Banc Of California, Inc. · NYSE:BANC
Banc Of California — Q1 2025 Earnings Presentation
37 slides from Banc Of California's earnings presentation, Apr 24, 2025
Slide 1: Investor Presentation First Quarter 2025 Results
Draft v4.5 1/21/24 Investor Presentation First Quarter 2025 Results
Slide 2: Forward-Looking Statements and Other Matters
Forward-Looking Statements and Other Matters This presentation includes forward-looking statements within the meaning of the “Safe-Harbor” provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations rega
Slide 3: Financial Highlights
Financial Highlights 1Q25 results reflect 6% annualized loan growth, NIM expansion and YoY lower noninterest expense Change 1Q25 4Q24 1Q24 QoQ D YoY D Operating results PTPP(1) $82.4mm $82.9mm $52.4mm -0.7% 57.2% EPS NIM EPS $0.26 $0.28 $0.12 -$0.02 $0.14 $0.26, up over 2x YoY 3.08%, up 4bps QoQ ROA
Slide 4: Income Statement
Income Statement Core results driven by expanding NIM, lower cost of funds and expense discipline Cost of funds -27 bps -13 2.55% 2.42% ($ in millions) 1Q25 4Q24 1Q24 Key Income Statement Metrics 1Q25 4Q24 1Q24 Total interest income $406.7 $424.5 $478.7 EPS $0.26 $0.28 $0.12 Total interest expense 1
Slide 5: Balance Sheet
Balance Sheet Achieved strong loan growth while increasing capital and maintaining healthy liquidity position ($ in millions) 1Q25 4Q24 1Q24 Key Balance Sheet Metrics 1Q25 4Q24 1Q24 Cash and cash equivalents $2,344 $2,502 $3,085 Average interest-earning assets $30,611 $30,825 $34,615 Investment secu
Slide 6: Net Interest Income and Net Interest Margin
Net Interest Income and Net Interest Margin Consistent NIM expansion driven by continued declines in deposit costs NIM expanded 4 bps Net Interest Income (NII) ($mm) and Net Interest Margin (NIM) (%) to 3.08%, driven by 3.04% 3.08% 14bps decline in 2.80% 2.93% 2.66% deposit costs NII declined QoQ ~$
Slide 7: Noninterest Income
Noninterest Income 1Q25 noninterest income in-line with normalized run-rate $44.6(1) ($ in millions) $4.6 (1) $34.3 $8.3 $34.3(1,2) $35.0(1,3) $33.4(1,5) $34.0(1,4) $4.7 $4.5 $28.7 $29.4(1) $4.5 $4.8 $8.1 $17.2 $10.0 $8.6 $8.2 $11.7 $3.7 $10.8 $10.7 $11.5 $3.1 $2.3 $10.8 $0.0 $6.6 $1.2 $5.7 $5.8 $2.
Slide 8: Noninterest Expense
Noninterest Expense Higher compensation expense, partially offset by lower FDIC and customer related expense Adjusted Noninterest Expense / Average Assets Ratio(1) 2.43% ($ in millions) 1Q25 4Q24 1Q24 2.26% 2.27% 2.24% Compensation $86.4 $77.7 $92.2 2.16% Occupancy 15.0 15.7 18.0 2.06% IT and data p
Slide 9: Customer Related Expense
Customer Related Expense Lower ECR expense mostly driven by Fed rate cuts Adjusted Noninterest Expense Detail(1) ($mm) Customer Related Expense ($mm) $34.5 $216.3 $32.4 $31.7 $210.5 $30.9 $4.6 $4.7 ECR indexed to Fed $4.2 $27.8 $196.7 $4.9 Funds rate with high $32.4 $4.1 $30.9 $182.4 $183.7 beta and
Slide 10: Deposits
Deposits Core deposits grew 1.3% annualized, while deposit costs continued to decline HIGHLIGHTS ❖Achieved interest-bearing deposit beta of 68% ($ in millions) 1Q25 4Q24 1Q24 Noninterest-bearing Checking $7,594 $7,720 $7,834 Checking 7,747 7,611 7,836 Average Fed Funds Rate Average Total Cost of Dep
Slide 11: NIB Deposit Growth Remains a Key Priority
NIB Deposit Growth Remains a Key Priority Steady growth continuing in new NIB business deposit relationships and balances(1) 2,929 2,390 1,889 1,288 $537.8 $439.2 $382.6 650 $257.8 $107.3 1Q24 2Q24 3Q24 4Q24 1Q25 Cumulative New NIB Business Deposits Accounts Cumulative New NIB Business Deposits ($ m
Slide 12: Diversified Loan Portfolio
Diversified Loan Portfolio Loan portfolio grew 6% annualized, driven by growth across nearly all segments Existing core portfolios have strong credit quality with appropriate reserve levels for low loan loss categories 1Q25 4Q24 Loan Segment HFI % of Total Wtd. Avg. NPL % DQ % ($ in millions) 1Q25 4
