Banc of California, Inc. Reports Second Quarter 2024 Financial Results
Banc of California (NYSE: BANC) reported its Q2 2024 financial results with net earnings of $20.4 million or $0.12 per share, consistent with Q1 2024 earnings. Key highlights include a 3% increase in average noninterest-bearing deposits, a net interest margin of 2.80% (up by 14 basis points), and a reduction in the average total cost of deposits to 2.60%. Liquidity and capital ratios improved significantly following the sale of $1.95 billion CIVIC loans. The CET1 ratio increased to 10.27%, and book value per share rose to $17.23.
Key financial metrics include total revenue of $259.3 million and net interest income of $229.5 million. Noninterest income decreased to $29.8 million while noninterest expense dropped to $203.6 million. The provision for credit losses increased to $11.0 million. The company's strong capital position is reflected in a total risk-based capital ratio of 16.57%.
- Net earnings of $20.4 million or $0.12 per share.
- Average noninterest-bearing deposits increased by 3%.
- Net interest margin increased by 14 basis points to 2.80%.
- Book value per share increased to $17.23.
- High liquidity with available $16.9 billion.
- Total risk-based capital ratio of 16.57%.
- Noninterest income decreased by $4.0 million to $29.8 million.
- Provision for credit losses increased to $11.0 million.
- Total revenue decreased slightly compared to the previous quarter.
Banc of California has reported steady earnings per diluted share of $0.12 and net earnings of $20.4 million for Q2 2024, consistent with Q1 2024. While there hasn't been a dramatic increase in earnings, several key metrics indicate financial health and potential for future growth. Notably, the net interest margin expanded to 2.80%, an improvement from 2.66% in the previous quarter. This suggests effective management of interest-earning assets and liabilities, important in a challenging rate environment.
The decrease in nonperforming assets to 0.37% of total assets and the significant loan sale improving liquidity and capital ratios underscore the bank's proactive risk management. The CET1 ratio at 10.27% and strong liquidity position further reinforce the bank's stability. These factors, coupled with a book value per share increase to $17.23, signal a robust financial standing, making the stock a stable choice for long-term investors.
The market response to Banc of California's Q2 2024 results is likely to be cautiously optimistic. The 3% increase in noninterest-bearing deposits signals growing customer trust and a healthy deposit base. The strategic sale of $1.95 billion in CIVIC loans reflects a focus on capital optimization, likely enhancing the company's market competitiveness. Moreover, reducing the total cost of deposits and funds while increasing the net interest margin shows effective cost management strategies, which could drive future profitability.
However, the slight decline in total deposits by $88 million from Q1 to Q2 2024 might raise some concerns. Despite this, the increase in brokered time deposits helps mitigate the impact. Investors may view these moves as part of a broader strategy to stabilize and maximize returns in a fluctuating market. Overall, these financial maneuvers position Banc of California well in the competitive banking landscape.
Banc of California's ability to maintain strong capital ratios, such as a Total risk-based capital ratio of 16.57% and a Tier 1 leverage ratio of 9.51%, is commendable. These figures are well above regulatory requirements, indicating the bank's solid capital base and prudent risk management. The successful completion of the core systems conversion further enhances operational efficiencies across the platform, potentially reducing long-term costs and improving customer service.
The strategic divestment of non-core CIVIC loans and the subsequent liquidity boost highlights a focused approach to balance sheet management. This move is likely to free up resources for more profitable ventures while maintaining stringent asset quality controls. The ongoing focus on optimizing the business for sustainable growth aligns with industry trends towards consolidation and efficiency.
Overall, Banc of California's latest financial results and strategic initiatives paint a picture of a well-managed institution poised for steady growth amidst a challenging economic environment.
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Banc of California, Inc. (NYSE: BANC) (“Banc of California”), the parent company of wholly-owned subsidiary Banc of California (the “Bank”), today reported financial results for the second quarter ended June 30, 2024. The Company recorded net earnings available to common and equivalent stockholders of
Second quarter highlights include:
-
Average noninterest-bearing deposits higher by
, or$196.5 million 3% , in the second quarter. -
Net interest margin of
2.80% , an increase of 14 basis points from2.66% in the first quarter. -
Average total cost of deposits decreased by 6 basis points to
2.60% for the second quarter compared to2.66% in the first quarter and average total cost of funds decreased by 7 basis points to2.95% for the second quarter compared to3.02% in the first quarter. -
High liquidity levels, with available on-balance sheet liquidity and unused borrowing capacity of
at June 30, 2024, which was 2.5 times greater than uninsured and uncollateralized deposits.$16.9 billion -
Transferred
of CIVIC business-purpose residential loans with a fair value of$1.95 billion to held for sale at June 30, 2024. Sale closed on July 18, 2024, resulting in immediate increases in liquidity and capital ratios.$1.91 billion -
Nonperforming assets decreased to
0.37% of total assets at June 30, 2024, compared to0.44% at March 31, 2024, primarily due to the loans transferred to held for sale. -
Strong capital ratios well above the regulatory thresholds for "well capitalized" banks at June 30, 2024, including an estimated
16.57% Total risk-based capital ratio,12.62% Tier 1 capital ratio,10.27% CET1 capital ratio, and9.51% Tier 1 leverage ratio. -
Book value per share increased to
and tangible book value per share(1) increased to$17.23 .$15.07 - Successful core systems conversion completed on July 21, 2024.
(1) |
Non-GAAP measure; refer to section 'Non-GAAP Measures' |
Subsequent to quarter-end, Banc of California closed on the sale of
Jared Wolff, President & CEO of Banc of California, commented, “During the second quarter, we continued to make solid progress executing on our plan, strengthening our franchise, and improving our core earnings power. We further reduced our cost of funds, expanded the net interest margin, and grew average noninterest-bearing deposits in a rate environment that has remained challenging. We are on track with respect to controllable cost savings and are focused on building a valuable franchise for the long term with an enviable deposit base and core franchise.”
Mr. Wolff continued, “This is a transformational year for our company and we will remain focused on optimizing our business to drive long-term sustainable growth and profitability. Our recently completed sale of
Mr. Wolff added, “Thanks to the tireless efforts and dedication of our team, we successfully completed our core system conversion this past weekend. We are now operating on a single system across our entire platform and we are now able to serve our clients in all our markets as the combined Banc of California.”
