Attached files
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| 8-K - FORM 8-K - BANC OF CALIFORNIA, INC. | banc8kmay92014.htm |
Exhibit 99.1
Banc of California Reports 2014 First Quarter
Financial Results
Irvine, Calif. (May 9, 2014) 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.
-1-
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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.
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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.
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Source: Banc of California, Inc.
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Investor Relations Inquiries:
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Media Inquiries:
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Banc of California, Inc.
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Vectis Strategies
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Richard Herrin, (855) 361-2262
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David Herbst, (213) 973-4113 x101
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-2-
Financial Highlights
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As of or for the three months ended
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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($ in thousands, except per share data)
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Net income (loss)
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$ | 757 | $ | 3,321 | $ | 929 | ||||||
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Net income (loss) available to common stockholders
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$ | (153 | ) | $ | 2,370 | $ | 641 | |||||
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Diluted earnings (loss) per share
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$ | (0.01 | ) | $ | 0.12 | $ | 0.05 | |||||
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Return on average assets
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0.08 | % | 0.37 | % | 0.21 | % | ||||||
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Return on average equity
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0.93 | % | 4.06 | % | 1.96 | % | ||||||
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Net interest margin
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4.00 | % | 3.90 | % | 3.70 | % | ||||||
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Non-interest income
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$ | 25,278 | $ | 34,517 | $ | 17,928 | ||||||
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Non-interest expense
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$ | 57,768 | $ | 57,214 | $ | 29,558 | ||||||
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Provision for loan and lease losses
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$ | 1,929 | $ | 1,768 | $ | 2,168 | ||||||
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Loans and leases receivable, net of allowance
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$ | 2,376,992 | $ | 2,427,306 | $ | 1,611,257 | ||||||
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Total deposits
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$ | 3,109,146 | $ | 2,918,644 | $ | 1,698,798 | ||||||
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Non-accrual loans
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$ | 32,440 | $ | 31,648 | $ | 16,521 | ||||||
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Net charge-offs
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$ | (232 | ) | $ | 650 | $ | 601 | |||||
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Allowance for loan and lease losses (ALLL) to total loans
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0.83 | % | 0.77 | % | 0.98 | % | ||||||
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ALLL that were collectively evaluated for impairment to originated loans
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1.44 | % | 1.46 | % | 1.41 | % | ||||||
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ALLL and Discount to total originated and non-credit
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impaired loans acquired through business acquisitions (1)
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1.64 | % | 1.63 | % | 1.56 | % | ||||||
(1) The ratio was calculated by dividing a sum of ALLL and discounts by carrying value of loans
-3-
Banc of California, Inc.
Consolidated Statements of Financial Condition
(Dollars in thousands, except per share data)
(Unaudited)
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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ASSETS
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Cash and due from banks
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$ | 5,733 | $ | 4,937 | $ | 8,420 | ||||||
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Interest-bearing deposits
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327,906 | 105,181 | 114,776 | |||||||||
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Total cash and cash equivalents
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333,639 | 110,118 | 123,196 | |||||||||
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Time deposits in financial institutions
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1,745 | 1,846 | 3,635 | |||||||||
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Securities available for sale
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107,525 | 170,022 | 99,658 | |||||||||
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Loans held for sale
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1,000,394 | 716,733 | 114,582 | |||||||||
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Loans and leases receivable
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2,396,995 | 2,446,111 | 1,627,272 | |||||||||
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Allowance for loan and lease losses
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(20,003 | ) | (18,805 | ) | (16,015 | ) | ||||||
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Federal Home Loan Bank and other bank stock
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26,801 | 22,600 | 8,844 | |||||||||
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Servicing rights, net
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18,880 | 13,883 | 3,077 | |||||||||
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Other real estate owned, net
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150 | - | 1,764 | |||||||||
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Premises and equipment, net
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67,278 | 66,260 | 17,695 | |||||||||
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Goodwill
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32,868 | 30,143 | 7,048 | |||||||||
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Other intangible assets, net
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11,213 | 12,152 | 5,107 | |||||||||
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Deferred income tax
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- | - | 7,572 | |||||||||
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Income tax receivable
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2,769 | 2,995 | 2,624 | |||||||||
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Bank-owned life insurance investment
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18,928 | 18,881 | 18,742 | |||||||||
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Other assets
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31,452 | 35,084 | 26,254 | |||||||||
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Total assets
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$ | 4,030,634 | $ | 3,628,023 | $ | 2,051,055 | ||||||
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LIABILITIES AND SHAREHOLDERS’ EQUITY
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Deposits
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Noninterest-bearing deposits
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$ | 430,925 | $ | 429,158 | $ | 142,735 | ||||||
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Interest-bearing deposits
