Banc of California (NYSE: BANC) reported Q1 EPS of $0.06, $0.08 better than the analyst estimate of ($0.02).

Highlights for the first quarter included:

• Strong Organic Loan Growth: Held for investment loans increased by $271 million, or 4%, during the quarter to $6.9 billion, representing a 16% annualized growth rate.
  • Gross loan commitment originations totaled $867 million for the first quarter at an average production yield of 4.99%.
• Stabilization of Core Deposit Balances: Stabilized the deposit base and completed the run-off of legacy high-rate, high-volatility deposit balances, which comprised $207 million of deposit outflows in the first quarter. Core deposit balances increased by $55 million and brokered deposit balances declined by $31 million, which coupled with the legacy run-off, drove total reported deposit balances down by $183 million during the first quarter.
• Continuation of Balance Sheet Re-Mix: Reduced securities by $151 million, or 6%, driven by the sale of all remaining master limited partnership debt securities (\"MLPs\") totaling $77 million and the sale of $103 million of commercial mortgage-backed securities (\"CMBS\"). Additionally, the Company completed the sale of $26 million of mortgage servicing rights (\"MSRs\") during the first quarter, which resulted in $2.3 million of expenses which are reflected in all other income and a $1.8 million benefit from the release of the associated loan repurchase reserve.
• Bolstered Talent: Added key leadership talent including Kris Gagnon as Chief Credit Officer and Leticia Aguilar as Head of Community Banking. Executing on hiring and talent plan to support deposit growth initiatives including commercial deposit and treasury management sales and product leadership, Commercial Banking Los Angeles Market Executive and team, and bolstered Commercial Banking and Private Banking teams in San Diego.
• Disciplined Expense Management: First quarter noninterest expense totaled $59.8 million.
• Credit and Charge-offs: Net charge-offs totaled $14.1 million for the first quarter, primarily driven by the previously announced $13.9 million fraudulent credit. Our review of the underwriting process for this loan continues but, based upon our review to date, we believe this loan involved an isolated event of external fraud. Provision for loan and lease losses was $19.5 million for the quarter, primarily driven by the single credit described above, and excluding this item, provision expense was $5.6 million. Non-performing assets to total assets were 0.22% at quarter end, compared to 0.21% at the prior quarter end, and compared to 0.18% a year ago. The ALLL / total loan ratio was 0.79% at quarter end, up from 0.74% at the prior quarter end and up from 0.70% a year ago.
• Strong Capital Ratios: Common equity tier 1 capital ratio of 9.8%, compared to 9.4% a year ago.

For earnings history and earnings-related data on Banc of California (BANC) click here.