INCOME STATEMENT HIGHLIGHTS |
||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||
June 30, |
March 31, |
June 30, |
June 30, |
|||||||||||||||||
Summary Income Statement | 2024 |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||
(In thousands) |
||||||||||||||||||||
Total interest income | $ |
462,589 |
|
$ |
478,704 |
|
$ |
539,888 |
|
$ |
941,293 |
|
$ |
1,057,676 |
|
|||||
Total interest expense |
|
233,101 |
|
|
249,602 |
|
|
353,812 |
|
|
482,703 |
|
|
592,328 |
|
|||||
Net interest income |
|
229,488 |
|
|
229,102 |
|
|
186,076 |
|
|
458,590 |
|
|
465,348 |
|
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Gain (loss) on sale of loans |
|
1,135 |
|
|
(448 |
) |
|
(158,881 |
) |
|
687 |
|
|
(155,919 |
) |
|||||
Other noninterest income |
|
28,657 |
|
|
34,264 |
|
|
30,799 |
|
|
62,921 |
|
|
64,228 |
|
|||||
Total noninterest income (loss) |
|
29,792 |
|
|
33,816 |
|
|
(128,082 |
) |
|
63,608 |
|
|
(91,691 |
) |
|||||
Total revenue |
|
259,280 |
|
|
262,918 |
|
|
57,994 |
|
|
522,198 |
|
|
373,657 |
|
|||||
Goodwill impairment |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Acquisition, integration and reorganization costs |
|
(12,650 |
) |
|
- |
|
|
12,394 |
|
|
(12,650 |
) |
|
20,908 |
|
|||||
Other noninterest expense |
|
216,293 |
|
|
210,518 |
|
|
308,043 |
|
|
426,811 |
|
|
495,796 |
|
|||||
Total noninterest expense |
|
203,643 |
|
|
210,518 |
|
|
320,437 |
|
|
414,161 |
|
|
1,893,440 |
|
|||||
Earnings (loss) before income taxes |
|
44,637 |
|
|
42,400 |
|
|
(264,443 |
) |
|
87,037 |
|
|
(1,524,783 |
) |
|||||
Income tax expense (benefit) |
|
14,304 |
|
|
11,548 |
|
|
(67,029 |
) |
|
25,852 |
|
|
(131,945 |
) |
|||||
Net earnings (loss) |
|
30,333 |
|
|
30,852 |
|
|
(197,414 |
) |
|
61,185 |
|
|
(1,392,838 |
) |
|||||
Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Net earnings (loss) available to common and equivalent stockholders | $ |
20,386 |
|
$ |
20,905 |
|
$ |
(207,361 |
) |
$ |
41,291 |
|
$ |
(1,412,732 |
) |
Net Interest Income
Q2-2024 vs Q1-2024
Net interest income increased by
Average interest-earning assets decreased by
The average yield on interest-earning assets increased by 9 basis points to
The average yield on loans and leases increased by 10 basis points to
The average total cost of funds decreased by 7 basis points to
YTD June 30, 2024 vs YTD June 30, 2023
Net interest income decreased by
Average interest-earning assets decreased by
The average yield on interest-earning assets increased by 29 basis points to
The average yield on loans and leases increased by 2 basis points to
The average total cost of funds decreased by 8 basis points to
Provision For Credit Losses
Q2-2024 vs Q1-2024
The provision for credit losses was
YTD June 30, 2024 vs YTD June 30, 2023
The provision for credit losses increased by
Noninterest Income
Q2-2024 vs Q1-2024
Noninterest income decreased by
YTD June 30, 2024 vs YTD June 30, 2023
Noninterest income increased by
Noninterest Expense
Q2-2024 vs Q1-2024
Noninterest expense decreased by
YTD June 30, 2024 vs YTD June 30, 2023
Noninterest expense decreased by
Income Taxes
Q2-2024 vs Q1-2024
Income tax expense of
YTD June 30, 2024 vs YTD June 30, 2023
Income tax expense of
BALANCE SHEET HIGHLIGHTS |
||||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
Increase (Decrease) |
||||||||||||||
Selected Balance Sheet Items | 2024 |
|
2024 |
|
2023 |
|
QoQ |
|
YoY |
|||||||||||
(In thousands) |
||||||||||||||||||||
Cash and cash equivalents | $ |
2,698,810 |
|
$ |
3,085,228 |
|
$ |
6,698,147 |
|
$ |
(386,418 |
) |
$ |
(3,999,337 |
) |
|||||
Securities available-for-sale |
|
2,244,031 |
|
|
2,286,682 |
|
|
4,708,519 |
|
|
(42,651 |
) |
|
(2,464,488 |
) |
|||||
Securities held-to-maturity |
|
2,296,708 |
|
|
2,291,984 |
|
|
2,278,202 |
|
|
4,724 |
|
|
18,506 |
|
|||||
Loans held for sale |
|
1,935,455 |
|
|
80,752 |
|
|
478,146 |
|
|
1,854,703 |
|
|
1,457,309 |
|
|||||
Loan and leases held for investment, net of deferred fees |
|
23,228,909 |
|
|
25,473,022 |
|
|
22,258,210 |
|
|
(2,244,113 |
) |
|
970,699 |
|
|||||
Total assets |
|
35,243,839 |
|
|
36,073,516 |
|
|
38,337,250 |
|
|
(829,677 |
) |
|
(3,093,411 |
) |
|||||
Noninterest-bearing deposits | $ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
6,055,358 |
|
$ |
(8,601 |
) |
$ |
1,769,649 |
|
|||||
Total deposits |
|
28,804,450 |
|
|
28,892,407 |
|
|
27,897,083 |
|
|
(87,957 |
) |
|
907,367 |
|
|||||
Borrowings |
|
1,440,875 |
|
|
2,139,498 |
|
|
6,357,338 |
|
|
(698,623 |
) |
|
(4,916,463 |
) |
|||||
Total liabilities |
|
31,835,991 |
|
|
32,679,366 |
|
|
35,804,055 |
|
|
(843,375 |
) |
|
(3,968,064 |
) |
|||||
Total stockholders' equity |
|
3,407,848 |
|
|
3,394,150 |
|
|
2,533,195 |
|
|
13,698 |
|
|
874,653 |
|
Securities
The balance of securities held-to-maturity (“HTM”) remained consistent through the second quarter and totaled
Securities available-for-sale (“AFS”) decreased by
Loans and Leases
The following table sets forth the composition, by loan category, of our loan and lease portfolio held for investment, net of deferred fees, as of the dates indicated:
Composition of Loans and Leases |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Commercial | $ |
4,722,585 |
|
$ |
4,896,544 |
|
$ |
5,026,497 |
|
$ |
3,526,308 |
|
$ |
3,610,320 |
|
|||||
Multi-family |
|
5,984,930 |
|
|
6,121,472 |
|
|
6,025,179 |
|
|
5,279,659 |
|
|
5,304,544 |
|
|||||
Other residential |
|
2,866,085 |
|
|
4,949,383 |
|
|
5,060,309 |
|
|
5,228,524 |
|
|
5,373,178 |
|
|||||
Total real estate mortgage |
|
13,573,600 |
|
|
15,967,399 |
|
|
16,111,985 |
|
|
14,034,491 |
|
|
14,288,042 |
|
|||||
Real estate construction and land: | ||||||||||||||||||||
Commercial |
|
784,166 |
|
|
775,021 |
|
|
759,585 |
|
|
465,266 |
|
|
415,997 |
|
|||||
Residential |
|
2,573,431 |
|
|
2,470,333 |
|
|
2,399,684 |
|
|
2,272,271 |
|
|
2,049,526 |
|
|||||
Total real estate construction and land |
