Banc of California, Inc. (NYSE: BANC) today reported net income of $30.3 million and net income available to common shareholders of $26.7 million, or $0.91 per diluted common share for the year ended December 31, 2014. This compares to net income of $0.1 million and a net loss attributable to common shareholders of $2.1 million, or $(0.14) per diluted common share, for the year ended December 31, 2013.
For the quarter ended December 31, 2014, the Company reported net income available to common shareholders of $9.3 million, or $0.25 per diluted common share. This compares to net income available to common shareholders of $2.4 million, or $0.12 per diluted common share, for the quarter ended December 31, 2013.
“Over the past three years, Banc of California has emerged as California’s Bank,” said Steven Sugarman, President and Chief Executive Officer. “We are now a $6 billion financial institution with the scale to serve California’s diverse private businesses, entrepreneurs and homeowners. As we look to 2015, we believe there are compelling economics for continued growth and we are well situated to deliver on our stated financial targets.”
The Company’s consolidated assets totaled $6.0 billion at December 31, 2014, an increase of $1.4 billion compared to the prior quarter, and an increase of $2.3 billion compared to a year ago.
Return on average assets for the fourth quarter was 0.8%, and 0.7% for the full year ended December 31, 2014. Return on average tangible common equity was 11.2% for the fourth quarter, and 10.1% for the full year ended December 31, 2014. Both the full year and fourth quarter results included the release of the remaining $8.3 million deferred tax asset valuation allowance which resulted in a net tax benefit of $4.5 million and $5.5 million, for the full year and fourth quarter, respectively.
Total loans and leases, representing both loans held for investment and held for sale, of $5.1 billion at December 31, 2014 increased by $1.3 billion, compared to $3.8 billion at September 30, 2014, and have increased by $2.0 billion compared to the year ended December 31, 2013.
Total deposits of $4.7 billion at December 31, 2014 represented an increase of $1.0 billion compared to $3.6 billion at September 30, 2014, and an increase of $1.8 billion compared to $2.9 billion at December 31, 2013.
Growth in both total loans and deposits during the fourth quarter was primarily driven by the branch transaction with Popular Community Bank in November which resulted in the acquisition of $1.1 billion of loan balances and $1.1 billion of deposit balances.
Total revenue for the year ended December 31, 2014 of $300.9 million increased by $106.9 million, or 55%, compared to the full year ended December 31, 2013. Revenue of $87.2 million for the fourth quarter increased by $4.9 million compared with the prior quarter, and was $19.4 million higher compared to the fourth quarter 2013.
Net interest income of $155.3 million for 2014 increased by $58.0 million, or 60%, from 2013. Fourth quarter net interest income of $46.3 million increased 21% from the prior quarter, and increased by $13.0 million, or 39% compared to the year ago quarter.
Net interest margin of 3.72% for 2014 increased by 5 basis points compared to 3.67% for 2013. Fourth quarter net interest margin was 3.65%, an increase of 7 basis points from 3.58% reported in the third quarter. Lower deposit costs contributed to the margin expansion during the quarter.
Noninterest income for 2014 totaled $145.6 million, an increase of $48.9 million, compared to $96.7 million for 2013. Noninterest income for the fourth quarter totaled $40.9 million, compared to $44.1 million for the prior quarter and $34.5 million for the year ago quarter.
Total noninterest expense for the fourth quarter totaled $78.4 million, an increase of $10.8 million compared to the prior quarter. Fourth quarter noninterest expense included approximately $5.9 million of non-recurring costs including from the acquisition of branches from Popular Community Bank as well as an increase of $2.1 million of ongoing operating expense from the acquired branch locations.
The Company’s allowance for loan and lease losses (ALLL) increased to $29.5 million for the fourth quarter, and equaled 1.38% of originated loans, and represented a coverage ratio of 77% of nonperforming loans at December 31, 2014. The provision for loan losses for the fourth quarter was $4.2 million, compared to $2.8 million in the prior quarter, driven primarily by loan growth during the fourth quarter. The ratio of delinquent non-PCI loans to total non-PCI loans equaled 1.55% for the fourth quarter, and declined compared to 2.08% from the prior quarter, and was down from 2.43% a year ago. The ratio of nonperforming assets to total assets declined from 0.86% at the third quarter and stands at 0.65% as of December 31, 2014. Net charge offs for the fourth quarter were in a net recovery position of less than $0.1 million.
The Company remains well-capitalized with a Tier 1 Risk-Based Capital Ratio of 10.5%, a Tier 1 Leverage Ratio of 8.6%, and a Tangible Common Equity to Tangible Assets Ratio (TCE/TA) of 6.2% as of December 31, 2014.
The Company will host a conference call to discuss its fourth quarter and full year financial results at 8:00 a.m. Pacific Time (PT) tomorrow, March 6, 2015. Interested parties are welcome to attend the conference call by dialing 888-317-6003, and referencing event code 9966897. A live audio webcast will also be available and the webcast link will be posted on the Company’s website under the Investors section. The slide presentation for the call will also be available on the Company's website prior to the call.
About Banc of California, Inc.
Banc of California, Inc. (NYSE: BANC) has total assets of $6.0 billion and is the largest bank holding company headquartered in Orange County, CA. The Company’s principal subsidiary, Banc of California, N.A., provides banking services and loans serving the diverse needs of California’s private businesses, entrepreneurs and homeowners. Banc of California operates over 100 offices, including 40 full-service branch locations, in California and the West.
