Business Wire | Oct 22, 2020 06:01AM EDT

Banc of California Reports Third Quarter 2020 Financial Results

Oct. 22, 2020

SANTA ANA, Calif.--(BUSINESS WIRE)--Oct. 22, 2020--Banc of California, Inc. (NYSE: BANC) today reported net income available to common stockholders for the third quarter of 2020 of $12.1 million, or diluted earnings per common share of $0.24.

Highlights for the third quarter included:

* Noninterest-bearing deposit balances increased $59.2 million during the quarter and represented 24% of total deposits at September 30, 2020, up from 19% a year earlier * Total checking balances increased $257.7 million during the quarter and represented 58% of total deposits at September 30, 2020, up from 45% a year earlier * Net interest margin remained stable at 3.09% * Average cost of total deposits declined 20 basis points from the prior quarter to 0.51%, with period-end cost of deposits at 0.39% * Total deferrals/forbearances declined to $282.5 million at September 30, 2020 from $604.2 million * Allowance for credit losses remained strong at 1.66% of total loans * Common Equity Tier 1 capital at 11.64%

Jared Wolff, President & CEO of Banc of California, commented, "Our third quarter results reflect the growing earnings momentum that we have been building following nearly 18 months of restructuring our operations. Our strong execution on the strategies we have identified to enhance the value of our franchise continued to result in positive trends on many fronts including a further reduction in our cost of deposits, a stable net interest margin, and improved operating efficiencies. These efforts translated into a significant improvement in earnings and pre-tax pre-provision income."

"Our business development efforts continue to gain traction despite the impact of the COVID-19 pandemic. We are consistently adding new commercial banking relationships, which resulted in our fifth consecutive quarter of demand deposit account growth and further improvement in our mix of deposits. The commercial banking team we have built is also effectively bringing in new, high quality commercial loans to offset the planned run-off of our single-family residential portfolio. As a result, we saw an increase in total loan balances in the third quarter, while our mix of loans continued to shift more towards relationship-based business loans."

"We believe that we continue to have many levers to pull that will further improve our financial performance. While the ongoing pandemic creates a level of near-term uncertainty, we believe that over the longer-term, we are very well positioned to generate earning asset growth, expand our net interest margin, realize additional operating leverage, and deliver a higher level of earnings and returns for our shareholders as the economy strengthens," said Mr. Wolff.

Lynn Hopkins, Chief Financial Officer of Banc of California, said, "We are very pleased with our third quarter performance and results which are a reflection of executing on our strategic vision. Our net interest margin remained unchanged at 3.09% as we successfully lowered our average cost of funds 21 basis points which helped absorb the decrease in our average earning assets yield. Our period end total deposits costs also fell 20 basis points to 39 basis points. Our loan portfolio remains well-positioned as it is heavily weighted towards real estate loans with low loan-to-values and we saw lower levels of loans on deferment and forbearance. Our allowance for credit losses to total loans was 1.66% and is a reflection of the considerable uncertainty of the timing and magnitude of the impact of the pandemic. Nonetheless, we are confident in our ability to continue to execute on our initiatives and optimize our capital in ways that will be accretive to earnings and create further value for our shareholders."

Income Statement Highlights

Three Months Ended Nine Months Ended

September June 30, March 31, December September September September 30, 2020 2020 31, 30, 30, 30, 2020 2019 2019 2020 2019

($ in thousands)

Totalinterest and $ 69,666 $ 72,697 $ 74,714 $ 83,702 $ 92,657 $ 217,077 $ 307,409 dividendincome

Totalinterest 13,811 17,382 22,853 27,042 33,742 54,046 115,906 expense

Net interest 55,855 55,315 51,861 56,660 58,915 163,031 191,503 income

Totalnoninterest 3,954 5,528 2,061 4,930 3,181 11,543 7,186 income

Total revenue 59,809 60,843 53,922 61,590 62,096 174,574 198,689

Totalnoninterest 40,394 72,770 46,919 47,483 43,240 160,083 148,989 expense

Pre-tax /pre-provision 19,415 (11,927 ) 7,003 14,107 18,856 14,491 49,700 income (loss)

Provision for(reversal of) 1,141 11,826 15,761 (2,976 ) 38,607 28,728 38,805 credit losses

Income taxexpense 2,361 (5,304 ) (2,165 ) 2,811 (5,619 ) (5,108 ) 1,408 (benefit)

Net income $ 15,913 $ (18,449 ) $ (6,593 ) $ 14,272 $ (14,132 ) $ (9,129 ) $ 9,487 (loss)



Net income(loss)available to $ 12,084 $ (21,936 ) $ (9,694 ) $ 10,415 $ (22,722 ) $ (19,265 ) $ (8,015 )commonstockholders^(1)

(1)

Balance represents the net income (loss) available to common stockholders after subtracting preferred stock dividends, income allocated to participating securities, participating securities dividends and impact of preferred stock redemption from net income (loss). Refer to the Statement of Operations for additional detail on these amounts.

Net interest income

Q3-2020 vs Q2-2020

Net interest income increased $0.5 million to $55.9 million for the third quarter due mostly to lower funding costs, offset by lower yields on interest-earning assets. Compared to the prior quarter, average interest-earning assets declined by $14.4 million to $7.18 billion, due to lower average loans of $174.0 million, offset by higher average securities of $126.8 million and other interest-earning assets of $32.8 million. During the third quarter, average deposits increased $164.3 million, consisting of higher average interest-bearing deposits of $156.6 million and higher average noninterest-bearing deposits of $7.7 million. Average FHLB advances decreased $211.0 million due to current quarter deposit growth and the impact of the early payoff of $100.0 million in FHLB advances at the end of the second quarter.

The net interest margin remained unchanged compared to the prior quarter at 3.09% for the third quarter as the average cost of funds decreased 21 basis points, offset by a 20 basis point decrease in the average earning-assets yield. The yield on average interest-earning assets decreased to 3.86% for the third quarter from 4.06% for the second quarter due to lower yields on most interest-earning asset classes and the change in the mix of interest-earning assets. The average yield on loans declined only 2 basis points to 4.46% during the third quarter as higher prepayment penalty fees and PPP fee income helped to offset the decreases in loan yields due to the mix of loans and lower interest rate environment. The third quarter includes $2.1 million of PPP fee income, which increased the net interest margin by 11 basis points, compared to $1.7 million in the second quarter which increased the net interest margin by 10 basis points. The average yield on securities decreased 69 basis points to 2.26% due mostly to a 106 basis point decrease in the collateralized loan obligations (CLOs) yield to 2.16% for the third quarter from 3.22% for the second quarter as these securities reprice quarterly.

The average cost of funds decreased 21 basis points to 0.82% for the third quarter from 1.03% for the second quarter. This decrease was driven by the lower average cost of interest-bearing liabilities and improved funding mix, including higher average noninterest-bearing deposits during the third quarter. We continue to reduce our reliance on high cost transaction accounts, non-brokered certificates of deposits, and wholesale funds as we continue to execute on our relationship-focused business banking strategy. The average cost of interest-bearing liabilities decreased 27 basis points to 1.02% for the third quarter from 1.29% for the second quarter due to actively managing down the cost of interest-bearing deposits into the current rate environment. The average cost of interest-bearing deposits declined 27 basis points to 0.66% for the third quarter from 0.93% for the prior quarter. Additionally, average noninterest-bearing deposits increased by $7.7 million and represented 22.9% of total average deposits in the third quarter compared to 23.4% of total average deposits for the second quarter. Our total cost of average deposits decreased 20 basis points to 0.51% for the third quarter. The spot rate of total deposits at the end of the third quarter of 2020 was 0.39%.

YTD 2020 vs YTD 2019

Net interest income for the nine months ended September 30, 2020 decreased $28.5 million to $163.0 million from $191.5 million for the same 2019 period. Net interest income was impacted by the overall decrease in market interest rates between periods and lower average interest-earning assets, as a result of targeted sales of securities and loans during 2019, in line with our strategy of remixing the loan portfolio towards relationship-based lending, offset by a higher net interest margin. For the nine months ended September 30, 2020, average interest-earning assets declined $1.87 billion to $7.14 billion, and the net interest margin increased 21 basis points to 3.05% for the nine months ended September 30, 2020 compared to 2.84% for the same 2019 period.

Our average yield on interest-earning assets decreased 50 basis points to 4.06% for the nine months ended September 30, 2020 as compared to 4.56% during the same 2019 period. The decrease in yield was primarily attributable to lower average yields on the loan and securities portfolios. Our average yield on loans was 4.50% for the nine months ended September 30, 2020, compared to 4.77% for the same 2019 period, primarily due to lower market interest rates and a lower percentage of higher-yielding commercial and industrial balances in the portfolio. Our average yield on securities decreased 109 basis points due mostly to CLOs repricing into the lower rate environment and a decrease in average CLO balances.

The average cost of funds decreased to 1.08% for the nine months ended September 30, 2020 from 1.83% for the same 2019 period. This decrease was driven by the lower average cost of interest-bearing liabilities and the improved funding mix, including higher average noninterest-bearing deposits. The 74 basis point decline in the average cost of interest-bearing liabilities to 1.34% for the nine months ended September 30, 2020 from 2.08% for the same 2019 period was driven by the lower average cost of interest-bearing deposits as they reprice into the lower interest rate environment and the lower average cost of FHLB term advances resulting from maturities and early repayments during the year and as a result of the refinancing of advances during the second quarter of 2020. The average cost of interest-bearing deposits declined 89 basis points to 0.98% from the prior period due to actively managing down deposit rates in response to the interest rate cuts by the Federal Reserve in March of 2020 and a lower reliance on brokered deposits. Additionally, average noninterest-bearing deposits increased by $245.8 million when compared to the same 2019 period. Our cost of average total deposits decreased 83 basis points to 0.76% for the nine months ended September 30, 2020 when compared to the same 2019 period.

Provision for credit losses

Q3-2020 vs Q2-2020

The provision for credit losses totaled $1.1 million for the third quarter, compared to $11.8 million for the second quarter. The third quarter provision for credit losses is comprised of $0.9 million in general reserves and $1.2 million related to specific reserves, offset by provision release of $1.0 million related to unfunded commitments. The general provision is due to changes in key macro-economic forecast variables, such as unemployment and gross domestic product, improved credit quality metrics, and higher period end loan balances of $50.3 million.

YTD 2020 vs YTD 2019

During the nine months ended September 30, 2020, the provision for credit losses totaled $28.7 million under the CECL model, compared to $38.8 million under the incurred loss model during 2019. The lower provision for credit losses was primarily the result of lower net charge-offs and lower period end loan balances of $705.3 million, offset by increases from using the new CECL model, the estimated future impact of the health crisis on our loans, and higher specific reserves.

Noninterest income

Q3-2020 vs Q2-2020

Noninterest income decreased $1.6 million, or 28%, to $4.0 million for the third quarter due mostly to lower gains on sale of securities. The second quarter of 2020 included a $2.0 million gain on the sale of $20.7 million in securities; there were no sales of securities in the third quarter. The third quarter included a $0.3 million gain on sale of $17.8 million in single-family residential mortgage loans held for sale; there were no sales of loans during second quarter of 2020.

YTD 2020 vs YTD 2019

Noninterest income for the nine months ended September 30, 2020 increased $4.4 million, or 60.6%, to $11.5 million compared to the prior year. The increase was primarily attributable to (i) higher net gain on sale of investment securities of $6.9 million, and (ii) higher other income of $7.4 million as the third quarter of 2019 included a previously reported $9.6 million realized loss from interest rate swap agreements entered into in order to offset variability in the fair value of the Freddie Mac securitization completed during the third quarter of 2019. These increases were partially offset by (i) lower net gain on sale of loans of $8.4 million as the third quarter of 2019 included a $9.0 million realized gain from the aforementioned securitization, (ii) a $1.6 million loss due to decreases in the fair value of loans held for sale, and (iii) lower customer fees of $0.7 million.

Noninterest expense

Q3-2020 vs Q2-2020

Noninterest expense decreased $32.4 million to $40.4 million for the third quarter compared to the prior quarter. The decrease was primarily due to the second quarter of 2020 including a $26.8 million charge related to the termination of the LAFC naming rights agreements and a $2.5 million debt extinguishment fee, included in all other expenses, associated with the early repayment of certain FHLB term advances. There were no similar expenses during the third quarter. In addition, noninterest expense decreased during the quarter due to (i) lower salaries and benefits expense of $1.0 million due mostly to lower incentive accruals, (ii) a larger gain on investments in alternative energy partnerships of $1.3 million, and (iii) lower advertising costs of $0.9 million due to the termination of the LAFC naming rights agreements. These decreases were partially offset by higher professional fees of $0.6 million. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $2.1 million to $40.7 million for the third quarter compared to $42.8 million for the prior quarter.

