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- **Record 2025 Growth**: 15% loan growth, 11% deposit growth, 10.75% ROATCE, and 11% TBV growth
- **2026 Targets**: 20%+ PTPP growth, 10-12% NII growth, 3-3.5% expense growth
- **Margin Catalysts**: 6.83% new loan yields vs. 4.7% maturing loans, 10.5% annualized NIB deposit growth
- **Expense Efficiency**: 55.6% efficiency ratio, $6M annual ECR savings per 25bp rate cut
- **Strategic Moves**: $13.6M buybacks, 2027 preferred stock maturity ($0.16 EPS accretion), payments business expansion

**【CEO Summary Section】**
- **Record Performance in 2025**: Achieved 15% annualized loan growth, 11% deposit growth, and 10.75% ROATCE. Q4 EPS grew 11% sequentially to $0.42.
- **Strategic Growth Drivers**: 
  - Loan production disbursements of $9.6B (31% YoY), with Q4 at $2.7B (32% QoQ)
  - Noninterest-bearing deposits grew 10.5% annualized, reaching 28.5% of total deposits
  - Tangible book value per share grew 11%, including $13.6M in share buybacks
- **Credit Quality Improvements**: 
  - Nonperforming loans down 9% QoQ
  - Delinquency rate improved to 66 bps (excluding 2 loans)
  - Allowance for credit losses maintained at 1.12% of loans
- **2026 Outlook**: Target 20%+ PTPP growth, mid-single-digit loan/deposit growth, and continued margin expansion

**【CFO Financial Commentary】**
- **Q4 Financial Highlights**: 
  - Net income: $67.4M ($0.42 EPS)
  - Net interest income: $251.4M (down 1% QoQ due to late loan growth timing)
  - Net interest margin: 3.20% (3.22% spot NIM)
  - Deposit cost: 1.89% (down 19 bps QoQ)
- **2026 Guidance**: 
  - NII growth 10-12% (excluding rate cuts)
  - PTPP growth 20-25%
  - Expense growth 3-3.5% (includes tech/talent investments)
  - NIM expansion driven by higher loan yields (6.83% new production vs. 4.7% maturing loans)
- **Key Balance Sheet Metrics**: 
  - $2.5B loans maturing/resetting at 4.7% over next year
  - Multifamily portfolio repricing upside of $3.2B over 2.5 years
  - SFR loan purchases of $250M in Q4

**【Q&A Key Highlights】**
- **Rate Sensitivity**: 
  - 25bp rate cut saves $6M annually in ECR costs
  - Deposit beta ~60% (vs. 50% target)
  - Neutral NII sensitivity but positive margin impact from loan repricing
- **Expense Management**: 
  - 2026 expense guide includes $5M Q1 reset benefit
  - 3-3.5% growth targets balance growth investments (AI, data modernization) with discipline
- **Strategic Initiatives**: 
  - Payments business rollout expected mid-2026
  - Preferred stock maturity in Q3 2027 ($0.16 EPS accretion)
  - No immediate fintech acquisition plans
- **Market Dynamics**: 
  - CRE focus on mini-perm and LIHTC takeouts
  - SFR loans growing as hedge against floating rate exposure
  - 2026 loan growth balanced between geography-based and niche verticals

Banc of California, Inc. (BANC) Q4 2025 Earnings Call Transcript

- **EPS Growth**: Q3 EPS up 23% QoQ to $0.38, with ROTE at 9.87% (231 bps YoY improvement). Full-year EPS growth of nearly 50% since Q1.
- **Share Buybacks**: $185M repurchased under $300M authorization, maintaining CET1 at 10.14%.
- **NIM Expansion**: 3.22% NIM (3.18% exit rate), driven by loan remixing and repricing. Expect further expansion in 2025.
- **Credit Quality**: ACL at 1.12%, criticized loans down 4% QoQ. Classified loans up due to timing, but all performing.
- **Strategic Moves**: Avoiding office and government-related lending, focusing on multifamily and C&amp;I. Dynamic deposit management to reduce costs.

