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Banc of California, Inc. Reports Fourth Quarter Diluted Earnings per Share of $0.28, Reflecting Strong Year-Over-Year Net Interest Margin Expansion and Lower Noninterest Expenses

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Banc of California (NYSE: BANC) reported Q4 2024 net earnings of $47.0 million, or $0.28 per diluted share, compared to a Q3 2024 net loss of $1.2 million. Full-year 2024 net income was $87.1 million, or $0.52 per diluted share.

Key Q4 highlights include net interest margin expansion of 11 basis points to 3.04%, total loans growth of 4.3% annualized to $23.8 billion, and noninterest expense decline of 7.6% to $181.4 million. The company strengthened its CET1 capital ratio to 10.55% and increased book value per share to $17.78.

Notable improvements include lower funding costs by 27 basis points versus Q3, growth in average noninterest-bearing deposits to 29.1% of total deposits, and achievement of merger cost savings targets. The company's balance sheet shows total assets of $33.5 billion, with total deposits of $27.2 billion and total stockholders' equity of $3.5 billion.

Banc of California (NYSE: BANC) ha riportato un utile netto di $47,0 milioni per il quarto trimestre del 2024, corrispondente a $0,28 per azione diluita, rispetto a una perdita netta di $1,2 milioni nel terzo trimestre del 2024. L'utile netto totale per l'anno 2024 è stato di $87,1 milioni, o $0,52 per azione diluita.

I principali punti salienti del quarto trimestre includono un'espansione del margine di interesse netto di 11 punti base, arrivando al 3,04%, una crescita totale dei prestiti del 4,3% annualizzato, che porta il totale a $23,8 miliardi, e una diminuzione delle spese non relative agli interessi del 7,6%, scendendo a $181,4 milioni. L'azienda ha rafforzato il proprio rapporto di capitale CET1 al 10,55% e ha aumentato il valore contabile per azione a $17,78.

Tra i miglioramenti significativi ci sono costi di finanziamento più bassi, con una riduzione di 27 punti base rispetto al terzo trimestre, una crescita nei depositi medi non remunerati, arrivando al 29,1% dei depositi totali, e il raggiungimento degli obiettivi di risparmio sui costi di fusione. Il bilancio dell'azienda mostra attivi totali di $33,5 miliardi, con depositi totali di $27,2 miliardi e un patrimonio netto totale degli azionisti di $3,5 miliardi.

Banc of California (NYSE: BANC) reportó ganancias netas de $47.0 millones en el cuarto trimestre de 2024, o $0.28 por acción diluida, en comparación con una pérdida neta de $1.2 millones en el tercer trimestre de 2024. La ganancia neta total para el año 2024 fue de $87.1 millones, o $0.52 por acción diluida.

Los aspectos destacados del cuarto trimestre incluyen una expansión del margen de interés neto de 11 puntos básicos, alcanzando el 3.04%, un crecimiento total de préstamos del 4.3% anualizado, que se eleva a $23.8 mil millones, y una disminución de los gastos no relacionados con intereses del 7.6% a $181.4 millones. La compañía fortaleció su ratio de capital CET1 al 10.55% y aumentó el valor contable por acción a $17.78.

Mejoras notables incluyen una reducción de los costos de financiamiento en 27 puntos básicos en comparación con el tercer trimestre, un crecimiento en los depósitos promedio sin intereses al 29.1% del total de depósitos, y el logro de los objetivos de ahorro de costos por fusión. El balance de la compañía muestra activos totales de $33.5 mil millones, con depósitos totales de $27.2 mil millones y un patrimonio neto total de $3.5 mil millones.

캘리포니아 은행 (NYSE: BANC)는 2024년 4분기 순이익이 4,700만 달러, 또는 희석주당 0.28달러 라고 보고했습니다. 이는 2024년 3분기 순손실 120만 달러와 비교됩니다. 2024년 전체 진순이익은 8,710만 달러 또는 희석주당 0.52달러였습니다.

4분기의 주요 하이라이트는 순이자 마진이 11베이시스 포인트 증가하여 3.04%에 도달했으며, 총 대출은 연간 4.3% 증가해 238억 달러에 이르고, 비이자 비용이 7.6% 감소하여 1억 8140만 달러가 되었다는 점입니다. 회사는 CET1 자본 비율을 10.55%로 강화하였고, 주당 장부 가치를 17.78달러로 늘렸습니다.

주목할 만한 개선사항으로는 3분기 대비 27베이시스 포인트 낮아진 자금 조달 비용, 총 예금의 29.1%에 달하는 평균 비이자 예금의 증가, 합병 비용 절감 목표 달성이 있습니다. 회사의 대차대조표는 총 자산 335억 달러, 총 예금 272억 달러, 총 주주 자본 35억 달러를 나타냅니다.

Banc of California (NYSE: BANC) a rapporté un bénéfice net de 47,0 millions de dollars pour le quatrième trimestre de 2024, soit 0,28 dollar par action diluée, par rapport à une perte nette de 1,2 million de dollars au troisième trimestre de 2024. Le bénéfice net total pour l'année 2024 s'élevait à 87,1 millions de dollars, ou 0,52 dollar par action diluée.

Les faits saillants du quatrième trimestre incluent une expansion de la marge d'intérêt nette de 11 points de base à 3,04 %, une croissance totale des prêts de 4,3 % annualisée à 23,8 milliards de dollars, et une diminution des charges non liées aux intérêts de 7,6 % à 181,4 millions de dollars. L'entreprise a renforcé son ratio de capital CET1 à 10,55 % et a augmenté la valeur comptable par action à 17,78 dollars.

Parmi les améliorations notables, on note une baisse des coûts de financement de 27 points de base par rapport au troisième trimestre, une augmentation des dépôts non rémunérés moyens atteignant 29,1 % du total des dépôts et l'atteinte des objectifs d'économies de coûts liés à la fusion. Le bilan de l'entreprise indique des actifs totaux de 33,5 milliards de dollars, avec des dépôts totaux de 27,2 milliards de dollars et un total des capitaux propres des actionnaires de 3,5 milliards de dollars.

Banc of California (NYSE: BANC) berichtete über einen Nettogewinn von 47 Millionen Dollar im vierten Quartal 2024, was 0,28 Dollar pro verwässerter Aktie entspricht, im Vergleich zu einem Nettoverlust von 1,2 Millionen Dollar im dritten Quartal 2024. Der Gesamtnettogewinn für das Jahr 2024 betrug 87,1 Millionen Dollar oder 0,52 Dollar pro verwässerter Aktie.

Zu den wichtigsten Höhepunkten des vierten Quartals gehören eine Ausweitung der Nettomarge um 11 Basispunkte auf 3,04 %, ein Wachstum der Gesamtdarlehen um 4,3 % annualisiert auf 23,8 Milliarden Dollar und ein Rückgang der nichtzinsbezogenen Aufwendungen um 7,6 % auf 181,4 Millionen Dollar. Das Unternehmen stärkte sein CET1-Kapitalverhältnis auf 10,55 % und erhöhte den Buchwert pro Aktie auf 17,78 Dollar.

Bemerkenswerte Verbesserungen umfassen niedrigere Finanzierungskosten um 27 Basispunkte im Vergleich zum dritten Quartal, ein Wachstum der durchschnittlichen nichtzinsbringenden Einlagen auf 29,1 % der Gesamteinlagen und die Erreichung der Zielvorgaben für Fusion-Kosteneinsparungen. Die Bilanz des Unternehmens zeigt Gesamtaktiva in Höhe von 33,5 Milliarden Dollar, mit Gesamteinlagen von 27,2 Milliarden Dollar und einem Gesamteigenkapital von 3,5 Milliarden Dollar.

Positive
  • Net earnings improved to $47.0 million in Q4 from a loss in Q3
  • Net interest margin expanded 11 basis points to 3.04%
  • Total loans grew 4.3% annualized to $23.8 billion
  • Noninterest expense declined 7.6% to $181.4 million
  • CET1 capital ratio strengthened to 10.55%
  • Average noninterest-bearing deposits increased to 29.1% of total deposits
Negative
  • Average interest-earning assets decreased by $750.7 million in Q4
  • Average total deposits decreased by $1.2 billion due to brokered deposits paydown
  • Total assets declined by $5.0 billion year-over-year

Insights

Banc of California delivered a robust Q4 2024 that demonstrates successful execution of its strategic initiatives and margin expansion strategy. The reported $0.28 EPS reflects several positive developments in core banking operations:

The most impressive metric is the net interest margin expansion to 3.04%, achieved through two key drivers: 1) A significant reduction in funding costs by 27% quarter-over-quarter, showcasing strong deposit pricing discipline and improved funding mix with noninterest-bearing deposits reaching 29.1% of total deposits 2) Successful balance sheet repositioning actions from previous quarters that are now bearing fruit.

The expense management has been particularly noteworthy, with noninterest expenses declining 7.6% QoQ to $181.4M. This reflects both merger-related cost synergies and fundamental efficiency improvements. The 35.7% year-over-year decrease in adjusted noninterest expense suggests the cost savings are structural rather than temporary.

The loan growth of 4.3% annualized is healthy and well-diversified across warehouse lending, equity funds and residential mortgages. This balanced growth approach, combined with the strong capital position (10.55% CET1 ratio), positions the bank well for sustainable profitability.

The improvement in deposit mix, with noninterest-bearing deposits growing while higher-cost funding sources were reduced, provides a solid foundation for maintaining the expanded margins even in a potentially lower rate environment. This structural improvement in funding costs should support earnings stability going forward.

LOS ANGELES--(BUSINESS WIRE)-- Banc of California, Inc. (NYSE: BANC):

$0.28

Earnings Per Share

$17.78

Book Value Per Share

 

$15.72

Tangible Book Value

Per Share(1)

10.55%

CET1 Ratio

29.1%

Average Noninterest-

Bearing Deposits to

Average Total Deposits

Banc of California, Inc. (NYSE: BANC) (“Banc of California” or the “Company”), the parent company of wholly-owned subsidiary Banc of California (the “Bank”), today reported financial results for the fourth quarter and year ended December 31, 2024. The Company reported net earnings available to common and equivalent stockholders of $47.0 million, or $0.28 per diluted common share, for the fourth quarter of 2024. This compares to a net loss available to common and equivalent stockholders of $1.2 million, or a loss of $0.01 per diluted common share, for the third quarter of 2024. On an adjusted basis, net earnings available to common and equivalent stockholders were $41.4 million, or $0.25 per diluted common share for the third quarter.(1) The third quarter of 2024 included $60 million of pre-tax losses from repositioning a portion of the securities portfolio. For the full year 2024, we reported net income available to common and equivalent shareholders of $87.1 million, or $0.52 per diluted common share. On an adjusted basis, net income available to common and equivalent shareholders was $135.4 million, or $0.80 per diluted common shares.(1)

Update on Southern California Wildfires

The recent wildfires in Southern California have been devastating, severely impacting Los Angeles and the surrounding areas – home to our headquarters and where many of our clients and team members live and work. To support the recovery efforts, our charitable foundation has launched the Banc of California Wildfire Relief and Recovery Fund, which is dedicated to aiding relief efforts and rebuilding our community. To further our commitment, we have donated $1 million to the relief fund, standing in solidarity with Angelenos as we work together to rebuild and restore what has been lost. To date, we are not aware of any material impact on our loan portfolio, collateral or any of our facilities due to the Southern California wildfires. We are currently aware of four commercial properties and three residential properties that have been damaged or destroyed but all such collateral has insurance coverage in place and will continue to monitor and assess for potential exposure.

