On the surface, it would be very easy to compare Banc of California's (NYSE: BANC) year in 2020 to any other bank's. Earnings declined significantly as the bank dealt with higher credit costs from the coronavirus pandemic. But when you dig a little deeper, it's easy to see that 2020 proved to be incredibly productive for Banc of California. The bank accelerated its efforts on remixing its balance sheet, which has now positioned the bank to be much more consistent and profitable long-term.
Banc of California is a roughly $7.9 billion asset bank based in Southern California, with a footprint that extends from Santa Barbara to San Diego.
Just a few years ago, Banc of California looked like a much different bank. It relied more heavily on higher-cost funding sources such as certificates of deposits (CDs), and residential and multifamily lending that didn't generate good low-cost funding sources for the bank. In 2019, the bank embarked in a new strategic direction by pledging to remix its funding base and focus on loans that created more holistic banking relationships.
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After Remixing Its Balance Sheet, This Bank Stock Looks Well Positioned