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2,678,221 | 2,489,486 | 1,556,063 | |||||||||
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Total deposits
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3,109,146 | 2,918,644 | 1,698,798 | |||||||||
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Advances from Federal Home Loan Bank
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395,000 | 250,000 | 50,000 | |||||||||
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Federal funds purchased
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70,000 | - | - | |||||||||
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Notes payable, net
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82,416 | 82,320 | 82,031 | |||||||||
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Reserve for loss reimbursements on sold loans
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5,866 | 5,427 | 3,498 | |||||||||
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Accrued expenses and other liabilities
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42,880 | 46,763 | 28,430 | |||||||||
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Total liabilities
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3,705,308 | 3,303,154 | 1,862,757 | |||||||||
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Commitments and contingent liabilities
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Preferred stock, Series A, non-cumulative perpetual preferred stock
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31,934 | 31,934 | 31,934 | |||||||||
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Preferred stock, Series B, non-cumulative perpetual preferred stock
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10,000 | 10,000 | - | |||||||||
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Preferred stock, Series C, 8.00% non-cumulative perpetual preferred stock
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37,943 | 37,943 | - | |||||||||
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Common stock
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211 | 210 | 120 | |||||||||
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Common stock, class B non-voting non-convertible
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6 | 6 | 11 | |||||||||
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Additional paid-in capital
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258,861 | 256,306 | 155,139 | |||||||||
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Retained earnings
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14,398 | 16,981 | 25,755 | |||||||||
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Treasury stock
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(27,726 | ) | (27,911 | ) | (25,850 | ) | ||||||
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Accumulated other comprehensive (loss)/income, net
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(301 | ) | (600 | ) | 1,189 | |||||||
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Total shareholders’ equity
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325,326 | 324,869 | 188,298 | |||||||||
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Total liabilities and shareholders’ equity
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$ | 4,030,634 | $ | 3,628,023 | $ | 2,051,055 | ||||||
-4-
Banc of California, Inc.
Consolidated Statements of Operations
(Dollars in thousands, except per share data)
(Unaudited)
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Three months ended
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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Interest and dividend income
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Loans, including fees
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$ | 41,530 | $ | 39,922 | $ | 18,537 | ||||||
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Securities
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924 | 473 | 498 | |||||||||
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Dividends and other interest-earning assets
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322 | 361 | 133 | |||||||||
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Total interest and dividend income
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42,776 | 40,756 | 19,168 | |||||||||
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Interest expense
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Deposits
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5,735 | 5,665 | 1,999 | |||||||||
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Federal Home Loan Bank advances
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100 | 92 | 63 | |||||||||
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Notes payable and other interest-bearing liabilities
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1,756 | 1,697 | 1,747 | |||||||||
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Total interest expense
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7,591 | 7,454 | 3,809 | |||||||||
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Net interest income
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35,185 | 33,302 | 15,359 | |||||||||
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Provision for loan and lease losses
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1,929 | 1,768 | 2,168 | |||||||||
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Net interest income after provision for loan and lease losses
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33,256 | 31,534 | 13,191 | |||||||||
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Noninterest income
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Customer service fees
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253 | 266 | 546 | |||||||||
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Mortgage banking income
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17,324 | 15,028 | 16,370 | |||||||||
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All other income
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7,701 | 19,223 | 1,012 | |||||||||
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Total noninterest income
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25,278 | 34,517 | 17,928 | |||||||||
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Noninterest expense
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Salaries and employee benefits
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34,681 | 36,117 | 19,080 | |||||||||
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Occupancy and equipment
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8,537 | 7,592 | 3,193 | |||||||||
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All other expenses
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14,550 | 13,505 | 7,285 | |||||||||
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Total noninterest expense
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57,768 | 57,214 | 29,558 | |||||||||
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Income (loss) before income taxes
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766 | 8,837 | 1,561 | |||||||||
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Income tax (benefit) expense
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9 | 5,516 | 632 | |||||||||
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Net income (loss)
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757 | 3,321 | 929 | |||||||||
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Preferred stock dividends and discount accretion
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910 | 951 | 288 | |||||||||
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Net income (loss) available to common shareholders
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$ | (153 | ) | $ | 2,370 | $ | 641 | |||||
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Basic earnings (loss) per common share
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$ | (0.01 | ) | $ | 0.13 | $ | 0.05 | |||||
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Diluted earnings (loss) per common share
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$ | (0.01 | ) | $ | 0.12 | $ | 0.05 | |||||
-5-
Banc of California, Inc.