Financial Highlights for the Fourth Quarter and 2024 Fiscal Year

  • Net interest margin expansion of 11 basis points vs 3Q24 to 3.04% and 135 basis points year-over-year, driven by lower funding costs
  • Lowered funding costs by 27 basis points vs 3Q24 and 113 basis points year-over-year, reflecting benefits of prior balance sheet repositioning actions and improved funding mix
  • Average noninterest-bearing deposits grew to 29.1% of average total deposits, up from 27.7% in 3Q24 and 22.6% in 4Q23, driven by relationship-focused deposit growth strategy
  • Total loans of $23.8 billion grew 4.3% annualized or $254 million from 3Q24, driven by growth in warehouse lending, equity funds, and residential mortgage loan portfolios
  • Total noninterest expense declined 7.6% vs 3Q24 to $181.4 million and 50.1% year-over-year, driven by strong efficiency gains and achievement of our merger cost savings target. This reflects a 35.7% decrease in adjusted noninterest expense(1) year-over-year excluding acquisition, integration and reorganization costs and normalizing 4Q23 to include combined company expenses for a full quarter and incentive compensation adjusted to target.
  • Strengthened capital ratios with CET1 capital ratio(2) up 9 basis points vs 3Q24 to 10.55% and 41 basis points year-over year
  • Growth in book value per share to $17.78 and tangible book value per share(1) to $15.72

(1)

Non-GAAP measure; refer to section 'Non-GAAP Measures'

(2)

Capital ratio for 12/31/2024 is preliminary

Jared Wolff, President & CEO of Banc of California, commented, “Our strong fourth quarter results reflect continued momentum and consistent execution by our team. During the quarter, we achieved additional cost savings as well as a significant decline in our funding costs driven by our targeted reduction in deposit costs and the balance sheet repositioning actions that we completed earlier in the year. These actions helped drive an expansion in our net interest margin and increases in our net income, earnings per share, and level of returns.”

Mr. Wolff continued, “During the course of 2024, we made significant strides in strengthening our balance sheet and core earnings power. We believe we are well positioned to continue adding to our client base and expanding relationships with existing clients. Given the positive economic outlook, and the solid gains in loans and deposits generated by our teams in the fourth quarter, we believe we are well positioned to generate further growth in the balance sheet in 2025, expanding operating leverage and profitability to create additional value for our shareholders.”

INCOME STATEMENT HIGHLIGHTS

Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
Summary Income Statement

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(In thousands)
Total interest income

$

424,519

 

$

446,893

 

$

467,240

 

$

1,812,705

 

$

1,971,000

 

Total interest expense

 

189,234

 

 

214,718

 

 

316,189

 

 

886,655

 

 

1,223,872

 

Net interest income

 

235,285

 

 

232,175

 

 

151,051

 

 

926,050

 

 

747,128

 

Provision for credit losses

 

12,801

 

 

9,000

 

 

47,000

 

 

42,801

 

 

52,000

 

Gain (loss) on sale of loans

 

20

 

 

(62

)

 

(3,526

)

 

645

 

 

(161,346

)

(Loss) gain on sale of securities

 

(454

)

 

(59,946

)

 

(442,413

)

 

(60,400

)

 

(442,413

)

Other noninterest income

 

29,423

 

 

44,556

 

 

45,537

 

 

136,900

 

 

155,474

 

Total noninterest income (loss)

 

28,989

 

 

(15,452

)

 

(400,402

)

 

77,145

 

 

(448,285

)

Total revenue

 

264,274

 

 

216,723

 

 

(249,351

)

 

1,003,195

 

 

298,843

 

Goodwill impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

1,376,736

 

Acquisition, integration and reorganization costs

 

(1,023

)

 

(510

)

 

111,800

 

 

(14,183

)

 

142,633

 

Other noninterest expense

 

182,393

 

 

196,719

 

 

251,838

 

 

805,923

 

 

938,812

 

Total noninterest expense

 

181,370

 

 

196,209

 

 

363,638

 

 

791,740

 

 

2,458,181

 

Earnings (loss) before income taxes

 

70,103

 

 

11,514

 

 

(659,989

)

 

168,654

 

 

(2,211,338

)

Income tax expense (benefit)

 

13,184

 

 

2,730

 

 

(177,034

)

 

41,766

 

 

(312,201

)

Net earnings (loss)

 

56,919

 

 

8,784

 

 

(482,955

)

 

126,888

 

 

(1,899,137

)

Preferred stock dividends

 

9,947

 

 

9,947

 

 

9,947

 

 

39,788

 

 

39,788

 

Net earnings (loss) available to common and equivalent stockholders

$

46,972

 

$

(1,163

)

$

(492,902

)

$

87,100

 

$

(1,938,925

)

Net Interest Income

Q4-2024 vs Q3-2024

Net interest income increased by $3.1 million to $235.3 million for the fourth quarter from $232.2 million for the third quarter due to lower interest expense on interest-bearing liabilities, offset partially by lower interest income on interest-earning assets.

The net interest margin increased 11 basis points to 3.04% for the fourth quarter as the cost of average total funding decreased 27 basis points and the average interest-earning assets yield decreased 15 basis points.

The average yield on interest-earning assets decreased by 15 basis points to 5.48% for the fourth quarter from 5.63% for the third quarter due mainly to the average yield on deposits in financial institutions decreasing by 65 basis points and the average yield on loans and leases decreasing by 17 basis points, offset partially by the average yield on investment securities increasing by 21 basis points. The decrease in the average yield on deposits in financial institutions was due to lower market rates attributable mainly to the Federal Reserve reducing the federal funds rate by a total of 100 basis points since September 2024. The average yield on loans and leases decreased by 17 basis points to 6.01% for the fourth quarter from 6.18% for the third quarter as a result of lower market interest rates and lower loan discount accretion. The average yield on investment securities increased by 21 basis points benefiting from the balance sheet repositioning actions taken in the third quarter.

Average interest-earning assets decreased by $750.7 million to $30.8 billion for the fourth quarter due mainly to the decreases of $631.5 million in average deposits in financial institutions and $154.4 million in average loans and leases.

The average total cost of funds decreased by 27 basis points to 2.55% for the fourth quarter from 2.82% for the third quarter due mainly to lower market interest rates, lower rate on average borrowings, and lower average balance of total deposits due to the paydown of higher-cost brokered deposits in the third quarter. The average cost of interest-bearing liabilities decreased by 32 basis points to 3.48% for the fourth quarter from 3.80% for the third quarter. The average cost of interest-bearing deposits decreased by 34 basis points to 3.18% for the fourth quarter from 3.52% for the third quarter mainly due to deposit rate repricing driven by federal funds rate cuts, while the average cost of borrowings decreased by 95 basis points to 5.40% for the fourth quarter from 6.35% for the third quarter as the BTFP was paid off and partially replaced with lower fixed rate FHLB advances in the third quarter. Average noninterest-bearing deposits increased by $59.9 million for the fourth quarter compared to the third quarter, average total deposits decreased by $1.2 billion due to the aforementioned paydown of brokered deposits, and average borrowings increased by $335.5 million.

Full Year 2024 vs Full Year 2023

Net interest income increased by $178.9 million to $926.1 million for the year ended December 31, 2024 from $747.1 million for the year ended December 31, 2023 due to lower interest expense on interest-bearing liabilities, offset partially by lower interest income on interest-earning assets.

The net interest margin increased by 87 basis points to 2.85% for the year ended December 31, 2024 compared to 1.98% in 2023 due to the average yield on interest-earning assets increasing by 37 basis points, while the average total cost of funds decreased by 50 basis points.

The average yield on interest-earning assets increased by 37 basis points to 5.58% for the year ended December 31, 2024 from 5.21% in 2023 due mainly to the change in the interest-earning asset mix. This was driven by the increase in the balance of average loans and leases as a percentage of average interest-earning assets to 76% for the year ended December 31,2024 from 67% for the year ended December 31, 2023, the decrease in the balance of average investment securities as a percentage of average interest-earning assets to 14% for the year ended December 31, 2024 from 18% in 2023, and the decrease in the balance of average deposits in financial institutions as a percentage of average interest-earning assets to 10% for the year ended December 31, 2024 from 15% in 2023.

The average yield on loans and leases increased by 19 basis points to 6.11% for the year ended December 31, 2024 from 5.92% in 2023 as a result of changes in portfolio mix and higher net accretion of loan discounts. The average yield on investment securities increased by 44 basis points benefiting from the balance sheet repositioning actions taken in the third quarter of 2024.

Average interest-earning assets decreased by $5.4 billion to $32.5 billion for the year ended December 31, 2024 due to lower average balances in loans and leases, investments securities, and deposits in financial institutions. Average loans and leases decreased by $760.7 million primarily due to the sale in July 2024 of $1.95 billion of Civic loans, offset partially by the acquisition of legacy Banc of California loans completed in the fourth quarter of 2023. Average investment securities decreased by $2.1 billion mostly due to securities sales completed in the fourth quarter of 2023. Average deposits in financial institutions decreased by $2.5 billion due to lower cash balances which were used to pay down higher-cost funding including the full payoff of $2.6 billion of the BTFP and $1.85 billion in brokered deposits as part of the balance sheet repositioning actions taken during 2024.

