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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250122610723/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
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