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Section 1: 8-K (8-K)

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false0001169770Depositary Shares -- 7.375% non-cumulative perpetual preferred stock, series DDepositary Shares -- 7.00% non-cumulative perpetual preferred stock, series E 0001169770 2020-04-29 2020-04-29 0001169770 us-gaap:CommonStockMember 2020-04-29 2020-04-29 0001169770 us-gaap:SeriesDPreferredStockMember 2020-04-29 2020-04-29 0001169770 us-gaap:SeriesEPreferredStockMember 2020-04-29 2020-04-29



 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 

FORM 8-K
 

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 29, 2020
 

BANC OF CALIFORNIA, INC.
(Exact name of registrant as specified in its charter)
 

 
 
 
 
Maryland
001-35522
04-3639825
(State or other jurisdiction
of incorporation)
(Commission File Number)
(IRS Employer
Identification No.)
 
 
 
 
 
3 MacArthur Place,
Santa Ana,
California
92707
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (855361-2262
N/A
(Former name or former address, if changed since last report)
 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company  

    




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
Trading Symbol(s)
 
Name of each exchange on which registered
Common Stock, par value $0.01 per share
 
BANC
 
New York Stock Exchange
Depositary Shares each representing a 1/40th Interest in a share of 7.375% Non-Cumulative Perpetual Preferred Stock, Series D
 
BANC PRD
 
New York Stock Exchange
Depositary Shares each representing a 1/40th Interest in a share of 7.00% Non-Cumulative Perpetual Preferred Stock, Series E
 
BANC PRE
 
New York Stock Exchange




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Item 2.02 Results of Operations and Financial Condition.
On April 29, 2020, Banc of California, Inc. (the “Company”) issued a press release announcing 2020 first quarter financial results.
A copy of the press release is attached to this report as Exhibit 99.1 and is incorporated by reference herein.

Item 7.01 Regulation FD Disclosure.
The Company will host a conference call to discuss its first quarter results at 10:00 A.M. Pacific Time on Wednesday, April 29, 2020. Interested parties may attend the conference call by dialing (888) 317-6003, and referencing event code 5112344. A live audio webcast will be available through the webcast link to be posted on the Company’s Investor Relations website at www.bancofcal.com/investor, in addition to the slide presentation for investor review prior to the call. A copy of the presentation materials is attached to this report as Exhibit 99.2 and is incorporated by reference herein.

Forward-Looking Statements
This Current Report on Form 8-K includes forward-looking statements within the meaning of the “Safe Harbor” provisions of the Private Securities Litigation Reform Act of 1995. 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. with the Securities and Exchange Commission. In addition to those, statements about the potential effects of the COVID-19 pandemic on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Banc of California Inc. and its subsidiaries, their customers and third parties. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Item 9.01     Financial Statements and Exhibits.

(d) Exhibits.
99.1Banc of California, Inc. Press Release dated April 29, 2020.

99.2Banc of California, Inc. Earnings Conference Call Presentation Materials dated April 29, 2020.

104    Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 

BANC OF CALIFORNIA, INC.

April 29, 2020
/s/ Lynn M. Hopkins
 
Lynn M. Hopkins
 
Executive Vice President and Chief Financial Officer

    


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Section 2: EX-99.1 (EXHIBIT 99.1)

Exhibit
EX. 99.1

403787893_logoa07.jpg

Banc of California Reports First Quarter 2020 Financial Results

SANTA ANA, Calif., (April 29, 2020) — Banc of California, Inc. (NYSE: BANC) today reported net loss available to common stockholders for the first quarter of 2020 of $9.7 million, or diluted loss per common share of $0.19.
First quarter results included:
Common Equity Tier 1 capital at 11.57%
Noninterest-bearing deposit balances increased $167.6 million to 23% of total deposits, up from 20%
Total DDA balances increased $206.1 million to 51% of total deposits
End of period deposit costs dropped to 0.89%; average total deposit costs decreased 16 basis points to 1.11%
Allowance for credit losses increased to 1.45% of total loans, up from 1.04%
Day 2 CECL provision for credit losses of $15.8 million

Jared Wolff, President & CEO of Banc of California, commented, “Our first quarter results demonstrate our continued progress transforming Banc of California into a relationship focused business bank. Our work over the past 15 months to de-risk our balance sheet created significant excess capital to help absorb first quarter COVID-19 and CECL-related provisions while remaining very well-capitalized. As a result of our ongoing balance sheet transformation, we have also substantially increased our noninterest-bearing and low-cost deposits as a percent of total deposits. For 2020, while remaining vigilant about credit, we will continue to look to improve the deposit franchise, remix our loan portfolio towards relationship lending, and opportunistically deploy capital for the benefit of shareholders, building franchise value for the long term.”
Mr. Wolff continued, "During this time of uncertainty caused by the COVID-19 pandemic, we are focused on keeping our employees safe and healthy, so we can support our clients and our communities. We are actively assisting our clients who are experiencing disruption and hardship during these times. We are particularly proud of our colleagues who have been tireless in those efforts on the front lines and behind the scenes. At this time, we are demonstrating what true relationship banking is all about, solidifying relationships with existing clients and building new relationships as well."
Lynn Hopkins, Chief Financial Officer of Banc of California said, "We finished the first quarter in a strong financial position, with healthy capital levels, increased on-balance sheet liquidity, and continued growth in noninterest bearing and demand deposits. Net income was negatively impacted by a $15.8 million provision for credit losses under CECL and in response to the pandemic. Excluding the impact of the provision for credit losses and certain non-core expenses, pre-tax income was $10.6 million, and benefited from a $5 million reduction in core expenses that was set in motion before the crisis, and put us in a better position to operate with the lower revenues from the economic disruption and significant cuts in market interest rates.  Our net interest margin held up relatively well at 2.97% against these rate cuts, as our dedicated and proactive deposit efforts lowered deposit costs another 16 basis points to an average of 1.11% for the first quarter, and ended the period with a spot rate of 89 basis points. This quarter marked the fifth consecutive quarter of growth in average noninterest-bearing deposits. While the economic outlook remains uncertain, our healthy reserves and strong capital position will serve the Company well with the potential challenges ahead, as we continue to focus on closely managing credit, actively improving the mix and cost of deposits, reducing expenses, and continuing to strengthen our balance sheet."


