Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California.
The bank focuses on providing banking and treasury management services to small-, middle-market, and venture-backed businesses. The bank offers a broad range of loan and deposit products and services through full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional office...
Banc of California, Inc. operates as the bank holding company for Banc of California that provides various banking products and services in California.
The bank focuses on providing banking and treasury management services to small-, middle-market, and venture-backed businesses. The bank offers a broad range of loan and deposit products and services through full-service branches located throughout California and in Denver, Colorado, and Durham, North Carolina, as well as through regional offices nationwide. The bank also provides full-stack payment processing solutions through its subsidiary, Deepstack Technologies, LLC (‘Deepstack’).
The bank also serves the community association management industry nationwide with its technology-forward platform SmartStreet. The bank is committed to its local communities by supporting organizations that provide financial literacy and job training, small business support, affordable housing, and more.
Business Groups
The bank is organized into four business groups – Commercial & Community Banking (‘CCB’), Specialty Banking, Deposit Services, and Payment Solutions.
CCB provides in-market relationship lending and deposit gathering through regional offices and 80 branch locations throughout California, in Denver, Colorado and in Durham, North Carolina.
Specialty Banking is focused on serving clients in niche verticals by industry, including HOA (or homeowner associations), venture banking, lender finance, SBA lending, mortgage warehouse lending, media and entertainment, asset-based lending, and equipment finance.
The company’s Deposit Services provide valuable services through tailored cash management and treasury management solutions along with corporate asset management services through its subsidiary, BofCal Asset Management Inc. (BAM).
The company’s Payment Solutions includes proprietary merchant processing through its subsidiary, Deepstack, the issuance of credit cards and purchasing cards to the company’s business clients, and transaction processing services.
Business Strategy
The company focuses on fostering relationships with businesses in its markets and verticals and providing an exceptional level of service.
The company offers a wide variety of deposit, loan, and other financial services to small and middle-market businesses, venture capital and private equity firms, non-profit organizations, business owners, entrepreneurs, professionals and high-net worth individuals. The company’s deposit products include checking, savings, money market, certificates of deposit, retirement accounts, and safe deposit boxes. Additional products and services leverage other technology and include automated bill payments, cash and treasury management, master demand accounts, foreign exchange, interest rate swaps, card payment services, remote and mobile deposit capture, automated clearing house origination, wire transfer, and direct deposit. The company’s lending activities are focused on providing thoughtful financing solutions to its clients. The company is consistently investing in its technology infrastructure to gain operating efficiencies and to improve the client experience as the company delivers its high standard of service.
Depository Products and Services
Deposits are the company’s primary source of funds to support its interest-earning assets and provide a source of stable low-cost funds and deposit-related fee income. The company offers traditional deposit products to businesses and other customers with a variety of rates and terms, including demand, money market, and time deposits. The company primarily relies on its relationships from the company’s lending activities, competitive pricing policies, marketing, and superior client service to attract and retain deposits. The company also provides international banking services, multi-state deposit services, and asset management services. The Bank’s deposits are insured by the DIF of the FDIC up to applicable legal limits. The bank is a participant in the IntraFi Network, a product that offers deposit placement services, such as ICS and CDARS, and other reciprocal deposit networks which offer products that qualify large deposits for FDIC insurance. These products spread a customer's large deposit account among other banks in the network to increase the amount of FDIC insurance for that customer and to helps the company retain the customer's entire banking relationship.
The company’s branch network allows it to gather deposits, expand the company’s brand presence, and service its customers’ banking and cash management needs. The company also serves its customers through a wide range of non-branch channels, including online, mobile, remote deposit, and telephone banking platforms, all of which allows the company to expand its service area to attract new depositors without a commensurate increase in branch locations or branch traffic.
The company has ATMs at its branches located in California and ATM at the company's branch in Denver, Colorado. The company provides access to customer accounts via a 24 hour seven-day-a-week, toll-free, automated telephone customer service and secure online banking services.
Client Investment Funds
In addition to deposit products, the company also offers select client’s non-depository cash investment options through BAM, its SEC registered investment adviser subsidiary, and third-party money market sweep products. BAM provides customized investment advisory and asset management solutions.