The average total cost of funds decreased by 50 basis points to 2.84% for the year ended December 31, 2024 from 3.34% for the year ended December 31, 2023 due mainly to changes in the total funding mix. This was driven by the increase in the balance of lower-cost average total deposits as a percentage of average total funds to 91% for the year ended December 31, 2024 from 78% in 2023, and the decrease in the balance of higher-cost average borrowings as a percentage of average total funds to 6% for the year ended December 31, 2024 from 19% in 2023. The average cost of interest-bearing liabilities decreased by 35 basis points to 3.79% for the year ended December 31, 2024 from 4.14% in 2023. The average total cost of deposits decreased by 9 basis points to 2.52% for the year ended December 31, 2024 compared to 2.61% for the year ended December 31, 2023. Average noninterest-bearing deposits increased by $757.6 million for the year ended December 31, 2024 compared to 2023 and average total deposits decreased by $251.8 million. Average borrowings decreased by $5.2 billion for the year ended December 31, 2024 compared to 2023 due to paydown of borrowings in connection with the balance sheet repositioning completed due to the merger.

Provision For Credit Losses

Q4-2024 vs Q3-2024

The provision for credit losses increased by $3.8 million to $12.8 million for the fourth quarter compared to $9.0 million for the third quarter. The fourth quarter provision included an $11.5 million provision for loan losses and a $1.5 million provision for unfunded loan commitments, offset partially by a $0.2 million reversal of the provision for credit losses related to available-for-sale securities. The fourth quarter provision for loans and unfunded loan commitments was driven primarily by net charge-off activity during the quarter. The third quarter provision was driven primarily by increases in qualitative reserves, for loans secured by office properties and concentrations of credit, and specific reserves for nonperforming loan downgrades.

Full Year 2024 vs Full Year 2023

The provision for credit losses decreased by $9.2 million to $42.8 million for the year ended December 31, 2024 compared to $52.0 million for the year ended December 31, 2023. The provision for credit losses in 2024 included a $43.5 million provision for loan losses, offset partially by a $0.5 million reversal of the provision for credit losses related to unfunded loan commitments and a $0.2 million reversal of the provision for credit losses related to available-for-sale securities. The 2024 provision was driven mainly by net charge-off activity during the year. The provision for credit losses for 2023 included a $113.5 million provision for loan losses, offset partially by a $61.5 million reversal of the provision for credit losses related to lower unfunded loan commitments. The 2023 provision for loan losses also included an initial provision of $22.2 million for acquired legacy Banc of California non-PCD loans.

Noninterest Income

Q4-2024 vs Q3-2024

Noninterest income increased by $44.4 million to $29.0 million for the fourth quarter from a loss of $15.5 million for the third quarter due mainly to a $59.5 million decrease in loss on sale of securities, offset partially by decreases of $6.4 million in leased equipment income, $5.4 million in other income and $3.7 million in dividends and gains on equity investments. The decrease in loss on sale of securities was mainly due to the sale of $741.8 million in securities for a net loss of $59.9 million in the third quarter of 2024. The decrease in leased equipment was due mostly to lower gains from early lease terminations and sale of leased assets. The decrease in other income was due primarily to a $4.6 million increase in the negative fair value mark on the credit-linked notes. The decrease in dividends and gains on equity investments was due to lower income distributions from the CRA equity investments.

Full Year 2024 vs Full Year 2023

Noninterest income increased by $525.4 million to $77.1 million for the year ended December 31, 2024 due mostly to a decrease in the loss on sale of securities of $382.0 million and an increase in the gain on sale of loans of $162.0 million. The Company sold $753.7 million in securities for a net loss of $60.4 million in the year ended December 31, 2024 and $2.7 billion in securities for a net loss of $442.4 in the year ended December 31, 2023. The Company sold $2.5 billion of loans for a net gain of $0.6 million in the year ended December 31, 2024 and $8.7 billion of loans for a net loss of $161.3 million in the year ended December 31, 2023.

Noninterest Expense

Q4-2024 vs Q3-2024

Noninterest expense decreased by $14.8 million to $181.4 million for the fourth quarter due mainly to decreases of $7.9 million in compensation expenses, $2.8 million in customer related expenses, $1.5 million in insurance and assessments expense, and $1.2 million in occupancy expense. The decrease in compensation expenses was primarily due to lower headcount. The decrease in customer related expenses was driven by lower earnings credit rate expenses which were impacted by lower federal funds rate. The decrease in insurance and assessments expense was due to lower FDIC assessment rates. The decrease in occupancy expense was mostly attributable to facility consolidations leading to cost savings.

Full Year 2024 vs Full Year 2023

Noninterest expense decreased by $1.7 billion to $791.7 million for the year ended December 31, 2024 due mainly to a $1.4 billion goodwill impairment recorded in 2023, a $156.8 million decrease in acquisition, integration and reorganization costs related to our merger with PacWest, and a $65.0 million decrease in insurance and assessments expense for both the regular FDIC assessment and the special assessment.

Income Taxes

Q4-2024 vs Q3-2024

Income tax expense of $13.2 million was recorded for the fourth quarter resulting in an effective tax rate of 18.8% compared to income tax expense of $2.7 million for the third quarter and an effective tax rate of 23.7%. The lower fourth quarter effective tax rate was due primarily to tax benefits resulted from recording deferred tax assets at higher state tax rates.

Full Year 2024 vs Full Year 2023

Income tax expense of $41.8 million was recorded for the year ended December 31, 2024 resulting in an effective tax rate of 24.8% compared to an income tax benefit of $312.2 million for the year ended December 31, 2023 and an effective tax rate of 14.1%. The lower effective tax rate in 2023 was due primarily to non-deductible goodwill impairment recorded in 2023. Excluding non-deductible goodwill impairment of $1.0 billion, the effective tax rate was 26.2% for the year ended December 31, 2023.

BALANCE SHEET HIGHLIGHTS

December 31, September 30, December 31, Increase (Decrease)
Selected Balance Sheet Items

 

2024

 

 

2024

 

 

2023

 

QoQ YoY
(In thousands)
Cash and cash equivalents

$

2,502,212

$

2,554,227

$

5,377,576

$

(52,015

)

$

(2,875,364

)

Securities available-for-sale

 

2,246,839

 

 

2,300,284

 

 

2,346,864

 

 

(53,445

)

 

(100,025

)

Securities held-to-maturity

 

2,306,149

 

 

2,301,263

 

 

2,287,291

 

 

4,886

 

 

18,858

 

Loans held for sale

 

26,331

 

 

28,639

 

 

122,757

 

 

(2,308

)

 

(96,426

)

Loans and leases held for investment, net of deferred fees

 

23,781,663

 

 

23,527,777

 

 

25,489,687

 

 

253,886

 

 

(1,708,024

)

Total assets

 

33,542,864

 

 

33,432,613

 

 

38,534,064

 

 

110,251

 

 

(4,991,200

)

 
Noninterest-bearing deposits

$

7,719,913

 

$

7,811,796

 

$

7,774,254

 

$

(91,883

)

$

(54,341

)

Total deposits

 

27,191,909

 

 

26,828,269

 

 

30,401,769

 

 

363,640

 

 

(3,209,860

)

Borrowings

 

1,391,814

 

 

1,591,833

 

 

2,911,322

 

 

(200,019

)

 

(1,519,508

)

Total liabilities

 

30,042,915

 

 

29,936,415

 

 

35,143,299

 

 

106,500

 

 

(5,100,384

)

Total stockholders' equity

 

3,499,949

 

 

3,496,198

 

 

3,390,765

 

 

3,751

 

 

109,184

 

Securities

The balance of securities held-to-maturity (“HTM”) remained consistent through the fourth quarter and totaled $2.3 billion at December 31, 2024. As of December 31, 2024, HTM securities had aggregate unrealized net after-tax losses in accumulated other comprehensive income (loss) (“AOCI”) of $157.9 million remaining from the balance established at the time of transfer from available-for-sale on June 1, 2022.

Securities available-for-sale (“AFS”) decreased by $53.4 million during the fourth quarter to $2.2 billion at December 31, 2024. AFS securities had aggregate unrealized net after-tax losses in AOCI of $200.1 million. These AFS unrealized net losses related primarily to changes in overall interest rates and spreads and the resulting impact on valuations.

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:

December 31, September 30, June 30, March 31, December 31,
Composition of Loans and Leases

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

(Dollars in thousands)
Real estate mortgage:
Commercial

$

4,578,772

 

$

4,557,939

 

$

4,722,585

 

$

4,896,544

 

$

5,026,497

 

Multi-family

 

6,041,713

 

 

6,009,280

 

 

5,984,930

 

 

6,121,472

 

 

6,025,179

 

Other residential

 

2,807,174

 

 

2,767,187

 

 

2,866,085

 

 

4,949,383

 

 

5,060,309

 

Total real estate mortgage

 

13,427,659

 

 

13,334,406

 

 

13,573,600

 

 

15,967,399

 

 

16,111,985

 

Real estate construction and land:
Commercial

 

799,131

 

 

836,902

 

 

784,166

 

 

775,021

 

 

759,585

 

Residential

 

2,373,162

 

 

2,622,507

 

 

2,573,431

 

 

2,470,333

 

 

2,399,684

 

Total real estate construction and land

 

3,172,293

 

 

3,459,409

 

 

3,357,597

 

 

3,245,354

 

 

3,159,269

 

Total real estate

 

16,599,952

 

 

16,793,815

 

 

16,931,197

 

 

19,212,753

 

 

19,271,254

 

Commercial:
Asset-based

 

2,087,969

 

 

2,115,311

 

 

1,968,713

 

 

2,061,016

 

 

2,189,085

 

Venture capital

 

1,537,776

 

 

1,353,626

 

 

1,456,122

 

 

1,513,641

 

 

1,446,362

 

Other commercial

 

3,153,084

 

 

2,850,535

 

 

2,446,974

 

 

2,245,910

 

 

2,129,860

 

Total commercial

 

6,778,829

 

 

6,319,472

 

 

5,871,809

 

 

5,820,567

 

 

5,765,307

 

Consumer

 

402,882

 

 

414,490

 

 

425,903

 

 

439,702

 

 

453,126

 

Total loans and leases held for investment, net of deferred fees

$

23,781,663

 

$

23,527,777

 

$

23,228,909

 

$

25,473,022

 

$

25,489,687

 

 
Total unfunded loan commitments

$

4,887,690

 

$

5,008,449

 

$

5,256,473

 

$

5,482,672

 

$

5,578,907

 

 
 
Composition as % of Total December 31, September 30, June 30, March 31, December 31,
Loans and Leases

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

Real estate mortgage:
Commercial

 

19

%

 

19

%

 

20

%

 

19

%

 

20

%

Multi-family

 

26

%

 

25

%

 

26

%

 

24

%

 

23

%

Other residential

 

12

%

 

12

%

 

12

%

 

19

%

 

20

%

Total real estate mortgage

 

57

%

 

56

%

 

58

%

 

62

%

 

63

%

Real estate construction and land:
Commercial

 

3

%

 

4

%

 

4

%

 

3

%

 

3

%

Residential

 

10

%

 

11

%

 

11

%

 

10

%

 

9

%

Total real estate construction and land

 

13

%

 

15

%

 

15

%

 

13

%

 

12

%

Total real estate

 

70

%

 

71

%

 

73

%

 

75

%

 

75

%

Commercial:
Asset-based

 

9

%

 

9

%

 

8

%

 

8

%

 

9

%

Venture capital

 

6

%

 

6

%

 

6

%

 

6

%

 

6

%

Other commercial

 

13

%

 

12

%

 

11

%

 

9

%

 

8

%

Total commercial

 

28

%

 

27

%

 

25

%

 

23

%

 

23

%

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, increased by $253.9 million in the fourth quarter and totaled $23.8 billion at December 31, 2024. The increase in loans and leases held for investment was due primarily to increased balances in the warehouse lending, equity funds, and residential mortgage loan portfolios, offset partially by a decrease in the residential real estate construction loan portfolio. Loan originations including production, purchased loans, and unfunded new commitments were $1.8 billion in the fourth quarter with rate on new production at a weighted average interest rate of 7.02%.