1

EX. 99.1

COVID-19 Operational Update
With the onset of the COVID-19 pandemic, we successfully implemented our business continuity plan to enable our team to work remotely while continuing to serve our clients with as little disruption as possible. Early in March, we took meaningful steps to transition our team members to a "work from home" environment and we have over 80% of our team working remotely. We continue to operate 25 of our 31 branches as we temporarily consolidated some overlapping areas to ensure an adequate balance between employee and client safety and business continuity to meet our clients' banking needs. For the Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), we redeployed resources to this program in support of our clients and others seeking financial relief under the program. As of April 28, 2020, we estimate we helped our clients save over 8,500 jobs through pending applications or approvals for more than $270 million in PPP funds. We expect to earn fees of just under 3% on the total amount that ultimately funds. We are actively engaged with our borrowers who are seeking payment relief and waiving certain fees for impacted clients.

Adoption of the Current Expected Credit Loss (CECL) Model
On January 1, 2020, we adopted the new accounting standard, commonly known as CECL, which uses a current expected credit loss model for determining allowance for credit losses (ACL). Upon adoption, we recognized a Day 1 increase in the ACL of $6.4 million and a related after-tax decrease to retained earnings of $4.5 million. Our Day 1 ACL under the new CECL methodology totaled $68.1 million compared to $61.7 million under the incurred loss model at December 31, 2019, and represented 1.14% of total loans. We recorded a Day 2 provision for credit losses of $15.8 million which reflects the new CECL methodology using current economic forecasts and the estimated future impact of the COVID-19 pandemic on lifetime credit losses. At March 31, 2020, the ACL totaled $82.1 million resulting in an ACL to total loans coverage ratio of 1.45%, up from 1.04% at December 31, 2019. The ACL and provision for credit losses include amounts for unfunded commitments.

Income Statement Highlights
 
Three Months Ended
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
($ in thousands)
Total interest and dividend income
$
74,714

 
$
83,702

 
$
92,657

 
$
104,040

 
$
110,712

Total interest expense
22,853

 
27,042

 
33,742

 
39,260

 
42,904

Net interest income
51,861

 
56,660

 
58,915

 
64,780

 
67,808

Total noninterest income (loss)
2,061

 
4,930

 
3,181

 
(2,290
)
 
6,295

Total revenue
53,922

 
61,590

 
62,096

 
62,490

 
74,103

Total noninterest expense
46,919

 
47,483

 
43,240

 
43,500

 
62,249

Pre-tax / pre-provision income
7,003

 
14,107

 
18,856

 
18,990

 
11,854

Provision for (reversal of) credit losses
15,761

 
(2,976
)
 
38,607

 
(1,900
)
 
2,098

Income tax (benefit) expense
(2,165
)
 
2,811

 
(5,619
)
 
4,308

 
2,719

Net (loss) income
$
(6,593
)
 
$
14,272

 
$
(14,132
)
 
$
16,582

 
$
7,037

 
 
 
 
 
 
 
 
 
 
Net (loss) income available to common stockholders(1)
$
(9,694
)
 
$
10,415

 
$
(22,722
)
 
$
11,909

 
$
2,527

(1)
Balance represents the net (loss) income available to common stockholders after subtracting preferred stock dividends, income allocated to participating securities, participating securities dividends and impact of preferred stock redemption from net (loss) income. Refer to the Statement of Operations for additional detail on these amounts.

2

EX. 99.1

Net interest income
Net interest income decreased $4.8 million to $51.9 million for the first quarter due to the combination of lower average interest-earning assets and a lower net interest margin. Average interest-earning assets declined from the prior quarter by $354.7 million to $7.03 billion, including a $440.4 million reduction in average loans to $5.78 billion, and our net interest margin declined 7 basis points to 2.97%.
The lower net interest margin was due to a 23 basis point decline in the average yield on interest-earning assets to 4.27%, partially offset by a 14 basis point decline on the average cost of interest bearing liabilities to 1.71%. The decline in the earning asset yield was due mostly to lower yields on most interest-earning asset classes due to originating new business and repricing variable rate loans and investments in the lower interest rate environment given the cuts in the federal funds target rates during the current and prior quarters. On a linked-quarter basis, our average yield on loans declined 15 basis points to 4.56% and our average yield on securities decreased 42 basis points. The average yield for variable rate collateralized loan obligations (CLOs) was 3.60% for the first quarter compared to 3.81% for the fourth quarter as this investment class reprices quarterly.
The 14 basis point decline in the average cost of interest-bearing liabilities to 1.71% for the first quarter from 1.85% for the fourth quarter, was driven by the lower average cost of interest-bearing deposits and higher average noninterest-bearing deposits. The average cost of interest-bearing deposits declined 16 basis points to 1.41% from the prior quarter. Additionally, average noninterest-bearing deposits increased by $25.2 million, or 2.3%, and represented 21.4% of total average deposits in the first quarter. Our total cost of deposits decreased 16 basis points to 1.11% for the first quarter. The decrease in our funding cost is due to a lower reliance on high cost transaction accounts and wholesale funds as we have managed down the balance sheet and continue to execute on our strategy to focus on relationship clients.
Provision for credit losses
We recognized a provision for credit losses of $15.8 million under the CECL model compared to a recovery of credit losses of $3.0 million in the prior quarter under the incurred loss model. Our provision for credit losses includes $1.1 million related to unfunded commitments. The higher provision for credit losses was driven by using the new CECL model, the estimated future impact of the health crisis on our loans, and net charge-offs, partially offset by lower period end loan balances of $284.4 million. For the first quarter, approximately $19 million of the provision for credit losses was attributed to the change in the economic forecast.
Noninterest income
Noninterest income decreased $2.9 million, or 58%, to $2.1 million for the first quarter from the prior quarter. The decrease was primarily due to the impact of lower market interest rates on certain assets subject to fair value accounting including a $1.6 million decrease in the fair value of loans held for sale, a $333 thousand decrease in the fair value of customer-related loan swaps, and a $166 thousand decrease in the value of servicing assets due mostly to the impact of prepayment assumptions. In addition, the prior quarter included a $650 thousand insurance recovery; there was no similar insurance recovery in the current quarter. These decreases were offset in part by lower net losses on sales of loans of $860 thousand.
Noninterest expense
Noninterest expense decreased $564 thousand to $46.9 million for the first quarter compared to the prior quarter. Noninterest expense decreased due to: (1) lower salaries and benefits expense of $600 thousand primarily related to lower headcount and loan production-based incentives, (2) lower regulatory assessments of $1.4 million related to changes in the size of our asset base and an FDIC assessment credit, and (3) lower restructuring expense of $1.6 million as the prior quarter included certain severance costs compared to none in the current quarter. These decreases were offset in part by higher professional fees of $3.4 million as a result of the timing of certain legal costs and recoveries compared to the prior quarter, and a $866 thousand increase in loss on investments in alternative energy partnerships. The change in professional fees attributed to the timing difference of certain indemnified legal costs and recoveries was $1.7 million. When such indemnified legal costs and recoveries are excluded, professional fees would have decreased $1.9 million from the prior quarter and totaled $4.3 million for the first quarter. Other includes an $850 thousand charge to settle a legacy lending claim from an acquired bank; there was no similar item in the prior quarter. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $5.0 million to $43.3 million for the first quarter compared to the prior quarter.
Income taxes

