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Mar 31, 2022
Banc of California Q1 2022 Earnings Report
Reported net income of $48.5 million and EPS of $0.69 per diluted common share for the first quarter of 2022.
Key Takeaways
Banc of California reported a strong first quarter in 2022, with net income of $48.5 million and EPS of $0.69. The results reflect strong financial performance across the board, including high-quality loan growth, solid inflows of noninterest-bearing deposits, net interest margin expansion, higher levels of noninterest income, and strong asset quality.
Return on average assets increased to 2.09% from 0.24% in the prior quarter.
Net interest margin increased by 23 basis points from the prior quarter to 3.51%.
Noninterest-bearing deposits represented 40% of total deposits, up from 28% a year earlier.
The company redeemed all Series E Preferred Stock for $98.7 million and repurchased $4.3 million of common stock.
Forward Guidance
Banc of California anticipates continued growth in earnings and returns throughout 2022, driven by a strong loan pipeline, benefit from higher interest rates, and operating leverage.
Positive Outlook
- Strong loan pipeline, more than twice as large as the beginning of Q2 2021.
- Asset sensitive position benefiting from higher interest rates.
- Operating leverage realized as the balance sheet grows.
- Anticipated catalysts for driving further growth in earnings and returns.
- Expected effective tax rate for 2022, similar to the effective income tax rate for Q1.
Challenges Ahead
- Rising inflation.
- Higher oil prices.
- Ongoing supply chain issues.
- Military conflict between Russia and Ukraine.
Historical Earnings Impact
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Avg. Return Before/After Earnings
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