to
Provision For Credit Losses
Q1-2024 vs Q4-2023
The provision for credit losses was
Noninterest Income
Q1-2024 vs Q4-2023
Noninterest income increased by
Noninterest Expense
Q1-2024 vs Q4-2023
Noninterest expense decreased by
Income Taxes
Q1-2024 vs Q4-2023
Income tax expense of
BALANCE SHEET HIGHLIGHTS
| March 31, | December 31, | March 31, | Increase (Decrease) | |||||||||||||
| Selected Balance Sheet Items | 2024 |
2023 |
2023 |
CQ vs PQ | CQ vs PYQ | |||||||||||
| (In thousands) | ||||||||||||||||
| Cash and cash equivalents | $ |
3,085,228 |
$ |
5,377,576 |
$ |
6,680,136 |
$ |
(2,292,348 |
) |
$ |
(3,594,908 |
) |
||||
| Securities available-for-sale |
|
2,286,682 |
|
2,346,864 |
|
4,848,607 |
|
(60,182 |
) |
|
(2,561,925 |
) |
||||
| Securities held-to-maturity |
|
2,291,984 |
|
2,287,291 |
|
2,273,650 |
|
4,693 |
|
|
18,334 |
|
||||
| Loan and leases held for investment, net of deferred fees |
|
25,483,069 |
|
25,489,687 |
|
25,672,381 |
|
(6,618 |
) |
|
(189,312 |
) |
||||
| Total assets |
|
36,080,778 |
|
38,534,064 |
|
44,302,981 |
|
(2,453,286 |
) |
|
(8,222,203 |
) |
||||
| Noninterest-bearing deposits | $ |
7,833,608 |
$ |
7,774,254 |
$ |
7,030,759 |
$ |
59,354 |
|
$ |
802,849 |
|
||||
| Total deposits |
|
28,892,407 |
|
30,401,769 |
|
28,187,561 |
|
(1,509,362 |
) |
|
704,846 |
|
||||
| Borrowings |
|
2,139,498 |
|
2,911,322 |
|
11,881,712 |
|
(771,824 |
) |
|
(9,742,214 |
) |
||||
| Total liabilities |
|
32,679,344 |
|
35,143,299 |
|
41,531,504 |
|
(2,463,955 |
) |
|
(8,852,160 |
) |
||||
| Total stockholders' equity |
|
3,401,434 |
|
3,390,765 |
|
2,771,477 |
|
10,669 |
|
|
629,957 |
|
||||
Securities
The balance of securities held-to-maturity (“HTM”) remained consistent through the first quarter and totaled
Securities available-for-sale (“AFS”) decreased by
Loans and Leases
The following table sets forth the composition, by loan category, of our loan and lease portfolio held for investment, net of deferred fees, as of the dates indicated:
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| Composition of Loans and Leases |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| (Dollars in thousands) | |||||||||||||||||||
| Real estate mortgage: | |||||||||||||||||||
| Commercial | $ |
4,902,987 |
|
$ |
5,026,497 |
|
$ |
3,526,308 |
|
$ |
3,610,320 |
|
$ |
3,808,751 |
|
||||
| Multi-family |
|
6,124,404 |
|
|
6,025,179 |
|
|
5,279,659 |
|
|
5,304,544 |
|
|
5,523,320 |
|
||||
| Other residential |
|
4,949,371 |
|
|
5,060,309 |
|
|
5,228,524 |
|
|
5,373,178 |
|
|
6,075,540 |
|
||||
| Total real estate mortgage |
|
15,976,762 |
|
|
16,111,985 |
|
|
14,034,491 |
|
|
14,288,042 |
|
|
15,407,611 |
|
||||
| Real estate construction and land: | |||||||||||||||||||
| Commercial |
|
775,364 |
|
|
759,585 |
|
|
465,266 |
|
|
415,997 |
|
|
910,327 |
|
||||
| Residential |
|
2,470,340 |
|
|
2,399,684 |
|
|
2,272,271 |
|
|
2,049,526 |
|
|
3,698,113 |
|
||||
| Total real estate construction and land |
|
3,245,704 |
|
|
3,159,269 |
|
|
2,737,537 |
|
|
2,465,523 |
|
|
4,608,440 |
|
||||
| Total real estate |
|
19,222,466 |
|
|
19,271,254 |
|
|
16,772,028 |
|
|
16,753,565 |
|
|
20,016,051 |
|
||||
| Commercial: | |||||||||||||||||||
| Asset-based |
|
2,061,093 |
|
|
2,189,085 |
|
|
2,287,893 |
|
|
2,357,098 |
|
|
2,068,327 |
|
||||
| Venture capital |
|
1,513,641 |
|
|
1,446,362 |
|
|
1,464,160 |
|
|
1,723,476 |
|
|
2,058,237 |
|
||||
| Other commercial |
|
2,246,157 |
|
|
2,129,860 |
|
|
1,002,377 |
|
|
1,014,212 |
|
|
1,102,543 |
|
||||
| Total commercial |
|
5,820,891 |
|
|
5,765,307 |
|
|
4,754,430 |
|
|
5,094,786 |
|
|
5,229,107 |
|
||||
| Consumer |
|
439,712 |
|
|
453,126 |
|
|
394,488 |
|
|
409,859 |
|
|
427,223 |
|
||||
| Total loans and leases held for investment, net of deferred fees | $ |
25,483,069 |
|
$ |
25,489,687 |
|
$ |
21,920,946 |
|
$ |
22,258,210 |
|
$ |
25,672,381 |
|
||||
| Total unfunded loan commitments | $ |
5,482,672 |
|
$ |
5,578,907 |
|
$ |
5,289,221 |
|
$ |
5,845,375 |
|
$ |
9,776,789 |
|
||||
| Composition as % of Total | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| Loans and Leases |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| Real estate mortgage: | |||||||||||||||||||
| Commercial |
|
19 |
% |
|
20 |
% |
|
16 |
% |
|
16 |
% |
|
15 |
% |
||||
| Multi-family |
|
24 |
% |
|
23 |
% |
|
24 |
% |
|
24 |
% |
|
21 |
% |
||||
| Other residential |
|
19 |
% |
|
20 |
% |
|
24 |
% |
|
24 |
% |
|
24 |
% |
||||
| Total real estate mortgage |
|
62 |
% |
|
63 |
% |
|
64 |
% |
|
64 |
% |
|
60 |
% |
||||
| Real estate construction and land: | |||||||||||||||||||
| Commercial |
|
3 |
% |
|
3 |
% |
|
2 |
% |
|
2 |
% |
|
4 |
% |
||||
| Residential |
|
10 |
% |
|
9 |
% |
|
10 |
% |
|
9 |
% |
|
14 |
% |
||||
| Total real estate construction and land |
|
13 |
% |
|
12 |
% |
|
12 |
% |
|
11 |
% |
|
18 |
% |
||||
| Total real estate |
|
75 |
% |
|
75 |
% |
|
76 |
% |
|
75 |
% |
|
78 |
% |
||||
| Commercial: | |||||||||||||||||||
