Banc of California Reports 2014 First Quarter Financial Results

By Business Wire,  May 09, 2014, 06:00:00 AM EDT


IRVINE, Calif.--(BUSINESS WIRE)-- Banc of California, Inc. (NASDAQ:BANC) (the "Company"), the holding company for Banc of California, National Association (the "Bank"), today announced financial results for the three months ended March 31, 2014.

For the quarter, the Company reported net income of $757 thousand, with a net loss attributable to common shareholders of $153 thousand or $(0.01) per diluted common share. This compares with net income available to common shareholders of $2.4 million, or $0.12 per diluted common share, for the fourth quarter ended December 31, 2013, and net income available to common shareholders of $641 thousand, or $0.05 per diluted common share, for the first quarter ended March 31, 2013.

The Company's consolidated assets totaled $4.03 billion at March 31, 2014, representing an increase of $403 million compared to $3.63 billion at December 31, 2013, and an increase of $1.98 billion compared to $2.05 billion at March 31, 2013. Total loans and leases of $3.40 billion at March 31, 2014 increased $235 million compared to $3.16 billion at December 31, 2013, and increased $1.66 billion compared to $1.74 billion at March 31, 2013. The increases in total assets and loans and leases reflected organic loan growth with over $1 billion in new loan originations during the quarter, including over $150 million of new commercial loan originations and commitments.

Total deposits of $3.11 billion at March 31, 2014 represented an increase of $191 million compared to $2.92 billion at December 31, 2013 and an increase of $1.41 billion compared to $1.70 billion at March 31, 2013.

Steven Sugarman, Chief Executive Officer of the Company, stated: "Our recently announced acquisition of Popular Community Bank's Southern California branch network will help us expand our footprint and bring the scale needed to further leverage our operational capabilities and infrastructure. We continue to make good progress in our commercial bank, strengthening our origination capabilities and reducing the cost structure in our mortgage bank. The acquisition of Popular Community Bank will complement the strategies already in place and expedite achievement of our financial targets and business goals. The Banc of California today exceeds $4 billion in assets and, with completion of this acquisition we will grow to over $5 billion in assets, an accomplishment that has always been a critical milestone in our strategic plan."

The Company plans to discuss its first quarter earnings, among other items, on May 9, 2014, at 8:00 a.m., Pacific Time. All interested parties are welcome to attend the conference call at 866-770-0133, event code 83328951.

About Banc of California, Inc.

Since 1941, Banc of California, Inc. (NASDAQ:BANC) through its banking subsidiary Banc of California, National Association, has provided banking services and home loans to businesses and families in California and the West. Today, Banc of California, Inc. has over $4 billion in consolidated assets and more than 80 banking locations.

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. 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.

 

Financial Highlights

 
    As of or for the three months ended
March 31,     December 31,     March 31,
2014 2013 2013
($ in thousands, except per share data)
 
Net income (loss) $ 757 $ 3,321 $ 929
Net income (loss) available to common stockholders $ (153 ) $ 2,370 $ 641
Diluted earnings (loss) per share $ (0.01 ) $ 0.12 $ 0.05
Return on average assets 0.08 % 0.37 % 0.21 %
Return on average equity 0.93 % 4.06 % 1.96 %
Net interest margin 4.00 % 3.90 % 3.70 %
Non-interest income $ 25,278 $ 34,517 $ 17,928
Non-interest expense $ 57,768 $ 57,214 $ 29,558
Provision for loan and lease losses $ 1,929 $ 1,768 $ 2,168
Loans and leases receivable, net of allowance $ 2,376,992 $ 2,427,306 $ 1,611,257
Total deposits $ 3,109,146 $ 2,918,644 $ 1,698,798
Non-accrual loans $ 32,440 $ 31,648 $ 16,521
Net charge-offs $ (232 ) $ 650 $ 601
Allowance for loan and lease losses (ALLL) to total loans 0.83 % 0.77 % 0.98 %
ALLL that were collectively evaluated for impairment to originated loans 1.44 % 1.46 % 1.41 %

ALLL and Discount to total originated and non-credit impaired loans acquired through business acquisitions (1)

