Core Viewpoint - Banc of California (BANC) is expected to report quarterly earnings of $0.23 per share, reflecting a 150% increase year-over-year, with revenues projected at $273.08 million, a 41.5% increase from the previous year [1]. Earnings Projections - The consensus EPS estimate for the quarter has been revised upward by 0.9% over the past 30 days, indicating analysts have reassessed their projections [2]. - Changes in earnings projections are crucial for predicting investor reactions, as empirical studies show a strong correlation between earnings estimate trends and short-term stock price movements [3]. Key Metrics Estimates - Analysts project that 'Average Balance - Total interest-earning assets' will reach $30.96 billion, down from $35.42 billion reported in the same quarter last year [5]. - The estimate for 'Total Non-performing loans' is $165.06 million, significantly higher than the year-ago figure of $74.28 million [5]. - The estimated 'Total Non-performing assets' stands at $174.39 million, compared to $81.67 million reported in the same quarter last year [6]. - Analysts predict 'Net Interest Income' will be $238.86 million, up from $151.05 million a year ago [6]. Stock Performance - Banc of California shares have increased by 4.9% over the past month, contrasting with a -0.4% change in the Zacks S&P 500 composite [7]. - The company holds a Zacks Rank 3 (Hold), suggesting it is expected to closely follow overall market performance in the near term [7].

Core Viewpoint - Banc of California (BANC) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook on its earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, with a strong correlation observed between earnings estimate revisions and near-term stock performance [4][6]. - Banc of California is projected to earn $0.70 per share for the fiscal year ending December 2024, reflecting a year-over-year increase of 141.7% [8]. Analyst Behavior and Market Dynamics - Individual investors may struggle with subjective rating upgrades from Wall Street analysts, but the Zacks rating system provides a more objective measure based on earnings outlook [2][5]. - Institutional investors play a role in stock price movements by adjusting their valuations based on earnings estimates, leading to significant buying or selling activity [4]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - Banc of California's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - The market anticipates Banc of California (BANC) will report a year-over-year increase in earnings driven by higher revenues for the quarter ending December 2024, with actual results being crucial for stock price movement [1][2]. Earnings Expectations - The earnings report is expected on January 23, 2025, with a consensus EPS estimate of $0.23, reflecting a 150% increase year-over-year. Revenues are projected at $273.08 million, a 41.5% increase from the previous year [3]. - The consensus EPS estimate has been revised 0.93% higher in the last 30 days, indicating a collective reassessment by analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.17%, indicating a bearish outlook from analysts [10][11]. - Despite the negative Earnings ESP, Banc of California holds a Zacks Rank of 2, complicating predictions of an earnings beat [11]. Historical Performance - In the last reported quarter, Banc of California exceeded the expected EPS of $0.14 by delivering $0.25, resulting in a surprise of +78.57%. However, the company has only beaten consensus EPS estimates once in the last four quarters [12][13]. Conclusion - While the company may not be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [16].

Group 1 - The article discusses the analysis of oil and gas companies, focusing on identifying undervalued names in the sector, including a detailed examination of balance sheets, competitive positions, and development prospects [1] - A recent rescue plan involving a $400 million injection has been highlighted, with the Banc of California (NYSE: BANC) being identified as a survivor in this situation [2] - The oil and gas industry is characterized as a boom-bust, cyclical industry, requiring patience and experience for successful investment [2] Group 2 - The article emphasizes the importance of thorough analysis and understanding of the companies involved in the oil and gas sector for potential investment opportunities [1] - The author has a beneficial long position in the shares of Banc of California, indicating a personal investment interest in the company [3]