YTD 2020 vs YTD 2019

Noninterest expense for the nine months ended September 30, 2020 increased $11.1 million, or 7.4%, to $160.1 million compared to the prior year. The increase was primarily due to: (i) the aforementioned $26.8 million one-time charge related to the termination of our LAFC naming rights agreements, (ii) a $2.5 million debt extinguishment fee, included in all other expenses, associated with the early repayment of certain FHLB term advances, and (iii) higher professional fees of $6.1 million, due to overall reductions in recoveries of $18.4 million related to indemnified legal fees for resolved legal proceedings and various other litigations. These increases were offset by: (i) $4.0 million in lower consulting fees for bank projects and initiatives, (ii) lower salaries and benefits expense of $10.9 million resulting from lower headcount, (iii) lower advertising costs of $3.1 million due to the termination of our LAFC naming rights agreements and reductions in overall events and media spending, and (iv) lower regulatory assessments of $3.9 million due to changes in our asset size and an FDIC assessment credit.

Income taxes

Q3-2020 vs Q2-2020

Income tax expense totaled $2.4 million for the third quarter resulting in an effective tax rate of 12.9% compared to a $5.3 million benefit for the second quarter resulting in an effective tax rate of 22.3%. Based on our actual and projected level of earnings and permanent tax differences for 2020, our estimated effective tax rate for the full year was refined this quarter to a negative tax rate ranging from approximately 10% to 15%. As a result of the change, we expect our fourth quarter effective tax rate to be approximately 25%.

YTD 2020 vs YTD 2019

Income tax benefit totaled $5.1 million for the nine months ended September 30, 2020, representing an effective tax rate of 35.9%, compared to a $1.4 million expense and an effective tax rate of 12.9% for nine months ended September 30, 2019.

Balance Sheet

At September 30, 2020, total assets were $7.74 billion, which represented a linked-quarter decrease of $32.0 million. The following table shows selected balance sheet line items as of the dates indicated.

Balance represents the net income (loss) available to common stockholders after subtracting preferred stock dividends, income allocated to(1) participating securities, participating securities dividends and impact of preferred stock redemption from net income (loss). Refer to the Statement of Operations for additional detail on these amounts.

Net interest income

Q3-2020 vs Q2-2020

Net interest income increased $0.5 million to $55.9 million for the third quarter due mostly to lower funding costs, offset by lower yields on interest-earning assets. Compared to the prior quarter, average interest-earning assets declined by $14.4 million to $7.18 billion, due to lower average loans of $174.0 million, offset by higher average securities of $126.8 million and other interest-earning assets of $32.8 million. During the third quarter, average deposits increased $164.3 million, consisting of higher average interest-bearing deposits of $156.6 million and higher average noninterest-bearing deposits of $7.7 million. Average FHLB advances decreased $211.0 million due to current quarter deposit growth and the impact of the early payoff of $100.0 million in FHLB advances at the end of the second quarter.

The net interest margin remained unchanged compared to the prior quarter at 3.09% for the third quarter as the average cost of funds decreased 21 basis points, offset by a 20 basis point decrease in the average earning-assets yield. The yield on average interest-earning assets decreased to 3.86% for the third quarter from 4.06% for the second quarter due to lower yields on most interest-earning asset classes and the change in the mix of interest-earning assets. The average yield on loans declined only 2 basis points to 4.46% during the third quarter as higher prepayment penalty fees and PPP fee income helped to offset the decreases in loan yields due to the mix of loans and lower interest rate environment. The third quarter includes $2.1 million of PPP fee income, which increased the net interest margin by 11 basis points, compared to $1.7 million in the second quarter which increased the net interest margin by 10 basis points. The average yield on securities decreased 69 basis points to 2.26% due mostly to a 106 basis point decrease in the collateralized loan obligations (CLOs) yield to 2.16% for the third quarter from 3.22% for the second quarter as these securities reprice quarterly.

The average cost of funds decreased 21 basis points to 0.82% for the third quarter from 1.03% for the second quarter. This decrease was driven by the lower average cost of interest-bearing liabilities and improved funding mix, including higher average noninterest-bearing deposits during the third quarter. We continue to reduce our reliance on high cost transaction accounts, non-brokered certificates of deposits, and wholesale funds as we continue to execute on our relationship-focused business banking strategy. The average cost of interest-bearing liabilities decreased 27 basis points to 1.02% for the third quarter from 1.29% for the second quarter due to actively managing down the cost of interest-bearing deposits into the current rate environment. The average cost of interest-bearing deposits declined 27 basis points to 0.66% for the third quarter from 0.93% for the prior quarter. Additionally, average noninterest-bearing deposits increased by $7.7 million and represented 22.9% of total average deposits in the third quarter compared to 23.4% of total average deposits for the second quarter. Our total cost of average deposits decreased 20 basis points to 0.51% for the third quarter. The spot rate of total deposits at the end of the third quarter of 2020 was 0.39%.

YTD 2020 vs YTD 2019

Net interest income for the nine months ended September 30, 2020 decreased $28.5 million to $163.0 million from $191.5 million for the same 2019 period. Net interest income was impacted by the overall decrease in market interest rates between periods and lower average interest-earning assets, as a result of targeted sales of securities and loans during 2019, in line with our strategy of remixing the loan portfolio towards relationship-based lending, offset by a higher net interest margin. For the nine months ended September 30, 2020, average interest-earning assets declined $1.87 billion to $7.14 billion, and the net interest margin increased 21 basis points to 3.05% for the nine months ended September 30, 2020 compared to 2.84% for the same 2019 period.

Our average yield on interest-earning assets decreased 50 basis points to 4.06% for the nine months ended September 30, 2020 as compared to 4.56% during the same 2019 period. The decrease in yield was primarily attributable to lower average yields on the loan and securities portfolios. Our average yield on loans was 4.50% for the nine months ended September 30, 2020, compared to 4.77% for the same 2019 period, primarily due to lower market interest rates and a lower percentage of higher-yielding commercial and industrial balances in the portfolio. Our average yield on securities decreased 109 basis points due mostly to CLOs repricing into the lower rate environment and a decrease in average CLO balances.

The average cost of funds decreased to 1.08% for the nine months ended September 30, 2020 from 1.83% for the same 2019 period. This decrease was driven by the lower average cost of interest-bearing liabilities and the improved funding mix, including higher average noninterest-bearing deposits. The 74 basis point decline in the average cost of interest-bearing liabilities to 1.34% for the nine months ended September 30, 2020 from 2.08% for the same 2019 period was driven by the lower average cost of interest-bearing deposits as they reprice into the lower interest rate environment and the lower average cost of FHLB term advances resulting from maturities and early repayments during the year and as a result of the refinancing of advances during the second quarter of 2020. The average cost of interest-bearing deposits declined 89 basis points to 0.98% from the prior period due to actively managing down deposit rates in response to the interest rate cuts by the Federal Reserve in March of 2020 and a lower reliance on brokered deposits. Additionally, average noninterest-bearing deposits increased by $245.8 million when compared to the same 2019 period. Our cost of average total deposits decreased 83 basis points to 0.76% for the nine months ended September 30, 2020 when compared to the same 2019 period.

Provision for credit losses

Q3-2020 vs Q2-2020

The provision for credit losses totaled $1.1 million for the third quarter, compared to $11.8 million for the second quarter. The third quarter provision for credit losses is comprised of $0.9 million in general reserves and $1.2 million related to specific reserves, offset by provision release of $1.0 million related to unfunded commitments. The general provision is due to changes in key macro-economic forecast variables, such as unemployment and gross domestic product, improved credit quality metrics, and higher period end loan balances of $50.3 million.

YTD 2020 vs YTD 2019

During the nine months ended September 30, 2020, the provision for credit losses totaled $28.7 million under the CECL model, compared to $38.8 million under the incurred loss model during 2019. The lower provision for credit losses was primarily the result of lower net charge-offs and lower period end loan balances of $705.3 million, offset by increases from using the new CECL model, the estimated future impact of the health crisis on our loans, and higher specific reserves.

Noninterest income

Q3-2020 vs Q2-2020

Noninterest income decreased $1.6 million, or 28%, to $4.0 million for the third quarter due mostly to lower gains on sale of securities. The second quarter of 2020 included a $2.0 million gain on the sale of $20.7 million in securities; there were no sales of securities in the third quarter. The third quarter included a $0.3 million gain on sale of $17.8 million in single-family residential mortgage loans held for sale; there were no sales of loans during second quarter of 2020.

YTD 2020 vs YTD 2019

Noninterest income for the nine months ended September 30, 2020 increased $4.4 million, or 60.6%, to $11.5 million compared to the prior year. The increase was primarily attributable to (i) higher net gain on sale of investment securities of $6.9 million, and (ii) higher other income of $7.4 million as the third quarter of 2019 included a previously reported $9.6 million realized loss from interest rate swap agreements entered into in order to offset variability in the fair value of the Freddie Mac securitization completed during the third quarter of 2019. These increases were partially offset by (i) lower net gain on sale of loans of $8.4 million as the third quarter of 2019 included a $9.0 million realized gain from the aforementioned securitization, (ii) a $1.6 million loss due to decreases in the fair value of loans held for sale, and (iii) lower customer fees of $0.7 million.

Noninterest expense

Q3-2020 vs Q2-2020

Noninterest expense decreased $32.4 million to $40.4 million for the third quarter compared to the prior quarter. The decrease was primarily due to the second quarter of 2020 including a $26.8 million charge related to the termination of the LAFC naming rights agreements and a $2.5 million debt extinguishment fee, included in all other expenses, associated with the early repayment of certain FHLB term advances. There were no similar expenses during the third quarter. In addition, noninterest expense decreased during the quarter due to (i) lower salaries and benefits expense of $1.0 million due mostly to lower incentive accruals, (ii) a larger gain on investments in alternative energy partnerships of $1.3 million, and (iii) lower advertising costs of $0.9 million due to the termination of the LAFC naming rights agreements. These decreases were partially offset by higher professional fees of $0.6 million. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $2.1 million to $40.7 million for the third quarter compared to $42.8 million for the prior quarter.

YTD 2020 vs YTD 2019

Noninterest expense for the nine months ended September 30, 2020 increased $11.1 million, or 7.4%, to $160.1 million compared to the prior year. The increase was primarily due to: (i) the aforementioned $26.8 million one-time charge related to the termination of our LAFC naming rights agreements, (ii) a $2.5 million debt extinguishment fee, included in all other expenses, associated with the early repayment of certain FHLB term advances, and (iii) higher professional fees of $6.1 million, due to overall reductions in recoveries of $18.4 million related to indemnified legal fees for resolved legal proceedings and various other litigations. These increases were offset by: (i) $4.0 million in lower consulting fees for bank projects and initiatives, (ii) lower salaries and benefits expense of $10.9 million resulting from lower headcount, (iii) lower advertising costs of $3.1 million due to the termination of our LAFC naming rights agreements and reductions in overall events and media spending, and (iv) lower regulatory assessments of $3.9 million due to changes in our asset size and an FDIC assessment credit.

Income taxes

Q3-2020 vs Q2-2020

Income tax expense totaled $2.4 million for the third quarter resulting in an effective tax rate of 12.9% compared to a $5.3 million benefit for the second quarter resulting in an effective tax rate of 22.3%. Based on our actual and projected level of earnings and permanent tax differences for 2020, our estimated effective tax rate for the full year was refined this quarter to a negative tax rate ranging from approximately 10% to 15%. As a result of the change, we expect our fourth quarter effective tax rate to be approximately 25%.

YTD 2020 vs YTD 2019

Income tax benefit totaled $5.1 million for the nine months ended September 30, 2020, representing an effective tax rate of 35.9%, compared to a $1.4 million expense and an effective tax rate of 12.9% for nine months ended September 30, 2019.

Balance Sheet

At September 30, 2020, total assets were $7.74 billion, which represented a linked-quarter decrease of $32.0 million. The following table shows selected balance sheet line items as of the dates indicated.

As of and for the Three Months Ended Amount Change

September 30, June 30, March 31, December 31, September 30, Q3-20 vs. Q3-20 vs. 2020 2020 2020 2019 2019 Q2-20 Q3-19



($ in thousands)

Total assets $ 7,738,106 $ 7,770,138 $ 7,662,607 $ 7,828,410 $ 8,625,337 $ (32,032 ) $ (887,231 )

Securities $ 1,245,867 $ 1,176,029 $ 969,427 $ 912,580 $ 775,662 $ 69,838 $ 470,205 available-for-sale

Loans $ 5,678,002 $ 5,627,696 $ 5,667,464 $ 5,951,885 $ 6,383,259 $ 50,306 $ (705,257 )held-for-investment

Loans held-for-sale $ 1,849 $ 19,768 $ 20,234 $ 22,642 $ 23,936 $ (17,919 ) $ (22,087 )



Demand deposits $ 3,495,859 $ 3,238,202 $ 2,828,470 $ 2,622,398 $ 2,602,011 $ 257,657 $ 893,848

Other core deposits 2,446,593 2,619,502 2,515,703 2,794,769 3,074,936 (172,909 ) (628,343 )

Brokered deposits 89,814 179,761 218,665 10,000 93,111 (89,947 ) (3,297 )

Total Deposits $ 6,032,266 $ 6,037,465 $ 5,562,838 $ 5,427,167 $ 5,770,058 $ (5,199 ) $ 262,208

As percentage of total deposits

Demand deposits 57.95 % 53.64 % 50.85 % 48.32 % 45.10 % 4.31 % 12.85 %

Other core deposits 40.56 % 43.39 % 45.22 % 51.50 % 53.29 % (2.83 ) (12.73 ) % %

Brokered deposits 1.49 % 2.98 % 3.93 % 0.18 % 1.61 % (1.49 ) (0.12 ) % %



Average loan yield 4.46 % 4.48 % 4.56 % 4.71 % 4.75 % (0.02 ) (0.29 ) % %

Average cost of ) )interest-bearing 0.66 % 0.93 % 1.41 % 1.57 % 1.78 % (0.27 % (1.12 %deposits

Average cost of 0.51 % 0.71 % 1.11 % 1.27 % 1.48 % (0.20 ) (0.97 )total deposits % %

Investments

Securities available-for-sale increased $69.8 million to $1.25 billion at September 30, 2020 due to purchases of $48.5 million and lower unrealized net losses of $23.9 million. The decrease in the unrealized net losses was due mostly to credit spreads tightening during the quarter for a positive change on the pricing of the CLOs and corporate debt securities. Securities purchased included municipal bonds, government agency securities and floating rate SBA pool securities. There were no sales of securities during the third quarter. As of September 30, 2020, our securities portfolio included $685.9 million of CLOs, $325.8 million of agency securities, $69.2 million of municipal securities, $146.9 million of corporate debt securities, and $17.8 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 55.1% of the total securities portfolio and the carrying value included an unrealized net loss of $17.7 million at September 30, 2020 compared to an unrealized net loss of $35.3 million at June 30, 2020.

