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Sep 30, 2023
Banc of California Q3 2023 Earnings Report
Reported net income with stable deposit mix and improved net interest margin.
Key Takeaways
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.
Forward Guidance
Banc of California expects to close the merger with PacWest on or about November 30, 2023.
Positive Outlook
- Strong, liquid balance sheet
- Strong credit quality
- Ample reserves
- Sufficient capital
- Growth centered around relationship banking and high quality commercial clients
Challenges Ahead
- 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
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Avg. Return Before/After Earnings
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