Banc of California, Inc. (NYSE:BANC) Q2 2022 Earnings Conference Call July 21, 2022 1:00 PM ET

Company Representatives

Jared Wolff - President, Chief Executive Officer

Lynn Hopkins - Chief Financial Officer

Conference Call Participants

Timur Braziler - Wells Fargo

David Feaster - Raymond James

Matthew Clark - Piper Sandler

Kelly Motta - KBW

Gary Tenner - D.A. Davidson

Operator

Hello! And welcome to Banc of California's Second Quarter Earnings Conference call. All participants will be in listen-only mode. [Operator Instructions]. Today's call is being recorded and a copy of the recording will be available later today on the company's Investor Relations website.

Today's presentation will also include non-GAAP measures. The reconciliation for these and additional required information is available in the earnings press release, which is available on the company's Investor Relations website. The reference presentation is also available on the company's Investor Relations website.

Before we begin, we would like to direct everyone to the company's Safe-Harbor Statement on forward-looking statements included in both the Earnings Release and the Earnings Presentation.

I would like to now turn the conference over to Mr. Jared Wolff, Banc of California's President and Chief Executive Officer. Please go ahead.

Jared Wolff

Good morning! And welcome to Banc of California's second quarter earnings call. Joining me on today's call is Lynn Hopkins, our Chief Financial Officer, who will talk in more detail about our quarterly results.

Our performance in the second quarter was highlighted by a 7% increase in adjusted pre-tax, pre-provision income and a 10 basis point increase in adjusted pre-tax, pre-provision return on average assets. The quarter was a good representation of the strong commercial banking franchise that we have built over the past three years. 25% annualized commercial loan growth, excluding warehouse and PPP loans, funded with a low cost deposit base, disciplined expense control, and solid asset quality in our conservatively underwritten, well secured loan portfolio.

We are proud of our continued sequential growth in earnings per share, excluding the legal settlement that positively impacted our results in the prior quarter. Our tangible book value per share also remained flat despite an increase in negative AOCI and the repurchase of $38.9 million of our common stock during the quarter, which represented approximately 3.5% of our outstanding shares.

There is uncertainty in the operating environment due to the macro headwinds of inflation, higher interest rates, supply chain disruption and labor shortages. Nevertheless, the economy in Southern California and the other California markets where we operate continues to show resilience.