3

EX. 99.1

Income tax benefit totaled $2.2 million for the first quarter resulting in an effective tax rate of 24.7%. This compares to a $2.8 million expense for the fourth quarter and an effective tax benefit rate of 16.5%. The estimated effective tax rate for 2020 is approximately 25%.

Balance Sheet
At March 31, 2020, total assets were $7.66 billion, which represented a linked quarter decrease of $165.8 million, consistent with our strategic shift towards reducing non-core assets and focus on relationship lending. The following table shows selected balance sheet line items as of the dates indicated.
 
As of and for the Three Months Ended
 
Amount Change
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
Q1-20 vs. Q4-19
 
Q1-20 vs. Q1-19
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
($ in thousands)
Total assets
$
7,662,607

 
$
7,828,410

 
$
8,625,337

 
$
9,359,931

 
$
9,886,525

 
$
(165,803
)
 
$
(2,223,918
)
Securities available-for-sale
$
969,427

 
$
912,580

 
$
775,662

 
$
1,167,687

 
$
1,471,303

 
$
56,847

 
$
(501,876
)
Loans held-for-investment
$
5,667,464

 
$
5,951,885

 
$
6,383,259

 
$
6,719,570

 
$
7,557,200

 
$
(284,421
)
 
$
(1,889,736
)
Loans held-for-sale
$
20,234

 
$
22,642

 
$
23,936

 
$
597,720

 
$
25,191

 
$
(2,408
)
 
$
(4,957
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
$
2,828,470

 
$
2,622,398

 
$
2,602,011

 
$
2,510,233

 
$
2,690,738

 
$
206,072

 
$
137,732

Other core deposits
2,515,703

 
2,794,769

 
3,074,936

 
3,301,080

 
3,575,140

 
(279,066
)
 
(1,059,437
)
Brokered deposits
218,665

 
10,000

 
93,111

 
480,977

 
1,459,054

 
208,665

 
(1,240,389
)
Total Deposits
$
5,562,838

 
$
5,427,167

 
$
5,770,058

 
$
6,292,290

 
$
7,724,932

 
$
135,671

 
$
(2,162,094
)
As percentage of total deposits
 
 
 
 
 
 
 
 
 
 
 
 
 
Demand deposits
50.85
%
 
48.32
%
 
45.10
%
 
39.89
%
 
34.83
%
 
2.53
 %
 
16.02
 %
Other core deposits
45.22
%
 
51.50
%
 
53.29
%
 
52.46
%
 
46.28
%
 
(6.28
)%
 
(1.06
)%
Brokered deposits
3.93
%
 
0.18
%
 
1.61
%
 
7.64
%
 
18.89
%
 
3.75
 %
 
(14.96
)%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Average loan yield
4.56
%
 
4.71
%
 
4.75
%
 
4.80
%
 
4.76
%
 
(0.15
)%
 
(0.20
)%
Average cost of interest-bearing deposits
1.41
%
 
1.57
%
 
1.78
%
 
1.89
%
 
1.92
%
 
(0.16
)%
 
(0.51
)%
Average cost of deposits
1.11
%
 
1.27
%
 
1.48
%
 
1.62
%
 
1.67
%
 
(0.16
)%
 
(0.56
)%
Investments
Securities available-for-sale increased $56.8 million to $969.4 million at March 31, 2020, primarily due to purchases of $147.4 million of corporate debt and government agency securities, offset by net CLO maturities of $30.0 million and a higher net unrealized loss of $59.9 million due to changes in market prices and expectations attributed mainly to the estimated impact of the COVID-19 pandemic. The CLOs are AA and AAA rated and the carrying value includes an unrealized net loss of $80.0 million. As of March 31, 2020, our securities portfolio included $623.6 million of CLOs, $243.4 million of agency securities, $54.4 million of municipal securities, and $47.9 million of corporate debt securities.

4

EX. 99.1

Loans
The following table sets forth the composition, by loan category, of our loan portfolio as of the dates indicated:
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
($ in thousands)
Composition of held-for-investment loans
 
 
 
 
 
 
 
 
 
Commercial real estate
$
810,024

 
$
818,817

 
$
891,029

 
$
856,497

 
$
865,521

Multifamily
1,466,083

 
1,494,528

 
1,563,757

 
1,598,978

 
2,332,527

Construction
227,947

 
231,350

 
228,561

 
209,029

 
211,549

Commercial and industrial
1,578,223

 
1,691,270

 
1,789,478

 
1,951,707

 
1,907,102

SBA
70,583

 
70,981

 
75,359

 
80,929

 
74,998

Total commercial loans
4,152,860

 
4,306,946

 
4,548,184

 
4,697,140

 
5,391,697

Single-family residential mortgage
1,467,375

 
1,590,774

 
1,775,953

 
1,961,065

 
2,102,694

Other consumer
47,229

 
54,165

 
59,122

 
61,365

 
62,809

Total consumer loans
1,514,604

 
1,644,939

 
1,835,075

 
2,022,430

 
2,165,503

Total gross loans
$
5,667,464

 
$
5,951,885

 
$
6,383,259

 
$
6,719,570

 
$
7,557,200

Composition percentage of held-for-investment loans
 
 
 
 
 
 
 
 
 