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.
| Banc of California, Inc | ||||||||||||
| Consolidated Statements of Financial Condition | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2014 | 2014 | 2013 | ||||||||||
| ASSETS | ||||||||||||
| Cash and due from banks | $ | 14,364 | $ | 5,646 | $ | 4,937 | ||||||
| Interest-bearing deposits | 216,835 | 179,339 | 105,181 | |||||||||
| Total cash and cash equivalents | 231,199 | 184,985 | 110,118 | |||||||||
| Time deposits in financial institutions | 1,900 | 1,900 | 1,846 | |||||||||
| Securities available for sale | 345,695 | 310,385 | 170,022 | |||||||||
| Loans held for sale | 1,187,090 | 1,127,339 | 716,733 | |||||||||
| Loans and leases receivable | 3,949,122 | 2,712,068 | 2,446,111 | |||||||||
| Allowance for loan and lease losses | (29,480 | ) | (25,283 | ) | (18,805 | ) | ||||||
| Federal Home Loan Bank and other bank stock | 42,241 | 35,432 | 22,600 | |||||||||
| Servicing rights, net | 19,566 | 11,745 | 13,883 | |||||||||
| Other real estate owned, net | 423 | 605 | - | |||||||||
| Premises and equipment, net | 78,685 | 67,323 | 66,260 | |||||||||
| Goodwill | 31,591 | 31,591 | 30,143 | |||||||||
| Other intangible assets, net | 25,252 | 10,829 | 12,152 | |||||||||
| Deferred income tax | 16,445 | 8,663 | - | |||||||||
| Income tax receivable | - | - | 2,995 | |||||||||
| Bank-owned life insurance investment | 19,095 | 19,038 | 18,881 | |||||||||
| Other assets | 52,747 | 41,376 | 35,084 | |||||||||
| Total assets | $ | 5,971,571 | $ | 4,537,996 | $ | 3,628,023 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||
| Deposits | ||||||||||||
| Noninterest-bearing deposits | $ | 662,295 | $ | 457,743 | $ | 429,158 | ||||||
| Interest-bearing deposits | 4,009,536 | 3,173,967 | 2,489,486 | |||||||||
| Total deposits | 4,671,831 | 3,631,710 | 2,918,644 | |||||||||
| Advances from Federal Home Loan Bank | 633,000 | 305,000 | 250,000 | |||||||||
| Notes payable, net | 93,569 | 95,549 | 82,320 | |||||||||
| Reserve for loss reimbursements on sold loans | 8,303 | 7,045 | 5,427 | |||||||||
| Income taxes payable | 56 | 2,158 | - | |||||||||
| Accrued expenses and other liabilities | 61,223 | 49,653 | 46,763 | |||||||||
| Total liabilities | 5,467,982 | 4,091,115 | 3,303,154 | |||||||||
| 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 | 10,000 | |||||||||
| Preferred stock, Series C, 8.00% non-cumulative perpetual preferred stock | 37,943 | 37,943 | 37,943 | |||||||||
| Common stock | 358 | 297 | 210 | |||||||||
| Common stock, class B non-voting non-convertible | 6 | 6 | 6 | |||||||||
| Additional paid-in capital | 422,910 | 371,738 | 256,306 | |||||||||
| Retained earnings | 29,863 | 24,862 | 16,981 | |||||||||
| Treasury stock | (29,798 | ) | (29,798 | ) | (27,911 | ) | ||||||
| Accumulated other comprehensive (loss)/income, net | 373 | (101 | ) | (600 | ) | |||||||
| Total shareholders’ equity | 503,589 | 446,881 | 324,869 | |||||||||
| Total liabilities and shareholders’ equity | $ | 5,971,571 | $ | 4,537,996 | $ | 3,628,023 | ||||||
| Banc of California, Inc | ||||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||
| (Unaudited) | ||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||
| Interest and dividend income | ||||||||||||||||||
| Loans, including fees | $ | 52,599 | $ | 44,555 | $ | 39,922 | $ | 180,761 | $ | 116,673 | ||||||||
| Securities | 1,781 | 1,460 | 473 | 5,158 | 2,632 | |||||||||||||
| Dividends and other interest-earning assets | 700 | 634 | 361 | 2,220 | 1,206 | |||||||||||||
| Total interest and dividend income | 55,080 | 46,649 | 40,756 | 188,139 | 120,511 | |||||||||||||
| Interest expense | ||||||||||||||||||
| Deposits | 6,440 | 6,165 | 5,665 | 24,411 | 16,051 | |||||||||||||
| Federal Home Loan Bank advances | 210 | 118 | 92 | 527 | 269 | |||||||||||||
| Notes payable and other interest-bearing liabilities | 2,099 | 2,180 | 1,697 | 7,924 | 6,962 | |||||||||||||
| Total interest expense | 8,749 | 8,463 | 7,454 | 32,862 | 23,282 | |||||||||||||
| Net interest income | 46,331 | 38,186 | 33,302 | 155,277 | 97,229 | |||||||||||||
| Provision for loan and lease losses | 4,159 | 2,780 | 1,768 | 10,976 | 7,963 | |||||||||||||
