Pacwest Bancorp (PACW) 25 Jan 242023 Q4 Earnings call transcript

Company Profile

Participants

Jared Wolff	executive
Joseph Kauder	executive
Matthew Clark	analyst
Brandon King	analyst
Gary Tenner	analyst
William Black	executive
Timur Braziler	analyst
Kelly Motta	analyst
Timothy Coffey	analyst

Call transcript

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Operator

Hello, and welcome to Banc of California's Fourth Quarter Earnings Conference Call. [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 in the earnings presentation. At this time, I'd like to turn the floor over to Mr. California's Chief of Officer. Banc Wolff, President Executive and Jared

Jared Wolff

fourth Banc call. Good to California's quarter morning. Welcome of earnings

Joining me on CFO, and today's call are Black, Head Joe our of Strategy. Will Kauder, our

were to along the several our deal presentation, actions. merger information unusual which and fourth the our onetime repositioning of given provide the was investor Our impacted of earnings release, by balance a designed sheet with great the quarter, related nature items to closing of

time call. I'm detailed time walk-through California, provide announced and items QX introduce and later the specific $XX out transaction to a and sheet the book metrics the end Thanks we for we complicated our our insight advisers fourth call aren't changes XX, answer we metrics we quarter. and progress line when sheet line transaction key the other our repositioning our of do regulators, value, that front our We for sheet, mid-to-low notwithstanding Banc outlined items and we've team QX indicated delivered collaborating objectives delivered considerable a of provide the and actions the timing going well, on the the progress to various been of tangible in beyond. to November that the hit the from the the and moving on range. our deal. $XX balance the on repositioning of Instead, we rate made as in record to We'll the time and thrilled our We financial the of target, of received merger today talented update new nearly results in integration any after approval the of we'll into work happy announcement. on and to have were on announced of exceptionally on lay merger Many so prior we an we the the on at delivered the on excellent made utilize balance the our XX% hard questions closing in top truly colleagues guiding has to when environment for quarter balance the many the that work range earnings. we key closed well. Since be CETX key in on

merger who agreement SFR portfolio. from The billion $XXX power of billion multifamily largest California our solutions proceeds As approximately completed of to billion and the a portfolio of Approximately the as have $X $X.X for. result, as securities. excess portfolio, $X.X along were Banc the tailored envisioned. and Among enviable strong investment and of of legacy planned with million of well merger of which through California's based reduce cash the institution exceptionally in of balance utilized we from PacWest colleagues to sales deposits, that broker the the clean PacWest the getting the of higher well-capitalized reduce the we in with high-touch the the continued as also volume businesses and We and down on Today, from nearly relentless position the sheet. bank repurchase funding end wholesale higher-cost of XXXX. announcement retired assets, reflected with liquid earnings the California aren't headquartered notable with time on have $X become that Atlas execution $X.X are billion billion cost are most with up third others. The the credit highly the are talented created an Banc of closing the service financial our on serving items, we an California team clients strong a target we has and focused known state, down presence

the broker of program higher total, pay retain billion balance higher level $X.X liquidity portion we assets choosing cost a paid with order contributing bank and of more billion repaid a down to deposits. In an interest an in of of billion also to term maintain sold approximately X.X%. of down December. the million in funding of X.X%, funding We margin. was cost $X with of wholesale nearly And average $X than to month annually This the approximately all average completed yield net $XX

originally mentioned, given planned. portion loans. approximately X-year after rates. were accounting we the rather in of that best for they outlook mark, well our portfolio performing effective portfolio entire decided the retain multifamily to selling And interest the These in attractive As duration a purchase we than our potentially determine an are have retain yields as to declining

most we flexibility. were for a on balance actions execute of enhanced able in noted, and our planned repositioning sheet repositioning time, to short strengthening company our improved and period balance sheet of performance the As

to We continue sheet will forward. as seek evaluate to options balance all going we optimize our available

of some have benefits that would see to we the believed we started merger. following also potential have the We

back clients the restructured With balance bank the turmoil during started that the superior the we that of we and left to of level of have operating service many year. bring provide, accounts deposit sheet can the strength early of last PacWest

a felt also there be further capitalize talent opportunities on magnet. would We our to as that position

will of to franchise talent in our positively profitable to We that individuals adding coming number already the banking contribute look of continue growth have can we added the believe a exceptional and years.

it financial closing questions. hand Joe? I'll to remarks who additional up provide me line for information, the over have some let Now some and Joe, opening before will