| Asset-based |
|
8 |
% |
|
9 |
% |
|
10 |
% |
|
11 |
% |
|
8 |
% |
||||
| Venture capital |
|
6 |
% |
|
6 |
% |
|
7 |
% |
|
8 |
% |
|
8 |
% |
||||
| Other commercial |
|
9 |
% |
|
8 |
% |
|
5 |
% |
|
4 |
% |
|
4 |
% |
||||
| Total commercial |
|
23 |
% |
|
23 |
% |
|
22 |
% |
|
23 |
% |
|
20 |
% |
||||
| Consumer |
|
2 |
% |
|
2 |
% |
|
2 |
% |
|
2 |
% |
|
2 |
% |
||||
| Total loans and leases held for investment, net of deferred fees |
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
|
|
100 |
% |
Total loans and leases held for investment, net of deferred fees, remained consistent through the first quarter and totaled
Deposits and Client Investment Funds
The following table sets forth the composition of our deposits at the dates indicated:
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| Composition of Deposits |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| (Dollars in thousands) | |||||||||||||||||||
| Noninterest-bearing checking | $ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
$ |
7,030,759 |
|
||||
| Interest-bearing: | |||||||||||||||||||
| Checking |
|
7,836,097 |
|
|
7,808,764 |
|
|
7,038,808 |
|
|
7,112,807 |
|
|
5,360,622 |
|
||||
| Money market |
|
5,020,110 |
|
|
6,187,889 |
|
|
5,424,347 |
|
|
5,678,323 |
|
|
8,195,670 |
|
||||
| Savings |
|
2,016,398 |
|
|
1,997,989 |
|
|
1,441,700 |
|
|
897,277 |
|
|
671,918 |
|
||||
| Time deposits: | |||||||||||||||||||
| Non-brokered |
|
2,761,836 |
|
|
3,139,270 |
|
|
3,038,005 |
|
|
2,725,265 |
|
|
2,502,914 |
|
||||
| Brokered |
|
3,424,358 |
|
|
3,493,603 |
|
|
4,076,788 |
|
|
5,428,053 |
|
|
4,425,678 |
|
||||
| Total time deposits |
|
6,186,194 |
|
|
6,632,873 |
|
|
7,114,793 |
|
|
8,153,318 |
|
|
6,928,592 |
|
||||
| Total interest-bearing |
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|
21,156,802 |
|
||||
| Total deposits | $ |
28,892,407 |
|
$ |
30,401,769 |
|
$ |
26,598,681 |
|
$ |
27,897,083 |
|
$ |
28,187,561 |
|
||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| Composition as % of Total Deposits |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| Noninterest-bearing checking |
|
27 |
% |
|
26 |
% |
|
21 |
% |
|
22 |
% |
|
25 |
% |
||||
| Interest-bearing: | |||||||||||||||||||
| Checking |
|
27 |
% |
|
26 |
% |
|
27 |
% |
|
26 |
% |
|
19 |
% |
||||
| Money market |
|
17 |
% |
|
20 |
% |
|
20 |
% |
|
20 |
% |
|
29 |
% |
||||
| Savings |
|
7 |
% |
|
6 |
% |
|
5 |
% |
|
3 |
% |
|
2 |
% |
||||
| Time deposits: | |||||||||||||||||||
| Non-brokered |
|
10 |
% |
|
10 |
% |
|
12 |
% |
|
10 |
% |
|
9 |
% |
||||
| Brokered |
|
12 |
% |
|
12 |
% |
|
15 |
% |
|
19 |
% |
|
16 |
% |
||||
| Total time deposits |
|
22 |
% |
|
22 |
% |
|
27 |
% |
|
29 |
% |
|
25 |
% |
||||
| Total interest-bearing |
|
73 |
% |
|
74 |
% |
|
79 |
% |
|
78 |
% |
|
75 |
% |
||||
| Total deposits |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
||||
Total deposits decreased by
Noninterest-bearing checking totaled
Uninsured and uncollateralized deposits of
In addition to deposit products, we also offer alternative, non-depository corporate treasury solutions for select clients to invest excess liquidity. These alternative options include investments managed by BofCal Asset Management Inc. (“BAM”), our registered investment advisor subsidiary, and third-party sweep products. Total off-balance sheet client investment funds were
Borrowings
Borrowings decreased by
Equity
During the first quarter, total stockholders’ equity increased by
At March 31, 2024, book value per common share increased to
(1) |
Non-GAAP measures; refer to section 'Non-GAAP Measures' |
CAPITAL AND LIQUIDITY
Capital ratios remain strong with total risk-based capital at
The following table sets forth our regulatory capital ratios as of the dates indicated:
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||
| Capital Ratios | 2024 (1) |
2023 |
2023 |
2023 |
2023 |
||||
| Banc of California, Inc. | |||||||||
| Total risk-based capital ratio |
|
|
|
|
|
||||
| Tier 1 risk-based capital ratio |
|
|
|
|
|
||||
| Common equity tier 1 capital ratio |
|
|
|
|
|
||||
| Tier 1 leverage capital ratio |
|
|
|
|
|
||||
| Banc of California | |||||||||
| Total risk-based capital ratio |
|
|
|
|
|
||||
| Tier 1 risk-based capital ratio |
|
|
|
|
|
||||
| Common equity tier 1 capital ratio |
|
|
|
|
|
||||
| Tier 1 leverage capital ratio |
|
|
|
|
|
||||
| (1) Capital information for March 31, 2024 is preliminary. | |||||||||
At March 31, 2024, immediately available cash and cash equivalents were
CREDIT QUALITY
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
| Asset Quality Information and Ratios |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| (Dollars in thousands) | |||||||||||||||||||
| Delinquent loans and leases held for investment: | |||||||||||||||||||
| 30 to 89 days delinquent | $ |
178,594 |
|
$ |
113,307 |
|
$ |
49,970 |
|
$ |
57,428 |
|
$ |
144,431 |
|
||||
| 90+ days delinquent |
|
