Business Wire | Apr 22, 2021 06:02AM EDT

Banc of California Reports First Quarter 2021 Financial Results

Apr. 22, 2021

SANTA ANA, Calif.--(BUSINESS WIRE)--Apr. 22, 2021--Banc of California, Inc. (NYSE: BANC) today reported net income of $14.4 million and net income available to common stockholders for the first quarter of 2021 of $7.8 million, or diluted earnings per common share of $0.15.

Highlights for the first quarter included:

* Return on average assets of 0.74% * Average cost of total deposits of 0.28%, an 8 basis point decrease from the prior quarter, and period-end total cost of deposits of 0.24% * Noninterest-bearing deposit balances represented 28% of total deposits at March 31, 2021, up from 23% a year earlier * Allowance for credit losses at 1.43% of total loans and 148% of non-performing loans * Total deferrals/forbearances declined to $108.7 million at March 31, 2021 from $251.9 million at December 31, 2020 * Common Equity Tier 1 capital at 11.50% * Entered into an agreement and plan of merger with Pacific Mercantile Bancorp, a commercial bank headquartered in Costa Mesa, California with total assets of $1.6 billion at December 31, 2020 * Redemption of all Series D Preferred Stock for total consideration of $93.3 million

Jared Wolff, President & CEO of Banc of California, commented, "Our first quarter results reflected solid core operating performance and execution on the strategies that are enhancing the value of our franchise. We continued to grow average loans and earning assets, improve our deposit mix, reduce our cost of deposits, and maintain disciplined expense control. Certain non-core items in the quarter masked some of these results but, adjusted for these items, our quarterly results were very good."

Mr. Wolff continued, "Strong loan production helped to offset runoff in certain legacy areas of our portfolio. Our loan pipeline is steadily building which should support continued loan and earning asset growth through the year, assuming economic trends continue. During the first quarter, we also announced that we entered into a definitive agreement to acquire Pacific Mercantile Bancorp. The transaction is currently on track to close during the third quarter of 2021 and both organizations are excited about the opportunities to leverage the collective strengths of the combined company, and to realize the earnings accretion and other benefits that will further accelerate profitability."

Lynn Hopkins, Chief Financial Officer of Banc of California, said, "Given the high level of reserves we built during 2020 and improving economic forecasts, we had a small reserve release in the first quarter, and our allowance for credit losses to total loans ratio was unchanged from the prior quarter. We continued to see a significant decline in loan deferrals during the first quarter, although non-performing loans increased due to the downgrade of well-secured single family residential loans. We are pleased we were able to redeem our Series D Preferred Stock during the first quarter, which we expect to be accretive to our earnings per share going forward. With the improvement we are seeing in our financial performance and strong capital ratios, we remain well positioned to redeem our Series E Preferred Stock late in 2021 or in early 2022, which we expect will provide additional earnings accretion."

Ms. Hopkins continued, "Our net income available to common stockholders and earnings per share in the first quarter included $3.6 million in pre-tax losses on alternative energy investment partnership investments, $1.4 million in pre-tax merger-related and indemnified professional fees, $3.4 million in Series D preferred stock redemption expense, and $2.1 million in tax benefits related to the exercise of all previously issued outstanding stock appreciation rights. Excluding these items, net of a more normalized effective tax rate of 25%, our adjusted net income available to common stockholders for the quarter would have been $12.9 million or $0.25 per diluted share."

Income Statement Highlights

Three Months Ended

March 31, December September June 30, March 31, 2021 31, 30, 2020 2020 2020 2020

($ in thousands)

Totalinterest and $ 68,618 $ 73,530 $ 69,666 $ 72,697 $ 74,714 dividendincome

Totalinterest 10,702 11,967 13,811 17,382 22,853 expense

Net interest 57,916 61,563 55,855 55,315 51,861 income

Totalnoninterest 4,381 6,975 3,954 5,528 2,061 income

Total revenue 62,297 68,538 59,809 60,843 53,922

Totalnoninterest 46,735 38,950 40,394 72,770 46,919 expense

Pre-tax /pre-provision 15,562 29,588 19,415 (11,927 ) 7,003 income (loss)

(Reversal of)provision for (1,107 ) 991 1,141 11,826 15,761 credit losses

Income taxexpense 2,294 6,894 2,361 (5,304 ) (2,165 ) (benefit)

Net income $ 14,375 $ 21,703 $ 15,913 $ (18,449 ) $ (6,593 ) (loss)



Net income(loss)available to $ 7,825 $ 17,706 $ 12,084 $ (21,936 ) $ (9,694 ) 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 Statements of Operations for additional detail on these amounts.

Net interest income

Q1-2021 vs Q4-2020

Net interest income decreased $3.6 million to $57.9 million for the first quarter due to lower prepayment fees, higher net nonaccrual interest reversal, lower amortized fee income from PPP loan forgiveness, and 2 less days in the current quarter, offset by higher average interest-earning assets and lower interest expense. Compared to the prior quarter, average interest-earning assets increased by $110.0 million to $7.36 billion, including higher average loans of $39.1 million and higher other interest-earning assets of $74.1 million.

The net interest margin decreased 19 basis points to 3.19% for the first quarter of 2021 from 3.38% for the fourth quarter of 2020 as the average earning-assets yield decreased 26 basis points and the average cost of total funding decreased 7 basis points. The yield on average interest-earning assets decreased to 3.78% for the first quarter from 4.04% for the fourth quarter due mostly to lower loan yields. The average yield on loans decreased 28 basis points to 4.30% during the first quarter due to impact of lower prepayment penalty fees, higher net reversal of nonaccrual loan interest, and lower amortized fees from PPP loan forgiveness; these items increased the first quarter loan yield by 13 basis points and the fourth quarter loan yield by 34 basis points. The average yield on securities remained flat at 2.13% between quarters. The average yield on our collateralized loan obligations (CLOs) decreased 3 basis points to 1.91% for the first quarter from 1.94% for the fourth quarter as these securities reprice quarterly.

The average cost of total funding decreased 7 basis points to 0.63% for the first quarter from 0.70% for the fourth 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 first quarter. During the first quarter, average deposits increased $164.2 million, consisting of higher average noninterest-bearing deposits of $205.1 million and lower average interest-bearing deposits of $40.9 million. Average Federal Home Loan Bank (FHLB) advances decreased $87.7 million primarily due to maturities of $105.0 million in advances during the prior quarter. The average cost of interest-bearing liabilities decreased 6 basis points to 0.83% for the first quarter of 2021 from 0.89% for the fourth quarter of 2020 due to actively managing down the cost of interest-bearing deposits into the current rate environment. The average cost of interest-bearing deposits declined 9 basis points to 0.38% for the first quarter from 0.47% for the prior quarter. Additionally, average noninterest-bearing deposits represented 27% of total average deposits for the first quarter compared to 24% of total average deposits for the fourth quarter. The average cost of total deposits decreased 8 basis points to 0.28% for the first quarter. The spot rate of total deposits at the end of the first quarter of 2021 was 0.24%.

Provision for credit losses

Q1-2021 vs Q4-2020

The provision for credit losses was a reversal of $1.1 million for the first quarter, compared to a provision for credit losses of $1.0 million for the fourth quarter. The first quarter reversal of credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, consideration of credit quality metrics, and lower period end loan balances of $134.0 million.

Noninterest income

Q1-2021 vs Q4-2020

Noninterest income decreased $2.6 million, to $4.4 million for the first quarter due mostly to lower other income from legacy legal settlements for the benefit of the Company which totaled $2.8 million during the fourth quarter of 2020. Customer service fees decreased by $195 thousand due to lower loan fees of $367 thousand, offset by higher deposit activity fees of $172 thousand. The increase in deposit activity fees is attributed to higher balances and our initiative to bring our service fee schedules more in line with market.

Noninterest expense

Q1-2021 vs Q4-2020

Noninterest expense increased $7.8 million to $46.7 million for the first quarter compared to the prior quarter. The increase was primarily due to higher professional fees of $4.0 million, higher merger-related costs of $700 thousand, and higher net losses in alternative energy partnership investments of $4.3 million. Professional fees included indemnified legal expenses, net of recoveries, of $721 thousand in the first quarter compared to net recoveries of $4.2 million during the fourth quarter. These increases were offset by lower occupancy and equipment of $364 thousand due mostly to lower rent and other facility-related expenses and a $566 thousand decrease in all other expense. The fourth quarter all other expenses included the write-off of capitalized software costs of $336 thousand; there were no similar charges in the first quarter. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $2.3 million to $41.7 million for the first quarter compared to $44.0 million for the prior quarter primarily due to lower professional fees, occupancy and equipment, and other expenses.

Income taxes

Q1-2021 vs Q4-2020

Income tax expense totaled $2.3 million for the first quarter resulting in an effective tax rate of 13.8% compared to $6.9 million for the fourth quarter and an effective tax rate of 24.1%. The lower effective tax rate between quarters was due to a tax benefit resulting from the exercise of all previously issued outstanding stock appreciation rights, including a net benefit of $2.1 million in the first quarter. The effective tax rate is expected to be in the 25% to 27% range for the remaining quarters in 2021.

Balance Sheet

At March 31, 2021, total assets were $7.93 billion, which represented a linked-quarter increase of $56.1 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 Statements of Operations for additional detail on these amounts.

Net interest income

Q1-2021 vs Q4-2020

Net interest income decreased $3.6 million to $57.9 million for the first quarter due to lower prepayment fees, higher net nonaccrual interest reversal, lower amortized fee income from PPP loan forgiveness, and 2 less days in the current quarter, offset by higher average interest-earning assets and lower interest expense. Compared to the prior quarter, average interest-earning assets increased by $110.0 million to $7.36 billion, including higher average loans of $39.1 million and higher other interest-earning assets of $74.1 million.

The net interest margin decreased 19 basis points to 3.19% for the first quarter of 2021 from 3.38% for the fourth quarter of 2020 as the average earning-assets yield decreased 26 basis points and the average cost of total funding decreased 7 basis points. The yield on average interest-earning assets decreased to 3.78% for the first quarter from 4.04% for the fourth quarter due mostly to lower loan yields. The average yield on loans decreased 28 basis points to 4.30% during the first quarter due to impact of lower prepayment penalty fees, higher net reversal of nonaccrual loan interest, and lower amortized fees from PPP loan forgiveness; these items increased the first quarter loan yield by 13 basis points and the fourth quarter loan yield by 34 basis points. The average yield on securities remained flat at 2.13% between quarters. The average yield on our collateralized loan obligations (CLOs) decreased 3 basis points to 1.91% for the first quarter from 1.94% for the fourth quarter as these securities reprice quarterly.