Joseph Kauder

I'm as interest net XX Thank Jared. some our the spot provide by start you, to visibility for first sheet items quarter. December margin providing the balance to to going rates of for

spot X.XX%. was XXXX, XX, our for estimated December loan of yields rate As

interest-earning spot assets was of estimated X.XX%. the all yield rate for Our

X.XX%. Our spot the rate for deposits was of cost

rate X.XX% was Our fourth was and to interest for XXXX. spot compared rate for and spot the the the our cost for of of net month December X.XX%, of margin X.XX% our X.XX%, for estimated quarter funds

with our and repositioning approximate actions from new our rate point increase rates improvement wholesale relative position. in options to including we have customer much moderately quarter aside interest repositioning, X%. for additional this improvement and cost we interest that point a we as asset that we have from intend interest cost cost the deposits expect funds originations at net the driven continue of we in XX an a repricing to the could a of rates, with are the to core of lower-cost through in will the our will exiting bank sheet spot see percentage a be the to sheet deposits. Putting and and decline benefit may our cost targets our and by efforts. yields net earning higher positive our our by There interest impact funding due steady changes lower rates. and Once through on loan an of XX to between development increase our for point, higher X% first cost using by asset the paydown interest margin higher asset-sensitive we liability-sensitive XXXX quarter approximate in sales interest basis mostly balance margin wholesale and sheet reaching currently higher are margin basis a low-cost internal margin, additional expense funding X%, expect deposits, higher approach or an we completed sources deposits. At and in to in business acquired slightly December quarter in balance net off-balance are The first XX and net take move also driven interest We actions neutral merger reduction replace some expected including manage benefits in driven

reasonable be XXXX to quarter expense, OpEx in Looking of the expect will to at XXX%. range our to noninterest be ratio it first XXX%

rate of run forward. With for that provided all rate targeting be total from with focus a ROTCE. in the indicated have in from the will of phased we point is the X.X% to we is integration cost repositioning focusing actions X.XX% XXXX. Major the our time QX returns contributors we of expense, By for at run around line which start than we changed. ensuring ROAA reduction X% include of declining the expiring the XXXX. which to completion the expected announced the be be the balance that expense ratio systems XX% down over has level of on course to anticipate XX% cost we PacWest in in assets approximately or Rather approximately merger our with in scheduled year, on quarter sheet assessment of and offices As previously, full ending office incur the savings fourth during quarter the May, the FDIC OpEx first merger and a proceeding guidance conversion, noninterest schedule, and expect the and below we quarterly leases our on the approximately XXXX, targets of our savings consolidation of to is to not the of are primary on

timing the achieving Given year. At back turn Jared. this the time, savings of throughout the call to over I'll cost

Jared Wolff

like and outlook. Thanks, company the for to broader comments I'd around we wrap with have the our up vision Joe. some

We areas. are organized around primary two

this of have from we We provide. in competing differentiate opportunities new market. impact we strength our third-party property the solutions, and solutions, Colorado, with corporate we specialty treasury or centered best-in-class assets across relationships expertise in-market expertise banking out positively many management banking franchise add high-quality banking. to of media us few low-cost and the as in in efforts. First, bankers locations. with as relationship the and provide market bank, management processing. We that real client can with continue few enhance provide solutions who in will our we which management California homeowners business we on community SBA, in payments depository lending. Paired comprised and commercial are which the build which our and we ecosystem and includes given areas, asset building, across development consistently pulling and so believe competitors from proposition, which lines, are the ecosystem, including in lending level including Whether processing, focus and have only California, entertainment, past changes finance our card Denver, bulk believe service a our our seen market community finance, significant significantly and lending, estate us deposits North specific significant other value years of or issuer Bank, in our fund is of payments provide and loans. we of banks believe further merchant Particularly asset-based to and California, great offer venture given C&I, attractive We the our asset warehouse talented and will our Community corporate exiting verticals, Durham, the that an Carolina position over new full-service it superior our back our presents specialty And

we institution assets generated. we've years, high-performing to the there power. that will of portion some were recent that historical lower-yielding profitability cost A impacted As profitability. that sources In expect added funding be from strong indicated, have of level a come were PacWest earnings with negatively that funded higher PacWest's restoring with historically high businesses

actions and have have sheet a we path a taken, which sources, for With repositioning combined balance level we creates returns these funding reduced of the higher assets significantly the institution. to

production there cases, some XXXX, seeing conservative on loans loans uncertainty, rates We're greater As positive loan us reasonable meaningful new financial be a highly us institution being the is the to those loan a seeing loan same to done demand, in we off. larger, of of continuing with than consider. or make. In are while remains choose which enabling books to the at generate of we a for coming of are opportunities the being already most while higher on volume impact to economic paying our stronger level degree production of start and we a selective level

this Given slightly as is the while XXXX, end conditions the some we during expecting total year-end to of XXXX regarding growing improve. balances level and the At and runoff are point, we pace then anticipate, down that XXXX from flat with are volume uncertainty there economic timing. to loan the

some in rated on merger given based of impact through on process that that move good the of an and provide to we loan in highly the we the a liquid such of and expectations sheet resolve material note about as at are rate take every credit loan to we to want we bank well now the make rates, balance feel portfolio loan appropriately have. The loan positioned that pace and in we we see As of on changes changes look that weaker were curve close the quality as well have each update very sure economic portfolio. we the legacy I they dictated a any demand conditions production. that credits. Regardless of will capitalize opportunity, interest XXXX, our