57,595 |
|
|
30,881 |
|
|
77,327 |
|
|
62,322 |
|
|
49,936 |
|
||||
| Total delinquent loans and leases | $ |
236,189 |
|
$ |
144,188 |
|
$ |
127,297 |
|
$ |
119,750 |
|
$ |
194,367 |
|
||||
| Total delinquent loans and leases to loans and leases held for investment |
|
0.93 |
% |
|
0.57 |
% |
|
0.58 |
% |
|
0.54 |
% |
|
0.76 |
% |
||||
| Nonperforming assets, excluding loans held for sale: | |||||||||||||||||||
| Nonaccrual loans and leases | $ |
145,981 |
|
$ |
62,527 |
|
$ |
125,396 |
|
$ |
104,886 |
|
$ |
87,124 |
|
||||
| 90+ days delinquent loans and still accruing |
|
- |
|
|
11,750 |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Total nonperforming loans and leases ("NPLs") |
|
145,981 |
|
|
74,277 |
|
|
125,396 |
|
|
104,886 |
|
|
87,124 |
|
||||
| Foreclosed assets, net |
|
12,488 |
|
|
7,394 |
|
|
6,829 |
|
|
8,426 |
|
|
2,135 |
|
||||
| Total nonperforming assets ("NPAs") | $ |
158,469 |
|
$ |
81,671 |
|
$ |
132,225 |
|
$ |
113,312 |
|
$ |
89,259 |
|
||||
| Allowance for loan and lease losses | $ |
291,503 |
|
$ |
281,687 |
|
$ |
222,297 |
|
$ |
219,234 |
|
$ |
210,055 |
|
||||
| Allowance for loan and lease losses to NPLs |
|
199.69 |
% |
|
379.24 |
% |
|
177.28 |
% |
|
209.02 |
% |
|
241.10 |
% |
||||
| NPLs to loans and leases held for investment |
|
0.57 |
% |
|
0.29 |
% |
|
0.57 |
% |
|
0.47 |
% |
|
0.34 |
% |
||||
| NPAs to total assets |
|
0.44 |
% |
|
0.21 |
% |
|
0.36 |
% |
|
0.30 |
% |
|
0.20 |
% |
||||
At March 31, 2024, total delinquent loans and leases were
At March 31, 2024, nonperforming assets were
At March 31, 2024, nonperforming loans were
Nonperforming loans and leases as a percentage of total loans and leases increased to
At March 31, 2024, nonperforming assets included
ALLOWANCE FOR CREDIT LOSSES - LOANS
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
| Allowance for Credit Losses - Loans |
|
2024 |
|
|
2023 |
|
|
2023 |
|
||
| (Dollars in thousands) | |||||||||||
| Allowance for loan and lease losses ("ALLL"): | |||||||||||
| Balance at beginning of period | $ |
281,687 |
|
$ |
222,297 |
|
$ |
200,732 |
|
||
| Initial ALLL on acquired PCD loans |
|
- |
|
|
25,623 |
|
|
- |
|
||
| Charge-offs |
|
(5,014 |
) |
|
(14,628 |
) |
|
(10,397 |
) |
||
| Recoveries |
|
3,830 |
|
|
1,395 |
|
|
1,220 |
|
||
| Net charge-offs |
|
(1,184 |
) |
|
(13,233 |
) |
|
(9,177 |
) |
||
| Provision for loan losses |
|
11,000 |
|
|
47,000 |
|
(1) |
|
18,500 |
|
|
| Balance at end of period | $ |
291,503 |
|
$ |
281,687 |
|
$ |
210,055 |
|
||
| Reserve for unfunded loan commitments ("RUC"): | |||||||||||
| Balance at beginning of period | $ |
29,571 |
|
$ |
29,571 |
|
$ |
91,071 |
|
||
| (Negative provision) provision for credit losses |
|
(1,000 |
) |
|
- |
|
|
(15,500 |
) |
||
| Balance at end of period | $ |
28,571 |
|
$ |
29,571 |
|
$ |
75,571 |
|
||
| Allowance for credit losses ("ACL") - Loans: | |||||||||||
| Balance at beginning of period | $ |
311,258 |
|
$ |
251,868 |
|
$ |
291,803 |
|
||
| Initial ALLL on acquired PCD loans |
|
- |
|
|
25,623 |
|
|
- |
|
||
| Charge-offs |
|
(5,014 |
) |
|
(14,628 |
) |
|
(10,397 |
) |
||
| Recoveries |
|
3,830 |
|
|
1,395 |
|
|
1,220 |
|
||
| Net charge-offs |
|
(1,184 |
) |
|
(13,233 |
) |
|
(9,177 |
) |
||
| Provision for credit losses |
|
10,000 |
|
|
|
47,000 |
|
|
3,000 |
|
|
| Balance at end of period | $ |
320,074 |
|
$ |
311,258 |
|
$ |
285,626 |
|
||
| ALLL to loans and leases held for investment |
|
1.14 |
% |
|
1.11 |
% |
|
0.82 |
% |
||
| ACL to loans and leases held for investment |
|
1.26 |
% |
|
1.22 |
% |
|
1.11 |
% |
||
| ACL to NPLs |
|
219.26 |
% |
|
419.05 |
% |
|
327.84 |
% |
||
| ACL to NPAs |
|
201.98 |
% |
|
381.11 |
% |
|
320.00 |
% |
||
| Annualized net charge-offs to average loans and leases |
|
0.02 |
% |
|
0.22 |
% |
|
0.13 |
% |
||
(1) Includes |
|||||||||||
The allowance for credit losses, which includes the reserve for unfunded loan commitments, totaled
Net charge-offs were
Conference Call
The Company will host a conference call to discuss its first quarter 2024 financial results at 10:00 a.m. Pacific Time (PT) on Tuesday, April 23, 2024. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 1537279. 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. A replay of the call will be made available approximately one hour after the call has ended on the Company’s Investor Relations website at www.bancofcal.com/investor or by dialing (877) 344-7529 and referencing event code 4374649.
About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) is a bank holding company with over
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. Words or phrases such as “believe,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “strategy,” or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. 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. (the “Company”) with the Securities and Exchange Commission (“SEC”). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.
Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing inflation; (iii) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base, including among our venture banking clients, or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; and in the case of our recent acquisition of PacWest Bancorp (“PacWest”), reputational risk, regulatory risk and potential adverse reactions of the Company's or PacWest's customers, suppliers, vendors, employees or other business partners; (x) results of examinations by regulatory authorities of the Company and the possibility that any such regulatory authority may, among other things, limit our business activities, restrict our ability to invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xi) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xvii) the impact of bank failures or other adverse developments at other banks on general depositor and investor sentiment regarding the stability and liquidity of banks; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xix) our existing indebtedness, together with any future incurrence of additional indebtedness, could adversely affect our ability to raise additional capital and to meet our debt obligations; (xx) the risk that we may incur significant losses on future asset sales; and (xxi) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this press release and from time to time in other documents that we file with or furnish to the SEC.
| BANC OF CALIFORNIA, INC. | |||||||||||||||||||
| CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) | |||||||||||||||||||
| March 31, | December 31, | September 30, | June 30, | March 31, | |||||||||||||||
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|||||
| (Dollars in thousands) | |||||||||||||||||||
| ASSETS: | |||||||||||||||||||
| Cash and due from banks | $ |
199,922 |
|
$ |
202,427 |
|
$ |
182,261 |
|
$ |
208,300 |
|
$ |
218,830 |
|
||||
| Interest-earning deposits in financial institutions |
|
2,885,306 |
|
|
5,175,149 |
|
|
5,887,406 |
|
|
6,489,847 |
|
|
6,461,306 |
|
||||
| Total cash and cash equivalents |
|
3,085,228 |
|
|
5,377,576 |
|
|
6,069,667 |
|
|
6,698,147 |
|
|
6,680,136 |
|
||||
| Securities available-for-sale |
|
2,286,682 |
|
|
2,346,864 |
|
|
4,487,172 |
|
|
4,708,519 |
|
|
4,848,607 |
|
||||
| Securities held-to-maturity |
|
2,291,984 |
|
|
2,287,291 |
|
|
2,282,586 |
|
|
2,278,202 |
|
|
2,273,650 |
|
||||
| FRB and FHLB stock |
|
129,314 |
|
|
126,346 |
|
|
17,250 |
|
|
17,250 |
|
|
147,150 |
|
||||
| Total investment securities |
|
4,707,980 |
|
|
4,760,501 |
|
|
6,787,008 |
|
|
7,003,971 |
|
|
7,269,407 |
|
||||
| Loans held for sale |
|
80,752 |
|
|
122,757 |
|
|
188,866 |
|
|
478,146 |
|
|
2,796,208 |
|
||||
| Gross loans and leases held for investment |
|
25,527,075 |
|
|
25,534,730 |
|
|
21,969,789 |
|
|
22,311,292 |
|
|
25,770,912 |
|
||||
| Deferred fees, net |
|
(44,006 |
) |
|
(45,043 |
) |
|
(48,843 |
) |
|
(53,082 |
) |
|
(98,531 |
) |
||||
| Total loans and leases held for investment, net of deferred fees |
|
25,483,069 |
|
|
25,489,687 |
|
|
21,920,946 |
|
|
22,258,210 |
|
|
25,672,381 |
|
||||
| Allowance for loan and lease losses |
|
(291,503 |
) |
|
(281,687 |
) |
|
(222,297 |
) |
|
(219,234 |
) |
|
(210,055 |
) |
||||
| Total loans and leases held for investment, net |
|
25,191,566 |
|
|
25,208,000 |
|
|
21,698,649 |
|
|
22,038,976 |
|
|
25,462,326 |
|
||||
| Equipment leased to others under operating leases |
|
339,925 |
|
|
344,325 |
|
|
352,330 |
|
|
380,022 |
|
|
399,972 |
|
||||
| Premises and equipment, net |
|
144,912 |
|
|
146,798 |
|
|
50,236 |
|
|
57,078 |
|
|
60,358 |
|
||||
| Bank owned life insurance |
|
341,806 |
|
|
339,643 |
|
|
207,946 |
|
|
206,812 |
|
|
207,402 |
|
||||
| Goodwill |
|
198,627 |
|
|
198,627 |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Intangible assets, net |
|
157,226 |
|
|
165,477 |
|
|
24,192 |
|
|
26,581 |
|
|
28,970 |
|
||||
| Deferred tax asset, net |
|
738,373 |
|
|
739,111 |
|
|
506,248 |
|
|
426,304 |
|
|
342,557 |
|
||||
| Other assets |
|
1,094,383 |
|
|
1,131,249 |
|
|
992,691 |
|
|
1,021,213 |
|
|
1,055,645 |
|
||||
| Total assets | $ |
36,080,778 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
$ |
44,302,981 |
|
||||
| LIABILITIES: | |||||||||||||||||||
| Noninterest-bearing deposits | $ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
$ |
7,030,759 |
|
||||
| Interest-bearing deposits |
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|
21,156,802 |
|
||||
| Total deposits |
|
28,892,407 |
|
|
30,401,769 |
|
|
26,598,681 |
|
|
27,897,083 |
|
|
28,187,561 |
|
||||
| Borrowings |
|
2,139,498 |
|
|
2,911,322 |
|
|
6,294,525 |
|
|
6,357,338 |
|
|
11,881,712 |
|
||||
| Subordinated debt |
|
937,717 |
|
|
936,599 |
|
|
870,896 |
|
|
870,378 |
|
|
868,815 |
|
||||
| Accrued interest payable and other liabilities |
|
709,722 |
|
|
893,609 |
|
|
714,454 |
|
|
679,256 |
|
|
593,416 |
|
||||
| Total liabilities |
|
32,679,344 |
|
|
35,143,299 |
|
|
34,478,556 |
|
|
35,804,055 |
|
|
41,531,504 |
|
||||
| STOCKHOLDERS' EQUITY: | |||||||||||||||||||
| Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
||||
| Common stock |
|
1,583 |
|
|
1,577 |
|
|
1,231 |
|
|
1,233 |
|
|
1,232 |
|
||||
| Class B non-voting common stock |
|
5 |
|
|
5 |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Non-voting common stock equivalents |
|
101 |
|
|
108 |
|
|
- |
|
|
- |
|
|
- |
|
||||
| Additional paid-in-capital |
|
3,827,777 |
|
|
3,840,974 |
|
|
2,798,611 |
|
|
2,799,357 |
|
|
2,792,536 |
|
||||
| Retained (deficit) earnings |
|
(490,112 |
) |
|
(518,301 |
) |
|
(25,399 |
) |
|
7,892 |
|
|
215,253 |
|
||||
| Accumulated other comprehensive loss, net |
|
(436,436 |
) |
|
(432,114 |
) |
|
(873,682 |
) |
|
(773,803 |
) |
|
(736,060 |
) |
||||
| Total stockholders’ equity |