The average cost of total funding decreased 7 basis points to 0.63% for the first quarter from 0.70% for the fourth 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 first quarter. During the first quarter, average deposits increased $164.2 million, consisting of higher average noninterest-bearing deposits of $205.1 million and lower average interest-bearing deposits of $40.9 million. Average Federal Home Loan Bank (FHLB) advances decreased $87.7 million primarily due to maturities of $105.0 million in advances during the prior quarter. The average cost of interest-bearing liabilities decreased 6 basis points to 0.83% for the first quarter of 2021 from 0.89% for the fourth quarter of 2020 due to actively managing down the cost of interest-bearing deposits into the current rate environment. The average cost of interest-bearing deposits declined 9 basis points to 0.38% for the first quarter from 0.47% for the prior quarter. Additionally, average noninterest-bearing deposits represented 27% of total average deposits for the first quarter compared to 24% of total average deposits for the fourth quarter. The average cost of total deposits decreased 8 basis points to 0.28% for the first quarter. The spot rate of total deposits at the end of the first quarter of 2021 was 0.24%.

Provision for credit losses

Q1-2021 vs Q4-2020

The provision for credit losses was a reversal of $1.1 million for the first quarter, compared to a provision for credit losses of $1.0 million for the fourth quarter. The first quarter reversal of credit losses was due primarily to improvements in key macro-economic forecast variables, such as unemployment and gross domestic product, consideration of credit quality metrics, and lower period end loan balances of $134.0 million.

Noninterest income

Q1-2021 vs Q4-2020

Noninterest income decreased $2.6 million, to $4.4 million for the first quarter due mostly to lower other income from legacy legal settlements for the benefit of the Company which totaled $2.8 million during the fourth quarter of 2020. Customer service fees decreased by $195 thousand due to lower loan fees of $367 thousand, offset by higher deposit activity fees of $172 thousand. The increase in deposit activity fees is attributed to higher balances and our initiative to bring our service fee schedules more in line with market.

Noninterest expense

Q1-2021 vs Q4-2020

Noninterest expense increased $7.8 million to $46.7 million for the first quarter compared to the prior quarter. The increase was primarily due to higher professional fees of $4.0 million, higher merger-related costs of $700 thousand, and higher net losses in alternative energy partnership investments of $4.3 million. Professional fees included indemnified legal expenses, net of recoveries, of $721 thousand in the first quarter compared to net recoveries of $4.2 million during the fourth quarter. These increases were offset by lower occupancy and equipment of $364 thousand due mostly to lower rent and other facility-related expenses and a $566 thousand decrease in all other expense. The fourth quarter all other expenses included the write-off of capitalized software costs of $336 thousand; there were no similar charges in the first quarter. Total operating costs, defined as noninterest expense adjusted for certain non-core items (refer to section Non-GAAP Measures), decreased $2.3 million to $41.7 million for the first quarter compared to $44.0 million for the prior quarter primarily due to lower professional fees, occupancy and equipment, and other expenses.

Income taxes

Q1-2021 vs Q4-2020

Income tax expense totaled $2.3 million for the first quarter resulting in an effective tax rate of 13.8% compared to $6.9 million for the fourth quarter and an effective tax rate of 24.1%. The lower effective tax rate between quarters was due to a tax benefit resulting from the exercise of all previously issued outstanding stock appreciation rights, including a net benefit of $2.1 million in the first quarter. The effective tax rate is expected to be in the 25% to 27% range for the remaining quarters in 2021.

Balance Sheet

At March 31, 2021, total assets were $7.93 billion, which represented a linked-quarter increase of $56.1 million. The following table shows selected balance sheet line items as of the dates indicated.

Amount Change

March 31, December 31, September 30, June 30, March 31, Q1-21 vs. Q1-21 vs. 2021 2020 2020 2020 2020 Q4-20 Q1-20



($ in thousands)

Securities $ 1,270,830 $ 1,231,431 $ 1,245,867 $ 1,176,029 $ 969,427 $ 39,399 $ 301,403 available-for-sale

Loans held-for-investment $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 5,627,696 $ 5,667,464 $ (134,004 ) $ 96,937

Loans held-for-sale $ 1,408 $ 1,413 $ 1,849 $ 19,768 $ 20,234 $ (5 ) $ (18,826 )

Total assets $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 $ 7,662,607 $ 56,125 $ 270,852



Noninterest-bearing $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 $ 1,256,081 $ 141,095 $ 444,262 deposits

Total deposits $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 6,037,465 $ 5,562,838 $ 56,242 $ 579,204

Borrowings^(1) $ 891,546 $ 796,110 $ 733,105 $ 790,707 $ 1,151,479 $ 95,436 $ (259,933 )

Total liabilities $ 7,128,766 $ 6,980,127 $ 6,863,852 $ 6,923,179 $ 6,827,605 $ 148,639 $ 301,161

Total equity $ 804,693 $ 897,207 $ 874,254 $ 846,959 $ 835,002 $ (92,514 ) $ (30,309 )

(1)

Represents Advances from Federal Home Loan Bank and Notes payable, net

Investments

Securities available-for-sale increased $39.4 million during the first quarter to $1.27 billion at March 31, 2021 primarily due to purchases of $52.8 million, offset by principal payments of $9.4 million and lower unrealized net gains of $3.6 million. The decrease in the unrealized net gains was due mostly to decreases in the value of mortgage-backed securities as a result of increases in longer term interest rates, offset by improved pricing of CLOs and corporate debt securities due to lower credit spreads. There were no sales of securities during the first quarter. As of March 31, 2021, our securities portfolio included $683.9 million of CLOs, $334.3 million of agency securities, $85.5 million of municipal securities, $150.3 million of corporate debt securities, and $16.7 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 53.8% of the total securities portfolio and the carrying value included an unrealized net loss of $3.6 million at March 31, 2021 compared to an unrealized net loss of $9.7 million at December 31, 2020.

Loans

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

(1) Represents Advances from Federal Home Loan Bank and Notes payable, net

Investments

Securities available-for-sale increased $39.4 million during the first quarter to $1.27 billion at March 31, 2021 primarily due to purchases of $52.8 million, offset by principal payments of $9.4 million and lower unrealized net gains of $3.6 million. The decrease in the unrealized net gains was due mostly to decreases in the value of mortgage-backed securities as a result of increases in longer term interest rates, offset by improved pricing of CLOs and corporate debt securities due to lower credit spreads. There were no sales of securities during the first quarter. As of March 31, 2021, our securities portfolio included $683.9 million of CLOs, $334.3 million of agency securities, $85.5 million of municipal securities, $150.3 million of corporate debt securities, and $16.7 million of SBA pool securities. The CLO portfolio, which is comprised only of AA and AAA rated securities, represented 53.8% of the total securities portfolio and the carrying value included an unrealized net loss of $3.6 million at March 31, 2021 compared to an unrealized net loss of $9.7 million at December 31, 2020.

Loans

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

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

($ in thousands)

Composition ofheld-for-investment loans

Commercial real $ 839,965 $ 807,195 $ 826,683 $ 822,694 $ 810,024 estate

Multifamily 1,258,278 1,289,820 1,476,803 1,434,071 1,466,083

Construction 169,122 176,016 197,629 212,979 227,947

Commercial and 1,878,325 2,088,308 1,586,824 1,436,990 1,578,223 industrial

SBA 338,903 273,444 320,573 310,784 70,583

Total commercial 4,484,593 4,634,783 4,408,512 4,217,518 4,152,860 loans

Single-familyresidential 1,253,251 1,230,236 1,234,479 1,370,785 1,467,375 mortgage

Other consumer 26,557 33,386 35,011 39,393 47,229

Total consumer 1,279,808 1,263,622 1,269,490 1,410,178 1,514,604 loans

Total gross loans $ 5,764,401 $ 5,898,405 $ 5,678,002 $ 5,627,696 $ 5,667,464

Compositionpercentage of held-for-investmentloans

Commercial real 14.6 % 13.7 % 14.6 % 14.6 % 14.3 %estate

Multifamily 21.8 % 21.9 % 26.0 % 25.5 % 25.9 %

Construction 2.9 % 3.0 % 3.5 % 3.8 % 4.0 %

Commercial and 32.6 % 35.3 % 28.0 % 25.5 % 27.9 %industrial

SBA 5.9 % 4.6 % 5.6 % 5.5 % 1.2 %

Total commercial 77.8 % 78.5 % 77.7 % 74.9 % 73.3 %loans

Single-familyresidential 21.7 % 20.9 % 21.7 % 24.4 % 25.9 %mortgage

Other consumer 0.5 % 0.6 % 0.6 % 0.7 % 0.8 %

Total consumer 22.2 % 21.5 % 22.3 % 25.1 % 26.7 %loans

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

Held-for-investment loans decreased $134.0 million to $5.76 billion from the prior quarter, resulting from lower commercial and industrial (C&I) loans of $210.0 million due, in part, to decreased utilization of credit facilities and decreases in multifamily loans of $31.5 million, and construction loans of $6.9 million due to prepayment activity. The decreases were partially offset by increases in commercial real estate loans of $32.8 million and SBA loans of $65.5 million due mostly to $131.9 million in new PPP loans originated, offset by the SBA processing forgiveness requests of $62.5 million during the quarter. At March 31, 2021, SBA loans included $276.0 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 credit facilities) represent approximately 66% 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:

March 31, 2021

Amount % of Portfolio

($ in thousands)

C&I Portfolio by Industry

Finance and insurance (includes Warehouse $ 1,220,408 65 %lending)

Real Estate & Rental Leasing 230,781 12 %

Gas Stations 68,672 4 %

Healthcare 68,964 4 %

Wholesale Trade 40,803 2 %

Television / Motion Pictures 34,067 2 %

Manufacturing 25,198 1 %

Food Services 31,366 2 %

Other Retail Trade 21,167 1 %

Professional Services 16,993 1 %

Transportation 4,773 - %

Accommodations 2,427 - %

All other 112,706 6 %

Total $ 1,878,325 100 %

Deposits

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

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

($ in thousands)

Composition of deposits

Noninterest-bearing $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 $ 1,256,081 checking

Interest-bearing 2,088,528 2,107,942 2,045,115 1,846,698 1,572,389 checking

Money market 775,072 714,297 689,769 765,854 575,820

Savings 909,631 932,363 946,293 939,018 877,947

Non-brokeredcertificates of 668,468 755,727 820,531 924,630 1,071,936 deposit

Brokeredcertificates of - 16,223 79,814 169,761 208,665 deposit

Total deposits $ 6,142,042 $ 6,085,800 $ 6,032,266 $ 6,037,465 $ 5,562,838

Compositionpercentage of deposits

Noninterest-bearing 27.7 % 25.6 % 24.1 % 23.0 % 22.6 %checking

Interest-bearing 34.0 % 34.6 % 33.9 % 30.6 % 28.3 %checking

Money market 12.6 % 11.7 % 11.4 % 12.7 % 10.3 %

Savings 14.8 % 15.3 % 15.7 % 15.6 % 15.8 %

Non-brokeredcertificates of 10.9 % 12.4 % 13.6 % 15.3 % 19.3 %deposit

Brokeredcertificates of - % 0.4 % 1.3 % 2.8 % 3.7 %deposit

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

Total deposits increased $56.2 million during the first quarter of 2021 to $6.14 billion due to higher noninterest-bearing checking balances of $141.1 million and money market balances of $60.8 million, offset by lower interest-bearing checking of $19.4 million, savings balances of $22.7 million, and non-brokered certificates of deposit of $87.3 million. We continue to focus on growing relationship-based deposits, strategically augmented by wholesale funding, as we actively managed down deposit costs in response to the current interest rate environment. Noninterest-bearing deposits totaled $1.70 billion and represented 27.7% of total deposits at March 31, 2021 compared to $1.56 billion, or 25.6% of total deposits, at December 31, 2020.