the the the well franchise. higher to of Banc group in strong on we to we believe years. With beyond. let's out recorded and colleagues. talented result, want cleaner our to with has heroic I standpoint, asset leading that, specifically this for privileged that has an of market And It's comfortable at operator, the to our that California their of year what closing, our fourth value feel a contributions colleagues As an 'XX, and in for and than to I'm ahead we of we Banc create of credit our are we California new well fair of its in dedicated go enhance today built to confident witnessed quality a Thanks and actions, all incredible following new positioned this the bank level be the the deliver set the provision reserves predecessors. I shareholders QX line. position great performance undertakings, very from have where stand. on up credit I for say accomplish open cleaner coming quarter. are as capitalize to consistently of and and many to have sacrifices in either In and franchise them, have to financial such as exciting in helping that thank amazing efforts, based California we we

Operator

today Instructions] question Matthew our comes first Clark Sandler. from from Piper [Operator

Matthew Clark

Just of of the legacy in a you might charges, on kind that I way X expenses how you But and run saves not quarter Banc of run start speak but quarter upcoming months wanted another the related partial of Banc. had much the know merger kind in left? XQ, rate are far to of for of you rate? to or and kind much only month have you out of legacy get ex can shake so cost where how realized and

Jared Wolff

lot path between glide a which XXX. left out will company. the by facilities. that the OpEx have in we to quarter, do, place going that after a end that mentioned The first across QX. going XXX the take down We conversion the to be X the ratio and think of to And number is there's May. until the isn't is And to why Joe be of things come getting

lot in We that's will we don't to there. I have know a year. later are first if lift going the quarter. Joe, from FDIC come the there's going get assessment that think take out be more a the you color to reduced But to in beginning

Joseph Kauder

you correctly. think it Yes. No, I captured

manage I list detailed think we initiatives. have a of a we savings --

from favorability big We spoke there. are initiatives assessment the in expect the out we'll do have see FDIC in quarter. ones and coming it to plans the get some first our that place, of Jared start the larger And we to

Jared Wolff

have things to done And which through a and And lose XX assigned get going and literally person they're within by a go. the as to them, believe. list it's track we Matthew, off we them supposed we all of we're not control, with we're impact. our list the deadline and check like going that of

bank. necessarily sure realize we're appropriate. We deposit to have solicited making be obviously savings about that's side that, and was problems BofA happy bring the based them a I on to by addition volume of their got weren't lot we back. that my protect this the beyond and this call costs past back. They it stories we paying talking full that for come new the of it want same pay relationships wins And the in inbox new moved about back -- think can being proactive of strength I the to going million feedback XXXX, to ask they we number interest relationships. the to wherever don't deposits the the out we they in brought but on levels given we need the our In clients went, brought of expense are franchise, [ of from tears it and And and at all -- share coming knew $X I client and with back they I of just stories colleagues and of in of to during they had or eyes, ] already early what client people the about. a

of but so well. over a will and that's interest place take of going that expense the And stories year, lot impact improve like ability course that, our as there's to the our to

Matthew Clark

those better then coming And into a it. sense get here. earning might trying assets, year where of just to balances be the Got on

the just earning like and still have we of it to You knowing year? piece probably How you think have. assets overall would more BTFP that some about brokered but to loan than year, for spoke should the average CDs this you

Jared Wolff

our with the made Fed on BTFP, the of at end Well, March. cost the in yesterday of the really terms jacking announcement decision right, easy

get what's sure assets then, out our I'm Joe, earning sense we'll be... average of it will not where by probably before. So if for your

Joseph Kauder

right they're excess being the the flat a And sheet deployed have be shrinking year should bit, going be that decision new we for pretty coming into on earning move the pretty high-cost against but BTFP balance we deposits to assets the may the stable. just think depending I year. is or see the liquidity with little as what you the forward,

Jared Wolff

be not We're our assets wouldn't of assets we hitting -- we'll regardless on then said, rightly about the levels And get focused really we should in to little then so profitability going and lower means on the it be we ability we #X as that. of it we -- earn balance are have our at we're it smaller. if larger profitability it. totaled a We the while we're But out the should by targets XX.X%, Joe the sheet. end focus earning is If being focused comfortable size the means surprising our -- year, smaller, goal. pointed be profitability stay because to prioritize call bit the profitability, but on the to of while won't

Matthew Clark

CETX And common XX%, book? guess me. and appetite below pretty Okay. XX%, a probably the for rebuilding here. I quickly tangible one now got the what's with -- for What's Great. tangible XX% you last stock then buyback over

Jared Wolff

reinvest it's demonstrate options. share to once to common. we're We're Well, up and also we to we sustainability that from sustainable they're going think level we get preferred capital pace. whether believe will at very it's capital we I we there, we reduce going not exclusive. our And the and a And that mutually sufficient consider excess. in it a to it's we continue where at obviously looking believe healthy have plenty that company. a But capital count, options. building that be We're And levels obviously certainly level, variety to of we'll important up and to of have ways we at earnings our have that build that or excess of

Operator

next comes Brandon from question Our King from Truist.