Credit Quality

December 31, September 30, June 30, March 31, December 31,
Asset Quality Information and Ratios

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

(Dollars in thousands)
Delinquent loans and leases held for investment:
30 to 89 days delinquent

$

91,347

 

$

52,927

 

$

27,962

 

$

178,421

 

$

113,307

 

90+ days delinquent

 

88,846

 

 

72,037

 

 

55,792

 

 

57,573

 

 

30,881

 

Total delinquent loans and leases

$

180,193

 

$

124,964

 

$

83,754

 

$

235,994

 

$

144,188

 

 
Total delinquent loans and leases to loans and leases held for investment

 

0.76

%

 

0.53

%

 

0.36

%

 

0.93

%

 

0.57

%

 
Nonperforming assets, excluding loans held for sale:
Nonaccrual loans and leases

$

189,605

 

$

168,341

 

$

117,070

 

$

145,785

 

$

62,527

 

90+ days delinquent loans and still accruing

 

-

 

 

-

 

 

-

 

 

-

 

 

11,750

 

Total nonperforming loans and leases ("NPLs")

 

189,605

 

 

168,341

 

 

117,070

 

 

145,785

 

 

74,277

 

Foreclosed assets, net

 

9,734

 

 

8,661

 

 

13,302

 

 

12,488

 

 

7,394

 

Total nonperforming assets ("NPAs")

$

199,339

 

$

177,002

 

$

130,372

 

$

158,273

 

$

81,671

 

 
Classified loans and leases held for investment

$

563,502

 

$

533,591

 

$

415,498

 

$

366,729

 

$

228,417

 

Allowance for loan and lease losses

$

239,360

 

$

254,345

 

$

247,762

 

$

291,503

 

$

281,687

 

Allowance for loan and lease losses to NPLs

 

126.24

%

 

151.09

%

 

211.64

%

 

199.95

%

 

379.24

%

NPLs to loans and leases held for investment

 

0.80

%

 

0.72

%

 

0.50

%

 

0.57

%

 

0.29

%

NPAs to total assets

 

0.59

%

 

0.53

%

 

0.37

%

 

0.44

%

 

0.21

%

Classified loans and leases to loans and leases held for investment

 

2.37

%

 

2.27

%

 

1.79

%

 

1.44

%

 

0.90

%

We continued to remain conservative on risk rating of loans and leases. Increases to classified loans and leases that remained on accrual status resulted from downward migration for loans and leases where performance metrics deteriorated but with no current expectation of loss. Nonperforming, classified and delinquent loan inflows were primarily driven by one customer relationship with two loans with no expected loss due to collateral coverage. Our overall loan portfolio continues to benefit from strong underwriting, borrower strength and good credit metrics.

At December 31, 2024, total delinquent loans and leases were $180.2 million, compared to $125.0 million at September 30, 2024. The $55.2 million increase in total delinquent loans was due mainly to increases in the 30 to 89 days delinquent category of $20.2 million in other residential real estate mortgage loans, $10.4 million in commercial real estate mortgage loans, and $10.3 million in multi-family mortgage loans. In the 90 or more days delinquent category, there was a $21.9 million increase in multi-family mortgage loans, offset partially by a $6.9 million decrease in commercial real estate mortgage loans. Total delinquent loans and leases as a percentage of total loans and leases increased to 0.76% at December 31, 2024, as compared to 0.53% at September 30, 2024.

At December 31, 2024, nonperforming assets were $199.3 million, or 0.59% of total assets, compared to $177.0 million, or 0.53% of total assets, as of September 30, 2024. At December 31, 2024, nonperforming assets included $9.7 million of foreclosed assets, consisting entirely of single-family residences.

At December 31, 2024, nonperforming loans were $189.6 million, compared to $168.3 million at September 30, 2024. During the fourth quarter, nonperforming loans increased by $21.3 million due to additions of $56.9 million, offset partially by charge-offs of $22.0 million and payoffs and paydowns of $13.6 million. The addition to nonperforming loans was mainly related to aforementioned two commercial loans from one customer relationship.

Nonperforming loans and leases as a percentage of loans and leases held for investment increased to 0.80% at December 31, 2024 compared to 0.72% at September 30, 2024.

Allowance for Credit Losses – Loans

Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
Allowance for Credit Losses – Loans

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(Dollars in thousands)
Allowance for loan and lease losses
("ALLL"):
Balance at beginning of period

$

254,345

 

$

247,762

 

$

222,297

 

$

281,687

 

$

200,732

 

Initial ALLL on acquired PCD loans

 

-

 

 

-

 

 

25,623

 

 

-

 

 

25,623

 

Charge-offs

 

(27,696

)

 

(4,163

)

 

(14,628

)

 

(94,943

)

 

(63,428

)

Recoveries

 

1,211

 

 

1,746

 

 

1,395

 

 

9,116

 

 

5,260

 

Net charge-offs

 

(26,485

)

 

(2,417

)

 

(13,233

)

 

(85,827

)

 

(58,168

)

Provision for loan losses

 

11,500

 

 

9,000

 

 

47,000

 

 

43,500

 

 

113,500

 

Balance at end of period

$

239,360

 

$

254,345

 

$

281,687

 

$

239,360

 

$

281,687

 

 
Reserve for unfunded loan commitments
("RUC"):
Balance at beginning of period

$

27,571

 

$

27,571

 

$

29,571

 

$

29,571

 

$

91,071

 

(Negative provision) provision for credit losses

 

1,500

 

 

-

 

 

-

 

 

(500

)

 

(61,500

)

Balance at end of period

$

29,071

 

$

27,571

 

$

29,571

 

$

29,071

 

$

29,571

 

 
Allowance for credit losses ("ACL") –
Loans:
Balance at beginning of period

$

281,916

 

$

275,333

 

$

251,868

 

$

311,258

 

$

291,803

 

Initial ALLL on acquired PCD loans

 

-

 

 

-

 

 

25,623

 

 

-

 

 

25,623

 

Charge-offs

 

(27,696

)

 

(4,163

)

 

(14,628

)

 

(94,943

)

 

(63,428

)

Recoveries

 

1,211

 

 

1,746

 

 

1,395

 

 

9,116

 

 

5,260

 

Net charge-offs

 

(26,485

)

 

(2,417

)

 

(13,233

)

 

(85,827

)

 

(58,168

)

Provision for credit losses

 

13,000

 

 

9,000

 

 

47,000

 

 

43,000

 

 

52,000

 

Balance at end of period

$

268,431

 

$

281,916

 

$

311,258

 

$

268,431

 

$

311,258

 

 
ALLL to loans and leases held for investment

 

1.01

%

 

1.08

%

 

1.11

%

 

1.01

%

 

1.11

%

ACL to loans and leases held for investment

 

1.13

%

 

1.20

%

 

1.22

%

 

1.13

%

 

1.22

%

ACL to NPLs

 

141.57

%

 

167.47

%

 

419.05

%

 

141.57

%

 

419.05

%

ACL to NPAs

 

134.66

%

 

159.27

%

 

381.11

%

 

134.66

%

 

381.11

%

Annualized net charge-offs to average loans and leases

 

0.45

%

 

0.04

%

 

0.22

%

 

0.35

%

 

0.23

%

The allowance for credit losses – loans, which includes the reserve for unfunded loan commitments, totaled $268.4 million, or 1.13% of total loans and leases, at December 31, 2024, compared to $281.9 million, or 1.20% of total loans and leases, at September 30, 2024. The $13.5 million decrease in the allowance was due to net charge-offs of $26.5 million, offset partially by the $13.0 million provision. The ACL coverage ratio decreased from last quarter driven by improvement in the economic forecast, a mix shift towards loan categories with lower expected losses, and the impact of charge-offs, offset partially by the impact of changes in risk ratings.

Our ability to absorb credit losses is also bolstered by (i) $117.0 million of loss coverage from the credit-linked notes, pursuant to which the bank sold the first 5% of any losses on our $2.3 billion single-family residential mortgage loan portfolio; and (ii) unearned credit marks of $22.5 million on approximately $1.7 billion of purchased loans without credit deterioration that were originated by Banc of California prior to the merger. When the loss coverage from the credit-linked notes and unearned credit marks is added to our allowance for credit losses, this provides additional economic coverage on top of our ACL ratio. We refer to this adjusted ACL ratio as our economic coverage ratio(1), which equaled 1.72% of total loans and leases at December 31, 2024.

The ACL coverage of nonperforming loans was 142% at December 31, 2024 compared to 167% at September 30, 2024.

Net charge-offs were 0.45% of average loans and leases (annualized) for the fourth quarter, compared to 0.04% for the third quarter. The increase in net charge-offs in the fourth quarter was attributable primarily to a commercial loan exposure with isolated risk and one Civic loan, both of which migrated to nonperforming loan status in the third quarter.