Financial Position - As of September 30, 2024, the company had total assets of $33.4 billion, a decrease of $5.1 billion from $38.5 billion at December 31, 2023[220] - Total loans and leases amounted to $23.6 billion, down from $25.6 billion at the end of 2023, reflecting a decrease of $2.1 billion[220] - Total liabilities were $29.9 billion, a reduction of $5.2 billion from $35.1 billion at December 31, 2023, primarily due to a $3.6 billion decrease in deposits[220] - The company reported total stockholders' equity of $3.5 billion at September 30, 2024, an increase from $3.4 billion at December 31, 2023[220] Mergers and Acquisitions - The merger with PacWest Bancorp was completed on November 30, 2023, with an all-stock transaction valued at approximately $663 million[222] - Goodwill resulting from the merger was recorded at $216.8 million[222] - The company raised $400 million in equity capital concurrent with the merger[222] Asset Management - The company completed the sale of $1.95 billion of Civic business-purpose residential loans, generating net proceeds of $1.91 billion[221] - The company sold assets totaling $6.1 billion and paid down $8.6 billion of high-cost liabilities as part of its balance sheet repositioning strategy following the merger[223] - The company sold $742 million of securities with a weighted average yield of 2.94%, resulting in a pre-tax loss of $60 million, while purchasing $724 million of similar quality securities with a yield of 5.65%[223] Income and Earnings - The adjusted net earnings available to common stockholders for Q3 2024 was $4.53 million, compared to a loss of $181.95 million in the same period last year[232] - The return on average tangible common equity for Q3 2024 was 0.70%, down from 3.13% in the previous year[233] - Net interest income for the three months ended September 30, 2024, was $232,175 thousand, compared to $229,488 thousand for the previous quarter, indicating a slight increase[238] - Adjusted net earnings available to common and equivalent stockholders were $41,414 thousand, a significant recovery from a loss of $25,065 thousand in the same period last year[236] Credit Quality - The provision for credit losses is based on the allowance methodology, reflecting historical experience and economic forecasts, with an emphasis on maintaining credit quality[226] - The provision for credit losses was $9.0 million for Q3 2024, down from $11.0 million in Q2 2024, driven by increases in qualitative reserves for office property loans[252] - The allowance for credit losses at quarter-end was $281.9 million, reflecting a slight increase from $275.3 million in the previous quarter[252] Deposits and Liquidity - Total deposits as of September 30, 2024, were $26,828,269,000, a decrease of $3,573,500,000 from $30,401,769,000 as of December 31, 2023[285] - Noninterest-bearing checking accounts increased to $7,811,796,000, representing 29% of total deposits, up from 26% in the previous period[285] - Available liquidity was $16.2 billion at September 30, 2024, exceeding uninsured and uncollateralized deposits of $6.7 billion, with a coverage ratio of 241%[286] Interest Rate Risk - Interest rate risk is the primary market risk for the company, with ongoing monitoring and management of interest rate sensitivity through established asset/liability committees[316] - The company utilizes a balance sheet simulation model to estimate changes in net interest income and economic value of equity due to interest rate fluctuations[315] - As of September 30, 2024, the company's interest rate risk profile is classified as "liability sensitive," indicating a potential compression in net interest income with rising short-term interest rates[318] Noninterest Income and Expenses - Noninterest income for Q3 2024 decreased by $45.2 million to a loss of $15.5 million, primarily due to a $59.9 million loss on the sale of securities[256] - Total noninterest expense for Q3 2024 decreased by $7.4 million to $196.2 million, mainly due to lower insurance and assessments expense[260] - Noninterest expense for the nine months ended September 30, 2024, decreased by $1.5 billion to $610.4 million compared to $2.1 billion for the same period in 2023, largely due to a $1.4 billion goodwill impairment recorded in 2023[261] Loan Portfolio - The loan and lease portfolio totaled $23,527,777 thousand, with real estate mortgage comprising 56% of the total[270] - Total loans and leases held for investment decreased to $23.5 billion as of September 30, 2024, down from $25.5 billion at December 31, 2023[296] - The company reported a net decrease in loans and leases held for investment of $1,961,910 thousand for the nine months ended September 30, 2024[273] Capital Ratios - The Tier 1 leverage capital ratio was 9.83% as of September 30, 2024, up from 9.00% at December 31, 2023, exceeding the minimum required ratio of 4.00%[300] - The CET1 capital ratio increased to 10.46% as of September 30, 2024, compared to 10.14% at December 31, 2023, surpassing the minimum required ratio of 4.50%[300] - Total capital ratio improved to 17.00% as of September 30, 2024, from 16.43% at December 31, 2023, well above the minimum required ratio of 8.00%[300]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, with the aim of buying high and selling higher, leveraging established price movements for profitable trades [1] Group 1: Company Overview - Banc of California (BANC) currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [1] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [2] Group 2: Price Performance - BANC shares have increased by 4.76% over the past week, outperforming the Zacks Banks - Southwest industry, which rose by 2.58% during the same period [3] - Over the last quarter, BANC shares have risen by 9.37%, and over the past year, they have increased by 42.5%, compared to the S&P 500's gains of 4.71% and 39.26%, respectively [3] Group 3: Trading Volume - The average 20-day trading volume for BANC is 2,126,974 shares, which serves as a bullish indicator when combined with rising stock prices [3] Group 4: Earnings Outlook - In the past two months, one earnings estimate for BANC has increased while two have decreased, leading to a consensus estimate rise from $0.62 to $0.63 [4] - For the next fiscal year, three estimates have moved upwards while two have been revised downwards [4]