**【CEO Summary Section】**
- **Strong Earnings Growth**: Q3 EPS of $0.38, up 23% QoQ, with ROTE improving to 9.87% (231 bps YoY). Full-year EPS growth of nearly 50% since Q1.
- **Share Buybacks**: Repurchased 2.2M shares ($185M total) under $300M authorization, maintaining CET1 at 10.14%.
- **Deposit Strategy**: Core deposits up 9% (noninterest-bearing), reducing broker deposits by 16% QoQ, lowering cost of deposits to 2.08%.
- **Loan Production**: $2.1B in loans, excluding $346M SFR purchases. Total loans down 1.6% due to paydowns, but core portfolio stable.
- **Credit Quality**: ACL at 1.12% of loans, criticized loans down 4% QoQ. Classified loans up due to timing and procedural changes, but all performing.

**【CFO Financial Commentary】**
- **Net Interest Income**: $253M (+5% QoQ), NIM 3.22% (3.18% exit rate). Expect further expansion from loan remixing and repricing.
- **Noninterest Income**: $34.3M (+5% QoQ), stable at $10-12M/month run rate.
- **Expense Control**: $185.7M flat QoQ, efficiency ratio 58% (down 300 bps). 2025 guidance for mid-single-digit loan growth and 3.20-3.30% NIM.
- **Credit Reserves**: ACL at 1.12%, consistent with prudent management.

**【Q&A Highlights】**
- **Credit Quality**: $50M CRE loan classified due to timing, but all loans performing. NDFI lending at <5% of portfolio, with negligible historical losses.
- **NIM Outlook**: Neutral balance sheet, ECR benefits offset liability sensitivity. 2025 NIM target 3.20-3.30%, 2026 guidance to follow.
- **Deposit Growth**: Focus on noninterest-bearing deposits, managing HOA ECR costs dynamically.
- **Strategic Lending**: Avoiding office and government-related properties, focusing on multifamily and C&amp;I.
- **Buybacks**: Opportunistic at $13.59 avg price, maintaining CET1 >10%.
- **Expense Management**: Tight control on headcount and projects, leveraging technology for efficiency.

Banc of California, Inc. (BANC) Q3 2025 Earnings Call Transcript

- **Revenue Growth**: 9% annualized loan growth and 6% QoQ pretax pre-provision income expansion highlight strong execution.
- **Strategic Loan Sales**: $507 million in CRE loans sold at 95% proceeds, improving credit quality and freeing capital for high-margin growth.
- **Margin Expansion**: NIM of 3.10% driven by 7.29% loan production rates, with H2 targeting 3.20-3.30%.
- **Buyback Activity**: $150 million repurchased in Q2, with $150 million remaining for opportunistic share buybacks.
- **Credit Resilience**: 29% of loans in low-loss categories, economic coverage ratio of 1.61%, and normalized charge-offs of 12bp.
- **Expense Discipline**: Q2 expenses under guidance, with H2 expected to settle at $190-195 million while maintaining positive leverage.

**【CEO Summary Section】**
- **Strong Q2 Results**: Pretax pre-provision income grew 6% QoQ, driven by 9% annualized loan growth and disciplined expense management. Total loan production, including unfunded commitments, reached $2.2 billion, with $1.2 billion in originations, the highest since the merger.
- **Strategic Loan Sales**: Sold $507 million of commercial real estate loans, transferring $476.2 million to held-for-sale. Expected proceeds net of reserve release are 95%, with $243 million projected to close in Q3 and $233 million over the next several quarters. This move improved credit quality metrics, reducing NPLs, classified loans, and special mentions by 19, 46, and 115 basis points, respectively.
- **Buyback Program**: Repurchased $150 million of common stock (6.8% of shares) in Q2, with $150 million remaining for common and preferred stock. Management emphasized prudent use of remaining capacity.
- **Credit Resilience**: Core loan categories (warehouse, fund finance, lender finance, SFR) now account for 29% of total loans, with historically lower loss profiles. Economic coverage ratio stands at 1.61%.