Payment Processing
Payment’s processing provides comprehensive card issuing, merchant acquiring, and sponsorship programs, while also developing a robust banking-as-a-service offering. The company continues to focus on providing streamlined and secure payments solutions. In 2024, it successfully developed and implemented a new card issuing platform, along with delivering a new corporate payments card offering and mobile card application controls. The team enhanced the infrastructure and security measures, which includes transaction monitoring enhancements to ensure robust and reliable processing. The company continues to build its products and services, which includes developing point of sales solutions and payments hub process platform that will enable RTP and FedNow.
Lending Activities
The company’s lending activities include real estate mortgage loans, real estate construction and land loans, commercial loans and leases, purchased single-family residential mortgage loans, and a small amount of consumer loans. The company’s commercial real estate loans and real estate construction loans are secured by a range of property types. Included in the company’s commercial real estate loans and real estate construction loans are business-purpose loans secured by non-owner-occupied residential investment properties provided by Civic, a wholly owned subsidiary. The company’s commercial loans and leases portfolio is diverse and generally includes various asset-secured loans, equipment-secured loans and leases, venture capital loans to support venture capital firms’ operations and the operations of entrepreneurial and venture-backed companies during the various stages of their early life cycles, warehouse loans, and secured business loans originated through its CCB group.
Real Estate Mortgage Loans and Real Estate Construction and Land Loans
The company’s real estate lending activities focus primarily on loans to professional developers and real estate investors for the acquisition, construction, refinancing, renovation, and on-going operation of commercial real estate. The company also provides commercial real estate loans to borrowers operating businesses at these sites (owner occupied commercial real estate loans), including loans to municipalities, schools and school districts, and non-profit borrowers as part of its tax-exempt lending business line.
The company’s real estate secured loans include the following specific lending products:
Commercial real Estate Mortgage
The company’s commercial real estate mortgage loans generally are collateralized by first deeds of trust on specific commercial properties. The most prevalent types of properties securing the company’s commercial real estate loans are office properties, hotels, retail properties, and industrial properties. The properties are typically located in major metropolitan areas across the United States with a significant concentration of collateral properties located in California within its branch footprint. The company’s commercial real estate loans typically either have interest and principal payments due on an amortization schedule ranging from 25 to 30 years with a lump sum balloon payment due in one to ten years or may have an initial interest-only period followed by an amortization schedule with a lump sum balloon payment due in one to ten years. The company also provides commercial real estate secured loans under the SBA's 7(a) Program and 504 Program. Compliant SBA 7(a) loans have an SBA guaranty for 75% of the principal balance. SBA 504 loans are first deed of trust mortgage loans on owner occupied commercial real estate which are 50% loan-to-value at origination where a second deed of trust is also provided by a non-profit certified development company. The SBA 7(a) and 504 mortgage loans repay on a 25-year amortization schedule.
Residential Real Estate Mortgage
The company’s residential real estate mortgage loans generally are collateralized by first deeds of trust on multi-family and other residential properties. Multi-family properties consist of 68% of its residential real estate mortgage loans as of December 31, 2024. Other types of properties securing these loans include non-owner occupied for-rent residential properties, owner-occupied single-family properties, and mobile home parks. During 2022 and prior years, the company directly originated and purchased from other banks multi-family secured real estate mortgage loans. In the second quarter of 2023, the company ceased making new originations of Civic loans. The company divested a portion of this non-core loan portfolio in 2023 and 2024 and continued to run off the remaining portfolio.
Real Estate Construction and Land
The company’s real estate construction and land loans generally are collateralized by first deeds of trust on specific residential and commercial properties. The most prevalent types of properties securing the company’s construction and land loans are multi-family, residential properties undergoing a substantial renovation, and office properties (primarily medical office and life science space). Construction loans typically finance from 60% to 65% of the cost to construct residential and commercial properties. The terms are generally one to three years with short-term, performance-based extension options. Civic, a lending subsidiary, up until the second quarter of 2023 originated business-purpose loans secured by non-owner-occupied residential properties undergoing renovation. In the second quarter of 2023, the company ceased making new originations of Civic loans. The company divested a portion of this non-core loan portfolio in 2023 and 2024 and continued to run off the remaining portfolio.
Commercial Loans and Leases
The company’s commercial loans and leases portfolio is diverse and includes various asset-secured loans, equipment-secured loans and leases, venture capital loans to support venture capital firms’ operations and the operations of entrepreneurial and venture-backed companies, warehouse loans, and business loans originated through its CCB group. Commercial loan and lease growth also assists in the growth of the company’s deposits because many commercial loan borrowers establish deposit accounts and utilize treasury management services. Those deposit accounts help it to reduce the overall cost of funds, and those banking service relationships provide a source of noninterest fee income.