|
3,357,597 |
|
|
3,245,354 |
|
|
3,159,269 |
|
|
2,737,537 |
|
|
2,465,523 |
|
|||||
Total real estate |
|
16,931,197 |
|
|
19,212,753 |
|
|
19,271,254 |
|
|
16,772,028 |
|
|
16,753,565 |
|
|||||
Commercial: | ||||||||||||||||||||
Asset-based |
|
1,968,713 |
|
|
2,061,016 |
|
|
2,189,085 |
|
|
2,287,893 |
|
|
2,357,098 |
|
|||||
Venture capital |
|
1,456,122 |
|
|
1,513,641 |
|
|
1,446,362 |
|
|
1,464,160 |
|
|
1,723,476 |
|
|||||
Other commercial |
|
2,446,974 |
|
|
2,245,910 |
|
|
2,129,860 |
|
|
1,002,377 |
|
|
1,014,212 |
|
|||||
Total commercial |
|
5,871,809 |
|
|
5,820,567 |
|
|
5,765,307 |
|
|
4,754,430 |
|
|
5,094,786 |
|
|||||
Consumer |
|
425,903 |
|
|
439,702 |
|
|
453,126 |
|
|
394,488 |
|
|
409,859 |
|
|||||
Total loans and leases held for investment, net of deferred fees | $ |
23,228,909 |
|
$ |
25,473,022 |
|
$ |
25,489,687 |
|
$ |
21,920,946 |
|
$ |
22,258,210 |
|
|||||
Total unfunded loan commitments | $ |
5,256,473 |
|
$ |
5,482,672 |
|
$ |
5,578,907 |
|
$ |
5,289,221 |
|
$ |
5,845,375 |
|
|||||
Composition as % of Total Loans and Leases |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
Real estate mortgage: | ||||||||||||||||||||
Commercial |
|
20 |
% |
|
19 |
% |
|
20 |
% |
|
16 |
% |
|
16 |
% |
|||||
Multi-family |
|
26 |
% |
|
24 |
% |
|
23 |
% |
|
24 |
% |
|
24 |
% |
|||||
Other residential |
|
12 |
% |
|
19 |
% |
|
20 |
% |
|
24 |
% |
|
24 |
% |
|||||
Total real estate mortgage |
|
58 |
% |
|
62 |
% |
|
63 |
% |
|
64 |
% |
|
64 |
% |
|||||
Real estate construction and land: | ||||||||||||||||||||
Commercial |
|
4 |
% |
|
3 |
% |
|
3 |
% |
|
2 |
% |
|
2 |
% |
|||||
Residential |
|
11 |
% |
|
10 |
% |
|
9 |
% |
|
10 |
% |
|
9 |
% |
|||||
Total real estate construction and land |
|
15 |
% |
|
13 |
% |
|
12 |
% |
|
12 |
% |
|
11 |
% |
|||||
Total real estate |
|
73 |
% |
|
75 |
% |
|
75 |
% |
|
76 |
% |
|
75 |
% |
|||||
Commercial: | ||||||||||||||||||||
Asset-based |
|
8 |
% |
|
8 |
% |
|
9 |
% |
|
10 |
% |
|
11 |
% |
|||||
Venture capital |
|
6 |
% |
|
6 |
% |
|
6 |
% |
|
7 |
% |
|
8 |
% |
|||||
Other commercial |
|
11 |
% |
|
9 |
% |
|
8 |
% |
|
5 |
% |
|
4 |
% |
|||||
Total commercial |
|
25 |
% |
|
23 |
% |
|
23 |
% |
|
22 |
% |
|
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, decreased by
Deposits and Client Investment Funds
The following table sets forth the composition of our deposits at the dates indicated:
Composition of Deposits |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Noninterest-bearing checking | $ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
|||||
Interest-bearing: | ||||||||||||||||||||
Checking |
|
7,309,833 |
|
|
7,836,097 |
|
|
7,808,764 |
|
|
7,038,808 |
|
|
7,112,807 |
|
|||||
Money market |
|
4,837,025 |
|
|
5,020,110 |
|
|
6,187,889 |
|
|
5,424,347 |
|
|
5,678,323 |
|
|||||
Savings |
|
2,040,461 |
|
|
2,016,398 |
|
|
1,997,989 |
|
|
1,441,700 |
|
|
897,277 |
|
|||||
Time deposits: | ||||||||||||||||||||
Non-brokered |
|
2,758,067 |
|
|
2,761,836 |
|
|
3,139,270 |
|
|
3,038,005 |
|
|
2,725,265 |
|
|||||
Brokered |
|
4,034,057 |
|
|
3,424,358 |
|
|
3,493,603 |
|
|
4,076,788 |
|
|
5,428,053 |
|
|||||
Total time deposits |
|
6,792,124 |
|
|
6,186,194 |
|
|
6,632,873 |
|
|
7,114,793 |
|
|
8,153,318 |
|
|||||
Total interest-bearing |
|
20,979,443 |
|
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|||||
Total deposits | $ |
28,804,450 |
|
$ |
28,892,407 |
|
$ |
30,401,769 |
|
$ |
26,598,681 |
|
$ |
27,897,083 |
|
|||||
Composition as % of Total Deposits |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
Noninterest-bearing checking |
|
27 |
% |
|
27 |
% |
|
26 |
% |
|
21 |
% |
|
22 |
% |
|||||
Interest-bearing: | ||||||||||||||||||||
Checking |
|
25 |
% |
|
27 |
% |
|
26 |
% |
|
27 |
% |
|
26 |
% |
|||||
Money market |
|
17 |
% |
|
17 |
% |
|
20 |
% |
|
20 |
% |
|
20 |
% |
|||||
Savings |
|
7 |
% |
|
7 |
% |
|
6 |
% |
|
5 |
% |
|
3 |
% |
|||||
Time deposits: | ||||||||||||||||||||
Non-brokered |
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
12 |
% |
|
10 |
% |
|||||
Brokered |
|
14 |
% |
|
12 |
% |
|
12 |
% |
|
15 |
% |
|
19 |
% |
|||||
Total time deposits |
|
24 |
% |
|
22 |
% |
|
22 |
% |
|
27 |
% |
|
29 |
% |
|||||
Total interest-bearing |
|
73 |
% |
|
73 |
% |
|
74 |
% |
|
79 |
% |
|
78 |
% |
|||||
Total deposits |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
Total deposits decreased by
Average noninterest-bearing checking totaled
Uninsured and uncollateralized deposits of
In addition to deposit products, we also offer alternative, non-depository corporate treasury solutions for select clients to invest excess liquidity. These alternative options include investments managed by BofCal Asset Management Inc. (“BAM”), our registered investment advisor subsidiary, and third-party sweep products. Total off-balance sheet client investment funds were
Borrowings
Borrowings decreased by approximately
Equity
During the second quarter, total stockholders’ equity increased by
At June 30, 2024, book value per common share increased to
(1) |
Non-GAAP measures; refer to section 'Non-GAAP Measures' |
CAPITAL AND LIQUIDITY
Capital ratios remain strong with total risk-based capital at
The following table sets forth our regulatory capital ratios as of the dates indicated:
June 30, |
|
March 31, |
|
December 31, |
|
September 30, |
|
June 30, |
|||||||
Capital Ratios | 2024 (1) |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
||||||
Banc of California, Inc. | |||||||||||||||
Total risk-based capital ratio | 16.57 |
% |
16.40 |
% |
16.43 |
% |
17.83 |
% |
17.61 |
% |
|||||
Tier 1 risk-based capital ratio | 12.62 |
% |
12.38 |
% |
12.44 |
% |
13.84 |
% |
13.70 |
% |
|||||
Common equity tier 1 capital ratio | 10.27 |
% |
10.09 |
% |
10.14 |
% |
11.23 |
% |
11.16 |
% |
|||||
Tier 1 leverage capital ratio | 9.51 |
% |
9.12 |
% |
9.00 |
% |
8.65 |
% |
7.76 |
% |
|||||
Banc of California | |||||||||||||||
