Banc of California posts Q2 2026 loss amid balance sheet overhaul

Banc of California, Inc. (NYSE: BANC) reported a net loss available to common stockholders of $251.3 million, or $(1.61) per diluted share, for the second quarter ended June 30, 2026, as the company executed a series of balance sheet repositioning actions that generated significant one-time charges.

The company completed three strategic actions during the quarter: the sale of $2.3 billion of lower-yielding held-to-maturity securities, which produced a $256.7 million pre-tax loss; the initiation of a sale process for $827.0 million of selected commercial real estate and multi-family construction loans, which drove a provision for credit losses of $161.8 million; and the early retirement of $385.0 million in subordinated debt ahead of a contractual interest rate reset.

The securities repositioning generated a 276 basis point yield pickup on redeployed balances. The company said it has entered into purchase and sale agreements for the loans transferred to held-for-sale and expects those transactions to close in the third quarter. Net interest margin was 3.13% for the quarter, down from 3.24% in the first quarter, but the company stated it expects margin to increase to approximately 3.30% upon closing of the targeted loan sale.

Total deposits increased $799.0 million, or 2.9%, during the quarter to $28.1 billion. Average loans grew 2.3% during the quarter, driven by $2.8 billion of loan production at a weighted average rate of 6.39%. The loan-to-deposit ratio decreased 235 basis points to 89.3%.

Preliminary capital ratios remained above regulatory "well capitalized" thresholds, with an estimated Tier 1 capital ratio of 11.67% and a CET1 ratio of 9.25%. The company said it expects CET1 to rise to approximately 9.45%-9.50% upon closing of the loan sale.

Book value per common share declined to $18.38 from $19.80 at March 31, 2026, and tangible book value per share fell to $16.44 from $17.77, reflecting the charges taken during the quarter.

Jared Wolff, Chairman and CEO, stated: "These actions resulted in significant one-time charges, but they increase our long-term earnings power, improve capital efficiency and provide greater financial flexibility to support future growth."

This article is based on a press release statement from Banc of California, Inc.

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