|
3,401,434 |
|
|
3,390,765 |
|
|
2,399,277 |
|
|
2,533,195 |
|
|
2,771,477 |
|
||||
| Total liabilities and stockholders’ equity | $ |
36,080,778 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
$ |
44,302,981 |
|
||||
| Common shares outstanding (1) |
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
|
78,988,424 |
|
||||
(1) Common shares outstanding include non-voting common equivalents that are participating securities. |
|||||||||||||||||||
| BANC OF CALIFORNIA, INC. | |||||||||||
| CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED) | |||||||||||
| Three Months Ended | |||||||||||
| March 31, | December 31, | March 31, | |||||||||
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
| (In thousands, except per share amounts) | |||||||||||
| Interest income: | |||||||||||
| Loans and leases | $ |
395,511 |
|
$ |
346,308 |
|
$ |
430,685 |
|
||
| Investment securities |
|
34,303 |
|
|
41,280 |
|
|
44,237 |
|
||
| Deposits in financial institutions |
|
58,936 |
|
|
79,652 |
|
|
42,866 |
|
||
| Total interest income |
|
488,750 |
|
|
467,240 |
|
|
517,788 |
|
||
| Interest expense: | |||||||||||
| Deposits |
|
194,807 |
|
|
207,760 |
|
|
155,892 |
|
||
| Borrowings |
|
38,124 |
|
|
92,474 |
|
|
69,122 |
|
||
| Subordinated debt |
|
16,671 |
|
|
15,955 |
|
|
13,502 |
|
||
| Total interest expense |
|
249,602 |
|
|
316,189 |
|
|
238,516 |
|
||
| Net interest income |
|
239,148 |
|
|
151,051 |
|
|
279,272 |
|
||
| Provision for credit losses |
|
10,000 |
|
|
47,000 |
|
|
3,000 |
|
||
| Net interest income after provision for credit losses |
|
229,148 |
|
|
104,051 |
|
|
276,272 |
|
||
| Noninterest income: | |||||||||||
| Service charges on deposit accounts |
|
4,705 |
|
|
4,562 |
|
|
3,573 |
|
||
| Other commissions and fees |
|
8,142 |
|
|
8,860 |
|
|
10,344 |
|
||
| Leased equipment income |
|
11,716 |
|
|
12,369 |
|
|
13,857 |
|
||
| (Loss) gain on sale of loans and leases |
|
(448 |
) |
|
(3,526 |
) |
|
2,962 |
|
||
| Loss on sale of securities |
|
- |
|
|
(442,413 |
) |
|
- |
|
||
| Dividends and gains (losses) on equity investments |
|
3,068 |
|
|
8,138 |
|
|
1,098 |
|
||
| Warrant income (loss) |
|
178 |
|
|
(173 |
) |
|
(333 |
) |
||
| LOCOM HFS adjustment |
|
330 |
|
|
3,175 |
|
|
- |
|
||
| Other income |
|
6,125 |
|
|
8,606 |
|
|
4,890 |
|
||
| Total noninterest income (loss) |
|
33,816 |
|
|
(400,402 |
) |
|
36,391 |
|
||
| Noninterest expense: | |||||||||||
| Compensation |
|
92,236 |
|
|
89,354 |
|
|
88,476 |
|
||
| Occupancy |
|
17,968 |
|
|
15,925 |
|
|
15,067 |
|
||
| Information technology and data processing |
|
15,418 |
|
|
13,099 |
|
|
12,979 |
|
||
| Other professional services |
|
5,075 |
|
|
2,980 |
|
|
6,073 |
|
||
| Insurance and assessments |
|
20,461 |
|
|
60,016 |
|
|
11,717 |
|
||
| Intangible asset amortization |
|
8,404 |
|
|
4,230 |
|
|
2,411 |
|
||
| Leased equipment depreciation |
|
7,520 |
|
|
7,447 |
|
|
9,375 |
|
||
| Acquisition, integration and reorganization costs |
|
- |
|
|
111,800 |
|
|
8,514 |
|
||
| Customer related expense |
|
30,919 |
|
|
45,826 |
|
|
24,005 |
|
||
| Loan expense |
|
4,491 |
|
|
4,446 |
|
|
6,524 |
|
||
| Goodwill impairment |
|
- |
|
|
- |
|
|
1,376,736 |
|
||
| Other expense |
|
8,026 |
|
|
8,515 |
|
|
11,126 |
|
||
| Total noninterest expense |
|
210,518 |
|
|
363,638 |
|
|
1,573,003 |
|
||
| Earnings (loss) before income taxes |
|
52,446 |
|
|
(659,989 |
) |
|
(1,260,340 |
) |
||
| Income tax expense (benefit) |
|
14,310 |
|
|
(177,034 |
) |
|
(64,916 |
) |
||
| Net earnings (loss) |
|
38,136 |
|
|
(482,955 |
) |
|
(1,195,424 |
) |
||
| Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
||
| Net earnings (loss) available to common and equivalent stockholders | $ |
28,189 |
|
$ |
(492,902 |
) |
$ |
(1,205,371 |
) |
||
| Basic and diluted earnings (loss) per common share (1) | $ |
0.17 |
|
$ |
(4.55 |
) |
$ |
(15.56 |
) |
||
| Basic and diluted weighted average number of common shares outstanding (1) |
|
168,972 |
|
|
108,290 |
|
|
77,468 |
|
||
| (1) Common shares include non-voting common equivalents that are participating securities. | |||||||||||
| BANC OF CALIFORNIA, INC. | |||||
| SELECTED FINANCIAL DATA | |||||
| (UNAUDITED) | |||||
| Three Months Ended | |||||
| March 31, | December 31, | March 31, | |||
| Profitability and Other Ratios | 2024 |
2023 |
2023 |
||
| Return on average assets ("ROAA")(1) |
|
|
(5.09)% |
|
(11.34)% |
| Adjusted ROAA (1)(2) |
|
|
(0.56)% |
|
|
| Return on average equity (1) |
|
|
(68.49)% |
|
(121.24)% |
| Return on average tangible common equity (1)(2) |
|
|
(87.95)% |
|
|
| Dividend payout ratio (3) |
|
|
(2.42)% |
|
(1.61)% |
| Average yield on loans and leases (1) |
|
|
|
|
|
| Average yield on interest-earning assets (1) |
|
|
|
|
|
| Average cost of interest-bearing deposits (1) |
|
|
|
|
|
| Average total cost of deposits (1) |
|
|
|
|
|
| Average cost of interest-bearing liabilities (1) |
|
|
|
|
|
| Average total cost of funds (1) |
|
|
|
|
|
| Net interest spread |
|
|
|
|
|
| Net interest margin (1) |
|
|
|
|
|
| Noninterest income to total revenue (4) |
|
|
|
|
|
| Adjusted noninterest income to adjusted total revenue (2)(4) |
|
|
|
|
|
| Noninterest expense to average total assets (1) |
|
|
|
|
|
| Adjusted noninterest expense to average total assets (1)(2) |
|
|
|
|
|
| Average loans and leases to average deposits |
|
|
|
|
|
| Average investment securities to average total assets |
|
|
|
|
|
| Average stockholders' equity to average total assets |
|
|
|
|
|
(1) Annualized. |
|||||
(2) Non-GAAP measure. |
|||||
(3) Ratio calculated by dividing dividends declared per common and equivalent share by basic earnings per common and equivalent share. |
|||||
(4)Total revenue equals the sum of net interest income and noninterest income. |
|||||