1.64 % 1.63 % 1.56 %
 

(1) The ratio was calculated by dividing a sum of ALLL and discounts by carrying value of loans

 
Banc of California, Inc.
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share data)
(Unaudited)
 
    March 31,     December 31,     March 31,
2014 2013 2013
ASSETS
Cash and due from banks $ 5,733 $ 4,937 $ 8,420
Interest-bearing deposits   327,906     105,181     114,776  
Total cash and cash equivalents 333,639 110,118 123,196
Time deposits in financial institutions 1,745 1,846 3,635
Securities available for sale 107,525 170,022 99,658
Loans held for sale 1,000,394 716,733 114,582
Loans and leases receivable 2,396,995 2,446,111 1,627,272
Allowance for loan and lease losses (20,003 ) (18,805 ) (16,015 )
Federal Home Loan Bank and other bank stock 26,801 22,600 8,844
Servicing rights, net 18,880 13,883 3,077
Other real estate owned, net 150 - 1,764
Premises and equipment, net 67,278 66,260 17,695
Goodwill 32,868 30,143 7,048
Other intangible assets, net 11,213 12,152 5,107
Deferred income tax - - 7,572
Income tax receivable 2,769 2,995 2,624
Bank-owned life insurance investment 18,928 18,881 18,742
Other assets   31,452     35,084     26,254  
Total assets $ 4,030,634   $ 3,628,023   $ 2,051,055  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing deposits $ 430,925 $ 429,158 $ 142,735
Interest-bearing deposits   2,678,221     2,489,486     1,556,063  
Total deposits 3,109,146 2,918,644 1,698,798
Advances from Federal Home Loan Bank 395,000 250,000 50,000
Federal funds purchased 70,000 - -
Notes payable, net 82,416 82,320 82,031
Reserve for loss reimbursements on sold loans 5,866 5,427 3,498
Accrued expenses and other liabilities   42,880     46,763     28,430  
Total liabilities 3,705,308 3,303,154 1,862,757
Commitments and contingent liabilities
 
Preferred stock, Series A, non-cumulative perpetual preferred stock 31,934 31,934 31,934
Preferred stock, Series B, non-cumulative perpetual preferred stock 10,000 10,000 -
Preferred stock, Series C, 8.00% non-cumulative perpetual preferred stock 37,943 37,943 -
Common stock 211 210 120
Common stock, class B non-voting non-convertible 6 6 11
Additional paid-in capital 258,861 256,306 155,139
Retained earnings 14,398 16,981 25,755
Treasury stock (27,726 ) (27,911 ) (25,850 )
Accumulated other comprehensive (loss)/income, net   (301 )   (600 )   1,189  
Total shareholders' equity   325,326     324,869     188,298  
Total liabilities and shareholders' equity $ 4,030,634   $ 3,628,023   $ 2,051,055  
 
 
Banc of California, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
 
    Three months ended
March 31,     December 31,     March 31,
2014 2013 2013
Interest and dividend income
Loans, including fees $ 41,530 $ 39,922 $ 18,537
Securities 924 473 498
Dividends and other interest-earning assets   322     361   133
Total interest and dividend income 42,776 40,756 19,168
Interest expense
Deposits 5,735 5,665 1,999
Federal Home Loan Bank advances 100 92 63
Notes payable and other interest-bearing liabilities   1,756     1,697   1,747
Total interest expense   7,591     7,454   3,809
Net interest income 35,185 33,302 15,359
Provision for loan and lease losses   1,929     1,768   2,168
Net interest income after provision for loan and lease losses 33,256 31,534 13,191
Noninterest income
Customer service fees 253 266 546
Mortgage banking income 17,324 15,028 16,370
All other income   7,701     19,223   1,012
Total noninterest income 25,278 34,517 17,928
Noninterest expense
Salaries and employee benefits 34,681 36,117 19,080
Occupancy and equipment 8,537 7,592 3,193
All other expenses   14,550     13,505   7,285
Total noninterest expense   57,768     57,214   29,558
Income (loss) before income taxes 766 8,837 1,561
Income tax (benefit) expense   9     5,516   632
Net income (loss) 757 3,321 929
Preferred stock dividends and discount accretion   910     951   288
Net income (loss) available to common shareholders $ (153 ) $ 2,370 $ 641
 
