Banc of California closed the books on a tumultuous first quarter, reporting lower net income that reflected restructuring charges and higher credit costs.
The $11.1 billion-asset company said in a press release Wednesday that its quarterly earnings fell 20% from a year earlier to $12.1 million. The results included $5.2 million in charges following the company’s decision to sell its mortgage business and lay off about 140 employees.
The loan-loss provision totaled $2.6 million, a big increase from the $321,000 set aside a year earlier.
Revenue increased by 8% as higher net interest income offset a decline in securities gains. The company also recorded $3.4 million in gains from loan sales.
Commercial loans rose 30% to $4 billion, accounting for about two-thirds of the company’s overall portfolio. Deposits grew 26% to $8.6 billion, though non-interest-bearing deposits fell 9% to $1.27 billion.
Despite the higher provision, Banc of California reported significant improvement in credit quality. Nonperforming loans were down more than 60% to $16.2 million, or 0.27% of total loans.
"Our first quarter results marked the successful execution of a series of strategic actions for the company to ensure we continue to drive long-term shareholder value," Francisco Turner, Banc of California’s interim president, said in the release. "We have charted a path toward a strategic transformation of our business into a commercial banking franchise.”
The first-quarter was turbulent for Banc of California in terms of leadership.
Steven Sugarman stepped down as chairman and CEO in January, after it was disclosed that the company made inaccurate statements in an October press release.
In March, the company disclosed plans to lay off 140 employees. It also agreed to sell its mortgage business to Caliber Home Loans in Irving, Texas. Several investors were added to the board and a number of corporate governance improvements were implemented.
Banc of California said last month that it had hired Doug Bowers, a former president of Square 1 Financial in Durham, N.C., as president and CEO. He is set to join the company on Monday.