Banc of California Roars into 2025 with Record Growth
Banc of California, a leading regional bank in California, has emerged from a transformative year with remarkable momentum, as evidenced by its recent Q4 2024 earnings report. With a strong focus on executing its strategy, optimizing its balance sheet, and achieving operational efficiencies, the company has set itself up for growth in 2025.
According to Jared Wolff, President and Chief Executive Officer, Banc of California had a "strong fourth quarter" that marked the end of a "transformational year" for the company. The bank made significant progress executing its strategy, which resulted in meaningful growth in core profitability and a significantly strengthened balance sheet.
One notable achievement was the growth of Net Interest Income (NIB) to 29.1% of total average deposits, up nearly 7% from a year ago. Additionally, wholesale funding was reduced to 10.3% of assets compared to over 17% in the fourth quarter of '23. Commercial and Industrial (C&I) loans grew to 30.1% of the core loan portfolio, up from 25.6% a year ago.
The bank's Net Interest Margin (NIM) expanded by 135 basis points year-over-year, while noninterest operating expenses decreased by 36% from a normalized fourth quarter of '23 as the company achieved its cost targets for the merger. As a result, Banc of California achieved strong growth in Earnings Per Share (EPS), tangible book value per share, and Common Equity Tier 1 (CET1) capital in 2024.
During the Q4 earnings call, Jared Wolff expressed the company's support and sympathies for those impacted by the devastating wildfires in Los Angeles. The bank has launched a charitable foundation, donating $1 million to the Banc of California Wildfire Relief and Recovery Fund, and will continue to work with local leaders to ensure the funds are directed effectively.
Banc of California's focus on external growth is set to take advantage of the strength of its franchise, which it has built over the years. The company's commitment to supporting the relief and rebuilding efforts in Los Angeles demonstrates its dedication to the community it serves.
As the bank looks ahead to 2025, it seems poised for continued success with its strong balance sheet, significant growth in core profitability, and focus on external growth. With a solid foundation established, Banc of California is well-equipped to navigate future challenges and seize new opportunities.