| Net interest income after provision for loan and lease losses | 42,172 | 35,406 | 31,534 | 144,301 | 89,266 | |||||||||||||
| Noninterest income | ||||||||||||||||||
| Customer service fees | 651 | 230 | 266 | 1,490 | 1,942 | |||||||||||||
| Net gain on sale of loans | 3,927 | 10,260 | 4,180 | 19,828 | 8,700 | |||||||||||||
| Mortgage banking income | 25,030 | 26,943 | 15,028 | 95,430 | 67,890 | |||||||||||||
| Advisory service fees | 6,722 | 3,264 | 354 | 12,904 | 377 | |||||||||||||
| Loan brokerage income | 2,314 | 2,033 | 1,343 | 8,674 | 1,356 | |||||||||||||
| All other income | 2,245 | 1,368 | 13,346 | 7,311 | 16,478 | |||||||||||||
| Total noninterest income | 40,889 | 44,098 | 34,517 | 145,637 | 96,743 | |||||||||||||
| Noninterest expense | ||||||||||||||||||
| Salaries and employee benefits | 47,974 | 41,094 | 36,117 | 162,879 | 110,687 | |||||||||||||
| Occupancy and equipment | 9,512 | 7,969 | 7,592 | 33,443 | 19,662 | |||||||||||||
| All other expenses | 20,885 | 18,494 | 13,505 | 67,839 | 48,321 | |||||||||||||
| Total noninterest expense | 78,371 | 67,557 | 57,214 | 264,161 | 178,670 | |||||||||||||
| Income before income taxes | 4,690 | 11,947 | 8,837 | 25,777 | 7,339 | |||||||||||||
| Income tax (benefit) expense | (5,524 | ) | 721 | 5,516 | (4,541 | ) | 7,260 | |||||||||||
| Net income | 10,214 | 11,226 | 3,321 | 30,318 | 79 | |||||||||||||
| Preferred stock dividends | 910 | 910 | 951 | 3,640 | 2,185 | |||||||||||||
| Net income (loss) available to common shareholders | $ | 9,304 | $ | 10,316 | $ | 2,370 | $ | 26,678 | $ | (2,106 | ) | |||||||
| Basic earnings (loss) per total common share | $ | 0.25 | $ | 0.31 | $ | 0.13 | $ | 0.91 | $ | (0.14 | ) | |||||||
| Diluted earnings (loss) per total common share | $ | 0.25 | $ | 0.30 | $ | 0.12 | $ | 0.91 | $ | (0.14 | ) | |||||||
| Banc of California, Inc | ||||||||||||||||||||
| Selected Financial Data | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Average balances: | ||||||||||||||||||||
| Total assets | $ | 5,223,463 | $ | 4,391,523 | $ | 3,555,265 | $ | 4,348,626 | $ | 2,773,276 | ||||||||||
| Total gross loans and leases | 4,534,428 | 3,829,204 | 3,056,232 | 3,805,239 | 2,217,421 | |||||||||||||||
| Securities available for sale | 310,454 | 257,067 | 170,350 | 225,182 | 153,229 | |||||||||||||||
| Total interest earning assets | 5,033,973 | 4,228,555 | 3,387,120 | 4,176,518 | 2,647,070 | |||||||||||||||
| Total interest-bearing deposits | 3,699,464 | 3,070,130 | 2,507,302 | 3,057,606 | 2,026,408 | |||||||||||||||
| Total borrowings | 406,531 | 378,671 | 244,708 | 364,095 | 160,045 | |||||||||||||||
| Interest bearing liabilities | 4,105,995 | 3,448,801 | 2,752,010 | 3,421,701 | 2,186,453 | |||||||||||||||
| Total shareholders’ equity | 487,578 | 449,392 | 324,290 | 413,454 | 264,818 | |||||||||||||||
| Profitability and other ratios: | ||||||||||||||||||||
| Return on average assets (1) | 0.78 | % | 1.01 | % | 0.37 | % | 0.70 | % | 0.00 | % | ||||||||||
| Return on average equity (1) | 8.31 | % | 9.91 | % | 4.06 | % | 7.33 | % | 0.03 | % | ||||||||||
| Dividend payout ratio (2) | 48.00 | % | 38.71 | % | 92.31 | % | 52.75 | % | 0.00 | % | ||||||||||
| Net interest spread | 3.49 | % | 3.41 | % | 3.70 | % | 3.54 | % | 3.49 | % | ||||||||||
| Net interest margin (1) | 3.65 | % | 3.58 | % | 3.90 | % | 3.72 | % | 3.67 | % | ||||||||||
| Noninterest income to total revenue (3) | 46.88 | % | 53.59 | % | 50.90 | % | 48.40 | % | 49.87 | % | ||||||||||
| Noninterest income to average total assets (1) | 3.11 | % | 3.98 | % | 3.85 | % | 3.35 | % | 3.49 | % | ||||||||||
| Noninterest expense to average total assets (1) | 5.95 | % | 6.10 | % | 6.38 | % | 6.07 | % | 6.44 | % | ||||||||||
| Efficiency ratio (4) | 89.85 | % | 82.10 | % | 84.36 | % | 87.79 | % | 92.11 | % | ||||||||||
| Average held for investment loans and leases to average deposits | 79.08 | % | 75.39 | % | 93.19 | % | 77.36 | % | 86.34 | % | ||||||||||
| Average securities available for sale to average total assets | 5.94 | % | 5.85 | % | 4.79 | % | 5.18 | % | 5.53 | % | ||||||||||
| Average shareholders’ equity to average total assets | 9.33 | % | 10.23 | % | 9.12 | % | 9.51 | % | 9.55 | % | ||||||||||
| Allowance for loan and lease losses (ALLL): | ||||||||||||||||||||