Loans

The following table sets forth the composition, by loan category, of our loan portfolio as of the dates indicated:

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

($ in thousands)

Composition ofheld-for-investment loans

Commercial real $ 826,683 $ 822,694 $ 810,024 $ 818,817 $ 891,029 estate

Multifamily 1,476,803 1,434,071 1,466,083 1,494,528 1,563,757

Construction 197,629 212,979 227,947 231,350 228,561

Commercial and 1,586,824 1,436,990 1,578,223 1,691,270 1,789,478 industrial

SBA 320,573 310,784 70,583 70,981 75,359

Total commercial 4,408,512 4,217,518 4,152,860 4,306,946 4,548,184 loans

Single-familyresidential 1,234,479 1,370,785 1,467,375 1,590,774 1,775,953 mortgage

Other consumer 35,011 39,393 47,229 54,165 59,122

Total consumer 1,269,490 1,410,178 1,514,604 1,644,939 1,835,075 loans

Total gross loans $ 5,678,002 $ 5,627,696 $ 5,667,464 $ 5,951,885 $ 6,383,259

Compositionpercentage of held-for-investmentloans

Commercial real 14.6 % 14.6 % 14.3 % 13.8 % 14.0 %estate

Multifamily 26.0 % 25.5 % 25.9 % 25.1 % 24.5 %

Construction 3.5 % 3.8 % 4.0 % 3.9 % 3.6 %

Commercial and 28.0 % 25.5 % 27.9 % 28.4 % 28.0 %industrial

SBA 5.6 % 5.5 % 1.2 % 1.2 % 1.2 %

Total commercial 77.7 % 74.9 % 73.3 % 72.4 % 71.3 %loans

Single-familyresidential 21.7 % 24.4 % 25.9 % 26.7 % 27.8 %mortgage

Other consumer 0.6 % 0.7 % 0.8 % 0.9 % 0.9 %

Total consumer 22.3 % 25.1 % 26.7 % 27.6 % 28.7 %loans

Total gross loans 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

Held-for-investment loans increased $50.3 million to $5.68 billion from the prior quarter, resulting from higher commercial and industrial (C&I) loans of $149.8 million due, in part, to increased utilization of credit facilities, and higher multifamily loans of $42.7 million. These increases were offset partially by lower single-family residential mortgage loans of $136.3 million and construction loans of $15.4 million. The decline in single-family residential is attributed to payoffs as the loans refinance away in the lower rate environment. The decline in construction loans is attributed to general fluctuations in volume and certain payoffs. At September 30, 2020, SBA loans included $255.8 million of PPP loans, net of fees.

We continue to focus the real estate loan portfolio toward relationship-based multifamily, bridge, light infill construction, and commercial real estate loans. Currently, loans secured by residential real estate (single-family, multifamily, single-family construction, and warehouse credit facilities) represent approximately 67% of our total loans outstanding.

The C&I portfolio has limited exposure to certain business sectors undergoing severe stress. The C&I industry concentrations in dollars and as a percentage of total outstanding C&I loan balances are summarized below:

September 30, 2020

Amount % of Portfolio

($ in thousands)

C&I Portfolio by Industry

Finance and insurance (includes Warehouse $ 932,887 59 %lending)

Real estate and rental leasing 204,182 13 %

Gas stations 70,630 4 %

Manufacturing 50,747 3 %

Healthcare 67,789 4 %

Wholesale trade 40,232 3 %

Other retail trade 37,157 2 %

Television/motion pictures 31,310 2 %

Food services 29,835 2 %

Professional services 13,878 1 %

Transportation 5,480 - %

Accommodations 1,473 - %

All other 101,224 6 %

Total $ 1,586,824 100 %

Deposits

The following table sets forth the composition of our deposits at the dates indicated.

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

($ in thousands)

Composition of deposits

Noninterest-bearing $ 1,450,744 $ 1,391,504 $ 1,256,081 $ 1,088,516 $ 1,107,442 checking

Interest-bearing 2,045,115 1,846,698 1,572,389 1,533,882 1,503,208 checking

Money market 689,769 765,854 575,820 715,479 695,530

Savings 946,293 939,018 877,947 885,246 1,042,162

Non-brokeredcertificates of 820,531 924,630 1,071,936 1,204,044 1,367,284 deposit

Brokeredcertificates of 79,814 169,761 208,665 - 54,432 deposit

Total deposits $ 6,032,266 $ 6,037,465 $ 5,562,838 $ 5,427,167 $ 5,770,058

Compositionpercentage of deposits

Noninterest-bearing 24.1 % 23.0 % 22.6 % 20.1 % 19.2 %checking

Interest-bearing 33.9 % 30.6 % 28.3 % 28.2 % 26.1 %checking

Money market 11.4 % 12.7 % 10.3 % 13.2 % 12.0 %

Savings 15.7 % 15.6 % 15.8 % 16.3 % 18.1 %

Non-brokeredcertificates of 13.6 % 15.3 % 19.3 % 22.2 % 23.7 %deposit

Brokeredcertificates of 1.3 % 2.8 % 3.7 % - % 0.9 %deposit

Total deposits 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

Total deposits decreased $5.2 million during the third quarter of 2020 to $6.03 billion due to lower brokered certificates of deposit of $89.9 million, non-brokered certificates of deposit of $104.1 million, and money market balances of $76.1 million, offset by higher noninterest-bearing checking balances of $59.2 million, interest-bearing checking of $198.4 million, and savings balances of $7.3 million. We continue to focus on growing relationship-based deposits, strategically augmented by wholesale funding, as we proactively reduce our deposit costs in response to the interest rate cuts by the Federal Reserve in March of 2020. Noninterest-bearing deposits totaled $1.45 billion and represented 24.1% of total deposits at September 30, 2020 compared to $1.39 billion, or 23.0% of total deposits, at June 30, 2020 and $1.11 billion, or 19.2% of total deposits, one year ago.

Debt

Advances from the FHLB decreased $57.7 million, or 9%, to $559.5 million, as of September 30, 2020, due to maturities of $58.0 million. At the end of the third quarter, FHLB advances included no overnight borrowings, $105.0 million maturing within three months, and $461.0 million maturing beyond three months with a weighted average life of 4.7 years and weighted average interest rate of 2.51%.

Equity

At September 30, 2020, total stockholders' equity increased by $27.3 million to $874.3 million and tangible common equity increased by $27.8 million to $649.3 million on a linked-quarter basis. The increase in total stockholders' equity for the three months ended September 30, 2020, was a result of net income of $15.9 million and lower net accumulated other comprehensive loss of $16.8 million, offset by dividends to common and preferred stockholders of $6.6 million, and redemption of preferred stock of $0.2 million. Tangible book value per share increased to $12.92 as of September 30, 2020 from $12.37 at June 30, 2020.

Capital ratios remain strong with total risk-based capital at 16.24% and a tier 1 leverage ratio of 10.83%. The following table sets forth our regulatory capital ratios at September 30, 2020 and the previous four quarters. The interim capital relief related to the adoption of CECL increased the Bank's leverage ratio approximately 12 basis points at September 30, 2020.

September June March December September 30, 30, 31, 31, 30, 2020 2020 2020 2019 2019

Capital Ratios^(1)

Banc of California, Inc.

Total risk-based capital 16.24 % 16.35 % 16.16 % 15.90 % 14.37 %ratio

Tier 1 risk-based 14.98 % 15.10 % 14.91 % 14.83 % 13.32 %capital ratio

Common equity tier 1 11.64 % 11.68 % 11.58 % 11.56 % 10.34 %capital ratio

Tier 1 leverage ratio 10.83 % 10.56 % 11.20 % 10.89 % 9.84 %

Banc of California, NA

Total risk-based capital 18.20 % 18.17 % 18.21 % 17.46 % 15.65 %ratio

Tier 1 risk-based 16.94 % 16.92 % 16.96 % 16.39 % 14.60 %capital ratio

Common equity tier 1 16.94 % 16.92 % 16.96 % 16.39 % 14.60 %capital ratio

Tier 1 leverage ratio 12.24 % 11.84 % 12.67 % 12.02 % 10.75 %

(1)

September 30, 2020 capital ratios are preliminary.

Credit Quality

(1) September 30, 2020 capital ratios are preliminary.

Credit Quality

September June 30, March 31, December September 30, 2020 2020 31, 30, 2020 2019 2019

Asset qualityinformation and ($ in thousands)ratios

Delinquent loans held-for-investment

30 to 89 days $ 51,229 $ 49,810 $ 56,338 $ 32,873 $ 39,122 delinquent

90+ days delinquent 31,809 45,384 28,632 24,734 17,220

Total delinquent $ 83,038 $ 95,194 $ 84,970 $ 57,607 $ 56,342 loans

Total delinquentloans to total 1.46 % 1.69 % 1.50 % 0.97 % 0.88 %loans

Non-performingassets, excluding loans held-for-sale

Non-performing $ 66,337 $ 72,703 $ 56,471 $ 43,354 $ 45,169 loans

90+ days delinquentand still accruing 547 - - - - loans

Other real estate - - - - - owned

Non-performing $ 66,884 $ 72,703 $ 56,471 $ 43,354 $ 45,169 assets

ALL tonon-performing 135.95 % 124.30 % 138.55 % 132.97 % 139.31 %loans

Non-performingloans to total 1.18 % 1.29 % 1.00 % 0.73 % 0.71 %loansheld-for-investment

Non-performingassets to total 0.86 % 0.94 % 0.74 % 0.55 % 0.52 %assets

Troubled debtrestructurings (TDRs)

Performing TDRs $ 5,408 $ 5,597 $ 6,100 $ 6,620 $ 6,800

Non-performing TDRs 20,002 20,275 20,852 21,837 14,605

Total TDRs $ 25,410 $ 25,872 $ 26,952 $ 28,457 $ 21,405

Total delinquent loans decreased $12.2 million in the third quarter to $83.0 million at September 30, 2020, due to $30.0 million returning to current status and $0.2 million of principal payments or payoffs, offset by $18.0 million of additions. Delinquent loans included primarily legacy single-family residential loans, which accounted for 86% of the balance at quarter end and represented an increase of $0.8 million quarter over quarter. Excluding delinquent single-family residential loans, delinquent loans totaled $12.0 million, or 0.27% of total loans at September 30, 2020.

Non-performing loans decreased $5.8 million to $66.9 million as of September 30, 2020, of which $31.5 million, or 47% relates to loans in a current payment status. The third quarter decrease was due primarily to $10.2 million in cured loans and payoffs, offset by $4.4 million of loans placed on nonaccrual status. The quarter-end balance includes three large loan relationships totaling $34.9 million, or 52% of total nonperforming loans, which consist of one $16.1 million legacy shared national credit, a $9.1 million single-family mortgage residential loan with a loan-to-value ratio of 58%, and a $9.6 million legacy relationship well-secured by commercial real estate and single-family residential properties with an average loan-to-value ratio of 51%. Aside from those three loan relationships, non-performing single-family residential loans totaled $17.7 million and the remaining non-performing loans totaled $14.3 million.

In light of the pandemic, during the second and third quarters we provided support to clients by granting loan deferments or forbearances. As of September 30, 2020 loans on deferment or forbearance status totaled $282.5 million as shown below:

September 30, 2020 June 30, 2020

% of % of Count Amount^(1) Loans Count Amount Loans in in Category Category

($ in thousands)

Single-familyresidential 123 $ 137,510 11 % 142 $ 163,815 12 %mortgage

All other 35 145,036 3 % 156 440,420 10 %loans

Total 158 $ 282,546 5 % 298 $ 604,235 11 %

(1)

Loans in the process of deferment or forbearance are not reported as delinquent.