Commercial real estate
14.3
%
 
13.8
%
 
14.0
%
 
12.7
%
 
11.5
%
Multifamily
25.9
%
 
25.1
%
 
24.5
%
 
23.8
%
 
30.9
%
Construction
4.0
%
 
3.9
%
 
3.6
%
 
3.1
%
 
2.8
%
Commercial and industrial
27.9
%
 
28.4
%
 
28.0
%
 
29.1
%
 
25.2
%
SBA
1.2
%
 
1.2
%
 
1.2
%
 
1.2
%
 
1.0
%
Total commercial loans
73.3
%
 
72.4
%
 
71.3
%
 
69.9
%
 
71.4
%
Single-family residential mortgage
25.9
%
 
26.7
%
 
27.8
%
 
29.2
%
 
27.8
%
Other consumer
0.8
%
 
0.9
%
 
0.9
%
 
0.9
%
 
0.8
%
Total consumer loans
26.7
%
 
27.6
%
 
28.7
%
 
30.1
%
 
28.6
%
Total gross loans
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Held-for-investment loans decreased $284.4 million to $5.67 billion from the prior quarter, due mostly to lower single-family residential mortgage loans of $123.4 million, lower commercial and industrial (C&I) loans of $113.0 million, and lower multifamily loans of $28.4 million. The decline in single-family residential is attributed to accelerated payoffs as the loans refinance away in the lower rate environment and proceeds are invested in other core business loans. The decline in C&I loans is primarily in response to strategically reducing certain credit facilities in response to the changed economic landscape and corresponding lower outstanding balances. The impact of the COVID-19 pandemic tempered loan production for the last part of the quarter and we did not experience any significant increase in credit line usage.
We continue to remix our real estate loan portfolio toward relationship-based multifamily, bridge, light infill construction, and commercial real estate loans. We are no longer originating single-family residential mortgage loans. Single-family residential mortgage and multifamily loans comprise 51.8% of the total held-for-investment loan portfolio as compared to 58.7% one year ago. Commercial real estate loans comprised 14.3% of the loan portfolio and commercial and industrial loans constituted 27.9%. Currently, loans secured by residential real estate (single-family, multifamily, single-family construction, and credit facilities) represent approximately 83% of our total loans outstanding.


5

EX. 99.1

The C&I portfolio has limited exposure to certain business sectors undergoing severe stress, as demonstrated by the following (as a percentage of total outstanding C&I loan balances):
 
March 31, 2020
 
Amount
 
% of Portfolio
C&I Portfolio by Industry
($ in thousands)
Real estate and rental and leasing
$
205,206

 
13
%
Retail trade
116,202

 
7
%
Finance and insurance
872,049

 
55
%
Manufacturing
73,299

 
5
%
Healthcare and social assistance
54,091

 
3
%
Wholesale trade
43,285

 
3
%
Accommodation and food services
31,867

 
2
%
All other
182,224

 
12
%
 
$
1,578,223

 
100
%

Deposits
The following table sets forth the composition of our deposits at the dates indicated.
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
($ in thousands)
Composition of deposits
 
 
 
 
 
 
 
 
 
Noninterest-bearing checking
$
1,256,081

 
$
1,088,516

 
$
1,107,442

 
$
993,745

 
$
1,120,700

Interest-bearing checking
1,572,389

 
1,533,882

 
1,503,208

 
1,577,901

 
1,573,499

Money market
575,820

 
715,479

 
695,530

 
800,898

 
899,330

Savings
877,947

 
885,246

 
1,042,162

 
1,061,115

 
1,151,442

Non-brokered certificates of deposit
1,071,936

 
1,204,044

 
1,367,284

 
1,479,137

 
1,684,895

Brokered certificates of deposit
208,665

 

 
54,432

 
379,494

 
1,295,066

Total deposits
$
5,562,838

 
$
5,427,167

 
$
5,770,058

 
$
6,292,290

 
$
7,724,932

Composition percentage of deposits
 
 
 
 
 
 
 
 
 
Noninterest-bearing checking
22.6
%
 
20.1
%
 
19.2
%
 
15.8
%
 
14.5
%
Interest-bearing checking
28.3
%
 
28.2
%
 
26.1
%
 
25.1
%
 
20.4
%
Money market
10.3
%
 
13.2
%
 
12.0
%
 
12.7
%
 
11.6
%
Savings
15.8
%
 
16.3
%
 
18.1
%
 
16.9
%
 
14.9
%
Non-brokered certificates of deposit
19.3
%
 
22.2
%
 
23.7
%
 
23.5
%
 
21.8
%
Brokered certificates of deposit
3.7
%
 
%
 
0.9
%
 
6.0
%
 
16.8
%
Total deposits
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
 
100.0
%
Total deposits increased $135.7 million during the first quarter of 2020 to $5.56 billion due to higher noninterest-bearing checking balances of $167.6 million, interest-bearing checking balances of $38.5 million and brokered certificates of deposit balances of $208.7 million, offset by lower money market balances of $139.7 million, savings balances of $7.3 million, and non-brokered certificates of deposit balances of $132.1 million. We continue to focus on growing relationship-based deposits, strategically supplemented wholesale funding, as we proactively drive our funding costs down. Noninterest-bearing deposits totaled $1.26 billion and represented 22.6% of total deposits at March 31, 2020 compared to $1.09 billion and 20.1% at December 31, 2019 and $1.12 billion and 14.5% one year ago.
Debt
Advances from the FHLB decreased $217.0 million, or 18%, to $978.0 million, as of March 31, 2020, due to lower short term and overnight advances of $193.0 million and the maturity of $24.0 million in long term fixed-rate advances. At the end of the first quarter,

6

EX. 99.1

FHLB advances included $90.0 million of overnight borrowings, $174.0 million maturing within three months, and $714.0 million maturing beyond three months with a weighted average life of 3.2 years and weighted average rate of 2.58%.
Equity
At March 31, 2020, total stockholders’ equity decreased by $72.2 million to $835.0 million on a linked-quarter basis, while tangible common equity decreased by $69.7 million to $606.4 million. The decrease in total stockholders’ equity related to the net loss of $6.6 million, the cumulative-effect adjustment of adoption of CECL of $4.5 million, dividends to common and preferred stockholders of $6.5 million, redemption of preferred stock of $1.6 million, repurchases of common stock under our previously announced share repurchase program of $12.0 million, and an increase in accumulated other comprehensive loss, net, of $42.2 million related to the lower fair value of CLOs and other securities available-for-sale.
In February 2020 we announced a share repurchase program for a total amount of $45.0 million and we repurchased 827,584 shares of common stock for an aggregate cost of $12.0 million. Given current macroeconomic conditions and the yet-to-be-determined impacts of the COVID-19 crisis, we have suspended common stock repurchases for the immediate future.
Capital ratios remain strong with total risk-based capital at 16.16% and a tier 1 leverage ratio of 11.20%. The following table sets forth our regulatory capital ratios at March 31, 2020 and the previous four quarters. The interim capital relief related to the adoption of CECL increased the Bank's leverage ratio approximately 10 basis points at March 31, 2020.
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Capital Ratios(1)
 
 
 
 
 
 
 
 
 
Banc of California, Inc.
 