Debt

Advances from the FHLB increased $95.3 million, or 18%, to $635.1 million, as of March 31, 2021, due to higher overnight advances, offset by maturities of $45.0 million in term advances. At the end of the first quarter, FHLB advances included $225.0 million in overnight borrowings, $5.0 million in term advances maturing within three months, and $411.0 million maturing beyond three months with a weighted average life of 4.7 years and weighted average interest rate of 2.53%.

Equity

At March 31, 2021, total stockholders' equity decreased by $92.5 million to $804.7 million and tangible common equity decreased by $2.3 million to $670.2 million on a linked-quarter basis. The decrease in total stockholders' equity for the first quarter, was a result of the redemption of all remaining Series D Preferred Stock for $93.3 million, lower net accumulated other comprehensive income of $2.6 million, dividends to common and preferred stockholders of $6.2 million and the impact of vested and exercised share-based awards of $6.4 million, offset by net income of $14.4 million and share-based award compensation of $1.5 million. Tangible book value per share decreased to $13.24 as of March 31, 2021 from $13.39 at December 31, 2020.

Capital ratios remain strong with total risk-based capital at 15.87% and a tier 1 leverage ratio of 9.62%. The following table sets forth our regulatory capital ratios at March 31, 2021 and the previous four quarters. The interim capital relief related to the adoption of the current expected credit losses (CECL) accounting standard increased the Bank's leverage ratio by approximately 10 basis points at March 31, 2021.

March December September June March 31, 31, 30, 30, 31, 2021 2020 2020 2020 2020

Capital Ratios^(1)

Banc of California, Inc.

Total risk-based capital 15.87 % 17.01 % 16.19 % 16.35 % 16.16 %ratio

Tier 1 risk-based capital 13.17 % 14.35 % 14.94 % 15.10 % 14.91 %ratio

Common equity tier 1 11.50 % 11.19 % 11.59 % 11.68 % 11.58 %capital ratio

Tier 1 leverage ratio 9.62 % 10.90 % 10.79 % 10.56 % 11.20 %

Banc of California, NA

Total risk-based capital 17.82 % 17.27 % 18.14 % 18.17 % 18.21 %ratio

Tier 1 risk-based capital 16.57 % 16.02 % 16.89 % 16.92 % 16.96 %ratio

Common equity tier 1 16.57 % 16.02 % 16.89 % 16.92 % 16.96 %capital ratio

Tier 1 leverage ratio 12.13 % 12.19 % 12.21 % 11.84 % 12.67 %

(1)

March 31, 2021 capital ratios are preliminary.

Credit Quality

(1) March 31, 2021 capital ratios are preliminary.

Credit Quality

March 31, December September June 30, March 31, 2021 31, 30, 2020 2020 2020 2020

Asset qualityinformation and ($ in thousands)ratios

Delinquent loans held-for-investment

30 to 89 days $ 31,005 $ 13,981 $ 51,229 $ 49,810 $ 56,338 delinquent

90+ days delinquent 30,292 17,636 31,809 45,384 28,632

Total delinquent $ 61,297 $ 31,617 $ 83,038 $ 95,194 $ 84,970 loans

Total delinquentloans to total 1.06 % 0.54 % 1.46 % 1.69 % 1.50 %loans

Non-performingassets, excluding loans held-for-sale

Non-accrual loans $ 55,920 $ 35,900 $ 66,337 $ 72,703 $ 56,471

90+ days delinquentand still accruing - 728 547 - - loans

Non-performing 55,920 36,628 66,884 72,703 56,471 loans

Other real estate - - - - - owned

Non-performing $ 55,920 $ 36,628 $ 66,884 $ 72,703 $ 56,471 assets

ALL tonon-performing 141.90 % 221.22 % 135.95 % 124.30 % 138.55 %loans

Non-performingloans to total 0.97 % 0.62 % 1.18 % 1.29 % 1.00 %loansheld-for-investment

Non-performingassets to total 0.70 % 0.46 % 0.86 % 0.94 % 0.74 %assets

Troubled debtrestructurings (TDRs)

Performing TDRs $ 4,547 $ 4,733 $ 5,408 $ 5,597 $ 6,100

Non-performing TDRs 4,130 4,264 20,002 20,275 20,852

Total TDRs $ 8,677 $ 8,997 $ 25,410 $ 25,872 $ 26,952

Total delinquent loans increased $29.7 million in the first quarter to $61.3 million at March 31, 2021, due to $39.0 million of additions, offset by $9.2 million returning to current status and $0.2 million of principal payments or payoffs. Delinquent loans included single-family residential (SFR) loans of $47.8 million, or 78% of the total delinquent balance at quarter end, and represented $24.9 million of the quarter over quarter increase. Excluding delinquent SFR loans, the remaining delinquent loans totaled $13.5 million, or 0.30% of total loans at March 31, 2021.

Non-performing loans increased $19.3 million to $55.9 million as of March 31, 2021, of which $18.1 million, or 32%, relates to loans in a current payment status. The first quarter increase was due to $22.5 million of loans placed on non-accrual status, offset by $3.2 million in cured loans and payoffs. Of the $22.5 million of loans placed on non-accrual status, $20.0 million, or 88.7%, of such loans, related to SFR loans.

At March 31, 2021, non-performing loans included (i) a legacy relationship totaling $7.3 million, or 13% of total non-performing loans, that is well-secured by a combination of commercial real estate and SFR properties with an average loan-to-value ratio of 51%, (ii) SFR loans totaling $32.4 million, or 58% of total non-performing loans, and (iii) other commercial loans of $16.1 million, or 29% of total non-performing loans.

In light of the pandemic, we provided support to clients by granting loan deferments or forbearances. The loans on deferment or forbearance status as of the dates indicated are shown below:

March 31, 2021 December 31, 2020

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

($ in thousands)

Single-familyresidential 47 $ 48,831 4 % 123 $ 138,771 11 %mortgage

All other 15 59,858 1 % 33 113,163 2 %loans

Total 62 $ 108,689 2 % 156 $ 251,934 4 %

(1)

Includes loans in the process of deferment or forbearance which are not reported as delinquent.

Loans on deferment or forbearance status decreased $143.2 million, or 57%, during the first quarter of 2021. Of the balances as of March 31, 2021, all other loans include 8 commercial loans totaling $34.0 million under review and pending approval for deferral, of which 3 loans totaling $17.3 million were initial deferral requests. 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) Includes loans in the process of deferment or forbearance which are not reported as delinquent.

Loans on deferment or forbearance status decreased $143.2 million, or 57%, during the first quarter of 2021. Of the balances as of March 31, 2021, all other loans include 8 commercial loans totaling $34.0 million under review and pending approval for deferral, of which 3 loans totaling $17.3 million were initial deferral requests. 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

March 31, December 31, September June 30, March 31, 2021 2020 30, 2020 2020 2020

($ in thousands)

Allowance for loan losses (ALL)

Balance at $ 81,030 $ 90,927 $ 90,370 $ 78,243 $ 57,649 beginning of period

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

Loans charged off (565 ) (11,520 ) (1,821 ) - (2,076 )

Recoveries 172 609 248 608 350

Net (charge-offs) (393 ) (10,911 ) (1,573 ) 608 (1,726 ) recoveries

Provision for(reversal of) loan (1,284 ) 1,014 2,130 11,519 14,711 losses

Balance at end of $ 79,353 $ 81,030 $ 90,927 $ 90,370 $ 78,243 period

Reserve forunfunded loan commitments

Balance at $ 3,183 $ 3,206 $ 4,195 $ 3,888 $ 4,064 beginning of period

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

Provision for(reversal of) 177 (23 ) (989 ) 307 1,050 credit losses

Balance at end of 3,360 3,183 3,206 4,195 3,888 period

Allowance for $ 82,713 $ 84,213 $ 94,133 $ 94,565 $ 82,131 credit losses (ACL)



ALL to total loans 1.38 % 1.37 % 1.60 % 1.61 % 1.38 %

ACL to total loans 1.43 % 1.43 % 1.66 % 1.68 % 1.45 %

ACL to total loans, 1.51 % 1.48 % 1.74 % 1.76 % 1.45 %excluding PPP loans

ACL to NPLs 147.91 % 229.91 % 140.74 % 130.07 % 145.44 %

Annualized net loancharge-offs(recoveries) to 0.03 % 0.77 % 0.12 % (0.04 ) % 0.12 %average total loansheld-for-investment



Reserve for loss on repurchased loans

Balance at $ 5,515 $ 5,487 $ 5,567 $ 5,601 $ 6,201 beginning of period

Initial provisionfor loan - - 11 - - repurchases

Provision for(reversal of) (132 ) 28 (91 ) (34 ) (600 ) provision for loanrepurchases

Balance at end of $ 5,383 $ 5,515 $ 5,487 $ 5,567 $ 5,601 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 $82.7 million, or 1.43% of total loans, at March 31, 2021, compared to $84.2 million, or 1.43% of total loans, at December 31, 2020. The $1.5 million decrease in the ACL was due to: (i) lower general reserves of $1.0 million from portfolio mix, (ii) net charge-offs of $393 thousand, and (iii) lower specific reserves of $58 thousand. The ACL coverage of non-performing loans was 148% at March 31, 2021 compared to 230% at December 31, 2020.

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 March 2021. In contrast to the December 2020 forecasts, the March forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates and lower unemployment rates). While the forecasts are improving and the economy is showing signs of recovery with the rollout of the vaccine and additional government stimulus, there remains uncertainty regarding the ultimate impact of the pandemic and the pace of the recovery. Accordingly, our economic assumptions and the resulting ACL level and 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 first quarter 2021 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, April 22, 2021. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 3056351. 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 $7.9 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). The Bank has 36 offices including 29 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 to 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 (SEC). 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. Further, statements about the potential effects of the proposed acquisition of Pacific Mercantile Bancorp 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 (i) the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals, financial tests or other conditions to closing are not received or satisfied on a timely basis or at all; (ii) changes in Banc of California Inc.'s or Pacific Mercantile Bancorp's stock price before closing, including as a result of its financial performance prior to closing, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies; (iii) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California Inc. and Pacific Mercantile Bancorp operate; (iv) the ability to promptly and effectively integrate the businesses of Banc of California Inc. and Pacific Mercantile Bancorp; (v) the reaction to the transaction of the companies' customers, employees and counterparties; (vi) diversion of management time on merger-related issues; (vii) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (viii) other risks that are described in Banc of California Inc.'s and Pacific Mercantile Bancorp's public filings with the SEC. 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.