Total risk-based capital ratio | 16.19 |
% |
15.88 |
% |
15.75 |
% |
16.37 |
% |
16.07 |
% |
|||||
Tier 1 risk-based capital ratio | 13.77 |
% |
13.34 |
% |
13.27 |
% |
13.72 |
% |
13.48 |
% |
|||||
Common equity tier 1 capital ratio | 13.77 |
% |
13.34 |
% |
13.27 |
% |
13.72 |
% |
13.48 |
% |
|||||
Tier 1 leverage capital ratio | 10.38 |
% |
9.84 |
% |
9.62 |
% |
8.57 |
% |
7.62 |
% |
____________________ | ||
(1) |
Capital information for June 30, 2024 is preliminary. |
At June 30, 2024, immediately available cash and cash equivalents were
CREDIT QUALITY |
||||||||||||||||||||
Asset Quality Information and Ratios |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Delinquent loans and leases held for investment: | ||||||||||||||||||||
30 to 89 days delinquent | $ |
27,962 |
|
$ |
178,421 |
|
$ |
113,307 |
|
$ |
49,970 |
|
$ |
57,428 |
|
|||||
90+ days delinquent |
|
55,792 |
|
|
57,573 |
|
|
30,881 |
|
|
77,327 |
|
|
62,322 |
|
|||||
Total delinquent loans and leases | $ |
83,754 |
|
$ |
235,994 |
|
$ |
144,188 |
|
$ |
127,297 |
|
$ |
119,750 |
|
|||||
Total delinquent loans and leases to loans and leases held for investment |
|
0.36 |
% |
|
0.93 |
% |
|
0.57 |
% |
|
0.58 |
% |
|
0.54 |
% |
|||||
Nonperforming assets, excluding loans held for sale: | ||||||||||||||||||||
Nonaccrual loans and leases | $ |
117,070 |
|
$ |
145,785 |
|
$ |
62,527 |
|
$ |
125,396 |
|
$ |
104,886 |
|
|||||
90+ days delinquent loans and still accruing |
|
- |
|
|
- |
|
|
11,750 |
|
|
- |
|
|
- |
|
|||||
Total nonperforming loans and leases ("NPLs") |
|
117,070 |
|
|
145,785 |
|
|
74,277 |
|
|
125,396 |
|
|
104,886 |
|
|||||
Foreclosed assets, net |
|
13,302 |
|
|
12,488 |
|
|
7,394 |
|
|
6,829 |
|
|
8,426 |
|
|||||
Total nonperforming assets ("NPAs") | $ |
130,372 |
|
$ |
158,273 |
|
$ |
81,671 |
|
$ |
132,225 |
|
$ |
113,312 |
|
|||||
Allowance for loan and lease losses | $ |
247,762 |
|
$ |
291,503 |
|
$ |
281,687 |
|
$ |
222,297 |
|
$ |
219,234 |
|
|||||
Allowance for loan and lease losses to NPLs |
|
211.64 |
% |
|
199.95 |
% |
|
379.24 |
% |
|
177.28 |
% |
|
209.02 |
% |
|||||
NPLs to loans and leases held for investment |
|
0.50 |
% |
|
0.57 |
% |
|
0.29 |
% |
|
0.57 |
% |
|
0.47 |
% |
|||||
NPAs to total assets |
|
0.37 |
% |
|
0.44 |
% |
|
0.21 |
% |
|
0.36 |
% |
|
0.30 |
% |
At June 30, 2024, total delinquent loans and leases were
At June 30, 2024, nonperforming assets were
At June 30, 2024, nonperforming loans were
Nonperforming loans and leases as a percentage of loans and leases held for investment decreased to
ALLOWANCE FOR CREDIT LOSSES - LOANS |
||||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
||||||||||||||
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 | $ |
291,503 |
|
$ |
281,687 |
|
$ |
210,055 |
|
$ |
281,687 |
|
$ |
200,732 |
|
|||||
Charge-offs |
|
(58,070 |
) |
|
(5,014 |
) |
|
(31,708 |
) |
|
(63,084 |
) |
|
(42,105 |
) |
|||||
Recoveries |
|
2,329 |
|
|
3,830 |
|
|
887 |
|
|
6,159 |
|
|
2,107 |
|
|||||
Net charge-offs |
|
(55,741 |
) |
|
(1,184 |
) |
|
(30,821 |
) |
|
(56,925 |
) |
|
(39,998 |
) |
|||||
Provision for loan losses |
|
12,000 |
|
|
11,000 |
|
|
40,000 |
|
|
23,000 |
|
|
58,500 |
|
|||||
Balance at end of period | $ |
247,762 |
|
$ |
291,503 |
|
$ |
219,234 |
|
$ |
247,762 |
|
$ |
219,234 |
|
|||||
Reserve for unfunded loan commitments ("RUC"): | ||||||||||||||||||||
Balance at beginning of period | $ |
28,571 |
|
$ |
29,571 |
|
$ |
75,571 |
|
$ |
29,571 |
|
$ |
91,071 |
|
|||||
(Negative provision) provision for credit losses |
|
(1,000 |
) |
|
(1,000 |
) |
|
(38,000 |
) |
|
(2,000 |
) |
|
(53,500 |
) |
|||||
Balance at end of period | $ |
27,571 |
|
$ |
28,571 |
|
$ |
37,571 |
|
$ |
27,571 |
|
$ |
37,571 |
|
|||||
Allowance for credit losses ("ACL") - Loans: | ||||||||||||||||||||
Balance at beginning of period | $ |
320,074 |
|
$ |
311,258 |
|
$ |
285,626 |
|
$ |
311,258 |
|
$ |
291,803 |
|
|||||
Charge-offs |
|
(58,070 |
) |
|
(5,014 |
) |
|
(31,708 |
) |
|
(63,084 |
) |
|
(42,105 |
) |
|||||
Recoveries |
|
2,329 |
|
|
3,830 |
|
|
887 |
|
|
6,159 |
|
|
2,107 |
|
|||||
Net charge-offs |
|
(55,741 |
) |
|
(1,184 |
) |
|
(30,821 |
) |
|
(56,925 |
) |
|
(39,998 |
) |
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Balance at end of period | $ |
275,333 |
|
$ |
320,074 |
|
$ |
256,805 |
|
$ |
275,333 |
|
$ |
256,805 |
|
|||||
ALLL to loans and leases held for investment |
|
1.07 |
% |
|
1.14 |
% |
|
0.98 |
% |
|
1.07 |
% |
|
0.98 |
% |
|||||
ACL to loans and leases held for investment |
|
1.19 |
% |
|
1.26 |
% |
|
1.15 |
% |
|
1.19 |
% |
|
1.15 |
% |
|||||
ACL to NPLs |
|
235.19 |
% |
|
219.55 |
% |
|
244.84 |
% |
|
235.19 |
% |
|
244.84 |
% |
|||||
ACL to NPAs |
|
211.19 |
% |
|
202.23 |
% |
|
226.64 |
% |
|
211.19 |
% |
|
226.64 |
% |
|||||
Annualized net charge-offs to average loans and leases |
|
0.89 |
% |
|
0.02 |
% |
|
0.46 |
% |
|
0.45 |
% |
|
0.29 |
% |
The allowance for credit losses, which includes the reserve for unfunded loan commitments, totaled
Net charge-offs were
Conference Call
The Company will host a conference call to discuss its second quarter 2024 financial results at 10:00 a.m. Pacific Time (PT) on Tuesday, July 23, 2024. Interested parties are welcome to attend the conference call by dialing (888) 317-6003 and referencing event code 3283432. 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 1656401.
About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) is a bank holding company with over
Forward-Looking Statements
This press release includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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 Banc of California, Inc. (the “Company”) with the Securities and Exchange Commission (“SEC”). The Company undertakes no obligation to revise or publicly release any revision or update to these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made, except as required by law.
Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing inflation; (iii) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base, including among our venture banking clients, or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; and in the case of our recent acquisition of PacWest Bancorp (“PacWest”), reputational risk, regulatory risk and potential adverse reactions of the Company's or PacWest's customers, suppliers, vendors, employees or other business partners; (x) results of examinations by regulatory authorities of the Company and the possibility that any such regulatory authority may, among other things, limit our business activities, restrict our ability to invest in certain assets, refrain from issuing an approval or non-objection to certain capital or other actions, increase our allowance for credit losses, result in write-downs of asset values, restrict our ability or that of our bank subsidiary to pay dividends, or impose fines, penalties or sanctions; (xi) legislative or regulatory changes that adversely affect our business, including changes in tax laws and policies, accounting policies and practices, privacy laws, and regulatory capital or other rules; (xii) the risk that our enterprise risk management framework may not be effective in mitigating risk and reducing the potential for losses; (xiii) errors in estimates of the fair values of certain of our assets and liabilities, which may result in significant changes in valuation; (xiv) failures or security breaches with respect to the network, applications, vendors and computer systems on which we depend, including due to cybersecurity threats; (xv) our ability to attract and retain key members of our senior management team; (xvi) the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, and other external events on our business; (xvii) the impact of bank failures or other adverse developments at other banks on general depositor and investor sentiment regarding the stability and liquidity of banks; (xviii) the possibility that our recorded goodwill could become impaired, which may have an adverse impact on our earnings and capital; (xix) our existing indebtedness, together with any future incurrence of additional indebtedness, could adversely affect our ability to raise additional capital and to meet our debt obligations; (xx) the risk that we may incur significant losses on future asset sales; and (xxi) other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services and the other risks described in this press release and from time to time in other documents that we file with or furnish to the SEC.
BANC OF CALIFORNIA, INC. | ||||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) | ||||||||||||||||||||
June 30, |
March 31, |
December 31, |
September 30, |
June 30, |
||||||||||||||||
2024 |
2024 |
2023 |
2023 |
2023 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
ASSETS: | ||||||||||||||||||||
Cash and due from banks | $ |
203,467 |
|
$ |
199,922 |
|
$ |
202,427 |
|
$ |
182,261 |
|
$ |
208,300 |
|
|||||
Interest-earning deposits in financial institutions |
|
2,495,343 |
|
|
2,885,306 |
|
|
5,175,149 |
|
|
5,887,406 |
|
|
6,489,847 |
|
|||||
Total cash and cash equivalents |
|
2,698,810 |
|
|
3,085,228 |
|
|
5,377,576 |
|
|
6,069,667 |
|
|
6,698,147 |
|
|||||
Securities available-for-sale |
|
2,244,031 |
|
|
2,286,682 |
|
|
2,346,864 |
|
|
4,487,172 |
|
|
4,708,519 |
|
|||||
Securities held-to-maturity |
|
2,296,708 |
|
|
2,291,984 |
|
|
2,287,291 |
|
|
2,282,586 |
|
|
2,278,202 |
|
|||||
FRB and FHLB stock |
|
132,380 |
|
|
129,314 |
|
|
126,346 |
|
|
17,250 |
|
|
17,250 |
|
|||||
Total investment securities |
|
4,673,119 |
|
|
4,707,980 |
|
|
4,760,501 |
|
|
6,787,008 |
|
|
7,003,971 |
|
|||||
Loans held for sale |
|
1,935,455 |
|
|
80,752 |
|
|
122,757 |
|
|
188,866 |
|
|
478,146 |
|
|||||
Gross loans and leases held for investment |
|
23,255,297 |
|
|
25,517,028 |
|
|
25,534,730 |
|
|
21,969,789 |
|
|
22,311,292 |
|
|||||
Deferred fees, net |
|
(26,388 |
) |
|
(44,006 |
) |
|
(45,043 |
) |
|
(48,843 |
) |
|
(53,082 |
) |
|||||
Total loans and leases held for investment, net of deferred fees |
|
23,228,909 |
|
|
25,473,022 |
|
|
25,489,687 |
|
|
21,920,946 |
|
|
22,258,210 |
|
|||||
Allowance for loan and lease losses |
|
(247,762 |
) |
|
(291,503 |
) |
|
(281,687 |
) |
|
(222,297 |
) |
|
(219,234 |
) |
|||||
Total loans and leases held for investment, net |
|
22,981,147 |
|
|
25,181,519 |
|
|
25,208,000 |
|
|
21,698,649 |
|
|
22,038,976 |
|
|||||
Equipment leased to others under operating leases |
|
335,968 |
|
|
339,925 |
|
|
344,325 |
|
|
352,330 |
|
|
380,022 |
|
|||||
Premises and equipment, net |
|
145,734 |
|
|
144,912 |
|
|
146,798 |
|
|
50,236 |
|
|
57,078 |
|
|||||
Bank owned life insurance |
|
341,779 |
|
|
341,806 |
|
|
339,643 |
|
|
207,946 |
|
|
206,812 |
|
|||||
Goodwill |
|
215,925 |
|
|
198,627 |
|
|
198,627 |
|
|
- |
|
|
- |
|
|||||
Intangible assets, net |
|
148,894 |
|
|
157,226 |
|
|
165,477 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Deferred tax asset, net |
|
738,534 |
|
|
741,158 |
|
|
739,111 |
|
|
506,248 |
|
|
426,304 |
|
|||||
Other assets |
|
1,028,474 |
|
|
1,094,383 |
|
|
1,131,249 |
|
|
992,691 |
|
|
1,021,213 |
|
|||||
Total assets | $ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
LIABILITIES: | ||||||||||||||||||||
Noninterest-bearing deposits | $ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
|||||
Interest-bearing deposits |
|
20,979,443 |
|
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|||||
Total deposits |
|
28,804,450 |
|
|
28,892,407 |
|
|
30,401,769 |
|
|
26,598,681 |
|
|
27,897,083 |
|
|||||
Borrowings |
|
1,440,875 |
|
|
2,139,498 |
|
|
2,911,322 |
|
|
6,294,525 |
|
|
6,357,338 |
|
|||||
Subordinated debt |
|
939,287 |
|
|
937,717 |
|
|
936,599 |
|
|
870,896 |
|
|
870,378 |
|
|||||
Accrued interest payable and other liabilities |
|
651,379 |
|
|
709,744 |
|
|
893,609 |
|
|
714,454 |
|
|
679,256 |
|
|||||
Total liabilities |
|
31,835,991 |
|
|
32,679,366 |
|
|
35,143,299 |
|
|
34,478,556 |
|
|
35,804,055 |
|
|||||