(1)

 

Non-GAAP measures; refer to section 'Non-GAAP Measures'

Deposits and Client Investment Funds

The following table sets forth the composition of our deposits at the dates indicated:

December 31, September 30, June 30, March 31, December 31,
Composition of Deposits

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

(Dollars in thousands)
Noninterest-bearing checking

$

7,719,913

 

$

7,811,796

 

$

7,825,007

 

$

7,833,608

 

$

7,774,254

 

Interest-bearing:
Checking

 

7,610,705

 

 

7,539,899

 

 

7,309,833

 

 

7,836,097

 

 

7,808,764

 

Money market

 

5,361,635

 

 

5,039,607

 

 

4,837,025

 

 

5,020,110

 

 

6,187,889

 

Savings

 

1,933,232

 

 

1,992,364

 

 

2,040,461

 

 

2,016,398

 

 

1,997,989

 

Time deposits:
Non-brokered

 

2,488,217

 

 

2,451,340

 

 

2,758,067

 

 

2,761,836

 

 

3,139,270

 

Brokered

 

2,078,207

 

 

1,993,263

 

 

4,034,057

 

 

3,424,358

 

 

3,493,603

 

Total time deposits

 

4,566,424

 

 

4,444,603

 

 

6,792,124

 

 

6,186,194

 

 

6,632,873

 

Total interest-bearing

 

19,471,996

 

 

19,016,473

 

 

20,979,443

 

 

21,058,799

 

 

22,627,515

 

Total deposits

$

27,191,909

 

$

26,828,269

 

$

28,804,450

 

$

28,892,407

 

$

30,401,769

 

 
 
December 31, September 30, June 30, March 31, December 31,
Composition as % of Total Deposits

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

 
Noninterest-bearing checking

 

28

%

 

29

%

 

27

%

 

27

%

 

26

%

Interest-bearing:
Checking

 

28

%

 

28

%

 

25

%

 

27

%

 

26

%

Money market

 

20

%

 

19

%

 

17

%

 

17

%

 

20

%

Savings

 

7

%

 

7

%

 

7

%

 

7

%

 

6

%

Time deposits:
Non-brokered

 

9

%

 

9

%

 

10

%

 

10

%

 

10

%

Brokered

 

8

%

 

8

%

 

14

%

 

12

%

 

12

%

Total time deposits

 

17

%

 

17

%

 

24

%

 

22

%

 

22

%

Total interest-bearing

 

72

%

 

71

%

 

73

%

 

73

%

 

74

%

Total deposits

 

100

%

 

100

%

 

100

%

 

100

%

 

100

%

Total deposits increased by $363.6 million during the fourth quarter to $27.2 billion at December 31, 2024.

Noninterest-bearing checking totaled $7.72 billion and represented 28% of total deposits at December 31, 2024, compared to $7.81 billion, or 29% of total deposits, at September 30, 2024.

Uninsured and uncollateralized deposits of $7.2 billion represented 26% of total deposits at December 31, 2024 compared to uninsured and uncollateralized deposits of $6.7 billion or 25% of total deposits at September 30, 2024.

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 $1.5 billion as of December 31, 2024, of which $0.7 billion was managed by BAM.

Borrowings

Borrowings decreased $200.0 million to $1.4 billion at December 31, 2024 from $1.6 billion at September 30, 2024 due to lower short-term borrowings.

Equity

During the fourth quarter, total stockholders’ equity increased by $3.8 million to $3.5 billion and tangible common equity(1) increased by $13.6 million to $2.7 billion at December 31, 2024. The increase in total stockholders’ equity for the fourth quarter resulted primarily from net earnings of $56.9 million, offset partially by an increase in the unrealized after-tax net loss in AOCI for AFS securities of $38.3 million and common and preferred stock dividends of $27.9 million.

At December 31, 2024, book value per common share increased to $17.78 compared to $17.75 at September 30, 2024, and tangible book value per common share(1) increased to $15.72 compared to $15.63 at September 30, 2024.

(1)

Non-GAAP measures; refer to section 'Non-GAAP Measures'

CAPITAL AND LIQUIDITY

Capital ratios remain strong with total risk-based capital at 17.05% and a tier 1 leverage ratio of 10.15% at December 31, 2024.

The following table sets forth our regulatory capital ratios as of the dates indicated:

December 31, September 30, June 30, March 31, December 31,
Capital Ratios

2024 (1)

2024

2024

2024

2023

 
Banc of California, Inc.
Total risk-based capital ratio

17.05

%

17.00

%

16.57

%

16.40

%

16.43

%

Tier 1 risk-based capital ratio

12.97

%

12.88

%

12.62

%

12.38

%

12.44

%

Common equity tier 1 capital ratio

10.55

%

10.46

%

10.27

%

10.09

%

10.14

%

Tier 1 leverage capital ratio

10.15

%

9.83

%

9.51

%

9.12

%

9.00

%

 
Banc of California
Total risk-based capital ratio

16.65

%

16.61

%

16.19

%

15.88

%

15.75

%

Tier 1 risk-based capital ratio

14.17

%

14.08

%

13.77

%

13.34

%

13.27

%

Common equity tier 1 capital ratio

14.17

%

14.08

%

13.77

%

13.34

%

13.27

%

Tier 1 leverage capital ratio

11.08

%

10.74

%

10.38

%

9.84

%

9.62

%

 

(1)

 

Capital information for December 31, 2024 is preliminary.

At December 31, 2024, immediately available cash and cash equivalents were $2.3 billion, a decrease of $52.9 million from September 30, 2024. Combined with total available borrowing capacity of $11.5 billion and unpledged AFS securities of $2.0 billion, total available liquidity was $15.9 billion at the end of the fourth quarter.

Conference Call

The Company will host a conference call to discuss its fourth quarter 2024 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, January 23, 2025. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 4964279. 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 6452827.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with over $33 billion in assets and the parent company of Banc of California. Banc of California is one of the nation’s premier relationship-based business banks, providing banking and treasury management services to small-, middle-market, and venture-backed businesses. Banc of California is the largest independent bank headquartered in Los Angeles and the third largest bank headquartered in California and offers a broad range of loan and deposit products and services through 80 full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-stack payment processing solutions through its subsidiary, Deepstack Technologies, and serves the Community Association Management industry nationwide with its technology-forward platform, SmartStreet™. The bank is committed to its local communities through the Banc of California Charitable Foundation, and by supporting organizations that provide financial literacy and job training, small business support, affordable housing, and more. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements and Other Matters

This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, liquidity and capital ratios and other non-historical statements. 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 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 or renewed 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 such as earthquakes and wildfires, 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 our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and from time to time in other documents that we file with or furnish to the SEC.

Non-GAAP Financial Measures

Included in this press release are certain non-GAAP financial measures, such as tangible assets, tangible equity to tangible assets, tangible book value per common share, return on average tangible common equity, adjusted return on average tangible common equity, adjusted net earnings (loss), adjusted noninterest expense, and economic coverage ratio, designed to complement the financial information presented in accordance with U.S. GAAP because management believes such measures are useful to investors. These non-GAAP financial measures should be considered only as supplemental to, and not superior to, financial measures provided in accordance with GAAP. Please refer to the “Non-GAAP Measures” section of this release for additional detail including reconciliations of the non-GAAP financial measures included in this press release to the most directly comparable financial measures prepared in accordance with GAAP.

BANC OF CALIFORNIA, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED)
 
December 31, September 30, June 30, March 31, December 31,

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

(Dollars in thousands)
ASSETS:
Cash and due from banks

$

192,006

 

$

251,869

 

$

203,467

 

$

199,922

 

$

202,427

 

Interest-earning deposits in financial institutions

 

2,310,206

 

 

2,302,358

 

 

2,495,343

 

 

2,885,306

 

 

5,175,149

 

Total cash and cash equivalents

 

2,502,212

 

 

2,554,227

 

 

2,698,810

 

 

3,085,228

 

 

5,377,576

 

 
Securities available-for-sale

 

2,246,839

 

 

2,300,284

 

 

2,244,031

 

 

2,286,682

 

 

2,346,864

 

Securities held-to-maturity

 

2,306,149

 

 

2,301,263

 

 

2,296,708

 

 

2,291,984

 

 

2,287,291

 

FRB and FHLB stock

 

147,773

 

 

145,123

 

 

132,380

 

 

129,314

 

 

126,346

 

Total investment securities

 

4,700,761

 

 

4,746,670

 

 

4,673,119

 

 

4,707,980

 

 

4,760,501

 

 
Loans held for sale

 

26,331

 

 

28,639

 

 

1,935,455

 

 

80,752

 

 

122,757

 

 
Gross loans and leases held for investment

 

23,808,205

 

 

23,553,534

 

 

23,255,297

 

 

25,517,028

 

 

25,534,730

 

Deferred fees, net

 

(26,542

)

 

(25,757

)

 

(26,388

)

 

(44,006

)

 

(45,043

)

Total loans and leases held for investment, net of deferred fees

 

23,781,663

 

 

23,527,777

 

 

23,228,909

 

 

25,473,022

 

 

25,489,687

 

Allowance for loan and lease losses

 

(239,360

)

 

(254,345

)

 

(247,762

)

 

(291,503

)

 

(281,687

)

Total loans and leases held for investment, net

 

23,542,303

 

 

23,273,432

 

 

22,981,147

 

 

25,181,519

 

 

25,208,000

 

 
Equipment leased to others under operating leases

 

307,188

 

 

314,998

 

 

335,968

 

 

339,925

 

 

344,325

 

Premises and equipment, net

 

142,546

 

 

143,200

 

 

145,734

 

 

144,912

 

 

146,798

 

Bank owned life insurance

 

339,517

 

 

343,212

 

 

341,779

 

 

341,806

 

 

339,643

 

Goodwill

 

214,521

 

 

216,770

 

 

215,925

 

 

198,627

 

 

198,627

 

Intangible assets, net

 

132,944

 

 

140,562

 

 

148,894

 

 

157,226

 

 

165,477

 

Deferred tax asset, net

 

720,587

 

 

706,849

 

 

738,534

 

 

741,158

 

 

739,111

 

Other assets

 

913,954

 

 

964,054

 

 

1,028,474

 

 

1,094,383

 

 

1,131,249

 

Total assets

$

33,542,864

 

$

33,432,613

 

$

35,243,839

 

$

36,073,516

 

$

38,534,064

 

 
LIABILITIES:
Noninterest-bearing deposits

$

7,719,913

 

$

7,811,796

 

$

7,825,007

 

$

7,833,608

 

$

7,774,254

 

Interest-bearing deposits

 

19,471,996

 

 

19,016,473

 

 

20,979,443

 

 

21,058,799

 

 

22,627,515

 

Total deposits

 

27,191,909

 

 

26,828,269

 

 

28,804,450

 

 

28,892,407

 

 

30,401,769

 

Borrowings

 

1,391,814

 

 

1,591,833

 

 

1,440,875

 

 

2,139,498

 

 

2,911,322

 

Subordinated debt

 

941,923

 

 

942,151

 

 

939,287

 

 

937,717

 

 

936,599

 

Accrued interest payable and other liabilities

 

517,269

 

 

574,162

 

 

651,379

 

 

709,744

 

 

893,609

 

Total liabilities

 

30,042,915

 

 

29,936,415

 

 

31,835,991

 

 

32,679,366

 

 

35,143,299

 

 
STOCKHOLDERS' EQUITY:
Preferred stock

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

Common stock

 

