Stockholders' Equity

12 Months Ended

Dec. 31, 2023

Equity, Attributable to Parent [Abstract]

Stockholders' Equity

NOTE 21. STOCKHOLDERS' EQUITY

Stockholders' equity was $3.4 billion at December 31, 2023, a decrease of $559.8 million compared to December 31, 2022. The decrease was primarily due to a net loss of $1.9 billion in 2023, partially offset by an increase of $1.0 billion from the issuance of stock in the Merger and the concurrent $400 million capital raise and a decrease in negative AOCI of $358.8 million. The components of stockholders' equity changed considerably during 2023 primarily due to new shares and new classes of stock issued in conjunction with the Merger. At December 31, 2022, our stockholders' equity consisted of approximately 79 million shares of issued common stock and 513,250 shares of issued Series A Preferred Stock. At December 31, 2023, our stockholders' equity consisted of the following:

In conjunction with the Merger, each outstanding share of PacWest Bancorp 7.75% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series A, was converted into the right to receive one share of a newly created series of BANC 7.75% Fixed Rate Reset Non-Cumulative Perpetual Preferred Stock, Series F (“Series F Preferred Stock”). The Series F Preferred Stock is listed on the NYSE under the symbol “BANC/PF.” The Series F Preferred Stock ranks senior to our common stock and common stock equivalents in the payment of dividends and in the distribution of assets on any liquidation, dissolution or winding up of the Company. There are 50,000,000 total preferred shares authorized, of which 27,000,000 were authorized for the non-voting common stock equivalents (“NVCE”) and 513,250 were authorized and outstanding for the Series F Preferred stock at December 31, 2023.

Our voting common stock is listed on the NYSE under the symbol “BANC” and there were 446,863,844 shares authorized and 156,790,349 shares outstanding at December 31, 2023.

Our Class B non-voting common stock is not listed or traded on any national securities exchange or automated quotation system, and there currently is no established trading market for such stock. There were 3,136,156 shares authorized and 477,321 shares outstanding at December 31, 2023.

In conjunction with the Merger, the Company issued a new class of NVCE from authorized preferred stock, which were issued under the Investment Agreements. Our NVCE stock is not listed or traded on any national securities exchange or automated quotation system, and there currently is no established trading market for such stock. The NVCE do not have voting rights and rank equally with, and have identical rights, preferences and privileges as the voting common stock with respect to dividends or distributions (including regular quarterly dividends) declared by the Board and rights upon any liquidation, dissolution, winding up or similar proceeding of the Company. There were 27,000,000 shares authorized and 10,829,990 shares outstanding at December 31, 2023.

In conjunction with the Merger and per the terms of the Investment Agreements, the Warburg Investors received warrants to purchase 15,853,659 shares of NVCE stock, and the Centerbridge Investor received warrants to purchase 3,040,780 shares of voting common stock (the “Centerbridge Warrants”), each with an initial exercise price of $15.375 per share, subject to customary anti-dilution adjustments provided for under the warrant agreements. The warrants carry a term of seven years but are subject to mandatory exercise when the market price of the voting common stock reaches or exceeds $24.60 for 20 or more trading days during any 30-consecutive trading day period. These warrants are being accounted for as equity. The exercise price of the Centerbridge Warrants will be adjusted downward, per the terms of the agreement, for cash distributions to stockholders of the Company's voting common stock, including the Company's quarterly cash dividend.

Common Stock Repurchased

The Company's common stock repurchased consisted of shares surrendered to the Company resulting from the statutory payroll tax obligations arising from the vesting of stock awards. The following table shows the dollar amount of shares surrendered, shares surrendered, and weighted average price per share for stock surrendered for the years indicated:

	Year Ended December 31,
Restricted Stock Surrendered	2023		2022		2021
Dollar amount of shares surrendered (in thousands)	$	5,421	$	9,531	$	8,505
Number of shares surrendered	228,151		169,152		130,735
Weighted average price per share	$	23.76	$	56.35	$	65.06

Stock Repurchase Program

The Stock Repurchase Program was initially authorized by the Banc of California, Inc. Board of Directors on February 9, 2023 to purchase shares of its common stock for an aggregate purchase price not to exceed $35 million. There were no shares repurchased by the combined company in December 2023. The repurchase authorization expired on February 9, 2024.

Preferred Stock Issuance

On June 6, 2022, PacWest Bancorp issued and sold 20,530,000 depositary shares (the “Depositary Shares”), each representing a 1/40th ownership interest in a share of the Company’s 7.75% fixed rate reset non-cumulative, non-convertible, perpetual preferred stock, Series A, par value $0.01 per share (the “Series A preferred stock”), with a liquidation preference of $1,000 per share of Series A preferred stock (equivalent to $25.00 per Depositary Share). The gross proceeds were $513.3 million while net proceeds from the issuance of the Series A preferred stock, after deducting $14.7 million of offering costs including the underwriting discount and other expenses, were $498.5 million. In conjunction with the Merger, each share of Series A preferred stock was exchanged for a new share of Banc of California, Inc. 7.75% fixed rate reset non-cumulative, non-convertible, perpetual preferred stock, Series F, par value $0.01 per share (the “Series F preferred stock”). The Series F preferred stock qualifies as Tier 1 capital for purposes of regulatory capital calculations.

Holders of the Depositary Shares will be entitled to all proportional rights and preferences of the Series F preferred stock (including dividend, voting, redemption, and liquidation rights).

Dividends on the Series F preferred stock are not cumulative or mandatory. If the Company’s Board of Directors does not declare a dividend on the Series F preferred stock in respect of a dividend period, then no dividend shall be deemed to be payable for such dividend period or be cumulative, and the Company will have no obligation to pay any dividend for that dividend period, whether or not the Board of Directors declares a dividend on the Series F preferred stock or any other class or series of its capital stock for any future dividend period. Additionally, so long as any share of Series F preferred stock remains outstanding, unless dividends on all outstanding shares of Series F preferred stock for the most recently completed dividend period have been paid in full or declared and a sum sufficient for the payment thereof has been set aside for payment, no dividend shall be declared or paid or set aside for payment and no distribution shall be declared or made or set aside for payment on the Company’s common stock.

The Series F preferred stock is perpetual and has no maturity date. The Series F preferred stock is not subject to any mandatory redemption, sinking fund, or other similar provisions. The Company, at its option and subject to prior regulatory approval, may redeem the Series F preferred stock (i) in whole or in part, from time to time, on any dividend payment date on or after September 1, 2027 or (ii) in whole but not in part at any time within 90 days following a regulatory capital treatment event, in each case, at a redemption price equal to $1,000 per share of Series F preferred stock (equivalent to $25 per Depositary Share), plus any declared and unpaid dividends, without regard to any undeclared dividends, to but excluding the redemption date. Neither the holders of the Series F preferred stock nor holders of the Depositary Shares have the right to require the redemption or repurchase of the Series F preferred stock.