| BANC OF CALIFORNIA, INC. | |||||||||||||||||||||||
| AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID | |||||||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||||||
| Three Months Ended | |||||||||||||||||||||||
| March 31, 2024 | December 31, 2023 | March 31, 2023 | |||||||||||||||||||||
| Interest | Average | Interest | Average | Interest | Average | ||||||||||||||||||
| Average | Income/ | Yield/ | Average | Income/ | Yield/ | Average | Income/ | Yield/ | |||||||||||||||
| Balance | Expense | Cost | Balance | Expense | Cost | Balance | Expense | Cost | |||||||||||||||
| (Dollars in thousands) | |||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
| Loans and leases (1)(2)(3) | $ |
25,518,700 |
|
$ |
395,511 |
|
|
|
$ |
23,608,246 |
|
$ |
346,308 |
|
|
|
$ |
28,583,265 |
|
$ |
433,029 |
|
|
| Investment securities |
|
4,721,556 |
|
|
34,303 |
|
|
|
|
6,024,737 |
|
|
41,280 |
|
|
|
|
7,191,362 |
|
|
44,237 |
|
|
| Deposits in financial institutions |
|
4,374,968 |
|
|
58,936 |
|
|
|
|
5,791,739 |
|
|
79,652 |
|
|
|
|
3,682,228 |
|
|
42,866 |
|
|
| Total interest-earning assets (1) |
|
34,615,224 |
|
|
488,750 |
|
|
|
|
35,424,722 |
|
|
467,240 |
|
|
|
|
39,456,855 |
|
|
520,132 |
|
|
| Other assets |
|
2,925,563 |
|
|
|
|
|
|
2,215,665 |
|
|
|
|
|
|
3,311,859 |
|
|
|
|
|||
| Total assets | $ |
37,540,787 |
|
|
|
|
|
$ |
37,640,387 |
|
|
|
|
|
$ |
42,768,714 |
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
| Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
| Interest checking | $ |
7,883,177 |
|
|
61,549 |
|
|
|
$ |
7,296,234 |
|
|
60,743 |
|
|
|
$ |
7,089,102 |
|
|
55,957 |
|
|
| Money market |
|
5,737,837 |
|
|
41,351 |
|
|
|
|
5,758,074 |
|
|
44,279 |
|
|
|
|
8,932,059 |
|
|
56,224 |
|
|
| Savings |
|
2,036,129 |
|
|
18,030 |
|
|
|
|
1,696,222 |
|
|
16,446 |
|
|
|
|
597,287 |
|
|
599 |
|
|
| Time |
|
6,108,321 |
|
|
73,877 |
|
|
|
|
6,915,504 |
|
|
86,292 |
|
|
|
|
5,123,955 |
|
|
43,112 |
|
|
| Total interest-bearing deposits |
|
21,765,464 |
|
|
194,807 |
|
|
|
|
21,666,034 |
|
|
207,760 |
|
|
|
|
21,742,403 |
|
|
155,892 |
|
|
| Borrowings |
|
2,892,406 |
|
|
38,124 |
|
|
|
|
5,229,425 |
|
|
92,474 |
|
|
|
|
5,289,429 |
|
|
69,122 |
|
|
| Subordinated debt |
|
937,005 |
|
|
16,671 |
|
|
|
|
894,219 |
|
|
15,955 |
|
|
|
|
867,637 |
|
|
13,502 |
|
|
| Total interest-bearing liabilities |
|
25,594,875 |
|
|
249,602 |
|
|
|
|
27,789,678 |
|
|
316,189 |
|
|
|
|
27,899,469 |
|
|
238,516 |
|
|
| Noninterest-bearing demand deposits |
|
7,685,027 |
|
|
|
|
|
|
6,326,511 |
|
|
|
|
|
|
10,233,434 |
|
|
|
|
|||
| Other liabilities |
|
870,273 |
|
|
|
|
|
|
726,414 |
|
|
|
|
|
|
637,124 |
|
|
|
|
|||
| Total liabilities |
|
34,150,175 |
|
|
|
|
|
|
34,842,603 |
|
|
|
|
|
|
38,770,027 |
|
|
|
|
|||
| Stockholders' equity |
|
3,390,612 |
|
|
|
|
|
|
2,797,784 |
|
|
|
|
|
|
3,998,687 |
|
|
|
|
|||
| Total liabilities and stockholders' equity | $ |
37,540,787 |
|
|
|
|
|
$ |
37,640,387 |
|
|
|
|
|
$ |
42,768,714 |
|
|
|
|
|||
| Net interest income (1) |
|
|
$ |
239,148 |
|
|
|
|
|
$ |
151,051 |
|
|
|
|
|
$ |
281,616 |
|
|
|||
| Net interest spread (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
| Net interest margin (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
| Total deposits (4) | $ |
29,450,491 |
|
$ |
194,807 |
|
|
|
$ |
27,992,545 |
|
$ |
207,760 |
|
|
|
$ |
31,975,837 |
|
$ |
155,892 |
|
|
| Total funds (5) | $ |
33,279,902 |
|
$ |
249,602 |
|
|
|
$ |
34,116,189 |
|
$ |
316,189 |
|
|
|
$ |
38,132,903 |
|
$ |
238,516 |
|
|
(1) |
|
Tax equivalent. |
(2) |
|
Includes net loan discount accretion of |
(3) |
|
Includes tax-equivalent adjustments of |
|
|
The federal statutory tax rate utilized was |
(4) |
|
Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. |
(5) |
|
Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds. |
BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
Under Item 10(e) of SEC Regulation S-K, public companies disclosing financial measures in filings with the SEC that are not calculated in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a presentation of the most directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as a statement of the reasons why the company's management believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the company's financial condition and results of operations and, to the extent material, a statement of the additional purposes, if any, for which the company's management uses the non-GAAP financial measure.
Tangible assets, tangible equity, tangible common equity, tangible common equity to tangible assets, tangible book value per common share, return on average tangible common equity, adjusted return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest income to adjusted total revenue, adjusted noninterest expense to average total assets, adjusted net earnings (loss) available to common stockholders, adjusted diluted earnings (loss) per diluted common share, and adjusted return on average assets (“ROAA”) constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance.
Tangible assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total stockholders’ equity. Tangible common equity is calculated by subtracting preferred stock, as applicable, from tangible equity. Return on average tangible common equity is calculated by dividing net earnings available to common stockholders, after adjustment for amortization of intangible assets and goodwill impairment, by average tangible common equity. Adjusted return on average tangible common equity is calculated by dividing adjusted net earnings available to common stockholders, after adjustment for amortization of intangible assets, goodwill impairment, and any unusual one-time items, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.