Of the balances as of September 30, 2020, $98.1 million of all other loans are in their second deferment. Further, as of September 30, 2020, 18 commercial loans totaling $45.3 million were under review and pending approval for a second deferral. We continue to actively monitor and manage all lending relationships in a manner that supports our clients and protects the Bank.

Allowance for Credit Losses

(1) Loans in the process of deferment or forbearance are not reported as delinquent.

Of the balances as of September 30, 2020, $98.1 million of all other loans are in their second deferment. Further, as of September 30, 2020, 18 commercial loans totaling $45.3 million were under review and pending approval for a second deferral. We continue to actively monitor and manage all lending relationships in a manner that supports our clients and protects the Bank.

Allowance for Credit Losses

Three Months Ended

September June 30, March 31, December September 30, 2020 2020 31, 30, 2020 2019 2019

($ in thousands)

Allowance for loan losses (ALL)

Balance at $ 90,370 $ 78,243 $ 57,649 $ 62,927 $ 59,523 beginning of period

Adoption of ASU - - 7,609 - - 2016-13 ^(1)

Loans charged off (1,821 ) - (2,076 ) (2,706 ) (35,546 )

Recoveries 248 608 350 106 410

Net (charge-offs) (1,573 ) 608 (1,726 ) (2,600 ) (35,136 )recoveries

Provision for(reversal of) loan 2,130 11,519 14,711 (2,678 ) 38,540 losses

Balance at end of $ 90,927 $ 90,370 $ 78,243 $ 57,649 $ 62,927 period

Reserve forunfunded loan commitments

Balance at $ 4,195 $ 3,888 $ 4,064 $ 4,362 $ 4,295 beginning of period

Adoption of ASU - - (1,226 ) - - 2016-13 ^(1)

(Reversal of)provision for (989 ) 307 1,050 (298 ) 67 credit losses

Balance at end of 3,206 4,195 3,888 4,064 4,362 period

Allowance for $ 94,133 $ 94,565 $ 82,131 $ 61,713 $ 67,289 credit losses (ACL)



ALL to total loans 1.60 % 1.61 % 1.38 % 0.97 % 0.99 %

ACL to total loans 1.66 % 1.68 % 1.45 % 1.04 % 1.05 %

ACL to total loans, 1.74 % 1.76 % 1.45 % 1.04 % 1.05 %excluding PPP loans

Annualized net loancharge-offs )(recoveries) to 0.12 % (0.04 % 0.12 % 0.17 % 2.19 %average total loansheld-for-investment



Reserve for loss on repurchased loans

Balance at $ 5,567 $ 5,601 $ 6,201 $ 6,561 $ 2,478 beginning of period

Initial provisionfor loan 11 - - - 4,415 repurchases

Reversal ofprovision for loan (91 ) (34 ) (600 ) (360 ) (123 )repurchases

Utilization ofreserve for loan - - - - (209 )repurchases

Balance at end of $ 5,487 $ 5,567 $ 5,601 $ 6,201 $ 6,561 period

(1)

Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020. As a result of adopting ASU 2016-13, our methodology to compute our allowance for credit losses is based on a current expected credit loss methodology, rather than the previously applied incurred loss methodology.

The allowance for expected credit losses ("ACL"), which includes the reserve for unfunded loan commitments, totaled $94.1 million, or 1.66% of total loans, at September 30, 2020 compared to $94.6 million or 1.68% of total loans, at June 30, 2020. The $0.4 million decrease in the ACL was due to: (i) net charge-offs of $1.6 million and (ii) a negative provision for unfunded loan commitments of $1.0 million, offset by (iii) specific reserves of $1.2 million, and (iv) general reserves of $0.9 million due to the impact of higher loan balances, updated forecasts, and improved credit quality metrics. The ACL coverage of nonperforming loans was 141% at September 30, 2020 compared to 130% at June 30, 2020 and 142% at December 31, 2019.

Our ACL methodology and resulting provision continues to be impacted by the current economic uncertainty and volatility caused by the COVID-19 pandemic. The ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables ("MEVs") released by our model provider during September 2020. In contrast to the June 2020 forecasts, these September forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates and lower unemployment rates). Despite this, the Company-specific economic view recognizes that the foreseeable future is uncertain with respect to the search for a vaccine and effective treatments for COVID-19; the lack of clarity regarding the timing and amount of a potential government stimulus; the unknown impact of the COVID-19 pandemic on the economy and certain industry segments; and the unknown benefit from Federal Reserve and other government actions. Accordingly, the ACL level and resulting provision reflect these uncertainties. The ACL also incorporated qualitative factors to account for certain loan portfolio characteristics that are not taken into consideration by the third-party model including underlying strengths and weaknesses in the loan portfolio. As is the case with all estimates, the ACL is expected to be impacted in future periods by economic volatility, changing economic forecasts, underlying model assumptions, and asset quality metrics, all of which may be better than or worse than current estimates.

The Company will host a conference call to discuss its third quarter 2020 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, October 22, 2020. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 8723927. A live audio webcast will also be available and the webcast link will be posted on the Company's Investor Relations website at www.bancofcal.com/investor. The slide presentation for the call will also be available on the Company's Investor Relations website prior to the call. A replay of the call will be made available approximately one hour after the call has ended on the Company's Investor Relations website at www.bancofcal.com/investor or by dialing (877) 344-7529 and referencing event code 10145608.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with approximately $7.7 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the "Bank"). The Bank has 39 offices including 31 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission. In addition to those, statements about the potential effects of the COVID-19 pandemic on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Banc of California Inc. and its subsidiaries, their customers and third parties. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Represents the impact of adopting ASU 2016-13, Financial Instruments - Credit Losses on January 1, 2020. As a result of adopting ASU 2016-13, our(1) methodology to compute our allowance for credit losses is based on a current expected credit loss methodology, rather than the previously applied incurred loss methodology.

The allowance for expected credit losses ("ACL"), which includes the reserve for unfunded loan commitments, totaled $94.1 million, or 1.66% of total loans, at September 30, 2020 compared to $94.6 million or 1.68% of total loans, at June 30, 2020. The $0.4 million decrease in the ACL was due to: (i) net charge-offs of $1.6 million and (ii) a negative provision for unfunded loan commitments of $1.0 million, offset by (iii) specific reserves of $1.2 million, and (iv) general reserves of $0.9 million due to the impact of higher loan balances, updated forecasts, and improved credit quality metrics. The ACL coverage of nonperforming loans was 141% at September 30, 2020 compared to 130% at June 30, 2020 and 142% at December 31, 2019.

Our ACL methodology and resulting provision continues to be impacted by the current economic uncertainty and volatility caused by the COVID-19 pandemic. The ACL methodology uses a nationally recognized, third-party model that includes many assumptions based on historical and peer loss data, current loan portfolio risk profile including risk ratings, and economic forecasts including macroeconomic variables ("MEVs") released by our model provider during September 2020. In contrast to the June 2020 forecasts, these September forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates and lower unemployment rates). Despite this, the Company-specific economic view recognizes that the foreseeable future is uncertain with respect to the search for a vaccine and effective treatments for COVID-19; the lack of clarity regarding the timing and amount of a potential government stimulus; the unknown impact of the COVID-19 pandemic on the economy and certain industry segments; and the unknown benefit from Federal Reserve and other government actions. Accordingly, the ACL level and resulting provision reflect these uncertainties. The ACL also incorporated qualitative factors to account for certain loan portfolio characteristics that are not taken into consideration by the third-party model including underlying strengths and weaknesses in the loan portfolio. As is the case with all estimates, the ACL is expected to be impacted in future periods by economic volatility, changing economic forecasts, underlying model assumptions, and asset quality metrics, all of which may be better than or worse than current estimates.

The Company will host a conference call to discuss its third quarter 2020 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, October 22, 2020. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 8723927. A live audio webcast will also be available and the webcast link will be posted on the Company's Investor Relations website at www.bancofcal.com/investor. The slide presentation for the call will also be available on the Company's Investor Relations website prior to the call. A replay of the call will be made available approximately one hour after the call has ended on the Company's Investor Relations website at www.bancofcal.com/investor or by dialing (877) 344-7529 and referencing event code 10145608.

About Banc of California, Inc.

Banc of California, Inc. (NYSE: BANC) is a bank holding company with approximately $7.7 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the "Bank"). The Bank has 39 offices including 31 full-service branches located throughout Southern California. Through our dedicated professionals, we provide customized and innovative banking and lending solutions to businesses, entrepreneurs and individuals throughout California. We help to improve the communities where we live and work, by supporting organizations that provide financial literacy and job training, small business support and affordable housing. With a commitment to service and building enduring relationships, we provide a higher standard of banking. We look forward to helping you achieve your goals. For more information, please visit us at www.bancofcal.com.

Forward-Looking Statements

This press release includes forward-looking statements within the meaning of the "Safe-Harbor" provisions of the Private Securities Litigation Reform Act of 1995. These statements are necessarily subject to risk and uncertainty and actual results could differ materially from those anticipated due to various factors, including those set forth from time to time in the documents filed or furnished by Banc of California, Inc. with the Securities and Exchange Commission. In addition to those, statements about the potential effects of the COVID-19 pandemic on the business, financial results and condition of Banc of California, Inc. and its subsidiaries may constitute forward-looking statements and are subject to the risk that the actual effects may differ, possibly materially, from what is reflected in those forward-looking statements due to factors and future developments that are uncertain, unpredictable and in many cases beyond the control of Banc of California, Inc., including the scope and duration of the pandemic, actions taken by governmental authorities in response to the pandemic, and the direct and indirect impact of the pandemic on Banc of California Inc. and its subsidiaries, their customers and third parties. You should not place undue reliance on forward-looking statements and Banc of California, Inc. undertakes no obligation to update any such statements to reflect circumstances or events that occur after the date on which the forward-looking statement is made.

Banc of California, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

ASSETS

Cash and cash $ 292,490 $ 420,640 $ 435,992 $ 373,472 $ 526,874 equivalents

Securities 1,245,867 1,176,029 969,427 912,580 775,662 available-for-sale

Loans held-for-sale 1,849 19,768 20,234 22,642 23,936

Loans 5,678,002 5,627,696 5,667,464 5,951,885 6,383,259 held-for-investment

Allowance for loan (90,927 ) (90,370 ) (78,243 ) (57,649 ) (62,927 )losses

Federal Home LoanBank and other bank 44,809 46,585 57,237 59,420 71,679 stock

Servicing rights, 1,621 1,753 2,009 2,299 2,407 net

Premises and 123,812 125,247 127,379 128,021 128,979 equipment, net

Investments inalternative energy 27,786 26,967 27,347 29,300 27,039 partnerships, net

Goodwill 37,144 37,144 37,144 37,144 37,144

Other intangible 2,939 3,292 3,722 4,151 4,605 assets, net

Deferred income 43,744 48,288 63,849 44,906 45,950 tax, net

Income tax 10,701 13,094 7,198 4,233 4,459 receivable

Bank owned lifeinsurance 111,115 110,487 110,397 109,819 108,720 investment

Right of use assets 18,909 19,408 20,882 22,540 23,907

Due from unsettled - - - - 334,769 securities sales

Other assets 188,245 184,110 190,569 183,647 188,875

Total assets $ 7,738,106 $ 7,770,138 $ 7,662,607 $ 7,828,410 $ 8,625,337



LIABILITIES ANDSTOCKHOLDERS' EQUITY

Noninterest-bearing $ 1,450,744 $ 1,391,504 $ 1,256,081 $ 1,088,516 $ 1,107,442 deposits

Interest-bearing 4,581,522 4,645,961 4,306,757 4,338,651 4,662,616 deposits

Total deposits 6,032,266 6,037,465 5,562,838 5,427,167 5,770,058

Advances fromFederal Home Loan 559,482 617,170 978,000 1,195,000 1,650,000 Bank

Notes payable, net 173,623 173,537 173,479 173,421 173,339

Reserve for loss on 5,487 5,567 5,601 6,201 6,561 repurchased loans

Lease liabilities 19,938 20,531 22,075 23,692 25,210

Accrued expensesand other 73,056 68,909 85,612 95,684 99,181 liabilities

Total liabilities 6,863,852 6,923,179 6,827,605 6,921,165 7,724,349

Commitments andcontingent liabilities

Preferred stock 184,878 185,037 187,687 189,825 189,825

Common stock 522 522 520 520 520

Common stock, classB non-voting 5 5 5 5 5 non-convertible

Additional paid-in 633,409 632,117 631,125 629,848 628,774 capital

Retained earnings 95,001 85,670 110,640 127,733 120,221

Treasury stock (40,827 ) (40,827 ) (40,827 ) (28,786 ) (28,786 )

Accumulated othercomprehensive 1,266 (15,565 ) (54,148 ) (11,900 ) (9,571 )income (loss), net

Total stockholders' 874,254 846,959 835,002 907,245 900,988 equity

Total liabilitiesand stockholders' $ 7,738,106 $ 7,770,138 $ 7,662,607 $ 7,828,410 $ 8,625,337 equity