The company’s commercial loans and leases include the following specific lending products:
Lender Finance
These are loans to companies used to purchase finance receivables or extend finance receivables to the underlying obligors and are secured primarily by the finance receivables owed to the company’s borrowers. The borrowers include lenders to small businesses, commercial real estate lenders, consumer lenders, and alternative asset managers. The primary sources of repayment are the operating incomes of the borrowers and the collection of the finance receivables securing the loans. The loans are typically revolving lines of credit with terms of one to three years with contractual borrowing availability as a percentage of eligible collateral.
Equipment Finance
These are loans and leases used to purchase equipment essential to the operations of the company’s borrowers or lessees. Equipment finance loans are secured by the equipment financed, and it owns and leases the equipment to the lessees. The primary source of repayment is the operating income of the borrower or lessee. The loan and lease terms are two to ten years and generally amortize to either a full repayment or residual balance or investment that is expected to be collected through a sale of the equipment to the lessee or a third party.
Other Asset-Based
These are loans used for working capital and are secured by trade accounts receivable and/or inventories. The primary sources of repayment are the operating incomes of the borrowers, the collection of the receivables securing the loans, and/or the sale of the inventories securing the loans. The loans are typically revolving lines of credit with terms of one to three years with contractual borrowing availability as a percentage of eligible collateral.
Venture Capital
These are loans directly to venture capital firms or loans to venture-backed companies and are composed of two categories: Fund Finance and Portfolio Company lending. Fund Finance loans are loans made directly to venture capital firms, private equity funds, venture capital funds, and venture capital management companies to provide a bridge to the receipt of capital calls and to support the borrowers’ working capital needs, such as the cost of raising a new venture fund or leasehold improvements for new office space. The primary sources of repayment are receipt of capital calls, proceeds from sales of portfolio company investments, and management fees. The loan terms are generally one to four years, and the loans are typically secured by a first position lien on the assets of the business, an assignment of capital call rights and/or an assignment of management fees. Portfolio Company lending involves loans made to venture-backed companies to support the borrowers’ operations, including operating losses, working capital requirements, and fixed asset and other acquisitions. The borrowers are at various stages in their development (early, expansion, or late), and are, generally, reporting operating losses. The company typically lends to portfolio companies in two industries: technology, where the portfolio companies are involved in the creation or development of technology or product that has a sizeable market opportunity; and life sciences, where the portfolio companies are involved in the creation and/or development of new medical technology or pharmaceuticals. In each case, the portfolio company has received significant investment from venture capital firms well known to the bank and lending is customarily a bridge between funding rounds. The primary sources of repayment are future additional venture capital equity investments or the sale of the company or its assets. The loan terms are generally one to four years, and the loans are typically secured by a priority, secured blanket lien on all corporate assets and/or a lien on intellectual property.
Secured Business
These are secured business loans originated through the CCB group. The loans can be up to five years and are secured by a specific asset or assets of the borrower.
Warehouse Loans
Warehouse lending is a line of credit given to a loan originator, the funds from which are used to originate or purchase mortgage loans. The loans have one-year terms and generally renew annually. The primary sources of repayment are the sale in the secondary market, either directly or through securitization, of the mortgage loans funded on the warehouse line.
Other Lending
Loans aggregated into the category of ‘Other lending’ are various commercial loan types including the CCB group business loans, loans to homeowner associations, loans to municipalities and non-profit borrowers, and SBA 7(a) loans for small business expansion. The primary sources of repayments for the CCB group business loans, non-profit borrowers, and SBA 7(a) business expansion loans are the operations of the borrowers. The primary sources of repayment for loans to municipalities are tax collections from their tax jurisdictions.
Consumer Loans
Consumer loans are primarily purchased private student loans originated and serviced by third parties and not guaranteed by any program of the U.S. Government. These loans refinanced the outstanding student loan debt of borrowers who met certain underwriting criteria, with terms that fully amortize the debt over terms ranging from five to twenty years.
Loan Concentrations
As of December 31, 2024, the three largest property types securing real estate mortgage loans were multi-family properties, single-family residential properties, and industrial properties, which consists of 45%, 18%, and 8% of the company’s real estate mortgage loans, respectively.