Financial Data and Key Metrics Changes - The company reported a net loss of $0.01 per share for Q3 2024, which includes a $60 million loss from securities repositioning. Adjusted earnings per share was $0.25, a significant increase from the prior quarter [14][15] - Net interest income was $232 million, slightly up from the previous quarter, despite a $1.4 billion decrease in average interest-earning assets due to the sale of CIVIC loans. The net interest margin increased by 13 basis points to 2.93% [15][16] - The cost of funds declined from 2.95% to 2.82%, while the yield on average earning assets decreased from 5.65% to 5.63% [15][16] Business Line Data and Key Metrics Changes - The company added $1.6 billion in loans during the quarter, including production, unfunded new commitments, and purchase loans, while maintaining conservative underwriting standards [9][10] - The loan portfolio grew modestly, with new loans coming on at higher rates than those paying off, positively impacting average loan yields [10][12] - Non-interest-bearing deposits remained flat, but the percentage of non-interest-bearing deposits increased to 29% of total deposits due to efforts to reduce higher-cost brokered deposits [9][15] Market Data and Key Metrics Changes - The company experienced a favorable deposit mix, with a reduction in brokered deposits by $1.85 billion, contributing to a lower overall cost of deposits [16][20] - The economic environment remains challenging, impacting loan growth, particularly in real estate, with expectations that a further 50 basis point rate cut could unlock more activity [31][32] Company Strategy and Development Direction - The company is shifting focus from internal restructuring to external growth, aiming to capitalize on the strength of its franchise and enhance client relationships [22][23] - A new branding campaign is being launched to promote the superior banking experience offered by the company [23] - The company plans to continue investing in technology and talent to improve client experience and operational efficiency [8][55] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's positioning for future growth despite current economic uncertainties, emphasizing a cautious approach to credit management [12][23] - The company expects to see further improvements in net interest margin in Q4 2024, benefiting from the full quarter impact of recent balance sheet repositioning actions [17][18] - Management remains conservative regarding economic conditions and is prepared for various scenarios, maintaining robust reserves [12][23] Other Important Information - The company achieved its target range for non-interest expenses of $195 million to $200 million a quarter earlier than expected, primarily due to a decrease in FDIC assessment expenses [7][19] - The company has added over 1,700 new relationships over the past three quarters, indicating a focus on expanding its client base [9][23] Q&A Session Summary Question: What is the outlook for ECR deposits? - Management expects to grow HOA balances and is working hard to bring in new relationships [26] Question: What is the spot rate on borrowings and the expected cost of fund improvement? - The spot rate on borrowings was not disclosed, but management remains optimistic about achieving the targeted cost of funds improvement [27][29] Question: What is the loan growth outlook? - Loan growth is expected to remain muted until rates decrease further, with specific opportunities in warehouse lending and construction [31][32] Question: How does the company view deposit growth? - Management aims to build deposit relationships to support loan growth without relying heavily on external funding [36][38] Question: What are the expectations for margin expansion? - The company anticipates meaningful benefits from restructuring actions in Q4, with a conservative approach to rate cuts [61][62]

Draft v4.5 1/21/24 Investor Presentation Third Quarter 2024 Results Forward-Looking Statements and Other Matters This presentation includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, liquidity and capital ratios and other non-historical statements. Words or phrases such as "believe," "wi ...

Core Insights - Banc of California reported $276.67 million in revenue for Q3 2024, a year-over-year increase of 130.6% [1] - The EPS for the same period was $0.25, down from $0.30 a year ago [1] - Revenue exceeded the Zacks Consensus Estimate of $229.46 million by 20.57%, while EPS surprised by 78.57% against the consensus estimate of $0.14 [1] Financial Metrics - Net Interest Margin stood at 2.9%, matching the five-analyst average estimate [2] - Annualized net loan charge-offs to average total loans held-for-investment was 0%, compared to the four-analyst average estimate of 0.1% [2] - Average Balance of Total interest-earning assets was $31.58 billion, slightly below the four-analyst average estimate of $31.74 billion [2] - Tier 1 leverage ratio was 9.8%, in line with the average estimate based on two analysts [2] - Total Non-performing loans reached $168.34 million, exceeding the two-analyst average estimate of $121.78 million [2] - Total Non-performing assets were $177 million, higher than the two-analyst average estimate of $135.43 million [2] - Total Non Interest Income was -$15.45 million, significantly worse than the five-analyst average estimate of -$1.53 million [2] - Net Interest Income was $232.18 million, slightly above the $230.98 million average estimate based on five analysts [2] - Service charges on deposit accounts totaled $4.57 million, below the $5.32 million estimated by two analysts [2] - Leased equipment income was $17.18 million, surpassing the $11.30 million estimate by two analysts [2] - Other commissions and fees amounted to $8.26 million, compared to the $8.86 million average estimate based on two analysts [2] Stock Performance - Shares of Banc of California have returned -0.3% over the past month, while the Zacks S&P 500 composite increased by 2.8% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Core Insights - Banc of California reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, but down from $0.30 per share a year ago, indicating an earnings surprise of 78.57% [1] - The company generated revenues of $276.67 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 20.57% and significantly up from $120 million year-over-year [1] Earnings Performance - Banc of California has surpassed consensus EPS estimates only once in the last four quarters [1] - The company had a previous quarter earnings expectation of $0.19 per share but reported only $0.10, resulting in a surprise of -47.37% [1] Future Outlook - The stock's immediate price movement will largely depend on management's commentary during the earnings call [2] - Current consensus EPS estimate for the upcoming quarter is $0.22 on revenues of $268.94 million, and for the current fiscal year, it is $0.61 on revenues of $1.01 billion [4] Industry Context - The Banks - Southwest industry, to which Banc of California belongs, is currently in the top 40% of over 250 Zacks industries, indicating a favorable industry outlook [5] - The performance of Banc of California's stock may be influenced by the overall industry outlook [5]