Banc of California, Inc. Reports Second Quarter 2024 Financial Results
|
|
10.27%
|
27%
|
Second quarter highlights include:
-
Average noninterest-bearing deposits higher by
$196.5 million , or 3%, in the second quarter. - Net interest margin of 2.80%, an increase of 14 basis points from 2.66% in the first quarter.
- Average total cost of deposits decreased by 6 basis points to 2.60% for the second quarter compared to 2.66% in the first quarter and average total cost of funds decreased by 7 basis points to 2.95% for the second quarter compared to 3.02% in the first quarter.
-
High liquidity levels, with available on-balance sheet liquidity and unused borrowing capacity of
$16.9 billion atJune 30, 2024 , which was 2.5 times greater than uninsured and uncollateralized deposits. -
Transferred
$1.95 billion of CIVIC business-purpose residential loans with a fair value of$1.91 billion to held for sale atJune 30, 2024 . Sale closed onJuly 18, 2024 , resulting in immediate increases in liquidity and capital ratios. -
Nonperforming assets decreased to 0.37% of total assets at
June 30, 2024 , compared to 0.44% atMarch 31, 2024 , primarily due to the loans transferred to held for sale. -
Strong capital ratios well above the regulatory thresholds for "well capitalized" banks at
June 30, 2024 , including an estimated 16.57% Total risk-based capital ratio, 12.62% Tier 1 capital ratio, 10.27% CET1 capital ratio, and 9.51% Tier 1 leverage ratio. -
Book value per share increased to
$17.23 and tangible book value per share(1) increased to$15.07 . -
Successful core systems conversion completed on
July 21, 2024 .
(1) |
Non-GAAP measure; refer to section 'Non-GAAP Measures' |
Subsequent to quarter-end,
INCOME STATEMENT HIGHLIGHTS |
||||||||||||||||||||
Three Months Ended |
Six Months Ended |
|||||||||||||||||||
|
|
|
|
|||||||||||||||||
Summary Income Statement |
2024 |
2024 |
2023 |
2024 |
2023 |
|||||||||||||||
(In thousands) |
||||||||||||||||||||
Total interest income |
$ |
462,589 |
|
$ |
478,704 |
|
$ |
539,888 |
|
$ |
941,293 |
|
$ |
1,057,676 |
|
|||||
Total interest expense |
|
233,101 |
|
|
249,602 |
|
|
353,812 |
|
|
482,703 |
|
|
592,328 |
|
|||||
Net interest income |
|
229,488 |
|
|
229,102 |
|
|
186,076 |
|
|
458,590 |
|
|
465,348 |
|
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Gain (loss) on sale of loans |
|
1,135 |
|
|
(448 |
) |
|
(158,881 |
) |
|
687 |
|
|
(155,919 |
) |
|||||
Other noninterest income |
|
28,657 |
|
|
34,264 |
|
|
30,799 |
|
|
62,921 |
|
|
64,228 |
|
|||||
Total noninterest income (loss) |
|
29,792 |
|
|
33,816 |
|
|
(128,082 |
) |
|
63,608 |
|
|
(91,691 |
) |
|||||
Total revenue |
|
259,280 |
|
|
262,918 |
|
|
57,994 |
|
|
522,198 |
|
|
373,657 |
|
|||||
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Acquisition, integration and reorganization costs |
|
(12,650 |
) |
|
- |
|
|
12,394 |
|
|
(12,650 |
) |
|
20,908 |
|
|||||
Other noninterest expense |
|
216,293 |
|
|
210,518 |
|
|
308,043 |
|
|
426,811 |
|
|
495,796 |
|
|||||
Total noninterest expense |
|
203,643 |
|
|
210,518 |
|
|
320,437 |
|
|
414,161 |
|
|
1,893,440 |
|
|||||
Earnings (loss) before income taxes |
|
44,637 |
|
|
42,400 |
|
|
(264,443 |
) |
|
87,037 |
|
|
(1,524,783 |
) |
|||||
Income tax expense (benefit) |
|
14,304 |
|
|
11,548 |
|
|
(67,029 |
) |
|
25,852 |
|
|
(131,945 |
) |
|||||
Net earnings (loss) |
|
30,333 |
|
|
30,852 |
|
|
(197,414 |
) |
|
61,185 |
|
|
(1,392,838 |
) |
|||||
Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Net earnings (loss) available to common and equivalent stockholders |
$ |
20,386 |
|
$ |
20,905 |
|
$ |
(207,361 |
) |
$ |
41,291 |
|
$ |
(1,412,732 |
) |
Net Interest Income
Q2-2024 vs Q1 -2024
Net interest income increased by
Average interest-earning assets decreased by
The average yield on interest-earning assets increased by 9 basis points to 5.65% for the second quarter from 5.56% in the first quarter due mainly to the increase in the average yield on loans and leases.
The average yield on loans and leases increased by 10 basis points to 6.18% for the second quarter from 6.08% for the first quarter as a result of new originations being at rates higher than the existing portfolio and the change in the mix of loan product balances.
The average total cost of funds decreased by 7 basis points to 2.95% for the second quarter from 3.02% in the first quarter due mainly to decreases in interest-bearing deposits combined with an increase in average noninterest-bearing deposits. The average cost of interest-bearing liabilities increased by 1 basis point to 3.93% for the second quarter from 3.92% in the first quarter. The average total cost of deposits decreased by 6 basis points to 2.60% for the second quarter compared to 2.66% in the first quarter. Average noninterest-bearing deposits increased by
YTD
Net interest income decreased by
Average interest-earning assets decreased by
The average yield on interest-earning assets increased by 29 basis points to 5.60% for the first six months of 2024 from 5.31% for the same period in 2023 due mainly to the change in the interest-earning asset mix. This was driven by the increase in the balance of average loans and leases as a percentage of average interest-earning assets to 75% for the six months ended
The average yield on loans and leases increased by 2 basis points to 6.13% for the first six months of 2024 from 6.11% for the same period in 2023 as a result of changes in portfolio mix and higher net accretion of loan discounts/premiums.