Selected Financial Data
(Dollars in thousands)
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As of or for the three months ended
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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Quarterly average balance:
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Total assets
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$ | 3,728,170 | $ | 3,555,265 | $ | 1,770,089 | ||||||
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Total gross loans and leases
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3,289,689 | 3,056,232 | 1,416,071 | |||||||||
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Securities available for sale
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163,007 | 170,350 | 117,108 | |||||||||
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Total interest earning assets
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3,568,092 | 3,387,120 | 1,682,573 | |||||||||
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Total deposits
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3,008,958 | 2,936,922 | 1,409,107 | |||||||||
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Total borrowings
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350,631 | 244,708 | 140,711 | |||||||||
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Interest bearing liabilities
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2,943,515 | 2,752,010 | 1,405,606 | |||||||||
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Total shareholders’ equity
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329,617 | 324,290 | 191,903 | |||||||||
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Profitability and other ratios:
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Return on avg. assets (1)
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0.08 | % | 0.37 | % | 0.21 | % | ||||||
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Return on avg. equity (1)
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0.93 | % | 4.06 | % | 1.96 | % | ||||||
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Net interest margin (1)
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4.00 | % | 3.90 | % | 3.70 | % | ||||||
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Noninterest income to total revenue (2)
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41.81 | % | 50.90 | % | 53.86 | % | ||||||
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Noninterest income to avg. assets (1)
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2.75 | % | 3.85 | % | 4.11 | % | ||||||
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Noninterest exp. to avg. assets (1)
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6.28 | % | 6.38 | % | 6.77 | % | ||||||
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Efficiency ratio (3)
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95.54 | % | 84.36 | % | 88.80 | % | ||||||
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Avg. loans to average deposits
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109.33 | % | 104.06 | % | 100.49 | % | ||||||
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Average securities available for sale to average total assets
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4.37 | % | 4.79 | % | 6.62 | % | ||||||
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Average interest-earning assets to average interest-bearing liabilities
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121.22 | % | 123.08 | % | 119.70 | % | ||||||
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Average stockholders’ equity to average total assets
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8.84 | % | 9.12 | % | 10.84 | % | ||||||
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Asset quality information and ratios:
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Nonaccrual Loans, excluding PCI loans
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32,440 | 31,648 | 16,521 | |||||||||
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90+ delinquent loans, excluding PCI loans
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16,419 | 13,441 | 7,846 | |||||||||
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Other real estate owned (OREO), net
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150 | - | 1,764 | |||||||||
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Net loan charge-offs
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(232 | ) | 650 | 601 | ||||||||
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Loan breakdown by evaluation type:
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Originated loans
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Individually evaluated for impairment
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$ | 13,504 | $ | 16,704 | $ | 21,909 | ||||||
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Collectively evaluated for impairment
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1,210,993 | 1,168,195 | 987,486 | |||||||||
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Acquired loans through business acquisitions - non-impaired
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Individually evaluated for impairment
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1,759 | 2,243 | - | |||||||||
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Collectively evaluated for impairment
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438,815 | 469,916 | 189,389 | |||||||||
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Seasoned SFR mortgage loan pools - non-impaired
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418,501 | 449,767 | 210,033 | |||||||||
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Acquired with deteriorated credit quality
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313,422 | 339,286 | 218,455 | |||||||||
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Total loans
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$ | 2,396,995 | $ | 2,446,111 | $ | 1,627,272 | ||||||
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Allowance for loan and lease losses (ALLL) breakdown:
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Originated loans
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Individually evaluated for impairment
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$ | 62 | $ | 96 | $ | 1,462 | ||||||
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Collectively evaluated for impairment
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17,397 | 17,103 | 13,923 | |||||||||
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Acquired loans through business acquisitions - non-impaired
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Individually evaluated for impairment
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- | - | - | |||||||||
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Collectively evaluated for impairment
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2,347 | 1,410 | 391 | |||||||||
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Seasoned SFR mortgage loan pools - non-impaired
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- | - | - | |||||||||
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Acquired with deteriorated credit quality
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196 | 196 | 239 | |||||||||
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Total ALLL
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$ | 20,003 | $ | 18,805 | $ | 16,015 | ||||||
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Discount on Purchased/Acquired Loans:
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Acquired loans through business acquisitions - non-impaired
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$ | 7,479 | $ | 8,354 | $ | 2,898 | ||||||