Adjusted net earnings (loss) is calculated by adjusting net earnings (loss) by unusual, one-time items. ROAA is calculated by dividing annualized net earnings (loss) by average assets. Adjusted ROAA is calculated by dividing annualized adjusted net earnings (loss) by average assets.
Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute 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 provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.
| BANC OF CALIFORNIA, INC. | |||||||||||||||||||
| NON-GAAP MEASURES | |||||||||||||||||||
| (UNAUDITED) | |||||||||||||||||||
| Tangible Common Equity to | |||||||||||||||||||
| Tangible Assets and Tangible | March 31, | December 31, | September 30, | June 30, | March 31, | ||||||||||||||
| Book Value Per Common Share |
|
2024 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
||||
| (Dollars in thousands, except per share amounts) | |||||||||||||||||||
| Stockholders' equity | $ |
3,401,434 |
|
$ |
3,390,765 |
|
$ |
2,399,277 |
|
$ |
2,533,195 |
|
$ |
2,771,477 |
|
||||
| Less: Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
||||
| Total common equity |
|
2,902,918 |
|
|
2,892,249 |
|
|
1,900,761 |
|
|
2,034,679 |
|
|
2,272,961 |
|
||||
| Less: Goodwill and Intangible assets |
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|
28,970 |
|
||||
| Tangible common equity | $ |
2,547,065 |
|
$ |
2,528,145 |
|
$ |
1,876,569 |
|
$ |
2,008,098 |
|
$ |
2,243,991 |
|
||||
| Total assets | $ |
36,080,778 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
$ |
44,302,981 |
|
||||
| Less: Goodwill and Intangible assets |
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|
28,970 |
|
||||
| Tangible assets | $ |
35,724,925 |
|
$ |
38,169,960 |
|
$ |
36,853,641 |
|
$ |
38,310,669 |
|
$ |
44,274,011 |
|
||||
| Total stockholders' equity to total assets |
|
9.43 |
% |
|
8.80 |
% |
|
6.51 |
% |
|
6.61 |
% |
|
6.26 |
% |
||||
| Tangible common equity to tangible assets |
|
7.13 |
% |
|
6.62 |
% |
|
5.09 |
% |
|
5.24 |
% |
|
5.07 |
% |
||||
| Book value per common share (1) | $ |
17.18 |
|
$ |
17.12 |
|
$ |
24.12 |
|
$ |
25.78 |
|
$ |
28.78 |
|
||||
| Tangible book value per common share (2) | $ |
15.07 |
|
$ |
14.96 |
|
$ |
23.81 |
|
$ |
25.44 |
|
$ |
28.41 |
|
||||
| Common shares outstanding (3) |
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
|
78,988,424 |
|
||||
(1) Total common equity divided by common shares outstanding. |
|||||||||||||||||||
(2) Tangible common equity divided by common shares outstanding. |
|||||||||||||||||||
(3) Common shares outstanding include non-voting common equivalents that are participating securities. |
|||||||||||||||||||
| BANC OF CALIFORNIA, INC. | |||||||||||
| NON-GAAP MEASURES | |||||||||||
| (UNAUDITED) | |||||||||||
| Return on Average Tangible | Three Months Ended | ||||||||||
| Common Equity ("ROATCE") | March 31, | December 31, | March 31, | ||||||||
| and Adjusted ROATCE |
|
2024 |
|
|
2023 |
|
|
2023 |
|
||
| (Dollars in thousands) | |||||||||||
| Net earnings (loss) | $ |
38,136 |
|
$ |
(482,955 |
) |
$ |
(1,195,424 |
) |
||
| Earnings (loss) before income taxes | $ |
52,446 |
|
$ |
(659,989 |
) |
$ |
(1,260,340 |
) |
||
| Add: Intangible asset amortization |
|
8,404 |
|
|
4,230 |
|
|
2,411 |
|
||
| Add: Goodwill impairment |
|
- |
|
|
- |
|
|
1,376,736 |
|
||
| Adjusted earnings (loss) before income taxes used for ROATCE |
|
60,850 |
|
|
(655,759 |
) |
|
118,807 |
|
||
| Adjusted income tax expense (1) |
|
16,612 |
|
|
(175,743 |
) |
|
33,741 |
|
||
| Adjusted net earnings (loss) for ROATCE |
|
44,238 |
|
|
(480,016 |
) |
|
85,066 |
|
||
| Less: Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
||
| Adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE | $ |
34,291 |
|
$ |
(489,963 |
) |
$ |
75,119 |
|
||
| Adjusted earnings (loss) before income taxes used for ROATCE | $ |
60,850 |
|
$ |
(655,759 |
) |
$ |
118,807 |
|
||
| Add: FDIC special assessment |
|
4,814 |
|
|
32,746 |
|
|
- |
|
||
| Add: Loss on sale of securities |
|
- |
|
|
442,413 |
|
|
- |
|
||
| Add: Acquisition, integration, and reorganization costs |
|
- |
|
|
111,800 |
|
|
8,514 |
|
||
| Adjusted earnings (loss) before income taxes used for adjusted ROATCE |
|
65,664 |
|
|
(68,800 |
) |
|
127,321 |
|
||
| Adjusted income tax expense (1) |
|
17,926 |
|
|
(18,438 |
) |
|
36,159 |
|
||
| Adjusted net earnings (loss) for adjusted ROATCE |
|
47,738 |
|
|
(50,362 |
) |
|
91,162 |
|
||
| Less: Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
||
| Adjusted net earnings (loss) available to common and equivalent stockholders for adjusted ROATCE | $ |
37,791 |
|
$ |
(60,309 |
) |
$ |
81,215 |
|
||
| Average stockholders' equity | $ |
3,390,612 |
|
$ |
2,797,784 |
|
$ |
3,998,687 |
|
||
| Less: Average intangible assets |
|
360,680 |
|
|
89,041 |
|
|
1,391,857 |
|
||
| Less: Average preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
||
| Average tangible common equity | $ |
2,531,416 |
|
$ |
2,210,227 |
|
$ |
2,108,314 |
|
||
| Return on average equity (2) |
|
4.52 |
% |
|
(68.49 |
)% |
|
(121.24 |
)% |
||
| ROATCE (3) |
|
5.45 |
% |
|