1,586

 

 

1,586

 

 

1,583

 

 

1,583

 

 

1,577

 

Class B non-voting common stock

 

5

 

 

5

 

 

5

 

 

5

 

 

5

 

Non-voting common stock equivalents

 

98

 

 

98

 

 

101

 

 

101

 

 

108

 

Additional paid-in-capital

 

3,785,725

 

 

3,802,314

 

 

3,813,312

 

 

3,827,777

 

 

3,840,974

 

Retained deficit

 

(431,201

)

 

(478,173

)

 

(477,010

)

 

(497,396

)

 

(518,301

)

Accumulated other comprehensive loss, net

 

(354,780

)

 

(328,148

)

 

(428,659

)

 

(436,436

)

 

(432,114

)

Total stockholders’ equity

 

3,499,949

 

 

3,496,198

 

 

3,407,848

 

 

3,394,150

 

 

3,390,765

 

Total liabilities and stockholders’ equity

$

33,542,864

 

$

33,432,613

 

$

35,243,839

 

$

36,073,516

 

$

38,534,064

 

 
Common shares outstanding (1)

 

168,825,656

 

 

168,879,566

 

 

168,875,712

 

 

169,013,629

 

 

168,959,063

 

 

(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 Year Ended
December 31, September 30, December 31, December 31,

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(In thousands, except per share amounts)
Interest income:
Loans and leases

$

357,303

 

$

369,913

 

$

346,308

 

$

1,501,534

 

$

1,496,357

 

Investment securities

 

37,743

 

 

34,912

 

 

41,280

 

 

140,794

 

 

174,996

 

Deposits in financial institutions

 

29,473

 

 

42,068

 

 

79,652

 

 

170,377

 

 

299,647

 

Total interest income

 

424,519

 

 

446,893

 

 

467,240

 

 

1,812,705

 

 

1,971,000

 

Interest expense:
Deposits

 

154,085

 

 

180,986

 

 

207,760

 

 

715,984

 

 

748,423

 

Borrowings

 

18,993

 

 

16,970

 

 

92,474

 

 

104,398

 

 

416,744

 

Subordinated debt

 

16,156

 

 

16,762

 

 

15,955

 

 

66,273

 

 

58,705

 

Total interest expense

 

189,234

 

 

214,718

 

 

316,189

 

 

886,655

 

 

1,223,872

 

Net interest income

 

235,285

 

 

232,175

 

 

151,051

 

 

926,050

 

 

747,128

 

Provision for credit losses

 

12,801

 

 

9,000

 

 

47,000

 

 

42,801

 

 

52,000

 

Net interest income after provision for credit losses

 

222,484

 

 

223,175

 

 

104,051

 

 

883,249

 

 

695,128

 

Noninterest income:
Service charges on deposit accounts

 

4,770

 

 

4,568

 

 

4,562

 

 

18,583

 

 

16,468

 

Other commissions and fees

 

8,231

 

 

8,256

 

 

8,860

 

 

33,258

 

 

38,086

 

Leased equipment income

 

10,730

 

 

17,176

 

 

12,369

 

 

51,109

 

 

63,167

 

Gain (loss) on sale of loans and leases

 

20

 

 

(62

)

 

(3,526

)

 

645

 

 

(161,346

)

Loss on sale of securities

 

(454

)

 

(59,946

)

 

(442,413

)

 

(60,400

)

 

(442,413

)

Dividends and gains on equity investments

 

18

 

 

3,730

 

 

8,138

 

 

7,982

 

 

15,731

 

Warrant income (loss)

 

343

 

 

211

 

 

(173

)

 

408

 

 

(718

)

LOCOM HFS adjustment

 

(3

)

 

(74

)

 

3,175

 

 

215

 

 

(8,461

)

Other income

 

5,334

 

 

10,689

 

 

8,606

 

 

25,345

 

 

31,201

 

Total noninterest income (loss)

 

28,989

 

 

(15,452

)

 

(400,402

)

 

77,145

 

 

(448,285

)

Noninterest expense:
Compensation

 

77,661

 

 

85,585

 

 

89,354

 

 

341,396

 

 

332,353

 

Occupancy

 

15,678

 

 

16,892

 

 

15,925

 

 

67,993

 

 

61,668

 

Information technology and data processing

 

14,546

 

 

14,995

 

 

13,099

 

 

60,418

 

 

51,805

 

Other professional services

 

5,498

 

 

5,101

 

 

2,980

 

 

20,857

 

 

24,623

 

Insurance and assessments

 

11,179

 

 

12,708

 

 

60,016

 

 

70,779

 

 

135,666

 

Intangible asset amortization

 

7,770

 

 

8,485

 

 

4,230

 

 

33,143

 

 

11,419

 

Leased equipment depreciation

 

7,096

 

 

7,144

 

 

7,447

 

 

29,271

 

 

34,243

 

Acquisition, integration and reorganization costs

 

(1,023

)

 

(510

)

 

111,800

 

 

(14,183

)

 

142,633

 

Customer related expense

 

31,672

 

 

34,475

 

 

45,826

 

 

129,471

 

 

124,104

 

Loan expense

 

4,489

 

 

3,994

 

 

4,446

 

 

17,306

 

 

20,458

 

Goodwill impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

1,376,736

 

Other expense

 

6,804

 

 

7,340

 

 

8,515

 

 

35,289

 

 

142,473

 

Total noninterest expense

 

181,370

 

 

196,209

 

 

363,638

 

 

791,740

 

 

2,458,181

 

Earnings (loss) before income taxes

 

70,103

 

 

11,514

 

 

(659,989

)

 

168,654

 

 

(2,211,338

)

Income tax expense (benefit)

 

13,184

 

 

2,730

 

 

(177,034

)

 

41,766

 

 

(312,201

)

Net earnings (loss)

 

56,919

 

 

8,784

 

 

(482,955

)

 

126,888

 

 

(1,899,137

)

Preferred stock dividends

 

9,947

 

 

9,947

 

 

9,947

 

 

39,788

 

 

39,788

 

Net earnings (loss) available to common and equivalent stockholders

$

46,972

 

$

(1,163

)

$

(492,902

)

$

87,100

 

$

(1,938,925

)

 
Basic and diluted earnings (loss) per common share (1)

$

0.28

 

$

(0.01

)

$

(4.55

)

$

0.52

 

$

(22.71

)

Weighted average number of common shares outstanding
Basic

 

168,604

 

 

168,583

 

 

108,290

 

 

168,441

 

 

85,394

 

Diluted

169,732

168,583

108,290

168,684

85,394

(1)

 

Common shares include non-voting common equivalents that are participating securities.

 
BANC OF CALIFORNIA, INC.
SELECTED FINANCIAL DATA
(UNAUDITED)
 
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
Profitability and Other Ratios

2024

2024

2023

2024

2023

Return on average assets (1)

0.67

%

0.10

%

(5.09

)%

0.36

%

(4.71

)%

Adjusted ROAA (1)(2)

0.67

%

0.59

%

(0.66

)%

0.50

%

0.13

%

Pre-tax, pre-provision, pre-goodwill impairment ROAA (1)(2)

0.98

%

0.24

%

(6.46

)%

0.60

%

(1.94

)%

Adjusted pre-tax, pre-provision, pre-goodwill impairment ROAA (1)(2)

0.98

%

0.92

%

(0.27

)%

0.78

%

0.20

%

Return on average equity (1)

6.50

%

1.01

%

(68.49

)%

3.70

%

(63.42

)%

Return on average tangible common equity (1)(2)

7.35

%

0.70

%

(102.87

)%

4.35

%

(35.27

)%

Adjusted return on average tangible common equity (1)(2)

7.35

%

7.30

%

(12.39

)%

6.23

%

1.06

%

Dividend payout ratio (3)

35.71

%

(1000.00

)%

(2.64

)%

76.92

%

(2.33

)%

Average yield on loans and leases (1)

6.01

%

6.18

%

5.82

%

6.11

%

5.92

%

Average yield on interest-earning assets (1)

5.48

%

5.63

%

5.23

%

5.58

%

5.21

%

Average cost of interest-bearing deposits (1)

3.18

%

3.52

%

3.80

%

3.48

%

3.46

%

Average total cost of deposits (1)

2.26

%

2.54

%

2.94

%

2.52

%

2.61

%

Average cost of interest-bearing liabilities (1)

3.48

%

3.80

%

4.51

%

3.79

%

4.14

%

Average total cost of funds (1)

2.55

%

2.82

%

3.68

%

2.84

%

3.34

%

Net interest spread

2.00

%

1.83

%

0.72

%

1.79

%

1.07

%

Net interest margin (1)

3.04

%

2.93

%

1.69

%

2.85

%

1.98

%

Noninterest income to total revenue (4)

10.97

%

(7.13

)%

160.58

%

7.69

%

(150.01

)%

Adjusted noninterest income to adjusted total revenue (2)(4)

11.12

%

16.08

%

21.76

%

12.93

%

18.10

%

Noninterest expense to average total assets (1)

2.15

%

2.27

%

3.83

%

2.24

%

6.10

%

Adjusted noninterest expense to average total assets (1)(2)

2.16

%

2.26

%

2.31

%

2.28

%

2.06

%

Efficiency ratio (2)(5)

65.49

%

68.02

%

127.34

%

72.47

%

124.91

%

Adjusted efficiency ratio (2)(6)

65.49

%

68.02

%

110.38

%

72.02

%

86.20

%

Loans to deposits ratio

87.56

%

87.80

%

84.25

%

87.56

%

84.25

%

Average loans and leases to average deposits

87.05

%

84.05

%

84.34

%

86.42

%

88.32

%

Average investment securities to average total assets

14.01

%

13.55

%

16.01

%

13.26

%

16.94

%

Average stockholders' equity to average total assets

10.39

%

10.03

%

7.43

%

9.71

%

7.43

%

 

(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
December 31, 2024 September 30, 2024 December 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)

$

23,649,271

$

357,303

6.01

%

$

23,803,691

$

369,913

6.18

%

$

23,608,246

$

346,308

5.82

%

Investment securities

 

4,700,742

 

 

37,743

 

3.19

%

 

4,665,549

 

 

34,912

 

2.98

%

 

6,024,737

 

 

41,280

 

2.72

%

Deposits in financial institutions

 

2,474,732

 

 

29,473

 

4.74

%

 

3,106,227

 

 

42,068

 

5.39

%

 

5,791,739

 

 

79,652

 

5.46

%

Total interest-earning assets

 

30,824,745

 

 

424,519

 

5.48

%

 

31,575,467

 

 

446,893

 

5.63

%

 