**【CFO Financial Commentary】**
- **Net Income and EPS**: GAAP net income of $18.4 million ($0.12 per share) and adjusted net income of $48.4 million ($0.31 per share). Adjusted EPS exceeded expectations, excluding $20.2 million after-tax provision expense related to loan sales.
- **Net Interest Income (NII)**: $240 million, up 3.4% QoQ, driven by 9% annualized loan growth and 7.29% average loan production rates. Net interest margin (NIM) expanded to 3.10%, up 3 basis points from Q1.
- **Cost Management**: Noninterest expense of $185.9 million, up $2.2 million QoQ but below the $190-195 million target range. Expense growth is expected to settle at the low end of the range in H2, with positive operating leverage.
- **Credit Reserves**: Core provision for credit losses of $12.3 million, up $3 million QoQ, reflecting updated economic forecasts and portfolio shifts. Economic coverage ratio remains conservative at 1.61%.

**【Q&A Highlights】**
- **Loan Sales Execution**: Management emphasized the 95% proceeds target as conservative, with private credit buyers providing leverage (80-85% of loan value). Remaining sales are expected to close over the next several quarters without direct balance sheet impact.
- **Expense Trends**: Q2 expenses underperformed guidance due to disciplined hiring and budget management. H2 expenses are expected to rise slightly, supporting growth while maintaining positive operating leverage.
- **Deposit Dynamics**: Competitive deposit pricing (e.g., 9bp increase in interest-bearing checking) reflects strong loan growth and mix shifts. Management anticipates potential rate cuts could reduce ECR costs by $6-7 million annually.
- **Growth Outlook**: Mid-single-digit loan and NII growth expected for H2, with NIM targeting 3.20-3.30% by Q4. Management remains optimistic about 2026 growth, driven by California market share gains and niche lending strategies.
- **Credit Quality**: Normalized charge-offs of 12bp (excluding loan sales) and improving credit metrics suggest stability. Management expects provision levels to remain around $10-12 million per quarter.


Banc of California, Inc. (BANC) Q2 2025 Earnings Call Transcript

- **Q1 Growth Drivers**: $2.6B loan production, 3.08% net interest margin, and 1.1% ACL ratio highlight strong execution amid macro uncertainty.
- **Buyback Expansion**: $300M share buyback program reflects confidence in capital management, with focus on common stock.
- **Credit Discipline**: 84% of classified loan inflows remain current, with 1.66% economic coverage ratio mitigating risk.
- **Deposit Strategy**: Aiming for 30% NIB deposits to reduce funding costs, with stable HOA balances ($3.7B) driving ECR sensitivity.
- **Loan Growth Outlook**: Mid-single-digit 2025 target reflects cautious approach to tariff-related risks, but high-quality loan pipeline supports near-term growth.


**【CEO Summary Section】**
- **Q1 Performance**: Revenue growth driven by strong loan production ($2.6B in Q1 vs. $1.8B in Q4), net interest margin expansion, and prudent expense management. Completed a $150M share buyback program and announced an additional $150M program for common and preferred stock.
- **Loan Growth Outlook**: Adjusted 2025 loan growth target to mid-single digits (previously high single digits) due to macroeconomic uncertainties, but maintained focus on disciplined pricing and underwriting.
- **Credit Management**: Increased classified loans due to repricing risk in multifamily loans, but 84% of inflows remain current.headline reserve ratio of 1.1% and economic coverage ratio of 1.66% reflect conservative risk management.
- **Market Position**: Leveraging California market dominance to attract new commercial relationships, with loan production growth in warehouse, lender finance, and fund finance segments.