| Balance at beginning of period | $ | 25,283 | $ | 22,627 | $ | 19,130 | $ | 18,805 | $ | 14,448 | ||||||||||
| Loans and leases charged off | (25 | ) | (312 | ) | (868 | ) | (923 | ) | (3,013 | ) | ||||||||||
| Recoveries of loans and leases previously charged off | 63 | 96 | 218 | 1,235 | 850 | |||||||||||||||
| Transfer of loans from (to) held-for-sale | - | 92 | (1,443 | ) | (613 | ) | (1,443 | ) | ||||||||||||
| Provision for loan and lease losses | 4,159 | 2,780 | 1,768 | 10,976 | 7,963 | |||||||||||||||
| Balance at end of period | $ | 29,480 | $ | 25,283 | $ | 18,805 | $ | 29,480 | $ | 18,805 | ||||||||||
| Reserve for loss on repurchased loans | ||||||||||||||||||||
| Balance at beginning of period | $ | 7,045 | $ | 6,174 | $ | 4,282 | $ | 5,427 | $ | 3,485 | ||||||||||
| Acquired in business combinations | - | - | 314 | - | 314 | |||||||||||||||
| Provision for loan repurchases | 1,149 | 1,556 | 1,020 | 4,243 | 2,383 | |||||||||||||||
| Payment made for loss reimbursement on sold loans | 109 | (685 | ) | (189 | ) | (1,367 | ) | (755 | ) | |||||||||||
| Balance at end of period | $ | 8,303 | $ | 7,045 | $ | 5,427 | $ | 8,303 | $ | 5,427 | ||||||||||
| (1) Ratios are presented on an annualized basis | ||||||||||||||||||||
| (2) Dividends declared per common share divided by basic earnings per share. Not applicable for the year ended December 31, 2013, due to the net loss attributable to shareholders. | ||||||||||||||||||||
| (3) Total revenue is equal to the sum of net interest income before provision and noninterest income. | ||||||||||||||||||||
| (4) The ratios were calculated by dividing noninterest expense by the sum of net interest income before provision for loan and lease losses and noninterest income. | ||||||||||||||||||||
| Banc of California, Inc | ||||||||||||
| Selected Financial Data, Continued | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2014 | 2014 | 2013 | ||||||||||
| Asset quality information and ratios: | ||||||||||||
| 30 to 89 days delinquent, excluding PCI loans | $ | 40,694 | $ | 35,531 | $ | 37,699 | ||||||
| 90+ days delinquent, excluding PCI loans | 16,835 | 15,672 | 13,441 | |||||||||
| Total delinquent loans, excluding PCI loans | 57,529 | 51,203 | 51,140 | |||||||||
| PCI loans, 30 to 89 days delinquent | 17,641 | 18,743 | 30,514 | |||||||||
| PCI loans, 90+ days delinquent | 5,761 | 4,017 | 12,205 | |||||||||
| Total delinquent PCI loans | 23,402 | 22,760 | 42,719 | |||||||||
| Total delinquent loans | $ | 80,931 | $ | 73,963 | $ | 93,859 | ||||||
| Total delinquent non-PCI loans to total non-PCI loans | 1.55 | % | 2.08 | % | 2.43 | % | ||||||
| Total delinquent loans to gross loans | 2.05 | % | 2.73 | % | 3.84 | % | ||||||
| Non-performing loans, excluding PCI loans | $ | 38,381 | $ | 38,333 | $ | 31,648 | ||||||
| 90+ days delinquent and still accruing loans, excluding PCI loans | - | - | - | |||||||||
| Other real estate owned | 423 | 605 | - | |||||||||
| Non-performing assets | 38,804 | 38,938 | 31,648 | |||||||||
| ALLL to non-performing loans | 76.81 | % | 65.96 | % | 59.42 | % | ||||||
| Non-performing loans to gross loans | 0.97 | % | 1.41 | % | 1.29 | % | ||||||
| Non-performing assets to total assets | 0.65 | % | 0.86 | % | 0.87 | % | ||||||
| Loan breakdown by ALLL evaluation type: | ||||||||||||
| Originated loans | ||||||||||||
| Individually evaluated for impairment | $ | 29,287 | $ | 29,030 | $ | 16,704 | ||||||
| Collectively evaluated for impairment | 1,892,240 | 1,668,004 | 1,168,195 | |||||||||
| Acquired loans through business acquisitions - non-impaired | ||||||||||||
| Individually evaluated for impairment | 4,191 | 8,004 | 2,243 | |||||||||
| Collectively evaluated for impairment | 1,411,927 | 377,554 | 469,916 | |||||||||
| Seasoned SFR mortgage loan pools - non-impaired | 364,580 | 376,575 | 449,767 | |||||||||
| Acquired with deteriorated credit quality | 246,897 | 252,901 | 339,286 | |||||||||
| Total loans | $ | 3,949,122 | $ | 2,712,068 | $ | 2,446,111 | ||||||
| ALLL breakdown: | ||||||||||||
| Originated loans | ||||||||||||
| Individually evaluated for impairment | $ | 1,288 | $ | 517 | $ | 96 | ||||||
| Collectively evaluated for impairment | 25,263 | 22,011 | 17,103 | |||||||||
