Wolff, who works principally from the company’s newly minted Brentwood dual-headquartered office near where he lives, said his bank participated in an $8 million funding round in fintech OneNetworks Inc., which does business as Finexio, an Orlando, Fla.-based payment service provider for businesses.
“We’re the only bank that’s invested in them. So, I think there’s the opportunity for us to play an important role with them,” said Wolff, who wouldn’t discuss future plans.
Banc of California, which invested roughly $1 million in the growth round in August, wants to use Finexio’s payment services to expand its own product offerings for its business clients and to use the software to build out payment and related loan and deposit services.
“They provide what I would call payment optimization services to small and medium-sized businesses,” Wolff explained. “The product helps users to efficiently manage their accounts payable functions, and what they do is interface with customers’ existing accounting software.”
Finexio has raised a total of $40 million in debt financing and venture capital since its founding in 2017.
Banc of California sees a powerful use for Finexio’s machine learning, or artificial intelligence, software that relies on algorithms to spot bill-paying trends on when it might be better to pay by wire, automated clearing house, bill pay or by check.
The trick for a vendor is to know whether to pay by check or bill pay, which both take more time than automated clearing house — ACH in financial terms — or wire transfers.
ACH is a computer-based electronic network for processing transactions between financial institutions. Wire transfers allow money to be moved quickly and securely between parties in disparate regions of the world. Paying by ACH or wire transfer can result in a discount while paying by bill pay may lead to extra fees due to delays.
The concept behind Finexio’s artificial intelligence is to better juggle the selection of these options on a payment processing platform in order to keep more cash in a vendor’s pocket.
“We believe the services they provide are attractive to our clients,” said Wolff, who hopes to roll out Finexio’s payments platform to Banc of California’s customers by the second quarter of 2022.
Banc of California is building financial momentum.
On Oct. 21, it reported profit of $23.2 million in its third quarter ended Sept. 30 versus $15.9 million in the year-ago period. Three days earlier, the company completed its $226 million merger with Pacific Mercantile Bancorp.
Separately, Banc of California reported assets of $8.3 billion in its third quarter versus $7.7 billion in the year-ago period. Pacific Mercantile added on another $1.5 billion in assets, giving Banc of California a total of $9.8 billion in assets — a move that gets the bank nearly back to where it had been when Wolff joined the company in March 2019 and began cleaning up the balance sheet.
Earlier in his tenure, Wolff trimmed the size of the bank’s assets from $10 billion to less than $8 billion, reduced expenses and dramatically cut down on some riskier lending. He has also moved to save $7 million annually over the next dozen-plus years by terminating the bank’s stadium-naming rights with Los Angeles Football Club.