Slide 13: Loan Activity
Loan Activity Net loan growth driven by strong production and net line utilization 8.29% Rate on Production 7.80% Total Loan Yield Strong production yields reflect 8.21% growth in warehouse, lender 7.00% 7.20% finance and fund finance 6.18% 6.18% 6.01% 6.08% Loan yield declined QoQ due to 5.90% full
Slide 14: Asset Quality Ratios and Trends
Asset Quality Ratios and Trends Continuing conservative outlook and heightened monitoring given uncertain economic environment ACL / Total Loans ($mm) Nonperforming Loans / Total Loans (NPLs) ($mm) HIGHLIGHTS 0.88% 0.80% ❖ ACL coverage ratio impacted by a mix shift 1.26% 0.72% 1.19% 1.20% 0.57% towa
Slide 15: Allowance for Credit Losses
Allowance for Credit Losses ACL coverage ratio at appropriate level under CECL given portfolio mix, additional credit protection enhances total economic coverage Economic 1.66% coverage ratio(1) ($ in millions) HIGHLIGHTS $268.4 ❖ ACL decreased $3.9mm driven by: ($14.1) $10.2 $264.6 ❖ Net charge off
Slide 16: Investment Securities Portfolio
Investment Securities Portfolio Portfolio yield continuing to increase while duration is declining Duration Security Type (1) (yrs) Unrealized ($ in millions) 1Q25 4Q24 Variance 1Q25 Loss 1Q25 AFS - Gov't & Agency $1,497 $1,364 $133 5.8 ($182) AFS - CLO's 243 279 (37) 0.0 (1) HIGHLIGHTS AFS - Corpor
Slide 17: Capital
Capital Maintained healthy capital levels and TBVPS for strength and flexibility Regulatory Well- Excess of Well- 1Q25 4Q24 1Q24 Capitalized Capitalized Total Risk-Based Ratio 16.90% 17.05% 16.40% 10.00% 6.90% Tier 1 Risk-Based Capital 12.83% 12.97% 12.38% 8.00% 4.83% Repurchased 1.6% of outstanding
Slide 18: Liquidity
Liquidity Maintaining high levels of primary and secondary liquidity as prudent risk management ❖Uninsured and uncollateralized deposits of $7.4B, which represents approximately 26.8% of total deposits ❖Total primary and secondary liquidity was 2.1x uninsured and uncollateralized deposits ($ in mill
Slide 19: Interest Rate Sensitivity
Interest Rate Sensitivity IRR position for 2025 largely neutral for NII sensitivity, however total earnings are liability sensitive due to rate sensitive ECR costs 1Q25 IRR position – NII impact ($B) HIGHLIGHTS Asset / liability $19.7 ❖ IRR position for NII is closer to neutral as gap between gap of
Slide 20: Loan Maturity and Repricing Summary
Loan Maturity and Repricing Summary ~20% of total fixed rate and hybrid loans will reprice / reset within one year at higher rates Total Fixed Rate and Hybrid Loans – Maturities / Repricing Total fixed rate and hybrid loans: $14B $8.0B Fixed Total Loan Composition Hybrid Fixed ST Variable 1Q25 $6.3
Slide 21: 2025 outlook
2025 outlook Initial updates to 2025 outlook reflect potential impact from recent market volatility Prior 2025 Outlook Updates Key factors Future state financial targets remain unchanged ❖ Target mid single digit ❖ Driven by growth in ❖ ROAA ~1.1%+ ❖ Target mid to high single digit commercial loans
Slide 22: Supplemental Information
Supplemental Information
Slide 23: Noteworthy Items
Noteworthy Items 1Q25 results included several noteworthy items, which impacted financial results but partially offset each other ($ in millions) After-tax P&L impact(1) Revenue (2) Loan interest income ($1.8) Expense Compensation and other reserves(3) 4.1 FDIC 4Q24 expense true-up 1.8 1. 28% tax ra
Slide 24: Share Repurchases
Share Repurchases Share Repurchase Activity 1Q25 2Q25(1) Total Repurchase Amount $38,545,698 $111,454,299 $150,000,000 Price Per Share(2) $14.36 $12.65 $13.05 Number of Shares Repurchased 2,684,823 8,809,814 11,494,637 Common Shares Outstanding(3) 169,083,588 169,083,588 169,083,588 % of Shares Repu
Slide 25: CRE Portfolio