| Acquired loans through business acquisitions - non-impaired | ||||||||||||
| Individually evaluated for impairment | - | 7 | - | |||||||||
| Collectively evaluated for impairment | 2,906 | 2,748 | 1,410 | |||||||||
| Seasoned SFR mortgage loan pools - non-impaired | - | - | - | |||||||||
| Acquired with deteriorated credit quality | 23 | - | 196 | |||||||||
| Total ALLL | $ | 29,480 | $ | 25,283 | $ | 18,805 | ||||||
| Discount on Purchased/Acquired Loans: | ||||||||||||
| Acquired loans through business acquisitions - non-impaired | $ | 16,441 | $ | 6,512 | $ | 8,354 | ||||||
| Seasoned SFR mortgage loan pools - non-impaired | 29,955 | 30,811 | 38,240 | |||||||||
| Acquired with deteriorated credit quality | 55,865 | 57,961 | 105,650 | |||||||||
| Total Discount | $ | 102,261 | $ | 95,284 | $ | 152,244 | ||||||
| Ratios: | ||||||||||||
| To originated loans: | ||||||||||||
| Individually evaluated for impairment | 4.40 | % | 1.78 | % | 0.57 | % | ||||||
| Collectively evaluated for impairment | 1.34 | % | 1.32 | % | 1.46 | % | ||||||
| Total ALLL | 1.38 | % | 1.33 | % | 1.45 | % | ||||||
| To originated and acquired non-impaired loans: | ||||||||||||
| Individually evaluated for impairment | 3.85 | % | 1.41 | % | 0.51 | % | ||||||
| Collectively evaluated for impairment | 0.85 | % | 1.21 | % | 1.13 | % | ||||||
| Total ALLL | 0.88 | % | 1.21 | % | 1.12 | % | ||||||
| Total ALLL and discount (1) | 1.38 | % | 1.53 | % | 1.63 | % | ||||||
| To total loans: | ||||||||||||
| Individually evaluated for impairment | 3.85 | % | 1.41 | % | 0.51 | % | ||||||
| Collectively evaluated for impairment | 0.77 | % | 1.02 | % | 0.89 | % | ||||||
| Total ALLL | 0.75 | % | 0.93 | % | 0.77 | % | ||||||
| Total ALLL and discount (1) | 3.34 | % | 4.45 | % | 6.99 | % | ||||||
| (1) The ratios were calculated by dividing a sum of ALLL and discounts by carrying value of loans. | ||||||||||||
| Banc of California, Inc | ||||||||||||
| Selected Financial Data, Continued | ||||||||||||
| (Dollars in thousands) | ||||||||||||
| (Unaudited) | ||||||||||||
| December 31, | September 30, | December 31, | ||||||||||
| 2014 | 2014 | 2013 | ||||||||||
| Composition of held for investment loans and leases | ||||||||||||
| Commercial real estate | $ | 999,857 | $ | 521,867 | $ | 529,883 | ||||||
| Multi-family | 955,683 | 367,364 | 141,580 | |||||||||
| Construction | 42,198 | 25,997 | 24,933 | |||||||||
| Commercial and industrial | 490,900 | 366,416 | 287,771 | |||||||||
| SBA | 36,155 | 25,729 | 27,428 | |||||||||
| Lease financing | 85,749 | 72,027 | 31,949 | |||||||||
| Total commercial loans | 2,610,542 | 1,379,400 | 1,043,544 | |||||||||
| Single family residential mortgage | 1,171,662 | 1,191,021 | 1,286,541 | |||||||||
| Other consumer | 166,918 | 141,647 | 116,026 | |||||||||
| Total consumer loans | 1,338,580 | 1,332,668 | 1,402,567 | |||||||||
| Total gross loans and leases | $ | 3,949,122 | $ | 2,712,068 | $ | 2,446,111 | ||||||
| Composition percentage of held for investment loans and leases | ||||||||||||
| Commercial real estate | 25.3 | % | 19.2 | % | 21.7 | % | ||||||
| Multi-family | 24.2 | % | 13.5 | % | 5.8 | % | ||||||
| Construction | 1.1 | % | 1.0 | % | 1.0 | % | ||||||
| Commercial and industrial | 12.4 | % | 13.5 | % | 11.8 | % | ||||||
| SBA | 0.9 | % | 0.9 | % | 1.1 | % | ||||||
| Lease financing | 2.2 | % | 2.7 | % | 1.3 | % | ||||||
| Total commercial loans | 66.1 | % | 50.8 | % | 42.7 | % | ||||||
| Single family residential mortgage | 29.7 | % | 44.0 | % | 52.6 | % | ||||||
| Other consumer | 4.2 | % | 5.2 | % | 4.7 | % | ||||||
| Total consumer loans | 33.9 | % | 49.2 | % | 57.3 | % | ||||||
| Total gross loans and leases | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Composition of deposits | ||||||||||||
| Noninterest-bearing checking | $ | 662,295 | $ | 457,743 | $ | 429,158 | ||||||
| Interest-bearing checking | 1,054,828 | 779,704 | 539,098 | |||||||||
| Money market | 1,074,432 | 769,291 | 518,696 | |||||||||
| Savings | 985,646 | 932,133 | 963,536 | |||||||||
| Certificates of deposit | 894,630 | 692,839 | 468,156 | |||||||||
| Total deposits | $ | 4,671,831 | $ | 3,631,710 | $ | 2,918,644 | ||||||
| Composition percentage of deposits | ||||||||||||