Additional Information About the Merger and Where to Find It

Investors and security holders are urged to carefully review and consider each of Banc of California Inc.'s and Pacific Mercantile Bancorp's public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by Banc of California Inc. with the SEC may be obtained free of charge at Banc of California Inc.'s website at www.bancofcal.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from Banc of California Inc. by requesting them in writing to Banc of California, Inc., 3 MacArthur Place, Santa Ana, CA 92707; Attention: Investor Relations, by submitting an email request to ir@bancofcal.com or by telephone at (855) 361-2262.

The documents filed by Pacific Mercantile Bancorp with the SEC may be obtained free of charge at Pacific Mercantile Bancorp's website at www.pmbank.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from Pacific Mercantile Bancorp by requesting them in writing to Pacific Mercantile Bancorp, 949 South Coast Drive, Suite 300, Costa Mesa, CA 92626; Attention: Investor Relations, or by telephone at 714-438-2500.

Banc of California Inc. intends to file a registration statement with the SEC, which will include a joint proxy statement of Banc of California Inc. and Pacific Mercantile Bancorp and a prospectus of Banc of California Inc., and each party will file other documents regarding the proposed transaction with the SEC. Before making any voting or investment decision, investors and security holders of Banc of California Inc. and Pacific Mercantile Bancorp are urged to carefully read the entire registration statement and joint proxy statement/prospectus, when they become available, as well as any amendments or supplements to these documents, because they will contain important information about the proposed transaction. A definitive joint proxy statement/prospectus will be sent to the shareholders of Banc of California Inc. and Pacific Mercantile Bancorp seeking any required shareholder approvals. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC's website or from Banc of California Inc. or Pacific Mercantile Bancorp by writing to the addresses provided for each company set forth in the paragraphs above.

Banc of California Inc., Pacific Mercantile Bancorp, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from Banc of California Inc. and Pacific Mercantile Bancorp shareholders in favor of the approval of the transaction. Information about the directors and executive officers of Banc of California Inc. and their ownership of Banc of California Inc. common stock is set forth in the proxy statement for Banc of California Inc.'s 2021 annual meeting of stockholders, as previously filed with the SEC. Information about the directors and executive officers of Pacific Mercantile Bancorp and their ownership of Pacific Mercantile Bancorp common stock is set forth in the proxy statement for PMB's 2020 annual meeting of shareholders, as previously filed with the SEC. Shareholders may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available.

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 $82.7 million, or 1.43% of total loans, at March 31, 2021, compared to $84.2 million, or 1.43% of total loans, at December 31, 2020. The $1.5 million decrease in the ACL was due to: (i) lower general reserves of $1.0 million from portfolio mix, (ii) net charge-offs of $393 thousand, and (iii) lower specific reserves of $58 thousand. The ACL coverage of non-performing loans was 148% at March 31, 2021 compared to 230% at December 31, 2020.

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 March 2021. In contrast to the December 2020 forecasts, the March forecasts reflect a more favorable view of the economy (i.e. higher GDP growth rates and lower unemployment rates). While the forecasts are improving and the economy is showing signs of recovery with the rollout of the vaccine and additional government stimulus, there remains uncertainty regarding the ultimate impact of the pandemic and the pace of the recovery. Accordingly, our economic assumptions and the resulting ACL level and 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 first quarter 2021 financial results at 10:00 a.m. Pacific Time (PT) on Thursday, April 22, 2021. Interested parties are welcome to attend the conference call by dialing (888) 317-6003, and referencing event code 3056351. 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 $7.9 billion in assets and one wholly-owned banking subsidiary, Banc of California, N.A. (the Bank). The Bank has 36 offices including 29 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 to 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 (SEC). 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. Further, statements about the potential effects of the proposed acquisition of Pacific Mercantile Bancorp 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 (i) the possibility that the merger does not close when expected or at all because required regulatory, shareholder or other approvals, financial tests or other conditions to closing are not received or satisfied on a timely basis or at all; (ii) changes in Banc of California Inc.'s or Pacific Mercantile Bancorp's stock price before closing, including as a result of its financial performance prior to closing, or more generally due to broader stock market movements, and the performance of financial companies and peer group companies; (iii) the risk that the benefits from the transaction may not be fully realized or may take longer to realize than expected, including as a result of changes in general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Banc of California Inc. and Pacific Mercantile Bancorp operate; (iv) the ability to promptly and effectively integrate the businesses of Banc of California Inc. and Pacific Mercantile Bancorp; (v) the reaction to the transaction of the companies' customers, employees and counterparties; (vi) diversion of management time on merger-related issues; (vii) lower than expected revenues, credit quality deterioration or a reduction in real estate values or a reduction in net earnings; and (viii) other risks that are described in Banc of California Inc.'s and Pacific Mercantile Bancorp's public filings with the SEC. 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.

Additional Information About the Merger and Where to Find It

Investors and security holders are urged to carefully review and consider each of Banc of California Inc.'s and Pacific Mercantile Bancorp's public filings with the SEC, including but not limited to their Annual Reports on Form 10-K, their proxy statements, their Current Reports on Form 8-K and their Quarterly Reports on Form 10-Q. The documents filed by Banc of California Inc. with the SEC may be obtained free of charge at Banc of California Inc.'s website at www.bancofcal.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from Banc of California Inc. by requesting them in writing to Banc of California, Inc., 3 MacArthur Place, Santa Ana, CA 92707; Attention: Investor Relations, by submitting an email request to ir@bancofcal.com or by telephone at (855) 361-2262.

The documents filed by Pacific Mercantile Bancorp with the SEC may be obtained free of charge at Pacific Mercantile Bancorp's website at www.pmbank.com or at the SEC's website at www.sec.gov. These documents may also be obtained free of charge from Pacific Mercantile Bancorp by requesting them in writing to Pacific Mercantile Bancorp, 949 South Coast Drive, Suite 300, Costa Mesa, CA 92626; Attention: Investor Relations, or by telephone at 714-438-2500.

Banc of California Inc. intends to file a registration statement with the SEC, which will include a joint proxy statement of Banc of California Inc. and Pacific Mercantile Bancorp and a prospectus of Banc of California Inc., and each party will file other documents regarding the proposed transaction with the SEC. Before making any voting or investment decision, investors and security holders of Banc of California Inc. and Pacific Mercantile Bancorp are urged to carefully read the entire registration statement and joint proxy statement/prospectus, when they become available, as well as any amendments or supplements to these documents, because they will contain important information about the proposed transaction. A definitive joint proxy statement/prospectus will be sent to the shareholders of Banc of California Inc. and Pacific Mercantile Bancorp seeking any required shareholder approvals. Investors and security holders will be able to obtain the registration statement and the joint proxy statement/prospectus free of charge from the SEC's website or from Banc of California Inc. or Pacific Mercantile Bancorp by writing to the addresses provided for each company set forth in the paragraphs above.

Banc of California Inc., Pacific Mercantile Bancorp, their directors, executive officers and certain other persons may be deemed to be participants in the solicitation of proxies from Banc of California Inc. and Pacific Mercantile Bancorp shareholders in favor of the approval of the transaction. Information about the directors and executive officers of Banc of California Inc. and their ownership of Banc of California Inc. common stock is set forth in the proxy statement for Banc of California Inc.'s 2021 annual meeting of stockholders, as previously filed with the SEC. Information about the directors and executive officers of Pacific Mercantile Bancorp and their ownership of Pacific Mercantile Bancorp common stock is set forth in the proxy statement for PMB's 2020 annual meeting of shareholders, as previously filed with the SEC. Shareholders may obtain additional information regarding the interests of such participants by reading the registration statement and the joint proxy statement/prospectus when they become available.

Banc of California, Inc.

Consolidated Statements of Financial Condition (Unaudited)

(Dollars in thousands)

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

ASSETS

Cash and cash $ 379,509 $ 220,819 $ 292,490 $ 420,640 $ 435,992 equivalents

Securities 1,270,830 1,231,431 1,245,867 1,176,029 969,427 available-for-sale

Loans held-for-sale 1,408 1,413 1,849 19,768 20,234

Loans 5,764,401 5,898,405 5,678,002 5,627,696 5,667,464 held-for-investment

Allowance for loan (79,353 ) (81,030 ) (90,927 ) (90,370 ) (78,243 ) losses

Federal Home LoanBank and other bank 44,964 44,506 44,809 46,585 57,237 stock

Servicing rights, 1,407 1,454 1,621 1,753 2,009 net

Premises and 120,071 121,520 123,812 125,247 127,379 equipment, net

Alternative energypartnership 23,809 27,977 27,786 26,967 27,347 investments, net

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

Other intangible 2,351 2,633 2,939 3,292 3,722 assets, net

Deferred income 47,877 45,957 43,744 48,288 63,849 tax, net

Income tax 210 1,105 10,701 13,094 7,198 receivable

Bank owned lifeinsurance 112,479 111,807 111,115 110,487 110,397 investment

Right of use assets 22,069 19,633 18,909 19,408 20,882

Other assets 184,283 192,560 188,245 184,110 190,569

Total assets $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 $ 7,662,607



LIABILITIES ANDSTOCKHOLDERS' EQUITY

Noninterest-bearing $ 1,700,343 $ 1,559,248 $ 1,450,744 $ 1,391,504 $ 1,256,081 deposits

Interest-bearing 4,441,699 4,526,552 4,581,522 4,645,961 4,306,757 deposits

Total deposits 6,142,042 6,085,800 6,032,266 6,037,465 5,562,838

Advances fromFederal Home Loan 635,105 539,795 559,482 617,170 978,000 Bank

Notes payable, net 256,441 256,315 173,623 173,537 173,479

Reserve for loss on 5,383 5,515 5,487 5,567 5,601 repurchased loans

Lease liabilities 23,173 20,647 19,938 20,531 22,075

Accrued expensesand other 66,622 72,055 73,056 68,909 85,612 liabilities

Total liabilities 7,128,766 6,980,127 6,863,852 6,923,179 6,827,605

Commitments andcontingent liabilities

Preferred stock 94,956 184,878 184,878 185,037 187,687

Common stock 526 522 522 522 520

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

Additional paid-in 629,844 634,704 633,409 632,117 631,125 capital

Retained earnings 115,004 110,179 95,001 85,670 110,640

Treasury stock (40,827 ) (40,827 ) (40,827 ) (40,827 ) (40,827 )

Accumulated othercomprehensive 5,185 7,746 1,266 (15,565 ) (54,148 ) income (loss), net

Total stockholders' 804,693 897,207 874,254 846,959 835,002 equity

Total liabilitiesand stockholders' $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 $ 7,662,607 equity

