Activists, CEO change and delayed filings: Banc of California’s award-winning crisis management
Banc of California endured a series of events over the previous 15 months that individually could have caused a crisis, but the team navigated them all in a manner that leaves the company in a position to move forward.
During a crisis, it is often said that crisis management requires strong leadership, but Banc of California had experienced turnover of its CEO, CFO and five of its nine board members, all within a four-month period in 2017. The crisis continued to deepen with a short-seller coming into the stock, an anonymous blogger writing about the company online, a delayed 10Q filing, an activist filing a 13D and the company trying to negotiate the sale of its mortgage bank business (which accounted for nearly half of the bank’s total employees). One of the judges commented that if you looked up the word ‘crisis’ in the dictionary, this would be the description.
The IR team, led by Tim Sedabres, worked closely with the corporate secretary and PR team to weather the storm. The company has since announced significant governance changes, as a result of the annual meeting, and has new management in place. One of the indicators of how well the company has done at managing the message is its pre-crisis stock price of $22, which dipped to $13 at the height of the crisis. It has since returned to $21.50.