Banc of California Reports Second-Quarter Net Loss Due to Balance Sheet Restructuring
Banc of California reported a second-quarter net loss of $251.3 million due to balance sheet restructuring efforts aimed at improving long-term capital generation and recurring earnings, according to the bank's press release. The Los Angeles-based institution sold $2.3 billion in lower-yielding securities during the quarter, redeploying over half into higher-yielding alternatives with shorter durations. It also initiated a sale of $827 million in commercial real estate loans and retired $385 million in subordinated debt ahead of an interest rate reset. The loss significantly exceeded analyst expectations for a 40 cents-per-share gain, leading to an over-11% drop in the bank's stock price. CEO Jared Wolff described the restructuring as necessary for future growth, emphasizing stronger recurring net interest income and improved capital efficiency down the line. The bank plans to complete select commercial estate loan sales by the third quarter. Banc of California has $35 billion in assets following its 2023 acquisition of PacWest Bancorp amid regional banking challenges.
Tickers: $BANC
Topics: banking capital efficiency losses restructuring