The average total cost of funds decreased by 8 basis points to 2.99% for the six months ended
Provision For Credit Losses
Q2-2024 vs Q1 -2024
The provision for credit losses was
YTD
The provision for credit losses increased by
Noninterest Income
Q2-2024 vs Q1 -2024
Noninterest income decreased by
YTD
Noninterest income increased by
Noninterest Expense
Q2-2024 vs Q1 -2024
Noninterest expense decreased by
YTD
Noninterest expense decreased by
Income Taxes
Q2-2024 vs Q1 -2024
Income tax expense of
YTD
Income tax expense of
BALANCE SHEET HIGHLIGHTS |
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Increase (Decrease) |
||||||||||||||
Selected Balance Sheet Items |
2024 |
|
2024 |
|
2023 |
|
QoQ |
|
YoY |
|||||||||||
(In thousands) |
||||||||||||||||||||
Cash and cash equivalents |
$ |
2,698,810 |
|
$ |
3,085,228 |
|
$ |
6,698,147 |
|
$ |
(386,418 |
) |
$ |
(3,999,337 |
) |
|||||
Securities available-for-sale |
|
2,244,031 |
|
|
2,286,682 |
|
|
4,708,519 |
|
|
(42,651 |
) |
|
(2,464,488 |
) |
|||||
Securities held-to-maturity |
|
2,296,708 |
|
|
2,291,984 |
|
|
2,278,202 |
|
|
4,724 |
|
|
18,506 |
|
|||||
Loans held for sale |
|
1,935,455 |
|
|
80,752 |
|
|
478,146 |
|
|
1,854,703 |
|
|
1,457,309 |
|
|||||
Loan and leases held for investment, net of deferred fees |
|
23,228,909 |
|
|
25,473,022 |
|
|
22,258,210 |
|
|
(2,244,113 |
) |
|
970,699 |
|
|||||
Total assets |
|
35,243,839 |
|
|
36,073,516 |
|
|
38,337,250 |
|
|
(829,677 |
) |
|
(3,093,411 |
) |
|||||
Noninterest-bearing deposits |
$ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
6,055,358 |
|
$ |
(8,601 |
) |
$ |
1,769,649 |
|
|||||
Total deposits |
|
28,804,450 |
|
|
28,892,407 |
|
|
27,897,083 |
|
|
(87,957 |
) |
|
907,367 |
|
|||||
Borrowings |
|
1,440,875 |
|
|
2,139,498 |
|
|
6,357,338 |
|
|
(698,623 |
) |
|
(4,916,463 |
) |
|||||
Total liabilities |
|
31,835,991 |
|
|
32,679,366 |
|
|
35,804,055 |
|
|
(843,375 |
) |
|
(3,968,064 |
) |
|||||
Total stockholders' equity |
|
3,407,848 |
|
|
3,394,150 |
|
|
2,533,195 |
|
|
13,698 |
|
|
874,653 |
|
Securities
The balance of securities held-to-maturity (“HTM”) remained consistent through the second quarter and totaled
Securities available-for-sale (“AFS”) decreased by
Loans and Leases
The following table sets forth the composition, by loan category, of our loan and lease portfolio held for investment, net of deferred fees, as of the dates indicated:
Composition of Loans and Leases |
|
|
|
|
|
|
|
|
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Real estate mortgage: | ||||||||||||||||||||
Commercial |
$ |
4,722,585 |
|
$ |
4,896,544 |
|
$ |
5,026,497 |
|
$ |
3,526,308 |
|
$ |
3,610,320 |
|
|||||
Multi-family |
|
5,984,930 |
|
|
6,121,472 |
|
|
6,025,179 |
|
|
5,279,659 |
|
|
5,304,544 |
|
|||||
Other residential |
|
2,866,085 |
|
|
4,949,383 |
|
|
5,060,309 |
|
|
5,228,524 |
|
|
5,373,178 |
|
|||||
Total real estate mortgage |
|
13,573,600 |
|
|
15,967,399 |
|
|
16,111,985 |
|
|
14,034,491 |
|
|
14,288,042 |
|
|||||
Real estate construction and land: | ||||||||||||||||||||
Commercial |
|
784,166 |
|
|
775,021 |
|
|
759,585 |
|
|
465,266 |
|
|
415,997 |
|
|||||
Residential |
|
2,573,431 |
|
|
2,470,333 |
|
|
2,399,684 |
|
|
2,272,271 |
|
|
2,049,526 |
|
|||||
Total real estate construction and land |
|
3,357,597 |
|
|
3,245,354 |
|
|
3,159,269 |
|
|
2,737,537 |
|
|
2,465,523 |
|
|||||
Total real estate |
|
16,931,197 |
|
|
19,212,753 |
|
|
19,271,254 |
|
|
16,772,028 |
|
|
16,753,565 |
|
|||||
Commercial: | ||||||||||||||||||||
Asset-based |
|
1,968,713 |
|
|
2,061,016 |
|
|
2,189,085 |
|
|
2,287,893 |
|
|
2,357,098 |
|
|||||
Venture capital |
|
1,456,122 |
|
|
1,513,641 |
|
|
1,446,362 |
|
|
1,464,160 |
|
|
1,723,476 |
|
|||||
Other commercial |
|
2,446,974 |
|
|
2,245,910 |
|
|
2,129,860 |
|
|
1,002,377 |
|
|
1,014,212 |
|
|||||
Total commercial |
|
5,871,809 |
|
|
5,820,567 |
|
|
5,765,307 |
|
|
4,754,430 |
|
|
5,094,786 |
|
|||||
Consumer |
|
425,903 |
|
|
439,702 |
|
|
453,126 |
|
|
394,488 |
|
|
409,859 |
|
|||||
Total loans and leases held for investment, net of deferred fees |
$ |
23,228,909 |
|
$ |
25,473,022 |
|
$ |
25,489,687 |
|
$ |
21,920,946 |
|
$ |
22,258,210 |
|
|||||
Total unfunded loan commitments |
$ |
5,256,473 |
|
$ |
5,482,672 |
|
$ |
5,578,907 |
|
$ |
5,289,221 |
|
$ |
5,845,375 |
|
|||||
Composition as % of Total Loans and Leases |
|
|
|
|
|
|
|
|
|
|||||||||||
Real estate mortgage: | ||||||||||||||||||||
Commercial |
|
20 |
% |
|
19 |
% |
|
20 |
% |
|
16 |
% |
|
16 |
% |
|||||
Multi-family |
|
26 |
% |
|
24 |
% |
|
23 |
% |
|
24 |
% |
|
24 |
% |
|||||
Other residential |
|
12 |
% |
|
19 |
% |
|
20 |
% |
|
24 |
% |
|
24 |
% |
|||||
Total real estate mortgage |
|
58 |
% |
|
62 |
% |
|
63 |
% |
|
64 |
% |
|
64 |
% |
|||||
Real estate construction and land: | ||||||||||||||||||||
Commercial |
|
4 |
% |
|
3 |
% |
|
3 |
% |
|
2 |
% |
|
2 |
% |
|||||
Residential |
|
11 |
% |
|
10 |
% |
|
9 |
% |
|
10 |
% |
|
9 |
% |
|||||
Total real estate construction and land |
|
15 |
% |
|
13 |
% |
|
12 |
% |
|
12 |
% |
|
11 |
% |
|||||
Total real estate |
|
73 |
% |
|
75 |
% |
|
75 |
% |
|
76 |
% |
|
75 |
% |
|||||
Commercial: | ||||||||||||||||||||
Asset-based |
|
8 |
% |
|
8 |
% |
|
9 |
% |
|
10 |
% |
|
11 |
% |
|||||
Venture capital |
|
6 |
% |
|
6 |
% |
|
6 |
% |
|
7 |
% |
|
8 |
% |
|||||
Other commercial |
|
11 |
% |
|
9 |
% |
|
8 |
% |
|
5 |
% |
|
4 |
% |
|||||
Total commercial |
|
25 |
% |
|
23 |
% |
|
23 |
% |
|
22 |
% |
|
23 |
% |
|||||
Consumer |
|
2 |
% |
|
2 |
% |
|
2 |
% |
|
2 |
% |
|
2 |
% |
|||||
Total loans and leases held for investment, net of deferred fees |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
Total loans and leases held for investment, net of deferred fees, decreased by
Deposits and Client Investment Funds
The following table sets forth the composition of our deposits at the dates indicated:
Composition of Deposits |
|
|
|
|
|
|
|
|
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Noninterest-bearing checking |
$ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
|||||
Interest-bearing: | ||||||||||||||||||||
Checking |
|
7,309,833 |
|
|
7,836,097 |
|
|
7,808,764 |
|
|
7,038,808 |
|
|
7,112,807 |
|
|||||
Money market |
|
4,837,025 |
|
|
5,020,110 |
|
|
6,187,889 |
|
|
5,424,347 |
|
|
5,678,323 |
|
|||||
Savings |
|
2,040,461 |
|
|
2,016,398 |
|
|
1,997,989 |
|
|
1,441,700 |
|
|
897,277 |
|
|||||
Time deposits: | ||||||||||||||||||||
Non-brokered |
|
2,758,067 |
|
|
2,761,836 |
|
|
3,139,270 |
|
|
3,038,005 |
|
|
2,725,265 |
|
|||||
Brokered |
|
4,034,057 |
|
|
3,424,358 |
|
|
3,493,603 |
|
|
4,076,788 |
|
|
5,428,053 |
|
|||||
Total time deposits |
|
6,792,124 |
|
|
6,186,194 |
|
|
6,632,873 |
|
|
7,114,793 |
|
|
8,153,318 |
|
|||||
Total interest-bearing |
|
20,979,443 |
|
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|||||
Total deposits |
$ |
28,804,450 |
|
$ |
28,892,407 |
|
$ |
30,401,769 |
|
$ |
26,598,681 |
|
$ |
27,897,083 |
|
|||||
Composition as % of Total Deposits |
|
|
|
|
|
|
|
|
|
|||||||||||
Noninterest-bearing checking |
|
27 |
% |
|
27 |
% |
|
26 |
% |
|
21 |
% |
|
22 |
% |
|||||
Interest-bearing: | ||||||||||||||||||||
Checking |
|
25 |
% |
|
27 |
% |
|
26 |
% |
|
27 |
% |
|
26 |
% |
|||||
Money market |
|
17 |
% |
|
17 |
% |
|
20 |
% |
|
20 |
% |
|
20 |
% |
|||||
Savings |
|
7 |
% |
|
7 |
% |
|
6 |
% |
|
5 |
% |
|
3 |
% |
|||||
Time deposits: | ||||||||||||||||||||
Non-brokered |
|
10 |
% |
|
10 |
% |
|
10 |
% |
|
12 |
% |
|
10 |
% |
|||||
Brokered |
|
14 |
% |
|
12 |
% |
|
12 |
% |
|
15 |
% |
|
19 |
% |
|||||
Total time deposits |
|
24 |
% |
|
22 |
% |
|
22 |
% |
|
27 |
% |
|
29 |
% |
|||||
Total interest-bearing |
|
73 |
% |
|
73 |
% |
|
74 |
% |
|
79 |
% |
|
78 |
% |
|||||
Total deposits |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
|
100 |
% |
Total deposits decreased by
Average noninterest-bearing checking totaled
Uninsured and uncollateralized deposits of
In addition to deposit products, we also offer alternative, non-depository corporate treasury solutions for select clients to invest excess liquidity. These alternative options include investments managed by
Borrowings
Borrowings decreased by approximately
Equity
During the second quarter, total stockholders’ equity increased by
At
(1) |
Non-GAAP measures; refer to section 'Non-GAAP Measures' |
CAPITAL AND LIQUIDITY
Capital ratios remain strong with total risk-based capital at 16.57% and a tier 1 leverage ratio of 9.51% at
The following table sets forth our regulatory capital ratios as of the dates indicated:
|
|
|
|
|
|
|
|
|
|||||||
Capital Ratios |
2024 (1) |
|
2024 |
|
2023 |
|
2023 |
|
2023 |
||||||
|
|||||||||||||||
Total risk-based capital ratio |
16.57 |
% |
16.40 |
% |
16.43 |
% |
17.83 |
% |
17.61 |
% |
|||||
Tier 1 risk-based capital ratio |
12.62 |
% |
12.38 |
% |
12.44 |
% |
13.84 |
% |
13.70 |
% |
|||||
Common equity tier 1 capital ratio |
10.27 |
% |
10.09 |
% |
10.14 |
% |
11.23 |
% |
11.16 |
% |
|||||
Tier 1 leverage capital ratio |
9.51 |
% |
9.12 |
% |
9.00 |
% |
8.65 |
% |
7.76 |
% |
|||||
|
|||||||||||||||
Total risk-based capital ratio |
16.19 |
% |
15.88 |
% |
15.75 |
% |
16.37 |
% |
16.07 |
% |
|||||
Tier 1 risk-based capital ratio |
13.77 |
% |
13.34 |
% |
13.27 |
% |
13.72 |
% |
13.48 |
% |
|||||
Common equity tier 1 capital ratio |
13.77 |
% |
13.34 |
% |
13.27 |
% |
13.72 |
% |
13.48 |
% |
|||||
Tier 1 leverage capital ratio |
10.38 |
% |
9.84 |
% |
9.62 |
% |
8.57 |
% |
7.62 |
% |
____________________ | ||
(1) |
Capital information for |
At
CREDIT QUALITY |
||||||||||||||||||||
Asset Quality Information and Ratios |
|
|
|
|
|
|
|
|
|
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Delinquent loans and leases held for investment: | ||||||||||||||||||||
30 to 89 days delinquent |
$ |
27,962 |
|
$ |
178,421 |
|
$ |
113,307 |
|
$ |
49,970 |
|
$ |
57,428 |
|
|||||
90+ days delinquent |
|
55,792 |
|
|
57,573 |
|
|
30,881 |
|
|
77,327 |
|
|
62,322 |
|
|||||
Total delinquent loans and leases |
$ |
83,754 |
|
$ |
235,994 |
|
$ |
144,188 |
|
$ |
127,297 |
|
$ |
119,750 |
|
|||||
Total delinquent loans and leases to loans and leases held for investment |
|
0.36 |
% |
|
0.93 |
% |
|
0.57 |
% |
|
0.58 |
% |
|
0.54 |
% |
|||||
Nonperforming assets, excluding loans held for sale: | ||||||||||||||||||||
Nonaccrual loans and leases |
$ |
117,070 |
|
$ |
145,785 |
|
$ |
62,527 |
|
$ |
125,396 |
|
$ |
104,886 |
|
|||||
90+ days delinquent loans and still accruing |
|
- |
|
|
- |
|
|
11,750 |
|
|
- |
|
|
- |
|
|||||
Total nonperforming loans and leases ("NPLs") |
|
117,070 |
|
|
145,785 |
|
|
74,277 |
|
|
125,396 |
|
|
104,886 |
|
|||||
Foreclosed assets, net |
|
13,302 |
|
|
12,488 |
|
|
7,394 |
|
|
6,829 |
|
|
8,426 |
|
|||||
Total nonperforming assets ("NPAs") |
$ |
130,372 |
|
$ |
158,273 |
|
$ |
81,671 |
|
$ |
132,225 |
|
$ |
113,312 |
|
|||||
Allowance for loan and lease losses |
$ |
247,762 |
|
$ |
291,503 |
|
$ |
281,687 |
|
$ |
222,297 |
|
$ |
219,234 |
|
|||||
Allowance for loan and lease losses to NPLs |
|
211.64 |
% |
|
199.95 |
% |
|
379.24 |
% |
|
177.28 |
% |
|
209.02 |
% |
|||||
NPLs to loans and leases held for investment |
|
0.50 |
% |
|
0.57 |
% |
|
0.29 |
% |
|
0.57 |
% |
|
0.47 |
% |
|||||
NPAs to total assets |
|
0.37 |
% |
|
0.44 |
% |
|
0.21 |
% |
|
0.36 |
% |
|
0.30 |
% |
At
At
At
Nonperforming loans and leases as a percentage of loans and leases held for investment decreased to 0.50% at
ALLOWANCE FOR CREDIT LOSSES - LOANS |
||||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
Allowance for Credit Losses - Loans |
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Allowance for loan and lease losses ("ALLL"): | ||||||||||||||||||||
Balance at beginning of period |
$ |
291,503 |
|
$ |
281,687 |
|
$ |
210,055 |
|
$ |
281,687 |
|
$ |
200,732 |
|
|||||
Charge-offs |
|
(58,070 |
) |
|
(5,014 |
) |
|
(31,708 |
) |
|
(63,084 |
) |
|
(42,105 |
) |
|||||
Recoveries |
|
2,329 |
|
|
3,830 |
|
|
887 |
|
|
6,159 |
|
|
2,107 |
|
|||||
Net charge-offs |
|
(55,741 |
) |
|
(1,184 |
) |
|
(30,821 |
) |
|
