Banc of California in Irvine is working to address material weaknesses in its internal controls.
The $4.4 billion-asset company disclosed in its recently quarterly filing with regulators that it has hired personnel and designed new procedures to address the problem. Banc of California said the weakness, limited to its reporting from 2013, will not require it to restate earnings.
Specifically, the company said it discovered that it "did not sufficiently complete certain account level reviews." As a result, there was a "low potential risk of material error" to the company's financial reporting. The deficiencies could have resulted in a material misstatement that could not have been detected or prevented, the filing said.
The company said it has taken several steps to address the internal control problems, including hiring new staff, designing new controls and implementing new software. Earlier this year, the company hired a chief accounting officer, controller, director of accounting policy and director of internal audit. It also appointed a new chairman for its board's audit committee.