NYSE$BANC

Banc Of California · Q3 2023 earnings

Q3 2023 earnings · · Investor relations

Briefing

Reported net income with stable deposit mix and improved net interest margin.

Banc of California reported a net income of $42.6 million for Q3 2023, a 138% increase from the prior quarter. The results reflect strategic balance sheet positioning ahead of the merger with PacWest, including a $46.2 million gain from derivative instruments.

  • Net income of $42.6 million, or $0.74 per diluted common share, up 138% from the prior quarter.
  • Stable overall deposit mix, with the period-end noninterest-bearing deposit percentage consistent with the prior quarter at 36% of total deposits.
  • Net interest margin improvement of 8 basis points from 3.11% to 3.19% in comparison to the prior quarter.
  • High liquidity levels, with immediately available on-balance sheet liquidity and unused borrowing capacity of $3.67 billion.

Headline financials

Total Revenue

$120M

Previous: $85.1M+41.0%
EPS (adj)

$0.30

Previous: $0.44-31.8%
Net interest margin

3.2%

Previous: 3.6%-10.9%
Tier 1 risk-based capital ratio

12.2%

No prior period
Total risk-based capital ratio

14.5%

No prior period
Tier 1 leverage ratio

10.2%

No prior period
Capital Expenditures

-$7.88M

Previous: -$2.56M-208.3%
Free Cash Flow

$34.7M

Previous: $21.6M+60.3%
Net Income

$42.6M

Previous: $24.2M+76.0%
Operating Income

$46.7M

Previous: $52.4M-10.8%
Gross Profit

$115M

Previous: $85.1M+35.1%
Cash & Equivalents

$311M

Previous: $256M+21.5%
Total Assets

$9.25B

Previous: $9.37B-1.3%
Stock-Based Comp

$1.58M

No prior period

Revenue & EPS history

Banc of California · Revenue · Quarterly

$120M

Q3 2023+41%vs Q3 2022
Beat estimate in 10 of 14 quarters(71%)
ActualEstimate

Forward guidance

Banc of California expects to close the merger with PacWest on or about November 30, 2023.

Tailwinds

  • Strong, liquid balance sheet
  • Strong credit quality
  • Ample reserves
  • Sufficient capital
  • Growth centered around relationship banking and high quality commercial clients

Headwinds

  • Volatility and changes in the interest rate environment
  • Relative performance of the two companies
  • Potential impacts on the opening day and post-restructuring balance sheets
  • Refinements to many of the assumptions and estimates used in the creation of projections included in the Investor Presentation
  • Economic environment remains dynamic with heightened levels of volatility in interest rates, market levels and potentially other economic impacts.

Historical earnings impact

How earnings announcements have historically affected this stock's price.

Avg. return before/after earnings

Based on 20 quarterly earnings reports · overlaid with Q3 2023

Historical avgQ3 2023

+0.2%

Avg return

Earnings day

+0.9%

Avg return

5 days after

+3.2%

Avg return

30 days after

45%

30 / 66 earnings

Positive

+21.2%

Q3 2016

Best reaction

-11.8%

Q2 2024

Worst reaction

Earnings price reactions
QuarterReport dateReaction (Day 0)+5 days+30 days
Q1 2026+2.8%+2.7%+2.3%
Q4 2025-1.7%-4.5%-4.9%
Q3 2025-2.0%+1.6%+5.2%
Q2 2025-1.5%-0.4%+5.4%
Q1 2025-1.9%-1.5%+0.1%
Q4 2024-2.3%-0.1%-6.7%
Q3 2024+3.3%+2.8%+10.5%
Q2 2024-11.8%-1.9%-5.1%
Q1 2024-0.8%+0.8%-3.0%
Q4 2023+10.5%+11.3%+9.6%
Q3 2023-4.8%-4.0%+10.4%
Q2 2023+11.9%+10.0%-7.1%
Q1 2023-1.5%-7.1%-11.3%
Q4 2022-0.2%-2.6%+6.3%
Q3 2022-8.2%-5.4%-2.9%
Q2 2022-5.9%-3.6%-1.4%
Q1 2022-2.1%-2.5%-6.7%
Q4 2021-6.0%-7.2%-7.3%
Q3 2021+5.0%+9.3%+11.9%
Q2 2021+5.2%+5.5%+7.5%
Q1 2021-1.7%-1.5%-0.1%
Q4 2020-0.3%-1.1%+6.4%
Q3 2020+7.2%+2.3%+15.6%
Q2 2020+7.7%+7.7%+9.9%
Q1 2020-3.3%-9.7%+1.6%
Q4 2019-3.9%-3.2%-2.1%
Q3 2019-7.6%-7.3%-0.2%
Q2 2019+4.2%+6.7%-3.8%
Q1 2019-1.1%-0.8%-9.0%
Q4 2018-1.0%+0.0%+8.9%
Q3 2018-4.1%-0.1%+7.5%
Q2 2018+7.0%+7.0%+6.4%
Q1 2018+3.8%+1.4%+6.5%
Q4 2017-4.8%-9.2%-5.5%
Q3 2017+5.9%+2.7%+2.2%
Q2 2017-2.9%+0.2%-8.3%
Q1 2017-6.5%-2.1%-0.9%
Q4 2016+6.8%+10.5%+38.9%
Q3 2016+21.2%+15.7%+31.4%
Q2 2016+4.9%+11.7%+10.4%
Q1 2016+3.0%
Q4 2015+9.3%
Q3 2015+1.5%
Q2 2015-4.3%
Q1 2015-1.8%
Q4 2014+3.5%
Q3 2014+0.6%
Q2 2014+8.3%
Q1 2014+2.4%
Q4 2013-2.5%
Q3 2013-6.3%
Q2 2013-2.0%
Q1 2013+7.4%
Q4 2012+1.7%
Q3 2012-0.3%
Q2 2012+0.3%
Q1 2012+0.7%
Q1 2011+0.7%
Q4 2011+0.6%
Q4 2009+0.6%
Q3 2010-2.3%
Q3 2011-2.3%
Q2 2010-9.1%
Q2 2011-9.1%
Q4 2010-9.1%
Q1 2010+5.1%

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