(56,925 |
) |
|
(39,998 |
) |
|||||
Provision for loan losses |
|
12,000 |
|
|
11,000 |
|
|
40,000 |
|
|
23,000 |
|
|
58,500 |
|
|||||
Balance at end of period |
$ |
247,762 |
|
$ |
291,503 |
|
$ |
219,234 |
|
$ |
247,762 |
|
$ |
219,234 |
|
|||||
Reserve for unfunded loan commitments ("RUC"): | ||||||||||||||||||||
Balance at beginning of period |
$ |
28,571 |
|
$ |
29,571 |
|
$ |
75,571 |
|
$ |
29,571 |
|
$ |
91,071 |
|
|||||
(Negative provision) provision for credit losses |
|
(1,000 |
) |
|
(1,000 |
) |
|
(38,000 |
) |
|
(2,000 |
) |
|
(53,500 |
) |
|||||
Balance at end of period |
$ |
27,571 |
|
$ |
28,571 |
|
$ |
37,571 |
|
$ |
27,571 |
|
$ |
37,571 |
|
|||||
Allowance for credit losses ("ACL") - Loans: | ||||||||||||||||||||
Balance at beginning of period |
$ |
320,074 |
|
$ |
311,258 |
|
$ |
285,626 |
|
$ |
311,258 |
|
$ |
291,803 |
|
|||||
Charge-offs |
|
(58,070 |
) |
|
(5,014 |
) |
|
(31,708 |
) |
|
(63,084 |
) |
|
(42,105 |
) |
|||||
Recoveries |
|
2,329 |
|
|
3,830 |
|
|
887 |
|
|
6,159 |
|
|
2,107 |
|
|||||
Net charge-offs |
|
(55,741 |
) |
|
(1,184 |
) |
|
(30,821 |
) |
|
(56,925 |
) |
|
(39,998 |
) |
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Balance at end of period |
$ |
275,333 |
|
$ |
320,074 |
|
$ |
256,805 |
|
$ |
275,333 |
|
$ |
256,805 |
|
|||||
ALLL to loans and leases held for investment |
|
1.07 |
% |
|
1.14 |
% |
|
0.98 |
% |
|
1.07 |
% |
|
0.98 |
% |
|||||
ACL to loans and leases held for investment |
|
1.19 |
% |
|
1.26 |
% |
|
1.15 |
% |
|
1.19 |
% |
|
1.15 |
% |
|||||
ACL to NPLs |
|
235.19 |
% |
|
219.55 |
% |
|
244.84 |
% |
|
235.19 |
% |
|
244.84 |
% |
|||||
ACL to NPAs |
|
211.19 |
% |
|
202.23 |
% |
|
226.64 |
% |
|
211.19 |
% |
|
226.64 |
% |
|||||
Annualized net charge-offs to average loans and leases |
|
0.89 |
% |
|
0.02 |
% |
|
0.46 |
% |
|
0.45 |
% |
|
0.29 |
% |
The allowance for credit losses, which includes the reserve for unfunded loan commitments, totaled
Net charge-offs were 0.89% of average loans and leases (annualized) for the second quarter, compared to 0.02% for the first quarter. The increase in net charge-offs in the second quarter was attributable primarily to
Conference Call
The Company will host a conference call to discuss its second quarter 2024 financial results at
About
Forward-Looking Statements
This press release 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,” “will,” “should,” “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “plans,” “strategy,” or similar expressions are intended to identify these forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by
Factors that could cause actual results to differ materially from the results anticipated or projected include, but are not limited to: (i) changes in general economic conditions, either nationally or in our market areas, including the impact of supply chain disruptions, and the risk of recession or an economic downturn; (ii) changes in the interest rate environment, including the recent and potential future changes in the FRB benchmark rate, which could adversely affect our revenue and expenses, the value of assets and obligations, the realization of deferred tax assets, the availability and cost of capital and liquidity, and the impacts of continuing inflation; (iii) the credit risks of lending activities, which may be affected by deterioration in real estate markets and the financial condition of borrowers, and the operational risk of lending activities, including the effectiveness of our underwriting practices and the risk of fraud, any of which may lead to increased loan delinquencies, losses, and non-performing assets, and may result in our allowance for credit losses not being adequate; (iv) fluctuations in the demand for loans, and fluctuations in commercial and residential real estate values in our market area; (v) the quality and composition of our securities portfolio; (vi) our ability to develop and maintain a strong core deposit base, including among our venture banking clients, or other low cost funding sources necessary to fund our activities particularly in a rising or high interest rate environment; (vii) the rapid withdrawal of a significant amount of demand deposits over a short period of time; (viii) the costs and effects of litigation; (ix) risks related to the Company’s acquisitions, including disruption to current plans and operations; difficulties in customer and employee retention; fees, expenses and charges related to these transactions being significantly higher than anticipated; and our inability to achieve expected revenues, cost savings, synergies, and other benefits; and in the case of our recent acquisition of
|
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) | ||||||||||||||||||||
|
|
|
|
|
||||||||||||||||
2024 |
2024 |
2023 |
2023 |
2023 |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||||||
ASSETS: | ||||||||||||||||||||
Cash and due from banks |
$ |
203,467 |
|
$ |
199,922 |
|
$ |
202,427 |
|
$ |
182,261 |
|
$ |
208,300 |
|
|||||
Interest-earning deposits in financial institutions |
|
2,495,343 |
|
|
2,885,306 |
|
|
5,175,149 |
|
|
5,887,406 |
|
|
6,489,847 |
|
|||||
Total cash and cash equivalents |
|
2,698,810 |
|
|
3,085,228 |
|
|
5,377,576 |
|
|
6,069,667 |
|
|
6,698,147 |
|
|||||
Securities available-for-sale |
|
2,244,031 |
|
|
2,286,682 |
|
|
2,346,864 |
|
|
4,487,172 |
|
|
4,708,519 |
|
|||||
Securities held-to-maturity |
|
2,296,708 |
|
|
2,291,984 |
|
|
2,287,291 |
|
|
2,282,586 |
|
|
2,278,202 |
|
|||||
FRB and FHLB stock |
|
132,380 |
|
|
129,314 |
|
|
126,346 |
|
|
17,250 |
|
|
17,250 |
|
|||||
Total investment securities |
|
4,673,119 |
|
|
4,707,980 |
|
|
4,760,501 |
|
|
6,787,008 |
|
|
7,003,971 |
|
|||||
Loans held for sale |
|
1,935,455 |
|
|
80,752 |
|
|
122,757 |
|
|
188,866 |
|
|
478,146 |
|
|||||
Gross loans and leases held for investment |
|
23,255,297 |
|
|
25,517,028 |
|
|
25,534,730 |
|
|
21,969,789 |
|
|
22,311,292 |
|
|||||
Deferred fees, net |
|
(26,388 |
) |
|
(44,006 |
) |
|
(45,043 |