| Noninterest-bearing checking | 14.2 | % | 12.6 | % | 14.7 | % | ||||||
| Interest-bearing checking | 22.6 | % | 21.5 | % | 18.5 | % | ||||||
| Money market | 23.0 | % | 21.2 | % | 17.8 | % | ||||||
| Savings | 21.1 | % | 25.6 | % | 33.0 | % | ||||||
| Certificates of deposit | 19.1 | % | 19.1 | % | 16.0 | % | ||||||
Total deposits | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
| Banc of California, Inc | ||||||||||||||||||||||||||||||
| Average Balance, Average Yield Earned, and Average Cost Paid | ||||||||||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||
| Three Months Ended | ||||||||||||||||||||||||||||||
| December 31, 2014 | September 30, 2014 | December 31, 2013 | ||||||||||||||||||||||||||||
| Average | Yield | Average | Yield | Average | Yield | |||||||||||||||||||||||||
| Balance | Interest | / Cost | Balance | Interest | / Cost | Balance | Interest | / Cost | ||||||||||||||||||||||
| Interest earning assets: | ||||||||||||||||||||||||||||||
| Loans held for sale and SFR mortgage | $ | 1,778,112 | $ | 16,741 | 3.74 | % | $ | 1,757,890 | $ | 16,979 | 3.83 | % | $ | 1,204,739 | $ | 13,230 | 4.36 | % | ||||||||||||
| Seasoned SFR mortgage loan pools | 606,879 | 9,605 | 6.28 | % | 675,083 | 11,753 | 6.91 | % | 776,359 | 12,776 | 6.53 | % | ||||||||||||||||||
| Commercial real estate, multi-family, and construction | 1,486,406 | 17,993 | 4.80 | % | 827,934 | 9,592 | 4.60 | % | 670,057 | 8,765 | 5.19 | % | ||||||||||||||||||
| Commercial and industrial, SBA, and lease financing | 523,194 | 6,192 | 4.70 | % | 451,992 | 5,060 | 4.44 | % | 326,160 | 4,255 | 5.18 | % | ||||||||||||||||||
| Other consumer | 139,837 | 2,068 | 5.87 | % | 116,305 | 1,171 | 3.99 | % | 78,917 | 896 | 4.50 | % | ||||||||||||||||||
| Gross loans and leases | 4,534,428 | 52,599 | 4.60 | % | 3,829,204 | 44,555 | 4.62 | % | 3,056,232 | 39,922 | 5.18 | % | ||||||||||||||||||
| Securities | 310,454 | 1,781 | 2.28 | % | 257,067 | 1,460 | 2.25 | % | 170,350 | 473 | 1.10 | % | ||||||||||||||||||
| Other interest-earning assets | 189,091 | 700 | 1.47 | % | 142,284 | 634 | 1.77 | % | 160,538 | 361 | 0.89 | % | ||||||||||||||||||
| Total interest-earning assets | 5,033,973 | 55,080 | 4.34 | % | 4,228,555 | 46,649 | 4.38 | % | 3,387,120 | 40,756 | 4.77 | % | ||||||||||||||||||
| Allowance for loan and lease losses | (26,105 | ) | (23,266 | ) | (19,960 | ) | ||||||||||||||||||||||||
| BOLI and non-interest earning assets | 215,595 | 186,234 | 188,105 | |||||||||||||||||||||||||||
| Total assets | $ | 5,223,463 | $ | 4,391,523 | $ | 3,555,265 | ||||||||||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||||||||||||
| Savings | 960,253 | 1,963 | 0.81 | % | 953,925 | 2,215 | 0.92 | % | 969,266 | 2,751 | 1.13 | % | ||||||||||||||||||
| Interest-bearing checking | 937,623 | 2,078 | 0.88 | % | 745,635 | 2,037 | 1.08 | % | 515,911 | 1,450 | 1.12 | % | ||||||||||||||||||
| Money market | 964,414 | 841 | 0.35 | % | 681,576 | 673 | 0.39 | % | 550,652 | 639 | 0.46 | % | ||||||||||||||||||
| Certificates of deposit | 837,174 | 1,558 | 0.74 | % | 688,994 | 1,240 | 0.71 | % | 471,473 | 825 | 0.69 | % | ||||||||||||||||||
| FHLB advances | 307,859 | 210 | 0.27 | % | 276,739 | 118 | 0.17 | % | 157,772 | 92 | 0.23 | % | ||||||||||||||||||
| Long-term debt and other interest-bearing liabilities | 98,672 | 2,099 | 8.44 | % | 101,932 | 2,180 | 8.48 | % | 86,936 | 1,697 | 7.74 | % | ||||||||||||||||||
Total interest-bearing liabilities | 4,105,995 | 8,749 | 0.85 | % | 3,448,801 | 8,463 | 0.97 | % | 2,752,010 | 7,454 | 1.07 | % | ||||||||||||||||||
| Noninterest-bearing deposits | 577,623 | 448,825 | 429,620 | |||||||||||||||||||||||||||
| Non-interest-bearing liabilities | 52,267 | 44,505 | 49,345 | |||||||||||||||||||||||||||
| Total liabilities | 4,735,885 | 3,942,131 | 3,230,975 | |||||||||||||||||||||||||||
| Total shareholders’ equity | 487,578 | 449,392 | 324,290 | |||||||||||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 5,223,463 | $ | 4,391,523 | $ | 3,555,265 | ||||||||||||||||||||||||
| Net interest income/spread | $ | 46,331 | 3.49 | % | $ | 38,186 | 3.41 | % | $ | 33,302 | 3.70 | % | ||||||||||||||||||
| Net interest margin | 3.65 | % | 3.58 | % | 3.90 | % | ||||||||||||||||||||||||