 
 
 
 
 
 
 
 
Total risk-based capital ratio
16.16
%
 
15.90
%
 
14.37
%
 
15.00
%
 
14.01
%
Tier 1 risk-based capital ratio
14.91
%
 
14.83
%
 
13.32
%
 
14.03
%
 
13.03
%
Common equity tier 1 capital ratio
11.57
%
 
11.56
%
 
10.34
%
 
10.50
%
 
9.72
%
Tier 1 leverage ratio
11.20
%
 
10.89
%
 
9.84
%
 
9.62
%
 
8.87
%
Banc of California, NA
 
 
 
 
 
 
 
 
 
Total risk-based capital ratio
18.21
%
 
17.46
%
 
15.65
%
 
16.70
%
 
15.79
%
Tier 1 risk-based capital ratio
16.96
%
 
16.39
%
 
14.60
%
 
15.73
%
 
14.81
%
Common equity tier 1 capital ratio
16.96
%
 
16.39
%
 
14.60
%
 
15.73
%
 
14.81
%
Tier 1 leverage ratio
12.67
%
 
12.02
%
 
10.75
%
 
10.80
%
 
10.07
%
(1)
March 31, 2020 capital ratios are preliminary,


7

EX. 99.1

Credit Quality
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Asset quality information and ratios
($ in thousands)
Delinquent loans held-for-investment
 
 
 
 
 
 
 
 
 
30 to 89 days delinquent
$
56,338

 
$
32,873

 
$
39,122

 
$
34,938

 
$
44,840

90+ days delinquent
28,632

 
24,734

 
17,220

 
17,272

 
14,623

Total delinquent loans
$
84,970

 
$
57,607

 
$
56,342

 
$
52,210

 
$
59,463

Total delinquent loans to total loans
1.50
%
 
0.97
%
 
0.88
%
 
0.78
%
 
0.79
%
Non-performing assets, excluding loans held-for-sale
 
 
 
 
 
 
 
 
 
Non-performing loans
$
56,471

 
$
43,354

 
$
45,169

 
$
28,499

 
$
27,739

90+ days delinquent and still accruing loans

 

 

 
275

 
731

Other real estate owned

 

 

 
276

 
316

Non-performing assets
$
56,471

 
$
43,354

 
$
45,169

 
$
29,050

 
$
28,786

ALL to non-performing loans
138.55
%
 
132.97
%
 
139.31
%
 
206.86
%
 
224.40
%
Non-performing loans to total loans held-for-investment
1.00
%
 
0.73
%
 
0.71
%
 
0.43
%
 
0.38
%
Non-performing assets to total assets
0.74
%
 
0.55
%
 
0.52
%
 
0.31
%
 
0.29
%
Troubled debt restructurings (TDRs)
 
 
 
 
 
 
 
 
 
Performing TDRs
$
6,100

 
$
6,620

 
$
6,800

 
$
20,245

 
$
5,574

Non-performing TDRs
20,852

 
21,837

 
14,605

 
2,428

 
1,943

Total TDRs
$
26,952

 
$
28,457

 
$
21,405

 
$
22,673

 
$
7,517

Credit quality remains strong. Total delinquent loans increased $27.4 million in the first quarter to $85.0 million at March 31, 2020, due to $43.1 million of additions, offset by $8.5 million returning to current status and $7.3 million of principal payments or payoffs. Delinquent loans includes primarily legacy single-family residential mortgage loans, which account for 84% of the balance and $28.0 million of the increase quarter over quarter. Excluding delinquent legacy single-family loans, delinquent loans are $13.6 million, or 0.24%, of total loans at March 31, 2020. We ceased originating single-family mortgage loans in the second quarter of 2019.
Non-performing loans totaled $56.5 million as of March 31, 2020, of which $21.5 million or 38% of the balance relates to loans in a current payment status. The $13.1 million increase during the first quarter was primarily due to $14.1 million of loans being placed on nonaccrual status, offset by cured loans and payoffs. The quarter-end balance includes two large loans with delinquent payment status that comprise 45% of our total nonperforming loans, consisting of one $16.4 million legacy shared national credit and a $9.1 million single-family mortgage residential loan with a loan-to-value ratio of 67%. Aside from those two loans, nonperforming loans total $31.0 million, of which 49% relates to legacy single-family residential mortgage loans.
In light of the COVID-19 crisis, we have provided support to clients by granting loan deferments, when requested and supported by our borrowers. As of April 27, in our SFR portfolio, we had 122 active deferments on $123 million of principal balances, or approximately 8% of the portfolio. With respect to our non-SFR loan portfolio, as of April 27, we had 68 active deferments on $257 million of principal balances or 6% of our non-SFR portfolio. As with our entire portfolio, we will continue to actively monitor and manage our lending relationships in a manner that supports our clients and protects the bank.


8

EX. 99.1

Allowance for Credit Losses
 
Three Months Ended
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
 
($ in thousands)
Allowance for loan losses (ALL)
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
57,649

 
$
62,927

 
$
59,523

 
$
63,885

 
$
62,192

Adoption of ASU 2016-13 (1)
7,609

 

 

 

 

Loans charged off
(2,076
)
 
(2,706
)
 
(35,546
)
 
(2,451
)
 
(1,063
)
Recoveries
350

 
106

 
410

 
76

 
244

Net charge-offs
(1,726
)
 
(2,600
)
 
(35,136
)
 
(2,375
)
 
(819
)
Provision for (reversal of) loan losses
14,711

 
(2,678
)
 
38,540

 
(1,987
)
 
2,512

Balance at end of period
78,243

 
$
57,649

 
$
62,927

 
$
59,523

 
$
63,885

Reserve for unfunded loan commitments
 
 
 
 
 
 
 
 
 