) |
|
(48,843 |
) |
|
(53,082 |
) |
|||||
Total loans and leases held for investment, net of deferred fees |
|
23,228,909 |
|
|
25,473,022 |
|
|
25,489,687 |
|
|
21,920,946 |
|
|
22,258,210 |
|
|||||
Allowance for loan and lease losses |
|
(247,762 |
) |
|
(291,503 |
) |
|
(281,687 |
) |
|
(222,297 |
) |
|
(219,234 |
) |
|||||
Total loans and leases held for investment, net |
|
22,981,147 |
|
|
25,181,519 |
|
|
25,208,000 |
|
|
21,698,649 |
|
|
22,038,976 |
|
|||||
Equipment leased to others under operating leases |
|
335,968 |
|
|
339,925 |
|
|
344,325 |
|
|
352,330 |
|
|
380,022 |
|
|||||
Premises and equipment, net |
|
145,734 |
|
|
144,912 |
|
|
146,798 |
|
|
50,236 |
|
|
57,078 |
|
|||||
Bank owned life insurance |
|
341,779 |
|
|
341,806 |
|
|
339,643 |
|
|
207,946 |
|
|
206,812 |
|
|||||
|
|
215,925 |
|
|
198,627 |
|
|
198,627 |
|
|
- |
|
|
- |
|
|||||
Intangible assets, net |
|
148,894 |
|
|
157,226 |
|
|
165,477 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Deferred tax asset, net |
|
738,534 |
|
|
741,158 |
|
|
739,111 |
|
|
506,248 |
|
|
426,304 |
|
|||||
Other assets |
|
1,028,474 |
|
|
1,094,383 |
|
|
1,131,249 |
|
|
992,691 |
|
|
1,021,213 |
|
|||||
Total assets |
$ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
LIABILITIES: | ||||||||||||||||||||
Noninterest-bearing deposits |
$ |
7,825,007 |
|
$ |
7,833,608 |
|
$ |
7,774,254 |
|
$ |
5,579,033 |
|
$ |
6,055,358 |
|
|||||
Interest-bearing deposits |
|
20,979,443 |
|
|
21,058,799 |
|
|
22,627,515 |
|
|
21,019,648 |
|
|
21,841,725 |
|
|||||
Total deposits |
|
28,804,450 |
|
|
28,892,407 |
|
|
30,401,769 |
|
|
26,598,681 |
|
|
27,897,083 |
|
|||||
Borrowings |
|
1,440,875 |
|
|
2,139,498 |
|
|
2,911,322 |
|
|
6,294,525 |
|
|
6,357,338 |
|
|||||
Subordinated debt |
|
939,287 |
|
|
937,717 |
|
|
936,599 |
|
|
870,896 |
|
|
870,378 |
|
|||||
Accrued interest payable and other liabilities |
|
651,379 |
|
|
709,744 |
|
|
893,609 |
|
|
714,454 |
|
|
679,256 |
|
|||||
Total liabilities |
|
31,835,991 |
|
|
32,679,366 |
|
|
35,143,299 |
|
|
34,478,556 |
|
|
35,804,055 |
|
|||||
STOCKHOLDERS' EQUITY: | ||||||||||||||||||||
Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Common stock |
|
1,583 |
|
|
1,583 |
|
|
1,577 |
|
|
1,231 |
|
|
1,233 |
|
|||||
Class B non-voting common stock |
|
5 |
|
|
5 |
|
|
5 |
|
|
- |
|
|
- |
|
|||||
Non-voting common stock equivalents |
|
101 |
|
|
101 |
|
|
108 |
|
|
- |
|
|
- |
|
|||||
Additional paid-in-capital |
|
3,813,312 |
|
|
3,827,777 |
|
|
3,840,974 |
|
|
2,798,611 |
|
|
2,799,357 |
|
|||||
Retained (deficit) earnings |
|
(477,010 |
) |
|
(497,396 |
) |
|
(518,301 |
) |
|
(25,399 |
) |
|
7,892 |
|
|||||
Accumulated other comprehensive loss, net |
|
(428,659 |
) |
|
(436,436 |
) |
|
(432,114 |
) |
|
(873,682 |
) |
|
(773,803 |
) |
|||||
Total stockholders’ equity |
|
3,407,848 |
|
|
3,394,150 |
|
|
3,390,765 |
|
|
2,399,277 |
|
|
2,533,195 |
|
|||||
Total liabilities and stockholders’ equity |
$ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
Common shares outstanding (1) |
|
168,875,712 |
|
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
____________________ | ||
(1) |
Common shares outstanding include non-voting common equivalents that are participating securities. |
|
|
||||||||||||||||||||
CONSOLIDATED STATEMENTS OF EARNINGS (LOSS) (UNAUDITED) | ||||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||||||||
(In thousands, except per share amounts) |
||||||||||||||||||||
Interest income: | ||||||||||||||||||||
Loans and leases |
$ |
388,853 |
|
$ |
385,465 |
|
$ |
408,972 |
|
$ |
774,318 |
|
$ |
839,657 |
|
|||||
Investment securities |
|
33,836 |
|
|
34,303 |
|
|
44,153 |
|
|
68,139 |
|
|
88,390 |
|
|||||
Deposits in financial institutions |
|
39,900 |
|
|
58,936 |
|
|
86,763 |
|
|
98,836 |
|
|
129,629 |
|
|||||
Total interest income |
|
462,589 |
|
|
478,704 |
|
|
539,888 |
|
|
941,293 |
|
|
1,057,676 |
|
|||||
Interest expense: | ||||||||||||||||||||
Deposits |
|
186,106 |
|
|
194,807 |
|
|
178,789 |
|
|
380,913 |
|
|
334,681 |
|
|||||
Borrowings |
|
30,311 |
|
|
38,124 |
|
|
160,914 |
|
|
68,435 |
|
|
230,036 |
|
|||||
Subordinated debt |
|
16,684 |
|
|
16,671 |
|
|
14,109 |
|
|
33,355 |
|
|
27,611 |
|
|||||
Total interest expense |
|
233,101 |
|
|
249,602 |
|
|
353,812 |
|
|
482,703 |
|
|
592,328 |
|
|||||
Net interest income |
|
229,488 |
|
|
229,102 |
|
|
186,076 |
|
|
458,590 |
|
|
465,348 |
|
|||||
Provision for credit losses |
|
11,000 |
|
|
10,000 |
|
|
2,000 |
|
|
21,000 |
|
|
5,000 |
|
|||||
Net interest income after provision for credit losses |
|
218,488 |
|
|
219,102 |
|
|
184,076 |
|
|
437,590 |
|
|
460,348 |
|
|||||
Noninterest income: | ||||||||||||||||||||
Service charges on deposit accounts |
|
4,540 |
|
|
4,705 |
|
|
4,315 |
|
|
9,245 |
|
|
7,888 |
|
|||||
Other commissions and fees |
|
8,629 |
|
|
8,142 |
|
|
11,241 |
|
|
16,771 |
|
|
21,585 |
|
|||||
Leased equipment income |
|
11,487 |
|
|
11,716 |
|
|
22,387 |
|
|
23,203 |
|
|
36,244 |
|
|||||
Gain (loss) on sale of loans and leases |
|
1,135 |
|
|
(448 |
) |
|
(158,881 |
) |
|
687 |
|
|
(155,919 |
) |
|||||
Dividends and gains on equity investments |
|
1,166 |
|
|
3,068 |
|
|
2,658 |
|
|
4,234 |
|
|
3,756 |
|
|||||
Warrant (loss) income |
|
(324 |
) |
|
178 |
|
|
(124 |
) |
|
(146 |
) |
|
(457 |
) |
|||||
LOCOM HFS adjustment |
|
(38 |
) |
|
330 |
|
|
(11,943 |
) |
|
292 |
|
|
(11,943 |
) |
|||||
Other income |
|
3,197 |
|
|
6,125 |
|
|
2,265 |
|
|
9,322 |
|
|
7,155 |
|
|||||
Total noninterest income (loss) |
|
29,792 |
|
|
33,816 |
|
|
(128,082 |
) |
|
63,608 |
|
|
(91,691 |
) |
|||||
Noninterest expense: | ||||||||||||||||||||
Compensation |
|
85,914 |
|
|
92,236 |
|
|
82,881 |
|
|
178,150 |
|
|
171,357 |
|
|||||
Occupancy |
|
17,455 |
|
|
17,968 |
|
|
15,383 |
|
|
35,423 |
|
|
30,450 |
|
|||||
Information technology and data processing |
|
15,459 |
|
|
15,418 |
|
|
12,887 |
|
|
30,877 |
|
|
25,866 |
|
|||||
Other professional services |
|
5,183 |
|
|
5,075 |
|
|
9,973 |
|
|
10,258 |
|
|