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

Nine Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

September 30,2020

September 30,2019

Interest and dividend income

Loans, including fees

$

62,019

$

63,642

$

65,534

$

73,930

$

80,287

$

191,195

$

260,004

Securities

6,766

7,816

7,820

7,812

10,024

22,402

40,322

Other interest-earning assets

881

1,239

1,360

1,960

2,346

3,480

7,083

Total interest and dividend income

69,666

72,697

74,714

83,702

92,657

217,077

307,409

Interest expense

Deposits

7,564

10,205

14,611

18,247

22,811

32,380

82,852

Federal Home Loan Bank advances

3,860

4,818

5,883

6,396

8,519

14,561

25,889

Notes payable and other interest-bearing liabilities

2,387

2,359

2,359

2,399

2,412

7,105

7,165

Total interest expense

13,811

17,382

22,853

27,042

33,742

54,046

115,906

Net interest income

55,855

55,315

51,861

56,660

58,915

163,031

191,503

Provision for (reversal of) credit losses

1,141

11,826

15,761

(2,976

)

38,607

28,728

38,805

Net interest income after provision for (reversal of) credit losses

54,714

43,489

36,100

59,636

20,308

134,303

152,698

Noninterest income

Customer service fees

1,498

1,224

1,096

1,451

1,582

3,818

4,531

Loan servicing income

186

95

75

312

128

356

367

Income from bank owned life insurance

629

591

578

599

588

1,798

1,693

Impairment loss on investment securities

-

-

-

-

(731

)

-

(731

)

Net gain (loss) on sale of securities available for sale

-

2,011

-

3

(5,063

)

2,011

(4,855

)

Fair value adjustment on loans held for sale

24

25

(1,586

)

30

16

(1,537

)

76

Net gain (loss) on sale of loans

272

-

(27

)

(863

)

4,310

245

8,629

All other income (loss)

1,345

1,582

1,925

3,398

2,351

4,852

(2,524

)

Total noninterest income

3,954

5,528

2,061

4,930

3,181

11,543

7,186

Noninterest expense

Salaries and employee benefits

23,277

24,260

23,436

24,036

25,934

70,973

81,879

Naming rights termination

-

26,769

-

-

-

26,769

-

Occupancy and equipment

7,457

7,090

7,243

7,900

7,767

21,790

23,408

Professional fees

5,147

4,596

5,964

2,611

1,463

15,707

9,601

Data processing

1,657

1,536

1,773

1,684

1,568

4,966

4,736

Advertising

219

1,157

1,756

2,227

2,090

3,132

6,195

Regulatory assessments

784

725

484

1,854

1,239

1,993

5,857

Reversal of loan repurchase reserves

(91

)

(34

)

(600

)

(360

)

(123

)

(725

)

(300

)

Amortization of intangible assets

353

430

429

454

500

1,212

1,741

Restructuring expense

-

-

-

1,626

-

-

2,637

All other expenses

3,021

6,408

4,529

4,412

3,742

13,958

12,580

Total noninterest expense excluding (gain) loss on investments in alternative energy partnerships

41,824

72,937

45,014

46,444

44,180

159,775

148,334

(Gain) loss on investments in alternative energy partnerships

(1,430

)

(167

)

1,905

1,039

(940

)

308

655

Total noninterest expense

40,394

72,770

46,919

47,483

43,240

160,083

148,989

Income (loss) from operations before income taxes

18,274

(23,753

)

(8,758

)

17,083

(19,751

)

(14,237

)

10,895

Income tax expense (benefit)

2,361

(5,304

)

(2,165

)

2,811

(5,619

)

(5,108

)

1,408

Net income (loss)

15,913

(18,449

)

(6,593

)

14,272

(14,132

)

(9,129

)

9,487

Preferred stock dividends

3,447

3,442

3,533

3,540

3,403

10,422

12,019

Income allocated to participating securities

281

-

-

224

-

-

-

Participating securities dividends

94

94

94

93

94

282

390

Impact of preferred stock redemption

7

(49

)

(526

)

-

5,093

(568

)

5,093

Net income (loss) available to common stockholders

$

12,084

$

(21,936

)

$

(9,694

)

$

10,415

$

(22,722

)

$

(19,265

)

$

(8,015

)

Earnings (loss) per common share:

Basic

$

0.24

$

(0.44

)

$

(0.19

)

$

0.21

$

(0.45

)

$

(0.38

)

$

(0.16

)

Diluted

$

0.24

$

(0.44

)

$

(0.19

)

$

0.20

$

(0.45

)

$

(0.38

)

$

(0.16

)

Weighted average number of common shares outstanding

Basic

50,108,655

50,030,919

50,464,777

50,699,915

50,882,227

50,201,112

50,804,429

Diluted

50,190,933

50,030,919

50,464,777

50,927,978

50,882,227

50,201,112

50,804,429

Dividends declared per common share

$

0.06

$

0.06

$

0.06

$

0.06

$

0.06

$

0.18

$

0.25

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended Nine Months Ended

September June 30, March 31, December 31, September September September 30, 2020 2020 2019 30, 30, 30, 2020 2019 2020 2019

Interest and dividend income

Loans, including $ 62,019 $ 63,642 $ 65,534 $ 73,930 $ 80,287 $ 191,195 $ 260,004 fees

Securities 6,766 7,816 7,820 7,812 10,024 22,402 40,322

Otherinterest-earning 881 1,239 1,360 1,960 2,346 3,480 7,083 assets

Total interestand dividend 69,666 72,697 74,714 83,702 92,657 217,077 307,409 income

Interest expense

Deposits 7,564 10,205 14,611 18,247 22,811 32,380 82,852

Federal HomeLoan Bank 3,860 4,818 5,883 6,396 8,519 14,561 25,889 advances

Notes payableand other 2,387 2,359 2,359 2,399 2,412 7,105 7,165 interest-bearingliabilities

Total interest 13,811 17,382 22,853 27,042 33,742 54,046 115,906 expense

Net interest 55,855 55,315 51,861 56,660 58,915 163,031 191,503 income

Provision for(reversal of) 1,141 11,826 15,761 (2,976 ) 38,607 28,728 38,805 credit losses

Net interestincome afterprovision for 54,714 43,489 36,100 59,636 20,308 134,303 152,698 (reversal of)credit losses

Noninterest income

Customer service 1,498 1,224 1,096 1,451 1,582 3,818 4,531 fees

Loan servicing 186 95 75 312 128 356 367 income

Income from bankowned life 629 591 578 599 588 1,798 1,693 insurance

Impairment losson investment - - - - (731 ) - (731 )securities

Net gain (loss)on sale ofsecurities - 2,011 - 3 (5,063 ) 2,011 (4,855 )available forsale

Fair valueadjustment on 24 25 (1,586 ) 30 16 (1,537 ) 76 loans held forsale

Net gain (loss) 272 - (27 ) (863 ) 4,310 245 8,629 on sale of loans

All other income 1,345 1,582 1,925 3,398 2,351 4,852 (2,524 )(loss)

Totalnoninterest 3,954 5,528 2,061 4,930 3,181 11,543 7,186 income

Noninterest expense

Salaries andemployee 23,277 24,260 23,436 24,036 25,934 70,973 81,879 benefits

Naming rights - 26,769 - - - 26,769 - termination

Occupancy and 7,457 7,090 7,243 7,900 7,767 21,790 23,408 equipment

Professional 5,147 4,596 5,964 2,611 1,463 15,707 9,601 fees

Data processing 1,657 1,536 1,773 1,684 1,568 4,966 4,736

Advertising 219 1,157 1,756 2,227 2,090 3,132 6,195

Regulatory 784 725 484 1,854 1,239 1,993 5,857 assessments

Reversal of loanrepurchase (91 ) (34 ) (600 ) (360 ) (123 ) (725 ) (300 )reserves

Amortization ofintangible 353 430 429 454 500 1,212 1,741 assets

Restructuring - - - 1,626 - - 2,637 expense

All other 3,021 6,408 4,529 4,412 3,742 13,958 12,580 expenses

Totalnoninterestexpenseexcluding (gain)loss on 41,824 72,937 45,014 46,444 44,180 159,775 148,334 investments inalternativeenergypartnerships

(Gain) loss oninvestments inalternative (1,430 ) (167 ) 1,905 1,039 (940 ) 308 655 energypartnerships

Totalnoninterest 40,394 72,770 46,919 47,483 43,240 160,083 148,989 expense

Income (loss)from operations 18,274 (23,753 ) (8,758 ) 17,083 (19,751 ) (14,237 ) 10,895 before incometaxes

Income taxexpense 2,361 (5,304 ) (2,165 ) 2,811 (5,619 ) (5,108 ) 1,408 (benefit)

Net income 15,913 (18,449 ) (6,593 ) 14,272 (14,132 ) (9,129 ) 9,487 (loss)

Preferred stock 3,447 3,442 3,533 3,540 3,403 10,422 12,019 dividends

Income allocatedto participating 281 - - 224 - - - securities

Participatingsecurities 94 94 94 93 94 282 390 dividends

Impact ofpreferred stock 7 (49 ) (526 ) - 5,093 (568 ) 5,093 redemption

Net income(loss) available $ 12,084 $ (21,936 ) $ (9,694 ) $ 10,415 $ (22,722 ) $ (19,265 ) $ (8,015 )to commonstockholders



Earnings (loss)per common share:

Basic $ 0.24 $ (0.44 ) $ (0.19 ) $ 0.21 $ (0.45 ) $ (0.38 ) $ (0.16 )

Diluted $ 0.24 $ (0.44 ) $ (0.19 ) $ 0.20 $ (0.45 ) $ (0.38 ) $ (0.16 )

Weighted averagenumber of common sharesoutstanding

Basic 50,108,655 50,030,919 50,464,777 50,699,915 50,882,227 50,201,112 50,804,429

Diluted 50,190,933 50,030,919 50,464,777 50,927,978 50,882,227 50,201,112 50,804,429

Dividendsdeclared per $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.18 $ 0.25 common share

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

Profitability and other ratios of consolidated operations

Return on average assets(1)

0.82

%

(0.96

)%

(0.35

)%

0.71

%

(0.64

)%

Return on average equity(1)

7.32

%

(8.69

)%

(2.89

)%

6.20

%

(5.83

)%

Return on average tangible common equity(2)

7.92

%

(13.77

)%

(5.44

)%

6.46

%

(12.49

)%

Dividend payout ratio(3)

25.00

%

(13.64

)%

(31.58

)%

28.57

%

(13.33

)%

Net interest spread

2.84

%

2.77

%

2.56

%

2.65

%

2.47

%

Net interest margin(1)

3.09

%

3.09

%

2.97

%

3.04

%

2.86

%

Noninterest income to total revenue(4)

6.61

%

9.09

%

3.82

%

8.00

%

5.12

%

Noninterest income to average total assets(1)

0.20

%

0.29

%

0.11

%

0.25

%

0.15

%

Noninterest expense to average total assets(1)

2.09

%

3.78

%

2.50

%

2.37

%

1.97

%

Adjusted noninterest expense to average total assets(1)

2.10

%

2.22

%

2.30

%

2.41

%

2.13

%

Efficiency ratio(2)(5)

67.54

%

119.60

%

87.01

%

77.10

%

69.63

%

Adjusted efficiency ratio including the pre-tax effect of investments in alternative energy partnerships(2)(5)

68.30

%

119.55

%

86.54

%

74.51

%

70.00

%

Average loans held-for-investment to average deposits

92.86

%

98.51

%

108.54

%

108.50

%

105.92

%

Average securities available-for-sale to average total assets

15.49

%

13.75

%

12.60

%

10.48

%

12.71

%

Average stockholders' equity to average total assets

11.26

%

11.04

%

12.11

%

11.47

%

11.06

%

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

September June 30, March December September 30, 2020 31, 31, 30, 2020 2020 2019 2019

Profitability and otherratios of consolidated operations

Return on average 0.82 % (0.96 ) (0.35 ) 0.71 % (0.64 )%assets^(1) % %

Return on average 7.32 % (8.69 ) (2.89 ) 6.20 % (5.83 )%equity^(1) % %

Return on average ) )tangible common equity^ 7.92 % (13.77 % (5.44 % 6.46 % (12.49 )%(2)

Dividend payout ratio^ 25.00 % (13.64 ) (31.58 ) 28.57 % (13.33 )%(3) % %

Net interest spread 2.84 % 2.77 % 2.56 % 2.65 % 2.47 %

Net interest margin^(1) 3.09 % 3.09 % 2.97 % 3.04 % 2.86 %

Noninterest income to 6.61 % 9.09 % 3.82 % 8.00 % 5.12 %total revenue^(4)

Noninterest income toaverage total assets^ 0.20 % 0.29 % 0.11 % 0.25 % 0.15 %(1)

Noninterest expense toaverage total assets^ 2.09 % 3.78 % 2.50 % 2.37 % 1.97 %(1)

Adjusted noninterestexpense to average 2.10 % 2.22 % 2.30 % 2.41 % 2.13 %total assets^(1)

Efficiency ratio^(2)(5) 67.54 % 119.60 % 87.01 % 77.10 % 69.63 %

Adjusted efficiencyratio including thepre-tax effect of 68.30 % 119.55 % 86.54 % 74.51 % 70.00 %investments inalternative energypartnerships^(2)(5)

Average loansheld-for-investment to 92.86 % 98.51 % 108.54 % 108.50 % 105.92 %average deposits

Average securitiesavailable-for-sale to 15.49 % 13.75 % 12.60 % 10.48 % 12.71 %average total assets

Average stockholders'equity to average total 11.26 % 11.04 % 12.11 % 11.47 % 11.06 %assets

(1)

Ratios are presented on an annualized basis.