STOCKHOLDERS' EQUITY: | ||||||||||||||||||||
Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Common stock |
|
1,583 |
|
|
1,583 |
|
|
1,577 |
|
|
1,231 |
|
|
1,233 |
|
|||||
Class B non-voting common stock |
|
5 |
|
|
5 |
|
|
5 |
|
|
- |
|
|
- |
|
|||||
Non-voting common stock equivalents |
|
101 |
|
|
101 |
|
|
108 |
|
|
- |
|
|
- |
|
|||||
Additional paid-in-capital |
|
3,813,312 |
|
|
3,827,777 |
|
|
3,840,974 |
|
|
2,798,611 |
|
|
2,799,357 |
|
|||||
Retained (deficit) earnings |
|
(477,010 |
) |
|
(497,396 |
) |
|
(518,301 |
) |
|
(25,399 |
) |
|
7,892 |
|
|||||
Accumulated other comprehensive loss, net |
|
(428,659 |
) |
|
(436,436 |
) |
|
(432,114 |
) |
|
(873,682 |
) |
|
(773,803 |
) |
|||||
Total stockholders’ equity |
|
3,407,848 |
|
|
3,394,150 |
|
|
3,390,765 |
|
|
2,399,277 |
|
|
2,533,195 |
|
|||||
Total liabilities and stockholders’ equity | $ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
Common shares outstanding (1) |
|
168,875,712 |
|
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
____________________ | ||
(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 |
|
Six Months Ended |
||||||||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
||||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans and leases | $ |
388,853 |
|
$ |
385,465 |
|
$ |
408,972 |
|
$ |
774,318 |
|
$ |
839,657 |
|
|||||
Investment securities |
|
33,836 |
|
|
34,303 |
|
|
44,153 |
|
|
68,139 |
|
|
88,390 |
|
|||||
Deposits in financial institutions |
|
39,900 |
|
|
58,936 |
|
|
86,763 |
|
|
98,836 |
|
|
129,629 |
|
|||||
Total interest income |
|
462,589 |
|
|
478,704 |
|
|
539,888 |
|
|
941,293 |
|
|
1,057,676 |
|
|||||
Interest expense: | ||||||||||||||||||||
Deposits |
|
186,106 |
|
|
194,807 |
|
|
178,789 |
|
|
380,913 |
|
|
334,681 |
|
|||||
Borrowings |
|
30,311 |
|
|
38,124 |
|
|
160,914 |
|
|
68,435 |
|
|
230,036 |
|
|||||
Subordinated debt |
|
16,684 |
|
|
16,671 |
|
|
14,109 |
|
|
33,355 |
|
|
27,611 |
|
|||||
Total interest expense |
|
233,101 |
|
|
249,602 |
|
|
353,812 |
|
|
482,703 |
|
|
592,328 |
|
|||||
Net interest income |
|
229,488 |
|
|
229,102 |
|
|
186,076 |
|
|
458,590 |
|
|
465,348 |
|
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Net interest income after provision for credit losses |
|
218,488 |
|
|
219,102 |
|
|
184,076 |
|
|
437,590 |
|
|
460,348 |
|
|||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts |
|
4,540 |
|
|
4,705 |
|
|
4,315 |
|
|
9,245 |
|
|
7,888 |
|
|||||
Other commissions and fees |
|
8,629 |
|
|
8,142 |
|
|
11,241 |
|
|
16,771 |
|
|
21,585 |
|
|||||
Leased equipment income |
|
11,487 |
|
|
11,716 |
|
|
22,387 |
|
|
23,203 |
|
|
36,244 |
|
|||||
Gain (loss) on sale of loans and leases |
|
1,135 |
|
|
(448 |
) |
|
(158,881 |
) |
|
687 |
|
|
(155,919 |
) |
|||||
Dividends and gains on equity investments |
|
1,166 |
|
|
3,068 |
|
|
2,658 |
|
|
4,234 |
|
|
3,756 |
|
|||||
Warrant (loss) income |
|
(324 |
) |
|
178 |
|
|
(124 |
) |
|
(146 |
) |
|
(457 |
) |
|||||
LOCOM HFS adjustment |
|
(38 |
) |
|
330 |
|
|
(11,943 |
) |
|
292 |
|
|
(11,943 |
) |
|||||
Other income |
|
3,197 |
|
|
6,125 |
|
|
2,265 |
|
|
9,322 |
|
|
7,155 |
|
|||||
Total noninterest income (loss) |
|
29,792 |
|
|
33,816 |
|
|
(128,082 |
) |
|
63,608 |
|
|
(91,691 |
) |
|||||
Noninterest expense: | ||||||||||||||||||||
Compensation |
|
85,914 |
|
|
92,236 |
|
|
82,881 |
|
|
178,150 |
|
|
171,357 |
|
|||||
Occupancy |
|
17,455 |
|
|
17,968 |
|
|
15,383 |
|
|
35,423 |
|
|
30,450 |
|
|||||
Information technology and data processing |
|
15,459 |
|
|
15,418 |
|
|
12,887 |
|
|
30,877 |
|
|
25,866 |
|
|||||
Other professional services |
|
5,183 |
|
|
5,075 |
|
|
9,973 |
|
|
10,258 |
|
|
16,046 |
|
|||||
Insurance and assessments |
|
26,431 |
|
|
20,461 |
|
|
25,635 |
|
|
46,892 |
|
|
37,352 |
|
|||||
Intangible asset amortization |
|
8,484 |
|
|
8,404 |
|
|
2,389 |
|
|
16,888 |
|
|
4,800 |
|
|||||
Leased equipment depreciation |
|
7,511 |
|
|
7,520 |
|
|
9,088 |
|
|
15,031 |
|
|
18,463 |
|
|||||
Acquisition, integration and reorganization costs |
|
(12,650 |
) |
|
- |
|
|
12,394 |
|
|
(12,650 |
) |
|
20,908 |
|
|||||
Customer related expense |
|
32,405 |
|
|
30,919 |
|
|
27,302 |
|
|
63,324 |
|
|
51,307 |
|
|||||
Loan expense |
|
4,332 |
|
|
4,491 |
|
|
5,245 |
|
|
8,823 |
|
|
11,769 |
|
|||||
Goodwill impairment |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Other expense |
|
13,119 |
|
|
8,026 |
|
|
117,260 |
|
|
21,145 |
|
|
128,386 |
|
|||||
Total noninterest expense |
|
203,643 |
|
|
210,518 |
|
|
320,437 |
|
|
414,161 |
|
|
1,893,440 |
|
|||||
Earnings (loss) before income taxes |
|
44,637 |
|
|
42,400 |
|
|
(264,443 |
) |
|
87,037 |
|
|
(1,524,783 |
) |
|||||
Income tax expense (benefit) |
|
14,304 |
|
|
11,548 |
|
|
(67,029 |
) |
|
25,852 |
|
|
(131,945 |
) |
|||||
Net earnings (loss) |
|
30,333 |
|
|
30,852 |
|
|
(197,414 |
) |
|
61,185 |
|
|
(1,392,838 |
) |
|||||
Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Net earnings (loss) available to common and equivalent stockholders | $ |
20,386 |
|
$ |
20,905 |
|
$ |
(207,361 |
) |
$ |
41,291 |
|
$ |
(1,412,732 |
) |
|||||
Basic and diluted earnings (loss) per common share (1) | $ |
0.12 |
|
$ |
0.12 |
|
$ |
(2.67 |
) |
$ |
0.25 |
|
$ |
(18.21 |
) |
|||||
Basic and diluted weighted average number of common shares outstanding (1) |
|
168,432 |
|
|
168,143 |
|
|
77,682 |
|
|
168,287 |
|
|
77,576 |
|
____________________ | ||
(1) |
Common shares include non-voting common equivalents that are participating securities. |
|
BANC OF CALIFORNIA, INC. | |||||||||||||||
SELECTED FINANCIAL DATA | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|||||||||
Profitability and Other Ratios | 2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Return on average assets (1) | 0.34 |
% |
0.33 |
% |
(1.84 |
)% |
0.34 |
% |
(6.55 |
)% |
|||||
Return on average equity (1) | 3.59 |
% |
3.66 |
% |
(29.12 |
)% |
3.63 |
% |
(83.71 |
)% |
|||||
Return on average tangible common equity (1)(2) | 4.14 |
% |
4.30 |
% |
(37.62 |
)% |
4.21 |
% |
(11.00 |
)% |
|||||
Dividend payout ratio (3) | 83.33 |