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Interest and dividend income

Loans, including fees

$

61,345

$

66,105

$

62,019

$

63,642

$

65,534

Securities

6,501

6,636

6,766

7,816

7,820

Other interest-earning assets

772

789

881

1,239

1,360

Total interest and dividend income

68,618

73,530

69,666

72,697

74,714

Interest expense

Deposits

4,286

5,436

7,564

10,205

14,611

Federal Home Loan Bank advances

3,112

3,479

3,860

4,818

5,883

Notes payable and other interest-bearing liabilities

3,304

3,052

2,387

2,359

2,359

Total interest expense

10,702

11,967

13,811

17,382

22,853

Net interest income

57,916

61,563

55,855

55,315

51,861

(Reversal of) provision for credit losses

(1,107

)

991

1,141

11,826

15,761

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

59,023

60,572

54,714

43,489

36,100

Noninterest income

Customer service fees

1,758

1,953

1,498

1,224

1,096

Loan servicing income

268

149

186

95

75

Income from bank owned life insurance

672

691

629

591

578

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

-

-

-

2,011

-

Fair value adjustment on loans held for sale

-

36

24

25

(1,586

)

Net gain (loss) on sale of loans

-

-

272

-

(27

)

All other income

1,683

4,146

1,345

1,582

1,925

Total noninterest income

4,381

6,975

3,954

5,528

2,061

Noninterest expense

Salaries and employee benefits

25,719

25,836

23,277

24,260

23,436

Naming rights termination

-

-

-

26,769

-

Occupancy and equipment

7,196

7,560

7,457

7,090

7,243

Professional fees

4,022

29

5,147

4,596

5,964

Data processing

1,655

1,608

1,657

1,536

1,773

Advertising

118

171

219

1,157

1,756

Regulatory assessments

774

748

784

725

484

Reversal of loan repurchase reserves

(132

)

28

(91

)

(34

)

(600

)

Amortization of intangible assets

282

306

353

430

429

Merger-related costs

700

-

-

-

-

All other expense

2,771

3,337

3,021

6,408

4,529

Total noninterest expense before loss (gain) in alternative energy partnership investments

43,105

39,623

41,824

72,937

45,014

Loss (gain) in alternative energy partnership investments

3,630

(673

)

(1,430

)

(167

)

1,905

Total noninterest expense

46,735

38,950

40,394

72,770

46,919

Income (loss) before income taxes

16,669

28,597

18,274

(23,753

)

(8,758

)

Income tax expense (benefit)

2,294

6,894

2,361

(5,304

)

(2,165

)

Net income (loss)

14,375

21,703

15,913

(18,449

)

(6,593

)

Preferred stock dividends

3,141

3,447

3,447

3,442

3,533

Income allocated to participating securities

62

456

281

-

-

Participating securities dividends

-

94

94

94

94

Impact of preferred stock redemption

3,347

-

7

(49

)

(526

)

Net income (loss) available to common stockholders

$

7,825

$

17,706

$

12,084

$

(21,936

)

$

(9,694

)

Earnings (loss) per common share:

Basic

$

0.16

$

0.35

$

0.24

$

(0.44

)

$

(0.19

)

Diluted

$

0.15

$

0.35

$

0.24

$

(0.44

)

$

(0.19

)

Weighted average number of common shares outstanding

Basic

50,350,897

50,125,462

50,108,655

50,030,919

50,464,777

Diluted

50,750,522

50,335,271

50,190,933

50,030,919

50,464,777

Dividends declared per common share

$

0.06

$

0.06

$

0.06

$

0.06

$

0.06

Banc of California, Inc.

Consolidated Statements of Operations (Unaudited)

(Dollars in thousands, except per share data)

Three Months Ended

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Interest and dividend income

Loans, including fees $ 61,345 $ 66,105 $ 62,019 $ 63,642 $ 65,534

Securities 6,501 6,636 6,766 7,816 7,820

Other interest-earning 772 789 881 1,239 1,360 assets

Total interest and 68,618 73,530 69,666 72,697 74,714 dividend income

Interest expense

Deposits 4,286 5,436 7,564 10,205 14,611

Federal Home Loan Bank 3,112 3,479 3,860 4,818 5,883 advances

Notes payable and otherinterest-bearing 3,304 3,052 2,387 2,359 2,359 liabilities

Total interest expense 10,702 11,967 13,811 17,382 22,853

Net interest income 57,916 61,563 55,855 55,315 51,861

(Reversal of) provision (1,107 ) 991 1,141 11,826 15,761 for credit losses

Net interest incomeafter (reversal of) 59,023 60,572 54,714 43,489 36,100 provision for creditlosses

Noninterest income

Customer service fees 1,758 1,953 1,498 1,224 1,096

Loan servicing income 268 149 186 95 75

Income from bank owned 672 691 629 591 578 life insurance

Net gain (loss) on saleof securities available - - - 2,011 - for sale

Fair value adjustment - 36 24 25 (1,586 ) on loans held for sale

Net gain (loss) on sale - - 272 - (27 ) of loans

All other income 1,683 4,146 1,345 1,582 1,925

Total noninterest 4,381 6,975 3,954 5,528 2,061 income

Noninterest expense

Salaries and employee 25,719 25,836 23,277 24,260 23,436 benefits

Naming rights - - - 26,769 - termination

Occupancy and equipment 7,196 7,560 7,457 7,090 7,243

Professional fees 4,022 29 5,147 4,596 5,964

Data processing 1,655 1,608 1,657 1,536 1,773

Advertising 118 171 219 1,157 1,756

Regulatory assessments 774 748 784 725 484

Reversal of loan (132 ) 28 (91 ) (34 ) (600 ) repurchase reserves

Amortization of 282 306 353 430 429 intangible assets

Merger-related costs 700 - - - -

All other expense 2,771 3,337 3,021 6,408 4,529

Total noninterestexpense before loss(gain) in alternative 43,105 39,623 41,824 72,937 45,014 energy partnershipinvestments

Loss (gain) inalternative energy 3,630 (673 ) (1,430 ) (167 ) 1,905 partnership investments

Total noninterest 46,735 38,950 40,394 72,770 46,919 expense

Income (loss) before 16,669 28,597 18,274 (23,753 ) (8,758 ) income taxes

Income tax expense 2,294 6,894 2,361 (5,304 ) (2,165 ) (benefit)

Net income (loss) 14,375 21,703 15,913 (18,449 ) (6,593 )

Preferred stock 3,141 3,447 3,447 3,442 3,533 dividends

Income allocated toparticipating 62 456 281 - - securities

Participating - 94 94 94 94 securities dividends

Impact of preferred 3,347 - 7 (49 ) (526 ) stock redemption

Net income (loss)available to common $ 7,825 $ 17,706 $ 12,084 $ (21,936 ) $ (9,694 ) stockholders



Earnings (loss) per common share:

Basic $ 0.16 $ 0.35 $ 0.24 $ (0.44 ) $ (0.19 )

Diluted $ 0.15 $ 0.35 $ 0.24 $ (0.44 ) $ (0.19 )

Weighted average numberof common shares outstanding

Basic 50,350,897 50,125,462 50,108,655 50,030,919 50,464,777

Diluted 50,750,522 50,335,271 50,190,933 50,030,919 50,464,777

Dividends declared per $ 0.06 $ 0.06 $ 0.06 $ 0.06 $ 0.06 common share

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Profitability and other ratios of consolidated operations

Return on average assets(1)

0.74

%

1.11

%

0.82

%

(0.96

)

%

(0.35

)

%

Return on average equity(1)

6.56

%

9.67

%

7.32

%

(8.69

)

%

(2.89

)

%

Return on average tangible common equity(2)

4.81

%

11.02

%

7.92

%

(13.77

)

%

(5.44

)

%

Pre-tax pre-provision income (loss) ROAA

0.80

%

1.52

%

1.00

%

(0.62

)

%

0.37

%

Adjusted pre-tax pre-provision income ROAA(1)(2)

1.06

%

1.25

%

0.98

%

0.83

%

0.65

%

Dividend payout ratio(3)

37.50

%

17.14

%

25.00

%

(13.64

)

%

(31.58

)

%

Average loan yield

4.30

%

4.58

%

4.46

%

4.48

%

4.56

%

Average cost of interest-bearing deposits

0.38

%

0.47

%

0.66

%

0.93

%

1.41

%

Average cost of total deposits

0.28

%

0.36

%

0.51

%

0.71

%

1.11

%

Net interest spread

2.95

%

3.15

%

2.84

%

2.77

%

2.56

%

Net interest margin(1)

3.19

%

3.38

%

3.09

%

3.09

%

2.97

%

Noninterest income to total revenue(4)

7.03

%

10.18

%

6.61

%

9.09

%

3.82

%

Noninterest income to average total assets(1)

0.23

%

0.36

%

0.20

%

0.29

%

0.11

%

Noninterest expense to average total assets(1)

2.41

%

2.00

%

2.09

%

3.78

%

2.50

%

Adjusted noninterest expense to average total assets(1)(2)

2.15

%

2.26

%

2.10

%

2.22

%

2.30

%

Efficiency ratio(2)(5)

75.02

%

56.83

%

67.54

%

119.60

%

87.01

%

Adjusted efficiency ratio(2)(5)

66.91

%

64.26

%

68.31

%

72.74

%

78.07

%

Average loans held-for-investment to average deposits

93.74

%

95.65

%

92.86

%

98.51

%

108.54

%

Average securities available-for-sale to average total assets

15.73

%

15.96

%

15.49

%

13.75

%

12.60

%

Average stockholders' equity to average total assets

11.30

%

11.49

%

11.26

%

11.04

%

12.11

%

Banc of California, Inc.