35,424,722

 

 

467,240

 

5.23

%

Other assets

 

2,737,283

 

 

2,850,718

 

 

2,215,665

 

Total assets

$

33,562,028

 

$

34,426,185

 

$

37,640,387

 

 
Liabilities and Stockholders' Equity:
Interest checking

$

7,659,320

 

 

56,408

 

2.93

%

$

7,644,515

 

 

61,880

 

3.22

%

$

7,296,234

 

 

60,743

 

3.30

%

Money market

 

5,003,118

 

 

31,688

 

2.52

%

 

4,958,777

 

 

32,361

 

2.60

%

 

5,758,074

 

 

44,279

 

3.05

%

Savings

 

1,954,625

 

 

14,255

 

2.90

%

 

2,028,931

 

 

17,140

 

3.36

%

 

1,696,222

 

 

16,446

 

3.85

%

Time

 

4,645,115

 

 

51,734

 

4.43

%

 

5,841,965

 

 

69,605

 

4.74

%

 

6,915,504

 

 

86,292

 

4.95

%

Total interest-bearing deposits

 

19,262,178

 

 

154,085

 

3.18

%

 

20,474,188

 

 

180,986

 

3.52

%

 

21,666,034

 

 

207,760

 

3.80

%

Borrowings

 

1,399,080

 

 

18,993

 

5.40

%

 

1,063,541

 

 

16,970

 

6.35

%

 

5,229,425

 

 

92,474

 

7.02

%

Subordinated debt

 

942,221

 

 

16,156

 

6.82

%

 

940,480

 

 

16,762

 

7.09

%

 

894,219

 

 

15,955

 

7.08

%

Total interest-bearing liabilities

 

21,603,479

 

 

189,234

 

3.48

%

 

22,478,209

 

 

214,718

 

3.80

%

 

27,789,678

 

 

316,189

 

4.51

%

Noninterest-bearing demand deposits

 

7,905,750

 

 

7,846,641

 

 

6,326,511

 

Other liabilities

 

566,635

 

 

648,760

 

 

726,414

 

Total liabilities

 

30,075,864

 

 

30,973,610

 

 

34,842,603

 

Stockholders' equity

 

3,486,164

 

 

3,452,575

 

 

2,797,784

 

Total liabilities and stockholders' equity

$

33,562,028

 

$

34,426,185

 

$

37,640,387

 

Net interest income (1)

$

235,285

 

$

232,175

 

$

151,051

 

Net interest spread

2.00

%

1.83

%

0.72

%

Net interest margin

3.04

%

2.93

%

1.69

%

 
Total deposits (2)

$

27,167,928

 

$

154,085

 

2.26

%

$

28,320,829

 

$

180,986

 

2.54

%

$

27,992,545

 

$

207,760

 

2.94

%

Total funds (3)

$

29,509,229

 

$

189,234

 

2.55

%

$

30,324,850

 

$

214,718

 

2.82

%

$

34,116,189

 

$

316,189

 

3.68

%

 

(1)

Includes net loan discount accretion of $20.7 million, $23.0 million and $15.7 million for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023.

(2)

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.

(3)

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.
AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID
(UNAUDITED)
 
Year Ended
December 31, 2024 December 31, 2023
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Cost Balance Expense Cost
(Dollars in thousands)
Assets:
Loans and leases (1)(2)(3)

$

24,569,650

$

1,501,534

6.11

%

$

25,330,351

$

1,498,701

5.92

%

Investment securities

 

4,686,615

 

 

140,794

 

3.00

%

 

6,827,059

 

 

174,996

 

2.56

%

Deposits in financial institutions

 

3,226,658

 

 

170,377

 

5.28

%

 

5,746,858

 

 

299,647

 

5.21

%

Total interest-earning assets (1)

 

32,482,923

 

 

1,812,705

 

5.58

%

 

37,904,268

 

 

1,973,344

 

5.21

%

Other assets

 

2,850,565

 

 

2,389,112

 

Total assets

$

35,333,488

 

$

40,293,380

 

 
Liabilities and Stockholders' Equity:
Interest checking

$

7,714,920

 

 

240,913

 

3.12

%

$

6,992,888

 

 

220,735

 

3.16

%

Money market

 

5,164,566

 

 

138,176

 

2.68

%

 

6,724,296

 

 

190,027

 

2.83

%

Savings

 

2,005,513

 

 

66,421

 

3.31

%

 

1,051,117

 

 

30,978

 

2.95

%

Time

 

5,714,821

 

 

270,474

 

4.73

%

 

6,840,920

 

 

306,683

 

4.48

%

Total interest-bearing deposits

 

20,599,820

 

 

715,984

 

3.48

%

 

21,609,221

 

 

748,423

 

3.46

%

Borrowings

 

1,838,819

 

 

104,398

 

5.68

%

 

7,068,826

 

 

416,744

 

5.90

%

Subordinated debt

 

939,528

 

 

66,273

 

7.05

%

 

875,621

 

 

58,705

 

6.70

%

Total interest-bearing liabilities

 

23,378,167

 

 

886,655

 

3.79

%

 

29,553,668

 

 

1,223,872

 

4.14

%

Noninterest-bearing demand deposits

 

7,829,976

 

 

7,072,334

 

Other liabilities

 

693,981

 

 

672,950

 

Total liabilities

 

31,902,124

 

 

37,298,952

 

Stockholders' equity

 

3,431,364

 

 

2,994,428

 

Total liabilities and stockholders' equity

$

35,333,488

 

$

40,293,380

 

Net interest income (1)(2)

$

926,050

 

$

749,472

 

Net interest spread (1)

1.79

%

1.07

%

Net interest margin (1)

2.85

%

1.98

%

 
Total deposits (4)

$

28,429,796

 

$

715,984

 

2.52

%

$

28,681,555

 

$

748,423

 

2.61

%

Total funds (5)

$

31,208,143

 

$

886,655

 

2.84

%

$

36,626,002

 

$

1,223,872

 

3.34

%

 

(1)

Tax equivalent.

(2)

Includes net loan discount accretion of $88.0 million and $9.7 million for the year ended December 31, 2024 and 2023, respectively.

(3)

Includes tax-equivalent adjustments of $0.0 million and $2.3 million for the year ended December 31, 2024 and 2023 related to tax-exempt income on loans. The federal statutory tax rate utilized was 21%.

(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

We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”) in this press release, including: tangible assets, tangible common equity, tangible common equity to tangible assets, tangible book value per common share, return on average tangible common equity, adjusted net earnings (loss), adjusted noninterest expense, and economic coverage ratio. These non-GAAP measures are used by management in its analysis of the Company's performance.

Tangible assets is calculated by subtracting goodwill and other intangible assets from total assets. 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.

Adjusted noninterest expense is calculated by subtracting acquisition, integration and reorganization costs from total noninterest expense.

Economic coverage ratio is calculated by dividing the allowance for credit losses adjusted for the impact of the credit-linked notes and unearned credit mark from purchase accounting by loans and leases held for investment, net of deferred fees.

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 to financial measures defined by GAAP.

BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
(UNAUDITED)
 
Tangible Common Equity Ratio December 31, September 30, June 30, March 31, December 31,
and Tangible Book Value Per Share

 

2024

 

 

2024

 

 

2024

 

 

2024

 

 

2023

 

(Dollars in thousands, except per share amounts)

Stockholders' equity

$

3,499,949

 

$

3,496,198

 

$

3,407,848

 

$

3,394,150

 

$

3,390,765

 

Less: Preferred stock

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

Total common equity

 

3,001,433

 

 

2,997,682

 

 

2,909,332

 

 

2,895,634

 

 

2,892,249

 

Less: Goodwill and intangible assets

 

347,465

 

 

357,332

 

 

364,819

 

 

355,853

 

 

364,104

 

Tangible common equity

$

2,653,968

 

$

2,640,350

 

$

2,544,513

 

$

2,539,781

 

$

2,528,145

 

 
Total assets

$

33,542,864

 

$

33,432,613

 

$

35,243,839

 

$

36,073,516

 

$

38,534,064

 

Less: Goodwill and intangible assets

 

347,465

 

 

357,332

 

 

364,819

 

 

355,853

 

 

364,104

 

Tangible assets

$

33,195,399

 

$

33,075,281

 

$

34,879,020

 

$

35,717,663

 

$

38,169,960

 

 
Total stockholders' equity to total assets

 

10.43

%

 

10.46

%

 

9.67

%

 

9.41

%

 

8.80

%

Tangible common equity ratio (1)

 

7.99

%

 

7.98

%

 

7.30

%

 

7.11

%

 

6.62

%

Book value per common share (2)

$

17.78

 

$

17.75

 

$

17.23

 

$

17.13

 

$

17.12

 

Tangible book value per common share (3)

$

15.72

 

$

15.63

 

$

15.07

 

$

15.03

 

$

14.96

 

Common shares outstanding (4)

 

168,825,656

 

 

168,879,566

 

 

168,875,712

 

 

169,013,629

 

 

168,959,063

 

 

(1)

Tangible common equity divided by tangible assets.

(2)

Total common equity divided by common shares outstanding.

(3)

Tangible common equity divided by common shares outstanding.

(4)

Common shares outstanding include non-voting common equivalents that are participating securities.
 
BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
(UNAUDITED)
 
Three Months Ended Year Ended
Return on Average Tangible December 31, September 30, December 31, December 31,
Common Equity ("ROATCE")

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(Dollars in thousands)
Net earnings (loss)

$

56,919

 

$

8,784

 

$

(482,955

)

$

126,888

 

$

(1,899,137

)

 
Earnings (loss) before income taxes

$

70,103

 

$

11,514

 

$

(659,989

)

$

168,654

 

$

(2,211,338

)

Add: Intangible asset amortization

 

7,770

 

 

8,485

 

 

4,230

 

 

33,143

 

 

11,419

 

Add: Goodwill impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

1,376,736

 

Adjusted earnings (loss) before income taxes used for ROATCE

 

77,873

 

 

19,999

 

 

(655,759

)

 

201,797

 

 

(823,183

)

Adjusted income tax expense (benefit) (1)

 

19,281

 

 

5,522

 

 

(92,593

)

 

49,965

 

 

(116,233

)

Adjusted net earnings (loss) for ROATCE

 

58,592

 

 

14,477

 

 

(563,166

)

 

151,832

 

 

(706,950

)

Less: Preferred stock dividends

 

9,947

 

 

9,947

 

 

9,947

 

 

39,788

 

 

39,788

 

Adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE

$

48,645

 

$

4,530

 

$

(573,113

)

$

112,044

 

$

(746,738

)

 
Average stockholders' equity

$

3,486,164

 

$

3,452,575

 

$

2,797,784

 

$

3,431,364

 

$

2,994,428

 

Less: Average goodwill and intangible assets

 

352,907

 

 

361,316

 

 

89,041

 

 

356,960

 

 

379,005

 

Less: Average preferred stock

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

Average tangible common equity

$

2,634,741

 

$

2,592,743

 

$

2,210,227

 

$

2,575,888

 

$

2,116,907

 

 
Return on average equity (2)

 

6.50

%

 

1.01

%

 

(68.49

)%

 

3.70

%

 

(63.42

)%

ROATCE (3)

 

7.35

%

 

0.70

%

 

(102.87

)%

 

4.35

%

 

(35.27

)%

 

(1)

Effective tax rates of 24.76%, 27.61%, and 14.12% used for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Effective tax rates of 24.76% and 14.12% used for the years ended December 31, 2024 and 2023.