Balance at beginning of period
4,064

 
4,362

 
4,295

 
4,208

 
4,622

Adoption of ASU 2016-13 (1)
(1,226
)
 

 

 

 

Provision for credit losses
1,050

 
(298
)
 
67

 
87

 
(414
)
Balance at end of period
3,888

 
4,064

 
4,362

 
4,295

 
4,208

Allowance for credit losses (ACL)
$
82,131

 
$
61,713

 
$
67,289

 
$
63,818

 
$
68,093

 
 
 
 
 
 
 
 
 
 
ALL to total loans
1.38
%
 
0.97
%
 
0.99
%
 
0.89
%
 
0.85
%
ACL to total loans
1.45
%
 
1.04
%
 
1.05
%
 
0.95
%
 
0.90
%
Annualized net loan charge-offs to average total loans held-for-investment
0.12
%
 
0.17
%
 
2.19
%
 
0.13
%
 
0.04
%
 
 
 
 
 
 
 
 
 
 
Reserve for loss on repurchased loans
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
6,201

 
$
6,561

 
$
2,478

 
$
2,486

 
$
2,506

Initial provision for loan repurchases

 

 
4,415

 
53

 
96

Reversal of provision for loan repurchases
(600
)
 
(360
)
 
(123
)
 
(61
)
 
(116
)
Utilization of reserve for loan repurchases

 

 
(209
)
 

 

Balance at end of period
$
5,601

 
$
6,201

 
$
6,561

 
$
2,478

 
$
2,486

(1)
Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020. As a result of adopting ASU 2016-13, our methodology to compute our allowance for credit losses is based on a current expected credit loss methodology, rather that the previously applied incurred loss methodology.
The allowance for expected credit losses, which includes the reserve for unfunded loan commitments, totaled $82.1 million, or 1.45% of total loans at March 31, 2020 compared to $61.7 million or 1.04% at December 31, 2019. The $20.4 million increase in the allowance reflects a higher provision due to the earlier recognition of losses under CECL and the impact of the change in the economic forecast scenarios as of quarter end, including the expected impact of the COVID-19 pandemic on future losses. This increase includes a Day 1 transition adjustment amount of $6.4 million and a Day 2 provision of $15.8 million, offset by net charge-offs of $1.7 million. The net charge-offs included $1.1 million in C&I loans and $401 thousand in SFR mortgages. The ACL coverage of non-performing loans was 145% at March 31, 2020 compared to 142% at December 31, 2019.

Our ACL methodology and resulting provision is significantly impacted by the current economic uncertainty and volatility caused by the COVID-19 pandemic. Our ACL methodology uses a nationally-recognized, third party model that includes many assumptions based on our historical and peer loss data, our current loan portfolio risk profile, and economic forecasts. We used economic forecasts released by our model provider during the last week of March which included the onset of the pandemic. These forecasts included a sharp contraction in annualized GDP growth and a sharp spike in near-term unemployment rates ranging from 8% to 13%, before returning to moderate long-term economic trends. Our visibility at the end of the quarter indicated that local unemployment was heading higher and that the economic recovery would likely be slower. Accordingly, we incorporated qualitative factors to account for this visibility at quarter end related to actual conditions and an economic outlook that was worse than the late March forecasts incorporated into the CECL model. As a result of the COVID-19 pandemic and adoption of CECL, we expect our allowance for credit losses to continue to be impacted in future periods by economic

9

EX. 99.1

volatility, changing economic forecasts, as well as the related impacts to CECL model assumptions, all of which may be better than or worse than our current estimate.

The reserve for loss on repurchased loans decreased by $600 thousand in the first quarter due to continued runoff of principal balances associated with the multifamily loan securitization and single-family residential mortgage loans previously sold. This reduction in the associated sold balances results in reduced anticipated losses from repurchases.


The Company will host a conference call to discuss its first quarter 2020 financial results at 10:00 a.m. Pacific Time (PT) on Wednesday, April 29, 2020. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 5112344. 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.


About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) is a bank holding company with approximately $7.7 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the “Bank”). The Bank has 42 offices including 31 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.


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 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. with the Securities and Exchange Commission. In addition to those, statements about the potential effects of the COVID-19 pandemic on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Banc of California Inc. and its subsidiaries, their customers and third parties. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Source: Banc of California, Inc.
Investor Relations Inquiries:
Banc of California, Inc.
(855) 361-2262
Jared Wolff, (949) 385-8700
Lynn Hopkins, (949) 265-6599


10

EX. 99.1

Banc of California, Inc.
Consolidated Statements of Financial Condition (Unaudited)
(Dollars in thousands)

 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
ASSETS
 
 
 
 
 
 
 
 
 
Cash and cash equivalents
$
435,992

 
$
373,472

 
$
526,874

 
$
313,850

 
$
304,705

Securities available-for-sale
969,427

 
912,580

 
775,662

 
1,167,687

 
1,471,303

Loans held-for-sale
20,234

 
22,642

 
23,936

 
597,720

 
25,191

Loans held-for-investment
5,667,464

 
5,951,885

 
6,383,259

 
6,719,570

 
7,557,200

Allowance for loan losses
(78,243
)
 
(57,649
)
 
(62,927
)
 
(59,523
)
 
(63,885
)
Federal Home Loan Bank and other bank stock
57,237

 
59,420

 
71,679

 
76,373

 
55,794

Servicing rights, net
2,009

 
2,299

 
2,407

 
2,715

 
3,053

Other real estate owned, net

 

 

 
276

 
316

Premises and equipment, net
127,379

 
128,021

 
128,979

 
129,227

 
130,417

Investments in alternative energy partnerships, net
27,347

 
29,300

 
27,039

 
26,633

 
26,578

Goodwill
37,144

 
37,144

 
37,144

 
37,144

 
37,144

Other intangible assets, net
3,722

 
4,151

 
4,605

 
5,105

 
5,726

Deferred income tax, net
63,849

 
44,906

 
45,950

 
42,798

 
45,111

Income tax receivable
7,198

 
4,233

 
4,459

 
2,547

 
4,787

Bank owned life insurance investment
110,397

 
109,819

 
108,720

 
108,132

 
107,552

Right of use assets
20,882

 
22,540

 
23,907

 
24,118

 
24,519

Due from unsettled securities sales

 

 
334,769

 

 