Brandon King

So about on you level could thoughts thinking of you're deposits. give the us some just how

know You mentioned operating excess manage customers have are then back. also with costs And the legacy But pretty prudently. deposit I bringing deposits you PacWest customers trying to you're liquidity.

go year. you level of sense if of could kind we us you as the throughout of how shifting So deposits the think give a

Jared Wolff

at of question. on level with was Banc good loan-to-deposit of a it's deposits, historically ratio. and California along what I our noninterest-bearing on And have our Yes, focus

us see are noninterest-bearing And that and below how deposits rise, XX%, watch in we maintain as different of our loan-to-deposit so gives preferably the And types. for that we'd it mid-XXs, goes. flexibility other we'll percentage like ratio our to

went to to which of initiatives XX%, and a place from we put XX% time, eventually, NIP. But a at accounts get So we'll at And we approximately to we'll it. get to to NIB, XX% from get to Banc bunch going grow XX% over not of in and expect California to whole I'm bringing here and is date grow have operating from on we'll Banc legacy, XX% of XX%, businesses. over our California we eventually,

going will any we We or a what which do to leave. think happens customers it loan all focusing deposits. We're do thing on ask though we other And means road is the customer how live one deposit I customers to value not this on we've we the it do one concentration I on and side. on at started to focus map have -- have have and these the pace relationships learned risk. too not become that early, to will and dictate we the and the with our and we've We within already our reliant all

carefully. And we're very so that that's something to manage going

bring clients balance keep We have the bank, it but relationship their to sheet. tools at our help off

So lending. we're for not relying on it

people We it. management, have here great right can for clients, with asset that help management, should need that's some corporate a of asset And solution. we team the

delicate so balance there's And Brandon, of how we move of Banc kind we did California a historically. of together, things at it all these

percent say loan-to-deposit for I else. so would and And flexibility ratio that NIB of are that the at our everything the look that provides things we and the

Brandon King

makes Got we your How pretty expecting how what remarks, types as I but elaborate impact mentioned individuals a And how going you're talent it. could sense. know That about as talent. expenses? Could far tight year, adding think prepared in. you're of you're just range this that, that forward. should have in it adding on you you you in

Jared Wolff

to positions venture of just Yes. leader some that head some a and California Well, grow. there were lead added areas here. our We talented to in in team we want

doing before We new have the who's in City a for Brata, De great job announced Communications National. us. Head brought from Corporate we of a we -- acquisition,

recently. discipline. it. to But confident to we going X% to down is targets our in whole of do OpEx obviously exercise and some is the head and it We all levels that manage that talented ratio host can expense getting bringing Bank have are we're of We going players at a we're leaders side brought within in. on to have a There underwriting Community that require we that to us

Brandon King

Could lastly, on gave helpful. give portfolio? you it. is spot securities a yields, then us which just us very the Got you the spot And yield

Jared Wolff

Joe, that? do have you

Joseph Kauder

do. I Yes

X Just give second. me

Jared Wolff

for Brandon, Okay, we'll take Brandon. that, a look

Joseph Kauder

Jared. It's I'm No, read sorry, X.XX%. apologize, wrong, X.XX%. I X.XX%. it got I I that here,

Operator

next Gary from Tenner question Our comes D.A. from Davidson.

Gary Tenner

guide that of the X%, questions. accretion just out A loan an kind discount One, of basis expected was you approaching in couple of the deck? laid that's of NIM confirming on exclusive annualized I the slide

Jared Wolff

Yes.

Gary Tenner

All Okay. number. GAAP Full right.

Okay. kind And answered of comment of with to around you part BTFP the complete this in end that restructuring your and Jared, probably balance of the quarter. of But your was before kind one items repaying the of of the sheet. the checklist deck, it

Now I first repayment of a BTFP the get know quarter. to wanted be that planned are kind clear some But there's the of kind for kind balance optimizing going just any items to sense period sheet. discrete the obviously, still of time outside ongoing, of for of