(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.
 
BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
(UNAUDITED)
 
Three Months Ended Year Ended
Adjusted Return on Average December 31, September 30, December 31, December 31,
Tangible Common Equity ("ROATCE")

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(Dollars in thousands)
Net earnings (loss)

$

56,919

 

$

8,784

 

$

(482,955

)

$

126,888

 

$

(1,899,137

)

 
Earnings (loss) before income taxes

$

70,103

 

$

11,514

 

$

(659,989

)

$

168,654

 

$

(2,211,338

)

Add: Intangible asset amortization

 

7,770

 

 

8,485

 

 

4,230

 

 

33,143

 

 

11,419

 

Add: Goodwill impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

1,376,736

 

Add: FDIC special assessment

 

-

 

 

-

 

 

32,746

 

 

4,814

 

 

32,746

 

Add: Loss on sale of securities

NA

 

59,946

 

 

442,413

 

 

59,946

 

 

442,413

 

Less: Acquisition, integration, and reorganization costs

NA

 

(510

)

 

111,800

 

 

(510

)

 

142,633

 

Add: Loan fair value loss adjustments

 

-

 

 

-

 

 

-

 

 

-

 

 

170,971

 

Add: Unfunded commitments fair value loss adjustments

 

-

 

 

-

 

 

-

 

 

-

 

 

106,767

 

Adjusted earnings before income taxes used for adjusted ROATCE

 

77,873

 

 

79,435

 

 

(68,800

)

 

266,047

 

 

72,347

 

Adjusted income tax expense (1)

 

19,281

 

 

21,932

 

 

(9,715

)

 

65,873

 

 

10,215

 

Adjusted net earnings for adjusted ROATCE

 

58,592

 

 

57,503

 

 

(59,085

)

 

200,174

 

 

62,132

 

Less: Preferred stock dividends

 

9,947

 

 

9,947

 

 

9,947

 

 

39,788

 

 

39,788

 

Adjusted net earnings available to common and equivalent stockholders for adjusted ROATCE

$

48,645

 

$

47,556

 

$

(69,032

)

$

160,386

 

$

22,344

 

 
Average stockholders' equity

$

3,486,164

 

$

3,452,575

 

$

2,797,784

 

$

3,431,364

 

$

2,994,428

 

Less: Average goodwill and intangible assets

 

352,907

 

 

361,316

 

 

89,041

 

 

356,960

 

 

379,005

 

Less: Average preferred stock

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

 

498,516

 

Average tangible common equity

$

2,634,741

 

$

2,592,743

 

$

2,210,227

 

$

2,575,888

 

$

2,116,907

 

 
Adjusted ROATCE (2)

 

7.35

%

 

7.30

%

 

(12.39

)%

 

6.23

%

 

1.06

%

 

(1)

Effective tax rates of 24.76%, 27.61%, and 14.12% used for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Effective tax rates of 24.76% and 14.12% used for the years ended December 31, 2024 and 2023.

(2)

Annualized adjusted net earnings 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 Year Ended
Available to Common and Equivalent December 31, September 30, December 31, December 31,
Stockholders, Diluted EPS, and ROAA

 

2024

 

 

2024

 

 

2023

 

 

2024

 

 

2023

 

(In thousands, except per share amounts)
Net earnings (loss)

$

56,919

 

$

8,784

 

$

(482,955

)

$

126,888

 

$

(1,899,137

)

 
Earnings (loss) before income taxes

$

70,103

 

$

11,514

 

$

(659,989

)

$

168,654

 

$

(2,211,338

)

Add: FDIC special assessment

 

-

 

 

-

 

 

32,746

 

 

4,814

 

 

32,746

 

Add: Loss on sale of securities

NA

 

59,946

 

 

442,413

 

 

59,946

 

 

442,413

 

Less: Acquisition, integration, and reorganization costs

NA

 

(510

)

 

111,800

 

 

(510

)

 

142,633

 

Add: Loan fair value loss adjustments

 

-

 

 

-

 

 

-

 

 

-

 

 

170,971

 

Add: Unfunded commitments fair value loss adjustments

 

-

 

 

-

 

 

-

 

 

-

 

 

106,767

 

Add: Goodwill impairment

 

-

 

 

-

 

 

-

 

 

-

 

 

1,376,736

 

Adjusted earnings (loss) before income taxes

 

70,103

 

 

70,950

 

 

(73,030

)

 

232,904

 

 

60,928

 

Adjusted income tax expense (benefit) (1)

 

13,184

 

 

19,589

 

 

(10,312

)

 

57,667

 

 

8,603

 

Adjusted net earnings (loss)

 

56,919

 

 

51,361

 

 

(62,718

)

 

175,237

 

 

52,325

 

Less: Preferred stock dividends

 

(9,947

)

 

(9,947

)

 

(9,947

)

 

(39,788

)

 

(39,788

)

Adjusted net earnings (loss) available to common and equivalent stockholders

$

46,972

 

$

41,414

 

$

(72,665

)

$

135,449

 

$

12,537

 

 
Weighted average common shares outstanding

 

169,732

 

 

168,583

 

 

108,290

 

 

168,684

 

 

85,394

 

Diluted (loss) earnings per common share

$

0.28

 

$

(0.01

)

$

(4.55

)

$

0.52

 

$

(22.71

)

Adjusted diluted earnings per common share (2)

$

0.28

 

$

0.25

 

$

(0.67

)

$

0.80

 

$

0.15

 

 
Average total assets

$

33,562,028

 

$

34,426,185

 

$

37,640,387

 

$

35,333,488

 

$

40,293,380

 

Return on average assets ("ROAA") (3)

 

0.67

%

 

0.10

%

 

(5.09

)%

 

0.36

%

 

(4.71

)%

Adjusted ROAA (4)

 

0.67

%

 

0.59

%

 

(0.66

)%

 

0.50

%

 

0.13

%

 

(1)

Effective tax rates of 24.76%, 27.61%, and 14.12% used for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively. Effective tax rates of 24.76% and 14.12% used for the years ended December 31, 2024 and 2023.

(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)
 
Three Months Ended Year Ended
December 31, September 30, December 31, December 31,
Adjusted Noninterest Expense

 

2024

 

 

2024

 

 

2023(1)

 

 

2024

 

 

2023

 

(Dollars in thousands)
Noninterest expense

$

181,370

$

196,209

$

363,638

 

$

791,740

$

2,458,181

 

Less: Acquisition, integration, and reorganization costs

 

1,023

 

 

510

 

 

(111,800

)

 

14,183

 

 

(142,633

)

Adjusted noninterest expense

$

182,393

 

$

196,719

 

$

251,838

 

$

805,923

 

$

2,315,548

 

 
(1) Does not reflect normalization to include combined company expenses for the full quarter and incentive compensation adjusted to target.
BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
(UNAUDITED)
December 31,
Economic Coverage Ratio

 

2024

 

(Dollars in thousands)
 
Allowance for credit losses ("ACL")

$

268,431

 

Add: Unearned credit mark from purchase accounting (1)

 

22,473

 

Add: Credit-linked notes (2)

 

116,991

 

Adjusted allowance for credit losses

$

407,895

 

 
Loans and leases held for investment, net of deferred fees

$

23,781,663

 

 
ACL to loans and leases held for investment (3)

 

1.13

%

 
Economic coverage ratio (4)

 

1.72

%

 

(1)

Unearned credit mark from purchase accounting estimated by using the same pro rata split between the credit and yield marks associated with the non-PCD loans (purchased loans without credit deterioration at the time of the purchase) at the time of the acquisition.

(2)

Credit-linked notes loss coverage equal to 5% of the unpaid principal balance of the pledged loans.

(3)

Allowance for credit losses divided by loans and leases held for investment, net of deferred fees.

(4)

Adjusted allowance for credit losses divided by loans and leases held for investment, net of deferred fees.

 

Investor Relations Inquiries:

Banc of California, Inc.

(855) 361-2262

Jared Wolff, (310) 424-1230

Joe Kauder, (310) 844-5224

Ann DeVries, (646) 376-7011

Media Contact:

Debora Vrana, Banc of California

(213) 533-3122

Deb.Vrana@bancofcal.com

Source: Banc of California, Inc.

FAQ

What was BANC's earnings per share in Q4 2024?

Banc of California reported earnings of $0.28 per diluted share in Q4 2024.

How much did BANC's net interest margin expand in Q4 2024?

BANC's net interest margin expanded by 11 basis points to 3.04% in Q4 2024 compared to Q3 2024.

What was BANC's loan growth in Q4 2024?

Total loans grew 4.3% annualized or $254 million to $23.8 billion in Q4 2024.

How much did BANC reduce noninterest expenses in Q4 2024?

Noninterest expenses declined 7.6% to $181.4 million in Q4 2024 compared to Q3 2024.

What was BANC's CET1 capital ratio at the end of 2024?

BANC's CET1 capital ratio was 10.55% at the end of 2024, up 9 basis points from Q3 2024.

Stock BANC logo
Banc of California, Inc.

NYSE:BANC

BANC Rankings

#1747 Ranked by Market Cap
#1232 Ranked by Dividends

BANC Latest News

Jan 14, 2025
Banc of California Creates Charitable Fund and Commits $1 Million to Support Southern California Communities Affected by Wildfires
Jan 3, 2025
Banc of California Announces Schedule of Fourth Quarter 2024 Earnings Release and Conference Call
Nov 25, 2024
Banc of California Renews Commitment to Alliance for Southern California Innovation
Nov 8, 2024
Banc of California, Inc. Announces Quarterly Dividends
Oct 22, 2024
Banc of California, Inc. Reports Third Quarter 2024 Financial Results Which Include Balance Sheet Repositioning

BANC Stock Data

2.73B
133.12M
1.05%
98.68%
5.61%
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