Selected Financial Data

(Unaudited)

Three Months Ended

March December September June 30, March 31, 31, 31, 30, 2020 2020 2021 2020 2020

Profitability andother ratios of consolidatedoperations

Return on average 0.74 % 1.11 % 0.82 % (0.96 ) % (0.35 ) %assets^(1)

Return on average 6.56 % 9.67 % 7.32 % (8.69 ) % (2.89 ) %equity^(1)

Return on averagetangible common 4.81 % 11.02 % 7.92 % (13.77 ) % (5.44 ) %equity^(2)

Pre-tax pre-provision 0.80 % 1.52 % 1.00 % (0.62 ) % 0.37 %income (loss) ROAA

Adjusted pre-taxpre-provision income 1.06 % 1.25 % 0.98 % 0.83 % 0.65 %ROAA^(1)(2)

Dividend payout ratio 37.50 % 17.14 % 25.00 % (13.64 ) % (31.58 ) %^(3)

Average loan yield 4.30 % 4.58 % 4.46 % 4.48 % 4.56 %

Average cost ofinterest-bearing 0.38 % 0.47 % 0.66 % 0.93 % 1.41 %deposits

Average cost of total 0.28 % 0.36 % 0.51 % 0.71 % 1.11 %deposits

Net interest spread 2.95 % 3.15 % 2.84 % 2.77 % 2.56 %

Net interest margin^ 3.19 % 3.38 % 3.09 % 3.09 % 2.97 %(1)

Noninterest income to 7.03 % 10.18 % 6.61 % 9.09 % 3.82 %total revenue^(4)

Noninterest income toaverage total assets^ 0.23 % 0.36 % 0.20 % 0.29 % 0.11 %(1)

Noninterest expenseto average total 2.41 % 2.00 % 2.09 % 3.78 % 2.50 %assets^(1)

Adjusted noninterestexpense to average 2.15 % 2.26 % 2.10 % 2.22 % 2.30 %total assets^(1)(2)

Efficiency ratio^(2) 75.02 % 56.83 % 67.54 % 119.60 % 87.01 %(5)

Adjusted efficiency 66.91 % 64.26 % 68.31 % 72.74 % 78.07 %ratio^(2)(5)

Average loansheld-for-investment 93.74 % 95.65 % 92.86 % 98.51 % 108.54 %to average deposits

Average securitiesavailable-for-sale to 15.73 % 15.96 % 15.49 % 13.75 % 12.60 %average total assets

Average stockholders'equity to average 11.30 % 11.49 % 11.26 % 11.04 % 12.11 %total 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

March 31, 2021

December 31, 2020

September 30, 2020

Average

Yield

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

1,413

$

7

2.01

%

$

1,564

$

8

2.03

%

$

19,544

$

139

2.83

%

SFR mortgage

1,210,105

11,747

3.94

%

1,224,865

12,955

4.21

%

1,311,513

13,178

4.00

%

Commercial real estate, multifamily, and construction

2,322,509

26,387

4.61

%

2,507,950

30,371

4.82

%

2,493,408

29,666

4.73

%

Commercial and industrial, SBA, and lease financing

2,221,494

22,910

4.18

%

1,978,684

21,984

4.42

%

1,673,548

18,585

4.42

%

Other consumer

28,520

294

4.18

%

31,856

787

9.83

%

35,563

451

5.05

%

Gross loans and leases

5,784,041

61,345

4.30

%

5,744,919

66,105

4.58

%

5,533,576

62,019

4.46

%

Securities

1,236,138

6,501

2.13

%

1,239,295

6,636

2.13

%

1,190,765

6,766

2.26

%

Other interest-earning assets

336,443

772

0.93

%

262,363

789

1.20

%

457,558

881

0.77

%

Total interest-earning assets

7,356,622

68,618

3.78

%

7,246,577

73,530

4.04

%

7,181,899

69,666

3.86

%

Allowance for loan losses

(81,111

)

(83,745

)

(89,679

)

BOLI and noninterest-earning assets

585,441

602,165

594,885

Total assets

$

7,860,952

$

7,764,997

$

7,687,105

Interest-bearing liabilities

Savings

$

928,446

$

2,013

0.88

%

$

937,649

$

2,128

0.90

%

$

948,898

$

2,353

0.99

%

Interest-bearing checking

2,140,314

901

0.17

%

2,086,146

1,131

0.22

%

1,919,327

1,660

0.34

%

Money market

726,079

377

0.21

%

671,949

414

0.25

%

681,421

645

0.38

%

Certificates of deposit

720,180

995

0.56

%

860,131

1,763

0.82

%

1,030,829

2,906

1.12

%

Total interest-bearing deposits

4,515,019

4,286

0.38

%

4,555,875

5,436

0.47

%

4,580,475

7,564

0.66

%

FHLB advances

446,618

3,112

2.83

%

534,303

3,479

2.59

%

608,169

3,860

2.52

%

Securities sold under repurchase agreements

-

-

-

%

-

-

-

%

1,309

2

0.61

%

Long-term debt and other interest-bearing liabilities

260,488

3,304

5.14

%

238,265

3,052

5.10

%

173,911

2,385

5.46

%

Total interest-bearing liabilities

5,222,125

10,702

0.83

%

5,328,443

11,967

0.89

%

5,363,864

13,811

1.02

%

Noninterest-bearing deposits

1,653,517

1,448,422

1,357,411

Noninterest-bearing liabilities

97,136

95,567

100,424

Total liabilities

6,972,778

6,872,432

6,821,699

Total stockholders' equity

888,174

892,565

865,406

Total liabilities and stockholders' equity

$

7,860,952

$

7,764,997

$

7,687,105

Net interest income/spread

$

57,916

2.95

%

$

61,563

3.15

%

$

55,855

2.84

%

Net interest margin

3.19

%

3.38

%

3.09

%

Ratio of interest-earning assets to interest-bearing liabilities

141

%

136

%

134

%

Total deposits

$

6,168,536

$

4,286

0.28

%

$

6,004,297

$

5,436

0.36

%

$

5,937,886

$

7,564

0.51

%

Total funding(1)

$

6,875,642

$

10,702

0.63

%

$

6,776,865

$

11,967

0.70

%

$

6,721,275

$

13,811

0.82

%

Banc of California, Inc.

Average Balance, Average Yield Earned, and Average Cost Paid

(Dollars in thousands)

(Unaudited)

Three Months Ended

March 31, 2021 December 31, 2020 September 30, 2020

Average Yield Average Yield Average Yield

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

Interest-earning assets

Loans held-for-sale $ 1,413 $ 7 2.01 % $ 1,564 $ 8 2.03 % $ 19,544 $ 139 2.83 %

SFR mortgage 1,210,105 11,747 3.94 % 1,224,865 12,955 4.21 % 1,311,513 13,178 4.00 %

Commercial real estate,multifamily, and 2,322,509 26,387 4.61 % 2,507,950 30,371 4.82 % 2,493,408 29,666 4.73 %construction

Commercial andindustrial, SBA, and 2,221,494 22,910 4.18 % 1,978,684 21,984 4.42 % 1,673,548 18,585 4.42 %lease financing

Other consumer 28,520 294 4.18 % 31,856 787 9.83 % 35,563 451 5.05 %

Gross loans and leases 5,784,041 61,345 4.30 % 5,744,919 66,105 4.58 % 5,533,576 62,019 4.46 %

Securities 1,236,138 6,501 2.13 % 1,239,295 6,636 2.13 % 1,190,765 6,766 2.26 %

Other interest-earning 336,443 772 0.93 % 262,363 789 1.20 % 457,558 881 0.77 %assets

Total interest-earning 7,356,622 68,618 3.78 % 7,246,577 73,530 4.04 % 7,181,899 69,666 3.86 %assets

Allowance for loan losses (81,111 ) (83,745 ) (89,679 )

BOLI andnoninterest-earning 585,441 602,165 594,885 assets

Total assets $ 7,860,952 $ 7,764,997 $ 7,687,105



Interest-bearing liabilities

Savings $ 928,446 $ 2,013 0.88 % $ 937,649 $ 2,128 0.90 % $ 948,898 $ 2,353 0.99 %

Interest-bearing checking 2,140,314 901 0.17 % 2,086,146 1,131 0.22 % 1,919,327 1,660 0.34 %

Money market 726,079 377 0.21 % 671,949 414 0.25 % 681,421 645 0.38 %

Certificates of deposit 720,180 995 0.56 % 860,131 1,763 0.82 % 1,030,829 2,906 1.12 %

Total interest-bearing 4,515,019 4,286 0.38 % 4,555,875 5,436 0.47 % 4,580,475 7,564 0.66 %deposits

FHLB advances 446,618 3,112 2.83 % 534,303 3,479 2.59 % 608,169 3,860 2.52 %

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

Long-term debt and otherinterest-bearing 260,488 3,304 5.14 % 238,265 3,052 5.10 % 173,911 2,385 5.46 %liabilities

Total interest-bearing 5,222,125 10,702 0.83 % 5,328,443 11,967 0.89 % 5,363,864 13,811 1.02 %liabilities

Noninterest-bearing 1,653,517 1,448,422 1,357,411 deposits

Noninterest-bearing 97,136 95,567 100,424 liabilities

Total liabilities 6,972,778 6,872,432 6,821,699

Total stockholders' 888,174 892,565 865,406 equity

Total liabilities and $ 7,860,952 $ 7,764,997 $ 7,687,105 stockholders' equity



Net interest income/ $ 57,916 2.95 % $ 61,563 3.15 % $ 55,855 2.84 %spread

Net interest margin 3.19 % 3.38 % 3.09 %



Ratio of interest-earningassets to 141 % 136 % 134 % interest-bearingliabilities

Total deposits $ 6,168,536 $ 4,286 0.28 % $ 6,004,297 $ 5,436 0.36 % $ 5,937,886 $ 7,564 0.51 %

Total funding^(1) $ 6,875,642 $ 10,702 0.63 % $ 6,776,865 $ 11,967 0.70 % $ 6,721,275 $ 13,811 0.82 %

(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

June 30, 2020

March 31, 2020

Average

Yield

Average

Yield

Balance

Interest

/ Cost

Balance

Interest

/ Cost

Interest-earning assets

Loans held-for-sale

$

19,967

$

155

3.12

%

$

22,273

$

220

3.97

%

SFR mortgage

1,416,358

14,187

4.03

%

1,532,967

15,295

4.01

%

Commercial real estate, multifamily, and construction

2,524,477

29,459

4.69

%

2,564,485

30,223

4.74

%

Commercial and industrial, SBA, and lease financing

1,706,120

19,392

4.57

%

1,613,324

19,157

4.78

%

Other consumer

40,697

449

4.44

%

47,761

639

5.38

%

Gross loans and leases

5,707,619

63,642

4.48

%

5,780,810

65,534

4.56

%

Securities

1,063,941

7,816

2.95

%

952,966

7,820

3.30

%

Other interest-earning assets

424,776

1,239

1.17

%

297,444

1,360

1.84

%

Total interest-earning assets

7,196,336

72,697

4.06

%

7,031,220

74,714

4.27

%

Allowance for loan losses

(78,528

)

(60,470

)

BOLI and noninterest-earning assets

622,398

592,192

Total assets

$

7,740,206

$

7,562,942

Interest-bearing liabilities

Savings

905,997

2,718

1.21

%

890,830

3,296

1.49

%

Interest-bearing checking

1,710,038

2,186

0.51

%

1,520,922

3,728

0.99

%

Money market

592,872

850

0.58

%

608,926

1,760

1.16

%

Certificates of deposit

1,214,939

4,451

1.47

%

1,151,518

5,827

2.04

%

Total interest-bearing deposits

4,423,846

10,205

0.93

%

4,172,196

14,611

1.41

%

FHLB advances

819,166

4,818

2.37

%

1,039,055

5,883

2.28

%

Securities sold under repurchase agreements

1,024

2

0.79

%

-

-

-

%

Long-term debt and other interest-bearing liabilities

173,977

2,357

5.45

%

174,056

2,359

5.45

%

Total interest-bearing liabilities

5,418,013

17,382

1.29

%

5,385,307

22,853

1.71

%

Noninterest-bearing deposits

1,349,735

1,133,306

Noninterest-bearing liabilities

118,208

128,282

Total liabilities

6,885,956

6,646,895

Total stockholders' equity

854,250

916,047

Total liabilities and stockholders' equity

$

7,740,206

$

7,562,942

Net interest income/spread

$

55,315

2.77

%

$

51,861

2.56

%

Net interest margin

3.09

%

2.97

%

Ratio of interest-earning assets to interest-bearing liabilities

133

%

131

%

Total deposits

$

5,773,581

$

10,205

0.71

%

$

5,305,502

$

14,611

1.11

%

Total funding(1)