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Seasoned SFR mortgage loan pools - non-impaired
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34,619 | 38,240 | 12,864 | |||||||||
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Acquired with deteriorated credit quality
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89,303 | 105,650 | 132,942 | |||||||||
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Total Discount
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$ | 131,400 | $ | 152,244 | $ | 148,704 | ||||||
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Ratios:
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To originated loans:
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Individually evaluated for impairment
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0.46 | % | 0.57 | % | 6.67 | % | ||||||
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Collectively evaluated for impairment
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1.44 | % | 1.46 | % | 1.41 | % | ||||||
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Total ALLL
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1.43 | % | 1.45 | % | 1.52 | % | ||||||
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To originated and acquired non-impaired loans:
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Individually evaluated for impairment
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0.41 | % | 0.51 | % | 6.67 | % | ||||||
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Collectively evaluated for impairment
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1.20 | % | 1.13 | % | 1.22 | % | ||||||
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Total ALLL
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1.19 | % | 1.12 | % | 1.32 | % | ||||||
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Total ALLL and discount (4)
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1.64 | % | 1.63 | % | 1.56 | % | ||||||
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To total loans:
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Individually evaluated for impairment
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0.41 | % | 0.51 | % | 6.67 | % | ||||||
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Collectively evaluated for impairment
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0.95 | % | 0.89 | % | 1.03 | % | ||||||
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Total ALLL
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0.83 | % | 0.77 | % | 0.98 | % | ||||||
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Total ALLL and discount (4)
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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
-6-
Banc of California, Inc.
Selected Quarterly Financial Data
(Dollars in thousands, except per share data)
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As of
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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Capital Ratios:
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Banc of California, Inc.
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Total risk-based capital ratio:
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11.93 | % | 12.45 | % | 14.42 | % | ||||||
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Tier 1 risk-based capital ratio:
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10.86 | % | 11.41 | % | 13.16 | % | ||||||
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Tier 1 leverage ratio:
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7.59 | % | 8.02 | % | 9.94 | % | ||||||
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Banc of California, NA (1)
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Total risk-based capital ratio:
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14.54 | % | 14.65 | % | 17.65 | % | ||||||
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Tier 1 risk-based capital ratio:
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13.47 | % | 13.60 | % | 16.40 | % | ||||||
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Tier 1 leverage ratio:
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9.41 | % | 9.58 | % | 10.47 | % | ||||||
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The Private Bank of California (1)
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Total risk-based capital ratio:
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N/A | N/A | 16.06 | % | ||||||||
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Tier 1 risk-based capital ratio:
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N/A | N/A | 15.37 | % | ||||||||
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Tier 1 leverage ratio:
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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:
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As of
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March 31,
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December 31,
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March 31,
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2014
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2013
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2013
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Tangible common equity to tangible assets ratio
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Total assets
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$ | 4,030,634 | $ | 3,628,023 | $ | 2,051,055 | ||||||
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Less goodwill
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(32,868 | ) | (30,143 | ) | (7,048 | ) | ||||||
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Less other intangible assets
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(11,213 | ) | (12,152 | ) | (5,107 | ) | ||||||
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Tangible assets
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$ | 3,986,553 | $ | 3,585,728 | $ | 2,038,900 | ||||||
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Total stockholders' equity
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$ | 325,326 | $ | 324,869 | $ | 188,298 | ||||||
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Less preferred stock
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(79,877 | ) | (79,877 | ) | (31,934 | ) | ||||||
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Less goodwill
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(32,868 | ) | (30,143 | ) | (7,048 | ) | ||||||
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Less other intangible assets
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(11,213 | ) | (12,152 | ) | (5,107 | ) | ||||||
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Tangible stockholders' equity
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$ | 201,368 | $ | 202,697 | $ | 144,209 | ||||||
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Total stockholders' equity to total assets
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8.07 | % | 8.95 | % | 9.18 | % | ||||||
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Tangible stockholders' equity to tangible assets
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5.05 | % | 5.65 | % | 7.07 | % | ||||||
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Common stock outstanding
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19,666,469 | 19,561,469 | 10,853,290 | |||||||||
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Class B non-voting non-convertible common stock outstanding
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590,068 | 584,674 | 1,112,188 | |||||||||
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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 | ||||||