Banc of California, Inc. reported a net loss available to common and equivalent stockholders of $1.2 million, or $0.01 per diluted common share, for the third quarter ended September 30, 2024. On an adjusted basis, net earnings available to common and equivalent stockholders were $41.4 million, or $0.25 per diluted common share. This adjusted performance compares to net earnings of $20.4 million, or $0.12 per diluted common share, in the second quarter of 2024.
The third quarter results included $60 million of pre-tax losses from repositioning a portion of the securities portfolio. Net interest income increased by $2.7 million quarter-over-quarter to $232.2 million, and the net interest margin expanded by 13 basis points to 2.93%. This expansion was driven by lower interest expense on interest-bearing liabilities, partially offset by lower interest income on interest-earning assets.
The company made significant progress on its balance sheet repositioning, including the sale of $1.95 billion of Civic loans in July 2024, which generated approximately $1.91 billion in liquidity and $100 million of capital. Proceeds were used to reduce higher-cost brokered deposits by approximately $1.85 billion and pay off $545 million of remaining BTFP borrowings. The company also repositioned $0.7 billion of investment securities, which is expected to expand yield by approximately 270 basis points.
Noninterest expense decreased by $7.4 million quarter-over-quarter to $196.2 million, reflecting additional merger synergies and normalized FDIC assessment accruals. The provision for credit losses was $9.0 million, down from $11.0 million in the prior quarter, driven by increases in qualitative reserves for office properties and specific reserves for nonperforming loan downgrades.
Capital ratios strengthened, with the CET1 ratio increasing to 10.45% from 10.3% in the previous quarter. Book value per share was $17.75, and tangible book value per share was $15.63. Management achieved its year-end targets for net interest margin, noninterest expenses, and balance sheet metrics a quarter early.
For the fourth quarter of 2024, management provided an outlook for net interest margin of 3.00% to 3.10%, assuming one additional 25 basis point rate cut in mid-November. Noninterest expenses are expected to be in the range of $195 million to $200 million.
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