$

6,767,748

$

17,382

1.03

%

$

6,518,613

$

22,853

1.41

%

Three Months Ended

June 30, 2020 March 31, 2020

Average Yield Average Yield

Balance Interest / Cost Balance Interest / Cost

Interest-earning assets

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

SFR mortgage 1,416,358 14,187 4.03 % 1,532,967 15,295 4.01 %

Commercial realestate, 2,524,477 29,459 4.69 % 2,564,485 30,223 4.74 %multifamily, andconstruction

Commercial andindustrial, SBA, 1,706,120 19,392 4.57 % 1,613,324 19,157 4.78 %and lease financing

Other consumer 40,697 449 4.44 % 47,761 639 5.38 %

Gross loans and 5,707,619 63,642 4.48 % 5,780,810 65,534 4.56 %leases

Securities 1,063,941 7,816 2.95 % 952,966 7,820 3.30 %

Otherinterest-earning 424,776 1,239 1.17 % 297,444 1,360 1.84 %assets

Totalinterest-earning 7,196,336 72,697 4.06 % 7,031,220 74,714 4.27 %assets

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

BOLI andnoninterest-earning 622,398 592,192 assets

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



Interest-bearing liabilities

Savings 905,997 2,718 1.21 % 890,830 3,296 1.49 %

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

Money market 592,872 850 0.58 % 608,926 1,760 1.16 %

Certificates of 1,214,939 4,451 1.47 % 1,151,518 5,827 2.04 %deposit

Totalinterest-bearing 4,423,846 10,205 0.93 % 4,172,196 14,611 1.41 %deposits

FHLB advances 819,166 4,818 2.37 % 1,039,055 5,883 2.28 %

Securities soldunder repurchase 1,024 2 0.79 % - - - %agreements

Long-term debt andother 173,977 2,357 5.45 % 174,056 2,359 5.45 %interest-bearingliabilities

Totalinterest-bearing 5,418,013 17,382 1.29 % 5,385,307 22,853 1.71 %liabilities

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

Noninterest-bearing 118,208 128,282 liabilities

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

Total stockholders' 854,250 916,047 equity

Total liabilitiesand stockholders' $ 7,740,206 $ 7,562,942 equity



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

Net interest margin 3.09 % 2.97 %



Ratio ofinterest-earningassets to 133 % 131 % interest-bearingliabilities

Total deposits $ 5,773,581 $ 10,205 0.71 % $ 5,305,502 $ 14,611 1.11 %

Total funding^(1) $ 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.

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.

Tangible assets, tangible equity, tangible common equity, tangible equity to tangible assets, tangible common equity to tangible assets, tangible common equity per common share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest expense to average assets, pre-tax pre-provision (PTPP) income (loss), adjusted PTPP income (loss), PTPP income (loss) ROAA, adjusted PTPP income (loss) ROAA, efficiency ratio, adjusted efficiency ratio, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS) and adjusted 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 assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total equity. Tangible common equity is calculated by subtracting preferred stock from tangible equity. Return on average tangible common equity is computed by dividing net income (loss) available to common stockholders by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

PTPP income is calculated by adding net interest income and noninterest income (total revenue) and subtracting noninterest expense. Adjusted PTPP income is calculated by adding net interest income and adjusted noninterest income (adjusted total revenue) and subtracting adjusted noninterest expense. PTPP income ROAA is computed by dividing annualized PTPP income by average assets. Adjusted PTPP income ROAA is computed by dividing annualized adjusted PTPP income by average assets. Efficiency ratio is computed by dividing noninterest expense by total revenue. Adjusted efficiency ratio is computed by dividing adjusted noninterest expense by adjusted total revenue.

Adjusted net income (loss) is calculated by adjusting net income (loss) for tax-effected noninterest income and expense adjustments and the tax impact from the exercise of stock appreciation rights. Adjusted ROAA is computed by dividing annualized adjusted net income by average assets. Adjusted net income (loss) available to common shareholders is computed by removing the impact of preferred stock redemptions from adjusted net income (loss).

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.

Tangible assets, tangible equity, tangible common equity, tangible equity to tangible assets, tangible common equity to tangible assets, tangible common equity per common share, return on average tangible common equity, adjusted noninterest income, adjusted noninterest expense, adjusted noninterest expense to average assets, pre-tax pre-provision (PTPP) income (loss), adjusted PTPP income (loss), PTPP income (loss) ROAA, adjusted PTPP income (loss) ROAA, efficiency ratio, adjusted efficiency ratio, adjusted net income, adjusted net income available to common stockholders, adjusted diluted earnings per share (EPS) and adjusted 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 assets and tangible equity are calculated by subtracting goodwill and other intangible assets from total assets and total equity. Tangible common equity is calculated by subtracting preferred stock from tangible equity. Return on average tangible common equity is computed by dividing net income (loss) available to common stockholders by average tangible common equity. Banking regulators also exclude goodwill and other intangible assets from stockholders' equity when assessing the capital adequacy of a financial institution.

PTPP income is calculated by adding net interest income and noninterest income (total revenue) and subtracting noninterest expense. Adjusted PTPP income is calculated by adding net interest income and adjusted noninterest income (adjusted total revenue) and subtracting adjusted noninterest expense. PTPP income ROAA is computed by dividing annualized PTPP income by average assets. Adjusted PTPP income ROAA is computed by dividing annualized adjusted PTPP income by average assets. Efficiency ratio is computed by dividing noninterest expense by total revenue. Adjusted efficiency ratio is computed by dividing adjusted noninterest expense by adjusted total revenue.

Adjusted net income (loss) is calculated by adjusting net income (loss) for tax-effected noninterest income and expense adjustments and the tax impact from the exercise of stock appreciation rights. Adjusted ROAA is computed by dividing annualized adjusted net income by average assets. Adjusted net income (loss) available to common shareholders is computed by removing the impact of preferred stock redemptions from adjusted net income (loss).

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.

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Tangible commonequity, andtangible common equity totangible assetsratio

Total assets $ 7,933,459 $ 7,877,334 $ 7,738,106 $ 7,770,138 $ 7,662,607

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

Less otherintangible (2,351 ) (2,633 ) (2,939 ) (3,292 ) (3,722 ) assets

Tangible assets $ 7,893,964 $ 7,837,557 $ 7,698,023 $ 7,729,702 $ 7,621,741 ^(1)



Totalstockholders' $ 804,693 $ 897,207 $ 874,254 $ 846,959 $ 835,002 equity

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

Less otherintangible (2,351 ) (2,633 ) (2,939 ) (3,292 ) (3,722 ) assets

Tangible equity 765,198 857,430 834,171 806,523 794,136 ^(1)

Less preferred (94,956 ) (184,878 ) (184,878 ) (185,037 ) (187,687 ) stock

Tangible common $ 670,242 $ 672,552 $ 649,293 $ 621,486 $ 606,449 equity^(1)



Totalstockholders' 10.14 % 11.39 % 11.30 % 10.90 % 10.90 %equity to totalassets

Tangible equityto tangible 9.69 % 10.94 % 10.84 % 10.43 % 10.42 %assets^(1)

Tangible commonequity to 8.49 % 8.58 % 8.43 % 8.04 % 7.96 %tangible assets^(1)



Common shares 50,150,447 49,767,489 49,760,543 49,750,958 49,593,077 outstanding

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

Total commonshares 50,627,768 50,244,810 50,237,864 50,228,279 50,070,398 outstanding



Tangible commonequity per $ 13.24 $ 13.39 $ 12.92 $ 12.37 $ 12.11 common share^(1)

Book value per $ 14.02 $ 14.18 $ 13.72 $ 13.18 $ 12.93 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

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Return on tangible common equity

Average total stockholders' equity

$

888,174

$

892,565

$

865,406

$

854,250

$

916,047

Less average preferred stock

(164,895

)

(184,878

)

(184,910

)

(185,471

)

(189,607

)

Less average goodwill

(37,144

)

(37,144

)

(37,144

)

(37,144

)

(37,144

)

Less average other intangible assets

(2,517

)

(2,826

)

(3,172

)

(3,574

)

(4,003

)

Average tangible common equity(1)

$

683,618

$

667,717

$

640,180

$

628,061

$

685,293

Net income (loss)

$

14,375

$

21,703

$

15,913

$

(18,449

)

$

(6,593

)

Less preferred stock dividends and impact of preferred stock redemption

(6,488

)

(3,447

)

(3,454

)

(3,393

)

(3,007

)

Add amortization of intangible assets

282

306

353

430

429

Less tax effect on amortization of intangible assets

(59

)

(64

)

(74

)

(90

)

(90

)

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

$

8,110

$

18,498

$

12,738

$

(21,502

)

$

(9,261

)

Return on average equity

6.56

%

9.67

%

7.32

%

(8.69

)

%

(2.89

)

%

Return on average tangible common equity(1)

4.81

%

11.02

%

7.92

%

(13.77

)

%

(5.44

)

%

Statutory Federal 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

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Return ontangible common equity

Average totalstockholders' $ 888,174 $ 892,565 $ 865,406 $ 854,250 $ 916,047 equity

Less averagepreferred (164,895 ) (184,878 ) (184,910 ) (185,471 ) (189,607 ) stock

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

Less averageother (2,517 ) (2,826 ) (3,172 ) (3,574 ) (4,003 ) intangibleassets

Averagetangible $ 683,618 $ 667,717 $ 640,180 $ 628,061 $ 685,293 common equity^(1)





Net income $ 14,375 $ 21,703 $ 15,913 $ (18,449 ) $ (6,593 ) (loss)

Lesspreferredstockdividends and (6,488 ) (3,447 ) (3,454 ) (3,393 ) (3,007 ) impact ofpreferredstockredemption

Addamortization 282 306 353 430 429 of intangibleassets

Less taxeffect onamortization (59 ) (64 ) (74 ) (90 ) (90 ) of intangibleassets

Net income(loss)available to $ 8,110 $ 18,498 $ 12,738 $ (21,502 ) $ (9,261 ) commonstockholders^(1)



Return onaverage 6.56 % 9.67 % 7.32 % (8.69 ) % (2.89 ) %equity

Return onaveragetangible 4.81 % 11.02 % 7.92 % (13.77 ) % (5.44 ) %common equity^(1)