As of December 31, 2024, the three largest property types for real estate construction and land loans were multi-family properties, industrial properties, and office land, which consists of 72%, 8% and 5% of the company’s real estate construction and land loans, respectively.
Financing
The company depends on deposits, including brokered deposits, and external financing sources to fund its operations. The company employs a variety of financing arrangements, including term debt, subordinated debt, and equity.
Investment Portfolio
As of December 31, 2024, the company's investment portfolio included agency residential mortgage-backed securities (MBS), agency commercial MBS, agency residential collateralized mortgage obligations (CMOs), municipal securities, corporate debt securities, private label residential CMOs, collateralized loan obligations, private label commercial MBS, asset-backed securities, and Small Business Administration (SBA) securities.
Supervision and Regulation
As a bank holding company, the company is subject to the Bank Holding Company Act of 1956 (BHCA) and is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the Board of Governors of the Federal Reserve System (FRB). The FRB’s jurisdiction also extends to any company that is directly or indirectly controlled by a bank holding company. The company has also elected to be a financial holding company under the BHCA. As a California state-chartered bank that is a member of the FRB, the bank is subject to ongoing and comprehensive supervision, regulation, examination and enforcement by the California Department of Financial Protection and Innovation (DFPI) and the FRB. In addition, as an FDIC-insured depository institution, the bank is also subject to regulation by the FDIC.
Under FRB regulations, which were codified by the Dodd-Frank Wall Street Reform and Consumer Protection Act, a bank holding company, such as the company, must serve as a source of financial and managerial strength for any FDIC-insured depository institution that it controls, such as the bank.
The bank’s deposits are insured by the DIF of the FDIC up to applicable legal limits. As an FDIC-insured depository institution, the bank is subject under certain circumstances to regulation by the FDIC.
The company is subject to several federal laws related to anti-money laundering (‘AML’), economic sanctions, and prevention of financial crime, including the Bank Secrecy Act, the Money Laundering Control Act, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (‘Patriot Act’), and economic sanctions programs. The company is required to, among other things, maintain an effective anti-money laundering (AML) and counter-terrorist compliance program, identify and file suspicious activity and currency transaction reports, and block transactions with sanctioned persons or jurisdictions. Compliance with these laws requires significant investment of management attention and resources. These laws are enforced by a number of regulatory authorities, including the FRB, U.S. Treasury Department's Office of Foreign Assets Control (OFAC), the Financial Crimes Enforcement Network, the U.S. Department of Justice, Drug Enforcement Administration, and Internal Revenue Service.
The bank is also subject to regulation under economic or financial sanctions imposed, administered, or enforced from time to time by the U.S. government, including as administered by OFAC (such regulations, ‘Sanctions Laws’). The bank has established compliance programs designed to comply with the Bank Secrecy Act, the Patriot Act and applicable Sanctions Laws.
The bank is subject to the provisions of the Community Reinvestment Act of 1977 (CRA).
Under the Fair and Accurate Credit Transactions Act (the ‘FACT Act’), the bank is required to develop and implement a written Identity Theft Prevention Program (the ‘Program’) to detect, prevent and mitigate identity theft ‘red flags’ in connection with the opening of certain accounts or certain existing accounts.
The company is subject to a broad array of federal, state and local consumer protection laws and regulations that govern almost every aspect of its business relationships with consumers, including but not limited to the Truth-in-Lending Act, the Truth in Savings Act, the Electronic Funds Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Fair Housing Act, the Secure and Fair Enforcement in Mortgage Licensing Act, the Real Estate Settlement Procedures Act, the Home Mortgage Disclosure Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, the Service Members Civil Relief Act, the Right to Financial Privacy Act, the Home Ownership and Equity Protection Act, the Consumer Leasing Act, the Fair Credit Billing Act, the Homeowners Protection Act, the Check Clearing for the 21st Century Act, laws governing flood insurance, federal and state laws prohibiting unfair and deceptive business practices, foreclosure laws and various regulations that implement the foregoing.
The bank is a member of the FHLB, which makes loans or advances to members.
BofCal Asset Management Inc. (BAM) is registered with the SEC under the Investment Advisers Act of 1940, as amended, and is subject to its rules and regulations. Following the completion of various studies on investment advisers and broker-dealers required by the Dodd-Frank Act, the SEC has, among other things, recommended to Congress that it consider various means to enhance the SEC’s examination authority over investment advisers.
History
Banc of California, Inc. was founded in 1941. The company was incorporated in 2002.