Basic earnings (loss) per common share $ (0.01 ) $ 0.13 $ 0.05
Diluted earnings (loss) per common share $ (0.01 ) $ 0.12 $ 0.05
 
 
Banc of California, Inc.
Selected Financial Data
(Dollars in thousands)
 
    As of or for the three months ended
March 31,     December 31,    

March 31,

2014 2013 2013
Quarterly average balance:
Total assets $ 3,728,170 $ 3,555,265 $ 1,770,089
Total gross loans and leases 3,289,689 3,056,232 1,416,071
Securities available for sale 163,007 170,350 117,108
Total interest earning assets 3,568,092 3,387,120 1,682,573
Total deposits 3,008,958 2,936,922 1,409,107
Total borrowings 350,631 244,708 140,711
Interest bearing liabilities 2,943,515 2,752,010 1,405,606
Total shareholders' equity 329,617 324,290 191,903
Profitability and other ratios:
Return on avg. assets (1) 0.08 % 0.37 % 0.21 %
Return on avg. equity (1) 0.93 % 4.06 % 1.96 %
Net interest margin (1) 4.00 % 3.90 % 3.70 %
Noninterest income to total revenue (2) 41.81 % 50.90 % 53.86 %
Noninterest income to avg. assets (1) 2.75 % 3.85 % 4.11 %
Noninterest exp. to avg. assets (1) 6.28 % 6.38 % 6.77 %
Efficiency ratio (3) 95.54 % 84.36 % 88.80 %
Avg. loans to average deposits 109.33 % 104.06 % 100.49 %
Average securities available for sale to average total assets 4.37 % 4.79 % 6.62 %
Average interest-earning assets to average interest-bearing liabilities 121.22 % 123.08 % 119.70 %
Average stockholders' equity to average total assets 8.84 % 9.12 % 10.84 %
Asset quality information and ratios:
Nonaccrual Loans, excluding PCI loans 32,440 31,648 16,521
90+ delinquent loans, excluding PCI loans 16,419 13,441 7,846
Other real estate owned (OREO), net 150 - 1,764
Net loan charge-offs (232 ) 650 601
Loan breakdown by evaluation type:
Originated loans
Individually evaluated for impairment $ 13,504 $ 16,704 $ 21,909
Collectively evaluated for impairment 1,210,993 1,168,195 987,486
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment 1,759 2,243 -
Collectively evaluated for impairment 438,815 469,916 189,389
Seasoned SFR mortgage loan pools - non-impaired 418,501 449,767 210,033
Acquired with deteriorated credit quality   313,422     339,286     218,455  
Total loans $ 2,396,995   $ 2,446,111   $ 1,627,272  
Allowance for loan and lease losses (ALLL) breakdown:
Originated loans
Individually evaluated for impairment $ 62 $ 96 $ 1,462
Collectively evaluated for impairment 17,397 17,103 13,923
Acquired loans through business acquisitions - non-impaired
Individually evaluated for impairment - - -
Collectively evaluated for impairment 2,347 1,410 391
Seasoned SFR mortgage loan pools - non-impaired - - -
Acquired with deteriorated credit quality   196     196     239  
Total ALLL $ 20,003   $ 18,805   $ 16,015  
Discount on Purchased/Acquired Loans:
Acquired loans through business acquisitions - non-impaired $ 7,479 $ 8,354 $ 2,898
Seasoned SFR mortgage loan pools - non-impaired 34,619 38,240 12,864
Acquired with deteriorated credit quality   89,303     105,650     132,942  
Total Discount $ 131,400   $ 152,244   $ 148,704  
Ratios:
To originated loans:
Individually evaluated for impairment 0.46 % 0.57 % 6.67 %
Collectively evaluated for impairment 1.44 % 1.46 % 1.41 %
Total ALLL 1.43 % 1.45 % 1.52 %
To originated and acquired non-impaired loans:
Individually evaluated for impairment 0.41 % 0.51 % 6.67 %
Collectively evaluated for impairment 1.20 % 1.13 % 1.22 %
Total ALLL 1.19 % 1.12 % 1.32 %
Total ALLL and discount (4) 1.64 % 1.63 % 1.56 %
To total loans:
Individually evaluated for impairment 0.41 % 0.51 % 6.67 %
Collectively evaluated for impairment 0.95 % 0.89 % 1.03 %
Total ALLL 0.83 % 0.77 % 0.98 %
Total ALLL and discount (4) 6.32 % 6.99 % 10.12 %
 