Jared Wolff

other funding yield I think rates could pay portfolios pricing on think kind a Well, of There permitting to the around we pricing If that can the at relative at we are off. looking settle we people of low be. and the is. in And pieces somewhat where is what are negative going market, that in We're looking of as constantly expense it's so moving -- that think look they reductions. sell. we to that carry the is might discontinued it's loan capital to

definitely those, ignoring absent one sell there that decision things. we things, things So two the we're or could not just sell. are haven't to other that We made

includes of of these debris something down I we standpoint. expect, have filled all path very need at I figure a I'm And we to execute are and it somewhat sales. lot lot they're we to clear a and to to our believe set. and road they're unclear we see of an loan pull. fortunate have we And ahead, are clear that drive what my end that economic the we and zone. levers the do. road within very are But laid ahead, So very achieve the out. times And -- lot we're I we Gary? Look, and kind could mixing metaphors a we there's And kind some earnings targets profitability things going the it's do, set And you we looking on to that's control road trying out have how think a it's here. of largely clearly that can the having out with we and guess, get that banks to -- to from if that potentially of think a

if loans, else So we we with want Will we that I of we have But don't you a is all those do. those that along something add anything to don't possibility if out. Joe, mentioned think have else or sales savings expense sell that loan I got listed I here. to know

William Black

the and would sheet on as liabilities to say in balance broker just I addition the BTFP with weather deposits.

do ratio do we et ratio, loan-to-deposit we'll or cetera. look the we various -- have, As funding wholesale drift let down, options they come market the at to -- we'll the we and all look at up

we So going and there's lots of have, to we're make options those.

based those that they time. environment shareholders articulated, decisions as come to Jared and going -- best at we're the best and upon make As the us for economic what's to

Gary Tenner

Great. fold your more. Jared, stories about Appreciate ask could one you former PacWest you've depositors deal. -- it. as if back coming mentioned that post I several And it into got were the

You how kind utilizing format a coming coming those they experience deposit shared sweep are of balances kind back? of or What about a the back? those of are as kind Are talked to product.

Jared Wolff

and incredibly during liquidity crisis, he the someone one BofA here long-time open of $X.X formats. got took right $X.X a his client, offices was mean, the He to all apologetic. so million our business story from small account, a checked It's I million I different which cashiers the in account. out of

realized same that service quickly he he the client receive always enjoyed. that did Our not

at bank After smaller mean, particular of other he took to have back. to merger like I this And me encourage be at the the way service brought based of continue we week. if fear. As we back and PacWest and do unfounded, service base. with at were That dissatisfied They all. renewed to and he at service outflows stories the successful had and attributed the to obviously but California on we bank solutions. going it's on our I the and with it. this million do I continue the very they joined. not $X.X how to will us them good we our Banc that and what a money the very, and continue with of we balances, on did we say really bring We care gratifying, loyal is had and surprising We very them that always much is bank execute strength client effort. client in was it when to this. And know really of bank, very we're I the it do, we pages that every impersonalized have, time focused

Operator

[indiscernible] comes from Our question next Andrew Stephens. from

Unknown Analyst

like Just stable confirm a mean asset throughout to couple kind kind expectations of expectations. just One, on relatively that average I the of quick ones balance standpoint, of for asset fair? an year. sounds from the sheet Is It me. size then earning total and

Jared Wolff

Yes.

Unknown Analyst

cash you'd run Okay. be to at? What's the comfortable willing level of

Joseph Kauder

Think about X%. Is that right, Jared?

Jared Wolff

X%, on you we today liquidity. the right be such XX% I higher we high little XX%. to get to a And bit with because yield But historically, it now. watermark. X% a than especially as think bring with would down we I banks we're I can mean, more, good and And ran want I be running think Yes, think are X%.

so it's get we now. function a what And can right of

think is right. target Joe's So I

Unknown Analyst

-- pieces all super the could helpful if I in here. lot And moving commentary know Perfect. I is there's of terms of a ask

trying 'XX. ask color for but the -- margin in type a the what XXX to better get on kind So of I would kind get I'm expect I'm to just exit just it trying you helpful, of XQ appreciate part is like want to expense the sense all of detail the is exit the of to one wanted that here NIM. seems to ROA

XXX NIM would of XQ an So that any provide ROA you be would kind on the color exit could helpful. underpin

Jared Wolff

Joe we? Yes. think, The don't we -- have that I haven't defined yet. is NIM

Joseph Kauder

was margin for estimated our rate is you're X.XX our -- our -- interest we Well, that for? what XX/XX. Andrew, we at what looking did did we exit spot say net

Jared Wolff

QX we're no. going where be. No, for asking to He's XXXX,

the why for reason And there is much pretty is not the output an so Andrew, because we're NIM us.

of it we're bit a little smaller, affect the obviously little if mix our so kind will the of NIM larger, bit a and portfolio. And

it just we these yet. levers. we We guided haven't all so have know to And

different these have We we at three models, but models. in ROA. We've different is NIM looked and the same there all still different get ways achieve these to the

provided so guidance haven't there And we yet.