CRE Portfolio High quality CRE portfolio has low weighted-average LTV and high debt-service coverage ratio (DSCR) Total CRE is well diversified across multiple industries HIGHLIGHTS Property Type % of Total % of Total Avg Loan WA ❖ 72% of total CRE portfolio located in California ($ in millions) Cou
Slide 26: Projects and Investments
Projects and Investments Expect total project and investment spend of $24mm in 2025, with $10-$13mm of planned expense in 2025 Project investment composition Revenue enhancing projects Back office and support projects $5.1mm $4.1mm $5.2mm 21% $1.7mm 22% $2.4mm 27% 36% 50% $19.1mm 79% 14% $9.8mm 51%
Slide 27: Experienced Management Team with Track Record of Success at Leading Institutions
Experienced Management Team with Track Record of Success at Leading Institutions Jared Wolff Joe Kauder Chris Baron Chris Blake President and Chief Executive Chief Financial Officer President, Community Banking Vice Chairman of the Bank Officer 30+ years banking experience, 30+ years banking experie
Slide 28: Appendix
Appendix
Slide 29: Non-GAAP Financial Information
Non-GAAP Financial Information Tangible assets, tangible common equity, tangible common equity ratio, tangible book value per common share, noninterest expense. Adjusted noninterest expense excluding customer related expenses is calculated by subtracting adjusted net earnings, adjusted return on ave
Slide 30: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share data) 1Q25 4Q24 3Q24 2Q24 1Q24 Tangible Common Equity to Tangible Assets Total stockholders' equity $3,521,656 $3,499,949 $3,496,198 $3,407,848 $3,394,150 Less: preferred stock 498,516 498,516 498,516 498,516 498,516 Total common equity 3,023
Slide 31: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 4Q24 3Q24 2Q24 1Q24 Return on Average Tangible Common Equity ("ROATCE") Net earnings $53,568 $56,919 $8,784 $30,333 $30,852 Earnings before income taxes $73,061 $70,103 $11,514 $44,637 $42,400 Add: Intangible asset amortization 7,160 7,770 8,485 8,484 8,
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands, except per share amounts) 1Q25 4Q24 3Q24 2Q24 1Q24 Adjusted Net Earnings Net earnings $53,568 $56,919 $8,784 $30,333 $30,852 Earnings before income taxes $73,061 $70,103 $11,514 $44,637 $42,400 Add: FDIC special assessment NA NA NA NA 4,814 Add: Loss on sale
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 4Q24 3Q24 2Q24 1Q24 PTPP Income Net interest income $232,364 $235,285 $232,175 $229,488 $229,102 Add: Noninterest (loss) income 33,650 28,989 (15,452) 29,792 33,816 Total revenue 266,014 264,274 216,723 259,280 262,918 Less: Noninterest expense (183,653)
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 4Q24 3Q24 2Q24 1Q24 Adjusted Efficiency Ratio Noninterest expense $183,653 $181,370 $196,209 $203,643 $210,518 Less: Intangible asset amortization (7,160) (7,770) (8,485) (8,484) (8,404) Less: Acquisition, integration, and reorganization costs NA 1,023 5
Slide 35: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 4Q24 3Q24 2Q24 1Q24 Adjusted Noninterest Expense to Average Total Assets Noninterest expense $183,653 $181,370 $196,209 $203,643 $210,518 Less: Acquisition, integration, and reorganization costs NA 1,023 510 12,650 NA Adjusted noninterest expense $183,65
Slide 36: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 4Q24 1Q24 Economic coverage ratio Allowance for credit losses ("ACL") $264,557 $268,431 $320,074 Add: Unearned credit mark from purchase accounting (1) 20,870 22,473 28,980 (2) Add: Credit-linked notes 115,188 116,991 122,782 Adjusted allowance for credi
Slide 37: Non-GAAP Reconciliation
Non-GAAP Reconciliation ($ in thousands) 1Q25 Adjusted ACL for Lower-Risk Loan Portfolio Ratio Allowance for credit losses ("ACL") $264,557 Less: ACL on lower-risk loan portfolios: ACL on warehouse lending loan portfolio (3,227) ACL on equity fund loan portfolio (220) ACL on lender finance loan port