(2)

The ratios are determined by methods other than in accordance with U.S. generally accepted accounting principles (GAAP). See Non-GAAP measures section for reconciliation of the calculation.

(3)

The ratio is calculated by dividing dividends declared per common share by basic earnings (loss) per common share.

(4)

Total revenue is equal to the sum of net interest income before provision for (reversal of) credit losses and noninterest income.

(5)

The ratios are calculated by dividing noninterest expense by the sum of net interest income before provision for credit losses and noninterest income.

(1) Ratios are presented on an annualized basis.

The ratios are determined by methods other than in accordance with U.S.(2) generally accepted accounting principles (GAAP). See Non-GAAP measures section for reconciliation of the calculation.

(3) The ratio is calculated by dividing dividends declared per common share by basic earnings (loss) per common share.

(4) Total revenue is equal to the sum of net interest income before provision for (reversal of) credit losses and noninterest income.

The ratios are calculated by dividing noninterest expense by the sum of(5) net interest income before provision for credit losses and noninterest income.

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

September 30, 2020

June 30, 2020

March 31, 2020

Average

Yield

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

19,544

$

139

2.83

%

$

19,967

$

155

3.12

%

$

22,273

$

220

3.97

%

SFR mortgage

1,311,513

13,178

4.00

%

1,416,358

14,187

4.03

%

1,532,967

15,295

4.01

%

Commercial real estate, multifamily, and construction

2,493,408

29,666

4.73

%

2,524,477

29,459

4.69

%

2,564,485

30,223

4.74

%

Commercial and industrial, SBA, and lease financing

1,673,548

18,585

4.42

%

1,706,120

19,392

4.57

%

1,613,324

19,157

4.78

%

Other consumer

35,563

451

5.05

%

40,697

449

4.44

%

47,761

639

5.38

%

Gross loans and leases

5,533,576

62,019

4.46

%

5,707,619

63,642

4.48

%

5,780,810

65,534

4.56

%

Securities

1,190,765

6,766

2.26

%

1,063,941

7,816

2.95

%

952,966

7,820

3.30

%

Other interest-earning assets

457,558

881

0.77

%

424,776

1,239

1.17

%

297,444

1,360

1.84

%

Total interest-earning assets

7,181,899

69,666

3.86

%

7,196,336

72,697

4.06

%

7,031,220

74,714

4.27

%

Allowance for loan losses

(89,679

)

(78,528

)

(60,470

)

BOLI and noninterest-earning assets

594,885

622,398

592,192

Total assets

$

7,687,105

$

7,740,206

$

7,562,942

Interest-bearing liabilities

Savings

$

948,898

$

2,353

0.99

%

$

905,997

$

2,718

1.21

%

$

890,830

$

3,296

1.49

%

Interest-bearing checking

1,919,327

1,660

0.34

%

1,710,038

2,186

0.51

%

1,520,922

3,728

0.99

%

Money market

681,421

645

0.38

%

592,872

850

0.58

%

608,926

1,760

1.16

%

Certificates of deposit

1,030,829

2,906

1.12

%

1,214,939

4,451

1.47

%

1,151,518

5,827

2.04

%

Total interest-bearing deposits

4,580,475

7,564

0.66

%

4,423,846

10,205

0.93

%

4,172,196

14,611

1.41

%

FHLB advances

608,169

3,860

2.52

%

819,166

4,818

2.37

%

1,039,055

5,883

2.28

%

Securities sold under repurchase agreements

1,309

2

0.61

%

1,024

2

0.79

%

-

-

-

%

Long-term debt and other interest-bearing liabilities

173,911

2,385

5.46

%

173,977

2,357

5.45

%

174,056

2,359

5.45

%

Total interest-bearing liabilities

5,363,864

13,811

1.02

%

5,418,013

17,382

1.29

%

5,385,307

22,853

1.71

%

Noninterest-bearing deposits

1,357,411

1,349,735

1,133,306

Noninterest-bearing liabilities

100,424

118,208

128,282

Total liabilities

6,821,699

6,885,956

6,646,895

Total stockholders' equity

865,406

854,250

916,047

Total liabilities and stockholders' equity

$

7,687,105

$

7,740,206

$

7,562,942

Net interest income/spread

$

55,855

2.84

%

$

55,315

2.77

%

$

51,861

2.56

%

Net interest margin

3.09

%

3.09

%

2.97

%

Ratio of interest-earning assets to interest-bearing liabilities

133.89

%

132.82

%

130.56

%

Total deposits

$

5,937,886

$

7,564

0.51

%

$

5,773,581

$

10,205

0.71

%

$

5,305,502

$

14,611

1.11

%

Total funding (1)

$

6,721,275

$

13,811

0.82

%

$

6,767,748

$

17,382

1.03

%

$

6,518,613

$

22,853

1.41

%

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

September 30, 2020 June 30, 2020 March 31, 2020

Average Yield Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Loans held-for-sale $ 19,544 $ 139 2.83 % $ 19,967 $ 155 3.12 % $ 22,273 $ 220 3.97 %

SFR mortgage 1,311,513 13,178 4.00 % 1,416,358 14,187 4.03 % 1,532,967 15,295 4.01 %

Commercial real estate,multifamily, and 2,493,408 29,666 4.73 % 2,524,477 29,459 4.69 % 2,564,485 30,223 4.74 %construction

Commercial andindustrial, SBA, and 1,673,548 18,585 4.42 % 1,706,120 19,392 4.57 % 1,613,324 19,157 4.78 %lease financing

Other consumer 35,563 451 5.05 % 40,697 449 4.44 % 47,761 639 5.38 %

Gross loans and leases 5,533,576 62,019 4.46 % 5,707,619 63,642 4.48 % 5,780,810 65,534 4.56 %

Securities 1,190,765 6,766 2.26 % 1,063,941 7,816 2.95 % 952,966 7,820 3.30 %

Other interest-earning 457,558 881 0.77 % 424,776 1,239 1.17 % 297,444 1,360 1.84 %assets

Total interest-earning 7,181,899 69,666 3.86 % 7,196,336 72,697 4.06 % 7,031,220 74,714 4.27 %assets

Allowance for loan (89,679 ) (78,528 ) (60,470 ) losses

BOLI andnoninterest-earning 594,885 622,398 592,192 assets

Total assets $ 7,687,105 $ 7,740,206 $ 7,562,942



Interest-bearing liabilities

Savings $ 948,898 $ 2,353 0.99 % $ 905,997 $ 2,718 1.21 % $ 890,830 $ 3,296 1.49 %

Interest-bearing 1,919,327 1,660 0.34 % 1,710,038 2,186 0.51 % 1,520,922 3,728 0.99 %checking

Money market 681,421 645 0.38 % 592,872 850 0.58 % 608,926 1,760 1.16 %

Certificates of deposit 1,030,829 2,906 1.12 % 1,214,939 4,451 1.47 % 1,151,518 5,827 2.04 %

Total interest-bearing 4,580,475 7,564 0.66 % 4,423,846 10,205 0.93 % 4,172,196 14,611 1.41 %deposits

FHLB advances 608,169 3,860 2.52 % 819,166 4,818 2.37 % 1,039,055 5,883 2.28 %

Securities sold under 1,309 2 0.61 % 1,024 2 0.79 % - - - %repurchase agreements

Long-term debt and otherinterest-bearing 173,911 2,385 5.46 % 173,977 2,357 5.45 % 174,056 2,359 5.45 %liabilities

Total interest-bearing 5,363,864 13,811 1.02 % 5,418,013 17,382 1.29 % 5,385,307 22,853 1.71 %liabilities

Noninterest-bearing 1,357,411 1,349,735 1,133,306 deposits

Noninterest-bearing 100,424 118,208 128,282 liabilities

Total liabilities 6,821,699 6,885,956 6,646,895

Total stockholders' 865,406 854,250 916,047 equity

Total liabilities and $ 7,687,105 $ 7,740,206 $ 7,562,942 stockholders' equity



Net interest income/ $ 55,855 2.84 % $ 55,315 2.77 % $ 51,861 2.56 %spread

Net interest margin 3.09 % 3.09 % 2.97 %



Ratio ofinterest-earning assets 133.89 % 132.82 % 130.56 % to interest-bearingliabilities

Total deposits $ 5,937,886 $ 7,564 0.51 % $ 5,773,581 $ 10,205 0.71 % $ 5,305,502 $ 14,611 1.11 %

Total funding ^(1) $ 6,721,275 $ 13,811 0.82 % $ 6,767,748 $ 17,382 1.03 % $ 6,518,613 $ 22,853 1.41 %

(1)

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Total funding is the sum of interest-bearing liabilities and(1) noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Three Months Ended

December 31, 2019

September 30, 2019

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

23,527

$

221

3.73

%

$

216,746

$

1,894

3.47

%

SFR mortgage

1,689,228

16,788

3.94

%

1,866,103

19,179

4.08

%

Commercial real estate, multifamily, and construction

2,633,342

32,763

4.94

%

2,717,609

33,343

4.87

%

Commercial and industrial, SBA, and lease financing

1,821,064

23,381

5.09

%

1,840,202

24,970

5.38

%

Other consumer

54,088

777

5.70

%

58,652

901

6.09

%

Gross loans and leases

6,221,249

73,930

4.71

%

6,699,312

80,287

4.75

%

Securities

833,726

7,812

3.72

%

1,105,499

10,024

3.60

%

Other interest-earning assets

330,950

1,960

2.35

%

362,613

2,346

2.57

%

Total interest-earning assets

7,385,925

83,702

4.50

%

8,167,424

92,657

4.50

%

Allowance for loan losses

(61,642

)

(55,976

)

BOLI and noninterest-earning assets

630,308

584,190

Total assets

$

7,954,591

$

8,695,638

Interest-bearing liabilities

Savings

981,346

3,889

1.57

%

1,055,086

4,722

1.78

%

Interest-bearing checking

1,546,322

4,234

1.09

%

1,511,432

4,483

1.18

%

Money market

743,695

2,593

1.38

%

755,114

3,093

1.63

%

Certificates of deposit

1,332,911

7,531

2.24

%

1,750,970

10,513

2.38

%

Total interest-bearing deposits

4,604,274

18,247

1.57

%

5,072,602

22,811

1.78

%

FHLB advances

1,020,478

6,396

2.49

%

1,333,739

8,519

2.53

%

Securities sold under repurchase agreements

2,223

15

2.68

%

1,922

13

2.68

%

Long-term debt and other interest-bearing liabilities

174,092

2,384

5.43

%

174,111

2,399

5.47

%

Total interest-bearing liabilities

5,801,067

27,042

1.85

%

6,582,374

33,742

2.03

%

Noninterest-bearing deposits

1,108,077

1,047,858

Noninterest-bearing liabilities

132,698

103,667

Total liabilities

7,041,842

7,733,899

Total stockholders' equity

912,749

961,739

Total liabilities and stockholders' equity

$

7,954,591

$

8,695,638

Net interest income/spread

$

56,660

2.65

%

$

58,915

2.47

%

Net interest margin

3.04

%

2.86

%

Ratio of interest-earning assets to interest-bearing liabilities

127.32

%

124.08

%

Total deposits

$

5,712,351

$

18,247

1.27

%

$

6,120,460

$

22,811

1.48

%

Total funding (1)

$

6,909,144

$

27,042

1.55

%

$

7,630,232

$

33,742

1.75

%

Three Months Ended

December 31, 2019 September 30, 2019

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Loans held-for-sale $ 23,527 $ 221 3.73 % $ 216,746 $ 1,894 3.47 %

SFR mortgage 1,689,228 16,788 3.94 % 1,866,103 19,179 4.08 %

Commercial realestate, 2,633,342 32,763 4.94 % 2,717,609 33,343 4.87 %multifamily, andconstruction

Commercial andindustrial, SBA, 1,821,064 23,381 5.09 % 1,840,202 24,970 5.38 %and lease financing

Other consumer 54,088 777 5.70 % 58,652 901 6.09 %

Gross loans and 6,221,249 73,930 4.71 % 6,699,312 80,287 4.75 %leases

Securities 833,726 7,812 3.72 % 1,105,499 10,024 3.60 %

Otherinterest-earning 330,950 1,960 2.35 % 362,613 2,346 2.57 %assets

Totalinterest-earning 7,385,925 83,702 4.50 % 8,167,424 92,657 4.50 %assets

Allowance for loan (61,642 ) (55,976 ) losses

BOLI andnoninterest-earning 630,308 584,190 assets

Total assets $ 7,954,591 $ 8,695,638



Interest-bearing liabilities

Savings 981,346 3,889 1.57 % 1,055,086 4,722 1.78 %

Interest-bearing 1,546,322 4,234 1.09 % 1,511,432 4,483 1.18 %checking

Money market 743,695 2,593 1.38 % 755,114 3,093 1.63 %

Certificates of 1,332,911 7,531 2.24 % 1,750,970 10,513 2.38 %deposit

Totalinterest-bearing 4,604,274 18,247 1.57 % 5,072,602 22,811 1.78 %deposits

FHLB advances 1,020,478 6,396 2.49 % 1,333,739 8,519 2.53 %

Securities soldunder repurchase 2,223 15 2.68 % 1,922 13 2.68 %agreements

Long-term debt andother 174,092 2,384 5.43 % 174,111 2,399 5.47 %interest-bearingliabilities