William Black

interest is it expenses. the to three into that, of that you fees, statement about net and the way components, back if though, income main income think easy Andrew,

cases, comfortable you're for that expenses, fees go essentially, in can If your and through you back it. with some estimate into and

your So pressure just -- on own I to to it test give own. mean, your mean

Unknown Analyst

running was in it to high. pretty plug an I analysis like was margin and I had bill, Yes. seemed just the

to So I just trying spot was check it.

talk you onetime? that? move quarter. view more this million Okay. The that And I wanted $XX.X you expense drove related Can so nature, the HOA guys the out business ask as transitory other it I can was specifically on. additional of to in we one about should as called to was what about

Jared Wolff

It catch-up onetime. It the a quarter. care we It a for time. expense was specific in And one fourth it was client. took was of

Unknown Analyst

for expense? borrowing Or actually, million. facility that through operating was termination then one, it last come And in your Did the Okay. expense? $XX.X interest

Joseph Kauder

Operating expense.

Operator

comes Wells Fargo. Our next from question Timur from Braziler

Timur Braziler

we're or loans made trimming I'm of just to demand the see balance categories more looking or is less loan okay, is had we runoff. flat comment regarding as a off expecting balances? some you that today, as maybe continuing see some you're but could some additional at wondering Jared, where runoff

Jared Wolff

premium laid this a And lower what of you versus a million discontinued quarter. the going running little kind those was what portfolios core of about yield, forward. the what is below discontinued last a $XXX pace, is in things. deck know the coming to it's don't that in at the lender portfolios And lender on XXX X.X%. And have down it's loans, we if finance going table finance that at all it is and consider finance, we are continue off out like So portfolio, finance, premium quarter-over-quarter I but

single some portion is is of on the rent portion and civics down have X kind bridge sure. other the stuff, family. We good of A for other yields of some that coming

think stuff liquidity barely national good to can be right lending. you those in overall loans So loans where the rates environment an the for with the but very loan I yields your good obviously two the is flat get obviously, we are because running down. We relative want reasonable portfolio to down. off. any now But the lending that's paying will there's categories to are think funds deploy the student And of that left, slightly is this stuff

we're to Joe cases, X% than in X% many that. said, what As getting higher is and

deploy that and for relationships, our we sheet the full we're balance being but relationships. so making sure in to good we're conservative, we to clients really for our want loans, use want and And it's right

we're are a today, when ensuring lending relationship. we so real it comes And with that

And a and more Chase. been a restaurant, components I And overall. It's with he past, relationship. "Could said ran for relationship after called into to call to With and in pulling the easier options larger is and require complicated to guy, was First now said, a given of I real he the speaking with course, to lunch?" to of not bank that of I they're somebody bank to Republic, are single estate said, yesterday in It's open he the going would. have reduction is talking said, well-known to us, the banks "Look, he to clients client We've talked us. I to which lend. in much as you been to overall our City us he me us every the back. it you in we're to a And and National with bank much and that we've more. better and the say available demand are position position

I $XX want million but in we'd you. I what do that and love We you we make one to you have accounts it. need I we to need operating to to said going sure million $XX about bank, talk need our put all with balances. said not it somewhere." put to We're to And how at can serve you

where all a that opportunities there's And look you so you're that. back us going. meet sure that like then you But and to lot come can we make of to let at

Timur Braziler

last maybe, deposits bringing what year. legacy then PacWest's And again, those circling with and just back you're are left just industries what back bank? to Great. to venture your Okay. deposits about the reengaging extent I'm tech-related wondering of comments in the that getting some

Jared Wolff

all I had at PacWest. they say but We're as more dramatic outflows California areas. the would that and well, were deposit of Banc had that obviously in PacWest

an very PacWest there I able that that We've we're deposits area on a not went deposits really and how where we looking course, the was positively to promote people bring the very, isn't so been side of that that those. classified out lot strong. this say relationships headline, bank. but and -- And of back the my venture gave would our strength the observation those is have data are combination of to comfort. And the

came credit ratings Our strong. out, obviously very

is we're I The continue we so to want manage do been that. back to those left deposits up concentration to going careful And have where bringing areas. we be And to successful area and agree at in that going better. we're all relationships

with balance corporate large we up are don't too asset And we our So end sheet. for that depositors management. have that

use in a balance great the sheet. can have balances that to We on have we family, not tool but the

bringing So sheet. they're because management our in balance asset numbers if [tomorrow] back we might be successful even they don't relationships deposit in by show up off

them can want we in than And back. but here. going we're them others, against. lend We so the want both. doing we them what balance serve keep be them think We on to careful family. we're what better and we We sheet We want

Timur Braziler

of but rollout guess Okay. Originally, DeepStack for then back when and PacWest to can revenue the fits some where all vertical look of what little me bit this. introduced, the that and into if, that the magnitude wondering And delayed of was does a again, that just a was the update on 'XX. provide touched payment bit, looking I and I'm you update then rate? you, this a, if PacWest might and kind deal run payment last what little of end you like at b, on contribution the

Jared Wolff

Absolutely.