% |
83.33 |
% |
(0.37 |
)% |
80.00 |
% |
(1.43 |
)% |
|||||
Average yield on loans and leases (1) | 6.18 |
% |
6.08 |
% |
6.08 |
% |
6.13 |
% |
6.11 |
% |
|||||
Average yield on interest-earning assets (1) | 5.65 |
% |
5.56 |
% |
5.28 |
% |
5.60 |
% |
5.31 |
% |
|||||
Average cost of interest-bearing deposits (1) | 3.58 |
% |
3.60 |
% |
3.35 |
% |
3.59 |
% |
3.13 |
% |
|||||
Average total cost of deposits (1) | 2.60 |
% |
2.66 |
% |
2.62 |
% |
2.63 |
% |
2.27 |
% |
|||||
Average cost of interest-bearing liabilities (1) | 3.93 |
% |
3.92 |
% |
4.21 |
% |
3.93 |
% |
3.87 |
% |
|||||
Average total cost of funds (1) | 2.95 |
% |
3.02 |
% |
3.58 |
% |
2.99 |
% |
3.07 |
% |
|||||
Net interest spread | 1.72 |
% |
1.64 |
% |
1.07 |
% |
1.67 |
% |
1.44 |
% |
|||||
Net interest margin (1) | 2.80 |
% |
2.66 |
% |
1.82 |
% |
2.73 |
% |
2.34 |
% |
|||||
Noninterest income to total revenue (4) | 11.49 |
% |
12.86 |
% |
(220.85 |
)% |
12.18 |
% |
(24.54 |
)% |
|||||
Noninterest expense to average total assets (1) | 2.29 |
% |
2.26 |
% |
2.99 |
% |
2.27 |
% |
8.90 |
% |
|||||
Loans to deposits ratio | 87.36 |
% |
88.44 |
% |
81.50 |
% |
87.36 |
% |
81.50 |
% |
|||||
Average loans and leases to average deposits | 87.95 |
% |
86.65 |
% |
98.56 |
% |
87.29 |
% |
93.65 |
% |
|||||
Average investment securities to average total assets | 13.00 |
% |
12.58 |
% |
16.69 |
% |
12.78 |
% |
16.75 |
% |
|||||
Average stockholders' equity to average total assets | 9.48 |
% |
9.03 |
% |
6.32 |
% |
9.25 |
% |
7.82 |
% |
____________________ | ||
(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 |
|||||||||||||||||||||||||||
June 30, 2024 |
|
March 31, 2024 |
|
June 30, 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) | $ |
25,325,578 |
$ |
388,853 |
6.18 |
% |
$ |
25,518,590 |
$ |
385,465 |
6.08 |
% |
$ |
26,992,283 |
$ |
408,972 |
6.08 |
% |
|||||||||
Investment securities |
|
4,658,690 |
|
33,836 |
2.92 |
% |
|
4,721,556 |
|
34,303 |
2.92 |
% |
|
7,183,986 |
|
44,153 |
2.47 |
% |
|||||||||
Deposits in financial institutions |
|
2,960,292 |
|
39,900 |
5.42 |
% |
|
4,374,968 |
|
58,936 |
5.42 |
% |
|
6,835,075 |
|
86,763 |
5.09 |
% |
|||||||||
Total interest-earning assets |
|
32,944,560 |
|
462,589 |
5.65 |
% |
|
34,615,114 |
|
478,704 |
5.56 |
% |
|
41,011,344 |
|
539,888 |
5.28 |
% |
|||||||||
Other assets |
|
2,889,907 |
|
2,925,593 |
|
2,028,985 |
|||||||||||||||||||||
Total assets | $ |
35,834,467 |
$ |
37,540,707 |
$ |
43,040,329 |
|||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||
Interest checking | $ |
7,673,902 |
|
61,076 |
3.20 |
% |
$ |
7,883,177 |
|
61,549 |
3.14 |
% |
$ |
6,601,034 |
|
46,798 |
2.84 |
% |
|||||||||
Money market |
|
4,962,567 |
|
32,776 |
2.66 |
% |
|
5,737,837 |
|
41,351 |
2.90 |
% |
|
6,590,615 |
|
47,008 |
2.86 |
% |
|||||||||
Savings |
|
2,002,670 |
|
16,996 |
3.41 |
% |
|
2,036,129 |
|
18,030 |
3.56 |
% |
|
733,818 |
|
3,678 |
2.01 |
% |
|||||||||
Time |
|
6,274,242 |
|
75,258 |
4.82 |
% |
|
6,108,321 |
|
73,877 |
4.86 |
% |
|
7,492,094 |
|
81,305 |
4.35 |
% |
|||||||||
Total interest-bearing deposits |
|
20,913,381 |
|
186,106 |
3.58 |
% |
|
21,765,464 |
|
194,807 |
3.60 |
% |
|
21,417,561 |
|
178,789 |
3.35 |
% |
|||||||||
Borrowings |
|
2,013,600 |
|
30,311 |
6.05 |
% |
|
2,892,406 |
|
38,124 |
5.30 |
% |
|
11,439,742 |
|
160,914 |
5.64 |
% |
|||||||||
Subordinated debt |
|
938,367 |
|
16,684 |
7.15 |
% |
|
937,005 |
|
16,671 |
7.16 |
% |
|
869,419 |
|
14,109 |
6.51 |
% |
|||||||||
Total interest-bearing liabilities |
|
23,865,348 |
|
233,101 |
3.93 |
% |
|
25,594,875 |
|
249,602 |
3.92 |
% |
|
33,726,722 |
|
353,812 |
4.21 |
% |
|||||||||
Noninterest-bearing demand deposits |
|
7,881,620 |
|
7,685,027 |
|
5,968,625 |
|||||||||||||||||||||
Other liabilities |
|
692,149 |
|
870,273 |
|
625,610 |
|||||||||||||||||||||
Total liabilities |
|
32,439,117 |
|
34,150,175 |
|
40,320,957 |
|||||||||||||||||||||
Stockholders' equity |
|
3,395,350 |
|
3,390,532 |
|
2,719,372 |
|||||||||||||||||||||
Total liabilities and stockholders' equity | $ |
35,834,467 |
$ |
37,540,707 |
$ |
43,040,329 |
|||||||||||||||||||||
Net interest income | $ |
229,488 |
$ |
229,102 |
$ |
186,076 |
|||||||||||||||||||||
Net interest spread | 1.72 |
% |
1.64 |
% |
1.07 |
% |
|||||||||||||||||||||
Net interest margin | 2.80 |
% |
2.66 |
% |
1.82 |
% |
|||||||||||||||||||||
Total deposits (2) | $ |
28,795,001 |
$ |
186,106 |
2.60 |
% |
$ |
29,450,491 |
$ |
194,807 |
2.66 |
% |
$ |
27,386,186 |
$ |
178,789 |
2.62 |
% |
|||||||||
Total funds (3) | $ |
31,746,968 |
$ |
233,101 |
2.95 |
% |
$ |
33,279,902 |
$ |
249,602 |
3.02 |
% |
$ |
39,695,347 |
$ |
353,812 |
3.58 |
% |
(1) |
Includes net loan discount accretion of |
|
(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) |
||||||||||||||||||
Six Months Ended |
||||||||||||||||||
June 30, 2024 |
|
June 30, 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) | $ |
25,422,084 |
$ |
774,318 |
6.13 |
% |
$ |
27,783,379 |
$ |
842,001 |
6.11 |
% |
||||||
Investment securities |
|
4,690,123 |
|
68,139 |
2.92 |
% |
|
7,187,654 |
|
88,390 |
2.48 |
% |
||||||
Deposits in financial institutions |
|
3,667,630 |
|
98,836 |
5.42 |
% |
|
5,267,361 |
|
129,629 |
4.96 |
% |
||||||
Total interest-earning assets (1) |
|
33,779,837 |
|
941,293 |
5.60 |
% |
|
40,238,394 |
|
1,060,020 |
5.31 |
% |
||||||
Other assets |
|
2,907,750 |
|
|
|
2,666,878 |
|
|
||||||||||
Total assets | $ |
36,687,587 |
|
|
$ |
42,905,272 |
|
|
||||||||||
|
|
|
|
|
|
|||||||||||||
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
||||||||||||
Interest checking | $ |
7,778,540 |
|
122,625 |
3.17 |
% |
$ |
6,843,720 |
|
102,755 |
3.03 |
% |
||||||
Money market |
|
5,350,202 |
|
74,127 |
2.79 |
% |
|
7,754,868 |
|
103,232 |
2.68 |
% |
||||||
Savings |
|
2,019,399 |
|
35,026 |
3.49 |
% |
|
665,929 |
|
4,277 |
1.30 |
% |
||||||
Time |
|
6,191,281 |
|
149,135 |
4.84 |
% |
|
6,314,566 |
|
124,417 |
3.97 |
% |
||||||
Total interest-bearing deposits |
|
21,339,422 |
|
380,913 |
3.59 |
% |
|
21,579,083 |
|
334,681 |
3.13 |
% |
||||||
Borrowings |
|
2,453,003 |
|
68,435 |
