Banc of California Reports Unexpected Q2 Loss Amid Strategic Moves
Los Angeles-based Banc of California reported an unexpected $251.3 million loss in its second-quarter results, driven by strategic decisions aimed at long-term stability and growth. The bank sold $827 million in commercial real estate loans to reduce credit risk, retired $385 million in subordinated debt ahead of a higher interest rate reset, and reclassified $2.3 billion in securities from held-to-maturity to available-for-sale. This last move led to a significant pretax loss but allowed the bank to reinvest at a much higher yield. The loss equated to $1.61 per diluted common share and caused an initial 10% drop in Banc of California's stock price, though it later recovered somewhat. CEO Jared Wolff emphasized that these actions were designed to improve long-term earnings power and capital efficiency while maintaining strong regulatory compliance. The bank also reported growth in average loans and deposits during the quarter. The loss is reminiscent of a similar $252 million loss by New York Community Bank, which had triggered concerns about commercial real estate loan concentrations.
Tickers: $BANC
Topics: Banking Commercial Real Estate Debt Management Losses Securities Portfolio