16,046 |
|
|||||
Insurance and assessments |
|
26,431 |
|
|
20,461 |
|
|
25,635 |
|
|
46,892 |
|
|
37,352 |
|
|||||
Intangible asset amortization |
|
8,484 |
|
|
8,404 |
|
|
2,389 |
|
|
16,888 |
|
|
4,800 |
|
|||||
Leased equipment depreciation |
|
7,511 |
|
|
7,520 |
|
|
9,088 |
|
|
15,031 |
|
|
18,463 |
|
|||||
Acquisition, integration and reorganization costs |
|
(12,650 |
) |
|
- |
|
|
12,394 |
|
|
(12,650 |
) |
|
20,908 |
|
|||||
Customer related expense |
|
32,405 |
|
|
30,919 |
|
|
27,302 |
|
|
63,324 |
|
|
51,307 |
|
|||||
Loan expense |
|
4,332 |
|
|
4,491 |
|
|
5,245 |
|
|
8,823 |
|
|
11,769 |
|
|||||
|
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Other expense |
|
13,119 |
|
|
8,026 |
|
|
117,260 |
|
|
21,145 |
|
|
128,386 |
|
|||||
Total noninterest expense |
|
203,643 |
|
|
210,518 |
|
|
320,437 |
|
|
414,161 |
|
|
1,893,440 |
|
|||||
Earnings (loss) before income taxes |
|
44,637 |
|
|
42,400 |
|
|
(264,443 |
) |
|
87,037 |
|
|
(1,524,783 |
) |
|||||
Income tax expense (benefit) |
|
14,304 |
|
|
11,548 |
|
|
(67,029 |
) |
|
25,852 |
|
|
(131,945 |
) |
|||||
Net earnings (loss) |
|
30,333 |
|
|
30,852 |
|
|
(197,414 |
) |
|
61,185 |
|
|
(1,392,838 |
) |
|||||
Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Net earnings (loss) available to common and equivalent stockholders |
$ |
20,386 |
|
$ |
20,905 |
|
$ |
(207,361 |
) |
$ |
41,291 |
|
$ |
(1,412,732 |
) |
|||||
Basic and diluted earnings (loss) per common share (1) |
$ |
0.12 |
|
$ |
0.12 |
|
$ |
(2.67 |
) |
$ |
0.25 |
|
$ |
(18.21 |
) |
|||||
Basic and diluted weighted average number of common shares outstanding (1) |
|
168,432 |
|
|
168,143 |
|
|
77,682 |
|
|
168,287 |
|
|
77,576 |
|
____________________ | ||
(1) |
Common shares include non-voting common equivalents that are participating securities. |
|
|
|||||||||||||||
SELECTED FINANCIAL DATA | |||||||||||||||
(UNAUDITED) | |||||||||||||||
Three Months Ended |
|
Six Months Ended |
|||||||||||||
|
|
|
|
|
|
|
|||||||||
Profitability and Other Ratios |
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
||||||
Return on average assets (1) |
0.34 |
% |
0.33 |
% |
(1.84 |
)% |
0.34 |
% |
(6.55 |
)% |
|||||
Return on average equity (1) |
3.59 |
% |
3.66 |
% |
(29.12 |
)% |
3.63 |
% |
(83.71 |
)% |
|||||
Return on average tangible common equity (1)(2) |
4.14 |
% |
4.30 |
% |
(37.62 |
)% |
4.21 |
% |
(11.00 |
)% |
|||||
Dividend payout ratio (3) |
83.33 |
% |
83.33 |
% |
(0.37 |
)% |
80.00 |
% |
(1.43 |
)% |
|||||
Average yield on loans and leases (1) |
6.18 |
% |
6.08 |
% |
6.08 |
% |
6.13 |
% |
6.11 |
% |
|||||
Average yield on interest-earning assets (1) |
5.65 |
% |
5.56 |
% |
5.28 |
% |
5.60 |
% |
5.31 |
% |
|||||
Average cost of interest-bearing deposits (1) |
3.58 |
% |
3.60 |
% |
3.35 |
% |
3.59 |
% |
3.13 |
% |
|||||
Average total cost of deposits (1) |
2.60 |
% |
2.66 |
% |
2.62 |
% |
2.63 |
% |
2.27 |
% |
|||||
Average cost of interest-bearing liabilities (1) |
3.93 |
% |
3.92 |
% |
4.21 |
% |
3.93 |
% |
3.87 |
% |
|||||
Average total cost of funds (1) |
2.95 |
% |
3.02 |
% |
3.58 |
% |
2.99 |
% |
3.07 |
% |
|||||
Net interest spread |
1.72 |
% |
1.64 |
% |
1.07 |
% |
1.67 |
% |
1.44 |
% |
|||||
Net interest margin (1) |
2.80 |
% |
2.66 |
% |
1.82 |
% |
2.73 |
% |
2.34 |
% |
|||||
Noninterest income to total revenue (4) |
11.49 |
% |
12.86 |
% |
(220.85 |
)% |
12.18 |
% |
(24.54 |
)% |
|||||
Noninterest expense to average total assets (1) |
2.29 |
% |
2.26 |
% |
2.99 |
% |
2.27 |
% |
8.90 |
% |
|||||
Loans to deposits ratio |
87.36 |
% |
88.44 |
% |
81.50 |
% |
87.36 |
% |
81.50 |
% |
|||||
Average loans and leases to average deposits |
87.95 |
% |
86.65 |
% |
98.56 |
% |
87.29 |
% |
93.65 |
% |
|||||
Average investment securities to average total assets |
13.00 |
% |
12.58 |
% |
16.69 |
% |
12.78 |
% |
16.75 |
% |
|||||
Average stockholders' equity to average total assets |
9.48 |
% |
9.03 |
% |
6.32 |
% |
9.25 |
% |
7.82 |
% |
____________________ | ||
(1) |
Annualized. |
|
(2) |
Non-GAAP measure. |
|
(3) |
Ratio calculated by dividing dividends declared per common and equivalent share by basic earnings per common and equivalent share. |
|
(4) |
Total revenue equals the sum of net interest income and noninterest income. |
|
|
|||||||||||||||||||||||||||
AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID | |||||||||||||||||||||||||||
(UNAUDITED) | |||||||||||||||||||||||||||
Three Months Ended |
|||||||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||||
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
|||||||||||
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
|||||||||||
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
|||||||||||
(Dollars in thousands) |
|||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||
Loans and leases (1) |
$ |
25,325,578 |
$ |
388,853 |
6.18 |
% |
$ |
25,518,590 |
$ |
385,465 |
6.08 |
% |
$ |
26,992,283 |
$ |
408,972 |
6.08 |
% |
|||||||||
Investment securities |
|
4,658,690 |
|
33,836 |
2.92 |
% |
|
4,721,556 |
|
34,303 |
2.92 |
% |
|
7,183,986 |
|
44,153 |
2.47 |
% |
|||||||||
Deposits in financial institutions |
|
2,960,292 |
|
39,900 |
5.42 |
% |
|
4,374,968 |
|
58,936 |
5.42 |
% |
|
6,835,075 |
|
86,763 |
5.09 |
% |
|||||||||
Total interest-earning assets |
|
32,944,560 |
|
462,589 |
5.65 |
% |
|
34,615,114 |
|
478,704 |
5.56 |
% |
|
41,011,344 |
|
539,888 |
5.28 |
% |
|||||||||
Other assets |
|
2,889,907 |
|
2,925,593 |
|
2,028,985 |
|||||||||||||||||||||
Total assets |
$ |
35,834,467 |
$ |
37,540,707 |
$ |
43,040,329 |
|||||||||||||||||||||
Liabilities and Stockholders' Equity: | |||||||||||||||||||||||||||
Interest checking |
$ |
7,673,902 |
|
61,076 |
3.20 |
% |
$ |
7,883,177 |
|
61,549 |
3.14 |
% |
$ |
6,601,034 |
|
46,798 |
2.84 |
% |
|||||||||
Money market |
|
4,962,567 |
|
32,776 |
2.66 |
% |
|
5,737,837 |
|
41,351 |
2.90 |
% |
|
6,590,615 |
|
47,008 |
2.86 |
% |
|||||||||
Savings |
|
2,002,670 |
|
16,996 |
3.41 |
% |
|
2,036,129 |
|
18,030 |
3.56 |
% |
|
733,818 |
|
3,678 |
2.01 |
% |