(87.95 |
)% |
|
14.45 |
% |
||
| Adjusted ROATCE (4) |
|
6.00 |
% |
|
(10.83 |
)% |
|
15.62 |
% |
||
| (1) Effective tax rates of |
|||||||||||
| (2) Annualized net earnings (loss) divided by average stockholders' equity. | |||||||||||
| (3) Annualized adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE divided by average tangible common equity. | |||||||||||
| (4) Annualized adjusted net earnings (loss) available to common and equivalent stockholders for adjusted ROATCE divided by average tangible common equity. | |||||||||||
| BANC OF CALIFORNIA, INC. | |||||||||||
| NON-GAAP MEASURES | |||||||||||
| (UNAUDITED) | |||||||||||
| Adjusted Net Earnings, Net Earnings | Three Months Ended | ||||||||||
| Available to Common and Equivalent | March 31, | December 31, | March 31, | ||||||||
| Stockholders, Diluted EPS, and ROAA |
|
2024 |
|
|
2023 |
|
|
2023 |
|
||
| (In thousands, except per share amounts) | |||||||||||
| Net earnings (loss) | $ |
38,136 |
|
|
$ |
(482,955 |
) |
|
$ |
(1,195,424 |
) |
|
|
|
|
|
|
|
|
|
|||
| Earnings (loss) before income taxes | $ |
52,446 |
|
|
$ |
(659,989 |
) |
|
$ |
(1,260,340 |
) |
| Add: FDIC special assessment |
|
4,814 |
|
|
|
32,746 |
|
|
|
- |
|
| Add: Loss on sale of securities |
|
- |
|
|
|
442,413 |
|
|
|
- |
|
| Add: Acquisition, integration, and reorganization costs |
|
- |
|
|
|
111,800 |
|
|
|
8,514 |
|
| Add: Goodwill impairment |
|
- |
|
|
|
- |
|
|
|
1,376,736 |
|
| Adjusted (loss) earnings before income taxes |
|
57,260 |
|
|
|
(73,030 |
) |
|
|
124,910 |
|
| Adjusted income tax expense (1) |
|
15,632 |
|
|
|
(19,572 |
) |
|
|
35,474 |
|
| Adjusted net earnings (loss) |
|
41,628 |
|
|
|
(53,458 |
) |
|
|
89,436 |
|
| Less: Preferred stock dividends |
|
(9,947 |
) |
|
|
(9,947 |
) |
|
|
(9,947 |
) |
|
|
|
|
|
|||||||
| Adjusted net earnings (loss) available to common and equivalent stockholders | $ |
31,681 |
|
|
$ |
(63,405 |
) |
|
$ |
79,489 |
|
|
|
|
|
|
|||||||
| Weighted average common shares outstanding |
|
168,972 |
|
|
|
108,290 |
|
|
|
77,468 |
|
| Diluted earnings (loss) per common share | $ |
0.17 |
|
|
$ |
(4.55 |
) |
|
$ |
(15.56 |
) |
| Adjusted diluted earnings (loss) per common share (2) | $ |
0.19 |
|
|
$ |
(0.59 |
) |
|
$ |
1.03 |
|
|
|
|
|
|
|||||||
| Average total assets | $ |
37,540,787 |
|
|
$ |
37,640,387 |
|
|
$ |
42,768,714 |
|
| Return on average assets ("ROAA") (3) |
|
0.41 |
% |
|
|
(5.09 |
)% |
|
|
(11.34 |
)% |
| Adjusted ROAA (4) |
|
0.45 |
% |
|
|
(0.56 |
)% |
|
|
0.85 |
% |
(1) Effective tax rates of |
|||||||||||
(2) Adjusted net earnings (loss) available to common and equivalent stockholders divided by weighted average common shares outstanding. |
|||||||||||
(3) Annualized net earnings (loss) divided by average assets. |
|||||||||||
(4) Annualized adjusted net earnings (loss) divided by average assets. |
|||||||||||
| BANC OF CALIFORNIA, INC. | |||||||||||
| NON-GAAP MEASURES | |||||||||||
| (UNAUDITED) | |||||||||||
| Adjusted Noninterest Income to | Three Months Ended | ||||||||||
| Adjusted Total Revenue and Adjusted | March 31, | December 31, | March 31, | ||||||||
| Noninterest Expense to Average Assets |
|
2024 |
|
|
2023 |
|
|
2023 |
|
||
| (Dollars in thousands) | |||||||||||
| Net interest income | $ |
239,148 |
|
$ |
151,051 |
|
$ |
279,272 |
|
||
| Noninterest income (loss) |
|
33,816 |
|
|
(400,402 |
) |
|
36,391 |
|
||
| Total revenue | $ |
272,964 |
|
$ |
(249,351 |
) |
$ |
315,663 |
|
||
| Noninterest income (loss) | $ |
33,816 |
|
$ |
(400,402 |
) |
$ |
36,391 |
|
||
| Add: Loss on sale of securities |
|
- |
|
|
442,413 |
|
|
- |
|
||
| Adjusted noninterest income |
|
33,816 |
|
|
42,011 |
|
|
36,391 |
|
||
| Net interest income |
|
239,148 |
|
|
151,051 |
|
|
279,272 |
|
||
| Adjusted total revenue | $ |
272,964 |
|
$ |
193,062 |
|
$ |
315,663 |
|
||
| Noninterest expense | $ |
210,518 |
|
$ |
363,638 |
|
$ |
1,573,003 |
|
||
| Less: FDIC special assessment |
|
(4,814 |
) |
|
(32,746 |
) |
|
- |
|
||
| Less: Acquisition, integration, and reorganization costs |
|
- |
|
|
(111,800 |
) |
|
(8,514 |
) |
||
| Less: Goodwill impairment |
|
- |
|
|
- |
|
|
(1,376,736 |
) |
||
| Adjusted noninterest expense | $ |
205,704 |
|
$ |
219,092 |
|
$ |
187,753 |
|
||
| Average total assets | $ |
37,540,787 |
|
$ |
37,640,387 |
|
$ |
42,768,714 |
|
||
| Noninterest income (loss) to total revenue |
|
12.39 |
% |
|
160.58 |
% |
|
11.53 |
% |
||
| Adjusted noninterest income to adjusted total revenue |
|
12.39 |
% |
|
21.76 |
% |
|
11.53 |
% |
||
| Noninterest expense to average total assets |
|
2.26 |
% |
|
3.83 |
% |
|
14.92 |
% |
||
| Adjusted noninterest expense to average total assets |
|
2.20 |
% |
|
2.31 |
% |
|
1.78 |
% |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240423672972/en/
Investor Relations Inquiries:
Banc of California, Inc.
(855) 361-2262
Jared Wolff, (310) 424-1230
Joe Kauder, (310) 844-5224
William Black, (919) 597-7466
Media Contact:
Debora Vrana, Banc of California
(213) 999-4141
Deb.Vrana@bancofcal.com
Source: Banc of California, Inc.
FAQ
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