Other assets
190,569

 
183,647

 
188,875

 
165,559

 
151,014

Total assets
$
7,662,607

 
$
7,828,410

 
$
8,625,337

 
$
9,359,931

 
$
9,886,525

 
 
 
 
 
 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
 
 
 
 
 
Noninterest-bearing deposits
$
1,256,081

 
$
1,088,516

 
$
1,107,442

 
$
993,745

 
$
1,120,700

Interest-bearing deposits
4,306,757

 
4,338,651

 
4,662,616

 
5,298,545

 
6,604,232

Total deposits
5,562,838

 
5,427,167

 
5,770,058

 
6,292,290

 
7,724,932

Advances from Federal Home Loan Bank
978,000

 
1,195,000

 
1,650,000

 
1,825,000

 
935,000

Notes payable, net
173,479

 
173,421

 
173,339

 
173,257

 
173,203

Reserve for loss on repurchased loans
5,601

 
6,201

 
6,561

 
2,478

 
2,486

Lease liabilities
22,075

 
23,692

 
25,210

 
25,457

 
25,893

Accrued expenses and other liabilities
85,612

 
95,684

 
99,181

 
77,905

 
76,686

Total liabilities
6,827,605

 
6,921,165

 
7,724,349

 
8,396,387

 
8,938,200

Commitments and contingent liabilities
 
 
 
 
 
 
 
 
 
Preferred stock
187,687

 
189,825

 
189,825

 
231,128

 
231,128

Common stock
520

 
520

 
520

 
520

 
518

Common stock, class B non-voting non-convertible
5

 
5

 
5

 
5

 
5

Additional paid-in capital
631,125

 
629,848

 
628,774

 
627,306

 
626,608

Retained earnings
110,640

 
127,733

 
120,221

 
146,039

 
136,943

Treasury stock
(40,827
)
 
(28,786
)
 
(28,786
)
 
(28,786
)
 
(28,786
)
Accumulated other comprehensive loss, net
(54,148
)
 
(11,900
)
 
(9,571
)
 
(12,668
)
 
(18,091
)
Total stockholders’ equity
835,002

 
907,245

 
900,988

 
963,544

 
948,325

Total liabilities and stockholders’ equity
$
7,662,607

 
$
7,828,410

 
$
8,625,337

 
$
9,359,931

 
$
9,886,525



11

EX. 99.1

Banc of California, Inc.
Consolidated Statements of Operations (Unaudited)
(Dollars in thousands, except per share data)
 
Three Months Ended
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Interest and dividend income
 
 
 
 
 
 
 
 
 
Loans, including fees
$
65,534

 
$
73,930

 
$
80,287

 
$
89,159

 
$
90,558

Securities
7,820

 
7,812

 
10,024

 
12,457

 
17,841

Other interest-earning assets
1,360

 
1,960

 
2,346

 
2,424

 
2,313

Total interest and dividend income
74,714

 
83,702

 
92,657

 
104,040

 
110,712

Interest expense
 
 
 
 
 
 
 
 
 
Deposits
14,611

 
18,247

 
22,811

 
28,598

 
31,443

Federal Home Loan Bank advances
5,883

 
6,396

 
8,519

 
8,289

 
9,081

Notes payable and other interest-bearing liabilities
2,359

 
2,399

 
2,412

 
2,373

 
2,380

Total interest expense
22,853

 
27,042

 
33,742

 
39,260

 
42,904

Net interest income
51,861

 
56,660

 
58,915

 
64,780

 
67,808

Provision for (reversal of) credit losses
15,761

 
(2,976
)
 
38,607

 
(1,900
)
 
2,098

Net interest income after provision for (reversal of) credit losses
36,100

 
59,636

 
20,308

 
66,680

 
65,710

Noninterest income
 
 
 
 
 
 
 
 
 
Customer service fees
1,096

 
1,451

 
1,582

 
1,434

 
1,515

Loan servicing income
75

 
312

 
128

 
121

 
118

Income from bank owned life insurance
578

 
599

 
588

 
580

 
525

Impairment loss on investment securities

 

 
(731
)
 

 

Net gain (loss) on sale of securities available for sale

 
3

 
(5,063
)
 

 
208

Fair value adjustment on loans held for sale
(1,586
)
 
30

 
16

 
59

 
1

Net (loss) gain on sale of loans
(27
)
 
(863
)
 
4,310

 
2,767

 
1,552

All other income (loss)
1,925

 
3,398

 
2,351

 
(7,251
)
 
2,376

Total noninterest income (loss)
2,061

 
4,930

 
3,181

 
(2,290
)
 
6,295

Noninterest expense
 
 
 
 
 
 
 
 
 
Salaries and employee benefits
23,436

 
24,036

 
25,934

 
27,506

 
28,439

Occupancy and equipment
7,243

 
7,900

 
7,767

 
7,955

 
7,686

Professional fees (reimbursement)
5,964

 
2,611

 
1,463

 
(2,903
)
 
11,041

Data processing
1,773

 
1,684

 
1,568

 
1,672

 
1,496

Advertising
1,756

 
2,227

 
2,090

 
2,048

 
2,057

Regulatory assessments
484

 
1,854

 
1,239

 
2,136

 
2,482

Reversal of loan repurchase reserves
(600
)
 
(360
)
 
(123
)
 
(61
)
 
(116
)
Amortization of intangible assets
429

 
454

 
500

 
621

 
620

Restructuring expense (reversal)

 
1,626

 

 
(158
)
 
2,795

All other expenses
4,529

 
4,412

 
3,742

 
5,039

 
3,799

Total noninterest expense excluding loss (gain) on investments in alternative energy partnerships
45,014

 
46,444

 
44,180

 
43,855

 
60,299

Loss (gain) on investments in alternative energy partnerships
1,905

 
1,039

 
(940
)
 
(355
)
 
1,950

Total noninterest expense
46,919

 
47,483

 
43,240

 
43,500

 
62,249

(Loss) income from operations before income taxes
(8,758
)
 
17,083

 
(19,751
)
 
20,890

 
9,756

Income tax (benefit) expense
(2,165
)
 
2,811

 
(5,619
)
 
4,308

 
2,719

Net (loss) income
(6,593
)
 
14,272

 
(14,132
)
 
16,582

 
7,037

Preferred stock dividends
3,533

 
3,540

 
3,403

 
4,308

 
4,308

Income allocated to participating securities

 
224

 

 
271

 