Totalinterest-bearing 5,801,067 27,042 1.85 % 6,582,374 33,742 2.03 %liabilities

Noninterest-bearing 1,108,077 1,047,858 deposits

Noninterest-bearing 132,698 103,667 liabilities

Total liabilities 7,041,842 7,733,899

Total stockholders' 912,749 961,739 equity

Total liabilitiesand stockholders' $ 7,954,591 $ 8,695,638 equity



Net interest income $ 56,660 2.65 % $ 58,915 2.47 %/spread

Net interest margin 3.04 % 2.86 %



Ratio ofinterest-earningassets to 127.32 % 124.08 % interest-bearingliabilities

Total deposits $ 5,712,351 $ 18,247 1.27 % $ 6,120,460 $ 22,811 1.48 %

Total funding ^(1) $ 6,909,144 $ 27,042 1.55 % $ 7,630,232 $ 33,742 1.75 %

(1)

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Total funding is the sum of interest-bearing liabilities and(1) noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Nine Months Ended

September 30, 2020

September 30, 2019

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

20,591

$

515

3.34

%

$

99,130

$

2,388

3.22

%

SFR mortgage

1,419,882

42,660

4.01

%

2,077,932

64,631

4.16

%

Commercial real estate, multifamily, and construction

2,527,331

89,348

4.72

%

3,168,206

111,119

4.69

%

Commercial and industrial, SBA, and lease financing

1,664,365

57,134

4.59

%

1,877,277

79,145

5.64

%

Other consumer

41,319

1,538

4.97

%

60,324

2,721

6.03

%

Gross loans and leases

5,673,488

191,195

4.50

%

7,282,869

260,004

4.77

%

Securities

1,069,668

22,402

2.80

%

1,384,928

40,322

3.89

%

Other interest-earning assets

393,495

3,480

1.18

%

342,597

7,083

2.76

%

Total interest-earning assets

7,136,651

217,077

4.06

%

9,010,394

307,409

4.56

%

Allowance for credit losses

(76,275

)

(60,294

)

BOLI and noninterest-earning assets

603,128

579,992

Total assets

$

7,663,504

$

9,530,092

Interest-bearing liabilities

Savings

915,364

8,366

1.22

%

1,112,949

15,152

1.82

%

Interest-bearing checking

1,717,483

7,575

0.59

%

1,548,655

13,562

1.17

%

Money market

627,927

3,255

0.69

%

831,401

11,124

1.79

%

Certificates of deposit

1,132,058

13,184

1.56

%

2,419,158

43,014

2.38

%

Total interest-bearing deposits

4,392,832

32,380

0.98

%

5,912,163

82,852

1.87

%

FHLB advances

821,349

14,561

2.37

%

1,347,330

25,889

2.57

%

Securities sold under repurchase agreements

779

4

0.69

%

2,146

47

2.93

%

Long-term debt and other interest-bearing liabilities

173,981

7,101

5.45

%

174,167

7,118

5.46

%

Total interest-bearing liabilities

5,388,941

54,046

1.34

%

7,435,806

115,906

2.08

%

Noninterest-bearing deposits

1,280,461

1,034,697

Noninterest-bearing liabilities

115,582

99,113

Total liabilities

6,784,984

8,569,616

Total stockholders' equity

878,520

960,476

Total liabilities and stockholders' equity

$

7,663,504

$

9,530,092

Net interest income/spread

$

163,031

2.72

%

$

191,503

2.48

%

Net interest margin

3.05

%

2.84

%

Ratio of interest-earning assets to interest-bearing liabilities

132.43

%

121.18

%

Total deposits

$

5,673,293

$

32,380

0.76

%

$

6,946,860

$

82,852

1.59

%

Total funding (1)

$

6,669,402

$

54,046

1.08

%

$

8,470,503

$

115,906

1.83

%

Nine Months Ended

September 30, 2020 September 30, 2019

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

Loans held-for-sale $ 20,591 $ 515 3.34 % $ 99,130 $ 2,388 3.22 %

SFR mortgage 1,419,882 42,660 4.01 % 2,077,932 64,631 4.16 %

Commercial realestate, 2,527,331 89,348 4.72 % 3,168,206 111,119 4.69 %multifamily, andconstruction

Commercial andindustrial, SBA, 1,664,365 57,134 4.59 % 1,877,277 79,145 5.64 %and lease financing

Other consumer 41,319 1,538 4.97 % 60,324 2,721 6.03 %

Gross loans and 5,673,488 191,195 4.50 % 7,282,869 260,004 4.77 %leases

Securities 1,069,668 22,402 2.80 % 1,384,928 40,322 3.89 %

Otherinterest-earning 393,495 3,480 1.18 % 342,597 7,083 2.76 %assets

Totalinterest-earning 7,136,651 217,077 4.06 % 9,010,394 307,409 4.56 %assets

Allowance for (76,275 ) (60,294 ) credit losses

BOLI andnoninterest-earning 603,128 579,992 assets

Total assets $ 7,663,504 $ 9,530,092



Interest-bearing liabilities

Savings 915,364 8,366 1.22 % 1,112,949 15,152 1.82 %

Interest-bearing 1,717,483 7,575 0.59 % 1,548,655 13,562 1.17 %checking

Money market 627,927 3,255 0.69 % 831,401 11,124 1.79 %

Certificates of 1,132,058 13,184 1.56 % 2,419,158 43,014 2.38 %deposit

Totalinterest-bearing 4,392,832 32,380 0.98 % 5,912,163 82,852 1.87 %deposits

FHLB advances 821,349 14,561 2.37 % 1,347,330 25,889 2.57 %

Securities soldunder repurchase 779 4 0.69 % 2,146 47 2.93 %agreements

Long-term debt andother 173,981 7,101 5.45 % 174,167 7,118 5.46 %interest-bearingliabilities

Totalinterest-bearing 5,388,941 54,046 1.34 % 7,435,806 115,906 2.08 %liabilities

Noninterest-bearing 1,280,461 1,034,697 deposits

Noninterest-bearing 115,582 99,113 liabilities

Total liabilities 6,784,984 8,569,616

Total stockholders' 878,520 960,476 equity

Total liabilitiesand stockholders' $ 7,663,504 $ 9,530,092 equity



Net interest income $ 163,031 2.72 % $ 191,503 2.48 %/spread

Net interest margin 3.05 % 2.84 %



Ratio ofinterest-earningassets to 132.43 % 121.18 % interest-bearingliabilities

Total deposits $ 5,673,293 $ 32,380 0.76 % $ 6,946,860 $ 82,852 1.59 %

Total funding ^(1) $ 6,669,402 $ 54,046 1.08 % $ 8,470,503 $ 115,906 1.83 %

(1)

Total funding is the sum of interest-bearing liabilities and noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Banc of California, Inc. Consolidated Operations Non-GAAP Measures (Dollars in thousands, except per share data) (Unaudited)

Under Item 10(e) of SEC Regulation S-K, public companies disclosing financial measures in filings with the SEC that are not calculated in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a presentation of the most directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as a statement of the reasons why the company's management believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the company's financial condition and results of operations and, to the extent material, a statement of the additional purposes, if any, for which the company's management uses the non-GAAP financial measure.

Return on average tangible common equity and efficiency ratio, as adjusted, tangible common equity, tangible common equity to tangible assets, tangible common equity per common share, and pre-tax pre-provision income and return on average assets ("ROAA") constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance.

Tangible common equity is calculated by subtracting preferred stock, goodwill, and other intangible assets from stockholders' equity. Tangible assets is calculated by subtracting goodwill and other intangible assets from total assets. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

Adjusted efficiency ratio is calculated by excluding (gain) loss on investments in alternative energy partnerships from noninterest expense and adding total pre-tax return, which includes the (gain) loss on investments in alternative energy partnerships, to the sum of net interest income and noninterest income (total revenue). Pre-tax pre-provision income is calculated by adding total revenue and subtracting noninterest expense. Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company.

This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.

Total funding is the sum of interest-bearing liabilities and(1) noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.

Banc of California, Inc. Consolidated Operations Non-GAAP Measures (Dollars in thousands, except per share data) (Unaudited)

Under Item 10(e) of SEC Regulation S-K, public companies disclosing financial measures in filings with the SEC that are not calculated in accordance with GAAP must also disclose, along with each non-GAAP financial measure, certain additional information, including a presentation of the most directly comparable GAAP financial measure, a reconciliation of the non-GAAP financial measure to the most directly comparable GAAP financial measure, as well as a statement of the reasons why the company's management believes that presentation of the non-GAAP financial measure provides useful information to investors regarding the company's financial condition and results of operations and, to the extent material, a statement of the additional purposes, if any, for which the company's management uses the non-GAAP financial measure.

Return on average tangible common equity and efficiency ratio, as adjusted, tangible common equity, tangible common equity to tangible assets, tangible common equity per common share, and pre-tax pre-provision income and return on average assets ("ROAA") constitute supplemental financial information determined by methods other than in accordance with GAAP. These non-GAAP measures are used by management in its analysis of the Company's performance.

Tangible common equity is calculated by subtracting preferred stock, goodwill, and other intangible assets from stockholders' equity. Tangible assets is calculated by subtracting goodwill and other intangible assets from total assets. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

Adjusted efficiency ratio is calculated by excluding (gain) loss on investments in alternative energy partnerships from noninterest expense and adding total pre-tax return, which includes the (gain) loss on investments in alternative energy partnerships, to the sum of net interest income and noninterest income (total revenue). Pre-tax pre-provision income is calculated by adding total revenue and subtracting noninterest expense. Management believes the presentation of these financial measures adjusting the impact of these items provides useful supplemental information that is essential to a proper understanding of the financial results and operating performance of the Company.

This disclosure should not be viewed as a substitute for results determined in accordance with GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.

The following tables provide reconciliations of the non-GAAP measures with financial measures defined by GAAP.

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Tangible commonequity, andtangible common equity totangible assetsratio

Total assets $ 7,738,106 $ 7,770,138 $ 7,662,607 $ 7,828,410 $ 8,625,337

Less goodwill (37,144 ) (37,144 ) (37,144 ) (37,144 ) (37,144 )

Less otherintangible (2,939 ) (3,292 ) (3,722 ) (4,151 ) (4,605 ) assets

Tangible assets $ 7,698,023 $ 7,729,702 $ 7,621,741 $ 7,787,115 $ 8,583,588 ^(1)



Totalstockholders' $ 874,254 $ 846,959 $ 835,002 $ 907,245 $ 900,988 equity

Less goodwill (37,144 ) (37,144 ) (37,144 ) (37,144 ) (37,144 )

Less otherintangible (2,939 ) (3,292 ) (3,722 ) (4,151 ) (4,605 ) assets

Tangible equity 834,171 806,523 794,136 865,950 859,239 ^(1)

Less preferred (184,878 ) (185,037 ) (187,687 ) (189,825 ) (189,825 ) stock

Tangible common $ 649,293 $ 621,486 $ 606,449 $ 676,125 $ 669,414 equity^(1)



Totalstockholders' 11.30 % 10.90 % 10.90 % 11.59 % 10.45 %equity to totalassets

Tangible equityto tangible 10.84 % 10.43 % 10.42 % 11.12 % 10.01 %assets^(1)

Tangible commonequity to 8.43 % 8.04 % 7.96 % 8.68 % 7.80 %tangible assets^(1)



Common shares 49,760,543 49,750,958 49,593,077 50,413,681 50,406,763 outstanding

Class Bnon-votingnon-convertible 477,321 477,321 477,321 477,321 477,321 common sharesoutstanding

Total commonshares 50,237,864 50,228,279 50,070,398 50,891,002 50,884,084 outstanding



Tangible commonequity per $ 12.92 $ 12.37 $ 12.11 $ 13.29 $ 13.16 common share^(1)

Book value per $ 13.72 $ 13.18 $ 12.93 $ 14.10 $ 13.98 common share

(1)

Non-GAAP measure.