**【CFO Financial Commentary】**
- **Q1 Financials**: Net income of $43.6M ($0.26 EPS), net interest income of $232M, and noninterest income of $33.7M. Net interest margin increased 4bps to 3.08% due to deposit cost reductions (14bps decline to 2.12%).
- **Expense Management**: Q1 noninterest expense of $183.7M, with expectations for $190-195M/Q2. Operating leverage expected in Q2 due to loan production growth offsetting seasonal expense increases.
- **Balance Sheet**: Maintained strong liquidity and capital levels, with CET1 ratio above 10%. Completed $150M buyback program and expanded to $300M total capacity.

**【Q&A Key Highlights】**
- **Capital Allocation**: Buyback program will be used opportunistically, with preference for common stock given current valuations. No immediate plans to deploy full $300M capacity.
- **Credit Reserves**: ACL decline driven by portfolio mix shift to low-risk loans (e.g., warehouse, fund finance) with minimal historical loss. Economic coverage ratio of 1.66% reflects conservative CECL modeling.
- **Deposit Strategy**: Targeting 30% NIB deposits (currently 28%) through new relationship growth. HOA deposits ($3.7B) remain stable, with ECR costs sensitive to rate changes.
- **Tariff Impact**: Minimal direct exposure to tariffs, with clients diversifying supply chains. Focus on short-duration, low-risk loans to mitigate macroeconomic volatility.
- **Expense Leverage**: Potential to rightsize expenses through bonus accruals and project delays if economic conditions warrant.


Banc of California (BANC)-24 Apr 25-2025 Q1 Earnings call transcript

- **Q4 Strong Performance**: EPS $0.28, NIM 3.04%, cost of deposits 2.26%, with 2025 NIM target 3.20%-3.30%.
- **Growth Focus**: Mid to upper-single-digit loan growth, 30%+ NIB deposits, and ECR expense reduction.
- **Wildfire Recovery**: Community support and long-term economic upside via LA 2.0 initiatives.
- **Expense Management**: 2025 Q1 expenses up due to seasonality, but 3%-6% savings vs. 2024 baseline.
- **Capital Flexibility**: CET1 12.3%, exploring buybacks and HTM repositioning for earnings optimization.

**CEO Opening Remarks**
- **Wildfire Support**: Donated $1 million to the Banc of California Wildfire Relief and Recovery Fund, emphasizing community commitment despite no direct portfolio impact.
- **Q4 Performance**: EPS of $0.28, NIM expansion to 3.04%, and cost of deposits reduced to 2.26% through balance sheet repositioning.
- **Strategic Focus**: Shift to external growth post-merger integration, targeting mid to upper-single-digit loan growth in 2025.
- **Wildfire Impact**: Anticipated economic recovery in LA, with potential for long-term growth through streamlined development and infrastructure rebuilding.

**CFO Financial Highlights**
- **Net Income**: $47 million ($0.28 EPS), driven by NIM expansion and cost savings.
- **NIM Dynamics**: 11 bps expansion to 3.04%, with 2025 target of 3.20%-3.30% assuming no Fed cuts.
- **Deposit Management**: NIB as 29.1% of total deposits, targeting >30% in 2025; cost of deposits down 28 bps Q/Q.
- **Expense Control**: Q4 non-interest expenses $181.4 million, seasonal low; 2025 guidance of $190-195 million quarterly.
- **Tax Rate**: 27%-28% for 2025, stable after one-time Q4 benefit.

**Q&A Key Takeaways**
- **Expense Outlook**: 2025 expenses to increase Q1 due to seasonal resets, but 3%-6% savings vs. 2024 normalized levels.
- **Loan Growth**: Mid to upper-single-digit target, driven by warehouse, fund finance, and C&I; net growth despite elevated payoffs.
- **Deposit Strategy**: Competitive pricing easing, repositioning high-cost deposits; ECR-related expenses down 8% Q/Q to $27.5 million.
- **Capital Use**: CET1 at 12.3%, exploring buyback and HTM repositioning; no immediate plans but active evaluation.
- **Wildfire Recovery**: Long-term economic upside via streamlined development, with LA 2.0 initiatives supporting growth.


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