| Banc of California, Inc | ||||||||||||||||||||
| Average Balance, Average Yield Earned, and Average Cost Paid, Continued | ||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Year Ended | ||||||||||||||||||||
| December 31, 2014 | December 31, 2013 | |||||||||||||||||||
| Average | Yield | Average | Yield | |||||||||||||||||
| Balance | Interest | / Cost | Balance | Interest | / Cost | |||||||||||||||
| Interest earning assets: | ||||||||||||||||||||
| Loans held for sale and SFR mortgage | $ | 1,632,547 | $ | 62,269 | 3.81 | % | $ | 935,284 | $ | 39,216 | 4.19 | % | ||||||||
| Seasoned SFR mortgage loan pools | 683,121 | $ | 46,153 | 6.76 | % | 439,445 | 32,878 | 7.48 | % | |||||||||||
| Commercial real estate, multi-family, and construction | 935,129 | $ | 44,494 | 4.76 | % | 560,661 | 28,241 | 5.04 | % | |||||||||||
| Commercial and industrial, SBA, and lease financing | 438,250 | $ | 22,558 | 5.15 | % | 234,426 | 14,376 | 6.13 | % | |||||||||||
| Other consumer | 116,192 | $ | 5,287 | 4.55 | % | 47,605 | 1,962 | 4.12 | % | |||||||||||
| Gross loans and leases | 3,805,239 | 180,761 | 4.75 | % | 2,217,421 | 116,673 | 5.26 | % | ||||||||||||
| Securities | 225,182 | 5,158 | 2.29 | % | 153,229 | 2,632 | 1.72 | % | ||||||||||||
| Other interest-earning assets | 146,097 | 2,220 | 1.52 | % | 276,420 | 1,206 | 0.44 | % | ||||||||||||
Total interest-earning assets | 4,176,518 | 188,139 | 4.50 | % | 2,647,070 | 120,511 | 4.55 | % | ||||||||||||
| Allowance for loan and lease losses | (22,354 | ) | (17,332 | ) | ||||||||||||||||
| BOLI and non-interest earning assets | 194,462 | 143,538 | ||||||||||||||||||
| Total assets | $ | 4,348,626 | $ | 2,773,276 | ||||||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||||
| Savings | 967,803 | 9,121 | 0.94 | % | 756,625 | 7,994 | 1.06 | % | ||||||||||||
| Interest-bearing checking | 735,156 | 7,629 | 1.04 | % | 339,731 | 2,041 | 0.60 | % | ||||||||||||
| Money market | 692,464 | 2,788 | 0.40 | % | 371,058 | 1,901 | 0.51 | % | ||||||||||||
| Certificates of deposit | 662,183 | 4,873 | 0.74 | % | 558,994 | 4,115 | 0.74 | % | ||||||||||||
| FHLB advances | 267,816 | 527 | 0.20 | % | 74,712 | 269 | 0.36 | % | ||||||||||||
| Notes payable and other interest-bearing liabilities | 96,279 | 7,924 | 8.23 | % | 85,333 | 6,962 | 8.16 | % | ||||||||||||
| Total interest-bearing liabilities | 3,421,701 | 32,862 | 0.96 | % | 2,186,453 | 23,282 | 1.06 | % | ||||||||||||
| Noninterest-bearing deposits | 468,077 | 287,325 | ||||||||||||||||||
| Non-interest-bearing liabilities | 45,394 | 34,680 | ||||||||||||||||||
| Total liabilities | 3,935,172 | 2,508,458 | ||||||||||||||||||
| Total shareholders’ equity | 413,454 | 264,818 | ||||||||||||||||||
| Total liabilities and shareholders’ equity | $ | 4,348,626 | $ | 2,773,276 | ||||||||||||||||
| Net interest income/spread | $ | 155,277 | 3.54 | % | $ | 97,229 | 3.49 | % | ||||||||||||
| Net interest margin | 3.72 | % | 3.67 | % | ||||||||||||||||
| Banc of California, Inc | |||||||||
| Capital Ratios | |||||||||
| (Unaudited) | |||||||||
| December 31, | September 30, | December 31, | |||||||
| 2014 | 2014 | 2013 | |||||||
| Capital Ratios: | |||||||||
| Banc of California, Inc. | |||||||||
| Total risk-based capital ratio: | 11.28 | % | 14.97 | % | 12.45 | % | |||
| Tier 1 risk-based capital ratio: | 10.54 | % | 14.03 | % | 11.41 | % | |||
| Tier 1 leverage ratio: | 8.57 | % | 9.28 | % | 8.02 | % | |||
| Banc of California, NA | |||||||||
| Total risk-based capital ratio: | 12.04 | % | 15.75 | % | 14.65 | % | |||
| Tier 1 risk-based capital ratio: | 11.29 | % | 14.80 | % | 13.60 | % | |||
| Tier 1 leverage ratio: | 9.17 | % | 9.80 | % | 9.58 | % | |||
| Banc of California, Inc | ||||||||||||||||||||
| Non-GAAP Measures | ||||||||||||||||||||
| (Dollars in thousands, except per share data) | ||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||
| Non-GAAP performance measure: | ||||||||||||||||||||
