Banc of California, Inc. reported net earnings available to common and equivalent stockholders of $18.4 million, or $0.12 per diluted common share, for the second quarter ended June 30, 2025. On an adjusted basis, net earnings were $48.4 million, or $0.31 per diluted common share. This adjusted performance represents an increase from $43.6 million, or $0.26 per diluted common share, in the first quarter of 2025.
The reported earnings for the second quarter included a provision expense, net of tax, of $20.2 million related to transferring $506.7 million of loans to held for sale at their estimated fair value. Additionally, there was a one-time non-cash income tax expense of $9.8 million primarily due to the revaluation of deferred tax assets related to California state tax changes.
Net interest income increased by $7.9 million quarter-over-quarter to $240.2 million, and the net interest margin expanded by 2 basis points to 3.10%. Average loans and leases grew by $715.7 million to $24.5 billion, representing a 9% annualized growth rate. New loan production had a weighted average interest rate of 7.29%.
The provision for credit losses increased to $39.1 million, primarily due to $26.3 million related to loans transferred to held for sale, along with net charge-off activity and increases in quantitative and qualitative reserves. The company also strategically redeemed $174 million of 5.25% Senior Notes, replacing them with lower-cost long-term Federal Home Loan Bank borrowings at a weighted average rate of 3.81%.
Capital ratios saw a sequential decrease, with the CET1 ratio at 9.92% compared to 10.43% in the prior quarter. Book value per share increased to $18.58, and tangible book value per share rose to $16.46, marking the fifth consecutive quarter of increase.
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