(1) Non-GAAP measure.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

Return on tangible common equity

Average total stockholders' equity

$

865,406

$

854,250

$

916,047

$

912,749

$

961,739

Less average preferred stock

(184,910

)

(185,471

)

(189,607

)

(189,824

)

(213,619

)

Less average goodwill

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

Less average other intangible assets

(3,172

)

(3,574

)

(4,003

)

(4,441

)

(4,935

)

Average tangible common equity(1)

$

640,180

$

628,061

$

685,293

$

681,340

$

706,041

Net income (loss)

$

15,913

$

(18,449

)

$

(6,593

)

$

14,272

$

(14,132

)

Less preferred stock dividends and impact of preferred stock redemption

(3,454

)

(3,393

)

(3,007

)

(3,540

)

(8,496

)

Add amortization of intangible assets

353

430

429

454

500

Less tax effect on amortization and impairment of intangible assets

(74

)

(90

)

(90

)

(95

)

(105

)

Net income (loss) available to common stockholders(1)

$

12,738

$

(21,502

)

$

(9,261

)

$

11,091

$

(22,233

)

Return on average equity

7.32

%

(8.69

)

%

(2.89

)

%

6.20

%

(5.83

)

%

Return on average tangible common equity(1)

7.92

%

(13.77

)

%

(5.44

)

%

6.46

%

(12.49

)

%

Statutory tax rate utilized for calculating tax effect on amortization of intangible assets

21.00

%

21.00

%

21.00

%

21.00

%

21.00

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Return ontangible common equity

Average totalstockholders' $ 865,406 $ 854,250 $ 916,047 $ 912,749 $ 961,739 equity

Less averagepreferred (184,910 ) (185,471 ) (189,607 ) (189,824 ) (213,619 ) stock

Less average (37,144 ) (37,144 ) (37,144 ) (37,144 ) (37,144 ) goodwill

Less averageother (3,172 ) (3,574 ) (4,003 ) (4,441 ) (4,935 ) intangibleassets

Averagetangible $ 640,180 $ 628,061 $ 685,293 $ 681,340 $ 706,041 common equity^(1)



Net income $ 15,913 $ (18,449 ) $ (6,593 ) $ 14,272 $ (14,132 ) (loss)

Lesspreferredstockdividends and (3,454 ) (3,393 ) (3,007 ) (3,540 ) (8,496 ) impact ofpreferredstockredemption

Addamortization 353 430 429 454 500 of intangibleassets

Less taxeffect onamortizationand (74 ) (90 ) (90 ) (95 ) (105 ) impairment ofintangibleassets

Net income(loss)available to $ 12,738 $ (21,502 ) $ (9,261 ) $ 11,091 $ (22,233 ) commonstockholders^(1)



Return onaverage 7.32 % (8.69 ) % (2.89 ) % 6.20 % (5.83 ) %equity

Return onaveragetangible 7.92 % (13.77 ) % (5.44 ) % 6.46 % (12.49 ) %common equity^(1)



Statutory taxrate utilizedforcalculating 21.00 % 21.00 % 21.00 % 21.00 % 21.00 %tax effect onamortizationof intangibleassets

Three Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

Adjusted efficiency ratio including the pre-tax effect of investments in alternative energy partnerships

Noninterest expense

$

40,394

$

72,770

$

46,919

$

47,483

$

43,240

Gain (loss) on investments in alternative energy partnerships

1,430

167

(1,905

)

(1,039

)

940

Total noninterest expense excluding (gain) loss on investments in alternative energy partnerships(1)

$

41,824

$

72,937

$

45,014

$

46,444

$

44,180

Net interest income

$

55,855

$

55,315

$

51,861

$

56,660

$

58,915

Noninterest income

3,954

5,528

2,061

4,930

3,181

Total revenue

59,809

60,843

53,922

61,590

62,096

Tax credit from investments in alternative energy partnerships

-

-

-

1,689

77

Deferred tax expense on investments in alternative energy partnerships

-

-

-

(177

)

(8

)

Tax effect on tax credit and deferred tax expense

-

-

-

267

7

(Loss) gain on investments in alternative energy partnerships

1,430

167

(1,905

)

(1,039

)

940

Total pre-tax adjustments for investments in alternative energy partnerships

1,430

167

(1,905

)

740

1,016

Adjusted total revenue(1)

$

61,239

$

61,010

$

52,017

$

62,330

$

63,112

Efficiency ratio(1)

67.54

%

119.60

%

87.01

%

77.10

%

69.63

%

Adjusted efficiency ratio including the pre-tax effect of investments in alternative energy partnerships(1)

68.30

%

119.55

%

86.54

%

74.51

%

70.00

%

Effective tax rate utilized for calculating tax effect on tax credit and deferred tax expense

N/A

N/A

N/A

15.00

%

9.36

%

Three Months Ended

September June 30, March 31, December 31, September 30, 2020 2020 2019 30, 2020 2019

Adjustedefficiencyratioincludingthe pre-taxeffect of investmentsinalternativeenergypartnerships

Noninterest $ 40,394 $ 72,770 $ 46,919 $ 47,483 $ 43,240 expense

Gain (loss)oninvestmentsin 1,430 167 (1,905 ) (1,039 ) 940 alternativeenergypartnerships

Totalnoninterestexpenseexcluding(gain) losson $ 41,824 $ 72,937 $ 45,014 $ 46,444 $ 44,180 investmentsinalternativeenergypartnerships^(1)



Net interest $ 55,855 $ 55,315 $ 51,861 $ 56,660 $ 58,915 income

Noninterest 3,954 5,528 2,061 4,930 3,181 income

Total 59,809 60,843 53,922 61,590 62,096 revenue

Tax creditfrominvestmentsin - - - 1,689 77 alternativeenergypartnerships

Deferred taxexpense oninvestmentsin - - - (177 ) (8 ) alternativeenergypartnerships

Tax effecton taxcredit and - - - 267 7 deferred taxexpense

(Loss) gainoninvestmentsin 1,430 167 (1,905 ) (1,039 ) 940 alternativeenergypartnerships

Totalpre-taxadjustmentsforinvestments 1,430 167 (1,905 ) 740 1,016 inalternativeenergypartnerships

Adjustedtotal $ 61,239 $ 61,010 $ 52,017 $ 62,330 $ 63,112 revenue^(1)

Efficiency 67.54 % 119.60 % 87.01 % 77.10 % 69.63 %ratio^(1)

Adjustedefficiencyratioincludingthe pre-taxeffect of 68.30 % 119.55 % 86.54 % 74.51 % 70.00 %investmentsinalternativeenergypartnerships^(1)

Effectivetax rateutilized forcalculatingtax effect N/A N/A N/A 15.00 % 9.36 %on taxcredit anddeferred taxexpense

(1)

Non-GAAP measure.

(1) Non-GAAP measure.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

Adjusted noninterest income and expense

Total noninterest income

$

3,954

$

5,528

$

2,061

$

4,930

$

3,181

Adjustments for non-core items:

Net (gain) loss on securities available for sale

-

(2,011

)

-

(3

)

5,794

Net (gain) loss on sale of legacy SFR loans held for sale

(272

)

-

-

-

-

Fair value adjustment on legacy SFR loans held for sale

(24

)

(25

)

1,586

(30

)

(16

)

Total non-core adjustments - noninterest income

(296

)

(2,036

)

1,586

(33

)

5,778

Adjusted noninterest income(1)

$

3,658

$

3,492

$

3,647

$

4,897

$

8,959

Total noninterest expense

$

40,394

$

72,770

$

46,919

$

47,483

$

43,240

Adjustments for non-core items:

Naming rights termination

-

(26,769

)

-

-

-

Extinguishment of debt

-

(2,515

)

-

-

-

Professional (fees) recoveries

(1,172

)

(875

)

(1,678

)

3,557

2,615

Restructuring expense

-

-

-

(1,626

)

-

Other expenses

-

-

-

-

(131

)

Total non-core adjustments - noninterest expense

(1,172

)

(30,159

)

(1,678

)

1,931

2,484

Gain (loss) on investments in alternative energy partnerships

1,430

167

(1,905

)

(1,039

)

940

Total adjustments - noninterest expense

258

(29,992

)

(3,583

)

892

3,424

Adjusted noninterest expense(1)

$

40,652

$

42,778

$

43,336

$

48,375

$

46,664

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

September June 30, March 31, December September 30, 2020 2020 31, 30, 2020 2019 2019

Adjustednoninterest income andexpense

Totalnoninterest $ 3,954 $ 5,528 $ 2,061 $ 4,930 $ 3,181 income

Adjustments for non-core items:

Net (gain) losson securities - (2,011 ) - (3 ) 5,794 available forsale

Net (gain) losson sale oflegacy SFR (272 ) - - - - loans held forsale

Fair valueadjustment onlegacy SFR (24 ) (25 ) 1,586 (30 ) (16 )loans held forsale

Total non-coreadjustments - (296 ) (2,036 ) 1,586 (33 ) 5,778 noninterestincome

Adjustednoninterest $ 3,658 $ 3,492 $ 3,647 $ 4,897 $ 8,959 income^(1)



Totalnoninterest $ 40,394 $ 72,770 $ 46,919 $ 47,483 $ 43,240 expense

Adjustments for non-core items:

Naming rights - (26,769 ) - - - termination

Extinguishment - (2,515 ) - - - of debt

Professional(fees) (1,172 ) (875 ) (1,678 ) 3,557 2,615 recoveries

Restructuring - - - (1,626 ) - expense

Other expenses - - - - (131 )

Total non-coreadjustments - (1,172 ) (30,159 ) (1,678 ) 1,931 2,484 noninterestexpense

Gain (loss) oninvestments inalternative 1,430 167 (1,905 ) (1,039 ) 940 energypartnerships

Totaladjustments - 258 (29,992 ) (3,583 ) 892 3,424 noninterestexpense

Adjustednoninterest $ 40,652 $ 42,778 $ 43,336 $ 48,375 $ 46,664 expense^(1)

Three Months Ended

September 30,2020

June 30,2020

March 31,2020

December 31,2019

September 30,2019

Adjusted pre-tax pre-provision income

Net interest income

$

55,855

$

55,315

$

51,861

$

56,660

$

58,915

Noninterest income

3,954

5,528

2,061

4,930

3,181

Total revenue

59,809

60,843

53,922

61,590

62,096

Noninterest expense

40,394

72,770

46,919

47,483

43,240

Pre-tax pre-provision income (loss)(1)

$

19,415

$

(11,927

)

$

7,003

$

14,107

$

18,856

Net interest income

$

55,855

$

55,315

$

51,861

$

56,660

$

58,915

Noninterest income

3,954

5,528

2,061

4,930

3,181

Total non-core adjustments - noninterest income

(296

)

(2,036

)

1,586

(33

)

5,778

Adjusted noninterest income(1)

3,658

3,492

3,647

4,897

8,959

Total revenue

59,513

58,807

55,508

61,557

67,874

Noninterest expense

40,394

72,770

46,919

47,483

43,240

Total adjustments - noninterest expense

258

(29,992

)

(3,583

)

892

3,424

Adjusted noninterest expense(1)

40,652

42,778

43,336

48,375

46,664

Adjusted pre-tax pre-provision income(1)

$

18,861

$

16,029

$

12,172

$

13,182

$

21,210

Average assets

$

7,687,105

$

7,740,206

$

7,562,942

$

7,954,591

$

8,695,638

Pre-tax pre-provision income (loss) ROAA

1.00

%

(0.62

)

%

0.37

%

0.70

%

0.86

%

Adjusted pre-tax pre-provision income ROAA(1)

0.98

%

0.83

%

0.65

%

0.66

%

0.97

%

Three Months Ended

September 30, June 30, March 31, December 31, September 30, 2020 2020 2020 2019 2019

Adjustedpre-tax pre-provisionincome

Net interest $ 55,855 $ 55,315 $ 51,861 $ 56,660 $ 58,915 income

Noninterest 3,954 5,528 2,061 4,930 3,181 income

Total revenue 59,809 60,843 53,922 61,590 62,096

Noninterest 40,394 72,770 46,919 47,483 43,240 expense

Pre-taxpre-provision $ 19,415 $ (11,927 ) $ 7,003 $ 14,107 $ 18,856 income (loss)^(1)



Net interest $ 55,855 $ 55,315 $ 51,861 $ 56,660 $ 58,915 income

Noninterest 3,954 5,528 2,061 4,930 3,181 income

Totalnon-coreadjustments - (296 ) (2,036 ) 1,586 (33 ) 5,778 noninterestincome

Adjustednoninterest 3,658 3,492 3,647 4,897 8,959 income^(1)

Total revenue 59,513 58,807 55,508 61,557 67,874

Noninterest 40,394 72,770 46,919 47,483 43,240 expense

Totaladjustments - 258 (29,992 ) (3,583 ) 892 3,424 noninterestexpense

Adjustednoninterest 40,652 42,778 43,336 48,375 46,664 expense^(1)

Adjustedpre-tax $ 18,861 $ 16,029 $ 12,172 $ 13,182 $ 21,210 pre-provisionincome^(1)



Average $ 7,687,105 $ 7,740,206 $ 7,562,942 $ 7,954,591 $ 8,695,638 assets

Pre-taxpre-provision 1.00 % (0.62 ) % 0.37 % 0.70 % 0.86 %income (loss)ROAA

Adjustedpre-taxpre-provision 0.98 % 0.83 % 0.65 % 0.66 % 0.97 %income ROAA^(1)

(1)

Non-GAAP measure.

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005471/en/

CONTACT: Investor Relations Inquiries: Banc of California, Inc. (855) 361-2262 Jared Wolff, (949) 385-8700 Lynn Hopkins, (949) 265-6599