of Banc that basis, on income to said in PacWest would stand-alone So a fee to income DeepStack we old fee we contributing million and $XX per XXXX. month million is said that California, at $XX start that DeepStack has continuing. historically meaningfully

way impact stand-alone to the magnitude longer of basis, ability in revenue the deep the to is fee a same So to Banc done the on a make on have combined basis, company stack to -- it California. an of a there no on would XXXX

the issuing solutions merchants isn't obviously It's cards contributed stand-alone to to to basis, credit It's we that it's context, the our credit So clients the would cards. direct on provide is any our ability balance is business who process cards those is selling which numbers the in but Worldpay, of infrastructure partners others credit. to a known just directly put Visa already whom to our and transactions And our merchant sheet third-party and intermediaries. existing business. to payments diluted process clients to MasterCard all ecosystem, credit of are it things. the giving [pins], layers rails, and is for that have card we've to are cards processing, our This now. have three building have are third that credit in with identification without on The third-party our those it built like whom well the like as go we're now. three and issue benefiting rolling trusted meaningfully, issuing, we consumer from that interchange broadly. This Those out using we to

that sheet. the clients. balance bigger their in great feature hoping rolling That the got going for going out be we're they making California that to it HOA But and in It's clients to talk a that along we that's accept think our something account number. call deposits. It's be now. digital enough not merger, think were opening, a we business until payments embedded it think in to have enough, ways it's are to in But easier. allow was payment to interested there accelerate of hundreds of contributing It's I'm not think huge we many as about, to to to which call them number anything. later on to out a have enough which making of acceptance going $X it obviously for payments out clients make combined this got venture good would it's is part like And meaningful provide specifically. this a DeepStack this a mean year, end I call tool it digital than I billion want we enough year going mean out actually has or at of to The our tool [PWB] so is -- to further is the by doesn't specifically tools. so really And we Banc clients business acceptance and their business. the payment their example, a DeepStack payments and using is

optimizing if on on to setting They've but way there's of and see out very some think We're in accelerate Worldpay positive and payments. XXX-pound focused lots we're obviously FIS we very will to with Worldpay ways to there we're with that the is the headquarters unique. synergies progress. that this. I discuss meeting in in year, through doing up been certainly and executives what at our in us So FIS February partner year XXXX. We're payments CEO going realize I'm and integration hopefully gorilla their a can this excited we're also the benefit focused optimal truly Jacksonville find in them to the

Operator

from KBW. comes Motta Kelly from question Next

Kelly Motta

I we had see have next kind that with different capabilities. additive like PacWest to of start and I talk fees a more either you're maybe sell banks about not another fees where like what combined kind one could general. basis, in as may together your Banc opportunities thought fee On we wondering income how how but year -- two and broadly or bit it? DeepStack, could or you And maybe what before. rate I'm just you run know complementary to of product of just bringing a not be looks

Jared Wolff

Yes.

-- that, solely and we of had build $XX wasn't it. $XX from And month we momentum a were weren't that that. issuer fee income to looking basically with accelerate that how they group, good per with start can kind the off at doing further partnerships did along they reseller for was a this I PacWest card program, there. were that much And level were great job collecting looking The of had on good I'll build right than that they we job should were great. ways. variety people expect. cards. way materials of they hopefully, of and of were then cards, think per in we a with But PacWest card an at So of others' month that can their I mean They fee but million previously. I think now, leaves that a a fees in income Susan morning in is it just virtual they it from was did Tang we the cards. million and a

little We partner roll an way The our programs. is the out with close down bit of up have build new have then a it this do issuer. some going we to and programs we we're to retooling start to as -- and have

income, in the down until see And we're don't acceleration so any think year. slow fee it's the but to going I going not to it in later

Kelly Motta

expected was last [indiscernible] in the the duration? how about the to poke how should time? cadence that thinking security AOCI be of against was the really help maybe Joe, us higher if it. what Got kind had bridge good tangible was a hoping is than helpful. see value get about that's tangible with Just trying to That's question you growth. book -- I the could also sense should we for I And of a on it but book come gap this of what over in the you number we quarter. of value thinking be

Joseph Kauder

on third change So on $XXX million was think stand-alone down compared and the the the in AOCI, was to significantly where which XXX some quarter. PacWest to basis, we've a come

in X-year is We'd We do down rates come curves to, higher-yielding to duration high-quality add will are These portfolio loss. unrealized as of north over that interest are the continue about that then where that feel the to if loss the and as AOCI well. time, down the of period. interest -- unrealized good up down on we continue years like X And bring portfolio. duration forward an as suggest, pretty Our securities come as to securities.