5.61 |
% |
|
8,381,575 |
|
230,036 |
5.53 |
% |
||||||
Subordinated debt |
|
937,686 |
|
33,355 |
7.15 |
% |
|
868,533 |
|
27,611 |
6.41 |
% |
||||||
Total interest-bearing liabilities |
|
24,730,111 |
|
482,703 |
3.93 |
% |
|
30,829,191 |
|
592,328 |
3.87 |
% |
||||||
Noninterest-bearing demand deposits |
|
7,783,324 |
|
|
|
8,089,248 |
|
|
||||||||||
Other liabilities |
|
781,211 |
|
|
|
631,338 |
|
|
||||||||||
Total liabilities |
|
33,294,646 |
|
|
|
39,549,777 |
|
|
||||||||||
Stockholders' equity |
|
3,392,941 |
|
|
|
3,355,495 |
|
|
||||||||||
Total liabilities and stockholders' equity | $ |
36,687,587 |
|
|
$ |
42,905,272 |
|
|
||||||||||
Net interest income (1) |
|
$ |
458,590 |
|
|
$ |
467,692 |
|
||||||||||
Net interest spread (1) |
|
|
1.67 |
% |
|
|
1.44 |
% |
||||||||||
Net interest margin (1) |
|
|
2.73 |
% |
|
|
2.34 |
% |
||||||||||
|
|
|
|
|
|
|||||||||||||
Total deposits (4) | $ |
29,122,746 |
$ |
380,913 |
2.63 |
% |
$ |
29,668,331 |
$ |
334,681 |
2.27 |
% |
||||||
Total funds (5) | $ |
32,513,435 |
$ |
482,703 |
2.99 |
% |
$ |
38,918,439 |
$ |
592,328 |
3.07 |
% |
(1) |
Tax equivalent. |
|
(2) |
Includes net loan discount accretion of |
|
(3) |
Includes tax-equivalent adjustments of |
|
|
The federal statutory tax rate utilized was |
|
(4) |
Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. |
|
|
The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. |
|
(5) |
Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. |
|
|
The cost of total funds is calculated as annualized total interest expense divided by average total funds. |
BANC OF CALIFORNIA, INC.
NON-GAAP MEASURES
We refer to certain financial measures that are not recognized under
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. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.
Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.
BANC OF CALIFORNIA, INC. | ||||||||||||||||||||
NON-GAAP MEASURES | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Common Share |
June 30,
|
|
March 31,
|
|
December 31,
|
|
September 30,
|
|
June 30,
|
|||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Stockholders' equity | $ |
3,407,848 |
|
$ |
3,394,150 |
|
$ |
3,390,765 |
|
$ |
2,399,277 |
|
$ |
2,533,195 |
|
|||||
Less: Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Total common equity |
|
2,909,332 |
|
|
2,895,634 |
|
|
2,892,249 |
|
|
1,900,761 |
|
|
2,034,679 |
|
|||||
Less: Goodwill and Intangible assets |
|
364,819 |
|
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Tangible common equity | $ |
2,544,513 |
|
$ |
2,539,781 |
|
$ |
2,528,145 |
|
$ |
1,876,569 |
|
$ |
2,008,098 |
|
|||||
Total assets | $ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
Less: Goodwill and Intangible assets |
|
364,819 |
|
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Tangible assets | $ |
34,879,020 |
|
$ |
35,717,663 |
|
$ |
38,169,960 |
|
$ |
36,853,641 |
|
$ |
38,310,669 |
|
|||||
Total stockholders' equity to total assets |
|
9.67 |
% |
|
9.41 |
% |
|
8.80 |
% |
|
6.51 |
% |
|
6.61 |
% |
|||||
Tangible common equity to tangible assets |
|
7.30 |
% |
|
7.11 |
% |
|
6.62 |
% |
|
5.09 |
% |
|
5.24 |
% |
|||||
Book value per common share (1) | $ |
17.23 |
|
$ |
17.13 |
|
$ |
17.12 |
|
$ |
24.12 |
|
$ |
25.78 |
|
|||||
Tangible book value per common share (2) | $ |
15.07 |
|
$ |
15.03 |
|
$ |
14.96 |
|
$ |
23.81 |
|
$ |
25.44 |
|
|||||
Common shares outstanding (3) |
|
168,875,712 |
|
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
____________________ | ||
(1) |
Total common equity divided by common shares outstanding. |
|
(2) |
Tangible common equity divided by common shares outstanding. |
|
(3) |
Common shares outstanding include non-voting common equivalents that are participating securities. |
|
BANC OF CALIFORNIA, INC. | ||||||||||||||||||||
NON-GAAP MEASURES | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
Return on Average Tangible | June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|||||||||||||
Common Equity ("ROATCE") | 2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Net earnings (loss) | $ |
30,333 |
|
$ |
30,852 |
|
$ |
(197,414 |
) |
$ |
61,185 |
|
$ |
(1,392,838 |
) |
|||||
Earnings (loss) before income taxes | $ |
44,637 |
|
$ |
42,400 |
|
$ |
(264,443 |
) |
$ |
87,037 |
|
$ |
(1,524,783 |
) |
|||||
Add: Intangible asset amortization |
|
8,484 |
|
|
8,404 |
|
|
2,389 |
|
|
16,888 |
|
|
4,800 |
|
|||||
Add: Goodwill impairment |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Adjusted earnings (loss) before income taxes used for ROATCE |
|
53,121 |
|
|
50,804 |
|
|
(262,054 |
) |
|
103,925 |
|
|
(143,247 |
) |
|||||
Adjusted income tax expense (1) |
|
16,999 |
|
|
13,819 |
|
|
(66,300 |
) |
|
30,866 |
|
|
(45,839 |
) |
|||||
Adjusted net earnings (loss) for ROATCE |
|
36,122 |
|
|
36,985 |
|
|
(195,754 |
) |
|
73,059 |
|
|
(97,408 |
) |
|||||
Less: Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE | $ |
26,175 |
|
$ |
27,038 |
|
$ |
(205,701 |
) |
$ |
53,165 |
|
$ |
(117,302 |
) |
|||||
Average stockholders' equity | $ |
3,395,350 |
|
$ |
3,390,532 |
|
$ |
2,719,372 |
|
$ |
3,392,941 |
|
$ |
3,355,495 |
|
|||||
Less: Average intangible assets |
|
352,934 |
|
|
360,680 |
|
|
27,824 |
|
|
356,807 |
|
|
706,072 |
|
|||||
Less: Average preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Average tangible common equity | $ |
2,543,900 |
|
$ |
2,531,336 |
|
$ |
2,193,032 |
|
$ |
2,537,618 |
|
$ |
2,150,907 |
|
|||||
Return on average equity (2) |
|
3.59 |
% |
|
3.66 |
% |
|
(29.12 |
)% |
|
3.63 |
% |
|
(83.71 |
)% |
|||||
ROATCE (3) |
|
4.14 |
% |
|
4.30 |
% |
|
(37.62 |
)% |
|
4.21 |
% |
|
(11.00 |
)% |
____________________ | ||
(1) |
Effective tax rates of |
|
(2) |
Annualized net earnings (loss) divided by average stockholders' equity. |
|
(3) |
Annualized adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE divided by average tangible common equity. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240723125107/en/
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
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