Participating securities dividends
94

 
93

 
94

 
94

 
202

Impact of preferred stock redemption
(526
)
 

 
5,093

 

 

Net (loss) income available to common stockholders
$
(9,694
)
 
$
10,415

 
$
(22,722
)
 
$
11,909

 
$
2,527

(Loss) earnings per common share:
 
 
 
 
 
 
 
 
 
Basic
$
(0.19
)
 
$
0.21

 
$
(0.45
)
 
$
0.23

 
$
0.05

Diluted
$
(0.19
)
 
$
0.20

 
$
(0.45
)
 
$
0.23

 
$
0.05

Weighted average number of common shares outstanding
 
 
 
 
 
 
 
 
 
Basic
50,464,777

 
50,699,915

 
50,882,227

 
50,857,137

 
50,676,722

Diluted
50,464,777

 
50,927,978

 
50,882,227

 
50,964,956

 
50,846,722

Dividends declared per common share
$
0.06

 
$
0.06

 
$
0.06

 
$
0.06

 
$
0.13


12

EX. 99.1

Banc of California, Inc.
Selected Financial Data
(Unaudited)

 
Three Months Ended
 
March 31,
2020
 
December 31,
2019
 
September 30,
2019
 
June 30,
2019
 
March 31,
2019
Profitability and other ratios of consolidated operations
 
 
 
 
 
 
 
 
 
Return on average assets(1)
(0.35
)%
 
0.71
%
 
(0.64
)%
 
0.69
 %
 
0.28
%
Return on average equity(1)
(2.89
)%
 
6.20
%
 
(5.83
)%
 
6.91
 %
 
2.98
%
Return on average tangible common equity(2)
(5.44
)%
 
6.46
%
 
(12.49
)%
 
7.43
 %
 
1.91
%
Dividend payout ratio(3)
(31.58
)%
 
28.57
%
 
(13.33
)%
 
26.09
 %
 
260.00
%
Net interest spread
2.56
 %
 
2.65
%
 
2.47
 %
 
2.50
 %
 
2.47
%
Net interest margin(1)
2.97
 %
 
3.04
%
 
2.86
 %
 
2.86
 %
 
2.81
%
Noninterest income (loss) to total revenue(4)
3.82
 %
 
8.00
%
 
5.12
 %
 
(3.66
)%
 
8.49
%
Noninterest income (loss) to average total assets(1)
0.11
 %
 
0.25
%
 
0.15
 %
 
(0.10
)%
 
0.25
%
Noninterest expense to average total assets(1)
2.50
 %
 
2.35
%
 
1.98
 %
 
1.82
 %
 
2.43
%
Efficiency ratio(2)(5)
87.01
 %
 
77.10
%
 
69.63
 %
 
69.61
 %
 
84.00
%
Adjusted efficiency ratio including the pre-tax effect of investments in alternative energy partnerships(2)(5)
86.54
 %
 
74.51
%
 
70.00
 %
 
67.70
 %
 
83.57
%
Average loans held-for-investment to average deposits
108.54
 %
 
108.50
%
 
105.92
 %
 
104.38
 %
 
100.45
%
Average securities available-for-sale to average total assets
12.60
 %
 
10.48
%
 
12.71
 %
 
13.58
 %
 
17.00
%
Average stockholders’ equity to average total assets
12.11
 %
 
11.47
%
 
11.06
 %
 
10.02
 %
 
9.29
%

(1)
Ratios are presented on an annualized basis.
(2)
The ratios are determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). See Non-GAAP measures section for reconciliation of the calculation.
(3)
The ratio is calculated by dividing dividends declared per common share by basic earnings per common share.
(4)
Total revenue is equal to the sum of net interest income before provision for credit losses and noninterest income (loss).
(5)
The ratios are calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income (loss).

 
 
 
 
 
 
 
 
 
 


13

EX. 99.1

Banc of California, Inc.
Average Balance, Average Yield Earned, and Average Cost Paid
(Dollars in thousands)
(Unaudited)
 
Three Months Ended
 
March 31, 2020
 
December 31, 2019
 
September 30, 2019
 
Average
 
 
 
Yield
 
Average
 
 
 
Yield
 
Average
 
 
 
Yield
 
Balance
 
Interest
 
/ Cost
 
Balance
 
Interest
 
/ Cost
 
Balance
 
Interest
 
/ Cost
Interest earning assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans held-for-sale
$
22,273

 
$
220

 
3.97
%
 
$
23,527

 
$
221

 
3.73
%
 
$
216,746

 
$
1,894

 
3.47
%
SFR mortgage
1,532,967

 
15,295

 
4.01
%
 
1,689,228

 
16,788

 
3.94
%
 
1,866,103

 
19,179

 
4.08
%
Commercial real estate, multifamily, and construction
2,564,485

 
30,223

 
4.74
%
 
2,633,342

 
32,763

 
4.94
%
 
2,717,609

 
33,343

 
4.87
%
Commercial and industrial, SBA, and lease financing
1,613,324

 
19,157

 
4.78
%
 
1,821,064

 
23,381

 
5.09
%
 
1,840,202

 
24,970

 
5.38
%
Other consumer
47,761

 
639

 
5.38
%
 
54,088

 
777

 
5.70
%
 
58,652

 
901

 
6.09
%
Gross loans and leases
5,780,810

 
65,534

 
4.56
%
 
6,221,249

 
73,930

 
4.71
%
 
6,699,312

 
80,287

 
4.75
%
Securities
952,966

 
7,820

 
3.30
%
 
833,726

 
7,812

 
3.72
%
 
1,105,499

 
10,024

 
3.60
%
Other interest-earning assets
297,444

 
1,360

 
1.84
%
 
330,950

 
1,960

 
2.35
%
 
362,613

 
2,346

 
2.57
%
Total interest-earning assets
7,031,220

 
74,714

 
4.27
%
 
7,385,925

 
83,702

 
4.50
%
 
8,167,424

 
92,657

 
4.50
%
Allowance for loan losses
(60,470
)
 
 
 
 
 
(61,642
)
 
 
 
 
 
(55,976
)
 
 
 
 
BOLI and noninterest earning assets
592,192

 
 
 
 
 
630,308

 
 
 
 
 
584,190

 
 
 
 
Total assets
$
7,562,942

 
 
 
 
 
$
7,954,591

 
 
 
 
 
$
8,695,638

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest-bearing liabilities