Jared Wolff

a been the impressed it's Officer. should so our on mentioned together, team mentioned, what the found Sahota, as to forward. a working of that's in this to move user banks to on and that brought team payments. that Chief each Jack really I've have we payment best of forward And the got I has this of who's want with at we There's job interfaces pieces PacWest jumped kind led build Banc we have things Payments helping we've didn't and is a how, whole we of ecosystem. development the California move And that by before, I've great Deep done

we'll lot on, in of a all, there's good can excited so to going out later and year. And things see this rolls how be I them wish I mention the but

Operator

comes next Coffey Janney. our Instructions] from Tim from question [Operator

Timothy Coffey

profitability and number closer all period that interest spot spot So to rates. of reasonable for rates to I appreciate details balances, at the $XXX look the press today? the started I giving today, income million. If in net a I company applied Is into end especially the a were that release estimate the

Joseph Kauder

ready don't that yet. we're that know to I say

The do California. because than we or being had we've balance other like we going think want every successful. pieces. this but accomplished statement. tremendous. with that. run do confirm to it What rate whole understand we did confidence Banc QX I think of of progress. or what And always were sheet we our easier execute bunch reason to in to not have at But X to PPNR is be deliver yet stuff are a is high said of lot We lot we going of things people we'd We're are be. I happen yet. for why in do of to moving I confidence to We QX promise and combined what done. guidance low. to it's being And off be away faster to think was balance income much moving as sheet difficult only -- of We We of today around. mean, did I kind there's QX us to a that going forecast month a I I we number that bit ability to level don't little can't that make it. that's more took to want a from of what And a and going here, it's Hopefully,

guide And through like from there. be to so QX, to get I'd to Tim, able

Timothy Coffey

significance? that. the of Appreciate do sheet cost comes there of also is in the I anything of we balance a And XQ up -- as throughout I'm the it coming the the wondering, balance to cadence year. saves in then reflection sheet, appreciate

Jared Wolff

think it's The FDIC big. Isn't I pretty Joe? it

Joseph Kauder

Yes.

throughout in rate assessment, the come So some we initiatives year. get on other that's big are item. then And assuming the there have, the very they cost, we FDIC a which run

due the first that, the in us on think happening you example, I see are think excess balance the restructuring quarter? going for liquidity sheet things you in first to other quarter. of our BTFP, But Because The come about is in some I could which the were March. against, deploying asking

Timothy Coffey

It's was front. that's Yes, on it BTFP then the balance that -- actually what sheet I just that's Is about. asking the side.

Joseph Kauder

the in how trying what's we are situation, day-by-day that's look we comment Well, the When manage the you -- best evaluate I due time as at And quarter. come which optimally environment the there's made the they to due. a coming other a on economic first higher-cost and earlier broker about deposits, portfolio them at basis. make decisions

Jared Wolff

that Tim, looking sales. we one We mention loan other thing. are at constantly did

going And right don't wouldn't don't price, be have depends we it so but surprised to because the get I obviously we execute But we the we're opportunities that. it. if did that won't on do we I if to know price, do

Timothy Coffey

of That off You're to that? to piece is going the the Okay. now, market hold right? multifamily on

Jared Wolff

to Yes, that. going Yes. hold onto we're

Joseph Kauder

a say be very may, a that interest there of that, be lot that of not portion. might we a in seems of a that to small be it large piece there was small very it subset would the but multifamily I subset would

Timothy Coffey

I my out I'm strategic smaller do be to question this reason Jared, size then run think what just you unprecedented is of to I announcement, follow the he much than And balance you do balance was keeping the in stuff banking going bigger? thought being was merger. pretty because critical did And And sheet. understand. the not do? to wasn't of But is kind just of I I'm you is, more Okay. this at sheet adds on for time today. it wondering, there of a kind -- Or it want the all

Jared Wolff

the piece sheet really planned. extra first said, down. it I to of I balance not bigger the a more think, have than was -- XXX keeping piece more multifamily. managing like that And we're But coming And do we ROA Well, obviously, the and ROA. of XXX earnings. it But means we on see cash, we're profitability I

sure you of something the So to balance, see expenses we to QX of because down on and of it's and rid that ROA bring assets it. go XXXX. they're balance get make that earnings out to might get earning managing a with and to where But we based XXX along need gate if delicate all we're that start we the where is obviously, sheet of the

to profitability we're to get don't I confident land, to going know our So we're but going targets. where I'm

Operator

a And from our follow-up is Timur from Wells question Fargo. final

Timur Braziler

for 'XX? for that are embedded estimates in one are your assumptions Just the quick one. purchase What accounting

Jared Wolff

know I directed question wasn't me. that to

I'll let that. Joe answer So

Joseph Kauder

for we be seeing a estimate I it's the included that current deck. way think with accretion loan impact which an on the accretion, will we're Page have so So I that that is But $X.XX the with consistent the off year, in we XX page new roll on showed our -- will -- our about marks originations. of think how will estimate yields a and the aggregate it which in includes we the deck, consistent we the -- EPS assumption

Operator

presentation. with call be thank and concluding We joining. that, conference today's do gentlemen, and Ladies we'll you for

lines. may disconnect now You your

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