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

(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

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Adjusted noninterest income and expense

Total noninterest income

$

4,381

$

6,975

$

3,954

$

5,528

$

2,061

Noninterest income adjustments:

Net (gain) loss on securities available for sale

-

-

-

(2,011

)

-

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

-

-

(272

)

-

-

Fair value adjustment on legacy SFR loans held for sale

-

(36

)

(24

)

(25

)

1,586

Total noninterest income adjustments

-

(36

)

(296

)

(2,036

)

1,586

Adjusted noninterest income(1)

$

4,381

$

6,939

$

3,658

$

3,492

$

3,647

Total noninterest expense

$

46,735

$

38,950

$

40,394

$

72,770

$

46,919

Noninterest expense adjustments:

Naming rights termination

-

-

-

(26,769

)

-

Extinguishment of debt

-

-

-

(2,515

)

-

Professional (fees) recoveries

(721

)

4,398

(1,172

)

(875

)

(1,678

)

Merger-related costs

(700

)

-

-

-

-

Adjusted noninterest expense before gain (loss) in alternative energy partnership investments

(1,421

)

4,398

(1,172

)

(30,159

)

(1,678

)

Gain (loss) in alternative energy partnership investments

(3,630

)

673

1,430

167

(1,905

)

Total noninterest expense adjustments

(5,051

)

5,071

258

(29,992

)

(3,583

)

Adjusted noninterest expense(1)

$

41,684

$

44,021

$

40,652

$

42,778

$

43,336

Average assets

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

$

7,562,942

Noninterest expense to average total assets

2.41

%

2.00

%

2.09

%

3.78

%

2.50

%

Adjusted noninterest expense to average total assets(1)

2.15

%

2.26

%

2.10

%

2.22

%

2.30

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Adjustednoninterest income andexpense

Totalnoninterest $ 4,381 $ 6,975 $ 3,954 $ 5,528 $ 2,061 income

Noninterestincome adjustments:

Net (gain)loss onsecurities - - - (2,011 ) - available forsale

Net (gain)loss on saleof legacy SFR - - (272 ) - - loans held forsale

Fair valueadjustment onlegacy SFR - (36 ) (24 ) (25 ) 1,586 loans held forsale

Totalnoninterest - (36 ) (296 ) (2,036 ) 1,586 incomeadjustments

Adjustednoninterest $ 4,381 $ 6,939 $ 3,658 $ 3,492 $ 3,647 income^(1)



Totalnoninterest $ 46,735 $ 38,950 $ 40,394 $ 72,770 $ 46,919 expense

Noninterestexpense adjustments:

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

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

Professional(fees) (721 ) 4,398 (1,172 ) (875 ) (1,678 ) recoveries

Merger-related (700 ) - - - - costs

Adjustednoninterestexpense beforegain (loss) in (1,421 ) 4,398 (1,172 ) (30,159 ) (1,678 ) alternativeenergypartnershipinvestments

Gain (loss) inalternativeenergy (3,630 ) 673 1,430 167 (1,905 ) partnershipinvestments

Totalnoninterest (5,051 ) 5,071 258 (29,992 ) (3,583 ) expenseadjustments

Adjustednoninterest $ 41,684 $ 44,021 $ 40,652 $ 42,778 $ 43,336 expense^(1)



Average assets $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206 $ 7,562,942

Noninterestexpense to 2.41 % 2.00 % 2.09 % 3.78 % 2.50 %average totalassets

Adjustednoninterestexpense to 2.15 % 2.26 % 2.10 % 2.22 % 2.30 %average totalassets^(1)

(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

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Adjusted pre-tax pre-provision income

Net interest income

$

57,916

$

61,563

$

55,855

$

55,315

$

51,861

Noninterest income

4,381

6,975

3,954

5,528

2,061

Total revenue

62,297

68,538

59,809

60,843

53,922

Noninterest expense

46,735

38,950

40,394

72,770

46,919

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

$

15,562

$

29,588

$

19,415

$

(11,927

)

$

7,003

Total revenue

$

62,297

$

68,538

$

59,809

$

60,843

$

53,922

Total noninterest income adjustments

-

(36

)

(296

)

(2,036

)

1,586

Adjusted total revenue(1)

62,297

68,502

59,513

58,807

55,508

Noninterest expense

46,735

38,950

40,394

72,770

46,919

Total noninterest expense adjustments

(5,051

)

5,071

258

(29,992

)

(3,583

)

Adjusted noninterest expense(1)

41,684

44,021

40,652

42,778

43,336

Adjusted pre-tax pre-provision income(1)

$

20,613

$

24,481

$

18,861

$

16,029

$

12,172

Average assets

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

$

7,562,942

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

0.80

%

1.52

%

1.00

%

(0.62

)

%

0.37

%

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

1.06

%

1.25

%

0.98

%

0.83

%

0.65

%

Efficiency ratio(1)

75.02

%

56.83

%

67.54

%

119.60

%

87.01

%

Adjusted efficiency ratio(1)

66.91

%

64.26

%

68.31

%

72.74

%

78.07

%

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Adjustedpre-tax pre-provisionincome

Net interest $ 57,916 $ 61,563 $ 55,855 $ 55,315 $ 51,861 income

Noninterest 4,381 6,975 3,954 5,528 2,061 income

Total revenue 62,297 68,538 59,809 60,843 53,922

Noninterest 46,735 38,950 40,394 72,770 46,919 expense

Pre-taxpre-provision $ 15,562 $ 29,588 $ 19,415 $ (11,927 ) $ 7,003 income (loss)^(1)



Total revenue $ 62,297 $ 68,538 $ 59,809 $ 60,843 $ 53,922

Totalnoninterest - (36 ) (296 ) (2,036 ) 1,586 incomeadjustments

Adjustedtotal revenue 62,297 68,502 59,513 58,807 55,508 ^(1)



Noninterest 46,735 38,950 40,394 72,770 46,919 expense

Totalnoninterest (5,051 ) 5,071 258 (29,992 ) (3,583 ) expenseadjustments

Adjustednoninterest 41,684 44,021 40,652 42,778 43,336 expense^(1)

Adjustedpre-tax $ 20,613 $ 24,481 $ 18,861 $ 16,029 $ 12,172 pre-provisionincome^(1)



Average $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206 $ 7,562,942 assets

Pre-taxpre-provision 0.80 % 1.52 % 1.00 % (0.62 ) % 0.37 %income (loss)ROAA^(1)

Adjustedpre-taxpre-provision 1.06 % 1.25 % 0.98 % 0.83 % 0.65 %income ROAA^(1)

Efficiency 75.02 % 56.83 % 67.54 % 119.60 % 87.01 %ratio^(1)

Adjustedefficiency 66.91 % 64.26 % 68.31 % 72.74 % 78.07 %ratio^(1)

(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

March 31,2021

December 31,2020

September 30,2020

June 30,2020

March 31,2020

Adjusted net income (loss)

Net income (loss)

$

14,375

$

21,703

$

15,913

$

(18,449)

$

(6,593)

Adjustments, net:(1)

Noninterest income

-

27

222

1,527

(1,190)

Noninterest expense

3,788

(3,803)

(194)

22,494

2,687

Adjusted net income (loss) before tax adjustment

18,163

17,927

15,941

5,572

(5,096)

Tax adjustment: tax impact from exercise of stock appreciation rights

2,093

-

-

-

-

Adjusted net income (loss)(2)

$

16,070

$

17,927

$

15,941

$

5,572

$

(5,096)

Average assets

$

7,860,952

$

7,764,997

$

7,687,105

$

7,740,206

$

7,562,942

ROAA

0.74

%

1.11

%

0.82

%

(0.96)

%

(0.35)

%

Adjusted ROAA(2)

0.83

%

0.92

%

0.82

%

0.29

%

(0.27)

%

Adjusted net income (loss) available to common stockholders

Net income (loss) available to common stockholders

$

7,825

$

17,706

$

12,084

$

(21,936)

$

(9,694)

Adjustments to net income (loss)(3)

1,695

(3,776)

28

24,021

1,497

Adjustments for impact of preferred stock redemption

3,347

-

7

(49)

(526)

Adjusted net income (loss) available to common stockholders(2)

$

12,867

$

13,930

$

12,119

$

2,036

$

(8,723)

Average diluted common shares

50,750,522

50,335,271

50,190,933

50,030,919

50,464,777

Diluted EPS

$

0.15

$

0.35

$

0.24

$

(0.44)

$

(0.19)

Adjusted diluted EPS(2)

$

0.25

$

0.28

$

0.24

$

0.04

$

(0.17)

Banc of California, Inc.

Consolidated Operations

Non-GAAP Measures, Continued

(Dollars in thousands, except per share data)

(Unaudited)

Three Months Ended

March 31, December 31, September 30, June 30, March 31, 2021 2020 2020 2020 2020

Adjusted netincome (loss)

Net income $ 14,375 $ 21,703 $ 15,913 $ (18,449) $ (6,593) (loss)

Adjustments, net:^(1)

Noninterest - 27 222 1,527 (1,190) income

Noninterest 3,788 (3,803) (194) 22,494 2,687 expense

Adjusted netincome(loss) 18,163 17,927 15,941 5,572 (5,096) before taxadjustment

Taxadjustment:tax impactfrom 2,093 - - - - exercise ofstockappreciationrights

Adjusted netincome $ 16,070 $ 17,927 $ 15,941 $ 5,572 $ (5,096) (loss)^(2)



Average $ 7,860,952 $ 7,764,997 $ 7,687,105 $ 7,740,206 $ 7,562,942 assets

ROAA 0.74 % 1.11 % 0.82 % (0.96) % (0.35) %

Adjusted 0.83 % 0.92 % 0.82 % 0.29 % (0.27) %ROAA^(2)



Adjusted netincome(loss) available tocommonstockholders

Net income(loss)available to $ 7,825 $ 17,706 $ 12,084 $ (21,936) $ (9,694) commonstockholders

Adjustmentsto net 1,695 (3,776) 28 24,021 1,497 income(loss)^(3)

Adjustmentsfor impactof preferred 3,347 - 7 (49) (526) stockredemption

Adjusted netincome(loss)available to $ 12,867 $ 13,930 $ 12,119 $ 2,036 $ (8,723) commonstockholders^(2)



Averagediluted 50,750,522 50,335,271 50,190,933 50,030,919 50,464,777 commonshares

Diluted EPS $ 0.15 $ 0.35 $ 0.24 $ (0.44) $ (0.19)

Adjusteddiluted EPS^ $ 0.25 $ 0.28 $ 0.24 $ 0.04 $ (0.17) (2)

(1)

Adjustments shown net of an effective tax rate of 25%

(2)

Non-GAAP measure.

(3)

Represents the difference between net income and adjusted net income

View source version on businesswire.com: https://www.businesswire.com/news/home/20210422005437/en/

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