| Tangible common equity to tangible assets ratio and return on average tangible common equity are supplemental financial information determined by a method other than in accordance with U.S. generally accepted accounting principles ("GAAP"). These non-GAAP measures are used by management in the analysis of Banc of California, Inc.’s capital strength and performance of businesses. 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 tables reconcile this non-GAAP performance measures to the GAAP performance measures for the periods indicated: | ||||||||||||||||||||
| December 31, | September 30, | December 31, | ||||||||||||||||||
| 2014 | 2014 | 2013 | ||||||||||||||||||
| Tangible common equity to tangible assets ratio | ||||||||||||||||||||
| Total assets | $ | 5,971,571 | $ | 4,537,996 | $ | 3,628,023 | ||||||||||||||
| Less goodwill | (31,591 | ) | (31,591 | ) | (30,143 | ) | ||||||||||||||
| Less other intangible assets | (25,252 | ) | (10,829 | ) | (12,152 | ) | ||||||||||||||
| Tangible assets | $ | 5,914,728 | $ | 4,495,576 | $ | 3,585,728 | ||||||||||||||
| Total shareholders' equity | $ | 503,589 | $ | 446,881 | $ | 324,869 | ||||||||||||||
| Less preferred stock | (79,877 | ) | (79,877 | ) | (79,877 | ) | ||||||||||||||
| Less goodwill | (31,591 | ) | (31,591 | ) | (30,143 | ) | ||||||||||||||
| Less other intangible assets | (25,252 | ) | (10,829 | ) | (12,152 | ) | ||||||||||||||
| Tangible common equity | $ | 366,869 | $ | 324,584 | $ | 202,697 | ||||||||||||||
| Total shareholders' equity to total assets | 8.43 | % | 9.85 | % | 8.95 | % | ||||||||||||||
| Tangible common equity to tangible assets | 6.20 | % | 7.22 | % | 5.65 | % | ||||||||||||||
| Common stock outstanding | 34,190,740 | 28,023,701 | 19,561,469 | |||||||||||||||||
| Class B non-voting non-convertible common stock outstanding | 609,195 | 602,783 | 584,674 | |||||||||||||||||
| Total common stock outstanding | 34,799,935 | 28,626,484 | 20,146,143 | |||||||||||||||||
| Minimum number of shares issuable under purchase contracts (1) | 3,215,538 | 4,198,425 | - | |||||||||||||||||
Total common stock outstanding and shares issuable under purchase contracts | 38,015,473 | 32,824,909 | 20,146,143 | |||||||||||||||||
| (1) Purchase contracts relating to the tangible equity units | ||||||||||||||||||||
| Tangible common equity per common stock | $ | 10.54 | $ | 11.34 | $ | 10.06 | ||||||||||||||
| Book value per common stock | $ | 12.18 | $ | 12.82 | $ | 12.16 | ||||||||||||||
Tangible equity per common stock and shares issuable under purchase contracts | $ | 9.65 | $ | 9.89 | $ | 10.06 | ||||||||||||||
Book value per common stock and shares issuable under purchase contracts | $ | 11.15 | $ | 11.18 | $ | 12.16 | ||||||||||||||
| Three Months Ended | Year Ended | |||||||||||||||||||
| December 31, | September 30, | December 31, | December 31, | December 31, | ||||||||||||||||
| 2014 | 2014 | 2013 | 2014 | 2013 | ||||||||||||||||
| Return on tangible common equity | ||||||||||||||||||||
| Average total shareholders' equity | $ | 487,578 | $ | 449,392 | $ | 324,290 | $ | 413,454 | $ | 264,818 | ||||||||||
| Less average preferred stock | (79,877 | ) | (79,877 | ) | (79,882 | ) | (79,877 | ) | (56,284 | ) | ||||||||||
| Less average goodwill | (33,129 | ) | (32,209 | ) | (27,384 | ) | (32,326 | ) | (15,872 | ) | ||||||||||
| Less average other intangible assets | (13,611 | ) | (10,634 | ) | (12,861 | ) | (11,739 | ) | (9,580 | ) | ||||||||||
| Average tangible common equity | 360,961 | 326,672 | 204,163 | 289,512 | 183,082 | |||||||||||||||
| Net income | $ | 10,214 | $ | 11,226 | $ | 3,321 | $ | 30,318 | $ | 79 | ||||||||||
| Less preferred stock dividends | (910 | ) | (910 | ) | (951 | ) | (3,640 | ) | (2,185 | ) | ||||||||||
| Add tax-effected amortization of intangible assets (1) | 849 | 579 | 614 | 2,651 | 1,723 | |||||||||||||||
| Add tax-effected impairment on intangible assets (1) | 31 | - | 55 | 31 | 690 | |||||||||||||||
| Net income (loss) available to common shareholders | $ | 10,184 | $ | 10,895 | $ | 3,039 | $ | 29,361 | $ | 307 | ||||||||||
| (1) Utilized a 35% effective tax rate | ||||||||||||||||||||
| Return on average equity | 8.31 | % | 9.91 | % | 4.06 | % | 7.33 | % | 0.03 | % | ||||||||||
| Return on average tangible common equity | 11.19 | % | 13.23 | % | 5.91 | % | 10.14 | % | 0.17 | % | ||||||||||
Contacts:
Banc of California, Inc.
Timothy
Sedabres, (855) 361-2262
or
MEDIA INQUIRIES:
Vectis
Strategies
David Herbst, (213) 973-4113 x101
