LOS ANGELES - Banc of California , Inc. (NYSE: NYSE:BANC) has reported its financial results for the first quarter ended March 31, 2024, surpassing analyst expectations for adjusted earnings per share (EPS).
The company recorded an adjusted EPS of $0.19, which was $0.05 higher than the analyst consensus of $0.14. However, revenue for the quarter was $272.96 million, falling short of the consensus estimate of $288.53 million.
The first quarter results showcased a significant improvement from the previous quarter, with net interest income increasing by 58% to $239.1 million. This rise reflects the benefits of balance sheet repositioning that continued into the first quarter. The net interest margin also saw an increase, rising by 109 basis points from the fourth quarter to 2.78%. Additionally, the average total cost of deposits decreased by 28 basis points to 2.66% for the first quarter compared to the fourth quarter.
President & CEO Jared Wolff commented on the results, stating, "Our first full quarter results as a combined company reflect strong execution on the key initiatives that will lead to achieving the profitability targets we set for the fourth quarter of 2024." He highlighted the growth in noninterest-bearing deposits and the expansion of the net interest margin as contributing factors to the lower average cost of deposits.
Despite the positive earnings report, the company did not provide specific financial guidance for the upcoming quarters, nor was there a mention of market movement in response to the earnings release.
The bank's balance sheet remains strong with high liquidity levels, boasting $16.8 billion in available on-balance sheet liquidity and unused borrowing capacity, which is 2.4 times greater than uninsured and uncollateralized deposits. The allowance for credit losses stood at 1.26% at the end of the first quarter, up from 1.22% at the end of the previous quarter.
Looking ahead, Wolff expressed confidence in the company's position, noting the strong balance sheet, good levels of capital, liquidity, and loan loss reserves, as well as a stable loan portfolio. He emphasized the bank's disciplined approach to new loan originations and the benefits of new banking relationships that provide both operating deposit accounts and high-quality loans.
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