|||||||||
Time |
|
6,274,242 |
|
75,258 |
4.82 |
% |
|
6,108,321 |
|
73,877 |
4.86 |
% |
|
7,492,094 |
|
81,305 |
4.35 |
% |
|||||||||
Total interest-bearing deposits |
|
20,913,381 |
|
186,106 |
3.58 |
% |
|
21,765,464 |
|
194,807 |
3.60 |
% |
|
21,417,561 |
|
178,789 |
3.35 |
% |
|||||||||
Borrowings |
|
2,013,600 |
|
30,311 |
6.05 |
% |
|
2,892,406 |
|
38,124 |
5.30 |
% |
|
11,439,742 |
|
160,914 |
5.64 |
% |
|||||||||
Subordinated debt |
|
938,367 |
|
16,684 |
7.15 |
% |
|
937,005 |
|
16,671 |
7.16 |
% |
|
869,419 |
|
14,109 |
6.51 |
% |
|||||||||
Total interest-bearing liabilities |
|
23,865,348 |
|
233,101 |
3.93 |
% |
|
25,594,875 |
|
249,602 |
3.92 |
% |
|
33,726,722 |
|
353,812 |
4.21 |
% |
|||||||||
Noninterest-bearing demand deposits |
|
7,881,620 |
|
7,685,027 |
|
5,968,625 |
|||||||||||||||||||||
Other liabilities |
|
692,149 |
|
870,273 |
|
625,610 |
|||||||||||||||||||||
Total liabilities |
|
32,439,117 |
|
34,150,175 |
|
40,320,957 |
|||||||||||||||||||||
Stockholders' equity |
|
3,395,350 |
|
3,390,532 |
|
2,719,372 |
|||||||||||||||||||||
Total liabilities and stockholders' equity |
$ |
35,834,467 |
$ |
37,540,707 |
$ |
43,040,329 |
|||||||||||||||||||||
Net interest income |
$ |
229,488 |
$ |
229,102 |
$ |
186,076 |
|||||||||||||||||||||
Net interest spread |
1.72 |
% |
1.64 |
% |
1.07 |
% |
|||||||||||||||||||||
Net interest margin |
2.80 |
% |
2.66 |
% |
1.82 |
% |
|||||||||||||||||||||
Total deposits (2) |
$ |
28,795,001 |
$ |
186,106 |
2.60 |
% |
$ |
29,450,491 |
$ |
194,807 |
2.66 |
% |
$ |
27,386,186 |
$ |
178,789 |
2.62 |
% |
|||||||||
Total funds (3) |
$ |
31,746,968 |
$ |
233,101 |
2.95 |
% |
$ |
33,279,902 |
$ |
249,602 |
3.02 |
% |
$ |
39,695,347 |
$ |
353,812 |
3.58 |
% |
(1) |
Includes net loan discount accretion of |
|
(2) |
Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. |
|
(3) |
Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. The cost of total funds is calculated as annualized total interest expense divided by average total funds. |
|
|
||||||||||||||||||
AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE COST PAID |
||||||||||||||||||
(UNAUDITED) |
||||||||||||||||||
Six Months Ended |
||||||||||||||||||
|
|
|
||||||||||||||||
|
|
Interest |
|
Average |
|
|
|
Interest |
|
Average |
||||||||
Average |
|
Income/ |
|
Yield/ |
|
Average |
|
Income/ |
|
Yield/ |
||||||||
Balance |
|
Expense |
|
Cost |
|
Balance |
|
Expense |
|
Cost |
||||||||
(Dollars in thousands) |
||||||||||||||||||
Assets: | ||||||||||||||||||
Loans and leases (1)(2)(3) |
$ |
25,422,084 |
$ |
774,318 |
6.13 |
% |
$ |
27,783,379 |
$ |
842,001 |
6.11 |
% |
||||||
Investment securities |
|
4,690,123 |
|
68,139 |
2.92 |
% |
|
7,187,654 |
|
88,390 |
2.48 |
% |
||||||
Deposits in financial institutions |
|
3,667,630 |
|
98,836 |
5.42 |
% |
|
5,267,361 |
|
129,629 |
4.96 |
% |
||||||
Total interest-earning assets (1) |
|
33,779,837 |
|
941,293 |
5.60 |
% |
|
40,238,394 |
|
1,060,020 |
5.31 |
% |
||||||
Other assets |
|
2,907,750 |
|
|
|
2,666,878 |
|
|
||||||||||
Total assets |
$ |
36,687,587 |
|
|
$ |
42,905,272 |
|
|
||||||||||
|
|
|
|
|
|
|||||||||||||
Liabilities and Stockholders' Equity: |
|
|
|
|
|
|
||||||||||||
Interest checking |
$ |
7,778,540 |
|
122,625 |
3.17 |
% |
$ |
6,843,720 |
|
102,755 |
3.03 |
% |
||||||
Money market |
|
5,350,202 |
|
74,127 |
2.79 |
% |
|
7,754,868 |
|
103,232 |
2.68 |
% |
||||||
Savings |
|
2,019,399 |
|
35,026 |
3.49 |
% |
|
665,929 |
|
4,277 |
1.30 |
% |
||||||
Time |
|
6,191,281 |
|
149,135 |
4.84 |
% |
|
6,314,566 |
|
124,417 |
3.97 |
% |
||||||
Total interest-bearing deposits |
|
21,339,422 |
|
380,913 |
3.59 |
% |
|
21,579,083 |
|
334,681 |
3.13 |
% |
||||||
Borrowings |
|
2,453,003 |
|
68,435 |
5.61 |
% |
|
8,381,575 |
|
230,036 |
5.53 |
% |
||||||
Subordinated debt |
|
937,686 |
|
33,355 |
7.15 |
% |
|
868,533 |
|
27,611 |
6.41 |
% |
||||||
Total interest-bearing liabilities |
|
24,730,111 |
|
482,703 |
3.93 |
% |
|
30,829,191 |
|
592,328 |
3.87 |
% |
||||||
Noninterest-bearing demand deposits |
|
7,783,324 |
|
|
|
8,089,248 |
|
|
||||||||||
Other liabilities |
|
781,211 |
|
|
|
631,338 |
|
|
||||||||||
Total liabilities |
|
33,294,646 |
|
|
|
39,549,777 |
|
|
||||||||||
Stockholders' equity |
|
3,392,941 |
|
|
|
3,355,495 |
|
|
||||||||||
Total liabilities and stockholders' equity |
$ |
36,687,587 |
|
|
$ |
42,905,272 |
|
|
||||||||||
Net interest income (1) |
|
$ |
458,590 |
|
|
$ |
467,692 |
|
||||||||||
Net interest spread (1) |
|
|
1.67 |
% |
|
|
1.44 |
% |
||||||||||
Net interest margin (1) |
|
|
2.73 |
% |
|
|
2.34 |
% |
||||||||||
|
|
|
|
|
|
|||||||||||||
Total deposits (4) |
$ |
29,122,746 |
$ |
380,913 |
2.63 |
% |
$ |
29,668,331 |
$ |
334,681 |
2.27 |
% |
||||||
Total funds (5) |
$ |
32,513,435 |
$ |
482,703 |
2.99 |
% |
$ |
38,918,439 |
$ |
592,328 |
3.07 |
% |
(1) |
Tax equivalent. |
|
(2) |
Includes net loan discount accretion of |
|
(3) |
Includes tax-equivalent adjustments of |
|
|
The federal statutory tax rate utilized was 21%. |
|
(4) |
Total deposits is the sum of total interest-bearing deposits and noninterest-bearing demand deposits. |
|
|
The cost of total deposits is calculated as annualized interest expense on total deposits divided by average total deposits. |
|
(5) |
Total funds is the sum of total interest-bearing liabilities and noninterest-bearing demand deposits. |
|
|
The cost of total funds is calculated as annualized total interest expense divided by average total funds. |
NON-GAAP MEASURES
We refer to certain financial measures that are not recognized under
Tangible assets is calculated by subtracting goodwill and other intangible assets from total assets. Tangible common equity is calculated by subtracting preferred stock, as applicable, from tangible equity. Return on average tangible common equity is calculated by dividing net earnings available to common stockholders, after adjustment for amortization of intangible assets and goodwill impairment, by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.
Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company. This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.
|
||||||||||||||||||||
NON-GAAP MEASURES | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Tangible Common Equity to Tangible Assets and Tangible Book Value Per Common Share |
|
|
|
|
|
|
|
|
|
|||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Stockholders' equity |
$ |
3,407,848 |
|
$ |
3,394,150 |
|
$ |
3,390,765 |
|
$ |
2,399,277 |
|
$ |
2,533,195 |
|
|||||
Less: Preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Total common equity |
|
2,909,332 |
|
|
2,895,634 |
|
|
2,892,249 |
|
|
1,900,761 |
|
|
2,034,679 |
|
|||||
Less: |
|
364,819 |
|
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Tangible common equity |
$ |
2,544,513 |
|
$ |
2,539,781 |
|
$ |
2,528,145 |
|
$ |
1,876,569 |
|
$ |
2,008,098 |
|
|||||
Total assets |
$ |
35,243,839 |
|
$ |
36,073,516 |
|
$ |
38,534,064 |
|
$ |
36,877,833 |
|
$ |
38,337,250 |
|
|||||
Less: |
|
364,819 |
|
|
355,853 |
|
|
364,104 |
|
|
24,192 |
|
|
26,581 |
|
|||||
Tangible assets |
$ |
34,879,020 |
|
$ |
35,717,663 |
|
$ |
38,169,960 |
|
$ |
36,853,641 |
|
$ |
38,310,669 |
|
|||||
Total stockholders' equity to total assets |
|
9.67 |
% |
|
9.41 |
% |
|
8.80 |
% |
|
6.51 |
% |
|
6.61 |
% |
|||||
Tangible common equity to tangible assets |
|
7.30 |
% |
|
7.11 |
% |
|
6.62 |
% |
|
5.09 |
% |
|
5.24 |
% |
|||||
Book value per common share (1) |
$ |
17.23 |
|
$ |
17.13 |
|
$ |
17.12 |
|
$ |
24.12 |
|
$ |
25.78 |
|
|||||
Tangible book value per common share (2) |
$ |
15.07 |
|
$ |
15.03 |
|
$ |
14.96 |
|
$ |
23.81 |
|
$ |
25.44 |
|
|||||
Common shares outstanding (3) |
|
168,875,712 |
|
|
169,013,629 |
|
|
168,959,063 |
|
|
78,806,969 |
|
|
78,939,024 |
|
____________________ | ||
(1) |
Total common equity divided by common shares outstanding. |
|
(2) |
Tangible common equity divided by common shares outstanding. |
|
(3) |
Common shares outstanding include non-voting common equivalents that are participating securities. |
|
|
||||||||||||||||||||
NON-GAAP MEASURES | ||||||||||||||||||||
(UNAUDITED) | ||||||||||||||||||||
Three Months Ended |
|
Six Months Ended |
||||||||||||||||||
Return on Average Tangible |
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|||||||||||||
Common Equity ("ROATCE") |
2024 |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||||||
(Dollars in thousands) |
||||||||||||||||||||
Net earnings (loss) |
$ |
30,333 |
|
$ |
30,852 |
|
$ |
(197,414 |
) |
$ |
61,185 |
|
$ |
(1,392,838 |
) |
|||||
Earnings (loss) before income taxes |
$ |
44,637 |
|
$ |
42,400 |
|
$ |
(264,443 |
) |
$ |
87,037 |
|
$ |
(1,524,783 |
) |
|||||
Add: Intangible asset amortization |
|
8,484 |
|
|
8,404 |
|
|
2,389 |
|
|
16,888 |
|
|
4,800 |
|
|||||
Add: |
|
- |
|
|
- |
|
|
- |
|
|
- |
|
|
1,376,736 |
|
|||||
Adjusted earnings (loss) before income taxes used for ROATCE |
|
53,121 |
|
|
50,804 |
|
|
(262,054 |
) |
|
103,925 |
|
|
(143,247 |
) |
|||||
Adjusted income tax expense (1) |
|
16,999 |
|
|
13,819 |
|
|
(66,300 |
) |
|
30,866 |
|
|
(45,839 |
) |
|||||
Adjusted net earnings (loss) for ROATCE |
|
36,122 |
|
|
36,985 |
|
|
(195,754 |
) |
|
73,059 |
|
|
(97,408 |
) |
|||||
Less: Preferred stock dividends |
|
9,947 |
|
|
9,947 |
|
|
9,947 |
|
|
19,894 |
|
|
19,894 |
|
|||||
Adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE |
$ |
26,175 |
|
$ |
27,038 |
|
$ |
(205,701 |
) |
$ |
53,165 |
|
$ |
(117,302 |
) |
|||||
Average stockholders' equity |
$ |
3,395,350 |
|
$ |
3,390,532 |
|
$ |
2,719,372 |
|
$ |
3,392,941 |
|
$ |
3,355,495 |
|
|||||
Less: Average intangible assets |
|
352,934 |
|
|
360,680 |
|
|
27,824 |
|
|
356,807 |
|
|
706,072 |
|
|||||
Less: Average preferred stock |
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|
498,516 |
|
|||||
Average tangible common equity |
$ |
2,543,900 |
|
$ |
2,531,336 |
|
$ |
2,193,032 |
|
$ |
2,537,618 |
|
$ |
2,150,907 |
|
|||||
Return on average equity (2) |
|
3.59 |
% |
|
3.66 |
% |
|
(29.12 |
)% |
|
3.63 |
% |
|
(83.71 |
)% |
|||||
ROATCE (3) |
|
4.14 |
% |
|
4.30 |
% |
|
(37.62 |
)% |
|
4.21 |
% |
|
(11.00 |
)% |
____________________ | ||
(1) |
Effective tax rates of 32.0%, 27.2%, and 25.3% used for the three months ended June 30, 2024, March 31, 2024, and June 30, 2023, respectively. Effective tax rate of 29.7% used for the six months ended June 30, 2024. Adjusted effective tax rate of 32.0% used to normalize the effect of goodwill impairment for the six months ended June 30, 2023. |
|
(2) |
Annualized net earnings (loss) divided by average stockholders' equity. |
|
(3) |
Annualized adjusted net earnings (loss) available to common and equivalent stockholders for ROATCE divided by average tangible common equity. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240723125107/en/
Investor Relations Inquiries:
(855) 361-2262
Media Contact:
(213) 533-3122
Deb.Vrana@bancofcal.com
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