(1) Ratios are presented on an annualized basis

(2) Total revenue is equal to the sum of net interest income before provision and noninterest income

(3) Efficiency ratios are calculated by dividing noninterest expense by the sum of net interest income before provision for loan losses and noninterest income

(4) The ratios were calculated by dividing a sum of ALLL and discounts by carrying value of loans

 
Banc of California, Inc.
Selected Quarterly Financial Data
(Dollars in thousands, except per share data)
 
    As of

March 31,

    December 31,     March 31,
2014 2013 2013
Capital Ratios:
Banc of California, Inc.
Total risk-based capital ratio: 11 .93% 12 .45% 14 .42%
Tier 1 risk-based capital ratio: 10 .86% 11 .41% 13 .16%
Tier 1 leverage ratio: 7 .59% 8 .02% 9 .94%
Banc of California, NA (1)
Total risk-based capital ratio: 14 .54% 14 .65% 17 .65%
Tier 1 risk-based capital ratio: 13 .47% 13 .60% 16 .40%
Tier 1 leverage ratio: 9 .41% 9 .58% 10 .47%
The Private Bank of California (1)
Total risk-based capital ratio: N/A N/A 16 .06%
Tier 1 risk-based capital ratio: N/A N/A 15 .37%
Tier 1 leverage ratio: N/A N/A 13 .39%
 

(1) On October 11, 2013, The Private Bank of California was merged with the Company's other wholly owned banking subsidiary, Banc of California, NA.

Non-GAAP performance measure:

Tangible common equity to tangible assets ratio is supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles ("GAAP"). This non-GAAP measure is used by management in the analysis of Banc of California, Inc.'s. capital strength. Tangible equity is calculated by subtracting goodwill and other intangible assets from total stockholders' equity. Banking and financial institution regulators also exclude goodwill and other intangible assets from total stockholders' equity when assessing the capital adequacy of a financial institution. Management believes the presentation of this financial measure excluding the impact of these items provides useful supplemental information that is essential to a proper understanding of the capital strength of Banc of California, Inc. This disclosure should not be viewed as a substitution 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 table reconciles this non-GAAP performance measure to the GAAP performance measure for the periods indicated:

 
    As of
March 31,     December 31,     March 31,
2014 2013 2013
Tangible common equity to tangible assets ratio
Total assets $ 4,030,634 $ 3,628,023 $ 2,051,055
Less goodwill (32,868 ) (30,143 ) (7,048 )
Less other intangible assets   (11,213 )   (12,152 )   (5,107 )
Tangible assets $ 3,986,553   $ 3,585,728   $ 2,038,900  
 
Total stockholders' equity $ 325,326 $ 324,869 $ 188,298
Less preferred stock (79,877 ) (79,877 ) (31,934 )
Less goodwill (32,868 ) (30,143 ) (7,048 )
Less other intangible assets   (11,213 )   (12,152 )   (5,107 )
Tangible stockholders' equity $ 201,368   $ 202,697   $ 144,209  
 
Total stockholders' equity to total assets 8.07 % 8.95 % 9.18 %
Tangible stockholders' equity to tangible assets 5.05 % 5.65 % 7.07 %
 
Common stock outstanding 19,666,469 19,561,469 10,853,290
Class B non-voting non-convertible common stock outstanding   590,068     584,674     1,112,188  
Total common stock outstanding   20,256,537     20,146,143     11,965,478  
 
Tangible common equity per common stock $ 9.94 $ 10.06 $ 12.05
Book value per common stock $ 12.12 $ 12.16 $ 13.07
 

Source: Banc of California, Inc.



This article appears in: News Headlines

Referenced Stocks: BANC


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